House of Representatives
5 March 1953

20th Parliament · 1st Session



Mr.Speaker (Hon. Archie Cameron) took the chair at 10.30 a.m., and read prayers.

page 571

QUESTION

LETTERS OF INTRODUCTION

Mr DEAN:
ROBERTSON, NEW SOUTH WALES

– In view of the increased number of requests now being made to the Prime Minister by members of this House to supply letters of introduction to various people, will the right honorable gentleman circularize honorable members asking them, as nominators, to ensure the bona fides of the people whom they nominate for such letters? From my personal experience, I know that the Prime Minister is good enough to provide those letters on the recommendation of honorable members.

Mr MENZIES:
Prime Minister · KOOYONG, VICTORIA · LP

– I venture to think that it is well known to honorable members that before they write in asking for such letters they should satisfy themselves in the matter. I am bound to tell the honorable member that I have no reason to think that that is not done. As he is aware, these letters are supplied as a privilege, and they ought not to be made available to persons who are not suitably recommended. That is why members of Parliament are responsible for asking for the letters to be issued.

page 571

QUESTION

EMPLOYMENT OF WOMEN

Dr EVATT:
BARTON, NEW SOUTH WALES

– Representations have been made to me by quite a number of women’s organizations in relation to the International Labour Organization Con vention that dealt with the subject of equal remuneration for women workers who perforin work of the same value as that performed by males. As the convention was concluded a considerable time ago, will the Minister for Labour and National Service inform the House of the action that has been taken in relation to the matter or the action that it is proposed to take ?

Mr HOLT:
Minister for Immigration · HIGGINS, VICTORIA · LP

– I shall have a reply prepared, which I shall make available to the Leader of the Opposition and other honorable members who may be interested in the matter.

Dr Evatt:

– Will it be made available in the House?

Mr HOLT:

– If desired.

page 571

QUESTION

COAL

Mr FREETH:
FORREST, WESTERN AUSTRALIA

– Will the Prime Minister inform the House whether the Western Australian Government recently asked the Commonwealth for financial assistance to enable the provision of amenities on the Collie coal-fields?I remind the right honorable gentleman that last year the Commonwealth paid to New South Wales to provide amenities on the coal-fields, more than 4d. for every ton of coal mined in that State, but that less than lid. a ton was paid to Western Australia for that purpose. Will the right honorable gentleman assure the House that, if the Government intends to continue subsidizing the provision of amenities on the coal-fields at the expense of the taxpayers, financial assistance will bo provided by the Commonwealth on an equitable basis, so that no particular State shall be favoured?

Mr MENZIES:
LP

– Insofar as the honorable member’s question relates to policy, I cannot deal with it now. I may say, however, that the Western Australian Government has asked for further assistance, and that matter has been the subject of inquiry and correspondence. In fact, the latest manifestation is now on my desk awaiting my signature. The honorable member may be assured that the matter is well in hand.

page 571

QUESTION

REPATRIATION

Mr JOSHUA:
BALLAARAT, VICTORIA

– My question to the

Treasurer concerns the system employed by the Repatriation Department for the payment of war pensions. I have received a letter from an aged war pensioner who has great difficulty in calling at his post office each month to collect hU pension. He has asked that the department adopt the simple method of posting his monthly cheque to him. Will the Treasurer issue appropriate instructions so that war pensioners may receive their pension cheques by mail in the same way as age pensioners receive payments from the Department of Social Services ?

Sir ARTHUR FADDEN:
Treasurer · MCPHERSON, QUEENSLAND · CP

– I shall have the proposal considered and will let the honorable member know what can be done to meet the request.

page 572

QUESTION

HOUSING

Mr FALKINDER:
FRANKLIN, TASMANIA

– Yesterday I asked the Minister for Social Services a question in relation to the trend shown by official figures relating to certain categories of war service homes. I am certain that the honorable gentleman misunderstood the import of my question. By way of explanation, I point out that the figures that he supplied to me last week show that houses that are semiconstructed by the War Service Homes Division, in the sense that they are fully controlled by the division from the beginning of construction, have increased by 2,000,- whereas the number of new homes taken over has decreased by 500 and the number of old homes taken over has decreased by 4,000. Is the accent to be further placed in future on control of construction by the War Service Homes Division to the detriment of transactions in the other two categories?

Mr TOWNLEY:
Minister for Social Services · DENISON, TASMANIA · LP

– I did .misunderstand the honorable member yesterday. I now realize that, when he referred to houses constructed by the War Service Homes Division, he had in mind houses that are built by private contractors on behalf of the division. The division has concentrated on a policy of building new homes in preference to the financing of. what might be termed estate agency transactions for the purchase of existing houses. It has done so for a variety of reasons. In the first place, it considers th’at it can help ex-servicemen and at the mme time improve the general housing situation by financing the construction of new houses. In the second place, the construction of new houses under the war service homes scheme helps to relieve unemployment. Therefore, I think that wo shall continue to concentrate on the building of new houses in preference to the purchase of existing properties.

page 572

THE PARLIAMENT

Mr CURTIN:
WATSON, NEW SOUTH WALES

– Will you, Mr. Speaker, give consideration to the broadcasting of our national anthem, Advance Australia Fair-

Mr Freeth:

– What rot !

Mr SPEAKER:

– Order ! This is not a matter for comment by honorable members at the moment.

Mr CURTIN:

– Will you arrange for the anthem to be broadcast immediately after the reading of prayers at the commencement of each day’s sitting of -this House? Do you not think that this action would generate national sentiment, would hare a beneficial effect on the outlook of the people, particularly the children, and would increase their appreciation of their magnificent country ?

Mr SPEAKER:

-In matters of this sort I am the servant of the House. If the House secs fit to give me instructions, they will be carried out. Until that stage is reached, the present procedure of this House will not be altered.

page 572

QUESTION

BROADCASTING

Mr LUCOCK:
LYNE, NEW SOUTH WALES

– Will the PostmasterGeneral say what plans are in hand for the provision of further regional broadcasting stations for country areas? How many such stations have been established by the present Government, and bow many were established during the eight years of office of the Labour Government ?

Mr ANTHONY:
Postmaster-General · RICHMOND, NEW SOUTH WALES · CP

– Plans have been prepared for the establishment of about fifteen low-powered regional stations on the national network to serve, in the main, country areas in which adequate radio programmes are not available now. During the life of the previous Government, which was about eight years, eleven of these stations were established. During the last three years, this Government has established six.

page 573

QUESTION

DRUGS

Mr ANDREWS:
DAREBIN, VICTORIA

– I understand that the Minister for Health has stated that the use of heroin in’ this country is to be either discontinued or seriously curtailed. Will the right honorable gentleman say when such instructions will be issued?

Sir EARLE PAGE:
Minister for Health · COWPER, NEW SOUTH WALES · CP

– The Commonwealth has no constitutional power to specify the uses to which heroin may be put. We have removed the drug from the list of free life-saving drugs, and we have had discussions with official organizations of the medical profession in order to ascertain whether they can effect a reduction of its use.

page 573

QUESTION

IMMIGRATION

Mr COSTA:
BANKS, NEW SOUTH WALES

– Has the Minister for Immigration received requests from some sections of British immigrants that cooking facilities be provided in certain immigrant hostels? .Some of the British immigrants are not complaining about the standard of menus. They believe that it would be better if they had facilities to cook their own meals, so that they could eat the foods that they like best.

Mr HOLT:
LP

– Suggestions of this kind have readied us from time to time from various hostels. We have made an experiment at the Gepp’s Cross hostel in South Australia, the modern construction of which lends itself to a development of this kind. I understand from the honorable member for Sturt that the scheme is working very successfully there. The committee that was established to consider the problems of British immigrants recommended that the practice .should not be adopted in a number of hostels, because it believed that a considerable fire risk would be created. However, the Chairman of the Immigration Advisory Council is going to inspect facilities at the Gepp’s Cross hostel, and we shall be guided to a considerable degree by the kind of recommendations that, he makes.

Mr JAMES:
HUNTER, NEW SOUTH WALES

– My question is directed to the Minister for Immigration. By way of explanation, may I say that I have previously spoken and written to the Minister about this matter, and have also had some contact with the Minister for the Interior, who, I understand, is administratively concerned. The question relates to British immigrant mine-workers who were sent by the Government to the northern mining districts of New South Wales, and their living quarters at West Cessnock and Kurri Kurri. I have received no reply from you-

Mr SPEAKER:

– Order ! The honorable member must address me.

Mr JAMES:

– “Well, they have jumped the homes.

Mr SPEAKER:

– Order ! The honorable member will resume his seat if he does not intend to abide by the Standing Orders.

Mr JAMES:

– I have had no reply to my correspondence with the Minister, and mine-workers are now occupying the houses at a rental of £3 19s. 6d., which is far too great in comparison with other housing accommodation in the locality. Will the Minister visit Cessnock as soon as possible to inspect these houses?

Mr HOLT:

– As the honorable member lias indicated, this aspect of administration comes within the jurisdiction of the Minister for the Interior, who is now dealing with it. As for the occupancy of some of the vacant houses mentioned by the honorable member, I point out again to him, as I indicated a week or so ago, that we are at present in negotiation with the Government of New South W ales with a view to that Government acquiring the houses. An official from New South Wales was in discussion with Mr. Goodes of the Treasury earlier this week. I hope that finality will be reached in the near future.

page 573

QUESTION

SOCIAL SERVICES

Mr CRAMER:
BENNELONG, NEW SOUTH WALES

– My question, which i3 directed to the Minister for Social Services, relates to the reciprocal agreement between the United Kingdom and Australia about the payment of social services benefits. Is the honorable gentleman aw are that there a number of elderly people in this country who, although they are British subjects, are not entitled to receive social services payments in either Great Britain or Australia because they have resided for so long in other parts of the Empire? Will the Minister try to help these people when consideration is being given to the terms of the reciprocal agreement ?

Mr TOWNLEY:
LP

– The reciprocal agreement between the United Kingdom and Australia will, as its name implies, provide for reciprocity. There will be an exchange of benefits between former residents of Great Britain who come to this country and Australians who go to live in Great Britain. 1 shall consider the matter that the honorable gentleman has raised, and see whether anything can be done to help the people to whom he has referred. I know that, in many instances, they are in great need.

Mr WILSON:
STURT, SOUTH AUSTRALIA

– In view of the substantial fall of the cost of living in South Australia, which has resulted in a decrease of the basic wage there by 4s. a week, will the Minister for Social Services strenuously resist a suggestion advanced by the Labour party last year that the age pension be tied to the basic wage? If that were done, it might easily result in a fall of pension rates-

Mr Calwell:

– I rise to order. This is a propaganda question. The honorable gentleman has deliberately falsified the position-

Mr SPEAKER:

– .Order ! An honorable member must not accuse another honorable member of deliberate falsification. The honorable member for Melbourne has used an unparliamentary expression. It must be withdrawn.

Mr Calwell:

– I withdraw the statement. The honorable gentleman is deliberately attempting to mislead this House.

Mr SPEAKER:

– Order ! That is equally unparliamentary. The honorable member cannot charge another member with deliberately attempting to mislead the House.

Mr Calwell:

– By making-

Mr SPEAKER:

– Order ! The honorable gentleman will withdraw any imputation of deliberately misleading the House.

Mr Calwell:

– I did so. I said he was attempting to mislead this House with a question which-

Mr SPEAKER:

– Order ! The honorable member cannot impute a base motive.

Mr Calwell:

– Is the honorable gentleman entitled to base a question on a false statement?

Mr SPEAKER:

– I hope and trust that the House will never charge me with the duty of sorting out the falsity or otherwise of questions addressed to Ministers, because I am afraid that that would be a rather difficult task. I do not express any view on what members ask and only require that they shall comply with standing orders.

Mr Calwell:

– You know this one is false,

Mr SPEAKER:

– Order! The honorable member will withdraw that statement which is an imputation against the Chair.

Mr Calwell:

– I withdraw.

Mr TOWNLEY:

– It is such a long time since the question was asked that I forget what it was about.

Mr SPEAKER:

– .Order ! The honorable member for Sturt.

Mr WILSON:

– In view of the substantial fall in the cost of living in South Australia which resulted-

Mr Ward:

– What substantial fall?

Mr SPEAKER:

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

Mr WILSON:

– I will start the question again. ‘ In view of the substantial fall in the cost of living in South Australia which resulted in a drop in the basic wage of 4s. a week, will the Minister for Social Services strenuously resist the suggestion that was put forward by the Labour party last year of’ tying the age pension to the basic wage as such action might easily result in a fall in the age pension?

Mr TOWNLEY:

– I assure the honorable member that I shall adopt his suggestion.

page 574

QUESTION

ARMED FORCES

Mr FITZGERALD:
PHILLIP, NEW SOUTH WALES

– Is the Prime Minister aware that a member of the Australian fighting services in Korea is to be court martialled and charged with murdering an American soldier? This man is to be tried for his life and I believe that he intends to plead not guilty. Have adequate arrangements been made for the legal defence of this young Australian? If the Prime Minister has no knowledge of the matter will he investigate it immediately with a view to providing legal assistance?

Mr MENZIES:
LP

– The honorable member need have no doubt about the defence arrangements which are always made under such circumstances. There will be no departure from the usual procedure. I am not familiar with the case but I shall obtain further information concerning it.

page 575

QUESTION

CIVIL AVIATION

Mr DRUMMOND:
NEW ENGLAND, NEW SOUTH WALES

– In view of the serious nature of the accident which occurred at Karachi recently, will the Minister for Civil Aviation inform the House what precautions have been taken to safeguard the air-travelling public in Australia? Can the Minister inform the House whether the record of air travel in Australia compares favorably with that of other countries of the world?

Mr ANTHONY:
CP

– Air travel is probably the safest form of transport in Australia. I think that, during the last financial year 2,500 people have been killed in Australia in motor accidents and about 170 in rail accidents. In the same period, there has not been a single fatality in civil aviation. That is an outstanding record. The Department of Civil Aviation is charged with the duty of inspecting civil aircraft and it issues regulations which provide for the various safety measures which are employed by the. air companies. The department also provides various navigational aids, such as direction-finding equipment for use in bad and foggy weather and at night-time. Those aids are being kept as up to date as possible. The number of passengers carried by air in Australia was about 2,000,000 last year, the year in which, as I have mentioned, there were no fatalities. That large number shows the great use of Australian civil aviation facilities made by the public, and the great confidence that the public justifiably has in our air services,

Mr BEAZLEY:
FREMANTLE, WESTERN AUSTRALIA

– Supplementary to the question asked by the honorable member for New England, I draw the attention of the Minister to the fact that when there was a failure by a Comet aircraft when taking off at Rome last year, no lives were lost because the aircraft landed in an open space near the aerodrome. On the latest occasion, however, the aircraft appears to have landed in a ditch. Because the higher speed of jet aircraft on taking off means that the margin for error is smaller than it is with ordinary aircraft, has the Department of Civil Aviation considered what the position will be in respect to aerodromes in builtup areas? Has it also considered the possibility of extending aerodromes in order to give a greater margin of safety when the faster types of aircraft are taking off?

Mr ANTHONY:

– Consideration has been given to that particular matter by the Department of Civil Aviation, because of the anticipated arrival in Australia of Comet jet aircraft. The department has formed an opinion, which is supported by the relevant scientific calculations, that the principal aerodromes that would be used by Comet aircraft are adequate for the purpose.

page 575

QUESTION

RAIN MAKING,

Mr KEON:
YARRA, VICTORIA

– In view of advances in the technique of rain-making, I ask the Prime Minister whether the Government has given any consideration to the difficult problems that may arise particularly in the event of drought? For instance, how can Victoria prevent New South Wales from commandeering the rain from clouds that are headed south during a time of drought and are being pursued by people in New South Wales. Will the Prime Minister give consideration to the establishment of a committee representative of the Commonwealth and the States, in order to draw up some charter regarding the rights both of States and of land owners?

Mr MENZIES:
LP

– No.

page 575

QUESTION

HEALTH AND MEDICAL SERVICES

Mr TURNBULL:
MALLEE, VICTORIA

– I sk the Minister for Health whether it is a fact that the amount a bed paid by the Commonwealth to mental hospitals is much less than that paid to general hospitals? If that is a fact, is there any reason for the disparity, and will the Minister give consideration to adjusting what appears to be an anomaly ?

Sir EARLE PAGE:
CP

– The amount paid to the States on behalf of mental hospitals was agreed on by the previous Labour Government and the States on the basis that if a State would cease to. charge mental hospital patients for attention in such hospitals the Commonwealth would make good the amount that was thereby lost, which was about 10di or ls. a day. That arrangement is still in force.

Mr W M BOURKE:
FAWKNER, VICTORIA

– Can the Minister for Health inform me whether any research is being conducted by his department into important aspects of industrial medicine, such as occupational diseases and other matters which affect the health of workers? If any work is being done in that connexion, are the results being made available to those members of the medical profession who make a special study of such subjects?

Sir EARLE PAGE:

– Medical research in Australia, for which funds are provided by the Australian Government, is under the direction of the National Health and Medical Research Council, which was established by the present Minister for External Affairs fifteen years ago, when he was Treasurer. That organization consists of representatives of the Commonwealth and the various States. Each year it selects for research certain subjects which frequently include matters such as those referred to by the honorable member. The results of such research receive general publication.

page 576

QUESTION

POSTAL DEPARTMENT

Mr CALWELL:

– On Tuesday, the Postmaster-General said, in reply to a question, that during the term of office of the Labour Government, the accounts of the Postal Department had shown an annual deficit of between £3,000,000 and £4.000,000 on several occasions. I have obtained from his own department a statement that shows that at no time during the nine years that the Labour Government was in office was there shown in the budget a loss on the Postal Department, except on two occasions when the loss was £1,000,000 in each of two years. In the next year - -

Mr SPEAKER:

– Order ! The honorable gentleman is raising a debatable matter, and should come to his question.

Mr CALWELL:

– I am coming to my question, which is based on the PostmasterGeneral’s statement in the House on Tuesday. I am basing it also on facts that his department has handed to me. My question is, will the PostmasterGeneral apologize to the House and the nation for having given the Parliament information that is not in accordance with facts, with a view to misrepresenting the position?

Mr SPEAKER:

– The PostmasterGeneral may answer that debatable question if he pleases.

Mr Calwell:

– I shall give the PostmasterGeneral a little information about the matter if he needs it.

Mr ANTHONY:
CP

– I do not need it. 1 have it in my head.

Mr Calwell:

– I shall check the honorable gentleman’s figures.

Mr ANTHONY:

– The Chifley Government handed over to the incoming administration a department that had been on a profit-earning basis in preceding years, but which showed a loss of £1,700,000 in the last financial year that it was under the Chifley Government. The honorable member for Melbourne may check these figures.

Mr Calwell:

– But the PostmasterGeneral said on Tuesday that the loss had been between £3,000,000 and £4,000,000 a year.

Mr ANTHONY:

– We had to accept the position that the department was losing money, and had to rectify that position. A profit-earning department had been reduced. by the preceding administration to a losing department.

page 576

QUESTION

TUBERCULOSIS

Dr DONALD CAMERON:
OXLEY, QUEENSLAND · LP

– Can the Minister for Health indicate to the House the nature of the resources and assistance that have been made available by the Australian Government to the Queensland Government in the campaign against tuberculosis ?

Sir EARLE PAGE:
CP

– For the last three years during which the tuberculosis agreement has been ratified by the Queensland Government, 70 per cent, of the total amount of money that has been spent on the campaign against tuberculosis in Queensland has been found by the Australian Government. Capital improvements during that period have been effected entirely at the cost of this Government. A notable instance of such improvement is the Chemside Hospital, which is being established quite close to Brisbane and which, I understand, is estimated to cost more than £1,000,000.

page 577

QUESTION

HEARING AIDS

Mr BERNARD CORSER:
WIDE BAY, QUEENSLAND

– I preface a question to the Minister for Health by stating that I am informed that hearing aids in Australia cost approximately £50 each. This exorbitant price is claimed to be due to the existence of patent rights, the real value of the equipment being about £5. As the present price of hearing aids makes it impossible for pensioners to obtain them, will the Minister undertake to have investigations made overseas with a viewto securing hearing aids at a reasonable price? If that is not possible, perhaps his department might be able to secure the Australian manufacturing rights and have such equipment manufactured here, as was done in the case of artificial limbs for disabled ex-servicemen, and thus enable needy individuals to receive hearing aids at a just price.

Sir EARLE PAGE:
CP

– This Government makes special provision in every capital city for the examination of young deafened school children and the supply of hearing aids to them where necessary. It is found that the aids are of most use when people are young. With old men and women they are not nearly so effective because of the extraordinary noises that sometimes occur when they are used. I shall examine the question of the cost of such equipment and let the honorable member know the results of my inquiries.

page 577

DAIRYRE SEARCH LABORATORY, HIGHETT, VICTORIA

Report of Public Works Committee

Sir PHILIP McBRIDE:
Minister for Defence · WakefieldMinister for Defence · LP

– I move -

That, in accordance with the provisions of the Commonwealth Public Works Committee Act 1913-1951, it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to this House the results of its investigation, namely: - The proposed erection of a dairy research Laboratory at Highett, Victoria.

The work proposed is designed to provide laboratory facilities and administrative, library accommodation, and so on, for officers of the Commonwealth Scientific and Industrial Research Organization required to carry out research into problems connected with the dairy products industry, which the dairy research section of the organization is being continually asked to investigate. The present laboratory premises used by the section are urgently required by the Division of Industrial Chemistry for that division’s research into minerals utilization. The committee has reported that as the production of dairy commodities must be rapidly increased, there is an urgent necessity to extend the work of the dairy research section, and that the laboratory should, therefore, be commenced as soon as possible.

The proposed method of construction is brick walls, reinforced concrete floors and corrugated asbestos cement roofing. The estimated cost of the project is £152,100.

The committee’s recommendation that reconsideration should be given to the desirability of providing internal access from the lower ground floor to the ground floor will receive attention in the preparation of the working drawings.

Question resolved in the affirmative.

page 577

COMMONWEALTH BANK BILL 1953

Declaration or Urgency.

Mr ERIC J HARRISON:
Vice-President of the Executive Council and Minister for Defence Production · WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– I declare that the Commonwealth Bank Bill 1953 is an urgent bill.

Question put -

That the bill be considered an urgent bill.

The House divided. (Mr. Speaker - Hon. Archie Cameron.)

AYES: 51

NOES: 35

Majority……. 16

AYES

NOES

Question so resolved in the affirmative.

Allotmentof Time.

Motion (by Mr. Eric J. Harrison) proposed -

That the time allotted in connexion with the bill be as follows: -

to the end of clause 6, until 4 p.m. this day,

to the end of clause 10, until 5 p.m. this day,

remainder of Committee stage, until 11 p.m. this day;

for the remaining stages, until 11.15 p.m. this day.

Dr EVATT:
Leader of the Opposition · Barton

– The House is considering a very important measure and because many honorable members did not have an opportunity to participate in the earlier stages of the debate, the allotment of time proposed by the Vice-President of the Executive Council (Mr. Eric J. Harrison) is quite unsatisfactory to the Opposition.

Honorable members interjecting,

Mr SPEAKER:

– Order ! The crossfire of interjections must cease.

Dr EVATT:

– After all, the Opposition has a case to put in regard to the bill and we want to complete it. The bill proposes substantially to interfere with the Commonwealth Bank and it contains proposals which are quite contrary to the recommendations of the Royal Commission on Monetary and Banking Systems, and are a negation of the promise by the Government that it would continue the trading activities of the Commonwealth Bank. In these circumstances, I submit that the proposed limitation of the debate should not be accepted by the House. If the “ guillotine “ must be applied to the bill I do not regard as unfair the proposed allocation of time as it relates to the various stages of the bill. My objection to the motion is that the time proposed for consideration of the committee stage of the bill is too limited, particularly in view of the fact that an amendment, which will be moved in committee, has already been circulated.

Mr SPEAKER:

– Order ! The right honorable gentleman may not anticipate the submission of an amendment during the committee stage.

Dr EVATT:

– I had no intention to discuss it or its merits. I am dealing only with the question whether the Government proposes to allow sufficient time for the proper consideration of the bill. I am entitled to point out that the committee will be called upon to consider, not only the bill as drafted by the Government, but also an amendment which has already been circulated. Whatever decision the committee may make in regard to the amendment it must be discussed. Therefore, on behalf of the Opposition I protest against the proposed limitation of time for the remaining stages of the bill. The Opposition will oppose this motion.

Mr ERIC J HARRISON:
Vice-President of the Executive Council and Minister for Defence Production · WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944
Mr SPEAKER:

– The Vice-President of the Executive Council, closing the debate.

Opposition members interjecting,,

Mr SPEAKER:

– Order ! After the

Leader of the Opposition sat down, the Vice-President of the Executive Council (Mr. Eric J. Harrison) was the only member to rise.

Mr James:

– I disagree with that.

Mr SPEAKER:

– The honorable member for Hunter (Mr. James) did not rise until I had called the Vice-President of the Executive Council.

Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– The Leader of the Opposition (Dr. Evatt) has claimed that under the proposed limitation of time for the remaining stages of the bill a large number of honorable members will have no opportunity to speak on it.

Mr James:

Mr. Speaker, I move -

That the Vice-President of the Executive Council (Mr. Eric J. Harrison) be not further heard.

Mr SPEAKER:

– Order! The honorable gentleman will not be in order in moving his motion at this stage.

Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– A tentative arrangement was made between the honorable member for Melbourne (Mr. Calwell), as Deputy Leader of the Opposition, and myself and it was based on the. practice that was followed by the Government of which the Leader of the Opposition was a member of allowing cognate bills such as the bill now before the Chair and the Banking Bill to be debated together up to the committee stage. If that arrangement had been adhered to, an opportunity would have been given to twice the number of honorable members to speak on the motion for the second reading than has been the case. However, when the honorable member for Melbourne was absent from Canberra oh Tuesday his leader reversed that tentative arrangement. I leave it to the House to say why the right honorable gentleman took that action.

Mr SPEAKER:

– Order! The right honorable gentleman is now dealing with a matter that is not before the Chair.

Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– The Leader of the Opposition said that under the proposed limitation of time a sufficient number of honorable members would not have an opportunity to speak on important clauses’ of the measure. If he wishes to pose as a tactician, he will need to employ other than the bumble-footed methods to which he is now resorting. If he had adhered to the arrangement that his deputy made with me, twice the number of speakers would have been enabled to address themselves to this measure. But, now, the Leader of the Opposition rises and protests that the Government is not providing sufficient time to enable the House to debate the bill fully. I repeat that the right honorable gentleman himself proposed the restrictions about which he now complains; and I have no doubt that he did so in an endeavour to get back on his deputy. I merely wish to say that when an arrangement is made-

Opposition members interjecting,

Mr SPEAKER:

– Order ! When the House is prepared to listen, I shall allow the Vice-President of the Executive Council to continue.

Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– I say to the Leader of the Opposition that when he appoints one of his colleagues to make an arrangement-

Mr SPEAKER:

– Order ! The VicePresident of the Executive Council cannot canvass that matter.

Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– I shall pass over it, because all honorable members know to what I was about to refer. The Leader of the Opposition has said that if the “ guillotine “ is to be applied he has no fault to find with the allotment of times for discussion of the various clauses. His objection is that the total time to be allowed for the remaining stages is insufficient. He knows that if the arrangement that I had made tentatively with his deputy had been adhered to, the House would have been enabled to debate this bill and the Banking Bill for six full days, but, as I have said, he chose to limit this debate to two days. Now, he is complaining. He cannot have it both ways. The proposed limitation of time will be sufficient to permit 50 honorable members, using their full allotment of time, to speak on this measure in committee. Therefore, the protest made by the right honorable gentleman is so much party political propaganda in order to justify the action which he took to revenge himself upon his deputy.

Mr Calwell:

– I ask for leave to make a statement.

Mr SPEAKER:

– Is leave granted? government members.- No.

Mr Calwell:

– Hitler is dead and Stalin is dying.

Mr SPEAKER:

– Order ! There must be no reference to the honorable gentleman’s friends who are outside the chamber.

Mr Calwell:

– May I make a personal explanation ?

Mr SPEAKER:

– If the honorable member claims that he has been misrepresented, he has the right to make a personal explanation.

Mr Calwell:

– The arrangements which I have made from time to time with the Vice-President of the Executive Council have not been final.

Mr SPEAKER:

– Order ! In fairness to the honorable gentleman, I point out one matter to him. If he makes a personal explanation in which he refers to matters that I have prevented the VicePresident of the Executive Council from discussing, I shall be obliged to allow the Vice-President of the Executive Council, if he so wishes, to make a statement on them.

Mr Calwell:

– The Vice-President of the Executive Council has put me on a hot spot, and I wish to make a personal explanation about exactly what did happen regarding the matters which the right honorable gentleman has canvassed. With or without your permission, Mr. Speaker, he has canvassed them successfully. I shall state precisely what happened. I saw the right honorable gentleman last week. We met, as is our custom, to discuss the business of the House for the week. He suggested that as the Commonwealth Bank Bill 1945 and the Banking Bill 1945 had been regarded as cognate measures in that year, it might be advisable to take the Commonwealth Bank Bill 1953 and the Banking Bill 1953 as cognate measures and have a full debate on either one or other of the two measures. I said that I would agree to that suggestion tentatively, but that I should have to report the matter to the Leader of the Opposition (Dr. Evatt), who would then consult his colleagues about it.

Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– I said “ tentatively “.

Mr Calwell:

– Yes. The right honorable gentleman stated the position correctly up to that stage. I reported the matter to my leader, who consulted our other colleagues about it, and the Labour party then decided that the bills should be considered separately. We had a perfect right to do so. It is a right that any Opposition, regardless of the political party that constitutes it, possesses. That I should be pilloried because of something that happened in that fashion, and that it should be used as a basis for an attack on the Leader of the Opposition is quite unfair. Having made that explanation, I conclude by remarking that it is all I wanted to say when I asked for leave to. make a statement. I do not think that the remarks about Stalin and Hitler were quite in order.

Question put -

That the motion (vide page 578) be agreed to.

The House divided. (Mr. Speaker - Hon. Archie Cameron.)

AYES: 52

NOES: 37

Majority . . . . 15

AYES

NOES

Question so resolved in the affirmative.

In committee: Consideration resumed from the 4th March (vide page 568).

Clause 1 agreed to.

Clause 2 (Establishment and functions of Commonwealth Bank Board).

Mr JEFF BATE:
Macarthur

– This is the vital clause of a bill which deals with one of the three vital issues on which, I believe, this Government was elected - banking. Clause 2 contains the machinery for constituting the General Banking Division of the Commonwealth Bank as a separate legal entity. But this new legal entity, the Commonwealth Trading Bank, is to take its instructions from the Commonwealth Bank Board. I voted for the second reading of this measure because I regarded that as the first vital step in the separation of the functions of the central bank and the trading bank. I believe the Government is correct in taking that first step. 1 believe also that the customers of the bank should be allowed to become accustomed to the separation, so that confidence and trust in the new bank may be fostered. The proposed amendments that I circulated are intended to empower the Government at any time, by administrative or executive action, to appoint a bank board, which could take over the direction of the Commonwealth Trading Bank and would not be responsible to the central bank. By that means there would be a complete separation of the functions of the central bank and the trading bank. ‘Under the amendments the presiding member of the board that I envisage would be responsible to the Treasurer, in the same way as is the Governor of the central bank board today, and, in the event of any dispute, the papers would be tabled in this House, in order to make the matter public in the proper way. My proposal would merely give the Government power to establish a board if it wanted to do so. A possible objection to the proposal is that the Government may not be able to carry out any special job. I hold - and I think other people hold also - that a special task such as providing funds for superphosphate production and housing could be undertaken, because the trading bank would still belong to the Government. As was pointed out during the second-reading debate, I believe that the complete separation of the banks would make nationalization more difficult in the future, and when the people became accustomed to them working smoothly and efficiently, the matter would no longer be a political issue. Furthermore, the present professional status of the employees of both the private banks and the Commonwealth Bank would be maintained. I consider that they have made a particularly fine contribution to the development of Australia. All acknowledged banking authorities adhere to the view that there should be a complete separation. When Labour introduced the Central Reserve Bank Bill in 1930 the Senate appointed a select committee to inquire into and report on its provisions. Paragraph 16 of the report of that committee contains thirteen accepted conditions and functions of a central reserve bank, as laid down by Sir Ernest Harvey of the Bank of England. He stated -

A central bank should not ordinarily compete with the trading banks for general hanking business.

That means there should be a separation of functions in order to allow the central bank to do its work properly. Sir Ernest Harvey also stated -

A central bank should not engage in trade nor have any interest in any commercial, industrial, or other undertaking.

I believe that, whatever happens to-day or later on, eventually there will be a central bank in Australia, completely divorced from trading functions. We are moving towards that end.

The honorable member for Fremantle (Mr. Beazley) quoted last night from a question that was asked by Mr. Chifley, and answered by Sir Ernest Riddle, during the enquiry by the Royal Commission on Monetary and Banking Systems in 1936 and 1937. I understood the honorable member to say that Sir Ernest had said that he thought that the activities of the trading bank could not be interfered with because it was joined to the central bank. I agree with the contention that there is interference with the efficiency of the trading bank and much more interference with the efficiency of the central bank, when they are tied together.

Mr Calwell:

– The honorable member for Fremantle did not say anything of the sort.

Mr JEFF BATE:

– One of the most vital things in Australia to-day is the regulation of credit. I believe that the central bank is getting towards an effective regulation of credit. But if the Commonwealth Bank Board found that it had to do something about special accounts or to take something away from the private trading banks, and at that time its members were worried about a trading bank difficulty, the minute they tried to carry out their job they would suffer from an “inhibition. Because of its split personality, the board could not give a correct decision. In the buying or selling of securities, or the regulation of the note issue, the central bank would find itself in conflict with its own interests in its own trading bank. Eventually, they should be separated completely, because their separate and clear-cut interests will grow away from each other. Reserve banking practice all over the world shows that separation has been manifestly successful. England and America are good examples. As I said before, the amendment that I have circulated seeks to give the Government power to do this at a later date.

The TEMPORARY CHAIRMAN (Mr Bowden:
GIPPSLAND, VICTORIA

– Order! The honorable member has not yet moved his proposed amendment.

Mr JEFF BATE:

– I have circulated the amendment but in view of the fact that I have been advised that it will not be agreed to I propose to withdraw it. I believe that I have achieved my purpose, which was to draw attention to the most important need for the eventual separation completely of the functions of the Commonwealth Bank and the Commonwealth Trading Bank. When one is in a fight to achieve something worthwhile, although he may lose the first round, he can then bring the matter up at every opportunity.

Mr Beazley:

– I rise to order! Is the honorable member entitled to speak to a proposed amendment that he has not moved ?

The TEMPORARY CHAIRMAN:

– Order ! The honorable member is entitled to speak for ten minutes on any subject related to this bill.

Mr JEFF BATE:

– I have been speaking to the clause under consideration, and referring to an amendment that I have circulated. I make it clear that I intend to keep up the fight to achieve this eventually. I believe that separation will come, and I shall do everything in my power to bring it about.

Dr EVATT:
Leader of the Opposition · Barton

– As the Chair has taken notice of the existence of a proposed amendment that has been circulated but not moved, I suppose that it will not be out of order for me to refer to it. Had the amendment been formally moved, I would have expressed the view that it would be strongly opposed by us. The substance of the amendment that the honorable member circulated but failed to move clearly indicated the intentions of a considerable number of honorable members on the Government side of the chamber. The bill provides that a connexion shall be retained between the trading bank and central bank activities of the Commonwealth Bank, through the Commonwealth Bank Board. That association will not be terminated. However, had the proposal of the honorable member for Macarthur been accepted, there would have been a complete separation of the ‘Commonwealth Trading Bank from the central bank. The whole plan of the Government then would have been revealed more openly. That plan, as we see it, is that the general business activities of the Commonwealth Bank shall be segregated from the central bank notwithstanding the fact that they have been intimately connected with the conduct of that bank for 40 years. The General Banking Division of the Commonwealth Bank is to have a new name. Some people see little significance in that proposal, but I consider it to be of great importance because inevitably it will affect the business of the Commonwealth Trading Bank and will confuse depositors. The honorable member for Macarthur has revealed, perhaps unconsciously, the inescapable consequence of the Government’s proposals which, in his view, do not go far enough.

