House of Representatives
8 March 1962

24^th Parliament · 1^st Session

QUESTION
- CANBERRA-TUMUT ROAD
QUESTION
- INDONESIA
QUESTION
- URANIUM
QUESTION
- POST OFFICE, ESSENDON
QUESTION
- BROADCASTING
QUESTION
- PAPUA AND NEW GUINEA
QUESTION
- SALES TAX
QUESTION
- KANGAROO MEAT
QUESTION
- SHIPPING LINE DIRECTORSHIP
QUESTION
- SOUTH-EAST ASIA
QUESTION
- LAOS
QUESTION
- COMMONWEALTH OFFICES
QUESTION
- APPRENTICESHIPS
QUESTION
- COMMUNISM
QUESTION
- DISARMAMENT
QUESTION
- RECOGNITION OF AUSTRALIAN DIPLOMAS IN MALAYA
QUESTION
- ELECTORAL
QUESTION
- MARRABOOR WEIR
QUESTION
- ARMY LAND AT SWANBOURNE
QUESTION
- WOOL
QUESTION
- POSTAL SERVICES
QUESTION
- WEST NEW GUINEA
QUESTION
- SHIPPING
QUESTION
- WOOL
QUESTION
- TELEVISION
QUESTION
- REPATRIATION
QUESTION
- PRIME MINISTER
QUESTION
- BAUXITE
GOVERNOR-GENERAL’S SPEECH
QUESTION
- SUPPLY (GRIEVANCE DAY)
COMMONWEALTH BANKS BILL 1962
- Second Reading
ADJOURNMENT
- Defence Equipment - Communism - State Elections
ANSWERS TO QUESTIONS
- Employment
- Local Government Finance
- Commonwealth Scientific and Industrial Research Organization
- Desalination of Water
- Television
- Postal Services
- Taxation
- Banking
- Sales Tax
- Government Securities
- West New Guinea

Mr. SPEAKER (Hon. Sir John McLeay) took the chair at 10.30 a.m., and read prayers.

page 607

QUESTION

CANBERRA-TUMUT ROAD

Mr FULLER:
HUME, NEW SOUTH WALES

– I address a question to the Prime Minister. When does the Government propose to give effect to the recommendation of the Joint Committee on the Australian Capital Territory on the provision of a safe, all-weather road between Canberra and Tumut? The recommendation was reported to both Houses in November, 1959. I ask the Prime Minister whether he will implement the recommendation, which contains these words -

The Commonwealth Government would be justified in voting the amount necessary for the completion of the Brindabella route, to connect with the extension of the main Forestry Commission road. The estimated cost of a twolane gravel road-

Mr SPEAKER:

– Order! The honorable member is now proceeding to give information. The honorable member should not take advantage of an opportunity to give information under the guise of quoting from a recommendation. I point out also to the honorable member that we are all endeavouring to keep questions and answers short.

Mr FULLER:

– I was just pointing out that the estimated cost of this road is £212,000, exclusive of the already planned development of the route within the Australian Capital Territory.

Mr MENZIES:
Prime Minister · KOOYONG, VICTORIA · LP

– As I freely concede that the honorable member knows more about this road than I do, I will discuss it with my colleague.

page 607

QUESTION

INDONESIA

Sir WILFRID KENT HUGHES:
CHISHOLM, VICTORIA

– I ask the Minister for External Affairs whether he can give the House any information concerning the .offer of Mr. Khrushchev to President Soekarno of substantial financial aid to bolster Indonesia’s weakened economy if the President will appoint a Minister tor Finance and a Minister for Labour who are approved by Moscow.

Who was appointed to these portfolios in the recent cabinet reshuffle? Were not Czechoslovakia and other East European satellites of the Russian empire conquered by the Communists by similar tactics?

Sir GARFIELD BARWICK:
Attorney-General · PARRAMATTA, NEW SOUTH WALES · LP

– I well know the honorable member’s interest in avoiding the extension of Communist influence in our near north. It is well known that the Russians have offered considerable economic assistance to Indonesia. Of course, the Indonesians will well know of the risks countries run if they take aid from the Soviet bloc. I would have thought that the Indonesian leaders are astute enough themselves to have seen the possible trap and not to have fallen into it. As for ministerial changes, the Indonesian Ministry has been changed by proper constitutional process, as laid down in the constitution, and I can tell the honorable member that the new Minister for Finance is a gentleman who has held that portfolio before. I personally know of no reason to think that he is a nominee of anybody but the Indonesian Government.

page 607

QUESTION

URANIUM

Mr RIORDAN:
KENNEDY, QUEENSLAND

– I direct a question to the Attorney-General. It concerns Mary Kathleen Uranium Limited and the contract which it has with the United Kingdom Atomic Energy Authority. It had been strongly rumoured in Mount Isa that the contract between the United Kingdom Atomic Energy Authority and Mary Kathleen Uranium Limited has been extended as to time and quantity for the production of uranium oxide to be supplied to the authority. Is this so? If it is, will he see that on this occasion effective arrangements are made to ensure that tribute ore suppliers participate in the increased tonnage of uranium oxide?

Sir GARFIELD BARWICK:
LP

– I will pass this long question to my colleague in another place, and permit myself the observation that it would have been very suitable to go on the notice-paper.

page 607

QUESTION

POST OFFICE, ESSENDON

Mr STOKES:
MARIBYRNONG, VICTORIA

– My question is addressed to the Postmaster-General. I recall to the Minister’s attention the representations I have made over the past few years for the provision of a more adequate and modern building for the Essendon Post Office, in my electorate. Is he able to inform me whether the consideration he promised me on those occasions has yet borne fruit?

Mr DAVIDSON:
Postmaster-General · DAWSON, QUEENSLAND · CP

– It is quite correct, as the honorable member states in his question, that he has on several occasions in the last few years discussed with me, and made representations about, the provision of better post office facilities at Essendon. It is also correct that I have told him on several occasions that the matter would bc investigated and that we would attempt to do something to relieve the situation that he had described. The present situation, as I understand it, is that an examination has been proceeding and will be completed quite shortly into whether a new post office building should be erected on the present site or whether the present building should be renovated and extended. I am expecting a decision to be made in that respect very shortly. I point out that whatever decision is arrived at - whether it be for a new building of for renovations and extensions - it will then become necessary to follow the usual procedure of preparing a design, plans and specifications. That, naturally, will take some time, so I do not want to mislead the honorable member. I expect that all this should be completed within the next couple of years.

page 608

QUESTION

BROADCASTING

Mr EINFELD:
PHILLIP, NEW SOUTH WALES

– My question is directed to the Postmaster-General. The honorable gentleman will recall that when he announced last June that the Australian Broadcasting Commission would close its frequency modulation broadcasting stations, he said that frequency space would still be available for such stations in the ultra-high frequency band throughout the Commonwealth. I now ask him: Have any steps been taken to restore frequency modulation broadcasting for listeners who prefer its static-free fidelity? I also ask him whether he can explain why Australia can no longer have frequency modulation stations when there are some 1,000 such stations in the United States of America, and also many stations in Britain. Germany, Japan and other countries.

Mr DAVIDSON:
CP

– Mr. Speaker, honorable members will recall that the proposed cessation of experimental frequency modulation broadcasts was discussed in this House on several occasions last year. I made a lengthy statement to the press, and copies of the statement were supplied to members of both Houses. I could give the honorable member a copy of that statement, which covers the whole ground. In immediate reply to the honorable member’s question, may I remind him that I informed the House that space would be made available in the ultra-high frequency band for a continuation of frequency modulation broadcasts if a fairly general desire to have such a service reinstated were indicated by listeners generally. I said that we would be prepared to consider representations, but as yet I have not been informed of any such general desire.

page 608

QUESTION

PAPUA AND NEW GUINEA

Mr DRUMMOND:
NEW ENGLAND, NEW SOUTH WALES

– I wish to preface a question to the Minister for Territories by referring to a statement issued under the authority of the Minister on 17th February at a press conference in Port Moresby. The Minister is reported to have said that leaders-

Mr SPEAKER:

– Order! If the honorable member is referring to a press statement he must be able to vouch for its accuracy, and must not quote it.

Mr DRUMMOND:

page 611

QUESTION

RECOGNITION OF AUSTRALIAN DIPLOMAS IN MALAYA

Mr CLEAVER:
SWAN, WESTERN AUSTRALIA

– My question to the Minister for External Affairs relates to the recognition of Australian diplomas in Malaya. Is the Minister aware of recent statements by government officials in Malaya that some technical diplomas gained by Malayan students in Australia are- not recognized by the Government of the Federation of Malaya? Is there any foundation for these statements?

Sir GARFIELD BARWICK:
LP

– I can understand the honorable gentleman’s interest because statements were made in Western Australia by representatives of some interests in the Federation of Malaya that Australian diplomas were not being recognized in Malaya. After I read those statements I noticed that the Minister of Labour in the Federation stated that there was no lack of opportunity at present for skilled persons in Malaya. I also made inquiries after seeing-these statements, and I found that Australian degrees are fully recognized in the Federation and that Australian diplomas, particularly, I think, in engineering and accountancy - both courses frequently taken by Malayan students here - are given the same recognition as are English diplomas.

It may very well be that Malayan economic interests do not give as much weight to a diploma as we would give it in this country, and I have asked the High Commissioner specially to inquire into that point. When I obtain further information I shall send it to the honorable member.

page 611

QUESTION

ELECTORAL

Mr MINOGUE:
WEST SYDNEY, NEW SOUTH WALES

– My question is directed to the Minister for the Interior. Having regard to the announcement that he made in this House concerning the redistribution of federal electorates in the Commonwealth, will he consider changing the name of the electorate of West Sydney to “Sydney”? Is the Minister aware that the names of all other capital cities are the names of electorates? There is the electorate of Melbourne in Victoria, Adelaide in South Australia, Perth in Western Australia and Brisbane in Queensland. Furthermore, Sydney is thi second largest city in the Commonwealth of Nations and in my opinion the electorate of West Sydney should be renamed “Sydney”.

Mr FREETH:
Minister for the Interior · FORREST, WESTERN AUSTRALIA · LP

– I listened with interest to the honorable member’s argument on this matter but it would be premature for me to make any comment at this stage. No redistribution commissioners have been appointed yet, and the Government will have to pay regard to whatever the commissioners recommend after they have considered the problem.

page 612

QUESTION

MARRABOOR WEIR

Mr TURNBULL:
MALLEE, VICTORIA

On this subject, I think it is just as well to emphasize the point that Australia is examining the prospects for markets in this part of the world very carefully. One large trade mission has just returned from that area, as the honorable member has mentioned. The trade ship “ Chandpara “ is on its way there now with a large group of Australian businessmen, who are looking at the market prospects in the region. Again the matter comes back to a problem of shipping. I can assure the honorable member that that problem is being examined very carefully, and that everything possible will be done to obtain satisfactory shipping services to the Middle East.

page 613

QUESTION

WOOL

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

– My question, which is directed to the Minister for Primary Industry, is supplementary to that asked by the honorable member for Farrer. I ask: Is it probable that the recommendations of the Wool Marketing Committee of Inquiry will lead to a referendum of woolgrowers? If so, will the Minister ask the Department of Primary Industry to begin the work of preparing the rolls of woolgrowers so that there will be no delay on that score?

Mr ADERMANN:
CP

– I would not like at this stage to forecast what may happen as a result of the recommendations of the Wool Marketing Committee of Inquiry. I think it is only fair that the organizations which are so vitally concerned should be given ample time to discuss this matter among themselves so that they may present their views to the Government. We stand prepared to discuss the matter with representatives of those organizations as soon as they are ready to talk to us.

page 614

QUESTION

TELEVISION

Mr JAMES:
HUNTER, NEW SOUTH WALES

– I ask the PostmasterGeneral: Has he taken any steps to break the boycott which Sydney television stations Channel 7 and Channel 9, at conferences last September, persuaded film distributors and advertising agencies to impose on long-term programmes for the new Channel 3, Newcastle, and Channel 4, Wollongong? Has the Minister done anything to ensure that every television station which he licenses will have reasonable access to films which his Government permits to be imported?

Mr DAVIDSON:
CP

– The policy of the Government regarding the availability of programmes to television licensees has been fully explained on several occasions. This was done also during the consideration of an amendment to the Broadcasting and Television Act which ensured that there would be no monopolizing of programmes.

Mr Haylen:

– That is laughable!

Mr SPEAKER:

– Order! The honorable member for Parkes will remain silent.

Mr DAVIDSON:

– Neither of the stations mentioned by the honorable member for Hunter has approached me on the subject of programmes. I have heard that there have been certain difficulties which have not yet been completely ironed out. However, I assure the honorable member that if definite evidence is placed before me that some attempt is being made to evade the provisions of the act, I will most certainly have it looked into.

page 614

QUESTION

REPATRIATION

Mr FALKINDER:
FRANKLIN, TASMANIA

– My question is directed to the Minister for Works, ls the Minister aware that there has been a temporary cessation of work on the additions and improvements to the repatriation hospital in Hobart? Can the Minister say whether there will be an early resumption of this work which will provide urgently needed facilities and accommodation?

Mr FREETH:
LP

– Yes, Mr. Speaker; the contractor engaged on this contract was unfortunately unable to complete it satis1 factorily and his contract was terminated. The department at the moment is trying to make fresh arrangements for the resumption of the work as quickly as possible.

page 614

QUESTION

PRIME MINISTER

Suggested Retirement

Mr DALY:
GRAYNDLER, NEW SOUTH WALES

– My question is addressed to the Prime Minister. Has he read reports that his retirement from the Prime Ministership and leadership of the Liberal Party will take place in the immediate future? Is he also aware that other reports suggest that this is not so? As this matter is of more than passing interest to the people of Australia, and in view of the Opposition’s solicitude for him in his difficulties, will he confirm or deny the reports? If he intends to retire, will he say what has prompted his decision?

Mr MENZIES:
LP

– I understand better than any outsider could the deep and anxious interest that the honorable member takes in this matter. I will make this single, unambiguous statement: When I decide to go, or when I am told to go, I will drop the honorable member a postcard at once.

page 614

QUESTION

BAUXITE

Sir WILFRID KENT HUGHES:

– I direct my question to the Minister for Repatriation, who is representing the Acting Minister for Trade. Was there any discussion between the Government of Australia and the Government of Malaya on the question of the sale of bauxite before the announcement concerning the sale to Japan of bauxite from Weipa? Is the price of bauxite in this contract below the price at which Indonesia and Malaya sell to Japan at present? If so, what effects are the results of increased sales on this basis likely to have on the economy of Malaya, which depends largely on the export of rubber, tin and bauxite? How does this sale affect our policy with regard to standard prices for basic exports?

Mr SWARTZ:
LP

– I think the honorable member will appreciate that I would not have available to me immediately the information he requires. Also, as the question involves to some degree my colleague in another place, as well as certain discussions with the Queensland Government, I ask that it be placed on the notice-paper so that an appropriate answer may be supplied.

page 615

GOVERNOR-GENERAL’S SPEECH

Address-in-Reply: Presentation to the Governor-General.

Mr SPEAKER (Hon Sir John McLeay:
BOOTHBY, SOUTH AUSTRALIA

-I desire to inform the House that the Address-in-Reply will be presented to His Excellency the Governor-General at Government House on Tuesday next at 5.15 p.m. I shall be glad if the mover and seconder, together with other honorable members, will accompany me to present the Address.

page 615

QUESTION

SUPPLY (GRIEVANCE DAY)

Bradfield Park Housing Settlement- Taxation - Immigration - Local Government Finance - Postal Department - Television - Decentralization - Australian Representation in Ireland - Water Supply.

Question proposed -

That Mr. Speaker do now leave the chair.

Mr TURNER:
Bradfield

.- This is Grievance Day, and I have a grievance about Bradfield Park. This is a slum where decent people ought not to be required to live, and the position is more reprehensible because it is sponsored and maintained by the Commonwealth Government and the State Government of New South Wales.

The site was acquired by the Commonwealth in 1940 for the purpose of establishing a Royal Australian Air Force camp, which was to be used as both a recruit training depot and an embarkation depot. Immediately after the war, when there was an acute shortage of housing, the Commonwealth leased a large part of the area to the Housing Commission of New South Wales for temporary housing accommodation purposes, and the Commonwealth Government has taken over another part as a migrant hostel. The tenants in the Housing Commission part of Bradfield Park are people who had been living in inadequate accommodation and who have been placed temporarily at the camp at Bradfield Park pending their transfer to permanent homes erected by the Housing Commission. For example, when, say, a man and his wife had been living on a verandah, having the use of the facilities of the house, and where perhaps the wife had become pregnant, and the couple could not continue to live under such conditions, that man and his wife would be given accommodation at Bradfield Park. Again, a family might have been evicted, for some reason or another, from its previous accommodation, and those people would be placed in Bradfield Park housing settlement until a permanent home could be found for them. They might be there for six months, twelve months, eighteen months, or perhaps a couple of years.

The part on which the migrant hostel is situated is entirely distinct from the Housing Commission part, and the migrants accommodated there include perhaps a handful of professional people such as school teachers, skilled craftsmen and others, and they live under hostel conditions. It is quite obvious that a service type of camp that is now 22 years old, with the normal kind of huts that one finds in these places arranged in very neat and regular rows, and made of wood and galvanized iron, with thin walls and thin partitions, and with, in effect, public latrines, no matter how well painted the buildings might be, no matter how the housewives might try to keep the huts clean, is simply not satisfactory as residential accommodation. Again, there are, of course, no individual yards in which young children can play. Indeed, the children in this area cannot be kept under control by their parents, and they run wild in the camp. There is a school at the camp for all the children there, and the accommodation at that school is of the same quality as the accommodation in the rest of the camp - a wood and iron structure with a leaky roof, and all the rest of it. It does not need any great exposition on my part to show that this is very bad residential accommodation.

I want to put forward a proposal to ameliorate the situation. First of all, 1 should say that the Commonwealth Scientific and Industrial Research Organization is anxious to get on with the construction of a standards laboratory on this site, which is ideal for that purpose. The present standards laboratory is bursting at the seams. It has accommodation at the Sydney University, and temporary accommodation in the adjoining suburb of Newtown. It happens that Bradfield Park is ideal for the purposes of a standards laboratory because, with the open spaces available, there is no interference of the kind that cannot be tolerated when using the delicate instruments that the scientists in a standards laboratory use. I do not want to go into all the reasons why this is an ideal site for the Commonwealth Scientific and Industrial Research Organization, but the Department of the Interior has agreed in principle to that organization taking over Bradfield Park as and when .it can get possession of it.

I want to be constructive. I want to put forward an alternative. I notice that the Minister for Immigration (Mr. Downer) is in the House, and I hope that his reaction will not be the stereotyped reaction of Ministers on matters of this kind. I hope, too, but without great confidence, that even the New South Wales Government will not react in the stereotyped way, but will look upon this matter in a more sensible light. The functions about which I am speaking are functions that will remain and continue for a long time. There will be migrants coming in, and they must be found some temporary accommodation until they can go into permanent accommodation. There will be people who, for one reason or another; will have to be put into temporary accommodation by the housing commission before they can be put into permanent homes. These are continuing functions which must be performed and, clearly, a camp like that at Bradfield Park, which has been there for 22 years, cannot go on forever. Indeed, it cannot go on for much longer. It should not go on for any longer at all. So the matter has to be faced. I say it should be faced now.

How should it be faced? I believe that the Commonwealth has got to consider the building of decent accommodation, decentralized, perhaps, in two or three centres in the metropolitan area of Sydney. I suggest that it should be the kind of accommodation which, if the present need for it should cease at some stage, could be used with modifications that could be kept in mind in planning it, for old people’s homes, or, if the Government wanted to dispose of it, for motels, or some other purpose. It should be decent and permanent accommodation and it could be decentralized in two or three areas in the metropolitan part of Sydney - in the districts where migrants, for example, are likely ultimately to live permanently and close, to where their work is likely to be. It so happens that Bradfield Park is in the midst of a high-class residential area where relatively few migrants or tenants of the housing commission are likely to be settled permanently and so would never be integrated into the community and would remain in isolation. But if decent decentralized accommodation of the kind I have mentioned was provided these people could be integrated into the community and their children could go to the schools at which they would ultimately stay. They could be integrated into the community where they will live and could live in decent circumstances.

There are many reasons, of course, why we should encourage migrants to come here. I do not suggest that hostel accommodation is a major consideration in this matter - obviously employment is the major consideration - but that this is the first hurdle that a number of migrants have to leap, and the Government has to do a great deal more to make their lot easier. This is something constructive which could be done, and I hope the Minister for Immigration (Mr. Downer) and the Government of New South Wales will recognize that the present conditions should not continue. They should not continue to sponsor and perpetuate what is really a slum, where decent people should not be expected to live.

Mr COLLARD:
Kalgoorlie

.- I wish to deal this morning with what I consider is a most unfair condition that is applied in regard to zone allowances as provided for in section 79a of the Income Tax and Social Services Contribution Assessment Act. As honorable members know, that section grants certain income tax deductions to residents in some parts of Australia who suffer disadvantages not experienced in cities or places close to the cities. Section 79a of the act reads as follows: - (1.) For the purpose of granting to residents of the prescribed area an income tax concession in recognition of the disadvantages to which they are subject because of the uncongenial climatic conditions, isolation and high cost of living in Zone A, to a lesser extent in Zone B, in comparison with parts of Australia not included in the prescribed area, in the case of a resident of the prescribed area an amount ascertained in accordance with this section shall, subject to section seventy-nine C of this Act be an allowable deduction. (2.) The deduction allowable under this section shall be -

In the case of a resident in Zone A—

I draw the attention of the House to the words “ a resident of Zone A “ - an amount equal to the sum of -

Two hundred and seventy pounds; and
one-half of the sum of the deductions, if any, to which the resident is entitled in respect of the year of income under sections eighty-two B, eighty-two c and eighly-two D of this Act;

Those sections, 82b, 82c and 82d also provide for deductions which are allowed in respect of the dependants of the taxpayer. That is a very handy provision for those people who can enjoy it, but unfortunately there is quite a number who, through no fault of their own, are unable to qualify for the deduction, even though they might be for nine, ten or eleven months continuously in that particular area. Subsection (4.) of section 79a prevents them from so qualifying, and that is the part 1 wish to bring to the notice of the Government. Sub-section (4.) is really the definition clause of the section. It reads - (4.) In this section - “ resident “ in relation to any area, means a person (other than a company or a . rustec)

who resides in that area for more than one-half of the year of income;
who has actually been in that area, whether continuously or not, during more than one-half of the year of income;

I emphasize that definition, and direct the attention of honorable members to the words, “ more than one-half of the year of income “. Those are the words through which some of these men lose their right to the allowance. That definition of residence does not simply mean that the man must be in the area for more than half a year or more than six months. It means what it says, and that is, “ for more than one-half of the year of income “. The income year, of course, is from 1st July until 30th June of the following year. The definition of “ residence “ clearly means that the period of residence or the time spent in the area must be longer than half the period between 1st June in one year and 3 1st July in the following year. Therefore, a man who remains in the northern area of Western Australia, for instance, from February until the end of September does not qualify for the zone allowance even though he has been in the area for eight months continuously. In fact, he could go to the area in the middle of January and remain there until the middle of December and still not qualify. He would have been eleven months in the area where all the disadvantages mentioned in section 79a of the act are suffered, but he would still not qualify for the allowance. Another man, by the same token, could go to that area at the end of June and leave in the middle of the following January - a total of six and a half months as against the other man’s eleven months - and he would qualify for the allowance.

It is well known that in the north and north-west of Australia there is a wet season, when practically all construction work, or a great deal of it, must stop and the men employed on those projects are obliged to go south to seek employment to carry them over the wet season before they are able to return to the north and carry on in the particular job. If they go back after the wet season and carry on until the next wet season, they qualify for the allowance in the second income year but not in the first year of income. If they continued to do this in the wet season, and after four or five years decided to have a twelve-month break outside the northern areas, they would lose their right to the allowance for a further part of the income year. They would lose the allowance in the first income year they spent in the north and in the last year as well. So in five years they would lose their qualification for the allowance for two years out of the five.