The honorable gentleman’s comments on the evidence given by Sir Ernest Riddle, the Governor of the Commonwealth Bank, before the Royal Commission on Monetary and Banking Systems, needs drastic correction. The truth is that the report of the commission has not been quoted accurately in this discussion by any honorable member on the Government side of the chamber, including the Treasurer (Sir Arthur Fadden). The Treasurer quoted from paragraph 577 of the report, but he read only the last sentence of that vital paragraph. I shall quote the earlier portions of the paragraph, which are of the utmost importance -

Although it is unusual for a central bank to carry on trading bank activities and to control a savings bank, we consider it desirable that the Commonwealth Bank should do both. Through its trading bank activities it possesses powers of competing with the trading banks which can be exercised as and when required. Similarly, its saving bank activities add to its ability to regulate the volume of credit and enable it to compete, if necessary, with the State savings banks. We are of opinion that the use of its trading bank activities as an adjunct to central banking policy is in keeping with its central bank functions and is to be approved.

That clearly conveys an express recognition by the commission of the necessity for continuing the trading, or general business, activities of the Commonwealth Bank as an essential and integral part of its functions. It cannot mean anything else. However, lest there be any doubt about the matter, I refer honorable members to paragraph 521 of the report, which states -

The present structure of the Commonwealth Bank, consisting as it does of a central bank with trading bank powers and a savings bank, is, in our opinion, essential to the efficient exercise of its functions as a central bank.

In other words, the commission firmly held the opinion that the present structure of the Commonwealth Bank should not be altered. But that structure is now to be altered. Therefore, I say that this Government has virtually torn up the report of the royal commission. Although its members held varying political views and entertained different theories on the subject of financial and monetary reforms, they were unanimous on that point.

This measure will strike two serious blows at the Commonwealth Bank. First, it will strike a blow at the Commonwealth Bank as the central bank, because the General Banking Division at present carries out some of the functions of a central bank, as the report of the royal commission clearly states. Secondly, it will strike a blow at the general business of the bank. The General Banking Division will be separated from the central bank, though not entirely divorced from it because a link will be retained through the Governor and the Commonwealth Bank Board. The General Banking Division will become the Commonwealth Trading Bank and will cease to be part and parcel of the central bank. The honorable member for Fremantle (Mr. Beazley) has quoted striking statements that were made by Sir Ernest Riddle when he gave evidence before the royal commission. Mr. Chifley asked the following question: -

I)o 1 understand that, if you did have funds available you would not make an advance to a customer of another bank nor allow him to transfer his business to you ?

Sir Ernest Riddle replied ;

There is no definite undertaking that we will not do it, but as a general rule we will not.

Later in his evidence, Sir Ernest Riddle confirmed that statement in answer to questions asked by the chairman of the commission, Mr. Justice Napier, Mr. Abbott, and other members. Therefore, it is true that, while the Commonwealth Bank was managed by a board, its General Banking Division was not permitted to compete with the private banks although the board had no authority from the Parliament to restrict the bank’s activities in that way. The statute of 1945 made active competition a duty of the Commonwealth Bank, hut this measure will render the execution of that duty practically impossible.

The clause that the committee is considering, and allied clauses, provide that the Commonwealth Trading Bank shall be established as an entirely new entity. It will take over certain assets and liabilities, but, for practical purposes, it will have to start afresh and make its way against the competition of the private banks. However, it will be hamstrung from the outset. The Government’s proposals for the crippling of the people’s bank in this way are completely opposed to all the findings of the royal commission on the subject of fair competition. This Government does not want to have fair competition between the Commonwealth Bank in its trading activities and the private banks. It wants to hinder the Commonwealth Bank, just as the Commonwealth Bank Board did formerly. There is no doubt that, when this Government talks of promoting fair competition between a great public utility and private interests, it means that it will do everything possible to prevent the successful management of the people’s asset. That is evident, not only in relation to the Commonwealth Bank, but also in relation to other public utilities. We have seen what the Government has done to Trans-Australia Airlines. That is a successful government utility. I do not criticize the rival private airline, but the clear fact is that the private airline was not able to withstand competition from Trans-Australia Airlines. Therefore, the Government intervened in order to make the conditions of competition more favorable to the private enterprise than to the Government airline. It has departed from the idea of true competition and has established a statutory combine or cartel under which everything associated with the activities of the two major airlines is controlled, Routes and fares are now controlled and there is no competition. In this bill, the attack upon the people’s assets is more indirect and perhaps more sinister than it was in the case of the airlines.

The proposal that has been discussed by the honorable member for Macarthur indicates the true intention of many Go- vernment supporters. The honorable gentleman has been publicly supported outside this chamber by the honorable member for St. George (Mr. Graham), the honorable member for Evans (Mr. Osborne), the honorable member for Mitchell (Mr. Wheeler) and other members of the Government parties. They have failed to come forward to support his proposal, but they have clearly revealed their intention to weaken the Commonwealth Bank again. I repeat that this measure will weaken the bank in two ways. It will weaken the central bank and it will weaken the General Banking Division, or the Commonwealth Trading Bank as it is to be known in future.

The TEMPORARY CHAIRMAN (Mr Bowden:

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

Mr WARD:

– I ask for your ruling Mr. Deputy Chairman. If an honorable member involves the Commonwealth in the expense of printing proposed amendments are the proposed amendments then in the possession of the committee? Must they be moved by the honorable member concerned, and can they be withdrawn only with the permission of the committee? If that be not the position, do you consider that this is a matter that might be considered by the House, in order to prevent public money from being wasted upon the printing of amendments which honorable members indicate that they propose to move, but which they do not proceed with? Could some method be evolved by which an honorable member who involved the Commonwealth in the expense of printing proposed amendments could be compelled to meet that expense himself if he failed to proceed with them?

The TEMPORARY CHAIRMAN:

– I do not think there is much substance in the point raised by the honorable member for East .Sydney (Mr. Ward). I rule that a proposed amendment is not in the possession of the committee until it has been moved.

Mr WENTWORTH:
Mackellar

– Whenever I hear the Leader of the Opposition (Dr. Evatt) quote from the report of the Royal Commission on Monetary and Banking Systems, I am reminded of the saying that the Devil cites the scriptures for his own purposes. Paragraph 669 of that report seems to me to be the vital paragraph upon which the remainder of the report depends. It contains the following passage : -

The view of the Commission, as set out in Chapter V., is that the most desirable hanking system in the present circumstances of Australia is one which includes privately-owned trading banks. The system which we contemplate is one in which a strong central bank regulates the volume of credit, and pays some attention to its distribution.

All of the recommendations of the commission were based upon the assumption that the private trading banks would continue in existence, and that there would be no centralized monopoly of credit. But that is not the objective of the Labour party. The objective of the Labour party is to have only one bank. It is easy for the Leader of the Opposition to say, as he has said in this chamber, that nationalization is a dead issue. It is not a. dead issue. It is simply “ playing possum “. The High Court has ruled that this Parliament has no power to nationalize banking by direct legislative action. That is a fact, just as it is a fact that the Labour party tried to do so. When that legislation was before the High Court, Senator Armstrong - I shall be corrected if that is not the right name, but it was a senior Minister of the Chifley Government - speaking at Goulburn said, “ We are ingenious men. There are other ways of doing this besides a simple act if the court should rule the act invalid “. We know that the members of the Opposition are still set on the nationalization of banking. If they cannot achieve it by direct legislative means, they will endeavour to achieve it by indirect administrative means. They have boasted that they will do so. That is in keeping with their character, and it is what they are doing at this moment. The requirement that all banks shall be nationalized has not been removed in any respect from the constitution of their party, to which they are subservient and the mandates of which they are here to carry out. Do not let them hope that they can conceal their real intentions by fair words, by taking a sentence here and a sentence there from the report of the royal commission, and by glossing over the fact that their objective is to destroy the whole of the foundations upon which that report was built.

It is with some regret, a regret that is shared by other honorable members on this side of the chamber, that I say I do not think that this bill will go very far towards preventing the nationalization of banking by administrative action. I, for one, wish it went further. Although I agree that the honorable member for Macarthur (Mr. Jeff Bate) could scarcely have moved his proposed amendment with effect, I join with other honorable members on this side of the chamber in saying that I hope that at some time in the future further action will be taken to erect a bulwark against the administrative designs of the Labour party in relation to the complete nationalization and centralization of banking. I do not say it is possible to give any effective guarantee that the nationalization of banking will not be achieved by administrative action, because nothing in an act of the Parliament can be protected against a future Parliament. The only safeguard against socialism is to keep the Labour party out of office. I think that we should be doing wrong if we were to give the public any impression that this measure will, in any effective manner, protect our banking system from administrative nationalization, which is the basic policy of the Labour party.

The Minister for External Affairs (Mr. Casey) has said that the measure goes a. little way in that direction. It does, but only a very little way. It would be unfair to say that it went no part of the way, but if it aroused in the public mind an illusion that any effective safeguard had been created, it might, to that degree, do harm rather than good. The small protection would not confer a benefit commensurate with the loss occasioned by an illusion- of safety. This measure, good though it is in certain respects - and it will have my support because of those good features - might have provided a greater safeguard against bank nationalization than it actually does. I do not know whether I should go further than that. I have described the measure to myself some times, not as the Commonwealth Bank Bill, but as the Coombs Consolidation Bill. Perhaps that is an unfair criticism in some respects, because the measure will improve the existing situation, but no substantial improvement of the situation is possible by legislativemeans while there is a possibility of the re-election to power in this Parliament of a party that is devoted to the nationalization of the banking system as the first and vital step in its road to complete socialization. I do not want to give any one the impression that I do not think some features of the bill are good, but I want to go on record as having said that I do not think it will confer upon the banking system of Australia much protection against those people who are out to socialize that system by administrative means, having failed to do so by a direct legislative method of attack.

Mr TOM BURKE:
Perth

.- The honorable member for Macarthur (Mr. Jeff Bate) foreshadowed an amendment, the effect of which would be completely to separate the proposed Commonwealth Trading Bank from the Commonwealth Bank. The honorable member, having embarked upon a course, is not lightly diverted from it. In the past, having moved or supported a motion, the honorable gentleman has even voted against the Government which he supports. So from his unexpected action in withdrawing his motion this morning we must deduce that some moves have taken place behind the scenes. After having prepared his proposed amendment in reneod form he had it printed by the Government Printer for presentation to the committee only this morning, he stated that he wanted to withdraw his amendment. Then he said that this would not be the last of the proposal and that he would push on with it until it was accepted.

Without being suspicious, there is only one reason we can deduce for the action of the honorable member. I believe that he has been told by the Government that it would be politically unwise to move his amendment at present. This is not a popular measure. It is a measure at which the people of Australia look with apprehension, and it might have a bad effect, from the Government’s point of view, on the elections which are to be held in South Australia and Queensland on Saturday. It might also have a similarly bad effect on the Senate election which is to be conducted shortly. So the honorable member has been told not to force his amendment to a division and that when the electoral storms blow over and there is peace and quiet again consideration will be given to his proposal. I believe that the honorable member has been prevailed upon by promises of further consideration of this matter. No doubt he has the assurance that if the Government is so fortunate, and Australia so unfortunate, that the Government will be returned to office at the next general election his proposal will be given effect. With elections pending in two States and a Senate election in May the Government does not dare to proceed with the proposal of the honorable member for Macarthur. It is certain that private persons dominate the thinking of this Government. This action will serve as a stark warning to the people of Australia that the Government does not believe the statements that it has made about the Commonwealth Bank but supports the move of the honorable member for Macarthur. There will be a real prospect of the honorable member’s proposal being given effect in the tragic circumstance of the Government’s being given a new lease of power.

The honorable member for Mackellar (Mr. Wentworth) said that the bill did not go far enough. In effect, he supported the honorable member for Macarthur as other honorable members opposite supported him. But the honorable member for Mackellar did not want to frighten the electors. He did not want to tell them his real purpose and that of the Government. He said, in effect, “We might frighten the people of Australia into returning a Labour government. So let us hide our fell purpose, disguise our motives, deceive the people and avoid telling them our real objective because they might elect a Labour government again.” There is no doubt that the people will elect a Labour government at the first opportunity. I invite the Government to test the confidence of the people by holding a general election at the time of the Senate elections in May. Opposition members have sought to find out why the Government has introduced this bill at such a time as this. The bill will do no good. It will do some harm and it foreshadows the real intentions of the Government. One of those intentions is to weaken the Commonwealth Bank’s power to compete with trading banks, and the bill will have that immediate effect although it will not do so over a period of ten or twelve years. The Government’s other intention is to try to deceive the electors. It wants the cry of “ socialization “ again to stampede the people.

The TEMPORARY CHAIRMAN (Mr Bowden:

– Order! This is not a second-reading debate. The committee is dealing with clause 2 of the bill.

Mr TOM BURKE:

– I realize that.

The TEMPORARY CHAIRMAN:

– The honorable member has done sufficient electioneering.

Mr TOM BURKE:

– The honorable member for Mackellar spoke on these matters. When the 1945 banking legislation was before the House I pointed out, as a spokesman for the Government, that the legislation originated in the crisis of the ‘thirties. Had that crisis not occurred and had the Australian Government not been defied by banks, private and government, the legislation would never have been placed on the statute-book. Whilst the trading banks accept the direction of the central bank and accord with Government policy there is no fear of their being nationalized. It is when they refuse to accept that direction that the private banks run the danger of the control that governments have had to impose on them and of even greater controls. The matter was dealt with by G. D. H. Cole, the English economist, who said that the trading banks in England would remain private trading banks as long as they liked to act as if they were nationalized and accept the direction of those competent to decide - the Treasurer and the central bank which, in the

United Kingdom, is the Bank of England. The Australian Labour party has developed its policy over the years. Its purpose has been to ensure that Australia’s natural resources are used and that the Australian economy is developed in such a way as to create the least dislocation and bring about the maximum good. The Labour party has never sought to do anything that would not increase the good of the people, but final assurances are needed. The private banks cannot be traded out of business by the use of section 48 of the Constitution as the Minister for External Affairs (Mr. Casey) alleged. They can be nationalized only by an amendment of the Constitution and there will be no intention to nationalize them if they accord with Government policy.

Sir ARTHUR Fadden:

– Who will decide that?

Mr TOM BURKE:

– The Treasurer was never very alert in his handling of bills in this House and he is getting worse. He asks, “ Who will decide whether the banks accord with Government policy ? “ Obviously, the government of the day will decide that. Unfortunately, the present Government has had the power to make such decisions in recent times and it has ruined the Australian economy and aggravated the problems of both private enterprise and Government enterprise. It is from the actions of governments such as this that private enterprise is in danger. Encouragement to export has been given and then cut off. Finance has been expanded and then contracted. The fits and starts of this Government’s policy have been the greatest blow ever delivered to private enterprise.

The TEMPORARY CHAIRMAN:

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

Mr ANTHONY:
PostmasterGeneral and Minister for Civil Aviation · Richmond · CP

– The speech of the honorable member for Perth (Mr. Tom Burke) is notable for its omissions rather than for its content. He said a great deal, but he did not mention the fact that the objective of the Labour party, as confirmed by the la3t triennial conference of the party in Adelaide last January, is the socialization of industry, production, distribution and exchange, and the socialization and exchange, and also of banking. The triennial conference did not alter that objective by one iota, so it still stands as the Labour party’s policy.

Mr WARD:

– Hear, hear !

Mr ANTHONY:

– I rather admire the honorable member for East Sydney (Mr. Ward) because he is one of those honorable members opposite who still proclaim the real objective of the Labour party, whilst the Leader of the Opposition (Dr. Evatt) and the honorable member for Fremantle (Mr. Beazley) try to disguise it in words. I admire the honorable member for East Sydney for being at least consistent. The honorable member for Perth has said that the banks arc safe now because of the Australian Government’s lack of constitutional power to nationalize them. He did not say, however, that the triennial conference df tb, Labour party, to which I have referred, carried a resolution to the effect that if Labour gets back into office it will hold h referendum to amend the Constitution -

To provide such powers as are necessary for effective government in the interests of the people.

That would mean, in effect, that all the instruments of propaganda-that are available would be used by the Labour party, if it regained office, to persuade the people to amend the Constitution so as to permit the nationalization of banking. Constitutions can be altered by persuasion. If the Labour party succeeded in having the Constitution amended it would have a charter as wide as the seas to do anything that it liked with the banks or with any industry. In order to camouflage the Labour party’s objective, the honorable member for Fremantle, the schoolmaster of the Labour party– ‘

The TEMPORARY CHAIRMAN (Mr Bowden:

– Order! I remind the Postmaster-General that I prevented the honorable member for Perth from indulging in a second-reading speech at this stage. The statements that the PostmasterGeneral is making have no relation to the clause now being considered by the committee. Certain statements are made in an amendment, to which an answer is allowed to be given, but beyond that I intend to ask the committee to adhere to the subject-matter of the clause, or we shall never get through. I shall therefore rule against any continuation of propaganda or electioneering speeches.

Mr ANTHONY:

– Very well, Mr. Temporary Chairman, I accept your ruling, but I considered that it was necessary to reply to the statements that the honorable member for Perth had been allowed to make. This clause provides for the separation of the functions of the Commonwealth Bank into two divisions, to be carried on by the central bank andthe Commonwealth Trading Bank. So far as we on this side of the chamber are concerned this is not a matter of protecting the trading banks or of injuring the Commonwealth Bank. It is a matter of providing freedom for fair competition in the industries and enterprises of the nation. It is meant not only to preserve the trading banks, but also to preserve the trading bank activities of the Commonwealth Bank. In the last two or three years the subsidiary divisions of the Commonwealth Bank have shown an improvement of business. Under this Government advances made by the bank’s Rural Credits Department have increased from £14,700,00Q in 1950 to £39,300,000 in 1952. That increase is a clear indication that no restriction has been placed on the Commonwealth Bank to prevent it from doing this most important class of business. It is an adequate answer to people who say that the Government has endeavoured to hamstring the bank.

I am an admirer of the Commonwealth’ Bank. I believe that it has performed a most useful service for Australia, but I believe equally that the trading banks have performed an extraordinarily useful service for the nation, and that the people of this country ought to have a choice in relation to who is to be their financier when they require financial accommodation. It could be a most serious thing if there were only one authority that a. person might approach for loan accommodation and if rejection by that authority of the application meant that the last door had been closed. The very essence of freedom is that there should be a choice.

Mr WARD:

– All this is a bit wide of the subject-matter of the clause.

Mr ANTHONY:

– No, it is not. I am talking about the trading bank activities of the Commonwealth Bank. It is essentia] that every person should have an option of going to another bank if the first bank that he has approached for financial accommodation refuses to make it available. The clause provides for the Commonwealth Bank to be divided into two sections, one of which will be the central bank and the other the Commonwealth Trading Bank, both of which will be controlled by the Commonwealth Bank Board. It ought to be clear to everybody that it is not the function of a central bank to engage in day-to-day trading activities with retail stores, manufacturing industries, farmers, and so on. The job of the central bank is to be there as a bulwark of the credit of the country, so that if any bank should get into difficulties through its assets not being liquid enough at any particular time, it would have available to it the resources of the central bank to help it to meet its obligations or overcome its temporary problems. This bill will give effect to this function of the Commonwealth Bank. On the one hand will be the central bank and, on the other, completely separate from it, will be the Commonwealth Trading Bank, which will, operate on equal terms with private trading banks. 1 do not say that it will operate on less advantageous terms. The terms will be competitive terms. If the Commonwealth Trading Bank wants business it will have to go out after it as the trading banks have to do. That, indeed, is the essence of enterprise in this country. When a housewife does not like the meat supplied by one butcher she can go to another butcher, but if there is no other butcher near, because the law prohibits one from operating in the vicinity, then she has to take what the only available butcher cares to sell her.

The TEMPORARY CHAIRMAN.Order ! The Minister’s time has expired.

Mr CREAN:
MELBOURNE PORTS, VICTORIA · ALP

-In addressing myself to clause 2 of the bill, I note how we are now departing from the essential unity that formerly characterized the Commonwealth Bank in all its activities. The degree of that departure can be gauged by reference to section 9 of the Common wealth Bank Act, as it appears in the 1945 legislation. That legislation was amended recently by the act which reconstituted the Commonwealth Bank Board, thereby intruding a second body, which was given power to determine policy into the affairs of the bank. The appointment of the Commonwealth Bank Board segregated the functions of the bank, in the ordinary sense, from those of the Commonwealth Savings Bank. The legislation now before the Parliament attempts to go further. The clause with which we are dealing contains the kernel of the change, because it is the one that proposes to set up the new section, the trading bank section of the Commonwealth Bank, and to segregate it from the Commonwealth Bank as a central entity.

To date, nothing has been suggested by the Government to indicate how the functioning of the bank as a trading bank has proved unfair in its competition with the private trading banks. If as the Government claims, it wishes to put the bank on the same footing as the private trading banks, in my opinion the Government should seriously consider the wording of proposed new sub-section (3.) of section 9. I shall read those words in order to indicate that the Commonwealth Bank, in its trading functions, is to be asked to do things that the private trading banks are not asked to do. In that sense, at least, there will be discrimination. The relevant words of the sub-section are as follows : -

The Board shall, in determining the policy of the Trading Bank, determine that policy in such a manner as not to conflict with the policy of the Commonwealth Bank in relation to the Commonwealth Bank acting as. a central bank.

So far, no evidence has been adduced to indicate that, in the past, conflict arose between the trading section of the Commonwealth Bank and the central banking functions of the bank, but if it is envisaged, that conflict may arise, and if this proposed change is to be made in the name of fair competition, why does not the Government go farther and give to the Commonwealth Bank Board overriding powers as far as the private trading banks are concerned if, in the opinion of the board, such banks act in a manner which conflicts with the policy of the

Commonwealth Bank acting as a central bank? To use the simile adopted by the Postmaster-General (Mr. Anthony), if the Commonwealth Bank determines that certain advances shall not be made by its trading bank division on the ground that such advances will conflict with the policy of the central bank, is it right, from the point of view of the community, for persons who are refused advances in those circumstances to be able to go farther along the street to the National Bank of Australia Limited, the English, Scottish and Australian Bank Limited or the Bank of New South Wales, and have implemented a policy which the Commonwealth Bank considers to be in conflict with its policy as a central bank? I suggest that we should be logical about this matter. If there can be danger of conflict in relation to the trading bank functions of the Commonwealth Bank, surely there can also be danger of conflict in respect of the trading functions of the private banks. Yet this legislation makes no attempt to regulate that kind of thing.

The. Government claims that the Commonwealth Bank, as a trading bank, is to be placed on the same footing as every other bank. That is not true. It is hypocrisy to assert that it is so. An honorable member opposite, who is a little more courageous than his colleagues, has gone so far as to circulate amendments to the effect that in his opinion this legislation does not go far enough. Honorable members on this side of the chamber feel that the legislation goes too far. The Government says that the bill will really do nothing but place the private banks and the Commonwealth Bank on an equal footing as far as competition is concerned. The members of the Opposition are suspicious of that claim and suggest that a careful reading of the words of this clause should be made. If that is done, it will be seen that the clause proposes to regulate the actions of the Commonwealth Bank in its trading division. No evidence has been adduced to indicate that, in the past, the Commonwealth Bank has suffered because it has not previously had this split personality. The Government proposes that henceforth the two sections of the bank shall think in separate terms instead of as an entity. After all, in the past the Common- wealth Bank Board did not have to say, when implementing the general policy of the bank, “Is this a central bank function, a trading bank function or a Rural Credits Department function “ ?

The more the Government attempts to make this kind of dichotomy and to intrude the powers of the board between the various functions of the bank, the more difficult will it become to secure the essential co-ordination that is necessary in a country such as Australia. If the great words of the Commonwealth Bank Act to be implemented, banking must function in the interests of the people as a whole, not only in the interests of a few individuals.

I challenge the Government’ to show that it is being consistent, at least in connexion with this proposed new subsection (3.) It is evident that the Government proposes to be most inconsistent in that it will apply a sanction to the Commonwealth Bank, as a trading bank, which does not apply to the private trading banks. It is, therefore, hypocrisy to suggest that the separation is to be made in the interests of fair competition. I suggest that the Government should seriously consider redrafting or deleting this sub-section, because it has never been demonstrated that there has been conflict between the two sections of the bank. If it is feared that conflict may occur in the future, surely such conflict will not be restricted merely to the trading section of the bank but could also apply to the private trading banks. Perhaps another section should be added to the bill with the object of regulating the functions of the private trading banks, so that if,, in the opinion of the Commonwealth Bank Board, the policy being pursued by those banks conflicts with the policy of the Commonwealth Bank as a central bank, the statute will also be obligatory as far as they are concerned. Consistency at least would be achieved if the same set of conditions applied to the two sets of bankers.

The TEMPORARY CHAIRMAN (Mr Bowden:

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

Mr WILSON:
Sturt

.- I support the bill and the clause now before the committee because I am opposed to the Labour party’s policy of the nationalization of banking. The bill, and this clause, will make it more difficult for a future government to nationalize banking by indirect means. I have always believed that the people should be free to choose where they will transact their banking business. There should be fair and free competition between the trading activities of the Commonwealth Bank and the private trading banks. I believe in private enterprise, and I believe that this country will progress just as long as private enterprise is allowed to remain active. I remind honorable members that 75 per cent, of the people who are employed in Australia are employed by private enterprise. The whole of the taxation paid in this country is paid by private enterprise, and it is out of that revenue that our great social services are maintained. Therefore, it is obvious that we should do everything possible to prevent people who have designs on the system of private enterprise from carrying out their socialistic and nationalistic schemes.

The TEMPORARY CHAIRMAN.Order ! I have already given a ruling that in this debate honorable members must adhere strictly to the clause before the committee. The clause now before the committee deals with the powers of the Commonwealth Bank Board in relation to the Commonwealth Trading Bank.

Mr WILSON:

– The clause provides for the separation of the trading functions of the Commonwealth Bank from the functions of the central bank. The Government, by separating the trading activities from the other functions of the Commonwealth Bank and placing them under a separate authority, will make it more difficult for a future government to introduce a policy of nationalization by indirect means. Therefore, the object of this clause is to ensure free competition, and to protect private enterprise from nationalization and socialization. I personally wanted to see even greater safeguards provided than are incorporated in this measure, but I do perceive that this bill will go a long way towards protecting private enterprise from those who are determined to socialize the industry and commerce of this country.

During the last 30 years there has been a great development in the credit structure of almost every country of the world. Central banking is of fairly modern vintage, and it has developed, as have most of our -great reforms, stage by stage. I believe that the central or reserve bank should be a banker’s bank, designed for the sole purpose of regulating the flow of currency and directing that currency into proper channels. The first objective of a central bank should be to gain the complete confidence and trust of the people and its customers. The customers of the central bank are the trading banks, and will include the proposed Commonwealth Trading Bank, the State trading banks and the private trading banks. I do not believe that there will be complete confidence between the central bank and the trading banks unless the Commonwealth Trading Bank is separately incorporated - and that is provided for in this measure - and unless the Commonwealth Trading Bank is controlled by a separate authority. However, I consider that we shall have to provide that the Commonwealth Trading Bank will have its own board of directors which will be entirely separate and distinct from the board of directors of the central bank. From the time that situation is brought about we shall get complete confidence and trust, and the whole system of federal and private banking will work as an integrated whole.

This bill will provide many safeguards against future nationalization. It will prevent the Commonwealth Trading Bank from wiping out its competitors by entirely unfair means. I believe that the ideal banking system for Australia is one in which the Commonwealth and the State trading banks and the private trading banks will all carry on business under fair and just competition, all controlled by separate boards of directors and all separately incorporated. Under such a system the people would have a choice of going to the Commonwealth Trading Bank, a State trading bank or a private bank. We would preserve the system of private enterprise and free competition and preserve also a very important right to the individual - the right to choose his own bank. That is the privilege that the Labour party tried to take away from the people, and it will, quite obviously, again attempt te take it from the people if it ever again achieves power in this country. Even if we cannot prevent a socialist-minded government from nationalizing the banks, we can make it as difficult as possible. This measure deserves the support of every honorable member on this side of the House, because it makes it very difficult for a socialist-minded Treasurer to bring about the complete socialization or nationalization of the banks. In the future a Labour Treasurer will not be able to use the Commonwealth Trading Bank as an instrument to destroy the private banks in the way that he could have used it under the present act. It is one thing to attempt to introduce measures through democratic parliamentary legislation, but it is quite another thing to carry out a socialist policy without legislation at all. We must endeavour to prevent a future government from carrying out its socialist policy, not according to the will of the people or by the democratic means of parliamentary legislation, but by the dictatorial means of a socialist-minded Treasurer exercising power under a certain act to destroy any competitors with the government organization.

The TEMPORARY CHAIRMAN:

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

Mr JOSHUA:
Ballarat

.- I desire to devote the time that I have at my disposal to an examination of proposed new sub-section 3 of section 9, which was clearly and correctly designated by the honorable member for Melbourne Ports (Mr. Crean) to be the kernel of the bill. Undoubtedly, it is. The objectives of the Commonwealth Bank are now entirely consistent with those objectives that were laid down by the Royal Commission on Monetary and Banking Systems as the proper functions of a central bank. They were quoted by the honorable member for Sturt (Mr. Wilson) and also by the honorable member for Mackellar (Mr. Wentworth). The royal commission stated, in fact, that in its opinion, a central bank was one that controlled the volume of credit and paid some attention to its distribution. Later it stated that it considered that a trad ing bank should be an integral part of tie central bank. Obviously a trading bank is a positive instrument for carrying out the policy of the central bank. If the central bank has to pay some attention to the distribution of the volume of credit, it must have a method of doing so. Honorable members should get down to earth a.nd be practical. If the central bank, which carries out the policy of the Government, desires to encourage industry or a certain section of the community, it should do so. That could be done by exhorting the trading banks to do all that was best in the interests of the community. It is easy to conceive that certain types of business might not be attractive to the trading banks. What could the central bank do in such a case to implement the Government’s policy? It must swing into action and state that if the proposition is unattractive to the trading banks, the Government’s bank will make the advance on such terms as the Government wishes. The general division of the Commonwealth Bank is the positive instrument for carrying out the wishes of the Government.

Mr Anthony:

– It would be compelled to undertake unattractive business?

Mr JOSHUA:

– If the trading banks did not wish to take the business because it was unattractive to them, the people’s bank should make the required assistance available. By their own free choice, the people will accept the opportunity that is thus open to them through the people’s bank. I direct the attention of the committee particularly to proposed subsection (3.) of section 9 of the bill and I shall read it again. It is so important that we should keep it in mind continually. It states -

The Board shall, in determining the policy of the Trading Bank, determine that policy in such a manner as not to conflict with the policy of the Commonwealth Bank in relation to the Commonwealth Bank acting as a central bank.

Can anybody imagine the trading bank section having any other policy than the policy of the central bank? That could not possibly happen. The Governor of the Commonwealth Bank is responsible for co-ordinating the policy of the bank. If the manager of the Commonwealth Trading Bank told the Governor that he was following a different policy, he would be directed to put it into line with the policy of the Commonwealth Bank. The policy of the Commonwealth Trading Bank and the Commonwealth Bank as the central bank are completely inseparable. The implication in the section to which I have referred that there might be some difference of policy is absurd. This measure is one of the poorest pieces of legislation that has ever been submitted to the Australian Parliament. That is the - reason why it has caused confusion and a split in the ranks of honorable members on the Government side. The honorable member for Petrie (Mr. Hulme) has said that the trading bank should be separate and have its own method of government.

Sitting suspended from 12.45 to 2.15 p.m.

Mr JOSHUA:

– There cannot be any conflict of policy between the Commonwealth Trading Bank and the Commonwealth Bank because, in view of the findings of the Royal Commission on Monetary and Banking Systems, the conception of the Commonwealth Bank to which we and, I believe, every other honorable member subscribe, envisages the control by the bank of the volume of credit issued and some supervision of its distribution. The bank must use its trading bank activities as an instrument for distributing credit. The objects and policies of the Commonwealth Trading Bank must be in line with those of the Commonwealth Bank itself. It is because of this implied conflict that confusion exists in the minds of Government supporters about this bill. Almost every one of them has repeatedly expressed a desire that additional provisions be inserted in the measure. The honorable member for Macarthur (Mr. Jeff Bate) circulated a proposed amendment the design of which was to separate the trading activities of the bank from its other activities and to give the Commonwealth Trading Bank a different charter and different objectives from those of the Commonwealth Bank. Upon reflection the honorable member somewhat hastily decided not to submit the amendment. The honorable member for Petrie (Mr. Hulme), in his second-reading speech, also referred to the need for the complete separation of the trading activities from the other activities of the bank. He said that he could not see how both could exist side by side. The honorable member for Sturt (Mr. “Wilson) contended that the Commonwealth Trading Bank should have its own board of directors. Obviously Government supporters realize that the legislation is bad and that it will not succeed. Of course it is bad. Indeed, it is the poorest piece of legislation that has ever been brought before the Parliament. The conception of a trading bank division of the Commonwealth Bank that is pretty clearly in the minds of Government supporters is a division devoted to profit making rather than the great objectives of a people’s bank. They cannot conceive of any other objective. Our conception of the Commonwealth Bank is an institution that controls the volume and distribution of credit. It can best do that by ascertaining the volume of credit which the people require. If they require advances in certain parts of the country for certain purposes and at certain rates of interest, it is the duty of the bank to see that they get it as far as it is within the power of the Commonwealth Bank Board to provide it. The bank must be a positive instrument for carrying out Government policy. There are many negative instruments for the maintenance of our economy on a sound level, such as advances and capital issues controls; but we must also have positive instruments for giving effect to Government policy. How can we prevent the establishment of a milk bar economy unless we have positive instruments to enable us to do so? The trading activities of the Commonwealth Bank provide the necessary positive instrument for that purpose.

The TEMPORARY CHAIRMAN:

– Order ! The honorable member’s time has expired. Is it the will of the committee that clauses 2 to 6 be considered together ?

Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– I thought that you, Mr. Temporary Chairman, would have invited the committee to consider clauses 1 to 6 together.

Dr Evatt:

– The only reason why that procedure was not followed was because of the foreshadowed amendment that had been circulated in the name of the honorable member for Macarthur (Mr. Jeff Bate), which related only to clause 2. I am sure that it will meet with the convenience of the committee if clauses 2 to 6 are considered together.

Clauses 2 to 6 - by leave - considered together.

Mr BIRD:
Batman

.- I oppose the provisions of clauses 2 to 6 for a variety of reasons. I oppose clause 2 primarily because its intention is to split the Commonwealth Bank into two parts. Such a move can be characterized only as an attempt to weaken the structure of the bank. I was very interested to hear the remarks made by the honorable member for Macarthur (Mr. Jeff Bate) in support of the circulated amendment which he failed to move. The only sin of which the honorable member was considered guilty by the Government was that of rashness in foreshadowing an amendment at a time when the discussion of the measure had been restricted by the guillotine. This is not the first occasion on which the Government will be able to get its own way after two bites of the cherry. It is the intention of the Government to rush this bill through and, if it gets away with it, to give effect to its true purposes by the introduction of a later measure. We had an example of that practice in connexion with the abolition of the land tax. The Government did not abolish the land tax in one fell swoop. First, it proposed to increase the statutory exemption from the tax from £5,000 to £S,750. During the discussion that ensued, supporter after supporter of the Government urged that the tax be completely abolished, but no move was made by the Government to do so until later when legislation was introduced into the Parliament to that end. The Government is following a similar practice in relation to the legislation now before us. It is merely angling for the support of the people at the forthcoming Senate election and if, by some miracle, it obtains that support, it will undoubtedly introduce amendments to the legislation which will incorporate the amendment foreshadowed by the honorable member for Macarthur which by then will have become the accepted policy of the Government. The bill as it is drafted is merely an indication of things to come. The Government is now only taking its first bite of the cherry. If its candidates should miraculously obtain a majority of the votes at the forthcoming Senate election it will take a second bite by introducing an amending bill which will embody the amendment foreshadowed by the honorable member for Macarthur. Many courageous Government supporters have openly stated that, in essence, they support the contentions advanced by the honorable member for Macarthur, but they have been persuaded to hold their hand by the wise old heads sitting behind the Government who realize that at this juncture such a move would be politically unwise. Consequently they are prepared to agree to clause 2 as it is printed.