We have still the other position of the man who goes to the north with the full intention of stopping there for several years, and who, through no fault of his own, is forced, after ten or eleven months, to go south. He is forced to do that perhaps because of sickness or because his family cannot staid up to the conditions in the north, or because the employer terminates his services, and he still does not qualify for the zone allowance. That man also has been in that area where the disadvantages which the act quotes apply, and yet he cannot get the allowance which the act provides. I am sure all honorable members will agree that in fairness to people in the circumstances I have mentioned section 79a of the act should be amended to give such people at least a proportionate amount of the zone allowance. I put it to the Government that this is the time, while we are considering an amendment to the act, when this most unfair position should also be dealt with and rectified.

As I said in my first speech in this House, it is my belief that, in order to bring about the full development of the north, the men who go to that area should have the burden of income tax lifted from them completely. But if the zone allowance is the best we can do for them, at least we should be fair and consistent. Let us treat fairly those men who, through no fault of their own, are unable to qualify for the allowance under the act as it now stands but who reside in the area for at least six months of the year. Take, for instance, people who go to work at the Wyndham meat-works in the extreme north of Western Australia. They go there for the meat season, which commences in April and finishes in December. They may not be fortunate enough to be picked up for the following season because the employer may not need the same number of employees again. So although these chaps have been in the area for eleven months they do not qualify for the zone allowance. I ask the Government to give this matter some attention.

Mr CHANEY:
Perth

.- I agree with the remarks of the honorable member for Kalgoorlie (Mr. Collard). Last year, I brought up the matter of certain public servants who go to the north for twelve months and whose appointment usually dates from January to December. Consequently, they miss the zone allowance twice. I agree that this matter should be examined.

The main subject on which I wish to speak concerns East African people who, as most honorable members know, have reached a position of crisis in their lives. The winds of change, as the United Kingdom Prime Minister, Mr. Macmillan, said, are blowing rather strongly over Africa and I think that Australia, through its Department of Immigration, should assist some of these very worthy people. There have been criticisms of certain immigrants to Australia - British, southern European and others. But I am certain that no mistake would be made in permitting immigrants from countries such as Kenya, Uganda, Zanzibar and Tanganyika to settle in Australia. Tanganyika became independent on 9th December last year and the others are fast approaching independence.

In those countries a change is taking place from white ownership of land to indigenous ownership. The white people are realizing that the best thing that they can do, not for themselves particularly, but for their families of young children, is to move to a country where they will be welcomed and where they will be able to invest their capital. Many of these people have to sell their properties at about a quarter of their real value. They cannot dispose of motor cars and other assets and they leave with much less than they should after a lifetime of hard work. Many of them are third or fourth generation British people who were born and brought up in the country and would normally have no desire to leave.

I believe that this is a type of person worth attracting into Australia, but we do nothing to assist them to come here. In Africa we have embassies in Cairo and in South Africa, a high commissioner in Accra in Ghana and one in Lagos and Nigeria. We have a trade commissioner at Nairobi in Kenya but he is not capable of giving the type of information that these people want. I think the time has arrived for us to establish information offices in places such as Kenya and Uganda so that prospective settlers in Australia can receive the type of information that they require. I think that we should consider granting some sort of assisted passage.

I understand that if these people go to England they can get an assisted passage to Australia, but by then they have probably used up the capital that they need to start life afresh. If they get here on their own initiative by a ship from an African port at great cost to themselves, they are often forced to stay at hotels while they look around for a property on which to settle. Most of them are farming people. One family which I know personally had to pay £60 a week in hotel bills while looking over properties and deciding where to go. This family sold its farm for £9,000 when the real value was £30,000. It would have been a simple matter for the Department of Immigration to have allowed these people to stay at an immigrant hostel. I know that, the honorable member for Bradfield (Mr. Turner) has criticized immigrant hostels in his electorate. But in Western Australia we have a couple of hostels in which people are quite willing to stay until they find a place to settle down. The Department of Immigration makes the facilities of these hostels available only to assisted immigrants. I think that we should extend these facilities to people from east Africa while they are looking for another place to live.

I am convinced that we should do this because these people are among the best types of people who come to this country. In the first place, they are pioneers or of pioneering stock. Many of them participated in the war service land settlement schemes introduced by the British Government to encourage the development of colonies after the first and second world wars. We could well do with them. They have some capital to start themselves off. If we offered them some inducement to come, Australia could well be the gainer. I suggest that we appoint information officers in these countries and that the Department of Immigration provide accommodation for these people when they arrive here. We do very much for other people who come here. The Department of

Immigration could well take a hand for the great benefit of these settlers and of Australia itself.

Mr COUTTS:
Griffith

.- During the last general election campaign, the Leader of the Australian Labour Party, aware of the importance of local government in the life of the people, gave an undertaking in the Brisbane Town Hall that if a Labour government were elected the Commonwealth would recognize local government to a greater extent than at present. That feature of the Australian Labour Party’s policy was well received by the citizens of Brisbane. There is ample evidence of that in the manner in which the people of Brisbane expelled Liberal members who had represented them for a long time and returned in their places members who were pledged to support the Australian Labour Party on what might be briefly described as a new deal for local government. Local government plays a particularly important part in the lives of the people - more so in some States than in others. In Brisbane, local government coordinates such matters as sewerage, local trading and electricity generation as well as other normal responsibilities. Because of that, the local authority of the city seems to be everlastingly in financial difficulties.

The difficult situation in which local government finds itself is causing much hardship and lack of development in many of the States and in country towns in Queensland. Local government is one of the three forms of government - federal, State and local. The Federal Government itself recognized the importance of local government as a means of meeting the unemployment situation when, a few weeks ago, the Prime Minister (Mr. Menzies) announced that there would be an increase in the authorized borrowings by local authorities. I understand that the City of Brisbane was authorized to increase its loan expenditure by about £400,000, solely for the purpose of relieving unemployment. This was a most worth-while proposition. I suppose I should say that it was most generous of the Prime Minister to approve of the increased borrowings, but he went only halfway towards doing the job. All that the City of Brisbane received was the authority to borrow; it then had to go and borrow it.

That presents very great difficulties, because the city authorities, as all other local authorities in Queensland, are in competition on the loan market with many other bodies in the southern States. It seems to me that the Lord Mayor of Brisbane has an almost perpetual job flying to Sydney and Melbourne in an endeavour to obtain loan money for the development of Brisbane.

The increased allocation of which the Prime Minister approved only recently will be spent on worthwhile projects - sewerage, drainage and the construction of roads, in itself, the construction of sewerage will have a snowballing effect on the unemployment problem, because householders affected will then be compelled to spend money on the installation of this amenity of modern life.

I am aware of the constitutional difficulties involved in the provision of local government finance. I know that the Constitution makes no provision for the recognition of local government bodies. That is because the Constitution was drawn up in the 19th century. It may truly be described, as far as local government is concerned, as a horse and buggy constitution. The Constitution was all right in the days when it was drawn up by that famous man whose name was given to the seat I represent, because at that time the only thing that local governments were concerned with was the provision of roads for the horses and the buggies. The advent of the internal combustion engine has changed the whole nature of local government, and has made on local authorities terrific demands which were not envisaged at the turn of the century. Consequently, there is need for a recognition of the role that local government plays in the development of this nation. The Constitutional Review Committee which, I am afraid, has not met for some considerable time, should bring to the notice of the Government the need for change in this matter.

It is all very well for Ministers and the Prime Minister to say - as the right honorable gentleman has said so frequently in this place - that local government authorities come within the ambit of the State Parliaments, and that the Commonwealth plays no constitutional role in relation to them. I would be the first to subscribe to the correctness of that view; but I believe that a change should be made, and that local government authorities should be recognized by the Commonwealth. The Prime Minister is not prepared to give this recognition. He is an arch-conservative who refuses to see the need for change. This is most unfortunate, and I hope that in the near future, when the present Prime Minister has departed from this place and a new man is occupying his seat, the importance of local government will be truly recognized.

What I should like to see - and this would be a most revolutionary change - is for the Commonwealth to allow the financial arrangements of local authorities to be handled in the same way as the financial arrangements of the States. The State governments submit their requests for loan money to the Loan Council, and approval granted by that body means that the money is made available to the State governments by the Commonwealth. What happens in relation to local authorities is that the Loan Council approves of certain works programmes and loan allocations for local authorities, and there the matter ends, the mayors of the cities and towns concerned being compelled to go cap in hand to financiers all over the Commonwealth seeking money.

I hope the day is not far distant when the role of local government in the general Australian scheme of government will be fully recognized and effect given to the proposal that local authorities, after having their programmes approved by the Loan Council, will be assured that the money they require will be made available through that body.

Mr LUCOCK:
Lyne

.- Briefly, I want to make some comment on the speech of the honorable member for Griffith (Mr. Coutts) in regard to local government. I have suggested previously that representatives of local government should at least attend meetings of the Loan Council as observers, even if in no other capacity. If they did so they would be able to put to the Premiers and the Commonwealth representatives their particular points of view. Even if they did not have a vote in the council at least they could have some part in the discussions. Nobody denies the importance of local government, and the vital part that it pays in our lives.

I think we should give some consideration to the present method of distributing funds to local government authorities, which is at present a State responsibility. We in New South Wales have seen the State government allocate money most unfairly, to my mind - putting it mildly. In certain areas of local government in my own electorate I have seen it happen that, when the Commonwealth Government has made more money available for distribution to local government authorities, that money has not been distributed in the proportions in which it should have been distributed to areas that are represented by non-Labour members of Parliament.

The two principal reasons for which 1 rose to speak to-day concern the Treasury. The first relates to tax deductions for medical expenses and the second relates to the Postmaster-General’s Department, but is also, I think, a Treasury matter. I ask the Treasurer (Mr. Harold Holt) to have a look at the position regarding tax deductions for medical expenses when he is preparing the forthcoming Budget. I appreciate fully that one of the difficulties of the Treasurer is the raising of the necessary money from taxes. However, I think that the limit on tax deductions for medical expenses should be raised, because in the case of a taxpayer who has a long illness in his or her family the greater degree of medical expense involved the greater the strain upon his financial resources. We know that there are many cases of people being involved in very heavy medical expenses. [Quorum formed.] 1 am not surprised at the action taken by the honorable member for Reid (Mr. Uren) in directing attention to the state of the House. His action shows the childlike mentality which he has revealed in this chamber on many occasions.

Mr Uren:

– I take exception to that statement, Mr. Deputy Speaker, and wish to raise a point of order in connexion with it. Under the Standing Orders a member has the right to direct attention to the state of the House when there is not one-third of the total membership present.

Mr DEPUTY SPEAKER (Mr Failes:
LAWSON, NEW SOUTH WALES

– Order! There is no substance in the point of order.

Mr Haylen:

– l submit that there is a point of order to answer when the honorable member for Lyne, who is Chairman of Committees, makes a remark such as he has made. The honorable member for Reid used a legitimate device in directing attention to the state of the House. While he is in the chair, the honorable member for Lyne has a duty to uphold the Standing Orders, and I submit that he should not use a term such as the one he directed to the honorable member for Reid because the latter exercises a right provided for in the Standing Orders.

Mr DEPUTY SPEAKER:

– Order! There is no substance in the point of order raised by the honorable member.

Mr LUCOCK:

– This is Grievance Day and honorable members have the right to direct the attention of the Government to matters within their electorates. We endeavour to give everybody a reasonable chance to speak within the framework of the Standing Orders. I had already told the Country Party Whip that I would not take my full time so that some other honorable member could have an opportunity to present his case. The honorable member for Reid did not help me in that connexion. 1 was referring to tax deductions for medical benefits. As I have said, when a person is faced with expense for medical attention, he needs all the help he can get through tax concessions.

I wish to refer now to a matter that I have mentioned previously. I believe that the Postmaster-General’s Department should be established as a commission acting separately in the normal course from the Public Service Board. I fully appreciate the difficulties that are associated with this suggestion. There would still need to be a Minister in charge of the Postal Department, and finance would still have to be made available from Consolidated Revenue for the public works associated with the Postal Department’s activities. However, I believe that if a commission were appointed to handle the business section of the Postal Department, it could go on the loan market and borrow money as a business proposition for the expansion of its activities.

There is an urgent need for telephones. Even on a percentage basis, many more persons are applying for telephones than was the case some years ago. When new telephone services are provided, many related requirements such as new trunk lines and switchboards, the extension of post office buildings and other things, may be involved. All this means that there is a tremendous responsibility on the Postal Department. I am not criticizing the work that is done by the officers of the department. I think they are doing a fantastic job in the extension of telephonic communications, but I feel that the Treasury is not fully appreciative of the real value of the work of the Postal Department. Extra money for this department provided from Consolidated Revenue could return more revenue if a section of the department were put on a commercial basis.

In my electorate, many people are waiting for telephones. It is almost beyond the physical capabilities of the staff in that area to cope with the applications. I believe there is a need for increased recruitment within the Postal Department and for further development and that the basis for this must come in the first place from the Treasury by the provision of extra finance. If my other suggestion for a commission could be adopted, I believe the Postmaster-General’s Department would have available to it more funds, which would enable it to expand its work to an even greater degree.

Mr HANSEN:
Wide Bay

.- I wish to direct my remarks to local government, and in this respect I support the honorable member for Griffith (Mr. Coutts). In the electorate of Wide Bay, there are twelve local government authorities, and they have protested against the treatment meted out to them in relation to recent grants to the States, including Queensland. The Commonwealth Government has placed’ some onus on the local government authorities to help in the relief of unemployment, and many of these authorities thought they would be entitled to some of the money provided for the States by way of grants. However, they are not to receive any portion of the grants and can look for assistance only through subsidized work.

It is worthy of note that the Queensland Government last year reduced the subsidies to local government authorities for works. The City of Gympie was con sidering a sewerage system but the reduction in the subsidy of 10 per cent, amounted to about £200,000. In some cases the local government authorities are required to raise £4 for every £1 of assistance given by the State governments from Commonwealth grants. At the least, they have to raise 60 per cent, of the money for works. Most of the local government authorities in the Wide Bay area are progressive and they have already borrowed to the limit of their economic ability. They believe that it would be unwise for them to place an additional burden on the ratepayers. To raise £4 for every £1 of assistance, they will have to levy the ratepayers next year.

Last year, some of the local authorities were concerned about seasonal unemployment. I refer particularly to Bundaberg where at present there are 1,155 unemployed. The local authorities provided additional work last year to assist the seasonal workers, but whereas last year they had a surplus they have recently had a deficit and as a result the rates were increased. They believe that if they are to have the responsibility of providing employment, they should be given additional financial help. The ratepayers cannot continue to carry the burden of responsibilities which they feel rightly are those of the Commonwealth and State governments.

The local government authorities believe that there is a need for co-ordinated loan raising, such as the central lending authority suggested by the honorable member for Griffith. When a loan allocation was approved, the representative of each local government authority could raise the amount required without going through the various channels of insurance companies and other lending authorities. It is indicative of current difficulties that this year local government authorities have had more trouble than previously in filling their loan allocations. It is also of interest to note that most local authorities find such public institutions as the Commonwealth Bank and the State Government Insurance Office in Queensland of most assistance to them in raising their loan quota. The fact that they now are allowed to borrow more money is not something which fills their administrators with any joy. They feel that if they take up this authority to borrow additional funds they will place an increased burden on the ratepayers in their district. They believe that some revision is needed in the method of raising funds for local authorities which at present is by the rating system.

The only solution to this problem is to establish a central lending authority which local authorities, having received authority to borrow, can approach to fill their loan quota. I put this suggestion to the Government for what it is worth. The local government associations are making various moves in this matter and I hope it will not be very long before they will be able to attend meetings of the Australian Loan Council and put their case along with that of the States, instead of having to approach the States which already have found that their funds are limited.

Let me refer to the reply of the Prime Minister (Mr. Menzies) to the question asked by the honorable member for Petrie (Mr. O’Brien) regarding the request of the Pine River Shire Council for an additional loan of £15,000 which was refused by the Superannuation Board. This indicates the problem facing local authorities in trying to fill their loan quota. By putting the onus on local authorities to increase their loan quota the Government is only adding an additional load to that which the already over-burdened ratepayers have to bear. I put it to the House that some revision is needed in the method of loan raising by local authorities.

Mr SNEDDEN:
Bruce

.- 1 could raise a number of matters during this Grievance Day debate but the most important one relates to the PostmasterGeneral’s Department, and particularly to the Australian Broadcasting Commission and television. This piece of electronic equipment is popularly known in some places as “T.V.”, “Telly” or, as I heard an honorable member opposite say yesterday, “ Tellyvision “. I think a more apt name for it is “ The idiot box “. Television is producing reactions in our community which we foresaw and attempted to prepare ourselves to meet, but we are just going along meeting things as they arrive and seeing certain characteristics emerge in our children. I suppose every one who has a child has had the experience of him coming home and saying, “ Daddy, will you answer this question for me? “ The child then poses the question. Father provides the answer, the child looks a little bewildered but does not comment, obviously because he does not want to commit himself. He comes along next day and says: “ You were right, Dad. I asked the teacher to-day and he confirmed what you said “. We have known always of the tremendous influence that teachers can exert on children, but now we are faced with the problem of the tremendous influence that the idiot box exerts on them.

I suppose every one with children has heard them reciting the little rhymes that advertisers of to-day adopt. For instance, many people have been warned that they should use a certain brand of toothpaste - “ You’ll wonder where the yellow went when you clean your teeth with Pepsodent” There is another jingle sung by a very attractive even though very experienced actress in Melbourne about Iceberg dairyfresh butter. But I suppose the real heights have been reached when a song about Craven A cigarettes is played on the merry-* go-round at the beach resorts on the Mornington peninsula.

Mr Jeff Bate:

– Sorbent!

Mr SNEDDEN:

– I will leave that for the people who are accustomed to speak in areas which are more appropriate to the use of that commodity.

The impact which advertisements have upon a child’s mind leads me to make the bold suggestion that the Australian Broadcasting Commission should itself institute a system of advertisements - not advertising products but presenting nice refreshing statements such as, “The schoolboy or schoolgirl who does his homework best and with the greatest attention and enthusiasm ultimately will succeed “. Some nice little homily like that would be most appropriate. Or, as my friend and colleague the honorable member for Perth (Mr. Chaney) suggests to me, “ Vote Liberal and make Australia safe”. Thai would be an attractive slogan for the A.B.C. to use. In any event, I believe that the A.B.C. could play some part in helping s child’s mind to counteract the influence of the jingles which we hear now on television

To do so would require a great deal of thought and initiative, but it seems tragic to leave unused such wonderful and influential vehicles as radio and television.

Last night the honorable member for Watson (Mr. Cope) complained about the standard of programmes on television. He referred to programmes depicting violence and law-breaking and tracing the meteoric rise to fame of certain American criminals. But I think that is only a very small part of the problem. Generally speaking, television programmes are quite good. This is especially so with the A.B.C. [Quorum formed.]

The House should know that the honorable member for West Sydney (Mr. Minogue) seeks to participate in this Grievance Day debate. The Government Whip and the Opposition Whip have arranged specially that all speakers in the debate should not take their full allotted time of ten minutes but voluntarily should cut short their speeches to enable the honorable member for West Sydney to participate. The action of the honorable member for Reid (Mr. Uren) in directing the Deputy Speaker’s attention to the state of the House is merely a deliberate attempt to muzzle the honorable member for West Sydney. The honorable member for West Sydney is a decent Labour man, whereas the honorable member for Reid, as everybody knows, has not the integrity of a-

Motion (by Mr. Uren) negatived -

That the honorable member for Bruce be not further heard.

Mr SNEDDEN:

– The honorable member for Reid is shedding supporters as fast as his former lamented leader. I think the suggestion I made about the Australian Broadcasting Commission attempting to influence the minds of child-like people really offended the honorable member for Reid. He probably felt that the Australian Broadcasting Commission might be indulging in a campaign to bring some small element of maturity to those in the Commonwealth Parliament who lack it.

I was speaking of the standard of television programmes. Honorable members on the other side of the House seemed to imply that there should be some kind of censorship of television programmes throughout Australia. I think this is a very wrong attitude. We have censorship at the moment which goes to the extent of placing films in various categories, some being classed as suitable only for adults and others as suitable for children as well, while those considered particularly bad are banned completely. Any suggestion to extend the range of censorship in Australia fills me with strong misgivings.

I think it is fair to say that the standard of programmes in Australia - in Melbourne in particular, and especially the live programmes - is very good. I cannot help but be struck by the difference between the brilliant wit and comedy of a natural comedian of world standard, a man named Grahame Kennedy, and the efforts of some of the sickly-weak American comics who come here, all using the same line of patter, evidently aping the performance of members of the Opposition, but using a different accent. 1 wish now to mention a matter which concerns the Repatriation Department.

Mr DEPUTY SPEAKER:

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

Mr McGUREN:
Cowper

.- Mr. Deputy Speaker, my grievance is concerned with a subject that is often spoken about, but very seldom acted upon. I refer to decentralization. It seems to me that decentralization has now become almost a dirty word. People sneer when it is mentioned. They say we do a lot of talking about it but never take any action. In discussing it to-day I would like to suggest certain things that should be done.

I know that this is a difficult problem. I know that Australia is only one of many countries that face this problem. I do believe, however, that it is vitally necessary for Australia to do something about developing those areas in which people are concerned as to what will happen if the problem of development is not tackled.

It is not easy to establish industries in areas in which population is lacking. There are several reasons for this. Perhaps the foremost is that the industrialist is interested only in making money. When a suggestion is made that he should establish one of his factories in a certain area, the first questions he asks are, “ Where is the raw material? Where is my man-power?

Where are my markets? “ Naturally the answer to these, questions, in most instances, is, “ In Sydney, or Melbourne, or Adelaide, or one of the other big centralized areas of the country “. That is the first problem connected with decentralization that we, as a government, have to face. It is not an easy one, and I appreciate it, I think, as much as any one in this House. But I suggest that we must do some really worthwhile thinking about the problem, whether it be from the point of view of military requirements or from the stand-point of using to the best advantage the areas that should be developed and are seeking development. Whichever way the matter is approached, I believe we must do something about it, and do it quickly.

I know that committees have been set up to consider the problem. I know that the New South Wales Government is now establishing a Ministry of Decentralization. But I feel that this should be a joint affair. It is not of much use for one State to do something along these lines. The question should be brought up to the top level. We should have a committee composed of the most knowledgeable people with the best brains in the country, because we are now going through a period in Australia when we must learn to stand on our own feet. For far too long we have been content to ride on the sheep’s back. . I am not decrying what the wool and wheat industries have done for us. I know that they have been all-important to Australia, but I think it is time we started exploiting fully all our other resources, and I suggest that the main move could be made by this Government, by the proper use of money provided through the Development Bank at a low rate of interest.

As I have said, the man who could do something about decentralization is the man who asks, “ Where is my market, my manpower and my raw materials? “ He must be offered a bait. Therefore I suggest that money should be supplied through the Development Bank at possibly half the normal rate of interest. That should .be the first bait to be offered. Then I suggest that local government authorities should come to the party. They should offer land, and perhaps electricity and water, at rates that would induce people to establish industries.

I believe we should go even further. The Commonwealth Government -should do something about providing assistance in solving the transport problems that are experienced in all parts of the country. The Government should help the various councils and shires in their task of maintaining roads other than highways. The transport issue is a most difficult one. Unfortunately, a great mistake was made in New South Wales in the early days, when adequate means of communication should have been provided between the coastal centres and inland areas, rather than concentrating on communications between the various points along the coastal strip. At the present time we have two railway lines running north and south, and two main roads going in the same direction. This has definitely served to retard decentralization.

I have suggested other ways in which assistance should be given, but the main requirement at the moment, I believe, is for us to become aware of the importance of the problem, to recognize it as one deserving first priority, and to realize that we must stand on our own feet from now on, particularly as we will have many more difficulties to surmount when the United Kingdom enters the European Common Market. We must exploit the areas that can produce the goods required, but which are not now, except in rare instances, being used. In many cases the few areas that are being exploited are those in which our natural birthright, in the form of bauxite and other minerals, has been sold to interests outside Australia. These resources should, I believe, be developed and used by Australians.