The provisions of clause 2 ‘will serve no useful purpose as far as the Commonwealth Bank is concerned. Government supporters have stated that these provisions will prevent the Commonwealth Bank from competing unfairly with the private banks. Since the measure was introduced, I have waited anxiously to hear those honorable members cite one concrete instance in which such unfair competition has occurred. Having regard to their spontaneous desire to abolish the present set-up, I should have thought that they would be able to support their arguments by digging up at least one instance in which the Commonwealth Bank, because it is also the central bank, has acted to the detriment of the private trading banks. So far, they have failed to do so. In view of that fact, one cannot believe that the bill has been introduced for the purpose for which Government supporters have indicated. On the contrary, this measure represents, in fact, the first nail in the coffin of the trading bank facilities of the Commonwealth Bank; and I have not the slightest doubt that if the Government parties obtain a majority at the forthcoming election for the Senate they will waste no time in driving more nails into the coffin. The honorable member for Sturt (Mr. Wilson) claimed that these provisions would make it more difficult for a future Labour government to nationalize the banking industry. At present, if the people desire that the industry should be nationalized they can approve, at a referendum, a proposal to alter the Constitution to enable the government of the day to take such action. The Australian Labour party, as a democratic party, will always abide by the decisions of the people. But this measure cannot in any way be regarded as being a means of preventing the nationalization of the banking industry by a future government. It has been introduced deliberately for the purpose of commencing the destruction of the Commonwealth Bank as a trading bank. The Government hopes by a gradual process to destroy the strength and prestige of the bank as a trading bank until, ultimately, it can be said that the bank is not serving any useful purpose and, consequently, should be abolished. That is the long-range plan of the Government in introducing this measure.

The Australian Labour party contends that the Commonwealth Bank was established primarily in. order to ensure that effect shall be given to economic policy in the interests of the community as a whole, and, as it is at present constituted, the bank possesses the requisite power to enable it to fulfil that task. The separation of the trading bank functions from the central bank will render the central bank impotent. The latter will be unable to implement central bank policy effectively if it is deprived of its trading bank activities which now provide it with a means of implementing such policy directly. We know that in the past the private banks have, in concert, adopted common practices and policies with respect to the making of advances and the release of credit through overdrafts. It could quite easily happen that at some time in the future, the common policy of the private banks could be diametrically opposed to that of the central bank. In such circumstances, the latter would be unable to give effect to its own policy if it were prohibited from engaging in trading bank activities. There can b?. no doubt that the Commonwealth Bank has proved to be fully effective under the present set-up. This measure can do nothing but impair its effectiveness in that respect. In any event, I regard with suspicion any comment that members of the Liberal party make with respect to the Commonwealth Bank. Down through the years, they have’ damned it with faint praise. They have accepted the fact of its existence because they realize that the people of Australia support it wholeheartedly. Government supporters in, their heart of hearts detest the institution, and are prepared to resort to any method to destroy it short of perpetrating an act of cold-blooded assassination. The committee should reject the clauses now before the Chair and thus enable the bank to continue to operate in the public interest. It is a monument to public enterprise and is doing a first-class job for the community.

The TEMPORARY CHAIRMAN:

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

Mr WHEELER:
Mitchell

.- I shall address myself to proposed new section 21 which is covered by clause 6. It deals with the profits of the proposed Commonwealth Trading Bank. I regret that I shall disappoint the honorable member for Batman (Mr. Bird), who complained that no Government supporter had produced one instance of unfair competition on the part of the Commonwealth Bank with the private trading banks. Clause 6 makes provision for the distribution of the net profits of the trading bank. Normally, the net profits of any commercial venture are generally referred to “net profits after taxation”, and such profits are arrived at after all claims on its income have been met. Apart from costs of materials and wages, the usual manufacturing and trading costs and administrative charges, the heaviest charge against the income of an ordinary business concern is taxation. It is significant that this clause in dealing with the net profits of the trading bank does not refer to such profits as “net profits after taxation”. Therefore, the Commonwealth Trading Bank is still to be left completely free of tax, particularly company tax. I shall at once anticipate the argument which honorable members opposite, no doubt, will be quick to advance to the effect that a tax upon the trading bank would be a tax upon the Government itself because any profit earned by the bank would be paid to the Government as provided for under the clause. Whilst that may be so, private trading banks, nevertheless, are obliged to pay heavy company taxation. Therefore, if the Commonwealth Trading Bank is to he exempt from company tax, it is idle for any honorable member to say that in such circumstances there can be fair competition between it and the private trading banks. Any concern that enjoys taxfree privileges must have a tremendous advantage over competitors which are obliged to pay tax.

Neither this Government nor any previous administration objected to the levying of tax in respect of the Government’s majority shareholding in Amalgamated Wireless (Australasia) Limited, or its shareholding in Commonwealth Engineering Company Limited. It is also interesting to note that Trans-Australia Airlines, which is completely owned by the Government, is obliged to pay taxation as is its main competitor, Australian National Airways Proprietary Limited. I accept the fact that under recent legislation Trans-Australia Airlines was obliged to pay tax as a means of placing that organization on equal trading terms with private airline companies. I believe that the same principle should have been applied under this measure to the trading bank activities of the Commonwealth Bank, and insofar as the bill fails to do that, it gives an unfair advantage to the Commonwealth Bank over its competitors. I should have thought that if the Government followed the right course in obliging Trans-Australia Airlines to pay tax, it should, in order to be consistent, make provision under this measure to tax the trading hank activities of the Commonwealth Bank and so place the bank cn the same basis as the private trading banks. Last night, the honorable member for Grayndler (Mr. Daly), in his usual tedious and inconsistent manner, pointed to the profits of the private trading banks. I trust that his socialistic outlook will permit him to be sufficiently logical to recognize that before those profits were arrived at the income of the private trading banks was subject to taxation, that is, even before the shareholders received any return on their investments in those institutions. For example, last year, the Bank of New South Wales, to which the honorable member fondly referred, paid in tax the sum of £1,750,000 which was two and a half times greater than the amount that was distributed to shareholders of that bank. The National Bank of Australasia paid £900,000 in taxes, or approximately double the amount of £470,000 distributed as dividends to the shareholders. If we proceed along this course, we find that the dividends received by shareholders are also taxable, and that the private banks and their shareholders, so far from being the villains in the piece working against the democracy, as socialist members opposite contend, contribute in no small degree to the welfare of the community. If honorable gentlemen opposite, in conformity with their true socialist feelings, believe in the welfare state, I ask them, how they anticipate that they will be able to introduce their socialist order when there is no taxpayer. Surely they do not believe that Australia is another Utopia, where everybody gets something for nothing, and nobody makes any contribution by way of taxes or other means towards the benefits.

This Government might well ponder how it expects . private enterprise to flourish in competition with governmentsponsored enterprises which, from the outset, have such a favorable advantage because they are not obliged to pay taxes. It remains to be seen whether it is possible to devise any conditions under which privately owned concerns can compete with government-owned institutions. Competition can be fair only when the government of the day is determined to see fair play; but fair play can never happen under a socialist administration. The socialist enterprises usually find the path of free competition too tough for them, so they are forced to use their own powers, associations and contacts with the Government to hamper private competitors, and, in time, put them out of business. In that direction, the Commonwealth Bank has certainly had a most favorable start on its private competitors.

Then again, the Commonwealth Bank is not obliged to pay income tax or rates. It is true that it is the custom of the bank to make a voluntary contribution to local government authorities, but I point out that there is a marked difference between a contribution on a voluntary basis, which may be suspended at the will of the contributor, and a definite obligation to pay rates. Such an obligation should be placed upon the Commonwealth Bank. It is idle to talk of free competition when those circumstances exist. I consider that the same policy should be applied in this matter to the Commonwealth Bank as was applied to TransAustralia Airlines under the Air Navigation (Charges) Act 1952. TransAustralia Airlines is obliged to pay not only income tax but also sales tax on its trading, in common with its private competitors.

Mr Bryson:

Mr. Bryson interjecting,

Mr WHEELER:

– We are not at a football match now. I am endeavouring to state my case as clearly and fairly as I can. The Commonwealth Bank, in the computation of its net profit, does not pay taxes. I have cited the example of the Bank of New South Wales, which paid taxation amounting to £1,750,000 last year, and the National Bank of Australasia, which paid in tax double the amount that it distributed to its shareholders as dividends. In my view, this state of affairs does not approach the essence of free competition. A system of healthy competition would ensure that every bank would have its chance, on its merits, to get whatever share of business was available from the public. I believe that only the true spirit of competition can give the public their requirements, which are service and efficiency. My conception of free competition does not embrace a system whereby one concern arrives at a net profit by the easy route of not paying taxes, whilst its competitor is obliged to reach the same goal by the hard way of paying taxes.

Mr CLAREY:
Bendigo

.- The speech of the honorable member for

Mitchell (Mr. Wheeler) amazed me. I thought that he would endeavour to place a correct construction on Part IV. of the principal act, and would state the real intention of the legislation. However, he has chosen to tell his own story that places the whole position in an improper light. Under this amending legislation, the amount of taxation which is being paid by the Commonwealth Bank to the Government exceeds the taxes that are being paid by the trading banks. In actual fact, a greater burden is placed upon the Commonwealth Bank by this legislation than is placed upon the private trading banks with which it is engaged in competition. The Commonwealth Bank and the private banks meet their tax obligations from their profits. The tax liabilities of the private banks are between 7s. and 9s. in the £1 on the profits made from their trading activities. Under this amending legislation, the Commonwealth Bank will be shackled and hamstrung in that it will be compelled to pay from its profits an impost at the rate of 10s. in the £1.

We have heard a great deal in the course of this debate about fair trading and the necessity to ensure the maintenance of fair competition. We have to bear in mind that this legislation will impose considerable hardship upon an institution that is to become a small bank compared with the long established and soundly entrenched private trading banks. The latest report of the Commonwealth Bank of Australia issued on the 30th June, 1952 indicates that the capital of the bank is. £4,000,000 and its reserve fund £2,405,000. In other words, its funds for trading purposes amount to £6,400,000. Yet that bank has to compete with a number of trading banks, the combined shareholders’ funds of which for the purpose of trading and competing with the Commonwealth Bank are £70,000,000. However, honorable members opposite speak of the necessity for legislation to enable a group of financial institutions with capital amounting to £70,000,000 for trading purposes to compete fairly with the Commonwealth Trading Bank with a capital of £6,400,000. In addition, a regular impost on profits of 10s. in the .£1 is to be paid to the national debt sinking fund. In those circumstances, the statement of the honorable member for Mitchell that the private trading banks will suffer unfair competition from the Commonwealth Trading Bank is a clear indication that he either does not understand the bill, or is deliberately placing upon it a construction that is not true and correct.

Much has been said in this debate about the functions of the Commonwealth Trading Bank. I think the honorable member for Petrie (Mr. Hulme) expressed admiration of the provisions of the bill in relation to that matter. Proposed new section 18 (1.) reads as follow : -

It shall be the duty of the trading bank to develop and expand its business.

The honorable member claimed that as a consequence of such a provision, the Government was doing something in respect of the Commonwealth Bank that no previous administration had attempted, and that that was an indication of the Government’s intentions towards the bank. The inclusion of those words will destroy the whole purpose of the Commonwealth Bank. Its only duty will be to extend its business; but, in section 8 of the principal act, the functions of the bank are described in this way -

It shall be the duty of the Commonwealth Bank, within the limits of its powers, to pursue a monetary and banking policy directed to the greatest advantage of the people of Australia, and to exercise its powers under this act and the Banking Act 1945, in such a manner as, in the opinion of the bank, will best contribute to -

the stability of the currency of Australia ;

the maintenance of full employment in Australia; and

the economic prosperity and welfare of the people of Australia.

This legislation will separate the trading bank entirely from the Commonwealth Bank of Australia, and the Commonwealth Bank, instead of having the very important function of assisting in the development of Australia, ensuring full employment, and carrying out the other obligations to which I have referred, will be charged only with developing and expanding its business. That apparently is a matter on which honorable members opposite take great credit to themselves. All I have to say that if the bank does not develop and expand its business a little more rapidly than it has done during the last three years, its future will be very . bleak indeed, because practically no expansion has taken place under the regime of this Government.

The number of branches established in the last three years has been negligible.

Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– The Government has nothing to do with that. That is a matter of bank policy.

Mr CLAREY:

– Section 9 of the principal act empowers the Treasurer to do this and that, and to override the board if he so wishes. Surely, if the Treasurer has power to veto policy decisions of the Commonwealth Bank Board, and to give instructions to the Governor about the policy of the bank, honorable members opposite can gain little by telling us that the Government cannot insist, through its Treasurer, that a certain policy shall be given effect. We have heard a lot in the last couple of days about the necessity for fair competition between the General Banking Division of the Commonwealth Bank and the private trading banks, but up to the present nobody has shown that, as a consequence of the existence of the Commonwealth Bank in its present form, and particularly the association between its trading bank and central bank activities, difficulties have been put in the way of the private banks. There is no evidence that the profits of the private banks have diminished, that their business has contracted, or that their activities have been prejudiced in any way. Indeed, all the investigations that one is able to make indicate that the private banks are flourishing, their assets growing, and their business expanding. Yet we are told that we must pass this legislation in the interests of fair competition ! In what way has competition been unfair in the past? In what way have the private banks suffered as a consequence of the activity of the Commonwealth Bank? Until the Government can answer those questions it cannot justify this legislation. Everybody is eager to see the Commonwealth Bank progress. It has progressed in the past in spite of very fierce competition from the trading banks.

The TEMPORARY CHAIRMAN:

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

Mr WARD:
East Sydney

.- As this debate proceeds, it becomes more and more evident that Government supporters are concerned not with whether the new system will be of benefit to the community generally, but with whether the private bankers are being treated fairly. At least that confirms an opinion that has been held and expressed by Labour members for many years. We have always believed that the anti-Labour parties represent private financial institutions in this Parliament and merely mouth phrases designed to capture votes when they speak of the welfare of the community. Throughout this debate, not one honorable member opposite has been able to show that the public will benefit as the result of the change proposed by the Government. In fact, the honorable member for Sturt (Mr. Wilson) made a remarkable statement. He said that the Government’s purpose, and of course his purpose^ was to make things more difficult for a future socialist government. In effect, he intends, by the use of powers that the Government possesses, to make it more difficult in future for the will of the people to be given effect to in this Parliament. I thought that the Government parties believed in democracy. If this is a democracy and the people decide at the ballot-box that they want to be governed by a progressive Labour party, to which some honorable members opposite refer as the “ socialist party “, no member of the Government side has any right to put obstacles in the way of the will of the people being given effect to. Therefore, the argument advanced by the honorable member for Sturt was very peculiar indeed.

Mention has been made of the need to permit people to choose their own banker, but of what real value is that choice when all the private banks are working to a common policy? My criticism of the Commonwealth Bank is that in the past, it has not taken advantage of its position to give more favorable treatment to various sections of the community. I am more interested in the benefit that the people generally could get from a progressive banking policy than with how this measure will effect the dividends of the private banks. There is no necessity for the Commonwealth Bank to earn profit? because all profits merely go back to Commonwealth revenue or build up the bank’s reserves. There are no private shareholders in the Commonwealth Bank, and therefore that insti tution does not have to worry about paying dividends as the private banks do. 1 am sure that most Australians would be interested to hear Government supporters say whether they believe that the facilities of the Commonwealth Bank should be used, for instance, to finance the construction of homes at a rate of interest sufficient only to cover the cost of issuance and administration, and certainly not exceeding 1 per cent, or 1& per cent. The Commonwealth Bank could do that, but it is not permitted to do it.

I am not very much concerned about whether there is to be one bank board or two hank boards. The present Commonwealth Bank Board is dominated by individuals who seek to favour and protect the interests of the private financial organizations. Therefore, whether we have one hostile board or two hostile boards, is not important. The real issue is whether there should be a board at all to restrict the activities of the bank. Members of the Australian Country party are supposed to be concerned with the welfare of people who live in country districts and of rural industries generally ; yet, in discussions such as this, their only concern seems to be that there shall be what they refer to as fair competition between the Commonwealth Bank and the private banks. What do they mean by fair competition? To-day the Commonwealth Bank would be able, if it were permitted, to make available cheap money, not only to home builders and home purchasers, but also to people in rural communities who want to expand their activities in order to increase production. The Government would regard an attempt by the Commonwealth Bank to discharge its services to the community at a rate of interest lower than that charged by the private bankers as unfair competition. The Government proposes not to have fair competition. It proposes to have no competition at all. It wants to sabotage the Commonwealth Bank. If the Commonwealth Bank were permitted to develop in the way that was envisaged by the Labour Government that established it many years ago, country people, home purchasers, and home builders, who require financial accommodation to-day, could get it at a greatly reduced rate of interest. But the Commonwealth Bank has never been allowed to undertake that kind of business because, it was argued, that would be unfair competition with the private banks. Prior to the abolition of the Commonwealth Bank Board by the previous Labour Government in 1945, the board refused to permit the Commonwealth Bank to take any new business from the private banks, and the board did everything possible to sabotage the bank. The attitude of honorable members opposite towards the Commonwealth Bank is not’ different from that of their predecessors many years ago, who opposed the establishment of the Commonwealth Bank. Supporters of the Government cannot claim- that the Commonwealth Bank has been a failure, or that it is an inefficient organization. Therefore they cannot advance any substantial reason why it should be completely destroyed. They have no acceptable reason to place before the Australian people why that course ought to be pursued. The position was similar in relation to Trans-Australia Airlines, which is a successful government undertaking, however one cares to examine it. The Government has adopted a different method of attack in this instance. It proposes to sabotage the Commonwealth Bank. Honorable members opposite believe that if they can eventually get the Commonwealth Bank into such a position that it can be represented to the public as an inefficient organization, one that is not operating at a profit, they will be able to sell it - as they would readily sell TransAustralia Airlines to-morrow if they thought that the public would endorse their action - and it would be readily absorbed by the private banking structure. I believe that the Government has exposed quite freely its intention.

In reply to Labour’s contention that the Commonwealth Bank has not been allowed to develop the PostmasterGeneral (Mr. Anthony) cited the progress that has been made by the Rural Credits Department of the bank. But he did not tell the public and members of the committee the business handled by that depart, ment of the Commonwealth Bank is business that the private bankers have never wanted. The Rural Credits Department has given to the community a service that was never provided by the private banks. Now the Government claims that its decision to permit a continuance of the department is a generous gesture. This exposes completely the purpose of the private banks. To-day the private banking institutions are not prepared to give service to the community unless they can derive a very high rate of profit for doing so. Therein lies the difference between the Commonwealth Bank and the private banks. As theCommonwealth Bank has no shareholders, it is not worried about the payment of dividends. I invite succeeding Government speakers to pay attention to this aspect of the matter, instead of talking about alleged unfair treatment of the private banking interests in this country. Let them say a word in favour of improving the banking facilities available to the Australian public. I should like them to explain why they claim that it is not possible and practicable for the Commonwealth Bank to make funds available for home building and home purchase at a very low rate of interest. Of course it is possible! The Commonwealth Bank has been compelled in the past to charge the same, or almost the same, rate of interest as that- charged by the private banking institutions, because the Government considered that the charging of a lower rate would constitute unfair competition. It has been said that the rate of interest charged by a bank is determined, to a degree, by the risk that the bank takes. If a great risk is involved the bank charges a high rate of interest to cover itself against any possible loss. I point out that in the construction of homes in this country there is no possible risk of loss, because the homes are constructed under the supervision of the officers of the bank. As soon as they are constructed they are occupied by tenants and begin to be revenueproducing, and money goes back to the bank either for the purpose of cancelling out the debt or of making possible the provision of further credit for home purchasers and home builders.

The TEMPORARY CHAIRMAN:

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

Mr WENTWORTH:
Mackellar

– In view of the statements that have been made by the honorable member for East Sydney (Mr. Ward), I shall remind the committee of some of the facts of this matter. He implied that we should not trammel the people. I remind the honorable m.ember that the former Labour Government tried to monopolize, centralize, and nationalize the banking system without any mandate from the people. The result of the subsequent general election proved that that action was in entire contravention of the popular will. It is because of Labour’s reputation in this connexion that we have to be on our guard. Although the Labour party could never again attempt to nationalize banking by legislative action it could, perhaps, if it gained office in the future, do so by administrative action. It is that kind of back-door nationalization against which we are trying to guard. The honorable member for East Sydney asked why the Commonwealth Bank cannot issue unlimited credit. Of course it could, but if it did so it would cause higher prices and inflation in the community. That inflation could be held back only by checks and controls such as are dear to the hearts of honorable members opposite. But let me remind them that such checks and controls, if continued - and they must be continued, as a logical sequence of socialization - they lead to the black market. The logical sequence of that course would be the development of the black market on a colossal scale, because of the severity of the controls that would have to be imposed to keep down inflation. We have seen the logical development under such conditions. The Australia Labour party would become the Doyle Labour party, which is the kind of thing that honorable members opposite perhaps desire. Whether or not they desire it, it is the inevitable consequence of the kind of policy that they espouse. Many honorable members opposite have protested against even a small degree of separation of banking functions. They fail to see that that is desirable both for the purpose of increasing the efficiency of the central bank as a central bank, and increasing the efficiency of the trading bank as such. It is perhaps a little late to remind them that all authorities on banking believe that the central bank should not carry out trading functions. For example, the governor of the South African Reserve Bank has written in these terms -

A further requisite of a real central bank is that it should not, to any great extent, perform such banking transactions as accepting deposits from the general public and accommodating regular commercial customers with discounts or advances. It is now almost generally accepted that a central bank should conduct direct dealings with the public only in such forms and to such extent as, in the circumstances of the particular country, it considers absolutely necessary for the purpose of carrying out its monetary and banking policy. If a central bank has a large commercial banking business, such operations might come into direct conflict with its functions as the banker’s bank, the lender of last resort and the controller of credit.

Honorable members opposite have made a great play with the recommendations of the Royal Commission on Monetary and Banking Systems that was held in 1936 and 1937. I refer them to paragraph 581 of the report of that royal commission, which contains this passage -

  1. . the most important powers of the Bank arise from ite . . . ability to buy and sell government securities on the open market, and from its trading activities.

The development of the money market in Australia was very narrow, and without access to open market operations the bank may not have been able to keep the requisite control over the volume of credit. That was merely temporary. It related to 1936 and is now a thing of the past. The circumstances which then might have differentiated the position of Australia’s central bank from those of other central banks have disappeared as a result of the greater maturity and the growth of our entire financial structure. Honorable members opposite should read the report of the royal commission carefully before they quote from it, and they should quote the relevant parts.

I have suggestions to offer to the Government in relation to two minor matters with which clause 6 deals. Proposed section 22a provides for the possible amalgamation of the Commonwealth Trading Bank with other trading banks. Such an amalgamation may become desirable in the course of time, but I believe that the procedure should be hedged around with precautions because, should the Labour party gain power in the future, it may try to cut down the private banks one by one by forcing them to amalgamate with the Commonwealth Trading Bank. I hope that the Government will consider amending this provision so as to guard against a possibility of that kind. The proposed section states -

The Trading Bank may, with the approval of the Treasurer, enter into an arrangement with any other bank .

I suggest that it should be altered to read as follows : - 1

The Trading Bank may, with the approval of the Treasurer and the consent of both Houses of the Parliament, enter into an arrangement with any other bank .

There is a danger that a future Labour government may take advantage of the proposed section in order to nationalize banking by back-door methods. At least the sanction of this Parliament should be obtained before any such procedure is put into effect. I hope that the Prime Minister will give consideration to the suggestion. My second suggestion refers to proposed section 19 (6), which applies to certain transfers of money as additions to the capital of the Commonwealth Trading Bank. It provides that the capital of the Commonwealth Trading Bank shall include such sums as are paid to it in pursuance of sections 15 and 47 of the present Commonwealth Bank Act, neither of which will be amended by this measure. It might be better to provide that the profits to which this provision will apply should be paid to the Rural Credits Department, the Mortgage Bank Department and the Industrial Finance Department instead of to the Commonwealth Trading Bank. At present, these profits are distributed between the General Banking Division, the Rural Credits Department, the Mortgage Bank Department and the Industrial Finance Department. This method has been logical up to the present because such profits have accrued to the Commonwealth Bank Reserve Fund as a result, to some degree at any rate, of the operations of the General Banking Division. This measure will eliminate the General Banking Division and will establish the Commonwealth Trading Bank. In the changed circumstances, the profits might be paid, with more justice and logic, to the Bura.l Credits Department, the Mori - gage Bank Department and the Indus trial Finance Department. I have not had an opportunity to consider the implications of the provision in detail, but I believe that my suggestion is well worthy of consideration.

I repeat that authorities all over the world agree that a central bank functions best when it has no trading bank appanage to poison its relations with other trading banks. The trading bank functions can be more efficiently performed when the trading bank functions as a separate institution.

The TEMPORARY CHAIRMAN.Order! The honorable member’s time has expired.

Mr COSTA:
Banks

.- The Government has announced that the purpose of this bill is to make socialization more difficult of achievement than it would he otherwise. If we refer to statements that were made by the present Prime Minister (Mr. Menzies) during the 1949 election campaign, we find that the right honorable gentleman announced that he, himself, was a socialist. Yet the Government still continues to proclaim its fear of socialization ! The Labour Government in 1947 introduced legislation that was designed to nationalize our banking system. The validity of that legislation was challenged in the Hight Court and before the Privy Council, which, in 1949, held that the Government did not have power to nationalize banking. The Labour party has accepted that decision. The late Mr. Chifley said, in 1949, in a speech on banking, that, if any industry operated against the best interests of the people, he would have no hesitation in nationalizing it so that the Government could operate it on behalf of the people.

Mr Fuller:

– Did not the present Prime Minister say the same thing?

Mr COSTA:

– He made a somewhat similar statement during the 1949 election campaign, when he said to a gathering of 2,000 people at Norwood, in South Australia. -

If you read my policy-speech, you will find that that is our policy.

He referred to Mr. Chifley’s policy. He continued -

We stand for freedom, not exploitation, and if you can show me some monopoly business operating to the detriment of Australia then I, as the leader of a non-socialist party, would not hesitate to socialize it to-morrow morning.

The policy speech delivered by the right honorable gentleman at the outset of the 1949 election campaign included the following declaration : -

We approach the problem of government ownership and control not as a problem of theory but as one of common sense and hard practical fact. There aire certain public utilities of an essentially monopoly kind, not suited1 to competitive enterprise and not requiring the stimulus of competitive selling, which we willingly accept as government instruments.

According to that pronouncement, the joint policy of the Liberal party and the Australian Country party is in agreement with the policy of the Labour party. But, for some reason, the Government and its supporters now declare that they are afraid of socialization and attack members of the Opposition on the ground that they are socialists. I presume that they have in mind the approaching State elections in South Australia and Queensland. However, when the numbers go up in those States, we shall find that their propaganda has had little effect upon the people.

The Government is planning to destroy the people’s bank, hut it is in two minds about the best way of achieving that result. The honorable member for Mackellar (Mr. Wentworth) would deliberately destroy the Commonwealth Bank outright without any “beg pardons “. However, the Government has decided that the best plan is to put hobbles on the bank so that it will be partially destroyed. That is a dangerous policy, because the Commonwealth Bank has proved itself to be a great instrument for the good of the people. Its value to the nation has been demonstrated over and over again during two world wars and during the period when the Labour party was in power after World War II. An examination- of the annual report of the Commonwealth Bank for 1951-52 will show how it has worked in the interests of the people. The honorable member for Mitchell (Mr. Wheeler) said that the Commonwealth Bank, like the private banks, should be obliged to pay taxes. That is utterly ridiculous. The, report states -

The aggregate net profit of the Commonwealth Bank, including the Note Issue Depart ment and the Commonwealth Savings Bank, after making provision for contingencies was, in round figures, £8,465,000. This compares with £7,300,000 last year.

The report goes on to explain how the profits of the bank have been disbursed. They have gone to the people as a whole. The profits of private banks go to a comparatively small number of people, and quite a few of these people do not even reside in Australia. If all banks in this country are to be placed upon the same level, let the private banks be placed upon the level of the Commonwealth Bank and let the people have their profits.

I am certain that the Commonwealth Bank has never been allowed to compete fairly with the private banks. The history of the bank shows that boards and managements have never devoted any great energy to the task of developing it so that it could compete properly with private banks. There is no branch of the Commonwealth Bank in many fair sized country towns in New South Wales, although there are branches of at least two private banks. In Barraba, there are branches of the Bank of New South Wales and of the Commercial Banking Company of Sydney Limited, but there is no branch of the- Commonwealth Bank. A similar position obtains in other towns such as Bingara, Boggabri, Bogangate Boolaroo, Bombala, Bundanoon, Bangalow, Branxton, Byron Bay and Berry. The Commonwealth Bank has never been allowed to function in fair competition with private banks. When it was controlled by a hostile board, or by a board consisting of bankers, it was prevented from paying the same rate of interest to depositors as was paid by the private banks. The object of the board was to discourage depositors from using the Commonwealth Bank so that’ it would be unable to function properly as a trading bank. If this bill is passed and the trading bank and central bank functions of the Commonwealth Bank are separated, there will be a great danger that a similar process of strangulation will be applied to the Commonwealth Trading Bank. It will be permitted to pay only 3-J per cent, interest upon deposits, fixed and otherwise, but the private banks will be allowed to pay 4 per cent. That happened previously, to the detriment of the development of the Commonwealth Bank. Its assets remained stationary, but the private banks were able to attract more depositors and, therefore, were able to lend more money.

I believe that the Government of this country should have complete control of our banking system so that money can be used in the best interests of Australia and loaned to important industries at the lowest possible rate of interest. Our economic system has had to carry the burden of our banking system for a long time. Private banks, not only in Australia but also throughout the world, have been bludgeoning industry for far too long. When any one wishes to establish a new industry or to increase production, he can obtain the necessary money only by paying an exorbitant rate of interest for it to private bankers. That is not in the best interests of the nation. I believe that the Commonwealth Bank should be strengthened, not weakened, as it will be by this bill.

The TEMPORARY CHAIRMAN:

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

Mr DRUMMOND:
New England

– I rise only to deal with some obviously inaccurate statements that were made by the honorable member for Banks (Mr. Costa). He said that any real competition between the Commonwealth Bank and private banks has been suppressed. To support his contention, he stated that there were no branches of the Commonwealth Bank in many country towns and villages. That is an interesting approach to the question, especially to myself, because the honorable gentleman referred to a number of places which are very well known to me. Some of them are in my electorate. He informed the committee that there is no branch of the Commonwealth Bank in Barraba, although there are branches of the Bank of New South Wales and of the Commercial Banking Company of Sydney Limited in the town. Let me say that they are very old-established branches of those banks. The honorable gentleman advanced an interesting argument, but when we analyse it we find that it will not hold water. In Barraba, there is no branch of the National Bank of Queensland, the Commercial Bank of Australia Limited, the English, Scottish and Australian Bank Limited or any Victorian bank. Probably that is true also of the other places to which he referred. If there is any substance in the honor able gentleman’s contention, it could be argued reasonably that the Government has adopted a policy of suppression in relation to some private banks and has prevented them from entering into competition with the Bank of New South Wales and the Commercial Banking Company of Sydney Limited. The truth of the matter is that the only active suppression of that kind of which I have knowledge occurred during the war, when the government of the day, a Labour government led by Mr. Curtin, insisted that, as far as possible, the banks should rationalize their services and decrease their staffs by closing down much needed branches in certain places. That policy was also implemented during the regime of the Chifley Government. In a State electorate that I used to represent, it had the effect of disturbing considerably the banking operations of some of my constituents, because they discovered that the branch of a certain bank that had operated in, say, Dorrigo, for a long time had been closed and that they had to use the .branch in Bellingen, which was about 20 miles away, and could be reached only by a road that was not very good. In time of war, that kind of thing was not unreasonable. I do not think any one is entitled to suggest that the banks did not attempt to co-operate to the full with the government of the day by releasing for war service as many of the members of their staffs as they possibly could. All that I want to do is to show the fallacy of the argument that the honorable member for Banks has advanced in support of his contention that the present Government parties have been guilty of sinister action in regard to the Commonwealth Bank. I do not want to prolong my contribution to this debate by referring at undue length to the subject of socialization. The contention of Opposition members that they accepted the decision of the Privy Council that the Australian Government did not have the constitutional power to bring about bank nationalization has been adequately answered by various Government supporters including the Minister for Social Services (Mr. Townley), who quoted the honorable member for Melbourne (Mr. Calwell). Other Government supporters have quoted Labour party members who have said emphatically that they would achieve by administrative means what they were prevented from achieving by the ordinary processes of legislation. As long as bank nationalization remains an integral part of the platform of the Labour party honorable members opposite are pledged to its achievement. The honorable member for Melbourne himself said that the Government should have control of all finance. If the Government gains control of all finance it will have control of the whole of the country’s industry. The authori ty that controls finance will be able in the final analysis, to turn the screw whenever it wants to. It is inevitable that the Government must bring pressure to bear in times of crisis and take certain action that would not have been advisable in time of peace. But if any government is given complete control of finance it will be in a. position to squeeze any section of the community that differs from it in the way mentioned by Marx and Lenin and other Russian Communists.

Proposed new section 21 (2.) states -

The Trading Bank may, from time to time, transfer from the Commonwealth Trading Bank of Australia Reserve Fund to the capital of the Trading Bank such sums as the Board determines.

In every other provision the imperative is used. The words are “ The Trading Bank shall “ ; but in this case the words are “ The Trading Bank may “. I wonder whether that is a misprint. Why should the trading bank have an option under the provision I have quoted, which is not given to it elsewhere? I do not think that that was intended. There are other cases in the bill where the word “ may “ is used for obvious reasons because the exercise of discretion is desirable. But it seems to me that if the controllers of the reserve fund are to be able to place the Commonwealth Trading Bank on the same footing as any other trading bank the imperative should be used in this provision. In other words the Commonwealth Trading Bank should have no option but to comply with the board’s direction. Since the intention of the bill before the House is to place the national trading bank on the same basis as private trading banks I ask the Prime Minister to consider whether more complete effect could not be given to the Government’s intentions by the moving of a minor amendment when the bill is before another place.

Mr WARD:
East Sydney

.- Honorable members opposite continually charge the Labour party with the intention of implementing sections of its policy by stealth. It is quite true that the nationalization of private banks is still the policy of the Labour party, as the honorable member for Mackellar (Mr. Wentworth) said when he quoted from the constitution and platform of the Australian Labour party. But it is also true that the Labour movement has no intention of giving effect to any item of its policy against the wish of a majority of the people of Australia. The position at this stage is as I shall now announce it. In 1947, the Labour Government introduced legislation which provided for the nationalization of private banks. That legislation was challenged, first in the High Court and then before the Privy Council. When it was challenged in the High Court, even the High Court judges were not” unanimous in their opinion that the Parliament did not possess the power to nationalize. It is interesting to note that the Chief Justice himself dissented from the majority viewpoint that it was not within the power of the Commonwealth Parliament to nationalize the private banks. But the majority decision was against the government of the day and an appeal was lodged with the Privy Council against that decision. The decision of the High Court was confirmed by the Privy Council. The present position is that the two authorities have declared, if only by majority decision, that the Commonwealth Parliament has insufficient existing power to nationalize private banks. But if on some future occasion the matter were again submitted to the people by referendum and a majority of the people, having had the matter explained to them fully by the Labour party, in their wisdom decided to support our proposal, do honorable members opposite who claim to be democrats contend that that decision of the people should not be given effect to? In my opinion the Labour party has no intention of proceeding in any other way to implement its policy. I am of the opinion that the banks will eventually be nationalized because the majority of the people will realize the good sense of voting for nationalization. But that is the only way in which nationalization will be effected by the Labour party.