Finally, I repeat my suggestion that the Government set up a committee to deal with this all-important problem. I put it to the House that if the Government gives some real thought to this matter it will he making a valuable contribution to the solution of one of Australia’s most serious problems.

Mr JEFF BATE:
Macarthur

.- Mr. Deputy Speaker, the honorable member for Cowper (Mr. McGuren) suggested that the Commonwealth should give the States financial assistance for road works in the name of decentralization. It is interesting to note that the allocation by the Commonwealth to the States this financial year under the Commonwealth Aid Roads scheme will total £50,000,000, of which New South Wales will receive £12,000,000 or £13,000,000. No doubt, a considerable proportion of the share received by New South Wales will be allocated by the New South Wales Minister for Local Government to the Cowper electorate. The Commonwealth’s allocation of £50,000,000 this financial year under the scheme compares with an allocation of £9,000,000 in the last year of the Chifley Government’s term. This Government is allocating about six times as much to the States for road works as was allocated by the Labour Government.

The honorable member for Cowper, with his background in local government affairs, comes here and says that the Commonwealth should make a contribution. It is contributing £50,000,000 a year, compared with a contribution of only £9,000,000 in the last year of office of the Government which he supported. At least, I suppose that he supported it. It is of no use for the honorable member to try to divert us from the real argument. I have stated the facts. Opposition members ought to try to get into their heads the fact that this Government is allocating to the States £50,000,000 a year for road works compared with an allocation of only £9,000,000 by the Labour Government in its last year of office. About £13,000,000 of the current financial year’s allocation of £50,000,000 will go to New South Wales, and a good deal of that share will go to the Cowper electorate.

There is not the slightest doubt that there is a great demand for development in Australia. Those of us who have taken the trouble to look at the situation in this country realize that the problem is so vast that a nation of about 10,000,000 people could not find the resources to do the job even in ten years, much less in one year or two years. A vast programme of national development has to be undertaken. The money cannot be obtained by ordinary loans or by taxes. If we tried to obtain it by those means, we would be bogged down and would not get the job done. However, there are methods that can be adopted, and I would like to give the Parliament two illustrations of what can be done. They are to be found close at hand - one in Canberra and one in Sydney. One is the responsibility of this Government and the other is the responsibility of the New South Wales Labour Government.

The Hobart office building being constructed at Civic Centre, Canberra, is on a block not so large as is the block in the heart of Sydney bounded by Martin-place and King, Castlereagh and Pitt streets. When the Hobart office building was projected, the National Capital Development Commission stated the height of the building and the number of stories and invited tenders from interests with sufficient money and resources which were prepared to undertake the construction. The unimproved capital value of the block of land on which the building is situated is £77,000. However, that is not of importance. The company which obtained the lease of the land paid £410,000 for it. The company has the right to lease office space in the building. This means that the Commonwealth Government, and, therefore, the taxpayers, are not called upon to find the money for this development. This brings to mind ideas for development elsewhere.

I understand that Mr. Renshaw, the Deputy Premier and Treasurer in the New South Wales Government, has in hand proposals for financing the development of the Rocks area of Sydney at the southern end of the Sydney harbour bridge at a cost of £100,000,000. Tenders are being invited overseas by the New South Wales Labour Government. It proposes to use financial resources, labour, new systems of design and new methods of architecture available overseas.

This method could be adopted to develop great areas of mineral wealth in northern Australia. The honorable member for Capricornia (Mr. Gray) knows that a group qf members of this Parliament has seen the possibilities of the Fitzroy River basin in his area. We know that in the Northern Territory there are 30 teams of surveyors, assayers and mineral experts investigating exciting new possibilities for the mineral wealth of the area. We have no chance of financing the development of mineral deposits there on our own. But we could do what the National Capital Development Commission has done with respect to the Hobart office building and what the New South Wales Government proposes to do with respect to the development of the

Rocks area in Sydney. I- suppose that similar developments are proposed elsewhere, too. The Hobart office building will be a desirable investment, and so will be the development of the Rocks area of Sydney. There is a demand for the minerals of northern Australia, and the development of those riches, also, is desirable. This Parliament, and the Northern Territory Administration and the Queensland and Western Australian Governments, as the case may be, have a responsibility to give all the assistance possible in the development of our mineral wealth.

We have recently heard suggestions that a Minister for Decentralization and Development will be appointed in New South Wales. Ministers charged with similar responsibilities in the governments concerned should at once combine with the Commonwealth Government and local authorities in preparing the rough outlines of a scheme for the development of the mineral wealth of the north. These outlines need do no more than assess the value of the minerals available, whatever they may be, and the depth of the mineral seams, as well as the mineral content of the ore. Those are the things which will have to be known by those who may be interested in the development of these resources. That information is necessary to such interests in deciding whether they can undertake the development that is required.

Mr McGuren:

– That kind of information has been available for years.

Mr JEFF BATE:

– The honorable member has a background of work in local government. Probably, a mass of paper work was done in respect of the area with which he is concerned, but nothing has come of it. No doubt, that is what he has in mind. I expect that the scribblers have been at work drawing lines on paper, but everything stopped there. The honorable member, I suppose, takes as much responsibility for the failures in that respect as I take now in respect of the matters with which 1 am dealing. I believe that I have a responsibility to seek a better approach to these problems of development.

We all know of the Constance Range iron ore deposits in north-western Queensland. A party of members of this Parliament has seen the extensive deposits of coal at Moura and Kianga in the Fitzroy River basin in Queensland. One seam that I saw had a depth of, 1 think, 70 feet and was quite close to the surface. The Japanese have realized the quality of this coal and have entered into contracts to buy millions of tons of it. They are shipping it over the long haul to Japan and using it in their steel mills. Similar resources of minerals exist all over Australia. We have been told that some crackpot may find something that will cost the Government millions of pounds to develop. But such development need not cost the Government millions of pounds. I have indicated the pattern - the template, as it were - that could be used for development all over the country. We have seen it in respect of the Hobart office building in Canberra and the proposed development scheme for the Rocks area in Sydney. No doubt, honorable members can call to mind many other examples. I suggest that the Government, the Department of National Development and all the authorities involved - all of them run by patriotic Australians - put their shoulders to the wheel. 1 am sure that everybody is conscious of the riches that we have.

Some people, it is true, have said, “ There is no oil in Australia “. We have heard that sort of talk everywhere. It suggests that we are a nation of knockers - that we knock a thing whenever we get a chance to do so. But, while those things are being said, oil of high quality which has been found in Queensland is being used in tractors in that State. The oil is there waiting for us to take it.

Mr Bryant:

– You would hand it over to foreign interests.

Mr JEFF BATE:

– Thank God somebody will come in and have a go at it despite the knockers and the calamity howlers. Thank goodness somebody has the faith, courage and confidence to develop these resources. I would encourage them and any more who would come. What I am asking for is encouragement of those who will undertake development projects. Mr. Renshaw, the New South Wales Deputy Premier and Treasurer, wants to bring in overseas interests to undertake the development of the Rocks area in Sydney. That is Labour policy in this instance. It is the correct policy. We ought to obtain finance and experts from overseas to undertake development. We are already bringing people into Australia under the immigration programme. We ought to bring in technical experts, resources, design techniques and the money from overseas to undertake the development that we need.

It is the duty of this Twenty-fourth Parliament to see that this country is developed. Just talking about development is of no use. Anybody can see that development is needed. We ought to prepare plans and advertise them throughout the world. We ought to seek the reservoirs of money and technical experts overseas that a country like this needs. We in the vast country have a great need for more people, and especially for technical experts and money, in the situation in which we find ourselves. We have only a narrow fringe of development round the east coast where there is a reasonably dense population. Our education systems present to our children maps of Australia with nicelycoloured areas representing the Northern Territory and the empty areas in the north of Western Australia and Queensland. The tendency is to think that those nicelycoloured areas are developed parts of the country. But they are not. We are barely touching the development that is required.

Mr SPEAKER (Hon Sir John McLeay:

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

Mr MINOGUE:
West Sydney

– Mr. Speaker, I wish to mention again a matter that I have continually brought to the notice of the Government for many years - an exchange of ambassadors with the Republic of Ireland. It is interesting, to note that during the last session of the last Parliament, the Prime Minister (Mr. Menzies), in his capacity as Minister for External Affairs, announced an exchange of ambassadors with the Republic of Korea, which we know as South Korea. That, I believe, was a step in the right direction. I am aware of the great friendship cemented between that country and Australia during the Korean war when Australian armed forces played a magnificent role in assisting the United Nations against the Communist aggressors. However, I should like to emphasize that the Australian people have absolutely no kinship ties with South Korea. On the other hand, at least 30 per cent, of Australians have kinship ties with Ireland and I might add that many of these people served Australia, and served well, iri World War I., World War II. and the Korean War.

During the regime of the Chifley Labour Government, Australia was represented in Ireland by an ambassador, Judge Dignam, and we had here from Ireland a very notable man, Dr. Kiernan. Yet this Government refuses to appoint an ambassador to Ireland. The Governments of the United Kingdom and Canada - two of our fellow members of the Commonwealth of Nations - are fully represented in Ireland, and 35 other nations are represented there by ambassadors. This prompts the question, “ Why not Australia? “

It is offensive to the people of Ireland, and to Australians of Irish origin, that the Australian Government refuses to appoint an ambassador to Ireland. Perhaps the newly appointed Minister for External Affairs (Sir Garfield Barwick) will see the logic in my argument and accede to my request, which has fallen on the deaf ears of his two predecessors in this portfolio. The present Minister held the. portfolio of External Affairs temporarily some time ago, before the Prime Minister took over the position. I remember, then, asking the Minister a question about our representation in Ireland. His excuse for not answering my question was that he could not understand my brogue. If I am to judge by the way he fared at the last election, I would say that he cannot understand some of the brogues in the Parramatta electorate. His majority dropped from about 9,000 to 2,000. Ministers should not come into the House and give these Shylock answers to honest questions. Lord Casey did this for years. When the Prime Minister held the portfolio, he was no exception to the rule. If we ask a fair question, we are surely entitled to be given a reasonable answer. If a suggestion that we make cannot be acceded to, we should be given the reasons.

As honorable members know, I had this honour, to represent Australia at the United Nations. The only question I. could not answer there was why we did not have a representative in Ireland. Ireland’s representative at the United Nations waa elected to the office of chairman. I think it was only because he was chairman and did his job well that Khrushchev took off only one shoe and not two. The Irish Minister for External Affairs, Mr. Aiken, was there and he asked me what was wrong in Australia, and why we did not appoint a representative to Ireland. I said that the excuses we had been given were always the same - that there was something wrong in Ireland. He said, “ You tell your Prime Minister from me that we will not change our policy merely to get a representative from Australia “. If the United Kingdom, Canada and other countries can comply with Ireland’s wishes so that they have representation in that country, surely Australia can do so.

I have in my electorate the Irish National Association of Australia. It has a membership of about 1,000. They never allow St. Patrick’s Day in March to go by without bringing to my notice the request to have representation in Ireland. I do not like to flail the Government all the time, but if 1 did not raise this matter, I would not be fulfilling my obligation. I told Mr. Aiken, “ The day we get rid of Menzies, we will have a representative in Ireland “. If, over all these years, we cannot be told why a representative is not appointed to Ireland, we are in a sad state. During the last war, proportionately more Irishmen won Victoria Crosses than did. men of any other nationality. We had Paddy Finucane, who joined Truscott, the Australian airman, and who gave his life for us. He was a great man then. We had Kelliher, who also won the Victoria Cross. He was here twelve months ago. All these men did a good job.

Although this Government has been elected twice because it raised the issue of communism, I have not yet heard the Prime Minister allege that communism has spread from Ireland. Government supporters in 1949 went to Brisbane and there promised the head of the Catholic Church that the first thing they would do if elected would be to send an ambassador to Ireland. That promise has not been fulfilled. Certainly, the Government tried to send Paul McGuire to Ireland. This was all very well, but Paul McGuire’s credentials were wrong and the

Government knew very well that he would not be accepted. That great soldier, the honorable member for Chisholm (Sir Wilfrid Kent Hughes), is chipping me now. I thought he would be on my side.

We hear of various nations being granted self-determination. At the United Nations I heard Lord Home say that the objective of the United Kingdom was to encourage self-determination in every country of the Commonwealth of Nations. 1 will not go into that now, because I am dealing wholly and solely with the appointment of an ambassador from Australia to Ireland. If this appointment cannot be made, I should like to know the reasons. I assure the Minister for External Affairs that he will regret the day if he decides not to appoint an ambassador to Ireland. Unless he appoints an ambassador to Ireland, I am sure he will not be elected next time. There is no reason why such an appointment should not be made. An honorable member on the Government side of the House was my comrade in New York when we represented Australia at the United Nations. I introduced him to a nice girl and he became engaged. We all went to the engagement party.

Mr SPEAKER:

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

Mr LESLIE:
Moore

.- In the few moments that remain to me, I obviously cannot present in full the case I wish to raise. However, I warn the Government at this stage that I will continue to raise this matter as the opportunity to do so presents itself. I appeal to the Government to reconsider the request of the Western Australian Government to continue the subsidy granted for the extension of the Comprehensive Water Supply Scheme in Western Australia. The reply given by the Treasurer (Mr. Harold Holt) to the State Government’s previous request was quite unacceptable. It was not really based on the true position and the Government did not appear to understand the situation.

Debate interrupted under Standing Order No. 291.

Question resolved in the negative.

Sitting suspended from 12.45 to 2.15 p.m.

page 630

COMMONWEALTH BANKS BILL 1962

Second Reading

Debate resumed from 21st February (vide page 53), on motion by Mr. Harold Holt-

That the bill be now read a second time.

Mr CREAN:
Melbourne Ports

.- Mr. Speaker, the purpose of this bill is clear enough and simple enough. The bill proposes to increase by a further £5,000,000 the capital of what is known as the Commonwealth Development Bank of Australia. As recently as October last year this House contemplated a similar measure and we on this side of the chamber were able to say then: “ We told you so. We told you at the time when this Development Bank was created that it was inadequately capitalized to perform the work that it had been designed to perform.” We also suggested that whoever formed the government after 9th December, 1961, would probably have to reconsider this matter.

Mr Whittorn:

– I do not remember that.

Mr CREAN:

– You can read that in “Hansard” for October, 1961. One of the first acts of the present Government is to add a further £5,000,000 to the capital of tht Development Bank. I believe that at this stage it is pertinent to ask the Government where the emphasis is being placed. Is it being placed on development as the Government wants it to be placed when any credit is to be drawn therefrom? Is money being made available for development, or is the bank being restricted by narrow ideological views of the role of banking in the community?

This organization is called a development bank, but in essence it is little more than a rolling fund. The contrast is drawn very clearly in one document, namely, the reports and balance-sheets for 1961 of the Commonwealth Banking Corporation. Two parts of that corporation are the Commonwealth Development Bank of Australia - the accounts of which are at pages 34 and 35 - and the Commonwealth Trading Bank of Australia - the accounts of which are at pages 18 and 19 of the same document.

The significant difference between the Development Bank and the Trading Bank can be seen by comparing the composition of the item “Liabilities” in the balancesheet in each instance. The capital of the Development Bank at 30th June, 1961 - it has been increased by £5,000,000 since then, and this bill proposes to increase it by a further £5,000,000- was £15,857,000 in total liabilities of £45,199,007. By contrast, the Commonwealth Trading Bank has a smaller capital than that of the Development Bank. Its capital at that date was only £7,429,000 in total liabilities of £360,000,000. Those figures pin-point very significantly the difference between the operations of the Commonwealth Trading Bank and those of the Commonwealth Development Bank.

One banking fact was learnt early in Australia. I notice that attention was directed to it in a banking supplement issued recently with the “ Australian Financial Review “. The issue of 27th February, 1962, contains a review article of the splendid history of the Australia and New Zealand Bank Limited written by Professor Butlin. The reviewer refers to the influence in the early days of Australian development, in the ‘thirties and ‘forties, of what the writer, Professor Butlin, calls the Anglos. They are the English banking people who came to Australia to take part in banking in our growing economy in those days. The reviewer says -

The “ Anglos “, among whom the Australasian and the Union-

As every one knows, the Australia and New Zealand Bank Limited is an amalgamation of the Bank of Australasia and the Union Bank of Australia - were the most substantial, transformed the banking in three principal ways.

They introduced branch banking and . . they recognized and exploited the importance of deposits for banking resources.

The significant point is that if an organization is really to be a bank it has to be allowed to receive deposits, because it is out of the interflow between the deposits which are a liability of the bank and the advances which become assets of the bank that a bank grows. That is the significant difference between the Commonwealth Development Bank and any other bank as it operates in Australia, with the exception of savings banks, and they are in a different category of banking altogether.

That fact is pointed out, to some extent, in the speech of the Treasurer (Mr. Harold Holt). He said-

Honorable members will recall that one increase of £5,000,000 has already been provided for in the Commonwealth Banks Act 1961. … As a result of these two increases the capital of the bank will now be £25,857,000, in addition to which the bank has substantial reserves of its own and also employs considerable sums borrowed from the Commonwealth Savings Bank.

The difference between getting resources by borrowing from another bank and getting them by deposits is that a bank has to pay interest on what it borrows and has to charge the people to whom it lends money as least as much as it costs the bank to borrow the money. That is one factor that is crippling the growth of the Development Bank. It must make a profit, and in order to make that profit it has to divide its business not so much in the broad field of development, but between development which is supposed to be the charter of this bank, and earning enough income from hire-purchase transactions with its own limited number of customers. That is also clearly pointed out in the annual report at page 30.

Mr Mackinnon:

– The Commonwealth Trading Bank pays interest on deposits.

Mr CREAN:

– It pays interest on some deposits; but on a large proportion of them, namely two-thirds, it does not pay interest. I suggest that the honorable member look at the proportion of fixed deposits to floating deposits in most of the banks. They pay no interest on floating deposits. They do pay interest on fixed deposits, but they represent only about a quarter, in total, of the total deposits of the banking system. The annual report states -

It was found possible to approve a large proportion of the many and varied applications received during the year 1960-61, and finance approved by the Bank totalled £24.9 million.

Of this amount, £10.8 million was by way of loans.

That is less than half of the amount of £24,900,000. The report continues -

The provision of the remaining £14.1 million for the financing of equipment on hire-purchase terms represented the re-employment of funds which came to hand from repayments on earlier transactions of the same type.

That indicates the kind of limiting factor which is stopping this bank from doing what it was supposed to do. I think it indicates perhaps a conflict between the Country Party in one particular corner of government and the Liberal Party in the other. These are the apostles of free enterprise, of competition, but they do not want the Development Bank to compete as a bank, and because it cannot compete in the full sense as a bank it is restricted in fulfilling its charter of assisting in development. That conflict was quite clear in this House when the original bill came beforeit. Technically, under the wording of the act, the Development Bank can do all that any other bank in Australia can do. For instance, it can receive deposits, but it does not do so because the Liberal Government, in the name of some ideology, does not want it to do that. One is rather amazed these days on watching television to see joint advertisements presented on behalf of the free enterprise banks. There is certainly not very much competition between them so far as the presentation of advertisements is concerned.

This gets us back to a very significant point. Although it was not novel at the time, attention was drawn to it in 1945 in the splendid report of the Rural Reconstruction Commission established by the Hon. J. J. Dedman. Under the heading “ Rural Credit” in the fifth report, dated 28th February, 1945, paragraph 833 states -

The resources which the banks command and the wide representation they enjoy through their branches enable them to serve a great variety of needs in the sphere of rural credit both for production and marketing.

That is still true. The report continues -

In this report, however, the Commission is mainly concerned with the extent to which they do not provide adequately for all the needs of agriculture. In this regard, the Commission is of the opinion that the trading banks do not give sufficient consideration to -

Projects which are in the development stage;

Farmers with small capital resources;

The tenant-farmer and the share-farmer.

In making this comment the Commission realizes that the banks are business concerns with obligations to depositors and shareholders and accordingly are entitled to operate within such limits as they themselves consider prudent.

That is not the charter of the Development Bank, the functions of which are quite clearly set out in section 72 of the act. If those functions are to be performed, they can be performed only In two ways. First, they can be performed if the Development Bank is allowed really to operate as a bank But if, in the name of an ideology, the Government wants to restrict its activities as a bank, then, if development is to take place, funds must be provided in the cheapest possible way.

Mr Turnbull:

– It has never been snort of funds.

Mr CREAN:

– It has been short’ of funds. I suggest, to begin with, that the fact that it has had to have two infusions of capital within the space of four to five months is clearly indicative of that. I submit, too, that if the . honorable member reads objectively the comments in the bank’s report, be will see that the bank has been able to do as well as it has done with its limited resources only because it has to divide its functions between hire-purchase transactions and development. Sometimes, the two activities can be coterminous, but in many instances they are not, and when they are not the genuine rural development of Australia must suffer. I advise that the honorable member look again at the aggregate of the advances made by the ordinary banking system of Australia over a period of years. For instance, take the period from June, 1959, to June, 1961. In that period, the total advances by all the private trading- banks and the Commonwealth Trading Bank increased from £933,000,000 to £1,039,000,000, an increase of £106,000,000; but, in advances for agriculture there was a total decline from £229,000,000 to £225,000,000. It may be argued that the reason for that was that farmers were more successful in June, 1961, than they were in June, 1959.

Mr Whittorn:

– That is right.

Mr CREAN:

– Again I suggest that the honorable member take that up with his colleagues in the Country Party section of the Government. It does not seem to be substantiated by the statistics relating to farm incomes in the statements of national income for the two periods. In other words, of the total banking activity outside the Development Bank there is a lesser proportion going to agriculture now than was the case even two years ago. That, of course, may again typify certain changes that are inevitably taking place in the Australian economy anyway.

I think also pertinent to this discussion is an address delivered by Dr. H. C. Coombs Governor of the Commonwealth Bank, to the third Conference of the Australian Agricultural Economics Society, held in Melbourne from 24th to 26th February, 1959. In a paper entitled ‘‘Rural Credit Developments in Australia “ Dr. Coombs makes this observation -

It may be that the new Development Bank proposed by the Government will be able to contribute to the filling of this gap.

He was talking about the same sort of gap, in effect, as had been pointed out in 1945. That gap was still existent in 1959 - fourteen years later. He went on to say -

I hope, however, that too much will not bo expected of it.

That too much will not be expected of the Development Bank! He did not say precisely why too much should not be expected of it, but I think he had a fairly good idea, bearing in mind its limitations as a, bank, even though it was called a bank. I noted last night that the Prime Minister (Mr. Menzies) was disposed to treat with great respect the opinions of Sir John Crawford. In the subsequent discussion of the paper read by Dr. Coombs, Sir John Crawford said -

It did seem to me that the paper went very close to admitting that the most profitable lending for the banking system, at least under existing economic conditions, is not in the rural field, except to the extent that hire purchase is associated with banking.

That is the same circumstance into which the Development Bank has had to get itself because it cannot cover its costs in any other way. Sir John Crawford also said -

Dr. Coombs commented on the development of pastoral companies, and one wonders what their real influence has been;-

And one will continue to wonder since two of them have been amalgamated within the last day or two -

Their own financial resources depend to some extent at least on what further back-stopping they will get from the banking system. Recent events suggest that the banking system in the future is less and less likely to provide rural credit - - “

That is .borne out by the figures I have cited for the period from 1959 to 1961. for anything but “ carry-on “ and for the purchase of property by existing or well-backed customers.

Is that the criterion of development that this Parliament wants - that only the wellheeled shall be allowed to obtain fresh soles in the future? Sir John Crawford went on to say of Dr. Coombs’s paper -

The problem he dealt with so interestingly, which is the unsolved problem, is what he called the supply of credit for the “ residual “ borrower-

I suggest that was the role that those who established the Development Bank hoped it would fill - the problem of providing credit for advancing development and productivity.