The policy of the Labour party i.s known and the method by which it proposes to give effect to its policy is known. The Labour party proposes to act by constitutional methods. Bank nationalization cannot be an issue at the forthcoming Senate election because the constitutional barrier remains. It cannot be an issue at the next federal elections because the same barrier will be there. But it is perfectly true that a Labour government of the future could resubmit the question to the people by a referendum. Those facts expose the attitude of honorable members opposite, because although they claim to be democrats they do not want the people to make the final decision. They are prepared to defend the privileged position of private financial interests and bankers, regardless of the Constitution and’ the will of the people. The honorable member for Sturt (Mr. Wilson) said that his party wanted to make it as difficult as possible for any future Labour government to proceed with its policy of socialization. If the honorable member for Sturt claims to be a democrat why should he want to create difficulties for a government which ha? been elected by the majority of the people? The parties opposite claim that, having been elected with a majority, they are entitled to implement the policy that they enunciated. Of course, we know that the Government parties have one policy at election time for public consumption, so as to win support for their candidates and another policy, their real policy, which they never announce to the people. They know that if they had told the people during the general election campaign what they intended to do, they would never have been able to secure a majority in this chamber. This Government represents the private finan- cial institutions of Australia. It believes in the right to exploit the people and the right to make exorbitant profits. Whenever its supporters believe that the citadel of private capital and finance is in any real danger every one of them, no matter what contrary opinions he may have expressed during an election campaign, rushes to defend it. They all fall into line. As I said earlier to-day, they are not concerned whether any change in the banking system is in the interests of the general community. All they are concerned about is whether the interests of their private financial backers are endangered, and whether they can still ensure that those backers will continue to ‘ enjoy their present privileged position.

The attempt of honorable members to whip up again, and play on, the fears of the people, will probably not be as effective this time as it was on the last occasion, because I cannot imagine any farmer in New England being worried about whether or not the private banks have been affected by the operation of the Commonwealth Bank if he is able to get financial accommodation from the Commonwealth Bank at a lower rate of interest than that at which he could formerly obtain it from a private bank. The same applies to people who live in working class areas. If they get financial accommodation at a lower rate of interest from the Commonwealth Bank than they could get it from a private bank, they will not be worried about this question of bank nationalization to which the honorable member referred. As a matter of fact it is rather interesting to note that the great bulk of the people’s savings to-day is not in private banks, but in Government Savings Banks, a,nd the depositors have not been prejudiced in any way by having their money in such banks. Government supporters, however, attempt to create, in the minds of the public, the illusion that the people’s savings could be transferred, under a Labour government, from a private bank to Government banks. The fact is that most of those savings are already in the Government bank. The general public has no direct interest in the private trading banks which would be affected by any nationalization of the banking system.

The honorable member for New England (Mr. Drummond) attempted to demolish the argument advanced by the honorable member for Banks (Mr. Costa), and referred to a town called Barraba, in which, he said, there were some private banks, but there was no branch of the Commonwealth Bank. He said the fact that some private banks had no branch in that town indicated that there was no basis for the argument advanced by the honorable member for Banks that the Commonwealth Bank had not been permitted to expand and develop in competition with the private banks to the degree intended by the Labour party. What the honorable member for New England omitted to mention is that there is no competition between the private banks, which rationalize the banking industry by agreement, sharing out districts among themselves and deciding in which districts branches of the various private banks shall be established. The only existing competition in Australian banking is between the private banks and the Commonwealth Bank. What Government supporters have endeavoured to do by the exercise of their power in this Parliament is to restrict the Commonwealth Bank’s competition with the private banks. The honorable gentleman referred to the war period, when it was necessary to rationalize industry. He talks about the co-operation of the banks with the government of the day. All I can say is that he does not know what he is talking about, because, in actual fact, when the country was in desperate need and wanted to conserve its man-power-

The TEMPORARY CHAIRMAN:

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

Mr MENZIES:
Prime Minister · Kooyong · LP

– I wish first to mention several points to which reference has been made. The honorable member for New England (Mr. Drummond) raised a question in relation to the proposed new section 21 (2.) which reads -

The Trailing Bank may, from time to time, transfer from the Common wealth Trading Bank of Australia Reserve Fund to the capital of the Trading Bank such sums as the Board determines.

I point out to him that there is no anomaly there, because the Common wealth Trading Bank will be under the control of the board, and therefore the whole problem of what should be done with the reserves will be a problem that the board has to determine, and the result will be exactly the same whether the word “ may “ or the word “ shall “ be used, because the operative words are “such sums as the Board determines “. It may determine none, it may determine a great deal, or it may determine all. The whole thing rests on a discretionary power.

The honorable member for Mackellar (Mr. Wentworth) raised two matters. He had been good enough to discuss them with me before the committee stage had been reached, and all I want to say now is that, whilst on each of the two points I am far from being satisfied that what he has suggested is the right thing to do, each of them merits some further consideration, and I am quite agreeable to having that consideration given to them before the bill goes to another place.

I turn now to the speeches that have been made during the debate, particularly by the honorable member for East Sydney (Mr. Ward) and, to some degree, by the honorable member for Banks (Mr. Costa). I am beginning to think that the honorable member for East Sydney is one of the most reactionary members of this House - and I use the word “ reactionary “ with due consideration - because he has not, in my experience, developed a fresh thought on this problem over the last 25 years. He has a few little catchwords in his mind, and he thinks they are an admirable substitute for thought, and that is, after all, characteristic of the tory and reactionary all over the world. What has he in his mind ? First of all he said that the Commonwealth Bank had been frustrated, that it had never been allowed to develop its business, and, in particular, that it had never been allowed to do all it should be doing in relation to the housing of the people. Those are fine mouth-filling statements to make. The only trouble about each of them is that it is utterly untrue. Because the honorable member has never troubled to catch up with any new facts of the last 25 years he is living on the slogans of a quarter of a century ago. On Tuesday the . Treasurer (Sir Arthur Fadden) answered a question on notice by the honorable member for Wilmot (Mr. Duthie) about the Commonwealth Bank. I do not propose to read all of his answer, because it has been in the possession of honorable members, although the honorable member for East Sydney has not read it. I merely point out that the number of accounts, including deposits bearing interest, maintained with the General Banking Division of the Commonwealth Bank rose from 257,982 in April, 1949, to 372,870 in April, 1952. So, to say the least of it, and I use the most courteous possible terms, it is a fairly bold statement to make that, in face of an expansion of that order, the General Banking Division of the Commonwealth Bank has been frustrated. The honorable member for East Sydney could hardly have selected a more unfortunate example than housing on which to base an argument that the activities of the bank have been frustrated, because the record of the Commonwealth Bank in respect of housing loans is a first-class record. The bank has devoted a great deal of particular attention to the needs of the people in relation to housing, and has been encouraged to do so by the present Government. The fact is that the advances made by the General Banking Division of the Commonwealth Bank for buildings and home buildings represent 29 per cent, of its portfolio, as compared with 10 per cent, in the case of the ordinary bank. I do not say that critically, because there is a limit, in ordinary banking practice, to the amount which you should have in your portfolio in a particular form of investment. But the Commonwealth Bank, which he says has been frustrated, denied and ordered about, has 29 per cent, of its advances in the form of advances for building purposes as against 10 per cent., which is the average percentage in the case of ordinary banks. For the second time, the trouble with the honorable member is that he has not caught up with what may be called the facts of life.

The next point that he made - and this is so old that it should have been dead and buried years ago - was to this effect : Why could not the Commonwealth Bank, as it would under a proper government, find money for housing at 1 per cent.?

Well, he had eight years in which to do so. Is it not odd how this virtue, which lay dormant for so many years, bursts into lovely flower a few years later? He did not do it. Why did he not do it?

Mr Ward:

– Because he was not the Treasurer.

Mr MENZIES:

– Exactly. For the third time to-day I am indebted to the honorable gentleman for a most frank statement. The Treasurer was the late Mr. Chifley, who had some sense of responsibility in respect of central bank credit. As the honorable member now tells us, his late leader, on whose reputation he has climbed into Parliament time after time, was against him, and that is why it was not done. Of course, Mr. Chifley knew, as every sensible person in this chamber knows, that to talk about’ the Commonwealth Bank merely inventing new capital for all kinds of purposes and pushing it out at what the honorable member is pleased to call “ cost of issue “, is the most fantastic notion in the world. I am amazed to find that my friend, the honorable member for Banks, to whom I usually listen with respect, seems to be a little touched - I hope not permanently - by the same illusion, this strange idea that there should never be any shortage of capital in the world, because as long as there is a central bank, capital can be produced. It is, perhaps, desirable to say to honorable members - and I wish it were known all over Australia - that at the recent economic conference in London, about which the honorable member for Melbourne Ports (Mr. Crean) was good enough to put a question to me the other day, eight governments of the British Commonwealth were represented by every conceivable variety of political thought. Yet not one person at that conference was heard to say, when we were discussing the question of how we were to secure more capital for development, “ That’ is quite simple. As long as you have a central bank there is no problem about capital. Just write a cheque on the central bank and get the money from it. If there is not enough in the till, the bank will print it for you.” That is a beautiful simplification of the problems affecting the capital requirements of a country.

Compared with a great many of the men present at that conference, I consider myself the merest apprentice in such matters. Some of the ablest minds in the world sat around that table and discussed how to obtain the capital needed in the various countries. Every one of them said, “ Let us start- off with this proposition : Unless we are going to destroy the value of the currency, and unless we are going to produce an inflation that is completely beyond control, first we must produce capital in our own countries, from our own savings.” This is not any “ wild cat “ conception of finance. It is first necessary to produce capital from savings in one’s own country. Then, if it is possible to do so, capital can be obtained from the savings of people in other countries, because that is all that overseas borrowing amounts to. Yet this old and tattered, disreputable and ruinous doctrine that as long as there is a central bank it is only necessary to say, “ How much do you want- £300,000,000 or £400,000,000? “ is still trotted out. I speak in such lofty figures because theycharacterize these bogus financiers on the other side of the committee. There is not to be found among them a soul who understands these matters. They then contend that, having obtained that money from the Commonwealth Bank, the Government should serve it out at 1 per cent, on what, we are now so frankly told, is the Ward formula but was never the Chifley formula.

I do not need to elaborate these matters overmuch, because everything that has been said by honorable members opposite in the course of this debate has been said in the light of a complete piece of nonsense, financially and economically. However, if one goes behind all the oddities and eccentricities to which I have been referring, the really interesting thing is that there are very many people in Australia, in the ranks of the supporters of both my own party and the Australian Country party, who would like this legislation to go further. There is no mystery about that. There is great variety of opinion on these matters. On the opposite side of the committee are those who appear to think unanimously along these lines : “ You fellows are going so much too far with this legislation that you are setting out to destroy the Commonwealth Bank”. What the Govern- ment has been doing - and what I hope a sane government will always do - is to pursue some planned course in this matter. The last thing that we propose to do is to destroy the Commonwealth Bank. The figures that I have cited are the best evidence of the vivacity of that institution under our general political control. On the other hand, if we can help it we do not propose to allow the trading banks to be destroyed.

Two or three honorable members opposite to-day made a virtue of necessity and said, almost with washings of the hands, “ Of course, we tried to nationalize the banks by statute, but that attempt was challenged in the High Court and we were beaten - but only by a majority “. Incidentally, I thought the latter remark was an interesting observation. They continued, “ The case then went to the Privy Council, which decided that the High Court was right. Therefore, that ends the matter. The last thing we would do would be to overrule the Privy Council “. Of course it is ! Honorable members do not need to tell us that. There is no virtue in saying that they have accommodated themselves to the decision of the Privy Council, but there is great value in trying to prove that the Privy Council decision, and primarily that of the High Court, was to the effect that the thing could not be done by statute in the form that was then adopted. Nothing whatever was said about the fact that the decision does not inhibit a Commonwealth Government administratively, in the exercise of valid laws, from squeezing the banking system out of existence. And not a word has been said by honorable members opposite to indicate that they are pledging themselves not to use their administrative powers to achieve, by a different route, the goal that was barred by the High Court and the Privy Council. Of course they cannot give a pledge on that. To-day we have heard the most sickening, unctuous remarks made by the Opposition abouttrusting the people. I have been informed to-day, by the honorable member for East Sydney (Mr. Ward), that honorable members on this side of the House do not trust the people. That comes singularly well” from a member of a party which, without a mandate, brought down a bill to nationalize banking and rejected an amendment that was moved by the then opposition to the effect that the legislation should not operate until after the matter had been determined by the people. Such are the democrats of the Labour party. This Government, when it assumed office, discovered a state of affairs in which, under a valid law - not the act of 1947-, but the valid act of 1945- the trading banks had accrued liabilities of £540,000,000 to the central bank. By administrative action, any government could have put the private banks out of business in 24 hours.

Mr Ward:

– I rise to a point of order. In view of the fact that the Government, acting on the Prime Minister’s (Mr. Menzies) instructions, by the application of the “guillotine”, has restricted the debate on this particular matter, I ask you, Mr. Temporary Chairman, whether there is any action that can be taken under the Standing Orders to prevent the Prime Minister from stone-walling the debate and thus preventing any reply being made to his misleading statements ?

The TEMPORARY CHAIRMAN:

– Order ! The Prime Minister is in order.

Mr MENZIES:

– I am glad to know that the honorable member for East Sydney is in such hilarious form that, having treated the committee to twenty minutes of nonsense, he now resents having to listen to twenty minutes of good sense. However, I understand him well - I would not like to say that I know him - but I have seen him for many years and I know his methods of provocation. He is not unaware of the clock. This Government inherited banking legislation under which any government, by administrative action in respect of the Commonwealth Bank, which was then under the sole control of the Treasurer of the Commonwealth and in which therewas no Commonwealth Bank Board and no statutary provision for reference of disputes to this House in relation to a matter so elementary as the special deposits lodged with the Commonwealth Bank by the trading banks, could have destroyed the trading banks.

Mr Tom Burke:

– That is not correct.

Mr MENZIES:

– Every schoolboy and every child knows that what I have said is perfectly correct. The interesting thing to realize about this matter is that the honorable member for East Sydney, when confronted by that position, let the cat out of the bag. He would not content himself by saying, “ We are not going to try to overrule the Privy Council’s decision without going to the people “, because he knew that it is the administrative weapon which can be most deadly.

Mr Curtin:

– A minute to go.

Mr MENZIES:

– It takes only a minute to say this, comrade. The honorable member for East Sydney stood up and said that bank nationalization was still the policy of the Labour parly. Therefore, the cat is now out of the bag. Bank nationalization is still the policy of the Labour party. Why is the Labour party now opposing this legislation? Because it knows that unless the legislation is altered as we are proposing to alter it, Labour may some day get into office with a weapon in its hands to give effect to its policy. In that event honorable members opposite need never refer to the people, because they will be taking administrative action, and when a general election comes along in due course they will be able to say, in the phrase of the honorable member for Melbourne (Mr. Calwell), “ Once we have scrambled the eggs you will never be able to unscramble them’”.

Mr TOM BURKE:
Perth

.- The Prime Minister (Mr. Menzies) has paid a tribute to the honorable member for East Sydney (Mr. Ward) because instead of answering his arguments he has misrepresented them. The honorable member for East Sydney said nothing about the number of houses that have been built, or the extension of the Commonwealth Bank-

The TEMPORARY CHAIRMAN.Order! The time allotted for the consideration of clauses 2 to 6 has expired.

Question put -

That clauses 2 to 6 be agreed to.

The committee divided. (The Temporary Chairman - Mr.

g. j. bowden.)

AYES: 51

NOES: 35

Majority . . . . 16

AYES

NOES

Question so resolved in the affirmative.

Progress reported.

page 611

TARIFF PROPOSALS 1953

Customs Tariff Amendment (No. 7) ; Customs Tariff (New Zealand Preference) Amendment (No. 2)

In Committee of Ways and Means:

Mr ERIC J HARRISON:
Vice-President of the Executive Council and Minister for Defence Production · WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– I move - [Customs Tariff Amendment (No. 7).]