Where, more than on the other side ot this House, do we hear used the words “ development “ and “ productivity “, and where is there a more determined effort to strangle the child than there is on that side of the chamber? The supporters of tha Government do not want the Development Bank to be a development fund at all. They want to cut its growth according to the behests of the private banking system, even though increasingly that system is getting out of the significant and important field of the development of Australia. I suggest that the members of the Australian Country Party in particular ought to ponder very seriously the present situation. Do they want the emphasis, so far as the Development Bank is concerned, to be on development, or do they want it to subscribe to some ancient shibboleths of the private banks? Do they want development primarily, or do they want an out-mode(. banking theory to be triumphant?

Sir John Crawford went on to say ;

It brought to my mind a little more clearly that one of the justifications for banks’ reluctance to provide extensive credit facilities in this field is the very cost and the very difficulty of incorporating the necessary routines in a normal banking operation.

Again, that is a very good reason why w.e need a separate institution. The time that it was necessary to devote to making an examination of whether or not a borrower was really creditworthy, according to the criteria of private banking, was not worth the candle so far as banks of that kind were concerned. Sir John continued -

As Dr. Coombs suggests, there is probably a need for a fresh institutional approach. He included in the term what I would suggest is separable in the concept - the addition of new principles.

It was hoped that new principles had been written into the legislation by virtue of sections 72 and 73 of the act -

It is worthy of note that the new Development Bank Bill does incorporate the test of income, as distinct from security value -

I suggest that that is one of the reasons why there has not been a great deal of enthusiasm for this institution on the part of the apostles of free enterprise in this Parliament. It was not a case of applying the old test and giving more security to one who already had assets. What the Development Bank aimed to do was to give a chance to the man who wanted to establish a farm or an industry, mainly on the security of his capacity and faith in his integrity. That is not the test applied by the other banks. Sir John said -

It is worthy of note that the new Development Bank Bill does incorporate the test of income, as distinct from security value, and this in itself is a courageous departure.

But again, the courageous departure has been halted by the inactivity of the Country Party corner of the House -

I have no doubt that even though it is a new test, the Development Bank will still need a very keen assessment of the personal factor.

Of course it would; that is only prudent. But if the personal factor proved satisfactory there ought not to be a withholding of funds. Sir John Crawford went on to say -

Nevertheless, this is a recognition that the -approach through security plus personal factor is not enough. The Development Bank will certainly need to handle this principle with great care, but it has to be attempted.

And, I suggest, it has also to be encouraged. Finally, when it came to Dr. Coombs’s summing up at the end of the lecture, and when he was speaking of the Commonwealth Bank, the State banks and the various other banks, he said -

However, these banks are limited in resources and like the pastoral companies tend to draw their funds from the field in which their loans are made.

That cannot be a circumstance so far as the Development Bank is concerned.

I suggest that the emphasis ought to be on development, not on banking. If it is to be on development, there has to be the provision of funds at low rates of interest. If funds cannot be obtained from other sources, why cannot they be provided from the revenues of this nation, without any interest toll at all? Apparently, we are going to have the blessing, in the next few days, of a depreciation allowance measure that will put some £10,000,000 or £12,000,000 into the pockets of companies in the Australian community that are already some of the strongest. If the Government can afford to do that for manufacturing industry, why can it not afford to be a little more generous as far as the essential rural development of the nation is concerned?

I leave the matter there, Mr. Speaker. We welcome this increase in the capital of the bank. We still say that the capital will be inadequate to serve the needs that exist in 1962, just as it was inadequate, perhaps even more so in the aggregate, to meet those that existed in 1945. The establishment of the Development Bank was recognized as at least a courageous attempt to do something for rural development. I suggest that it was a Country Party Treasurer who was largely instrumental, despite the shibboleths to which the other members of the Cabinet subscribed, in seeing the bank established. There is an inherent duty on the part of other members of the Country Party to see that the bank places emphasis, not on banking, but on development.

Mr FORBES:
Barker

.- I should like to say something about the extraordinary statement that the honorable member for Melbourne Ports (Mr. Crean) made just before he finished his speech. He referred to the Government’s proposal to introduce a 20 per cent, investment allowance, which, as he put it, ought to put £10,000,000 or £12,000,000 into the pockets of large secondary industries in Australia. He compared the way in which the Government was treating the secondary industries in this respect with the way in which it was treating the primary industries. Is not the honorable member aware that, about eleven years ago, in either 1951 or 1952, this Government introduced a system of taxation concessions, or depreciation allowances, for the primary industries which were very much more valuable to those industries than the proposed 20 per cent, concession for secondary industries?

That leads me to another point which the honorable member obviously has not appreciated. If we want to encourage development in Australian rural industries, the thing to encourage is not lending to the farmers for developmental purposes, but high incomes; because it has been proved beyond a shadow of doubt that the great bulk of farm investment comes out of income, and one of the reasons for the extraordinary growth in farm investment, which after all is development, has, since this Government has been in office, been the income tax concessions which, by giving the farmer a larger disposable income, has enabled him to re-invest it in his farm and so increase production. I believe you will never change that situation in Australia where the bulk of farm investment comes out of income, and for one very good reason. It is that the psychology of the farmer is such that he is disposed to undertake development investment when the prospects are good and he can see the way ahead. That is also the situation in which he borrows money. But you will never get him to accept a situation where you substitute the lending of money for a decline in investment because in his judgment the prospects are not good.

The honorable member for Melbourne Ports made some other extraordinary statements. The first of them was that the Opposition, when we increased the capital of the Development Bank by £5,000,000 at the time of last year’s Budget, said that the capital of the Development Bank was inadequate. Now that the Government has decided to increase that capital by another £5,000,000, honorable members opposite say they told us so. I can recall following the honorable member for Melbourne Ports in the debate on that occasion and pointing out that there was no sense whatever in using money from the public revenue to increase the capital of the Development Bank ahead of the need to do so. I pointed to the pledge given by the Government when the Development Bank was brought into being, that it would ensure that the bank always had sufficient resources for the purposes which lay within its charter. I suggest that the determination of the Government to again increase the capital of the bank is proof positive that that promise has been kept. What would have been the point in increasing the capital of the bank by £10,000.000 or £15,000,000 last August or September when there is still part of the original £5,000,000 in the bank’s resources available for lending? The money would have been lying idle, when it could perhaps have been used in that four or five months for purposes which honorable gentlemen opposite hold so dear to their hearts.

I know the honorable member for Melbourne Ports - to be fair to him - would suggest that I am not stating this correctly because, in fact, the Development Bank, even within its charter, has restricted its activities because of shortage of funds. But he did not give one single point of proof to demonstrate the correctness of that assertion. He did not give a single example to prove what he said; he merely quoted a statement from the report of the Chairman of the Commonwealth Banking Corporation which said more or less what the Government has since accepted - that before very long, if the bank is going to fulfil its charter, it will need additional funds.

I know the way in which the bank has operated only in South Australia, because that is the only place in which I have seen it operating at close quarters. But because I know that a Commonwealth-wide institution like the Commonwealth Banking Corporation takes a good deal of trouble to see that its administrative practices and policy apply right across the Commonwealth, I am pretty sure that what has happened in South Australia has happened elsewhere. I have been pretty closely in on a large proportion of the transactions made by the South Australian branch of the Development Bank with rural industry in that State, because the electorate of Barker is the area in South Australia in which the greatest amount of rural development is taking place - in a State in which the high rainfall zone is fairly restricted. I can therefore say, without fear of challenge, that the bank in South Australia has never since its inception refused a loan to an applicant on the ground that it did not have sufficient funds available. I make that quite categorical statement and challenge the Opposition to produce examples which prove the contrary to be the case.

The honorable member for Melbourne Ports also spoke of the Government’s tendency on ideological grounds to restrict the activity of the Development Bank. In fact be said the bank was not permitted to accept deposits but then reversed that statement because the bank is permitted to accept deposits. But the Development Bank does not accept deposits, and for a number of very good reasons. It is a specialist financial institution with a narrowly defined charter. If I may remind the House of what that charter is, it is to provide finance for developmental purposes in circumstances where the applicant is not able to obtain finance for development purposes on reasonable terms elsewhere. That is the main part of the charter, which then goes on to say that the prospects of the success of the enterprise rather than the form of security available will be the main criterion upon which the loan shall be based.

The honorable member for Melbourne Ports referred to the report of the Rural Reconstruction Commission, which was a very good commission indeed and produced very valuable reports. I pay credit to the honorable member for Lalor (Mr. Pollard), who was responsible under a Labour government for setting up that commission, although I do not give him much credit for the fact that, at least in this respect, he did not adopt its recommendations. It was left to this Government to adopt the commission’s recommendations on this point. I point out to honorable members opposite that the Labour Government set up the Industrial Finance Branch of the Commonwealth Bank, which granted its loans by the criteria which are now included in the charter of the Development Bank - the prospects of the success of the enterprise rather than the form of security. But the rural equivalent of that agency, the Mortgage Bank, had no such liberal clause in its charter at all. The Mortgage Bank, which I think was instituted in the time of the Labour Government, granted its loans on the same basis as do the normal trading banks, that is, the capacity of the applicant to provide ample security. I revert to the report of the Rural Reconstruction Commission. As the honorable member pointed out, it said that there was a major gap in the system of rural finance in Australia.

This gap existed, as the honorable member said, because the Australian credit institutions did not provide adequate developmental finance in the rural areas, particularly in circumstances where the people who wanted to undertake the development had, to use the honorable member’s phrase, inadequate capital resources. The Development Bank was designed precisely to fill that gap. If honorable members look at the bank’s charter, they will see that the bank meets that requirement. As I understand its report, the commission said that, normally speaking, the credit requirements of a great majority of primary producers were met by the existing financial institutions - that is, the trading banks and the pastoral houses or stock firms.

Even though Hie Labour Government had before it the commission’s report, it did nothing to fill this gap. lt was this Government which took the necessary action. The charter of the Development Bank states precisely that the bank is intended for developmental purposes, and it sets out the criteria which the bank shall follow. The charter establishes that the bank exists for the benefit of people who have inadequate financial resources. But evidently honorable gentlemen opposite are not satisfied now with this filling of the gap which the commission appointed by a Labour government said existed. Presumably they now believe that we should let the Development Bank embrace the whole field. That would be a pretty big undertaking. Advances made by the Development Bank for all purposes, including hire purchase, now total approximately £30,000,000. The latest figures I have show that trading bank advances in the rural field as at 30th June, 1961, amounted to £225,000,000. In addition to that sum, the pastoral finance companies have made rural advances totalling £106,000,000. The logical extension of what the honorable member for Melbourne Ports has advocated is a proposal that somehow or other we should find the resources to provide not only the £30,000,000 already made available by the Development Bank but also approximately £330,000,000 to cover what are normally the activities of specialist finance institutions.

Let me emphasize that the Development Bank was designed to fill, and has filled, a gap which was recognized by the commission established by Labour. But it was not intended, nor should it be intended, to take over from the other credit institutions, particularly the trading banks and the pastoral houses, all the functions of rural develop ment. We on this side of the House regard that as being both undesirable and unnecessary.

Why should the Development Bank bother about accepting deposits as the honorable member for Melbourne Ports has suggested? What does he envisage as likely to happen should this institution start to accept deposits and compete not only with the private trading banks but also the Commonwealth Trading Bank? When all is said and done, the Development Bank is but one section of a great group of banks known as the Commonwealth Banking Corporation. Why should the Development Bank accept deposits when the Commonwealth Trading Bank, as a government institution, does so? The Development Bank was designed as a specialist institution and was provided with resources to perform a specialist function and so far the Opposition has not given us one shred of proof to support the suggestion that it is not performing that function.

support the bill wholeheartedly. From my own observations, the Development Bank, as I said before, has been a very great boon to the constituents of the electorate of Barker. In fact, the South Australian branch of the bank is sometimes known as the “ Barker Development Bank “.

I should like to make at least one more point in the limited time that is available to me. One of the functions which the Development Bank has undertaken is that of assisting persons who have been allotted blocks under State land settlement schemes. It has done very useful work in this respect. As happens so often, there has been some heartburning. That has been mainly because the Development Bank is required to have regard to the prospect of success of the enterprise, and sometimes the blocks and the persons to whom they are allotted do not measure up to that criterion. I do not suggest that this always happens, but sometimes political rather than economic considerations dictate the type of land that is made available under the land settlement scheme and the type of people who are allotted the blocks.