  1. That the Schedule to the Customs Tariff 1933-1952 be amended as hereinafter set out, and that, on and after the sixth day of March, One thousand nine hundred and fifty-three, at nine o’clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Customs be collected in pursuance of the Customs Tariff 1933-1952 as so amended.
  2. That, without prejudice to the generality of paragraph 1. of these Proposals, the Governor-General may, from time to time by Proclamation declare that, from a time and date specified in the Proclamation. the Intermediate Tariff shall apply to such goods specified in the Proclamation as are the produce or manufacture of any British or foreign country specified in the Proclamation.
  3. That on and after the time and date specified in a Proclamation issued in accordance with the last preceding paragraph, the Intermediate Tariff shall apply to such goods specified in the Proclamation as are the produce or manufacture of a British or foreign country specified in that Proclamation.
  4. That any Proclamation issued in accordance with paragraph 2 of these Proposals may, from time to time, be revoked or varied by a further Proclamation, and upon the revocation or variation of the Proclamation, the Intermediate Tariff shall cease to apply to the goods specified in the Proclamation so revoked, or, as the case may be, the application of the Intermediate Tariff to the goods specified in the Proclamation so varied, shall be varied accordingly.
  5. That in these Proposals, unless the contrary intention appears - “ Proclamation “ mean a Proclamation by the Governor-General, or the person for the time being administering the government of the Commonwealth, acting with the advice of the Federal Executive Council, and published in the Commonwealth of Australia Gazette ; “ the Intermediate Tariff “ mean the rates of duty set out in the Schedule to these Proposals, in the column headed “ Intermediate Tariff “, in respect of goods in relation to which the expression is used.
[Customs Tariff (New Zealand Preference) Amendment (No. 2).] {: type="1" start="1"} 0. That, on and after the thirtieth day of January, One thousand nine hundred and fifty-three, the provisions of these Proposals be deemed to have had effect and have effect for the purposes of the Customs Tariff (New Zealand Preference) 1933-1952 in lieu of the provisions of section eleven of that Act. 1. That goods be deemed to be the produce of New Zealand if they are unmanufactured raw products of New Zealand. 2. That goods be deemed to be the manufacture of New Zealand - {: type="a" start="a"} 0. if the goods were wholly manufactured in New Zealand from materials of one or more of the following classes : - {: type="i" start="i"} 0. unmanufactured raw products ; 1. materials wholly manufactured in New Zealand or Australia, or in New Zealand and Australia ; and 2. imported materials which the Minister has determined, by notice in the *Gazette,* to be manufactured raw materials ; or 3. if the goods were partly manufactured in New Zealand, the process last performed in the manufacture of the goods was performed in New Zealand and - 4. not less than one-half of the factory or works cost of the goods is represented by the value of labour or material, or of labour and material, of New Zealand or of New Zealand and Australia ; 5. not less than three-quarters of the factory or works cost of the goods is represented by the value of labour or material, or of labour and material, of New Zealand and the United Kingdom or ofNew Zealand, Australia and the United Kingdom ; or 6. in the case of goods of a class or kind not commercially manufactured in Australia, not less than one-quarter of the factory or works cost of the goods is represented by the value of labour or material, or of labour and material, of New Zealand or of New Zealand and Australia, and the Minister has not determined, by notice in the *Gazette.* that the provisions enacted to give effect to this clause do not apply in relation to those goods or to a class of goods in which those goods are included. 3. That, for the purposes of the provisions enacted to give effect to paragraph 3 of these Proposals the Minister may, by notice in the *Gazette -* {: type="a" start="a"} 0. specify the manner in which the factory or works cost of goods or the value of labour and material is to be determined ; and 1. determine that goods, or goods included in a class of goods, shall be deemed to be goods of a class or kind not commercially manufactured in Australia. 4. That, for the purposes of the provisions enacted to give effect to clause (ii) of sub-paragraph (6) of paragraph 3 of these Proposals, material which, under the New Zealand British Preferential Tariff, is treated as having been wholly produced or wholly manufactured in the United Kingdom be deemed to be material of the United Kingdom. 5. That, in these Proposals - " the *Gazette "* mean theCommonwealth *of Australia Gazette;* " the Minister " mean the Minister of State for the time being administering the Customs Tariff (New Zealand Preference) 1933-1952, or that Act as amended from time to time, and include any Minister of State or member of the Federal Executive Council for the time being acting for or on behalf of that Minister ; " the New Zealand British Preferential Tariff " have the same meaning as in the Customs Tariff (New Zealand Preference) 1933-1952 ; [Customs Tariff (New Zealand Preference) Amendment (No. 2).] - *continued.* " unmanufactured raw products " mean natural or primary products that have not been subjected to an industrial process, other than an ordinary process of primary production, and include, without limiting the generality of the foregoing - {: type="a" start="a"} 0. animals, and parts of animals obtained by killing, including bones, hides and skins (raw or sun dried) ; 1. greasy wool ; 2. plants, and parts of plants, including raw cotton, bark, fruit, nuts, grain, seeds (in their natural state) and unwrought logs ; 3. minerals in their natural state and ores ; and 4. crude petroleum. The Customs Tariff Proposals which I have just introduced cover proposed amendments to the Customs Tariff 1933- 1952 and the Customs Tariff (New Zealand Preference) 1933-1952. The principal amendments to the Customs Tariff 1933-1952 relate to internal combustion engines, canvas and duck piece goods of flax or containing a mixture of fibres in which flax predominates, industrial type ironing and washing machines, micrometers and precision test indicators, leads for wooden pencils and frames and catches for ladies' and children's handbags. The proposed duties will operate as on and from 9 a.m. on the 6th March, 1953. The summary of alterations, which is already in the hands of honorable members, sets cut in concise form the proposed variations to the Customs Tariff 1933.-1952. The proposed duties are mainly consequent upon adoption by the Government of recommendations made by the Tariff Board. In a few instances the wording of the tariff items has been varied to more clearly express the intention of the existing item. The second proposal relates to the Customs Tariff (New Zealand Preference) 1933-1952. This proposal is designed to give effect to an alteration which the respective Governments of New Zealand and Australia have agreed to make in Article X. of the New Zealand Trade Agreement of 1933. Under the original provisions of Article X., goods manufactured in Australia, but not wholly from Australian materials, did not enjoy the benefits of the agreement when imported into New Zealand if they contained less than 50 per cent. of Australian content in terms of Australian materials and labour costs. Several products manufactured in Australia, chiefly from imported raw materials, did not ful fil these conditions. Similar conditions applied to New Zealand products imported into Australia. The proposed amendment alters the original conditions by adding alternative conditions to be applied on a reciprocal basis. They provide that a product imported into Australia which contains at least 75 per cent. of New Zealand, Australian and United Kingdom content or alternatively 75 per cent. of New Zealand and United Kingdom content shall be regarded as a product of New Zealand origin for purposes of the Trade Agreement. A 75 per cent. minimum content conforms with the normal conditions applying to imports from the United Kingdom. The New Zealand Government has already put into operation as on and from the 30th January, 1953, a similar amendment applying like conditions to Australian exports to New Zealand. It is desirable that the proposals should have effect on the same date in both countries - hence the retrospective provision for the operation of the proposals on the 30th January, 1953. At a later date honorable members will be accorded full opportunity to discuss these proposals. Progress reported. {: .page-start } page 615 {:#debate-20} ### TARIFF BOARD Reports onitems. {: #debate-20-s0 .speaker-KNX} ##### Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- I lay on the table reports of the Tariff Board on the following subjects: - {:#subdebate-20-0} #### Ironing Machines and Washing Machines; {:#subdebate-20-1} #### Precision Test Indicators and Micrometers; {:#subdebate-20-2} #### Turnbuttons and Snap Fasteners; {:#subdebate-20-3} #### Frames for Handbags; {:#subdebate-20-4} #### Matches and Mechanical Lighters; {:#subdebate-20-5} #### Internal Combustion Engines ; {:#subdebate-20-6} #### Catches for Ladies' Handbags and Wallets; {:#subdebate-20-7} #### Leads for Wooden Pencils; {:#subdebate-20-8} #### Domestic Sewing Machine Heads; {:#subdebate-20-9} #### Kit Bab Frames; {:#subdebate-20-10} #### Flax Canvas and Flax Canvas Fire Hose With the exception of the report on flax canvas and flax canvas fire hose, copies of the reports are available for circulation to honorable members. {: .page-start } page 616 {:#debate-21} ### COMMONWEALTH BANK BILL 1953 *In committee:* Consideration resumed *(vide* page 611). Clauses 7 to 10 - *by leave* - considered together. {: #debate-21-s0 .speaker-JTF} ##### Mr TOM BURKE:
Perth .- One question that appears to me to need consideration by the committee is the provision for the appointment of university graduates to the staff of the Commonwealth Bank. Clause 10 provides - (1.) The Bank may appoint to the Service of the Bank aperson who has not passed a prescribed entrance examination but is - {: type="a" start="a"} 0. A graduate of, or qualified for admission to a degree of, a University in Australia.; and 1. Not more than 25 years of age. (2.) The number of persons appointed to the Service of the Bank under the last preceding sub-section in any year shall not exceed one-ninth of the number of male persons appointed' to that service during that year after having passed a prescribed entrance examination. I am not opposed personally to the entrance of outside persons to the bank staff or to the Public Service. It would be bad if. we had a completely tight system under which nobody could gain entrance to the service except by the ordinary entrance examination. That is a personal opinion of mine and it may not be held by some other honorable members. At the same time, I think that we should safeguard the rights of public servants. Young men who have decided to make a career of banking are entitled to reasonable consideration in the filling of vacancies in the bank. I agree that the existing method of appointment to the service of the bank is not ideal and may result in many young men who have not had a chance to qualify for appointment by passing the entrance examination being' prevented for life from entering the service of the bank. I see no reason why appointment to the service of the bank, of persons other than those who have passed the prescribed entrance examination should be limited to university graduates. Many young men who have gained experience in banking in the private banks wish to enter the service of the Commonwealth Bank but will be prevented from doing so because they are not university graduates. The services of such young men would be very valuable to the bank. As the Government has clearly indicated its intention to push on with the establishment and expansion of the Commonwealth Trading Bank it may well have provided that, of those whom it proposes to admit to the service of the bank other than applicants who have passed the prescribed entrance examination at least 10 per cent. may be experienced young men who have gained banking knowledge and experience in the private banks. I understand that many employees of the private banks would gladly transfer to the Commonwealth Bank service if it were possible for them to do so on reasonable terms. The Government should consider widening the provision to enable persons, other than graduates or those who have qualified for admission to a degree of a university in Australia, to enter the service of the bank without examination. I assume that the limitation of the number of university graduates to one-ninth of the number of male persons appointed to the service of the bank during a year after having passed the prescribed entrance examination is in accordance with the practice followed in the Public Service. We should not make entrance to the Public Service or to the service of the bank so restrictive that young men may be denied for all time an opportunity to join either of the services. Fear has been expressed that the rights of officers already in the service of the bank are not being properly protected. Appropriate steps should be taken to ensure that the promotion rights' of officers are adequately safeguarded. Many officers of the bank have given long and faithful service. Their skill in banking practice should give them advantages not necessarily possessed by university graduates. {: .speaker-N76} ##### Mr Menzies: -- The provision relates, not to promotions within the service of the bank, but to appointments to the bank. {: .speaker-JTF} ##### Mr TOM BURKE: -- In a big organization such -as the Commonwealth Bank every incentive should be offered to the staff to train for higher posts. In addition to safeguarding the rights of the employees having regard to their special experience, the bank should institute a training scheme .to fit its young officers to fill higher positions.- In recent years the bank has developed a very valuable scholarship system under which selected officers are sent abroad to gain experience of banking practice in other countries. The experience gained by those who are fortunate enough to be granted scholarships is valuable, not only to the bank itself, but also to the community in general. The system might very well be extended to cover the training of officers in Australia to fill higher positions in the bank. Men and women employees should be encouraged to study in order to fit themselves for higher positions, and every assistance should be afforded to enable them to do so. As I said at the outset of my remarks we must make the new Commonwealth Trading Bank as efficient as possible, and for that purpose we must secure the sea-vices of the best available men. In filling positions in the new bank preference should he given to existing employees of the Commonwealth Bank. If that is done officers will be given an incentive to remain in the service of the bank. If sufficient staff is not available from among the officers of the bank the requisite additional staff should be recruited from outside the service of the bank but should not be restricted to university graduates to the exclusion of others who have special qualifications for appointment. {: #debate-21-s1 .speaker-KDX} ##### Mr JOSHUA:
Ballarat -- I support the remarks made by the honorable member for Perth **(Mr. Tom Burke).** Many officers of the Commonwealth Bank with whom I have discussed this matter have expressed fears regarding the proposal that one-tenth of the staff intake of the hank shall consist of university graduates. The Labour party has no objection to the appointment of university .students to the Public Service or to the service of the bank. Honorable members on this side of the chamber realize that those who devote a great deal of time to study play a very important part in carving on the affairs of the country. Commonwealth Bank officers are incensed at this provision because they fear that it will operate against their interests in the selection of officers to fill higher positions in the bank. They believe that it should be possible for the bank to establish a system of cadetship for training of young officers. Many youths enter the service of the bank at an early age because family circumstances or other considerations prevent them from matriculating and taking a university course. The bank would render a great service to the community if it provided cadetships for those of its young officers who indicate their intention to devote the whole of their working life to its service! The fullest opportunity should be given to them to participate in all of the benefits that the bank can confer by way of promotion to higher posts. At present the bank recruits its staff by competitive examination. By that means it attracts many bright lads to its service. The Government might very well give an incentive for those young lads to remain in the service of the bank by providing in the bill that officers of the bank shall have prior right to fill vacant higher positions. I believe that it is also a deficiency in the organization of the bank. Any bank, in order to have the capacity to endure, should train its own executive officers. Failure to enable officers of the bank to qualify for positions that are to be reserved for university graduates is a drastic omission from the bill. I recognize that on occasion no suitable officer may be available among the members of the hank's staff to perform work of a particular type; but such a contingency could be met by a proviso to the effect that in such circumstances the bank could engage persons from outside its service. I am not impressed by the age limitation of 25 years because many capable men over that age may be available. That limitation is unnecessary. Some members of the 'Commonwealth Bank Officers ' Association have expressed the fear that the general manager of the proposed Commonwealth Trading Bank will be actuated by thu profit motive and, .consequently, will endeavour to increase the bank's revenue and, at the same time, reduce its expenditure. The largest item of expenditure will be salaries. Members of the association have advised me that their scales of salaries under the 1945 act extended up to 27 years, whereas the scales of salaries of officers of the private trading banks, which are determined by the Commonwealth Court of Conciliation and Arbitration, extend up to only eighteen years. Members of the association fear that the general manager of the proposed Commonwealth Trading Bank, with the object of reducing expenditure, will reduce the scale of salaries. Probably, if he cannot reach agreement with the association, he will force its members into the arbitration court, and, consequently, the existing scales of salaries may be reduced. The Prime Minister has said that officers of the Commonwealth Bank will be fully protected. Nevertheless, I believe that the general manager of the proposed Commonwealth Trading Bank will make a strong move to produce the best results by the standards which the private trading banks observe and that his efforts in that direction may result in a deterioration of the salaries and standards of employment which officers of the Commonwealth Bank now enjoy. Thus those officers, particularly senior officers, may suffer as a result of this measure. The Government should make absolutely certain that officers of the bank shall not be forced into the arbitration *court,* but that the provisions of the 1945' act covering their salaries and their industry as a whole shall continue in force. {: #debate-21-s2 .speaker-JLW} ##### Mr ANDREWS:
Darebin .- I am somewhat perturbed about clause 10 which I regard as being unsatisfactory. Most honorable members will naturally agree with the statement made by the Prime Minister **(Mr. Menzies)** in his second-reading speech that a university degree should not be regarded as an impediment to engagement in the service of the Commonwealth Bank. However, the clause as drafted leaves the door open to the exercise of privilege. I do not know whether the Government adverted to that point. In any event, the Government will not administer the clause. If engagement under the clause is to be limited to university graduates up to the age of 25 years, which provision in itself is fairly restrictive, I doubt whether the appointees will have an adequate opportunity to indicate whether or not they will be outstanding in the particular field for which they are selected. The need to make provision for a greater degree of competition in the filling of such posts is obvious. I find it difficult to appreciate the necessity for making provision for the appointment of university graduates to the service of an institution of this kind. Perhaps, such persons may possess special qualifications in respect of economics, agriculture or business management. Nevertheless, competition for appointment to positions in this sphere should be broadened. At least, the management of the bank might have a look over the lists of those qualified in certain subjects. I repeat that the clause, as drafted, leaves open the door to privilege. I am reminded that on one occasion when a. Minister in Lord Melbourne's Government made the remark that if a certain appointment were to be made he would not mind appointing a person who was associated with the family *" ceteris paribus "* - all other things being equal - Lord Melbourne replied, " Neither would I, but *ceteris paribus* be damned ! " Officers of the bank should be encouraged by the bank to gain university qualifications. Such an institution could very well use some of its profits in making provision for the training of selected officers along lines which the bank believed would give them special qualifications in certain spheres. Provision should also be made to permit the appointment of officers of the private trading banks to the service of the Commonwealth Trading Bank. Many officers of the private banks might believe that they could carve out a career for themselves with the Commonwealth Bank. In addition, they would have special qualifications as a result of their experience with the private banks. Consequently, a degree of preference should be exercised in relation to such applicants. The proposed intake of one-tenth of university graduates, which is a comparatively large percentage, in circumstances in which the competitive spirit will be absent will leave open the door to the exercise of privilege. Whilst it is desirable that the bank should be enabled to obtain the services of officers with the highest qualifications for work of special types, the clause should be redrafted in order to ensure that those with the best qualifications shall be engaged after the bank management has examined the list of university graduates who apply to join its service. Safeguards must be provided against the exercise of privilege. That is most important, particularly when we remember that some years ago privilege was exercised to a scandalous degree in the making of appointments to the Public Service. {: #debate-21-s3 .speaker-N76} ##### Mr MENZIES:
Prime Minister · Kooyong · LP -- I intervene at this stage because it would be unfortunate if any misconceptions about this matter were allowed to become too ingrained. The honorable member for Ballarat **(Mr. Joshua),** who assumed to speak on behalf of the Commonwealth Bank Officers Association, will be interested to know that as far back as October last year the Governor of the bank, **Dr. Coombs** consulted with the association and laid before it the suggested terms of this provision which was promoted by the bank management itself because it knows how necessary it is. The association entirely approved of it. That is the first thing that I make clear. There is no novelty about this provision except in relation to the Commonwealth Bank. A similar provision applies in relation to the Public Service. But I am sure that honorable members, and particularly the honorable member for Darebin, will appreciate that the day has gone when we can say that all the members of the staff of a great central bank must start in its service at the age of sixteen or seventeen years when they have passed a relatively elementary examination. This business is becoming so complex that I believe that no central bank, particularly the one in this country, should be deprived of the services of the best-trained people that it can find. That is why this provision, which is entirely acceptable to the Commonwealth Bank Officers Association, has been introduced into this legislation. I have had communications from the association on one or two other aspects of the legislation, but no protest has been made against this provision, and I am very glad that it is so. I believe that the bank cannot afford to be without the services of persons with university graduate qualifications. The honorable member for Darebin says, in effect, " Well there should be some element of competition for appointment to the staff ". I merely submit to him, and he will appreciate the position at once, that graduates who have different degrees cannot be asked to submit themselves to a competitive examination. I cannot conceive of a graduate in law, a graduate in economics, and a graduate in commerce taking the same examination. Therefore, when university graduates are introduced into the service of the bank, the system must involve selection. Quite frankly, I. am not prepared to believe that the distinguished officers of the bank, who will be in charge of this selection, will have in mind anything but the best interests of the institution. {: .speaker-JTF} ##### Mr Tom Burke: -- Will graduates be chosen by a selection board, the officer in charge of staff matters, the Governor of the bank, or the Bank Board? {: .speaker-N76} ##### Mr MENZIES: -- I do not speak by the book now, but I think that the Governor and Deputy Governor undoubtedly would have the choice, at any rate in the first place. I do not think that we need worry about privilege. There is not half as much privilege now as there was in the days of Lord Melbourne. {: .speaker-JLW} ##### Mr Andrews: -- There should not be, either. {: .speaker-N76} ##### Mr MENZIES: -- I agree with the honorable member. I want the sort of privilege that will enable any boy, whatever his station, to get a university degree if he is capable of doing so. That is a great privilege. I myself have enjoyed it. But I also consider that the bank should have the privilege of recruiting to its ranks this modest percentage of new officers from persons who, by reason of their training, will be able. at once to direct their minds to the problems that they will be required to examine. The honorable member for Perth **(Mr. Tom Burke)** considers that provision should be made for the recruitment to the service of the Commonwealth Bank of members of the staffs of other banks. T am not sure how that proposal would commend itself to the officers of the Commonwealth Bank- {: .speaker-JTF} ##### Mr Tom BURKE: -- I was speaking of specialists. {: .speaker-N76} ##### Mr MENZIES: -- I was about to come to that point. I am not sure whether the proposal would commend itself to officers of the Commonwealth Bank unless the person whom the bank had in mind for selection had some special qualifications which no member of the staff of the bank possessed. -I believe that the position is covered by section 161 of the principal act, which reads as follows: - fi.) If at any time in any special ease it appears expedient or desirable in the interests of the Bank to appoint to the Service of. the Bank a person who has not passed a prescribed entrance examination, the Bank may appoint that person without examination. I think that the officers of the Commonwealth Bank will regard the next subsection as quite proper. It reads as follows : - (2.) No such appointment shall be made unless the Governor certifies that, *in* his opinion, there is no- officer available in th Service of the Bank who is as capable of filling the position to which it is proposed that the appointment shall be made. I have read those two sub-sections because I think that they meet the point which was raised, very properly, by the honorable member for Perth. Clearly, we cannot have a system of artificial competition among university graduates. The man of parts must be chosen. Some people may be the- possessors of law degrees, yet may not have distinguished minds. They have merely passed some examinations. Other men with law degrees may have not only ability but also training that has enriched their minds: Therefore, the matter is reduced to one of honest selection. I agree with the honorable member for Darebin that kissing should not go by favour, and that there should not be any privilege. The selection should be honest. If we require the honest selection of these officers, we all' must do our best to have honest men to make the selections. That is all we can do. {: .speaker-KDX} ##### Mr Joshua: -- I desire to make, a personal explanation. The Prime Minister has stated that I have presumed to speak on behalf of the Commonwealth Bank Officers Association. I merely wish to correct any misapprehension that may be in the. minds of honorable members. I have not had any official communication from the Commonwealth Bank Officers Association. - As I have stated, I have spoken on behalf of individual officers, and, incidentally, I have; spoken to many of them. {: .speaker-N76} ##### Mr Menzies: -- I thank the honorable member. {: #debate-21-s4 .speaker-K7O} ##### Mr CREMEAN:
Hoddle .- With- very great respect, I point out that I do not agree entirely with the opinion expressed by the Prime Minister **(Mr. Menzies)** on this matter. It is all very well for him to say that if we are to get the best kind of administration, we must engage the best brains that are offering. The Public Service of Australia and, for that matter, of the British Empire, has proved its worth because the officers have been appointed, not by a system of selection, but as the result of competitive examination. With a. few exceptions, involving special appointments to departments, the staff of the. Public Service' is selected on the results of competitive examinations, and, in ray opinion, that remains, the better system. It certainly represents a great improvement upon the system that formerly operated in various countries. The day is not. long past when nepotism and. privilege distinguished some appointments to positions in the Public Service. The Commonwealth Bank is in the position of a public service instrumentality. I agree with the view expressed by other Opposition members that the present method of administration in the Commonwealth Bank has functioned most effectively. The system of competitive examinations- is the best means of recruiting staff. Opposition members,, when they express these views, are not throwing- brick bats- at the university graduates ; but they realize that graduates have had similar opportunities to those who qualify for appointment to the staff of the bank. I simply suggest that it has yet to be proved that the system of selection has any greater merit than the system of competitive examination. Educationists throughout the world, and. particularly in - English-speaking countries, have given deep consideration to the problem of whether the system of competitive examination possesses greater merits than the system of selection on the basis of an applicant's alleged qualifications, academic or otherwise. At the risk of being tedious in this matter, I inform honorable members that I have consulted those who appear to be experts on education problems, and I should like briefly to mention their views. I quote from *An Evaluation of the Tests of General Educational Development* by Paul L. Dressel and John Seh mid, which is issued by the American Council of Education. One of the considered opinions of the authors of the handbook is as follows : - >Credit by examination has the double merit of placing the student according to ability rather than academic time served (thus preventing able students from being taught what they already know) and advancing such students more rapidly towards their educational goals. The method should be more widely used than at present, and should be improved by making available to students advance information about the ground to be covered and the nature of the examination, and by broadening the nature of the examinations where this is needed. There is considerable merit in the suggestion of the honorable member for Ballarat **(Mr. Joshua)** that encouragement should be given to existing members of the staff of the hank to study for degrees in certain subjects and so to qualify themselves for special jobs, including economic research which the Prime Minister very rightly regards as of such importance. Support for the system of public examination is not confined to the United States of America, but I shall cite one more authority from that country. In a book entitled *The Examination Tangle and the Way Out,* which embodies 'a report of the International Commission on Examinations of the New Education Fellowship, the following passage appears on page 55:- >A recent inquiry undertaken in the United States of America into the use of the new-type tests in connexion with social science teaching, reached similar conclusions. It found that new-type examinations " are competent to test, for academic purposes, memory of facts, a partial understanding (definition) of terms used . . . and certain logical discriminatory and associational powers." That goes right to the very elements that underlie competitive examinations. I have no wish in this chamber to make allegations of nepotism, or of other malpractices in past appointments, but I believe that, in future appointments to special positions in the bank first consideration should be given to present members of the bank staff. They should be given an opportunity to qualify for the degrees that are deemed desirable qualifications for promotion. I was formerly an officer of the Commonwealth Public Service and I well remember the time when the selective system was used in making appointments to the Third Division, or the Clerical Division as it was then known. I know from my own experience that some men who were appointed because of academic qualifications, including in some instances, university degrees, were inferior to men who had grown up in the service and acquired their knowledge and experience the hard way; The discussion on clause 10 has been constructive. I believe that, far from being a modest quota, the intake of university graduates provided for in proposed section 160a could render a disservice to the bank and prejudice the rights of existing members of the bank staff. In the opinion of the Opposition the public examination system is still the best method of recruiting staff. {: #debate-21-s5 .speaker-K6T} ##### Mr COSTA:
Banks -- I listened with great interest to the assurance given by the Prime Minister **(Mr. Menzies)** in connexion with the appointment of university graduates to the staff of the Commonwealth Bank; but I still believe that the system will have some dangers. The right honorable gentleman pointed out that the system was already in operation in the Commonwealth Public Service, but it does not always operate fairly there. It sometimes operates to the disadvantage of the man who has had vast practical experience, but has no academic qualifications. "We all know that, at times, when a job is vacant and those in authority wish to keep a particular person out or to get a particular person in, a certain university degree is added to the list of required qualifications. I believe . that appointments to special jobs within the Commonwealth Bank should be reserved as a right to officers of the bank. If a university degree is needed, present members of the staff should he given an opportunity to acquire it. I cannot understand the need for an alteration of the law relating to deposits made on behalf of infants. The existing savings bank regulations provide that money deposited for a child by a parent may not be withdrawn until the child has reached the age of 12 years. This amending legislation makes provision for earlier withdrawals in certain circumstances. I cannot see any need for the amendment. If the present section is to be reviewed, it should be deleted altogether and the matter left entirely to the discretion of the parents. The procedure involved in opening special accounts is considerable and requires a good deal of time on the part of the bank officers. Such accounts should not be opened unnecessarily. In regard to the appointment of university students, I endorse the remark of the honorable member for Hoddle **(Mr. Cremean).** I think the proposal has some danger. {: #debate-21-s6 .speaker-JSW} ##### Mr BRYSON:
Wills .- Notwithstanding the explanation that has been given by the Prime Minister **(Mr. Menzies)** of the proposal to admit a certain quota of university graduates to the Commonwealth Bank, I am still doubtful about the manner in which the provision will operate. The provisions of the act relating to appointments by competitive examination were inserted in 1945. The examination system was introduced because of practices that had been adopted or were alleged to have been adopted in the appointment of bank officers. It was the general view of the man in the street that unless an applicant wore the right school tie he need not apply for appointment with the Commonwealth Bank. Applicants were required to submit references of character, diligence, and so on. Prior to 1945 I made inquiries on behalf of a lad who wished to enter the Commonwealth Bank service, and I consulted a bank official about the requirements of the position. He provided the information that I sought and told me that, in many instances, a reference from a member of Parliament was helpful. However, he mentioned the name of a highly respected member of the Parliament, and said, " Tell the boy not to get a reference from that particular mem ber, because if his name appears on the application it will be discarded and the boy will have no opportunity to enter the service of the bank ". Although I do not claim that the inclusion of that member's name on the application would have had that result, the possibility may have been present. In 1945 we got away from the system under which preference in appointment to the service of the bank was accorded to applicants who wore the old school tie, or who were friendly with a leading officer of the bank, by the introduction of the system of entrance by competitive examination. I believe that this is the only system that is acceptable to the people. If we want to attract applicants of higher education qualifications there must be a competitive system of appointment. The Prime Minister has referred to the existing provision in relation to the appointment of persons other than by examination. Subsection (1.) of section 161 of the principal act provides - >If at any time in any special case it appears expedient or desirable in the interests of the Bank to appoint to the Service of the Bank a person who has not passed a prescribed entrance examination, the Bank may appoint that person without examination. Additional provisions ensure necessary safeguards. I know that, because of the ramifications of the bank's activities, it needs exceptionally brilliant men in its service. Sub-section (3.) of that section reads - >A copy of every certificate under the last preceding sub-section shall be laid before each House of the Parliament within fifteen sitting days of that House after the appointment is made. The section contains a definite safeguard that persons shall not be appointed to the bank's service only because they happen to know high officials of the bank, and there is a further safeguard that if a person with special qualifications is required, and such a person does not possess the necessary entrance examination qualification, he may be appointed to the service of the bank, but it has to be proved that a man with his qualifications is required, otherwise the door would be open to appointment by preference. If the Prime Minister would give more consideration to the clause he may see, as honorable members on this side of the chamber have seen, that, as matters stand, there will be a definite risk of the old system gradually coming back into operation. I am quite sure that that system did not give satisfaction to the great majority of persons who desired to enter the bank's service but who, because they did not have friends in the right quarter, were disregarded and had to seek other avenues of employment. Question put - >That clauses 7 to 10 be agreed to. The committee divided. (The Temporary Chairman - Mr. G. j. Bowden.) AYES: 50 NOES: 34 Majority . . . . 16 AYES NOES Question so resolved in the affirmative. Remainder of bill - *by leave* - taken as a whole. {: #debate-21-s7 .speaker-JTF} ##### Mr TOM BURKE:
Perth .- The remainder of the bill completes the pattern of the plan by which the Govern ment intends to establish a Commonwealth Trading Bank divorced entirely from the Commonwealth Bank of Australia. This appears to be a deliberate attempt by the Government to weaken the whole structure of the Commonwealth Bank. Clause 18 provides that the business of the General Banking Division shall be carried on in future by the Commonwealth Trading Bank. First, this will weaken the Commonwealth Bank as a. central bank. Secondly, we believe that it will damage, at least temporarily, the trading business that will be conducted by the Commonwealth Trading Bank. Thirdly, it will inconvenience the customers of the Commonwealth Bank who now deal with the General Banking Division by forcing them to transfer to the new Commonwealth Trading Bank. The main damage will be done, of course, to the central bank. A central bank should have the power to force its will upon the trading banks of the nation. That fact has been demonstrated time after time by experts throughout the world and has been stated clearly in this Parliament on many occasions. It is vital to the Commonwealth Bank of Australia, as a central bank, that it should have a trading division closely related to the central bank, the savings bank, the Rural Credits Department, and the Mortgage Bank Department. Even supporters of the Government no longer deny that a central bank must be able, at certain times, to give directions to the trading banks and insist that those directions be carried out. How can the Commonwealth Bank do so when this bill becomes law? There are various means by which a central bank may impose its will upon trading banks. In other countries, such as Great Britain, the ability of the central bank to establish the bank interest rate and engage in open market operations by entering into particular avenues of trade, providing money for other organizations to engage in industry or establishing new organizations, is vital to the stability of the economic system. The Bank of England, of course, was established in 1694 and has accumulated vast financial strength and great prestige over the years. Nevertheless it needs the weapons to which I have referred in order that it may have the power to force its will at particular times upon the trading banks of the United Kingdom. These weapons are not available to the Commonwealth Bank of Australia. Its open market operations are insignificant, and its attempts to fix the bank rate can be flouted by the private banks. I recall one notable occasion when the Commonwealth Bank sought to establish open market operations in Australia and issued a number of treasury-bills. The interest rate was fixed and the issue was opened for public subscription. Then the Bank of New South Wales increased its rate qf interest on fixed deposits and thereby rendered the issue of treasurybills completely unattractive to the public. That manoeuvre sabotaged the attempt by the Commonwealth Bank to test tho width of the open market in Australia. It might have been possible to determine what strength could be given to the central bank if the public had become accustomed to subscribing regularly to issues of treasury-bills. By that means, as in Great Britain, we could have had the bank reserves increased or decreased by the regular buying and selling of treasury-bills and other public securities on the open market. However, the private banks sabotaged the attempt to test the market, which was made on the recommendation of the Royal Commission on Monetary and Banking Systems. This proved that the private banks were completely unwilling to follow the lead given by the central bank and demonstrated that the central bank should be vested with power to force its will upon the private banks when voluntary action fails. In the absence of the weapons that I have mentioned, there is one way in which the central bank in this country can acquire the power to impose its will upon the private banks. That is for the bank to engage in general trading operations and to have enough monetary power, in its own right, to be able to engage in lending operations of sufficient magnitude to make the other banks fall into line. The Commonwealth Trading Bank, which will be established under the terms of this measure, will not have nearly sufficient money to enable it to meet the private banks successfully in open competition. The advance policy of a bank is based upon the amount of its cash resources. Therefore, the form in which the capital will be transferred to the new Commonwealth Trading Bank will determine the extent to which it can be used. If it is transferred in the form of actual cash or readily realizable securities, it can be used in its entirety as a base for advance operations. If it is transferred, in whole or in part, as fixed assets or other non-realizable securities, the bank is even more restricted in its lending operations. The effect, if not tha purpose, of the bill is to reduce rather than to increase the power of the central bank in this country, which is limited enough already. The effect of the measure, either immediately or in succeeding years, will be to make less effective the ability of the Commonwealth Bank to exercise its central banking functions. When a period of inflation occurs, the central bank is required to do certain work and, if used properly, it is an effective weapon to combat inflation. But the situation can be handled even better by proper Government action. If the Government does not act firmly, intelligently and courageously, the activities of the central bank cannot check inflation. We fear a depression even more than inflation, which can be controlled by various means. The TEMPORARY CHAIRMAN.Order ! The honorable gentleman's time has expired. **Mr. JOSHUA** (Ballarat) (5.16].- I direct the attention of the committee to section 116 of the Commonwealth Bank Act, which, after the passage of the bill, will be section 85. It reads as follows : - >The amount of a loan under this Division shall not exceed eighty-five per centum of the value (as determined by the Bank) of the estate or interest in land on which the loan is secured, or One thousand seven hundred and fifty pounds, whichever is the less. The sum that the bank may advance as ft housing loan is limited by that section to £1,750, and has been so limited for a long time. The sum was fixed many years ago, when housing costs were very much lower, and now is quite inadequate. In the interests of the community, the section should be amended, and this is t'hc time to amend it. Doubtless most honorable members have read in one of our leading daily newspapers that the present cost of a ten-square home, with the minimum finish, is about £2,690. If a man who wishes to build a modest house of that type has to pay a deposit of a quarter of that sum, he will require a loan of £2,018. Therefore, a loan of £1,75Q will not enable many people to build houses. The Commonwealth Bank has indicated quite clearly that it requires further money to enable it to make housing loans. In the report of the bank for the year ended the 30th June, 1952, under the heading " General Banking Division ", the following passage appears: - >This Division of the Bank operates in a similar manner to the Australian private banks . . . Its capacity to make advances is related to deposits received from its customers plus its capital and internal funds, and it does not, and lias not, borrowed from the central bank for this purpose. > >The funds available to the Division in 1951-52 were not sufficient to meet all demands and restrictions on lending were necessary during the year. The bank did not have enough money to lend to people who wished to build houses, although the maximum loan is fixed at a figure that I consider to be unduly low. The ability of the bank to lend money to such people should be increased. That could be done by the insertion in the act of a provision similar to that which relates to the Industrial Finance Department. It provides that the Treasurer may make advances to the bank for certain purposes. A provision of that kind should be inserted in the act, but, as I pointed out in my secondreading speech, the purpose of the Government is to hamstring the bank, not to allow it to expand .as it ought to expand and as the people want it to expand. The maximum housing loan permissible is too low. Under the war service homes legislation, the maximum loan has been increased to £2,750. I do not propose to enter into an argument about whether in this matter returned servicemen should he treated more favorably than ordinary members of the community. I say that everybody should have an opportunity to purchase the kind of house that he needs. The time is approaching when there will he -a big expansion of "bank advances. There will be a great release of credit, and the banks are eager to get in on it. I say that the Commonwealth Bank should be enabled to participate largely in that expansion and should be in a position to advance reasonable sums to enable people to buy their own homes. Peoplelike to deal with the Commonwealth Bank because it requires an equity of only 25 per cent., compared with the 40 per cent, required by private banks, and the rate of interest that it charges upon loans is one-quarter per cent, lower than that charged by the private banks. If the maximum permissible housing loan were increased, many people would borrow the money that they require from the Commonwealth Bank, but the Government will not amend the act to enable them to do so. I turn to the suggestion of the Prime Minister **(Mr. Menzies)** that it is impossible to make cheap loans to the people. Private trading banks are prepared to make housing loans available to their officers at 2^ per cent, interest. Therefore, it is ridiculous to say that we cannot make cheap loans to the people. {: #debate-21-s8 .speaker-JAG} ##### Mr CREAN:
MELBOURNE PORTS, VICTORIA · ALP -- I direct the attention of the committee to clause 18 (4.), which was expressly mentioned by the Prime Minister **(Mr. Menzies)** in his second-reading speech on the bill. It deals with liabilities which, apparently, in the banking world, are regarded as being of a somewhat onerous nature. The sub-clause proposes that if the General Banking Division of the Commonwealth Bank is carrying liabilities of that kind, the Commonwealth Bank, in its capacity as a central bank, may continue to carry on that portion of the business of the division after what is called the proclaimed date until such time as the Commonwealth Bank Board determines, or the Treasurer certifies that he is satisfied, that it is no longer impracticable for that portion of the business to be -carried on by the Commonwealth Trading Bank, and that thereupon the central hank shall make such arangements as are necessary for that business to he carried on by the trading bank. The point at issue is : what facilities will the public have for access to the Commonwealth Bank, in its central banking capacity, to negotiate loans <of that kind ? The ordinary public does not come into direct contact with the Commonwealth Bank. It comes into contact with the General Banking Division, the Commonwealth Savings Bank and other special agencies. Yet it is proposed that business of a certain type shall be segregated from the Commonwealth Trading Bank, which itself is to be segregated from the central bank. The Prime Minister has not given much information about how the kind of business to which the subclause refers will be undertaken in the future. It must be borne in mind that, in the past, the General Banking Division of the Commonwealth Bank has not been obsessed, as have the private banks, by profit considerations. I presume that this kind of onerous liability is the long-term type of overdraft which private banks tend to eschew. They like to clear overdrafts as quickly as possible and are not primarily interested in whether a person who seeks accommodation wants to build a house or a dog kennel. The social implications are not important to them. Sometimes local government bodies want a certain amount of accommodation for street building, for example, and apply for accommodation from the General Banking Division of the Commonwealth Bank. Is it that kind of activity which it is intended to separate under the provision of clause 18 sub-clause (4.) of the bill? If it is, how is the private individual who can no longer secure accommodation from the local branch of the Commonwealth Bank to secure accommodation of that kind which may be very necessary to him ? This clause is vague in its definitions, as are many other parts of this bill. The Opposition suggests that the essential unity of the Commonwealth Bank will be destroyed by this measure. .The bank will have to think what its right hand is doing in a place apart from its left hand. Not only is the General Banking Division to lose its old unity but certain classes of business are to be taken away from it and vested in the bigger body, the central bank. At least the Prime Minister or the Vice-President of the Executive Council **(Mr. Eric J. Harrison)** might inform the committee of the type of business that is referred to in the clause. The Prime Minister suggested that it would be unfair from the point of view of equality of competition between private banks and the Commonwealth Bank that this onerous type of obligation should continue to be shouldered by the Commonwealth Trading Bank and he said that in the interests of fair competition he proposed that it should be handled by the other section of the bank. The Prime Minister's idea of fair and unfair competition seems to be very vague. I would like him to give us instances of unfair competition in which the Commonwealth Bank has engaged. If the Vice-President of the Executive Council has any further information on sub-clause (4.) of clause 18 he might enlighten the committee as to the sort of business which is considered to be onerous. If it is highly necessary business how does he propose that members of the public who seek that sort of accommodation shall be able to get it from the central bank, sheered off from the Commonwealth Trading Bank? {: .speaker-KX7} ##### Mr Ward: -- Does the honorable member really think that the Vice-President of the Executive Council will be able to answer his question? {: .speaker-JAG} ##### Mr CREAN:
MELBOURNE PORTS, VICTORIA · ALP -- I shall ask it, in any case. When the committee was considering another bill it was informed that the Minister at the table had notes on various clauses and could amplify them. Consequently, I asked the Vice-President of the Executive Council to be so courteous as to tell one who is a little in doubt on this matter what the clause means. {: #debate-21-s9 .speaker-KDX} ##### Mr JOSHUA:
Ballarat .- I am surprised at the complete apathy of Government supporters in relation to this measure. None of them seems to be interested in the working of the Commonwealth Bank. They do not appear to want it to progress. It should not be necessary for Opposition members to inform the committee of facts concerning the Commonwealth Bank which frequently seemed to have been overlooked by the Government. New section 127 of the principal act to which I referred earlier provides that the Treasurer may make advances to the Industrial Finance Department. I consider that the bill should provide that the Treasurer may make advances to the Commonwealth Trading Bank. If that provision were inserted in the bill it would eliminate my objection that the bank will not be strong enough structurally. If the provision that I have suggested were included in the bill the Treasurer would have the power to make advances to the Commonwealth Trading Bank in order to enable it to carry out a positive policy for the benefit of the people. As every honorable member knows, the Industrial Finance Department has played, a most important part in the activities of the Commonwealth Bank. It has provided capital for small businessmen to commence operations. Its activities should appeal to Government supporters because it has assisted private enterprise. Its activities have certainly appealed to Opposition members. The report of the Commonwealth Bank for the financial year ended the 30th June, 1951, shows on page 25 that the balance outstanding at the 30th June, 1951, in current loans totalled slightly over £23,000,000. The report comments- >This figure does not represent a marked change from the total outstanding at 30/6/50. Although lending has been stabilized, considerable amounts repaid during the year were lent again in conformity with the policy of the Department in assisting industry. > >The Department's technical services in cost accounting and methods planning continue to bc sought after and plans are being made for the extension of these services. In the report of the Commonwealth Bank for 1952 the Governor of the Commonwealth Bank said - >The department does not accept deposits except credit funds of its advance customers. It has financed its lending from capital and reserves plus funds lent to it by the Commonwealth Savings Bank in accordance with the Commonwealth Bank Act. It is not indebted to the central bank with whom its borrowing powers, like those of the Mortgage Bank Department, are limited to £1,000,000. > >During the year there has been a heavy demand on the facilities of the department. On the other hand, new funds were available to it in very limited amounts because of the other demands on the Savings Bank's funds. Accordingly it has been necessary to confine advances to projects of first importance. In the latter portion of the year emphasis has been laid on financing agricultural tractors and implements under hire-purchase terms. The report continues - >Total balances outstanding in current loans as at 30th June, £24,068,000, show very little variation from the comparable figures as at 30th June, 1951, £23,221,000. The Commonwealth Bank has not been able to grant loans to people who have wanted to use its services, because the Treasurer **(Sir Arthur Fadden)** has not provided it with funds to enable it to do so. I consider that that is a matter in which this House should be interested, and I am astonished that honorable members opposite have not made some mention of it and have not indicated to the Government that, concurrently with- the expansion that we expect to take place in the coming twelve months, extra finance ought to be made available to the Industrial Finance Department to enable it to get on with its most important work. We on this side of the chamber are most interested that people with small means who wish to establish businesses should have the opportunity to do so successfully. I have directed attention to this matter because I consider that the Government has been remiss in not making some effort to enable the Industrial Finance Department to help small business men. I think that it is completely reprehensible on the part of Government supporters to sit in their seats like stuffed dummies and not -make any mention of this matter. {: #debate-21-s10 .speaker-KNX} ##### Mr ERIC J HARRISON:
Vice-President of the Executive Council and Minister for Defence Production · WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- I can quite understand the honorable member for Melbourne Ports **(Mr. Crean)** being confused by the terms of clause 18 (4), because the verbiage used would be confusing to any person not steeped in the law. I have the information that he requires, contained in a report that is associated with this clause. I take it that the honorable member is sincere in his desire to have this information, because he is not one of those ragtag and bobtail speakers who gets up on the other side of the chamber just for the sake of talking. I shall give him, therefore, in terms supplied by the Prime Minister **(Mr. Menzies)** himself, the meaning of the clause. The explanation reads - >It will be - impracticable to transfer to the trading bank on the proclaimed day all the business at present conducted by the general banking division. I think that the honorable member will concede that obvious point. *[Quorum formed.']* The explanation continues. - >This situation will arise in isolated cases where, for example, an account is guaranteed under State law which provides only for the giving of guarantees to the Commonwealth. Bank, or where the rules of a particular organization preclude it from, hanking with a bank other than the Commonwealth Bank. In these cases the Commonwealth Bank will, with the approval of the Treasurer, after receiving a report from the board, continue to carry on business of this kind until it is practicable for it to be taken over by the trading bank. {: .speaker-KX7} ##### Mr Ward: -- That makes it all quite clear, does it not ? {: #debate-21-s11 .speaker-KNX} ##### Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -T. HARRISON.- It will make the position clear to the honorable member for Melbourne Ports, but not to the honorable member for East Sydney **(Mr. Ward).** Mi DUTHIE (Wilmot) [5.40].- I refer to the Rural Credits Department of the Commonwealth Bank, which was established specifically to help primary producers and others. The Rural Credits Department established the Rural Credits Development Fund to make money available for development, particularly of primary production. That is an excellent idea. I am appalled, however, at the small amount of money that the report shows to have been made for this specific purpose. The Commonwealth Bank's report dated the 30th June, 1951, makes the following statement in relation to rural credits : - >During the year the Bank made grants from this Fund totalling £43,160, of which Australian Universities received £27,000 for research into such matters as cereal diseases, soil fertility and animal health, and for carrying out farm management surveys. That leaves only £16,160 for actual rural development. Divided among the six States the average amount was only about £2,500. Last year's report makes a similar statement. It says, at page 29 - >Grants totalling. £45,000 were made during the year from the Rural Credits Development Fund to assist various organizations in the promotion of primary- production. Of this amount £31,000 was made available to Australian Universities for research projects associated with rural industry. That leaves only £14,000 granted for development in rural areas. I cannot help feeling that the Commonwealth Bank Board, which the Government established to control the bank, has in some respects been a restrictive influence on that institution, as it was between 1924 and 1945. I shall instance one ease to show why I hold that opinion. A contractor in Hobart, whose only work was the clearing of new land, ditching, draining and so on, on contract, applied to the Commonwealth Bank in Hobart for a loan of £1,000 to help him to buy a second bulldozer. He has assets worth £8,000- {: .speaker-KGC} ##### Mr Hamilton: -- That does not come . under the Rural Credits Department. {: #debate-21-s12 .speaker-KDA} ##### Mr DUTHIE:
WILMOT, TASMANIA -- Yes, it does. I am referring to the Rural Credits Development Fund, which is designed to assist in the promotion of primary production. I saw a record of that man's assets. He could not obtain a loan of £1,000 from the Commonwealth Bank to enable him te buy another bulldozer. He had so many orders from farmers in the south of Tasmania for the work of ditching, clearing, and so on that he could not carry it out with only one bulldozer. Yet he could not obtain the loan he required. That man has told many of his friends about his experience. It seems to me that by methods such as those the volume of business transacted by the bank can be restricted. I urge the bank to give more mature consideration to requests such as that to which I have referred. After all, the purpose of the Rural Credits Department of the bank is to assist primary producers, which it did not do in that instance. As long as I can remember, I have been an advocate of the Commonwealth Bank. I have tremendous respect for it because I think that it is one of the greatest institutions that this country has produced. Its story is one of the most thrilling in Australian history. It grieves me to think that instances of the kind to which I. have referred should be allowed to occur. If the man had been asking for £100,000 it would have been a different matter, but he required only £1,000 and possessed assets of approximately £8,000. A refusal in such circumstances- is fantastic. During the last two years,, approximately £88,000 has been advanced for rural development over the whole of Australia. That is not nearly sufficient. Many farmers wish, to expand their properties and to clear areas which have been overrun by scrub. The Rural Credits Department of the bank is designed, to assist primary producers to carry out such work. I bring this matter forward not in any carping, critical way, because, as I have said, I am a supporter of the bank and try to secure business for it whenever I can, but because it is discouraging Ho me and! to other people if the bank conducts its affairs in the way that I have mentioned. ifr. DALY (Grayndler). [5.48].- One of the most significant features' of this debate is the silence of those who are selling out. the Commonwealth Bank by means of the legislation we are now discussing. That silence indicates the complete contempt in which the Government, holds this matter. Only a short time ago the. Minister who was. then in charge of the hill was obliged to read an answer which was unintelligible to most honorable members. Now hie has left the chamber, presumably to find out what the answer meant.. At the moment, the Minister- for Social Services, **(Mr. Townley),** is in charge of the measure, and I suggest that, although the honorable gentleman may know all about social services, his knowledge of the clauses of this bill is strictly limited. It is important that the Minister at the table should know what is- being discussed, because I have some pertinent questions t© ask concerning clause 11 and' several other- clauses. If answers: of the kind to which I have already referred are to be given to my. -questions', they may as well not be answered. I should like to see- in- the chamber the honorable member for Macarthur **(Mr. Jeff Bate),** the rebel who to-day. withdrew an amendment he had circulated! which sought to remove the Commonwealth Bank completely. I should also like, to hear the honorable member for- Mackellar- **(Mr. Wentworth)** discussing clause 11, and the views of the honorable member for Mitchell **(Mr. Wheeler)** on clause 13. In addition, I should like to hear what the honorable member for St. George **(Mr. Graham)** has- to say about clause 15 of the hill. The TEMPORARY CHAIRMAN Order! The honorable gentleman will tell, us what he thinks. {: #debate-21-s13 .speaker-6V4} ##### Mr DALY:
GRAYNDLER, NEW SOUTH WALES -- I appreciate your interest in this hill, **Mr. Temporary Chairman,** but the Opposition is here to present its ease, in a constructive way. So far, not one back-bencher on the Government side of the. committee has supported the proposals that have been put forward. Is it not right that. I should criticize the supporters of the Government who sit as silent as rabbits suffering from myxomatosis? Clause 11 provides, that - >Section one hundred and! seventy-five, of the. Principal Act is amended by omitting subsection (,3. ) . Subsection (3'.)- of the principal' act provides that - >The Chairman of the Disciplinary Appeal: Board shall be. a person who is or has. been a Police, Stipendary or Special Magistrate oi a State or Territory of the Commonwealth. Why should, that provision be removed from the legislation? It seems to me that that is a fair question to address to the Minister at the table, or to any member of the Government.. Apparently it is proposed to dispense with independent chairmen.' Although that appears to be so, honorable members opposite refuse to rise. and defend the proposal. What is the explanation of the Minister for Social Services: regarding this proposed important change in the structure of the bank?' I challenge all. members of the Government to explain why it is intended to dispense with the services of such reputable citizens as magistrates. The refusal of the Government to explain or defend that proposal is in keeping with its policy to pack the administration with- " yes-men " who support only the liberal party or the Australian Country party: This is the pattern feat is being followed with appointments all over the country. That comment applies to appointments' to the Commonwealth Court of Conciliation and Arbitration, as well as' to other appointments. Clause 12 of the bill provides - >Section one-, hundred and. seventy-eight of the Principal Act is. amended by omitting, from sub-section fi..) the word's " , as soon as practicable after the thirtieth day of June in each year, prepare a list of all officers in the Service of the Bank on that d-ate " and- inserting in their stead the words " from time to time,and whenever the Treasurer so directs, prepare a list of all officers in the Service of the bank." What is the reason behind this proposed sinister change in the administration of the bank? Does the Government wish these lists to be kept up to date so that it may see which members of the staff are supporters of the Liberal party and the Australian Country party? Does it want to pack the bank staff with persons recruited only from the wealthy and influential sections of the community? Does it intend to keep a dossier on every member of the staff, so that it may check up on him? Does it require such a list to check the political views of members of the bank staff, or does it wish to have staff members who will go out and fight for government policy, irrespective of their personal qualifications? I place my own interpretation on the proposed change and conclude that the Government wishes to build up a bank with a staff of administrators, and rank and file employees, who are prepared to do anything the Government wishes, irrespective of whether it is in the interests of the bank or not. If that is not the correct interpretation, let the Minister for Social Services **(Mr. Townley),** who is now present, explain what it is. Or let some intelligent member of the Government, if one can be found, tell honorable members the meaning of the changes. Not one honorable member on the Government side knows anything about this measure. It was presented to the Parliament before the supporters of the Government had even considered it in their caucus room. They sit here to-day like a collection of puppets, giving lip-service to the policy laid down in the measure which has been condemned by amendments that have been placed before the committee and which is opposed behind the scenes by the vast majority of Government supporters. You, **Mr. Temporary Chairman,** are an intelligent man who occupies an important position in this chamber. Surely you moist realize how unanswerable are the questions that I have asked to-day. But they are the same questions as are being asked all over the country. Unfortunately, my allotment of time does not permit me to consider separately all the clauses under review, and to ask pertinent questions on each one. I could ask the Minister for Social Services certain questions, but perhaps he would only smile, as he is doing now, and suggest that he will answer the questions later. The Minister for External Territories **(Mr. Hasluck),** who is also present, would not know anything about a bank. Therefore, the Government representation here has not improved since the Vice-President of the Executive Council **(Mr. Eric J. Harrison)** left the chamber. Now let me consider the second row of honorable members on the Government benches. First there is the honorable member for Wimmera **(Mr. Lawrence).** Then there is the honorable member for Bennelong **(Mr. Cramer).** What answer has that honorable member, who is a militant member of the Government parties, to the questions that I have asked? The next' honorable member is the honorable member for Forrest **(Mr. Freeth).** He comes from far-off Western Australia, but he could not answer me because he is not even interested in the problems that I am discussing. That is because he is merely a yes-man. Now we could look farther back) along the Government benches- The TEMPORARY CHAIRMAN.Order ! Look back to the bill. {: .speaker-6V4} ##### Mr DALY: -- I apologize, **Mr. Temporary Chairman,** for making a passing reference to the attitude of various honorable members on the Government side, but I am eager to know what they think about this measure. Why are they so silent about if in the Parliament? {: .speaker-KX7} ##### Mr Ward: -- What about the professor ? {: .speaker-6V4} ##### Mr DALY: -- Yes, the honorable member for Warringah **(Mr. Bland)** should be able to give us an intelligent answer to the questions that we have asked'. He is a mathematical expert, and perhaps he is able to tell us something about clause 14 of the bill. The TEMPORARY CHAIRMAN.Order! The honorable member's time has expired. *Sitting suspended from 5.58 to 8 p.m.* {: #debate-21-s14 .speaker-K7J} ##### Mr CRAMER:
Bennelong .- Immediately before the sitting was suspended, the committee was treated to a speech by the honorable member for Grayndler **(Mr. Daly)** who obviously was trying to talk out time. He charged honorable members on this side of the committee with knowing nothing about the clauses of the bill, but it was obvious that he himself was ignorant of their meaning. The debate has been extremely interesting up to this point. The only apparent weakness has been the floundering of the Opposition in its search for something to say. Honorable members on the Opposition side have repeated the same story like parrots. As a matter of fact, I believe that the debate has been used by the Leader of the Opposition **(Dr. Evatt)** as a. testing ground in his search for a Treasurer to fill that post in any prospective government that he hopes to lead. He has been trying out many of his supporters. First a trial was given to the honorable member for Melbourne Ports **(Mr. Crean),** but he appeared to fail miserably. The right honorable gentleman gave several trials to the honorable member for Ballarat **(Mr. Joshua)** because he was at one time a banker, but he also failed to make the grade. The Leader of the Opposition then gave the honorable member for Melbourne **(Mr. Calwell)** a chance, but his display last night showed- {: .speaker-6V4} ##### Mr DALY:
GRAYNDLER, NEW SOUTH WALES · ALP -. - I rise to order, **Mr. Temporary Chairman.** Could the honorable member for Bennelong **(Mr. Cramer)** be directed to give his attention to the bill? The TEMP OB ABY **CHAIRMAN (Mr. Bowden).** - Order! I shall watch that. {: .speaker-K7J} ##### Mr CRAMER: -- I would describe the debate as the battle for budding Treasurers. The honorable member for Melbourne appears to have fallen down on his task completely. Last night he displayed much bitterness in his speech. Finally, it appears that the honorable member for Perth **(Mr. Tom Burke)** has been chosen to lead the Opposition attack. No doubt it is very difficult for the Leader of the Opposition to find a prospective Treasurer and at the same time cure the differences between himself and his deputy, the honorable member for Melbourne. This afternoon the honorable member for East Sydney **(Mr. Ward)** let the cat out of the bag. He, too, is an aspirant for the treasurership and completes the team of possibilities for the office that the Labour party has had on display in this debate. I shall now revert to the bill because honorable members on the Opposition side have indicated that they would like to hear something from me on the matter. The committee is now considering clauses 11 to 18 of the bill. Almost all those clauses relate to minor details of the measure and are consequential upon the main principles that have already been decided, apart from the schedules which are very important to the measure. Clause 18 is a vital part of the bill because it- relates to the handing over of the physical assets and liabilities from the general, division of the Commonwealth Bank to the Commonwealth Trading Bank which is to be established. That is a very important function because without it there would not be a trading hank. Through this clause, an opportunity is presented for the new Commonwealth Trading Bank actually to get into action. At the date of the proclamation, it will be legally entitled to, and will, in fact, carry out all the functions of a trading bank. Through clause 18, the Government will bring to fruition a promise that it made to the electors. Moreover, that promise was approved by the electors though the Opposition would not admit it in any shape or form. This is the physical culmination of the Government's proposals. By handing over the assets of the General Division of the Commonwealth Bank to the new Commonwealth Trading Bank, the Government will be establishing the basis of fair competition between the Commonwealth Trading Bank and the private trading banks. I know that there is some difference of opinion upon this matter, but all the controls and directions that are to be used by the Central Bank apply equally to the new Commonwealth Trading Bank and to the private trading banks. In future, the people will be afforded an opportunity for fair trading and banking practice in every branch of banking service. This Government has been charged with acting at the dictation of the private banks. That is utter nonsense. The Government has acted in the best interests of Hie people 'of Australia without fear or favour. The private banks have said that the Government has not gone far enough. They, like many people in Australia, are suffering from the fear of what might happen to the banking structure if, by any chance, the Australian Labour party should gain control of the treasury bench. If the private banks and the people were quite sure that the Labour party would not be returned to office as a government, nobody would be worried. The Government has gone as far as it .can go at this stage to provide for fair competition between the two types of banks. That is fair and proper. So far as the people are concerned, the Commonwealth Bank will still be a government trading bank and the property of the people of Australia. The Leader of the Opposition endeavoured to prove that the Government was carrying out some scheme to dispose of the people's assets. The Commonwealth Trading Bank will still be a government hank, and the Labour party's view on the matter is inconsistent and ridiculous. The honorable member for Melbourne has suggested that the Government is trying to undermine the Commonwealth Bank. That is nonsense. As the honorable member for Melbourne knows, the bill contains a clause which states that the Commonwealth Trading Bank must .develop and expand its business. The Leader of the Opposition placed emphasis upon the change of name of the bank as though it was of some great importance. The name that the Government proposes to give to the bank is clear to the people. It will he a trading bank and it will be called the Commonwealth Trading Bank. If I am any judge of business and commerce, that name will be an asset io the bank and helpful to the people. The Opposition's criticism on that point is paltry. The truth is that the people cannot trust the Labour party with the hanks. The Labour party's record in that regard is indelibly printed upon the minds of the people. If it gets a chance, the Labour party will nationalize the banking structure of the nation. It tried to do so in 1945 and only failed because of "the findings of the High Court of Australia, first in relation to the direction- The TEMPORARY CHAIRMAN.Order ! The honorable member's time has expired. {: #debate-21-s15 .speaker-BV8} ##### Mr CALWELL:
Melbourne .- ' The honorable member for Bennelong **(Mr. Cramer)** is one of the disappointed aspirants for ministerial office in the Menzies Government.- He thought he was in on one occasion, but the Prime Minister **(Mr. Menzies)** could not see any virtues in him - and for once the right honorable gentleman was right. The honorable member, Who is a reject in his own party for ministerial advancement, tried to satirize my colleagues, the honorable member for Perth **(Mr. Tom Burke)** and the honorable member for Melbourne Ports **(Mr. Crean).** They may be treasurers of Australia one day, that is more than he will be, and they will make very good treasurers if they are ever given that office. This bill is intended to erode the Commonwealth Bank. The tories of other days did not want the hank, and they voted against its establishment' in 1911. The bank, in all its departments and by its control of the note issue, has made £1,000,000 in profits which, if there had been no Commonwealth Bank, would have gone to the shareholders of the private banks, many of whom live overseas. Their only interest in Australia is the interest of a person who is exploiting another country for his own benefit. The honorable member for Bennelong directed particular attention to clause 18 which provides the machinery by which hobbles are to be placed on the bank and the separation of the Commonwealth Trading Bank from the central hank is to be achieved. The purpose of the Government in establishing the Commonwealth Trading Bank is to make it more difficult for the Commonwealth Bank to trade. The Commonwealth Trading Bank will be relegated to the back portion of every Commonwealth Bank premises in Australia. We are reverting to the bad old days from 1911 to 1945 when the Commonwealth Bank was not allowed to compete with the private trading banks. A gentleman's agreement was made between **Sir Denison** Miller and the private banks and after the Commonwealth Bank Board . had been, established the Ashtons, the Gibsons,, the McComases and the Garvins came along;. as- the. honorable member for Fremantle **(Mr. Beazley)** pointed out last night,, with a settled and deliberate policy, according to evidence given by **Sir Ernest** Biddle before the Royal Commission on Monetary and Banking Systems, not. to take any business from the private- banks, and as a result the trading activities of the bank were restricted. The 1945 act, which honorable members opposite did not want and which some of them very vehemently criticized, was intended to make the Commonwealth Bank an active competitor with the private banking institutions. Government supporters are not prepared to stand up and say that they want to destroy the competitive power of the Commonwealth Bank. Now they are converts. They say that they want to support the Commonwealth Bank in- its competition with the private trading banks, but they have only allowed nineteen branches of the bank to be- established since the Government came into- office three years ago.. From the hypocritical pretence contained in all the speeches made by honorable members opposite it is obvious that their real desire, is not to protect the people's bank but to advance the cause of the private banks. I should like to hear the honorable member for St. George **(Mr. Graham)** repeat verbatim the article that he contributed to the Sydney *Daily Mirror* in June of last year, in which he went much further than did the honorable member for Macarthur **(Mr. Jeff Bate)** in the- proposed amendment he circulated but failed to. move to-day. I should like to hear the honorable member for Mitchell **(Mr. Wheeler)** speak his piece again, if be is not afraid of the party whip. I should like to hear from the honorable member for Evans **(Mr. Osborne),** who, if he gave expression to that which is moving inside his innermost being, would advocate the destruction of the Commonwealth Bank. I should like to see- the honorable member for Mackellar **(Mr. Wentworth)** go berserk about this bill as he has about other things. I should like to stir up the honorable member for Warringah. **(Mr. Bland.),** who was once a professor of public administration and who knows something about this: matter. Let those honorable members stand up and be counted. We want to know where they stand, on. this matter. {: .speaker-KWP} ##### Mr Turnbull: -- We want to know where the honorable' member himself stands. {: .speaker-BV8} ##### Mr CALWELL: -- Honorable members opposite know where I stand on everything. I do not hide my views on any matter. To-night I have a splendid opportunity, through the microphones, to appeal to the electors of South Australia and Queensland and to ask them to stand with the Labour party on Saturday next- {: #debate-21-s16 .speaker-10000} ##### The TEMPORARY CHAIRMAN: -- Order !' The honorable member has an obligation to address the Chair. {: .speaker-BV8} ##### Mr CALWELL: -- I am addressing the Chair and through you, **Mr. Temporary Chairman,** the vast audience of hundreds of thousands of Australian people who are listening to the broadcast of this debate, and particularly the electors of the two States that I have named. On Saturday we want them to return a good Labour Government in Queensland and destroy the anti-Labour Playford Government in South Australia. {: .speaker-10000} ##### The TEMPORARY CHAIRMAN: -- Order ! .The honorable member must return to the bill. {: .speaker-BV8} ##### Mr CALWELL: -- I shall do so.. The provisions of clause 18 cover three pages of the bill. The schedules to the bill cover another eight pages. In the course of the Government's preparations to destroy the trading activities of the bank it found that it had to mutilate the Audit Act, the Australian Broadcasting Act and Heaven only knows how many other acts of Parliament. It can truly be said that the Government has made a thorough mess of this legislation. It wants to hobble the Commonwealth Bank and render it ineffective and incapable of competing with the private banks. In this bill it wants to> do to the Commonwealth Bank what the airlines legislation did to TransAustralia Airlines for the benefit of Australian National Airways Proprietary Limited. I say all this in a spirit of sweet charitableness. If I wanted to be as bitter as the honorable member for Bennelong describes me to be - Heaven forbid that I should want to be bitter about anything - I could say a great deal about the depredations of the money power in Australia. The TEMPORARY CHAIRMAN.Order ! The honorable member might say a little about the bill. {: .speaker-BV8} ##### Mr CALWELL: -- il shall say something about the Australian Country party in a moment, and that, too, will make interesting hearing and reading. The depredations of the money power in Australia over the years are too terrible to contemplate. You, **Mr. Temporary Chairman,** are old enough to remember what the private banks did in my State and yours in 1S93. You will recall how they turned the people out into the streets; how they closed their doors and thousands of people were ruined; how many good people were driven to suicide; and how old-established families, whose forebears turned the first soil in this country, were driven off their lands. These things can happen again if there is no Commonwealth Bank in existence. Because we believe in safeguarding the people's bank we are opposing the passage of all these clauses. The ineffectual and fatuous speech of the honorable member for Bennelong did not impress even his own electors. After having heard his remarks, they will be benighted if they again elect him as their representative in the Parliament. The schedules to the bill make very interesting reading. One would need the assistance of a panel of Queen's Counsel to help one to search the various acts which this bill seeks to amend. The Government has not been fair to the committee, because it has failed to set out clearly the meaning of the amendments proposed to be made under the measure. The TEMPORARY CHAIRMAN.Order! The honorable member's time has expired. {: #debate-21-s17 .speaker-KWP} ##### Mr TURNBULL:
Mallee .- The honorable member for Melbourne **(Mr. Calwell)** has just repeated a speech which he has made over and over again in this chamber. It gave me the impression that I was listening to an old gramophone record. His speech to-night varied only insofar as the honorable member addressed certain of his remarks directly to the people of South Australia and Queensland where State elections will he held next Saturday. He merely indulged in party political propaganda. He invited Government supporters to speak their minds on this issue and to say what they really thought about it. We certainly know what the honorable member himself thinks about it. He is a dyed-in-the-wool socialist and his only aim as a member of the Parliament is to work for the introduction of socialism in Australia. In that aim he is supported by nine-tenths of the members of the Opposition. This afternoon, the honorable member for East Sydney **(Mr. Ward)** declared that it was still the definite aim of the Australian Labour party to nationalize the private trading banks. On the other hand, some of his colleagues have said that the people need not be afraid of the Australian Labour party on that score because the High Court and the Privy Council have ruled that the Parliament cannot nationalize the private banks because they are prevented by the Constitution from so doing. That is on a par with the attitude of a man who would say, " I would rob that bank if only the bars were not too strong to allow me to break into it and the caretaker were not watching ". What opinion could one hold of a citizen who would adopt that atitude and what kind of a political force can a party be which says that it will not nationalize the private trading banks simply because it cannot do so under the Constitution? Members of the Australian Labour party, if they had their way, would nationalize the private banks to-morrow. The honorable member for Melbourne is the leader of those honorable members who think along such lines. Therefore, I say to the people who may be listening to the broadcast of these proceedings that if they desire to avoid such a catastrophe they must be careful at any election to vote for candidates of the Liberal party and the Australian Country party. Under this measure the proposed Commonwealth Trading Bank will enjoy the same trading opportunities as are now enjoyed by the private banks. Government supporters stand for fair competition in banking as they do in respect of airlines or any other trading activities in which governmental and semi-governmental bodies engage. But the members of the Australian Labour party desire to build up the Commonwealth Bank so that when the time is opportune a Labour government can by legislation within the ambit of the Constitution establish socialism in this country. I have heard the honorable member for Melbourne say on at least four previous occasions in this chamber that if a party obtains control of the banks it will be enabled to obtain control of every activity in the country. Therefore, nationalization of the private banks is one of the main objectives of the Australian Labour party which advocates as a plank in its platform the socialization of industry, production, distribution and exchange. At present, within the organization of the Commonwealth Bank the General Banking Division is linked with the central bank and that arrangement gives to it the opportunity to enagage in all kinds of business in which very often the private trading banks are unable to participate. The purpose of this bill is to place the Commonwealth Bank on the same footing as the private trading banks, and that is why the Labour Opposition is vigorously opposing it. However', fair-minded people will agree that the bill is a step in the right direction. The Government has introduced it in order to honour the pledge which the present Government parties gave to the people during the last general election campaign. Unfortunately, many people have short memories, and require to be reminded that, but for the limitations imposed upon the Parliament by the Constitution, the Chifley Labour Government would have succeeded in nationalizing the private banks. Therefore, right thinking people will see in this measure a means of combating the Australian Labour party in its endeavour to establish socialism in Australia. Members of the Opposition never cease to advocate the doctrines of socialism. However, the fact remains that in every country in which socialism has been tried, even partially, it has proved to be a failure and has resulted in the reduction of standards of living. Australia would suffer a similar calamity if our people permitted the Australian Labour party to establish socialism in this country. "Without exception, members of the Opposition who have made visits overseas during the last few years have declared on their return that Australia is the greatest country in the world. Although this is a young country, it has attained economic strength mainly on the basis of private enterprise. That fact alone should convince everybody that our future welfare will depend upon the encouragement of private enterprise. {: #debate-21-s18 .speaker-JUP} ##### Mr CLAREY:
Bendigo .- The honorable member for Mallee **(Mr. Turnbull)** had much to say about socialism and described members of the Opposition as socialists. He and his colleagues are monopolists, because this measure aims to give to the private banks a monopoly in banking. In reply to the statements that he made about Labour's desire to nationalize the banks, I need make only two points which are as clear as crystal for the world to see and understand. The first of them is that both the High Court and the Privy Council have decided that this Parliament, under the Constitution, cannot nationalize the private banks. Those decisions of those tribunals are binding upon this Parliament. No government can nationalize the banks until the people at a referendum approve of an alteration of the Constitution to give such power to the Parliament. Secondly, the only mandate which the present Government parties can claim to have received from the people with respect to banking relates to the provisions of the Banking Act 1945 which were the cause of the recent double dissolution. The issue in that instance was the proposal of the present Government parties to re-establish the Commonwealth Bank Board. I take this opportunity to protest against the application of the "guillotine". The Government is making a farce of proceedings in the Parliament. {: .speaker-KNX} ##### Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- I rise to order, **Mr. Deputy Chairman.** I submit that the honorable member is not in order in discussing the application of the " guillotine ", which was the subject of a decision by the House earlier to-day. The TEMPORARY CHAIRMAN.The honorable member for Bendigo **(Mr. Clarey)** will not he in order in proceeding along those lines. {: .speaker-JUP} ##### Mr CLAREY: -- All I desire to point out is that the committee is required to complete by 11 p.m. its consideration of clauses .11 to 18 and the five schedules to the hill. The first schedule covers five and a half pages of the bill, contains amendments to 85 sections of the principal act, and makes no fewer than 101 amendments in all. The second schedule covers one and a half pages, deals with proposed re-numberings, and relates to 198 amendments. The third schedule deals with sixteen additional amendments of the principal act consequential on the re-numbering, and the fourth and fifth schedules' amend five other acts which are quite distinct from the Commonwealth Bank Act. The amendments to the other acts contain a most extraordinary provision about which I shall make some comment later. The point that I emphasize now is that honorable members are called upon to deal in an extremely limited period with all those matters, as well as with clause 18, which establishes the machinery for the transfer of assets and liabilities from the General Division of the Commonwealth Bank to the proposed Commonwealth Trading Bank. The Government is not fair to honorable members when it expects them to' give such hasty consideration to all those amendments to a most important act. {: .speaker-KNX} ##### Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- Nonsense! {: .speaker-JUP} ##### Mr CLAREY: -- From time to time during this debate, we have been told that the Government honestly and sincerely intends to encourage the expansion of the business of the Commonwealth Bank. I should like to direct the attention of honorable members to amendments incorporated in the fourth and fifth .schedules to the bill, which amend acts of Parliament apart from the Commonwealth Bank Act. It is clearly shown that the Government's policy is to take business from the Commonwealth Bank. I refer specifically to the amendments contained in the fourth schedule. As the result of the amendments to the Commonwealth Bank Act, amendments must be made to the Audit Act, the Broadcasting Act, the Hide and Leather Industries Act, the Re-establishment and Employment Act, and the Wheat Industry Stabilization Act. The Broadcasting Act, the Hide and Leather Industries Act, and the Wheat Industry Stabilization Act now provide that the authorities concerned shall transact their banking business with the Commonwealth Bank. Those acts are to be amended so as to provide that those authorities may bank with the Commonwealth Bank or open an account or accounts with any other prescribed bank. This Government professes to desire to expand the activities of the Commonwealth Bank, yet provision is made to enable certain public authorities to bank with private financial institutions. In other words, those public authorities are to be encouraged to transfer their business from the Commonwealth Bank to the private banking institutions. The Government has assured us that it intends to expand the operations of the Commonwealth Bank, and place it in a position .to compete, fairly with the private banks, yet statutory power is given to certain public authorities to take their business away from the Commonwealth Bank. That proposal does not satisfy me that Government supporters are as sincere as they have professed in this debate. Clause .11 of this bill reads as follows :: - >Section one hundred :and seventy-fire of the Principal Act is amended by omitting subsection (3.). Section 175 of the principal act establishes the Disciplinary Appeal Board. Machinery is provided to enable appeals of bank officers to be heard against their dismissal, or reduction of status. The chairman of the board shall be a stipendiary or special magistrate of a State or territory of the Commonwealth. I protest against the decision of the Government to repeal section 175. At no stage of the proceedings has any Minister attempted to explain the reason for it. The general principles of the hill were discussed during the second-reading debate, but the Government has made no effort to explain the far-reaching amendments that we are now considering. It is customary for the Minister in charge of a bill to explain the purpose of a clause when it is under consideration in committee, but neither the Vice-President of the Executive Council **(Mr. Eric J. Harrison)** nor any other Minister has attempted on this occasion to explain the reason for the decision to repeal section 175 of the principal act. The Disciplinary Appeal Board was established for obvious reasons. It is essential to the maintenance of industrial harmony that the chairman of sue'1 a board shall be accepted as impartial. Hitherto the appointment of a magistrate has been deemed by the respective parties to meet the position. The Minister in charge of the bill has not informed us whether the Governor of the Bank, the Bank Board or the Commonwealth Bank Officers Association has been consulted in this matter. I hope that he will rectify that omission. {: .speaker-KNX} ##### Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- Vice-President of the Executive Council and Minister for Defence Production) [8.38], - The extraordinary remarks of the honorable member for Bendigo **(Mr. Clarey)** compel me to intervene at this stage. I always listen with great respect to his .speeches, because I believe that he is always sincere. I do not say that he is insincere this evening, but I consider that he is completely ill-informed. That is most unfortunate. The honorable gentleman has complained about the limited time that is available to him to discuss various provisions of the bill. The fact is that the debate nearly collapsed on several occasions this afternoon because members of the Labour party were not in their places. The honorable gentleman, who was not in the chamber earlier, now complains that he has not sufficient time to enable him to discuss the provisions of the bill adequately. I shall examine some of his statements. He has said that the Government seeks to establish a monopoly in banking, and to hand over the whole of the trading bank activities of the Commonwealth Bank to the private banks. He has sought to produce facts and figures in support of his argument. Let us examine his submissions, because the proof of the pudding is in the eating. That *cliche* is old, but it is still effective when one can produce the exact figures. The Government is not establishing a monopoly for the trading banks. Deposits in the General Banking Division of the Commonwealth Bank increased from £80,200,000 in 1949 to £120,700,000 in December, 1952. That is the test. Do those figures indicate that the expansion of the Commonwealth Bank is being restricted? Do they indicate that we are directing business 'away from the General Banking Division to the private .trading banks? In December, 1949, the total deposits of the General Banking Division and of the major private banks amounted to £995,000,000. By December of last year, the total had reached £1,268,000,000. The increase of the General Banking Division's share of the overall deposits from 8.1 per cent, to 9.5 per cent., represented a relative increase in the division's deposits of 18 per cent. Those facts speak for themselves and require no elaboration by me. They prove conclusively that these ready statements . and charges .are made by honorable members opposite for a specific purpose. It is quite true that the Government expected this bill to be opposed. It is equally true thai, by means of the 1945 legislation, the then Labour Government sought to strangle the private banks. In 1947, honorable members opposite decided that the objective could be obtained more quickly by nationalizing the private banks. Unfortunately for them, the nationalization legislation was rejected by the High Court and ultimately by the Privy Council. But that was not the end of Labour's endeavours. The Chifley Government again resorted to the slow strangulation process. But for this Government's amending legislation, the special accounts of the trading banks with the Commonwealth Bank which represents approximately £545,000,000 or more .than half the deposits of the trading banks, could, under a Labour government, be called up by the Commonwealth Bank, thus forcing the private banks out of business. According to the statement of the honorable member for East Sydney **(Mr. Ward)** to-day, Labour is still pledged to the nationalization of banking. We must not let ourselves be hoodwinked. I come now to the other matter raised by the honorable" member for Bendigo. He claimed that, according to the Fourth Schedule, steps were being taken to prevent government instrumentalities from dealing with the Commonwealth Trading Bank. {: .speaker-JUP} ##### Mr Clarey: -- I did not say that. I said that government instrumentalities were being given the right to go to a private bank. {: .speaker-KNX} ##### Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- That is virtually the same thing. I remind the honorable member that there is a. principle associated with this matter. In areas where there is no Commonwealth Bank, government instrumentalities will have the right to deal with a private bank. Take for instance the Hide and Leather Industries Board. The amendment of the Hide and Leather Industries Act set out in the Fourth Schedule is as follows : - >Section 28. - Omit from sub-section (1.) "an account at .the Commonwealth Bank of Australia", insert "at the Commonwealth Bank of Australia, and may open and maintain at any other prescribed bank, an account or accounts." I emphasize the words " any other prescribed bank". What did honorable members opposite do when they were in power? I shall give one illustration. I could duplicate it or triplicate it if necessary, but my one example should be enough to show how completely insincere is the approach of the Opposition to this matter. Perhaps I should not say that about the honorable member for Bendigo. I shall say instead that he is ill informed. Take, for instance, the Whaling Industry Act of 1949 - one of the Labour party's babies. Section 22 of that act provides - >The Commission shall open and maintain an account or accounts with the Commonwealth Bank of Australia, and may open and maintain an account or accounts with such other bank or banks as the Treasurer approves. We say " prescribed bank " ; the Labour party's view was " Let us put it in the hands of the Treasurer. Let him say whether an instrumentality can go to this bank or to that bank." Labour's provision is as wide as the sea. Yet honorable members opposite have the temerity to come here and criticize the reference in this measure to a " prescribed bank ". I do not question the sincerity of the honorable member for Bendigo, but I say again that he is ill-informed, and surely it is a heinous offence for an. honorable member of his calibre - a member of the Labour party executive - to be ill-informed about a matter that he has to debate with honorable members on this side of the chamber. The impassioned appeals of the honorable member for Melbourne **(Mr. Calwell)** to the electors would fall on very deaf ears if the people knew the lengths to which the Opposition is prepared to go in an endeavour to create misunderstandings in the community. Time after time the Leader of the Opposition **(Dr. Evatt)** has failed in his attempts to represent himself as a financial genius. Time after time, he has pulled in his deputy, the honorable member for Melbourne, to get him out of his financial difficulties; and what a horrible crash that honorable member has come! The people of Australia are very concerned indeed at the prospect of having the honorable member for Melbourne as Treasurer, should a Labour government bt returned to office. Ranging farther afield, the Leader of the Opposition dragged in the honorable member for Eden-Monaro **(Mr. Allan Fraser),** who is not present to-night. His crash was as horrible as that of the honorable member for Melbourne. The honorable member for Melbourne Ports **(Mr. Crean)** was then called upon for assistance. He, too, failed to make the grade. We all know, of course, that the honorable member for Melbourne offended his leader recently and was disciplined. The result was that a mere tyro, the honorable member for Perth **(Mr. Tom Burke),** has led the Opposition during the committee stages of the bill. He has sought by his ponderous declarations to convince us that he may be the next financial genius to control the Treasury of the Commonwealth. We have pledged ourselves to bring about fair competition between the Commonwealth Trading Bank and the private trading banks. We shall do everything possible to prevent the dead hand of socialism from touching the financial resources of this nation. The greedy fingers of the socialist must never again be allowed to dig into the coffers of our Treasury because in socialism there lies only stagnation. {: #debate-21-s19 .speaker-KXZ} ##### Mr PETERS:
Burke -- I hazard the guess that it is not often in any part of the world that a deliberative assembly witnesses a performance of such arrogant clowning as has "been given tonight by the Vice-President of the Executive Council **(Mr. Eric J. Harrison).** He did not deal with any part of the bill. He resorted only to abuse. He abused the Leader of the Opposition **(Dr. Evatt).** He made some sneering although commendatory remarks about some members of the Opposition for the purpose, I assume, of dividing the Opposition. The Opposition has never been more united. It is united on this issue. What have honorable members opposite sought to do? -They say that, in 1947, the Labour party introduced a bill to nationalize the banks. Although provisions of that bill were proven *ultra vires* the Constitution by the courts of this country, that does not mean that the Labour party does not still believe in the nationalization of banking. {: .speaker-KNX} ##### Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- The honorable member for East Sydney **(Mr. Ward)** said that it does. {: .speaker-KXZ} ##### Mr PETERS: -- If the honorable member for Mallee **(Mr. Turnbull)** and every other member of the Government side had the courage to say what they mean, and were honest, they would say that they do not believe in the Commonwealth Bank. {: .speaker-KWP} ##### Mr Turnbull: -- Nothing of the kind ! {: .speaker-KXZ} ##### Mr PETERS: -- Supporters of the Government say, in effect, " We believe in private enterprise, because it has all the virtues ". The Liberal party sought to prevent the Commonwealth Bank from coming into existence. It sought to prevent the Commonwealth note issue from coming into existence, because, as their party members said, the people would be walking about the streets with a harrowload of " Fisher's flimsies ", unable to buy a pot of beer or a postage stamp. This Government seeks to destroy the Commonwealth Bank because the interests of honorable members opposite are bound up with the interests of the private financiers. No clause of the bill seeks to maintain the existing status of the Commonwealth Bank. Rather does the measure whittle away the hank's power. If Labour were in control of the treasury bench it would seek to strengthen the Commonwealth Bank by extending its functions, because we believe in it. But because the Government parties do not believe in the Commonwealth Bank, they want to whittle away its power by means of the measure that is before us to-night. If the members of the Government were honest they would pin to the mast their flag of private enterprise and say " This intrusion into the realm of private enterprise must be stopped. We shall go about the destruction of the Commonwealth Bank as rapidly and as effectively as we can ". But, of course, they are not honest. The honorable member for Bennelong **(Mr. Cramer)** would destroy the Commonwealth Bank if he could, although he knows that the workers, the manufacturers and the primary producers of this country realize that the Commonwealth Bank is a buttress between them and the private banking institutions. As it helps them in their hour of need, they want it to be solid and well-established. The Government is not willing to do openly what it seeks to do by subterfuge. The Vice-President of the Executive Council **(Mr. Eric J. Harrison),** who has just left the chamber, avoided the real issues. He said nothing about clauses 11 to 18. Clause 18 provides for the transference of accounts from one section of the Commonwealth Bank to another section, and the procedure that shall be followed in that connexion. I remind honorable members that if a person is granted a bank loan of £1,000, which is lodged in the hank, the loan becomes a deposit, on which he can draw by cheque as he desires. That deposit enables the bank to grant further advances. Every advance becomes a deposit, and in turn every deposit enables a hank to grant further advances. {: .speaker-K7J} ##### Mr Cramer: -- Is that socialism or Henry George-ism? {: .speaker-KXZ} ##### Mr PETERS: -- There is nothing revolutionary about that system, and every honorable member opposite who has denied its existence has shown that he knows nothing about banking procedure. As a bank's deposits increase by the amount of advances, so does the business of the bank expand. A person who obtains an advance from the central banking organization and deposits the amount in a private banking institution will lessen the power of the Commonwealth Bank and give to the private banking institution the power to grant advances of probably ten times the amount of his deposit. The Government is endeavouring by unfair means to destroy the competition that is offered by the Commonwealth Bank to the private banking institutions of this country. There is not the slightest doubt about that. Last night the honorable member for Fremantle **(Mr. Beazley)** quoted evidence that was given before the Royal Commission on Monetary and Banking Systems in this country in 1936 and 1937, which showed that, under anti-Labor administrations, the Commonwealth Bank did not seek to undertake advance business at the expense of other banking institutions. In other words, it did not enter into competition to obtain trade that was being carried on, or might be carried on by other banking institutions, but waited for the trade to come to it. As a result of the provisions of the clauses that we are now considering, the Government will induce the present customers of the Commonwealth Bank to transfer their business to the private banking institutions. Ultimately, perhaps not next week, but in years to come, if the anti-Labour parties continue to govern this country, the Commonwealth Bank must become merely an instrument to buttress the private banking institutions. The Commonweatlh Bank will not then be, as it should be, a bank working in competition with other banks to serve industrialists, manufacturers, primary producers, and the general: public, but merely an instrument to enable the private banking institutions to utilize not only the money that goes into the banking institutions of this country, but also the community credit and community capital in order to carry on their" financial business, which, after all, is the exploitation of the people of this country. The TEMPORARY CHAIRMAN.Order!. The honorable member's time has expired. Ifr. *Peters.* {: #debate-21-s20 .speaker-JXI} ##### Mr FREETH:
Forrest .- Honorable members opposite have been hard put to it to find an argument against the bill, because they are practically forbidden to disclose their own policy, or the fact that they have no policy at the moment. They have been forced to resort to the implication that this Government has some undisclosed or secret intention. But they have very little evidence in that connexion to fall back on. It is very easy for them to suggest that there are improper motives behind this measure. Although a man may go to church every Sunday, make large contributions to charity, and do everything that he should do, a section of the people may still decry him and say that he has some ulterior motive. The Opposition has contended that we would destroy the Commonwealth Bank, despite the fact that under this Government the deposits and advances of that bank have increased, and that it has been our stated policy to strengthen the bank by allowing it to trade side by side with, and in fair competition,, with the trading banks. All the actions of this Government since it has been in office show that it has tried to carry out that policy. Honorable members opposite have had to go back to the early years of this century in their efforts to find some basis for their vague allegations of improper motives. This bill would not have been needed, in view of the report of the Royal Commission on Monetary and Banking Systems in 1936, had it not been for the stated policy of the Labour party to nationalize the banking system. Honorable members opposite still support that policy. {: .speaker-JSW} ##### Mr Bryson: -- What utter rubbish! {: .speaker-JXI} ##### Mr FREETH: -- Does the honorable member deny that nationalization of banking is a part of the Labour party's policy? I acknowledge that there is some confusion amongst honorable members at the moment, because during these discussions we have heard three different pronouncements on the subject of nationalization by prominent members of the Opposition.. The Leader of the Opposition would have us believe that he wants the Labour party to accept the verdict of th& people on the issue of nationalization and to forgetall about its former plans. But, thehonorable member for Melbourne, who is the Deputy Leader of the Opposition, has proclaimed proudly in this chamber to-night that everybody knows where he stands. He has expressed his hatred of the private banks with great vigour and clarity. On the 11th October,, 1950, after bank nationalization had become a dead horse, as the Leader of the Opposition now pretends, the honorable member for Melbourne made his position unmistakably clear when he said - >In the course of time, the Commonwealth Bank will be the only bank in Australia. By competition it will force the private banks out of existence, and, thus the private banking system will be nationalized- Then he added with glee - without the necessity to pay compensation to the private banks. Those words can leave no doubt in our minds about the sinister intentions of the honorable member towards the private banks. He added - >The Government has chosen to have it in that way, and it will get it in that way. At that stage, the honorable member for Isaacs **(Mr. Haworth)** asked - >That is a threat? The honorable member for Melbourne replied - >It is a promise. The honorable gentleman has rightly declared that everybody knows where he stands on this issue. We on this side of the chamber have a right to ask the Labour party as a whole to declare where it stands. Honorable members opposite, in the face of the statements that the honorable member for Melbourne has made, attack the Government on the ground that it is trying to protect the private banks and advise us not to worry because the private banks will never be in danger from them. We find it hard to accept their assurances. The honorable member for East Sydney **(Mr. Ward),** of course, had to have a hand in this matter, and he produced another version of the Labour party's banking policy. He said that the Opposition was still pledged to nationalize the banks at some time when it suited it to do so. He added that nationalization of banking need not be an issue during the forthcoming Senate election, or the House of Representatives election campaign next year, but that it remained in the policy of the Labour party, which would alter the Constitution, if necessary, in order to achieve its purpose. That is a third statementof Labour's policy. Yet honorable members opposite dare to suggest that this Government has some undisclosedmotive. The record of the Government proves that the allegations of honorable members opposite are entirely false. The suggested motive is contrary to the policy of the Government and contrasts strongly with its actions. Numerous statements by honorable members opposite point to the fact that they have sinister designs on the trading banks. Furthermore, not one of them has risen in this chamber to-night to say that the Labour party does not intend to squeeze the private banks out of existence. They dare not do so for the simple reason that the honorable member for Melbourne, who commands a large following in the ranks of the Opposition, has stated exactly what the Labour party proposes to do about the private banks if it secures another opportunity to put its plans into effect. Clause 18, which is the vital clause of the bill, provides the only possible means of guarding against the intention of the Labour party to drive the private banks out of existence by any method that it can employ. {: #debate-21-s21 .speaker-JRF} ##### Mr W M BOURKE:
Fawkner -- This bill has nothing whatever to do with the nationalization of banking or with the private banking institutions of Australia. It is the Commonwealth Bank Bill 1953, and it provides for certain alterations in the structure of the Commonwealth Bank. Its main purpose is to give effect to the Government's plan to separate the General Banking Division of the Commonwealth Bank from the main body of that bank. It will establish a new organization, to be known as the Commonwealth Trading Bank, which will carry on the activities that have been conducted hitherto by the General Banking Division. The Opposition opposes these proposals because it fears that the measure will weaken the Commonwealth Bank in two extremely important respects. First, it will weaker the bank as a general banking organization. Secondly, it will weaken it as a central bank. The bill will not effect a complete separation of the trading activities of the bank from the remainder of its activities, but various supporters of the Government have declared that the measure does not go far enough. They have clearly shown that they regard it only as a step towards the complete separation of trading activities from the Commonwealth Bank proper. We vigorously oppose the measure because we are convinced that a complete separation would seriously weaken the whole structure of the Commonwealth Bank. I direct my remarks now to clause 13 as it applies to the sections of the principal act which relate to the issue of housing loans by the Commonwealth Bank. The report of the Commonwealth Bank for 1951-52 pointed out that, through its various departments, the bank had advanced a total of £19,000,000 for housing purposes during that year. That is a creditable record, though, in view of the difficulty that people experience when they try to obtain finance for housing purposes, I hope that the bank will not be complacent about the matter but will make every effort to increase the volume of its advances for housing purposes. The sections of the principal act which deal with housing loans urgently require amendment. They limit Credit Foncier advances by the Commonwealth Bank to a maximum amount of £1,750. It is common knowledge that it is almost impossible to buy a new house in Australia to-day for less than £3,000. The act provides that the bank shall give preference, in its lending policy, to the financing of new houses. That means that a buyer, who must pay at least £3,000 for a house, can obtain only £1,750 from the Commonwealth Bank and must provide a balance of not less than £1,250. It is virtually impossible for the average man to save such an amount to-day. We should encourage home ownership throughout the community. Every family should own its own home. I do not like all these housing commission settlements in the various States where tenants are required to pay rentals of about £3 10s. a week: Those housing settlements are necessary to a certain degree, but I would prefer the people in them to be paying £3 10s. a week on their own houses. Before we can have widespread home-ownership in this community, two financial requirements must be satisfied. First, finance should be made available on a very moderate deposit. It is virtually impossible for the average family man to save enough money to pay a substantial deposit upon a house. I believe that the average decent young Australian should be given an opportunity to buy his own house if he can pay a deposit of £100. I suggest to the committee that the section of the act that limits advances by the Commonwealth Bank - which, after all, iB the people's bank - to the totally inadequate slim of £1,750 should be amended, and that the Commonwealth Bank should be empowered to make advances of up to £3,000 to people who are able to pay a. deposit of £100. If that were done, the advantages and benefits of homeownership would be brought within the reach of every young family man in Australia. The second requirement is that money advanced to people to buy their own houses should be subject to a very low rate of interest. It is especially necessary that the interest rate should be lower when the sum advanced is fairly substantial - and it is necessary to make substantial advances to-day owing to high building costs. At the present time, the Commonwealth Bank charges interest at the rate of 4^ per cent, upon money advanced through its Credit Foncier Department, and also upon money advanced to cooperative housing societies, which are doing magnificent work by bringing the means of home-ownership to thousands of people. I suggest to the committee that 4^ per cent, is too high an interest rate to charge people who are buying their own houses through either Credit Foncier loans or co-operative housing societies. The Commonwealth Bank recognizes that there is a difference between a person who borrows money to buy his own house and one who borrows money for commercial purposes. It charges interest at the rate of 4£ per cent, upon money advanced through its General Banking Division upon an ordinary overdraft basis, and at the rate of 4^ per cent, upon money advanced to purchase houses. I say that the difference between the two rates is not large enough, that the bank should recognize the principle of differential interest rates, and that the rate charged upon money advanced on an ordinary overdraft basis should not be used as a criterion for the determination of the rate charged upon loans made for the purchase of houses. There is a considerable difference between the two types of borrowing, and that difference should be recognized by a substantial difference between the rates of interest. When a businessman borrows, say, £5,000, upon which he is charged 4f per cent, or 5 per cent, interest, the money that he pays in interest is a deductable item for income tax purposes. It is one of the normal and legitimate expenses of his business. In reality, the loan costs him very little, because his interest payments are entered upon the expenditure side of his business accounts. For him, such a loan is a cheap way of getting the use of capital resources. But a young man who borrows money to buy his house is not entitled to treat his interest payments upon the loan as a deductable item for income tax purposes. He has to pay that interest from his own pocket without receiving any benefit by way of deduction. It is the duty of governments in this country and of the people's bank, the Commonwealth Bank, to recognize the necessity to encourage and assist people to buy their own houses. One way to do that is to make money available to home-seekers at a rate of interest which, in my opinion, should be 2 per cent. The Commonwealth Bank makes housing loans to its own employees at, I understand, *2* per cent, interest. If the bank is able to do that for its own employees, why should it not do the same for the general public? {: #debate-21-s22 .speaker-10000} ##### The TEMPORARY CHAIRMAN: -- Order ! The honorable member's time has expired. {: #debate-21-s23 .speaker-KSD} ##### Mr McLEOD:
Wannon .- This bill proposes certain amendments of the Commonwealth Bank Act 1945. I have not heard one member of the Government parties give a satisfactory explanation of why those amendments should be made. What section of the community, other than the private banking interests, has asked for any alteration of the act? I have not heard any honorable gentleman opposite say that they have received such requests from primary producers, industrialists or any other section of the people. It has been said that the purpose of the bill is to ensure that the Commonwealth Bank will compete fairly with the private trading banks. I believe it to be vitally important that the people of this country, through their Government, should control the finances of the country. I feel that to-night we are going back 30 years. After the Commonwealth Bank had been established, it flourished and rendered great services to the primary producers of Australia, but in 1924 a Country party Treasurer crippled that great institution. The intentions of the Government parties at the present time are perhaps better disguised than they were in 1924, and the attack upon the Commonwealth Bank is perhaps a little more subtle than it was then. In those days, the Government parties were a little more outspoken. They said openly that they intended to make the Commonwealth Bank a prop for the private banks, so that primary producers and industrialists could no longer get financial accommodation from it. That will be the effect of this bill. After the Commonwealth Bank Act of 1945 came into operation, thousands of people availed themselves of the services of the Commonwealth Bank. I do not think that any primary producer in the Mallee was averse to accepting a loan from the hank to enable him to buy a tractor or a bulldozer. Finance for purchases of that kind was made available bv the Commonwealth Bank at a low rate of interest, but primary producers could not get similar accommodation at all from the private banks. Nevertheless, to-night the members of the Australian Country party are supporting a measure that will take primary producers back to the bad old days. I understand what people in the country areas think about the Commonwealth Bank. I know that they have great confidence in it, and I warn the Government that they will not tolerate any interference with it. Honorable gentlemen opposite may have scared the people by saying that the Labour party would take their savings if it nationalized the banks, bat: the people have been scared much more by this attempt,, on- behalf of the private banks, to cripple the Commonwealth Bank. Primary producers know that bad seasons may come and that the prices of primary products may fall. Therefore, they want the CommonwealthBank to remain strong and active, because they know that in bad times they will be able to obtain from it, on reasonable terms, financial accommodation to enable them to carry on. They know also that in bad times the private banks would call in their mortgages, as they did before. The existence of the Commonwealth Bank gives them a feeling of security, because they know that its objective is, not to crush them, but to help them to carry on. I am amazed that members of the Australian Country party are supporting, this measure, which will help to place control of the finances of this country in the hands of private money manipulators. The honorable member for Mallee **(Mr. Turnbull)** said that private enterprise built the nation. In 1892 many farmers lost their laud in the bank crash. That was how private enterprise- safeguarded the economy of the country at that time. The Government had to come to the rescue. Why has the Australian Country party supported a measure such as this? The reason is obvious. Its election campaigns have been financed by banking interests. If people are able to obtain money from the Commonwealth Bank at an interest rate of 4 per cent, they will not seek to borrow from the private banks at the rate of 5 per cent. In other words, the Commonwealth Bank prevents the private banks from exploiting the people. Many farmers will oppose this bill although they are not Labour supporters because they know that it would be foolish to place themselves in the position of having to pay a higher rate of interest than they need pay for their overdrafts. Under this clause of the bill the rate of interest on overdrafts will be controlled by the private banks. The day is coming when, because of drought, farmers will be in urgent need of accommodation. They will need assistance to carry on from one year to another. I think that the honorable member for Canning **(Mr. Hamilton)** has had personal experience of such circumstances. I am sure that he will only support this bill because he has been compelled to support it. As I have said, his party is financed by the banks. But if the Government would make this measure an election issue it would be thoroughly defeated. The Government has enough nails in its- coffin and there is no need for it to put in this one. The people will not tolerate any interference with the Commonwealth Bank. Therefore, I oppose this measure- which will cripple and destroy a great institution, the Commonwealth Bank of Australia. {: #debate-21-s24 .speaker-K6Q} ##### Mr BERNARD CORSER:
Wide Bay -- I am not surprised to learn that the honorable member for Wannon **(Mr. McLeod)** and the honorable member for Fawkner **(Mr. W. M. Bourke)** are opposing this measure. The honorable member for Fawkner said that this bill had nothing to do with nationalization. That is why he is opposing it. Ever since a Labour government interfered with the Commonwealth Bank these honorable members have supported nationalization not only of banks but of everything that the people own. It has been said that a government that controls banking controls the people. The 1945 legislation which this bill will amend was introduced by the Labour Government which wished to get its claws into the banking institution. It decided to nationalize private banks, a step which a Communist candidate in Queensland said recently was a stepping-stone to Communism. That is part of the Labour party's scheme. This bill will not ruin the people's bank. It will enable the bank to compete fairly with private banking institutions, which hold about six-sevenths of people's savings. It will give those banks the opportunity to compete fairly with a branch of the Commonwealth Bank which was opened in order to destroy them. The Commonwealth Bank has compulsorily taken the savings lodged with the private banks and accumulated them, to the extent of hundreds of millions of pounds in special deposits. Why should these banks have been required to pay 2£ per cent, or 3 per cent, for their own money "when they were only receiving- $ per cent, on their deposits? Opposition members speak on behalf of a section of the people which wants to get hold of the capital of others. When he compared present conditions with those of ten years ago,, the honorable member for Wannon revealed that he had not examined the situation very carefully. Conditions have altered considerably during the past ten years. {: .speaker-KX7} ##### Mr Ward: -- The honorable member longs for the good old days. {: .speaker-K6Q} ##### Mr BERNARD CORSER: -- Yes. They are coming again. {: .speaker-KX7} ##### Mr Ward: -- The honorable member wants to be able to pay low wages again. The TEMPORARY CHAIRMAN.Order ! {: .speaker-K6Q} ##### Mr BERNARD CORSER: -- I have paid out in wages, more in a week than the honorable member for East Sydney has paid in his life. If the Opposition were successful in its attempt to kill this bill all deposits would eventually revert to the Commonwealth Bank, and the result would be a fiasco and loss to the people generally.. The private banking institutions in which the people have placed six-sevenths of their savings would be ruined by the Labour party which is determined to take from those who have and give to those who have not. The Labour party desires to create a monopoly which will extend to the home, the farm and the cheque book and it is at present dealing with the cheque book. One honorable member complained that if he put £1,000 into a bank the bank would lend it and make money out of it. How would it be possible for a bank to build up assets without lending? Is it a crime for a bank to lend a portion of the deposits that are lodged with it? {: .speaker-KXZ} ##### Mr Peters: -- They thereby create credit. {: .speaker-K6Q} ##### Mr BERNARD CORSER: -- That is exactly what the Commonwealth Bank also does,, it creates that which has to be. backed by guarantee. I thank the honorable member for his. interjection. They create, credit, for which they are responsible up to a certain amount. That is a function of bank ing. The honorable member cannot expect banks to take care of the deposits of their customers in expensive buildings, and employ large numbers of employees and great amounts of material in doing so, without getting- something in return. The banking system of this country is the same as in every other country of the world, except Russia, and nobody knows what happens there. It is the same as the banking system of the greatest, country in the world, the United States of America, where the people are the wealthiest and happiest the world has ever known. It has more wealth than, the world has ever dreamed of, and it has shown the greatest sympathy and charity ever shown towards the weaker peoples of the world. Private banks in America are allowed to carry on without government interference. In the final analysis, private banking and private interests have been responsible for the saving of the world. If honorable gentlemen opposite know something that no one else outside the Iron Curtain knows, they will be able to tell us how banking is conducted in Russia. The Opposition really wants to achieve a political economy like the Russian political economy. The Communists are behind the Opposition's policy in relation to banking and the Com.munistsmunists are the force behind the policy, of many trade unions and the Australian Council of Trades Unions. The Communists are behind the Labour party's agitation to nationalize the banks. This bill is designed to cut some of the strings with which the private banks have been tied. The Opposition's attack on members of the Government over this hill is inspired by Communist agitators who are the friends of honorable members opposite and who are determined first of all- {: .speaker-KXZ} ##### Mr Peters: -- I rise to order. I object strongly to the statement of the honorable member for Wide Bay **(Mr. Corser)** that the Communists are my friends, and I ask that he be called upon to withdraw it. {: .speaker-K6Q} ##### Mr BERNARD CORSER: -- I did not mean that the Communists are personal friends of the honorable member for Burke **(Mr. Peters)** although perhaps they are the friends of some honorable members who sit behind him. However, I contend that the policy that honorable members opposite advocate is the same policy as is urged by the Communists who are friends of most honorable members opposite. {: .speaker-10000} ##### The TEMPORARY CHAIRMAN: -- Order ! The honorable gentleman's time has expired. {: #debate-21-s25 .speaker-JLV} ##### Mr GORDON ANDERSON:
KingsfordSmith -- In its early stages the debate pleased me because of the large proportion of Government supporters who appeared to be friends of the Commonwealth Bank. That is rather a change, when one remembers the history of the Commonwealth Bank, and the attitude to it of the anti-Labour predecessors of the present Government. Some of us are old enough to recall the very bitter opposition that the establishment of the bank aroused among the interests that this Government represents. They resented the intrusion of the Commonwealth Bank into the banking field. Early in the debate to-day it seemed that Government supporters wished only to do the Commonwealth Bank a good turn. However, as their arguments evolved, they showed themselves as being entirely contrary in intent to the impression that I had received earlier. They concentrated on pointing out the necessity for supporting the private banking institutions. The honorable member for "Wide Bay **(Mr. Corser)** let a whole litter of kittens out of the bag by admitting that the attitude of the conservatives in this country was that the Commonwealth Bank was not necessary, had been brought into existence to injure the private banks, and therefore had the support of Communists and socialists throughout Australia. Some honorable members may recall that during World War I., when this country was in a bad spot for finance, the then Government approached the private banking institutions, which our friends opposite champion so eagerly, for financial accommodation, but found it impossible to obtain it from them. Had it not been for the Commonwealth Bank, founded by a Labour government, it is hard to say how the war would have been financed. Later, we had the economic depression. Honorable members know how the Commonwealth Bank, which was then controlled by a board appointed by an anti-Labour government, hampered the policy of the Scullin Labour Government which was designed to alleviate the effects of the depression. That board was constituted of men who knew nothing of banking, as such, and who were not concerned with the welfare of the people, but were concerned only with commercial interests. That was, in fact, the reason for their appointment to the board. We can remember how they refused to allow the elected representatives of the people to obtain sufficient finance to save the country and to save hundreds of thousands of people from unemployment and degradation. It was only because the Commonwealth Bank at that time was labouring under a handicap imposed upon it by the anti-Labour predecessors of the present Government that the Scullin Government could not carry out its policy to combat the depression. We know how much the Commonwealth Bank, under its present form of control as established by a Labour government, was able to do to assist Australia's war effort during the last war. What is actually behind the desire of the Government to tear down, or, at *the* least, hobble the bank? It is proposing a large number of amendments all of which are aimed in some way at curtailing the power and prestige of the Commonwealth Bank. The various sections of the Commonwealth Bank, including the General Banking Division, the Commonwealth Savings Bank, the Rural Credits Department, and the Industrial Finance Department did a great job during the last war, and did an even better job during the post-war period. In what way has the bank failed that it should now be mutilated by the Government? I am forced to the conclusion that thi3 legislation is not aimed at doing anything for the people's bank, but is aimed at restricting it so that the private banking institutions will be able to make greater profits with less expenditure. We have heard a lot from honorable members opposite about socialism and communism, and I do not know how many other " isms ". To members of a democratic party who believe in the right of the elected representatives of the people to amend legislation, not only on banking but also on anything else, it seems strange that the Government should adopt the peculiar attitude of attempting to justify this legislation, not because it is necessary or may do somegood, but on the negative ground that it will stop some future government, in different circumstances, from doing something that it considers to be in the best interests of the people it represents. For democratic reasons alone, we should not give our support to this bill. A great deal has been said during this debate to the effect that the legislation will bring about fair competition between the private trading banks and the trading section of the Commonwealth Bank. This small bank is to be cut adrift from the reserve bank and given a different name from that which it has had foi1 the last 40 years. It is to be thrown out into the world to compete against 6 or 7 amalgamated private banking institutions which have been in the habit of getting together to determine -rates of interest and such matters. We know what may well happen to this one small government trading bank once it is cut off from its sheet anchor, the Commonwealth Bank. It is unnecessary for the trading section of ' the bank to be separated from the reserve bank. Most honorable members remember the opinion that was expressed by the experts who were appointed by an anti-Labour government to constitute the Royal Commission on Monetary and Banking Systems. They considered that the Commonwealth Bank, as it was then constituted, was the ideal kind of institution to carry out the reserve banking functions of Australia. Against that opinion, some young hopefuls on the other side of the chamber have pitted their views. I do not put myself up as an expert on hanking; I am prepared to abide by the findings of the Royal Commission on Monetary and Banking Systems, which had not previously been challenged - until they were questioned by several young honorable members oppo-site who have been in the Parliament only a few years. Some of them are very actively interested in commercial and financial institutions outside the Parliament, and I have no doubt that during the last few years they have obtained a great deal of real support in their political campaigns from such institutions. Some of those honorable gentlemen became so active in this matter that they circulated amendments of the legislation. Those amendments have now disappeared for reasons best known to themselves. I suggest that their disappearance indicates that the honorable members know very little about banking and are not so much concerned with the people's bank as they are with the interests of those who have supported them in the past. So far, the debate has not in any way demonstrated that the Commonwealth Bank has not done, and is not doing, an excellent job. {: .speaker-10000} ##### The TEMPORARY CHAIRMAN: -- Order ! The honorable member's time has expired. {: #debate-21-s26 .speaker-KID} ##### Mr LUCHETTI:
Macquarie -- This weak and anaemic legislation will not disturb the Opposition, nor will it cheer those who sit behind the Prime Minister **(Mr. Menzies),** because they obviously expected much more from the bill than its clauses contain. The clauses which the committee is at present considering are meaningless and worthless. They are as futile as a stream which rises in the mountains, dashes down a hillside, and proceeds to waste itself in the desert. The Government parties themselves are in a desert of despair at the present time. The honorable member for Mackellar **(Mr. Wentworth),** the honorable member for Mitchell **(Mr. Wheeler),** the honorable member for Bennelong **(Mr. Cramer)** and other honorable members opposite expressed their views on this legislation in the form of a fearful amendment which they circulated and then hurriedly withdrew. {: .speaker-KZP} ##### Mr Wheeler: -- I rise to a point of order. I did not circulate an amendment. The honorable member should pay some regard to the truth. {: .speaker-10000} ##### The TEMPORARY CHAIRMAN: -- The honorable member for Macquarie.. {: .speaker-KID} ##### Mr LUCHETTI: -- If I have disturbed the conscience of the honorable member for Mitchell, who feebly retreated before the wrath of his party and his leader, I am sorry for kim. This measure is not' likely to win a cheer from a single executive member of the private trading banks who, in other days, were able to determine matters concerning the finance of the nation. If honorable members turn back the pages of the *Sydney Morning Herald* to the issues following the death of **Mr. A.** 0. Davidson, who was head of the Bank of New South Wales, they will learn how he defied the nation and, with the heads of other private trading banks, determined the financial policy of Australia. This Government is now endeavouring to curry favour with its masters. It pretends that it is still serving the people of the country instead of Mammon. An amazing feature of this debate, and particularly in relation to the clauses with which the committee is now dealing, has been the avowal by honorable members opposite that they stand by the private trading banks and against socialism and monopolies. But not one word has been expressed by them to the effect that they also stand by the people; nor have they said that they wish to do something worthwhile for the community and for the justifiable aims and aspirations of its citizens. Because they have failed in that direction, the people will judge this Government at the first available opportunity, which will be on the occasion of the forthcoming Senate election. I wish to know whether this legislation has been introduced at the request of **Dr. Coombs,** of the Commonwealth Bank, or of any representative gathering in the community. Was it introduced at the request of the trade unionists, or any other worthwhile section of the people? Did the farmers seek these clauses? Did any section of the business community ask for them? The Government is not sufficiently courageous to go the whole way and to interpret fully the will of the private trading banks. It is not prepared to do all the things that they want done. Instead, it has gone half way. As a result, the people of Australia will be left in two minds whether the Commonwealth Bank is to be a people's bank, to serve the people of Australia and to do those things which are necessary for their welfare, or whether it will shackle them. I regret to say that to-day we have heard melancholy 'anti-democratic (expressions time and time again from supporters of the Government to the effect that if this measure is approved the people of another generation will not he able to determine what shall be done in their best interests, but will remain shackled by this Government which is going to its doom. The Government, knowing that it is certainly going to its doom, approaches this matter in an atmosphere of decay and defeat. However, the Government has been fortified to some extent by articles that have appeared in the *Sydney Morning Herald* and other newspapers complimenting it upon its handling of the hanking legislation, just as they complimented it upon its shackling legislation in regard to Commonwealth Oil Refineries Limited, Australian National Airways Proprietary Limited and other important matters. This Government has introduced a number of measures, including the one at present before the committee, which will not help the people to-day and which will prevent some future government from helping the people of its day. When I made my maiden speech in this Parliament, I said that the government of the day wa3 entitled to govern, and, indeed, had a responsibility to govern. But this Government not only wants to govern in its day, it also wants to govern in three, six or nine years time. It wants to tie the hands of those who will soon attainthe age of 21 and thus become eligible to vote, and it wants to tie the hands of those who may in the future have to fight for their country. It is trying to shackle the banking system so that the credit resources of Australia will be denied to the people of the future, and so that their elected representatives will not be .able to do what is necessary for their welfare and the healthy development of the nation. Finance is required in many directions. It is required to build up a greater and better Australia, and it is necessary for the individual needs of the people; yet this Government, by these clauses now under consideration intends to divide the activities of the Commonwealth Bank and prevent it from functioning in the best interests of the nation. The Postmaster-General **(Mr. Anthony)** said to-day that banks were like corner shops. He said that if there were a number of butcher shops available, people should be entitled to deal at whichever one they chose, and that banks should be in the same category. However, here is a Commonwealth Bank- {: .speaker-10000} ##### The TEMPORARY CHAIRMAN: -- Order ! The honorable member's time has expired. {: .speaker-KID} ##### Mr LUCHETTI: -- Yet here is the Commonwealth Bank in which all the people are entitled to share because they are members of the co-operative organization of the bank. But this Governmentwants to prevent them from dealing with the bank. {: .speaker-10000} ##### The TEMPORARY CHAIRMAN: -- Order ! The honorable- member must learn to obey the Chair or he will be dealt with. {: #debate-21-s27 .speaker-JSW} ##### Mr BRYSON:
Wills .- It is regrettable that during this debate so few honorable members from the Government side have participated in the discussion of the clauses of the measure before us. Certain apologists have spoken for the Government but instead of giving the chamber a reasonable explanation why this measure has been brought before it, they have endeavoured completely to misrepresent the real- issues. They have adopted the attitude that it is necessary for them to oppose the Opposition, and that they will use every argument possible against the Labour party in order to cloud the issue before the committee. The honorable member for Forrest **(Mr. Ereeth)** informed us that this measure was an attempt by the Government to prevent the nationalization of banking. I cannot find any reference to the nationalization of banking in this measure, nor can I find anything which will prevent the Parliament from nationalizing the banking services of Australia. Talk of the nationalization of banking is just one of the smokescreens that have been thrown around the reasons for introducing this bill. The High Court has given its verdict on the issue of bank nationalization. I take it that when an honorable member is elected to this Parliament he has sufficient intelli gence to understand what has previously happened in the world, and therefore all honorable members must know that the High Court has- made a declaration on the nationalization of banking. Because of that declaration there is only one way of introducing- this form of nationalization. That is by an alteration of theConstitution. The Constitution can be altered in two ways - by an agreement among the six State governments', or by a- majority of the people of Australia and a majority of voters in a majority of States approving an alteration at a referendum. If) at some future time, the people indicate that they desirethat banking should be nationalized, they will be entitled to vote for it at a. referendum, and it is most unfair that the Government apologists should' be endeavouring to show that this measure will prevent the- nationalization- of banking. Let us seek the real reasons for the. introduction of the measure. The Government prefers to talk of socialism and' communism, and to draw other red herrings across the trail, but the- people will refuse to be scared by the same old bogeys that are dragged out time and time- again by this Government. Unless the Government can change its policy of continually opposing the Labour party, it will not. last much longer. The Government is. proposing to make vital changes in the organization o£ the Commonwealth Bank. It is doing that for one purpose only - that is to strengthen the control of the private banks over the people, of Australia.. The honorable member for Wide Bay **(Mr. Bernard Corser)** made a statement to-day with which I agree, despite his muddled thinking and muddled arguments, and his suggestions about, communism. He said that the- people who control the banking of a country completely control the country. I believe that this measure is another step, by the Government towards once again placing the financial destiny of this great country in the- hand's of a few private financiers who are responsible only to themselves. In- that connexion, it is well that we should think back to the depression days of the 193(ys. In those times the Government did not control the finances of the country, and we know from sad experience what happened then. The financiers decided the policy that the then government had to follow, and although Australia had a government elected by the great majority of the people, a handful of private financiers dictated its policy. That state of affairs would suit this Government, because it is the mouthpiece of the few strong financiers in this community. Honorable members on the Government side are attempting, to the best of their limited ability, to carry out the dictates of the small' financial oligarchy in Australia. Honorable members on this side of the House will do their best to prevent them from doing so. If Australia is to be plunged into conditions similar to those of the 1930's, the people will be in a sorry state. At present we have control of the financial situation. In a democracy, it is essential that the Government that is elected by the majority of the people shall have control of the national finances. Without that control, any government is impotent to carry out its policy. We must make sure that the financial interests do not gain control. This is the second bite at the Commonwealth Bank that has been taken by this Government in the three years since it has been in office. If the Government can get away with this measure, honorable members know what its next step will be. A foretaste of the future was contained in the proposed amendments that were circulated by the honorable member for Macarthur **(Mr. Jeff Bate).** He intended to move those amendments, but because of pressure from his masters, he humbly withdrew them. {: .speaker-009MA} ##### Mr McMahon: -- Not humbly. {: .speaker-JSW} ##### Mr BRYSON: -- Yes, very humbly. He has come to heel. He went off halfcocked. But the proposed amendments have shown the next step that the Government might take towards the destruction of the people's bank. Despite the actions of anti-Labour governments over the years, the Commonwealth Bank has progressed and it will continue to do so when this anti-Labour Government is thrown out of office. It will not be long before an indignant electorate throws it out with the intention to keep it out of office permanently. This Government is paying back to the private banks the debt that it incurred when it accepted financial support from them to enable it to gain the treasury bench. The people of Australia believe in the Commonwealth Bank. The majority of them believe that the government of the nation should control its finances and they will not accept a measure of this kind which is deliberately designed to destroy the Commonwealth Bank. {: .speaker-10000} ##### The TEMPORARY CHAIRMAN: -- The honorable member's time has expired. *[Quorum formed.]* {: #debate-21-s28 .speaker-KDA} ##### Mr DUTHIE:
Wilmot .- It is a pity that the Opposition has had to get Government members away from their cups of tea to listen to the final stages of this measure, but the circumstances are indicative of the general attitude of honorable members on the Government side towards this important matter. If the Opposition had not studied some of the clauses of the bill closely, many of the hidden changes that are concealed in it would not have been revealed. According to honorable members on the Government side, the people of Australia were critical of the Labour Government because it attempted to nationalize the banks in 1947, but they will be even more indignant at the continuous whittling down by the Government of the autonomy of the Commonwealth Bank since they attained office. When the Labour Government went out of office, the Commonwealth Bank was a proud institution. It was free of a Commonwealth Bank Board and operated under a Governor with an advisory council, subject to the Treasurer of the day. But since then it has been strangled by the superimposition of the Commonwealth Bank Board. Now the Government, through this measure, is attempting to whittle down further the authority and autonomy of the Commonwealth Bank. The people of Australia are afraid of the future. Honorable members who have talked with, farmers and small businessmen, in particular, in their electorates know that that is so. In Australia to-day 80,000 people are unemployed and any attempt to make the circulation of credit through th, Australian economy more difficult will be viewed with grave suspicion by the people and particularly by those Australians and immigrants who are out of work. We have not yet discovered the true reason why the Government has introduced this bill. Several reasons have been given but honorable members still are not sure. One suggestion is that the bill is purely a gesture to the private banking institutions of Australia for assistance that they rendered to the Government during the election campaigns in 1949 and 1951. It is only a gesture because when the bill is analysed, there is really no distinct separation of the Commonwealth Trading Bank from the central bank functions. That was indicated by the proposed amendments that were circulated by the honorable member for Macarthur **(Mr. Jeff Bate).** The private banks will not be happy until the trading bank section of the Commonwealth Bank is put out of existence. It is also suggested that the Government has introduced the measure to weaken the Commonwealth Bank's impact upon the community as a financial organization owned and controlled by the people through the Government. That is the method of dividing and conquering, which is the most effective method of weakening any organization. The plan i3 to divide the bank and conquer each section at will. The third reason is that the competition and growth of the Commonwealth Bank have been so phenomenal in recent years that it has become a danger to private banks. I am not talking of nationalization, but of pure clean competition between the private banks and the Commonwealth Bank. The bank has operated so successfully that the Government has introduced this bill in order to weaken the bank's ability to compete against the private banks. Statistics furnished to me by the Treasurer **(Sir Arthur Fadden)** in answers to questions on this subject prove that that could be one of the reasons for the introduction of the bill. In 1939, there were 142,808 depositors in the trading bank section of the bank. By 1949, the number had increased to 257,982, and by 1952, only three years later, the number had grown to 372,870- {: .speaker-KE8} ##### Mr Kekwick: -- The number has increased by more than 100,000 during the present Government's term of office. {: .speaker-KDA} ##### Mr DUTHIE: -- I do not believe that the Government will claim credit for the increase. If the honorable member for Bass **(Mr. Kekwick)** contends that it can do so he tacitly admits that the Government controls the policy of the Commonwealth Bank. I am sure that he would not want to make such an admission. {: .speaker-KE8} ##### Mr Kekwick: -- The honorable member was endeavouring to prove that the Government is trying to hold back the progress of the bank. {: .speaker-KDA} ##### Mr DUTHIE: -- In the trading section and the Savings Bank Department there are 4,720,000 depositors, compared with only 1,500,000 depositors in the whole of the private trading banks. The Commonwealth Bank has a far larger business numerically than have the trading banks, but in value of transactions the business conducted by the private banks probably exceeds by far that of the Commonwealth Bank. Probably more than threequarters of bank depositors in Australia do business with the Commonwealth Bank. If the hank is doing so well, why should the Government interfere with the existing organization of the bank unless it desires to weaken the bank's trading activities? It is ridiculous for the Government to interfere with a growing concern. {: #debate-21-s29 .speaker-KNX} ##### Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- That is what we thought when the Labour Government tried to nationalize the private banks. {: .speaker-KDA} ##### Mr DUTHIE: -- The Labour Government proposed to nationalize banking because of its experience of the evil effect; of 50 years of private bank control of the credit of Australia. Honorable members opposite have frequently complained of the so-called unfair competition offered by the Commonwealth Bank. When this measure has been placed on the statutebook the Commonwealth Trading Bank will be under the control of the Commonwealth. Bank Board. If it were given a completely new entity and free from control by the Commonwealth Bank Board it might be able to stand on its own feet. It would then be the eighth trading bank in Australia free from Commonwealth Bank Board control- {: .speaker-KNX} ##### Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- Does the honorable member disagree with that? {: .speaker-KDA} ##### Mr DUTHIE: -- The existing organization of the bank should be left untouched. Because the bank is competing so effectively with the private trading banks, the Government, at the behest of its wealthy supporters, is determined to destroy it. Honorable members opposite have introduced into this debate the dead issue of bank nationalization in an attempt to engender fear in the minds of the people. They would have the people believe that the Labour party is the big bad wolf in the Australian political set-up. They conveniently forget that on the 26th November, 1949, at Norwood, South Australia, (he Prime Minister **(Mr. Menzies)** said that if any private monopoly exploited the people of Australia he, as leader of the non-socialist party, would nationalize it on the following day. "When my opponent in the election campaign of 1949 read that statement in the Tasmanian press he nearly took a fit because he had been warning the people against Labour's socialist .schemes. {: .speaker-KNX} ##### Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- The statement attributed to the Prime Minister is entirely untrue. {: .speaker-KDA} ##### Mr DUTHIE: -- It was published in the press throughout Australia and the right honorable gentleman has never denied it. {: #debate-21-s30 .speaker-KSC} ##### The TEMPORARY CHAIRMAN (Mr McLeay:
Minister for Shipping and Transport · BOOTHBY, SOUTH AUSTRALIA · LP -- Order! The honorable member's time has expired. {: #debate-21-s31 .speaker-K6T} ##### Mr COSTA:
Banks .- ,Some honorable members opposite have endeavoured to define the term " private banker ". Mark Twain once said that a private banker is a person who lends you his umbrella when it is fine, and takes it away from you when it is wet. The history of private banking in Australia indicates that the private bankers have done likewise with the credit of the country. In times of crisis they invariably crawl into their burrows and let the nation down. During the financial and economic depression of the 'thirties the private banks refused to make available sufficient money to provide employment for the people. {: .speaker-KNX} ##### Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- I rise to order. Standing Order 86 prohibits an honorable member from indulging in tedious repetition. I direct your attention, **Mr. Temporary 'Chairman,** to the standing order because we have been listening to nothing but tedious repitition throughout the evening. {: .speaker-JTF} ##### Mr Tom Burke: -- I, too, rise to order. I can well understand that if the VicePresident of the Executive Council **(Mr. Eric -T. Harrison)** is referring to the speeches made by honorable members opposite he might have described them not only as tedious but also as boring. The case put by the Opposition is so effective that it is damaging the very slim chance that the Vice-President of the Executive Council and his colleagues have of being returned to office. I invite you, **Mr. Temporary Chairman,** to rule on the point of order. The TEMPORARY CHAIRMAN.The honorable member for Banks is in order, but he must confine his remarks to the clauses under discussion. {: .speaker-JVJ} ##### Mr Mulcahy: -- I direct attention to the state of the committee. The TEMPORARY CHAIRMAN.Order ! After the committee has been counted and, if necessary, a quorum has been formed, the honorable member for Banks may continue his speech, but he must confine himself to the clauses 'before the committee. *[Quorum formed.]* {: .speaker-K6T} ##### Mr COSTA: -- During the whole of the committee debate the Prime Minister, who is in charge of the bill, has been conspicuously absent from the chamber. That is a regrettable fact because certain of the clauses under discussion need to bc explained. Perhaps the VicePresident of the Executive Council, who is something of a mental contortionist, can explain the meaning of clause 14 (1.), which reads as follows : - (1.) Any Part or section of the Principal Act, as amended toy the foregoing provisions of this Act, the number of which .is specified in a column headed " Existing number " in the Second Schedule of this Act, is renumbered as specified opposite to that number in the next succeeding column headed " New number " in that Schedule. The honorable member for Fawkner **(Mr. W. M. Bourke)** urged the Government to take ;the opportunity presented .by the introduction of this measure to strengthen the Credit Foncier operations of the Commonwealth Bank. The Government has yet to do something really worthwhile in facilitating the provision of loans to families for the purpose of building houses. The Prime Minister **(Mr. Menzies)** in the joint policy speech of the present Government parties during the last .'general election campaign, promised that if returned to power his Government would ensure that sufficient finance was made available to every family for that purpose. However, over 400,000 families are still without homes. At present, the Commonwealth Bank can make loans available for the building of houses up to an amount of only £1,750. Having regard to the degree to which costs have arisen since the Government assumed office, that amount is totally inadequate. During the last general election campaign, the Australian Labour party promised that if Labour were returned to office at would enable the bank to make loans available for that purpose up to a maximum of £3,000 .at a maximum rate of interest of 3 per cent. To-day, however, persons who obtain a loan from the Commonwealth Bank for that purpose, although such loans are limited to an amount of £1,750, are obliged to pay interest a.t the rate of 4£ per cent. The honorable member for Bendigo **(Mr. Clarey)** pointed out that whereas it is mandatory upon semi-governmental bodies which .are operating under the Broadcasting Act, the Hide and Leather Industries Act, the Re-establishment and Employment Act and the Wheat Industry Stabilization Act, to bank with the Commonwealth Bank, under this measure they will be given 'the option .of banking with a private trading 'bank. Obviously, so long as 'this 'Government remains in office, those bodies will bank in private banks Such a provision is nonsensical. A person who owned .a grocery would not purchase his groceries from a .competitor. Under clause 11, it is proposed .to delete the provision in tube principal act that the chairman, of the Disciplinary Appeal Board shall be .a person who as, or lias -been, :a police (stipendiary or 'special -magistrate of >a State or of -a territory of the Commonwealth. .However., "the ^Government has not indicated the qualifications which shall be required of the chairman of that body in the future. {: .speaker-10000} ##### The TEMPORARY CHAIRMAN: -- Order ! The honorable member's time has expired. {: #debate-21-s32 .speaker-K7J} ##### Mr CRAMER:
Bennelong .- Members of the Opposition have been floundering in their effort to keep this debate going until the time allotted for the committee stage has expired. That fact is noteworthy when we remember that they particularly protested .earlier that the time allotted for the committee stage was completely inadequate to enable them to discuss the bill fully. They have been indulging in tedious repetition. They have claimed that under this measure the structure of the Commonwealth Bank will be seriously weakened. Nothing could be farther from the truth. On the contrary, the bank's organization will be strengthened, because it will be converted into a full-blooded .trading bank which will be empowered to engage in direct and effective competition with the private trading hanks. The proposed ''Commonwealth Trading Bank will have its own general manager and will be enabled to determine its own policy. It will thus be placed on all fours with the .private banks. Members of the Opposition, without exception, have attacked the private trading banks as institutions which .should be completely destroyed. Of course, that is the real policy of the Australian Labour party. However, the people of Australia have not forgotten -the great contribution that the private trading banks made towards the development of a sound economy in this country long before the Commonwealth Bank was established ,in 1911. During World War I. those institutions rendered invaluable .assistance .to the nation. Ma'. Bird. - So did the Commonwealth Bank. {: .speaker-K7J} ##### Mr CRAMER: -- It waa at that t'i»e that -the 'Commonwealth Bank received, probably, its greatest impetus mainly *m* a result of the assistance that the (private banks gave .to at. Just after *tb.e outbreak <of World War II., a* the request of the 'Treasurer **(Sir Arthur Fadden)** when he formerly held his present peat the private banks voluntarily agreed to lodge a substantial proportion of their deposits with the Commonwealth Bank in order to assist the nation's war effort. That fact cannot be denied. However, when Labour assumed office it immediately passed regulations under the National Security Act to make it mandatory upon the private banks to lodge such deposits. The people recall the crash of the State savings banks in New South Wales in the early 'thirties when Labour was in office in that State. Incidentally, the Commonwealth Savings Bank benefited to a great degree at that time because, as a result of that crash, the people of New South Wales transferred their business to it. After World War II., a Labour Government, acting in conformity with Labour's policy, precipitately attempted to destroy the private banks by endeavouring to nationalize the banking structure, knowing full well that the banking institutions are the life-blood of the country. Our only bulwark against socialization is an economy with a free banking system. The Chifley Labour Government depended upon its banking legislation of 1945 to empower it to introduce socialization into Australia. One of the principal features of that legislation was the issuing of a direction to all semigovernmental bodies and local authorities to conduct their banking business with the Commonwealth Bank, despite the fact that many of them had banked with the trading banks for 50 years. That direction, arbitrarily given, was to be enforced. Only a legal challenge by the Melbourne City Council thwarted the Labour Government. Another of the principal features of the banking legislation of 1945, upon which the Labour Government depended, was the right to take the whole of the increased assets of the trading banks into special accounts held by the Commonwealth Bank. By those means, the Labour Government tried to nationalize the banking system. The socialists were frustrated by the decision of the High Court of Australia, and realized that time was running against them. The people were "waking up " to them. Accordingly, the Labour Government introduced the banking legislation of 1947, the specific purpose of which was to nationalize the banks. Yet members of the Labour party, in a mealy-mouthed manner, try to convince the people that they are not in favour of the nationalization of banking. The people know them, and what they intend to do, and will not be deceived by mealymouthed assurances on this issue. This bill will preserve democracy for the people in Australia. That is why the Government has introduced this legislation. We desire to be fair. Let us have a proper banking system in which the Commonwealth Bank and the private banks will engage in business in fair competition with one another. During the debate this evening, we have been compelled to listen to all sorts of stuff and nonsense, and stupid utterances, and submit to pin pricking, as members of the Opposition have tried to deceive the people. This Government is not attempting to destroy the Commonwealth Bank. I pledge my word to everybody who knows me that I shall fight for all I am worth to maintain a strong and vigorous Commonwealth Bank and Commonwealth Trading Bank. It is about time that we got down to tintacks on this matter, and exposed Opposition members to the people for what they are. Every member of the Labour party has believed throughout his political life, that the key to the whole situation is complete control of the banking system. If the people are foolish enough to return the Labour party to office again, it will try to nationalize the banking system at the earliest possible moment'. Many Opposition speakers have given proof of that intention to-day. We heard it from the lips of the honorable member for East Sydney **(Mr. Ward)** and the honorable member for Melbourne **(Mr. Calwell).** That cannot be denied. It is futile for the Leader of the Opposition **(Dr. Evatt)** to tell the people that he does not want nationalization of banking. It is impossible for him to hide the truth from the people. Let us face the issue, and understand the real position. The Labour party wants the nationalization of banking so that it can control the lives of the people, and place them under a socialist' dictatorship. This Government is in favour of democracy, and in preserving the rights of the people. {: #debate-21-s33 .speaker-DTN} ##### Dr EVATT:
Leader of the Opposition · Barton -- Some Government supporters have raised the issue quite clearly. The honorable member foi Bennelong **(Mr. Cramer),** who has just completed his second speech on this clause, is perfectly right when he says that it provides the machinery by which the essential objective of this bill is to be achieved. The marginal note to clause 18 reads as follows: - >Business of the General Banking Division to be carried on by Trading Bank. The clause proceeds to state how the assets and liabilities are to be transferred. I pointed out in my second-reading speech that it is doubtful, to say the least, whether there is constitutional power to make such a ' wholesale transfer of accounts from one bank to another without the consent of each customer concerned. . It is perfectly true that the Commonwealth accepts the liabilities. That provision is not new. It has always applied to the Commonwealth Savings Bank. However, I think that it is impossible legally to give effect to this provision, and I gather that the legal advisers of the Government hold a similar opinion, because the transfer of the business may not be effected until a proclaimed date. "When that date will be I do not know. Utter confusion must occur in the actual conduct of the General Banking Division of the Commonwealth Bank until the proclaimed date. After the proclaimed date a new bank will begin to function. The honorable member for Bennelong is really in favour of the Commonwealth Bank and its trading division. He wants it to progress. The Vice-President of the Executive Council **(Mr. Eric J. Harrison),** in one of his melodramatic monologues earlier in the evening, pointed out that the trading section of the Commonwealth Bank has been conducted successfully. The honorable member for Melbourne **(Mr. Calwell)** has pointed out that the increase of the number of branches of the bank has been small during the three years this Government has been in office, but I shall let that matter pass. The **3t remains that busi ness oi the bank has increased during that period. In view of those circumstances, why does the Government desire to alter the structure of the bank? If the institution is functioning effectively, why does the Government propose to change it? {: .speaker-KNX} ##### Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- We fear that a Labour government will nationalize banking under the legislation of 1945. {: .speaker-DTN} ##### Dr EVATT: -- This Government has now been in office for three years. For the last two years it has had a majority in the Senate and in this chamber, yet it' has made no effort until now to introduce this legislation. Why has it been introduced at this stage? If the Government is eager to preserve keen competition between the Commonwealth Bank and the private banks now, it should have been equally keen two years ago. {: .speaker-KNX} ##### Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- At that time we were busy dealing with the Communists. {: .speaker-DTN} ##### Dr EVATT: -- The Government went to the people on a specific banking issue in 1951. It wished to reconstitute the Commonwealth Bank Board. The Prime Minister **(Mr. Menzies),** in his policy speech, did not indicate that the Government had any other intention regarding the bank. After the general election, the Government appointed the bank hoard. But it had no authority from the people to take any other action in respect to the bank. In 1949, the present Prime Minister said in his policy speech that the trading functions of the Commonwealth Bank would be continued. The whole essence of that promise was that the trading division of the bank would not be liquidated, as it will be by this bill. It is proved beyond doubt that the bank has been conducted successfully. The Government has not assisted it, and has not insisted that new branches be opened, but nevertheless, the institution is doing well. The number of customers is increasing. The Government professes that it wishes to expand the Commonwealth Bank. I emphasize that the Government, with the introduction of this legislation, repudiates its pre-election promise given to the people in 1951, which was limited to the re-establishment of the bank board. The Government also repudiates its pre-election promises given in 194$, when l3ie Prime Minister promised, by implication, that- bis Government would not interfere wife the Commonwealth Bank. The Government also repudiates the recommendation- of the Royal Commission- on Monetary and Banking Systems that the structure of the Commonwealth Bank should consist of a central bank,, a savings hank and a general banking division. When Government supporters speak of the nationalization of banking they twist and turn and distort the statements of ray colleagues about it. Government supporters pick out, perhaps, a sentence from a paragraph in a speech delivered by a member of the La,bour party on this subject: They have' twisted the word's of the honorable member for East Sydney **(Mr. Ward)** and the honorable member for Melbourne in a desperate effort to gain some popular support on the eve of the Senate elections. They have said to themselves, "Every State is against us. What can we try to d'd now? Oh yes, we won an election on banking years ago ; we shall try to do itagain ". But the people will not be hoodwinked' by those tactics. As the honorable member for Wannon **(Mr. McLeod)** pointed out so impressively because of his knowledge of the working of the Commonwealth Bank, the people believe in that institution. This legislation must be examined in relation to the time at which it is introduced. It is here as the result of pressure from the private banks. That cannot be denied;, it is public knowledge. Some honorable members opposite have themselves taken part in applying that pressure: They would have liked the legislation to go even further than it does, but the Government said, "Let us be careful-. We shall- go as far as we can". I say that the Government is destroying- the banking legislation of 1945- which was approved- by the people. The CommonWealth Bank is being dealt a serious blow, and the people of Australia will not tol'erate this interference. I have expressed my view- 'On the nationalization of banking *1* have said' that, a* an issue, *it* is o$8 of the- way, and cannot possibly arise' again. {: .speaker-KNX} ##### Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -.- The right honorable' gentleman's party does hot agree with him. {: .speaker-10000} ##### The TEMPORARY CHAIRMAN: -- Order ! Interjections" must cease. {: .speaker-K8B} ##### Mr Curtin: **Mr. Curtin** *interjecting ,* The TEMPORARY CHAIRMAN.I call the honorable member for Watson to order, and I remind him he is not in his proper place in this chamber. Br. EVATT. - The Vice-President of the Executive Council- is not in his rightperhaps I had better not finish that sentence. We have witnessed his agony. He has said, in effect, to his colleagues; " Let us see if we can pick on something that Eddie has said or Arthur has said, and take it out of its context ". It may be easy to fool the people, once, but to fool them a second time is a little more difficult, and to fool them a third time is impossible. {: .speaker-KNX} ##### Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- The right honorable gentleman's party fooled him on television. {: .speaker-DTN} ##### Dr EVATT: -- Marvellous' ! I should like to see the Vice-President of the Executive Council in a television broadcast of parliamentary proceedings, Strutting up and down the front bench and talking about everything but the point at issue. Undoubtedly this bill does interfere with the Commonwealth Bank The magic words, " Commonwealth Bank of Australia ",, that have endured for 40 years are to be altered: We are to have instead " The Commonwealth Trading Bank of Australia ". Everybody will think it is a different bank. The TEMPORARY CHAIRMAN.Order! The right honorable gentleman's time has expired. {: #debate-21-s34 .speaker-009MC} ##### Mr HOLT:
Minister : for Labour and National Service and Minister for Immigration · HIGGINS, VICTORIA · LP ." The attitude of the* Labour party to this measure is becoming more difficult to follow as each Opposition speaker rises. The Leader- of the Opposition **(Dr. Evatt)** opened the secondreading debase by telling us that we were sabotaging- the Commonwealth Bank" a>3 an institution and greatly weakening its structure; but last night the honorable member for Fremantle **(Mr. Beazley),** who followed trie in debate, assured the House that this was- an inoffensive measure. He said that it meant nothing and would achieve nothing. We must try to get those contradictory statements sorted out some time* Some honorable members opposite who, I believe, speak with the true voice of the Labour movement; - I include the honorable member for East Sydney **(Mr. Ward)** and the honorable member for Melbourne **(Mr. Calwell)** - have said that they stand to-day where they stood in 1947. In other Words, they stand for the nationalization Of banking. That, of course, puts' the Leader of the Opposition in an uncomfortable position. He asks us now why we need this legislation. He has the effrontery to say, " Where is your mandate for this bill?'". That mandate was given in 1949 when the Labour Government, which had been returned with an overwhelming majority in 1946) was thrown out of office ignominously because of its attempt to nationalize the private banks. The people of Australia elected a Liberal government to ensure, not merely that the private banking structure of this country would romain substantially as it was at that time, but also that some safeguards would be provided against any attempt at arbitrary change in the future: The Leader of the Opposition has asked Why We need this legislation now, two years after our election to- office with- a majority in both Houses of the Parliament. If the right honorable gentleman's colleagues share his view that the nationalizationof banking is no longer ali issue, why do they retain that proposal not only as am integral part of the Labour party's objective, but also- as a- specific item of policy in the- party's platform? The Leader of the- Op-position has- accused us- of attempting tlo twist! Labour's views' by picking out sentences' and! giving them a distorted interpretation. I need Only pick one sentence from the Labour party's plat-1 form to show whether or not we are distorting Labour's attitude. The1 sentence that I select is, of course, the ohe- advocating the nationalization of' banking- in Australia. (Dan I be accused: o-f distorting the view of La-hour? Is the nationalization proposal not still part of the Labour party's platform? If it is part of the platform, why are not honorable members Opposite honest enough to tell the people of Australia that is where Labour still stands? We can have some respect for honorable members who make no mystery of their views on this matter. As opportunities have presented themselves, the Labour party has pursued the Course on which it set itself, apparently irrevocably, back in 1921. There has been no alteration of the substance of the Labour party's objective as it was laid down at that time and I believe that as legislative opportunities present themselves again in the future,, honorable members Opposite will go forward towards that objective so long as it remains a part of their platform. The Leader of the Opposition has sought to give us a lecture about mandates. He wants to know whether we have a mandate for this legislation,. Where was his mandate for the nationalization measures of 1947? We heard not one word about that in Labour's 1946 policyspeech. The proposal was sprung upon the country suddenly after a Saturday morning Cabinet discussion. The announcement was made in, a bald1 42-word statement by the then Prime Minister **Mr. Chifley.** Nationalization was to be thrust upon the Australian- people whether they wanted it or not. I recall most vividly how we pleaded with the then government to withhold its legislation until the', people had been given the opportunity to- express their views upon it. Later we vainly urged the Government not to' proclaim the legislation- until tfe electors had bean allowed' to declare where they stood1. The present Premier of Victoria knew where the- people stood on bank nationalization because he was thrown! neck and crop' out of office when the issue was fought' squarely in his' State ; but despite al'l the efforts of the then opposition in this- Parliament, these1 selfstyled democrats of the Labour party Went ahead with,, legislation which, they knew was bitterly resisted- by more than 60' per Gent', or- 70' per cent of the1 people: Now we are asked; why we- bring- this measure forward at this stage. We* have waited patiently to see the Labour party's socialization objective amended as the result of the democratically expressed will of the Australian people on the bank nationalization issue; but Labour stands as strongly for the nationalization of the banks to-day as it stood in 1947. Although we know that we cannot deprive any future Labour government that may be elected of its opportunity to seek again by means of amending legislation to work its will on the private banks - to number their days as the honorable member for Melbourne has said - we shall be able at least to take whatever steps are available to us when the time comes, to force such a government into the open so that the Australian people may know exactly what it proposes to do. The legislation now before us will make it much more necessary for honorable members opposite to say frankly where they stand. I am sure that this legislation will be accepted gladly by the people of this country. {: #debate-21-s35 .speaker-JUP} ##### Mr CLAREY:
Bendigo .- The more that members of the Government say about this measure the more mystified one becomes about the Government's policy. The Minister for Labour and National Service **(Mr. Holt)** has given the committee an entirely new reason why the Government has introduced this legislation. Apparently the pressure that was brought to bear by the Government back-benchers had nothing to do with the matter ! It would appear from the Minister's speech that the Government has a most tender regard for the constitution and platform of the Australian Labour party, but the truth is that the Minister decided to unburden himself by giving to the committee entirely new reasons which came suddenly into his mind only a few minutes ago. I remind honorable members that this measure will not prevent the nationalization of banking when the people want it. On the other hand, nationalization of the banks would not necessarily follow the repeal of this legislation in the future. "We have heard little more than such an implication from supporters of the Government to-night, which has not added to the value of the debate. Had honorable members opposite explained the true purpose of the bill, instead of discussing matters not associated with it, we should all by now understand the measure more clearly. During the 1949 general election campaign the present Prime Minister **(Mr. Menzies)** told the people that if the anti-Labour parties were returned to office the trading functions of the Commonwealth Bank would not be altered. On neither of the two occasions between 1949 and 1951, when legislation was brought down to provide for the re-introduction of the Commonwealth Bank Board, did the right honorable gentleman indicate that legislation would be introduced to amend the Commonwealth Bank Act. The rejection of the legislation to reconstitute the Commonwealth Bank Board was followed by a double dissolution of the Parliament, and the subsequent general election was fought only on the basis of the necessity to re-introduce the Commonwealth Bank Board. At no time during the last three years has the Government indicated that further amending legislation would be introduced. This measure has been brought down as a result of the pressure of Government back-benchers for amendment of the Commonwealth Bank Act and the Banking Act. Some of the statements of honorable members opposite in relation to the " fair go " that the Commonwealth Bank has received from the Government have not helped the committee to any appreciable degree to understand the Government's policy in relation to banking. In an endeavour to prove that the Commonwealth Bank has been well treated by the Government, the Vice-President of the Executive Council **(Mr. Eric J. Harrison)** cited figures to show that advances by the bank rose from £80,000,000 in 1949 to £120,000,000 in 1952. On their face value those figures indicated that there was a considerable improvement of the affairs of the bank, as far as advances are concerned. The Minister also cited figures of the combined advances that had been made by the trading banks and the Commonwealth Bank, which revealed a considerable improvement. However,, he did not state the aggregate amount of advances by the trading banks alone. I assure the Vice-President of the Executive Council that if the amount of combined advances that he mentioned had not been granted, the people of this country would be in a parlous position because, between 1949 and the end of 1952, actual costs and prices in this country rose by 60 per cent. Had there not been a corresponding increase of the total amount of advances and the amount of currency in circulation, it would have been impossible for Australian industry and the Australian economy to continue to function. I contend that the figures that have been furnished to the committee show that bank advances have been insufficient to provide for the needs of the community. That is possibly one of the reasons for the degree of unemployment that exists to-day. The Commonwealth Bank has been a unified structure, embracing a central bank, a trading bank, a savings bank, and other subsidiary departments. By functioning as one unit the bank has been able to provide adequate financial services for the people. It has functioned under the control of a board of directors, responsible to the Government, and every section of the bank has been able to adhere rigidly to, and carry out the policy determined by the central bank from time to time. As a result, there has been complete unity of financial policy and economic development. As the Government realizes that when the trading section ceases to be an integral part of the structure of the Commonwealth Bank, disputes may arise, and the unity that has been responsible for its present strong financial foundation will be broken down, it has inserted a provision in this measure in relation to the settlement of any such disputes. I point out to supporters of the Government who contend that this legislation will strengthen the Commonwealth Bank or make it a better servant of the people, that past experience shows that when unity of management is destroyed the result is not in the best interests of the people. I stress that this experiment - I hope that it will only be an experiment - will be fraught with very grave danger to the people of this country. In the realm of finance, it is essential to maintain the confidence of the people. Most of us can remember the effect on industry and the economy generally during the 'thirties when the people lost confidence in the financial structure of the country. I do not think that this legislation will be in the best interests of the Australian people. {: .speaker-10000} ##### The TEMPORARY CHAIRMAN: -- Order ! The time allotted for the remainder of the committee stage of the bill has expired. Question put - >That the remainder of the bill be agreed to and that the bill be reported without amendment. The committee divided. (The Temporary Chairman - Mr. G. J. Bowden.) AYES: 50 NOES: 33 Majority .. ..17 AYES NOES Question so resolved in the affirmative. Report adopted. Bill read a third time. {: .page-start } page 660 {:#debate-22} ### ASSENT TO BILLS Assent to the following bills re ported: - Taxation Administration Bill 1953. Land Tax Abolition Bill 1953. {: .page-start } page 660 {:#debate-23} ### ADJOURNMENT {:#subdebate-23-0} #### Civil Aviation - Imported Literature Motion (by **Mr. Eric** J. Harrison) proposed - >That theHouse do now adjourn. {: #subdebate-23-0-s0 .speaker-KX7} ##### Mr WARD:
East Sydney . This appears to be an appropriate occasion to raise an important matter that I wishto ventilate because honorable members have heard a great deal this week ; about the right of the people to choose their bankers. I think it is more important that the people should have the right to choose the airline to which they wish to entrust their lives when they travel by air. Therefore, I refer to the proposal by Australian National Airways Proprietary Limited, which is now current, that Trans-Australia Airlines be forced to discontinue certain services that it is conducting. In order to demonstrate to the Australian public the real danger that exists under a government that is eager to assist private enterprise, I shall discuss facts which indicate that, if this Government has its way, Australian National Airways Proprietary Limited will succeedin barring Trans-Australia Airlines from certain air routes. So that honorable members may realize what can happen, I point out that Australian National Airways Proprietary Limited some time ago proposed to increase the maximum permissible loading of DC3 passenger aircraft to 29,600 lb. That is. the maximum loading permitted for DC3 aircraft when they carryfreight. This company, however, wanted the same limit to be established for DC3machines carrying passengers. The Minister for Civil Aviation : **(Mr. Anthony)** has assured us repeatedly that the lives of passengers will not be endangered because the Department of Civil Aviation must approve of any such proposal before it can be put intoeffect, and that the department always places the security of the travelling public first. Nevertheless, this proposal was approved of by the Department ofCivil Aviation and would have become effective had it not been for the membersof the Australian Air Pilots Association, the men who fly the aircraft. It was they, not the Department of Civil Aviation, who protected the Australian public. I understand that, asthe result of the refusal of the Air Pilots Association to agree to the change until tests have been made, Australian National Airways Proprietary Limited couldnot proceed with its proposal. The association insisted that an aircraft be loaded with sandbags to a limit of 29,600 lb. Because of theunsatisfactory resultof the test, the associationdid what the Department of Civil Aviation should have done; it refused toagree to the change. As the membersof the (association are the men who fly the aircraft, the proposal of Australian National Airways Proprietary Limited didnot become effective. The Minister may ask: If a DC3 aircraft used for the carriage of freight can have a loading of 29/600 lb., why cannot passenger aircraft be loaded to the same degree? The answer is that the Air Pilots Association considers that when its members are flying freight aircraft they are not risking the lives of passengers, although they may be taking some risks themselves, but when they are flying passenger aircraft they have a much greater responsibility. Therefore, the association insists that the margin of safety for passenger aircraft should be much greater than for aircraft that carry only freight. I believe that the association should be commended for the action it has taken to protect the Australian public. Let me refer to another incident to show the danger that will exist if Australian National Airways Proprietary Limited has its way. At the moment, that company is managing Guinea Airways Limited. When it took over the management of 'Guinea Airways Limited, one of its first acts was to dismiss approximately 80 engineers on the ground staff. That was one of the first economy moves. I believe that the general public will be alarmed when it learns what is happening. Trans-Australia Airlines adopts what is regarded by Australian National Airways Proprietary Limited as the too expensive practice of giving its pilots periodic refresher courses to keep them in touch with modern standards for the flying of aircraft. Australian National Airways Proprietary Limited, having made inquiries about the practice adopted by Trans-Australia Airlines, discovered that it cost approximately £50,000 a year. So Australian National Airways Proprietary Limited decided that it would not give its pilots refresher courses, because it would be too costly to do so. We can see what will happen if Australian National Airways Proprietary Limited is able to succeed, with the assistance of this private enterprise Government, in forcing Trans-Australia Airlines out of business. Honorable members know of the plan that Australian National Airways Proprietary Limited has proposed to exclude Trans-Australia Airlines from AdelaidePerth flights, to take over the Tasmanian traffic, and to leave the Queensland traffic to Trans-Australia Airlines. It is well known that Trans-Australia Airlines is losing a considerable sum of money on its Queensland services, but it maintains them because it wants to provide the Australian public with adequate air services. The Tasmanian service is one of the most profitable air services, but Australian National Airways Proprietary Limited wants to take it over and to exclude the Government airline from it. It is obvious that if Australian National Airways Proprietary Limited were allotted the Adelaide-Perth services, people who wanted to go to Perth from Brisbane, Sydney or Melbourne would not make bookings with two companies. They would not fly to Adelaide by Trans-Australia Airlines, and then transfer to an aircraft operated by Australian National Airways Proprietary Limited. If the proposal of Australian National Airways Proprietary Limited were accepted, it would force into the lap of that company all the people who wanted to gogo to Perth from Brisbane, Sydney or Melbourne. At any rate, a large proportion of them would book the whole way with Australian National Airways Proprietary Limited. As time passes, we see more clearly the real intention of the Government when it forced an agreement upon TransAustralia Airlines recently. The intention of 'the Government is to destroy Trans-Australia Airlines, and to establish a private monopoly of interstate air travel for Australian National Airways Proprietary Limited. Honorable gentlemen opposite have talked about letting the people have a choice. Trans-Australia Airlines has shown that a government airline can operate more successfully and efficiently than can a private airline, and the public are entitled to have the services of the government airline preserved for thom. I do not want to fly by Australian National Airways Proprietary Limited, and the majority of honorable members opposite use the services of TransAustralia Airlines. I have given the House some illustrations of the way in which safety is disregarded by private operators, or does not receive the same consideration from them as from a government airline, because they are more concerned about making profits. Whatever the Minister may say, the facts are that since Trans- Australia Airlines has been in operation it has had one mishap to a freight aircraft but not one of its passengers has been killed, whilst in the same period Australian National Airways Proprietary Limited has suffered five major crashes. As the safety of the public should be a major consideration, I suggest that the Minister give an undertaking to the House and the people that Trans-Australia Airlines will not be forced out of the air, but will be permitted to continue to operate the services that it has been operating so far. {: #subdebate-23-0-s1 .speaker-BV8} ##### Mr CALWELL:
Melbourne -- I direct the attention of the VicePresident of the Executive Council **(Mr. Eric J. Harrison)** to protests that have been made by a number of citizens against the flood of -so-called literature that is coming into this country, and for which the Government is providing dollars. I have been given by **Mr. W.** B. Burke of Rockhampton, Queensland, some-examples of what are supposed to be detective novels. ;I am amazed that officers of the Department of Trade and Customs have let such printed matter come into the country, and I am appalled to think that dollars are being used to finance its importation. I have in my hand a book called *World of Fear.* The cover states that it contains stories of weird adventure. On the back, there is an advertisment for what is described as " a new comic magazine defying all description - Terror, horror, suspense ! " Apparently that comic is entitled *Unknown World.* The advertisement states, " to turn each cover is to enter corridors of horror never before conceived in the mind of man ". It costs 10 cents a copy. I have another publication called *Strange Tales.* Apparently it contains stories entitled, " Who Stands in the Shadows ", " The Horrible Man " and "My Brother Talks to Bats". I have been supplied with a clipping from a reputable Australian journal *A.M.,* published in Sydney, which describes one of the writers of this awful trash. The article is headed " Sex, Sadism and Scriptures ". It states - >With this formula an American thriller writer has sold a record 13,000,000 novels in five years. His name is Mickey Spillane. According to the article, his formula for writing novels is unorthodox. Apparently he writes the end of the novel first, then retreats to the beginning and works his way to the end. The article continues - >Spillane gives his books an atmosphere of sheer cruelty. Each novel is composed of a series of incidents, each a little more gruesome than the preceding one, until he reaches his previously written culmination - usually a smash surprise ending of horror and butchery. If we in this Parliament have any sense of responsibility, and if we think of the children of to-day who will be the citizens of to-morrow, we will not make dollars available for matter of that kind to come into this country. If we have any sense of fitness, and if we believe that there should be censorship of pornographic and dangerous trash, the censors of the Customs service ought to be told not to allow that kind of stuff to be brought in Spillane has sold 13,000,000 copies of his so-called novels in five years. I am told that they are on sale on bookstalls throughout Australia. The so-called books that I have produced to-night were sold in Rockhampton. The citizens of that city are so incensed about the matter that, at the request of the Rockhampton Trades and Labour Council, the mayor is calling a public protest meeting. I hope that the Vice-President of the Executive Council will have an investigation made and have this type of literature kept out of the country. {: #subdebate-23-0-s2 .speaker-K6Q} ##### Mr BERNARD CORSER:
I do not wish to detain the House at this hour, but I do wish to reply to the remarks of . the honorable member for East Sydney (Mr. Ward · Wide Bay; [11.20]. in regard to the losses that have been sustained by Australian National Airways Proprietary Limited. I remind the honorable member that it was Australian National Airways Proprietary Limited which pioneered air services and made it easier for those who followed. The losses to which he referred were sustained by that company in the course of its pioneering work. {: #subdebate-23-0-s3 .speaker-JLZ} ##### Mr ANTHONY:
PostmasterGeneral and Minister for Civil Aviation · Richmond · CP -- I do not know whether one should give serious attention to the charges of the honorable member for East Sydney **(Mr. Ward)** because they were so obviously intended to damage the traffic business of a private airline. They were intended to instil into people the fear that it would not be safe to travel with a private enterprise company and that for the reasons he alleged their lives might be in jeopardy. The honorable member even said that the officers of the Department of Civil Aviation, who are non-political so far as I am aware, would be privy to a scheme which would endanger the lives of the public by permitting aircraft to be used which were not airworthy. That charge is not worth answering. The honorable member suggested that he would not travel on certain planes hecause he would fear for his life. I do not think that many others would share that fear. In answer to a question which was asked in this House to-day, I supplied figures relating to the record of Australian commercial aviation. In the last fifteen months not a single life has been lost in the air. I think that that record is sufficient testimony to the efficacy of inspection and other controls that are exercised by the Department of Civil Aviation in order to ensure the safety of those who travel by air. I think that the insinuations that were made by the honorable member for East Sydney are beyond contempt. I think that tho community has agreed that a very genuine effort has been made by the Government .to preserve the two competitive airlines - Trans-Australia Airlines and Australian National Airways Proprietary Limited. If this had been a government of the political complexion of the honorable member for East Sydney as soon as we had attained office in 1949 wc would have destroyed Trans-Australia Airlines completely. We have preserved it because we believe that it is a good institution. Whether it is a government-controlled company or a private enterprise did not concern us so much as the fact that both TransAustralia Airlines and Australian National Airways Proprietary Limited have given an excellent service to the public. We were convinced that the public wanted both. We have tried to preserve both. To suggest that Trans-Australia Airlines is being forced out of certain air routes is to ignore the provisions of the airlines legislation which was passed by this Parliament two or three months ago and which provides that Australian National Airways Proprietary Limited and TransAustralia Airlines should put their case for the rationalization of services before an arbitrator who is to be agreed upon by both of them. {: .speaker-BV8} ##### Mr Calwell: -- That will be done in the event of their failure to agree. {: .speaker-JLZ} ##### Mr ANTHONY: -- Yes. But they have agreed to the extent of saving about £200,000 each a year without any lessening of the efficiency of their services to the public. But it is natural that in certain instances both companies should have a preference for the same air route and it may be very difficult to achieve agreement in every case. It is possible, therefore, that certain matters may have to bo settled by arbitration. The airlines legislation provided that the arbitration should take place outside the political arena. {: .speaker-BV8} ##### Mr Calwell: -- Who will he the arbitrator? {: .speaker-JLZ} ##### Mr ANTHONY: -- His name will be announced in due course when authority is given by both, companies. It will be the companies who will select him. He will not be chosen by me. The honorable member for East Sydney referred to the opinion of the Air Pilots Association. That does not concern me. That association is not governed, as the Department of Civil Aviation is governed, by rules which have been formulated by air authorities of the world through the body known as the International Civil Aviation Organization. A meeting was held recently in Melbourne of air experts from fifteen nations who determine what is adequate for the safety of the air-travelling public. It is not the function of the Air Pilots Association any more than it is the function of some job controller .in a workshop to take matters out of the hands of the appointed authority. Of course, it suits the honorable member for East Sydney to try to start industrial trouble in the airlines as he has started it in so many other industries. I have not heard anything on this subject from the Air Pilots Association but I should be very surprised if this body of men for whom I have the highest degree of respect selected the honorable member for East Sydney to be their spokesman in this House. I completely repudiate all the allegations and insinuations of the honorable member that the conscientious officers of my department would have no consideration for the lives of people who might fly in a DC3. On their behalf, therefore, I say that it is without the slightest justification. {: #subdebate-23-0-s4 .speaker-JTF} ##### Mr TOM BURKE:
Perth **.- Mr. Speaker-** Motion (by **Mr. Eric** J. Harrison) put - >That the question bc now put. The House divided. (Mr. Speaker - Hon. Archie Cameron.) AYES: 41 NOES: 24 Majority .. '.. 17 AYES NOES Question so resolved in the affirmative. Original question resolved in the affirmative. {: .page-start } page 664 {:#debate-24} ### PAPERS The following papers were presented: >New Guinea - Report to General Assembly of the United Nations on Administration of New Guinea for year 19S1-52. > >Public Service Act - ^Appointment - Department of National Development--M. C. Koneoki > >House adjourned at 1 1.33 p.m.

Cite as: Australia, House of Representatives, Debates, 5 March 1953, viewed 22 October 2017, <http://historichansard.net/hofreps/1953/19530305_reps_20_221/>.