I suggest to the Minister assisting the Treasurer (Mr. Bury), who is now seated at the table, that he consider suggesting to the State governments that in future when they are contemplating land settlement schemes, and where they do not intend to finance the applicants when they go on to their blocks, they bring the Development Bank and the other credit institutions into the discussions at an early stage. From my own observations, I am sure that if that approach had been adopted in the past a certain amount of heartburning and disappointment would have , been avoided. I mention, for example, the Fairview Estate near Lucindale in the south-east of South Australia, which is situated in my electorate. In most cases the blocks were allotted on the right basis, but I am quite sure that in a number of cases if there had been consultation between the State land settlement authorities and the Development Bunk the . people concerned would never have got into the situation in which they found themselves.

Finally, as I said earlier, we should never forget that the overwhelming bulk of farm development is undertaken with farm income. If farm incomes are healthy, then farm investment will be healthy. Indeed, the psychology of the’ farmer is such that he is more prepared to borrow funds when incomes are high and the prospects therefore are good, than when the prospects are net good. High farm incomes are the key to high farm investment, irrespective of whether that investment comes from income or. borrowing. A policy which attempts to arrest a decline in farm investment by providing easier credit will never succeed, and it is not desirable that it should. That is not the .motive of the Government in providing extra funds for the Development Bank, and I am sure it has never cast the bank in that role. However, I believe it is timely to remind the Government now that if it wants farm investment to remain at its present level and even to increase, farm incomes must be high. I support the bill.

Mr HAYLEN:
Parkes

.- The honorable member for Barker (Mr. Forbes) has missed the point entirely in dealing with the statement made by the honorable member for Melbourne Ports (Mr. Crean), who puts the Opposition’s attitude on financial and banking practices. His speech was not an attack on the Commonwealth Development Bank. He reminded us, with evidence from “ Hansard ,? and references to banking history, what has happened. No matter what Dr. Coombs says at a summer school nor what Sir John Crawford says somewhere else and regardless of what situation is visualized by the honorable member for Barker, the fact remains that this bank is miscalled a Development Bank. We are all, perforce, interested in banking and banking practice. Until members of the Opposition become the government in the fullness of time - and the time is almost ripe - we want to convey our feelings upon these things which, willy nilly, had to be accepted when we were a small minority in this House.

What the honorable member for Melbourne Ports said was utterly consistent with our views. In his earlier speech which I read in “ Hansard “ before I came in here, he blessed with faint praise, I suppose, this institution which was founded in order to create some sort of bridge over a credit gap. The fact is that the farmer was flopping about trying to get money but the cities, conventionally, traditionally and almost eternally, were mopping up the money that he wanted. Consequently, he was short of the finance necessary to carry him along in many circumstances.

The members of the Liberal Party pat themselves on the chest when they speak about the Development Bank but it was an unwanted child. The Australian Country Party Treasurer brought it and laid it on the doorstep one morning and they had to adopt it. But they put it into a crimped cradle where it is cribbed, cabined, and confined, and it cannot grow.

If you consider the Development Bank in relation to the development of this country, the position is absurd. The Opposition is not criticizing what little you have. We say that the bank ought to be expanded. The honorable member for Macarthur (Mr. Jeff Bate) and other rural members strut about and talk the stuff which we used to think so valid in 1902. “ This’ is a country with a vast hinterland and great reserves “, they say. Those are generalities. You cannot make grass grow or cattle fatten or grow lucerne on river banks unless you have money and machinery. This little bank -with its little capital and little outlook is unworthy of being in the great corporation now known as the Commonwealth Banking Corporation. Under the Chifley Government and in previous Labour policy the development of radical banking was seen as an opportunity for the benefit of all people and, not something that should be of benefit to people with big financial resources, big incomes and big opportunities for making a slugging good profit out pf the people.

What is our complaint about the whole measure? As the honorable member for Melbourne Ports has said, the capital was meagre but it was good enough at the time to do the job that it was supposed to do. The bank was like a little tweeny maid in one of Sir James Barrie’s plays - one of those little servants who flutter between the kitchen and the servery and never get into the dining room. On one side you have the great Commonwealth Banking Corporation; on the other side you have the trading banks; and the little tweeny maid, the Commonwealth Development Bank, has to do the service in between them. It has to do the little menial tasks that they are too noble, great and aristocratic to do. That is why we object to its being called the Development Bank.

Let us look at what happened in regard to it. The agents of this so-called Development Bank in the city and the country are the trading banks. That is farming the cat out! No lush bit of rural lending will be passed over to the Development Bank by the Bank of New South Wales, the Australia and New Zealand Bank Limited or any other trading bank. They have made a Cinderella of the Development Bank. What it is doing is fantastic. Let us take a hypothetical case at Mildura-

Mr Turnbull:

– Will you-

Mr HAYLEN:

– I ask the honorable member for Mallee to hang on and the grapes of wrath may yet be revealed to him.

Let us assume that a progresssive vine fruit-grower has a good property and is well in debt to the Bank of New South Wales. He decides that he wants a packing shed, wire fencing, a drying shed or machinery, and various soil conservation measures to be taken. On the solid old bankers’ practice of getting about four times the value of a loan in collateral, he is not a good enough risk for his own bank to advance more money. So his bank manager says to the Development Bank, “You should give Bill Flinders down the road £10,000 or £20,000 because he wants to develop “. As custodian of the people’s money, the Developmental Bank should reply: “ If he is worth lending money to, why do you not lend it to him? You have a fat hand on the collateral.” But the Development Bank does not say that. It says, “ We will give poor old Bill Flinders a second mortgage.” Then, if he goes broke the Bank of New South Wales will make off with the loot and the Development Bank will write off its loss.

That is what has happened. That is why the Development Bank has become completely a creature of trading bank thinking. That is why we resent the position in which the bank has been placed although we accepted the bank as the best of a bad job when it was established. In view of the small amount of capital, the bank has made a fairly good profit - £600,000. The whole concept of development surely is not encompassed in this small bank with its small development.

If you want to look at another side of the question, you can always tell where the banks or the insurance companies are going by the way they lash out with their investments in buildings. At the top of Martin Place, Sydney, the Reserve Bank is to build a £4,000,000 bank. The Commonwealth Bank is busy expanding everywhere. But wedged in between them is the tiny, emaciated Development Bank, which, under this Government, is not meant to grow to any great extent. It is to be used as a gimmick to suggest that there is a liberal lending reservoir of money for the ruralists in this bank. There was a nobler and freer concept in the Chifley banking legislation, which has been truncated by this measure.

This Government got into power in the long and weary past because it told the country that there was something wrong with Labour’s attitude to banking. Having won an election upon that issue it left most of the salient points of the Chifley laws where they were. But in order to kid to the electors and its supporters, particularly the wealthy trading banks, the Government had to do something about the Commonwealth Bank. If honorable members think that this is a fictitious version I suggest that they get a trading banker to tell them what he thinks of the Government in relation to the Commonwealth Bank.

Look at the articles in the newspapers daily about the influence of the Commonwealth Bank! There is the old irk, the old hatred, the old desire of the private interests to get their fingers on the people’s bank. So, the Development Bank is not powerful, for the reasons much more explicitly put forward by the honorable member for Melbourne Ports than by myself. The argument that has been advanced on the other side of the House has had nothing to do with the case. We do not say that it is not a good thing that these fellows should get rural credits. We think it is a splendid thing. The Government’s Development Bank is some sort of rugged adaptation of the rural credit scheme first conceived by the honorable member for Lalor (Mr. Pollard) when he was a Minister and later developed into the Industrial Finance Department of the Commonwealth Bank. That department could, by now, have been an enormous bank on its own. The radical banking policy of the Labour Party is not opposed to having a lot of banks as long as they are all controlled by the people and sectionalized in this day of specialization.

The honorable member for Barker, after having ranted about the trading banks and their great rights and freedom, then said that there could not be too many banks. He said that his idea was that everybody should be able to have a special bank to go to if he wanted to do so. He knows, in his own heart, that planning must enter into the banking sphere just as it must enter into all other activities.

I have risen to-day because I wanted to direct attention to the fact that the Development Bank has a function to fulfil. To-day it reminds one of a plant that could grow extensively but is placed in too small a flower pot. Dr. Coombs has indicated, in the statement read by the honorable member for Melbourne Ports, that that is his view. Sir John Crawford goes a little further and says that he believes we must not expect too much from this bank, because it does not have the facilities for growth, although it has the facilities for lending to people who want to use its services. Those are the points that were driven home by the honorable member for Melbourne Ports.

Having read the reports, Ithink that the concept of the bank was not a generous one. It was established as a result of pressure applied to the Government by the Country Party. When the Government went to the polls, the members of the Country Party wanted to be able to say, “ We shall lend more and more money to the farmers “. The honorable member for Barker made the nonsensical statement that anybody who approaches the bank for money will get it. Rubbish! You have to go through the grinder and undergo a psychological examination by an inspector, a deputy chairman, and so on, before getting any money. You have to go through the mincer that all borrowers have to go through. I know from some of my constituents who have properties in the country that it is hard to get money from the Development Bank. They have accounts in the Commonwealth Bank or in the trading banks. If the proposition is a little doubtful, they are told, “Why do you not try the Development Bank?” The Development Bank has become tired of being asked to finance propositions that are no good at all. It naturally curls up, and people do not get interviews with the directorate as easily as they would like.

Let us not run away with the idea that this is a beautiful link between the Commonwealth Bank and the trading banks, and that if one of those banks will not touch a proposition, the money can be obtained from the Development Bank. Because of the narrowness of the bank’s charter and the limitation of its funds, it cannot do very much. When we contrast the statements made about our illimitable future by, for instance, the honorable member for Macarthur (Mr. Jeff Bate), with the very limited amount of money that can be got out of the Development Bank, we can see that the argument that this bank is really worth while is completely cockeyed.

The Development Bank should be a lusty, vigorous and growing partner of the group of banks known as the Commonwealth Banking Corporation. As the position stands, it is a little tweenie, alternating between the scullery and the attic and living on the crumbs that fall from the other sides of the banking structure. It has made a profit of only £600,000, so obviously its operations have been limited by its capitalization. The Commonwealth Bank this year is letting out £300,000,000 in loans and advances. This bank is lending about £11,000,000. That is the figure given by the honorable member for Melbourne Ports. It is a useful thing, but it is small. It is silly to talk as if the bank were something that had been planned on an enormous scale. It cannot really act as a development bank because its capital is limited.

Speaking merely as an observer and as a dilettante in relation to banking and economics, I thought a vital point was made by the honorable member for Melbourne Ports in relation to deposits. How simple it is to lend money when it is coming in practically free. This Development Bank does not issue cheques; it does not say, “ Come in and bank with us “. Cheques are exchanged between those who have mortgages and overdrafts, but it is not a general trading bank. Would it not be better, as the honorable member for Melbourne Ports has said quite reasonably, to let the bank have its own funds, rather than to depend on grants from the Government ‘ from time to time in amounts of £5,000,000, such as this legislation provides for? Would it not be better for the bank to have money of its own so that it could grow? If that is not to be the case, I am suspicious enough to believe that the bank, was never intended to survive.

I have looked through the list of banking “ dos and don’ts “ in relation to this institution. We have heard a glorious story to the effect that everybody who cannot get money from the trading banks can go to the Development Bank and that Bob will be literally their uncle and give them money. That is not borne out either in fact or in fiction, as far as I can see. A farmer can get money from the bank only if his production has something to do with exports. It is all bound up with that accursed term “ balance of payments “. We have to pay our debts overseas. We are frightened of the landlady, or of the people in Lombardstreet. Before the bank will lend some of the. people’s money to a farmer, to grow lucerne or something else, it has to make sure that he is producing for export. I do not think that that is fair or reasonable. When the Labour Party takes control, the bank’s charter will be greatly extended in regard to its finance and its ability to lend, so that it can make a proper job of development.

A constituent of mine is keenly interested in the development of an overseas market for wheat products and for bacon and other pig meats, but he has run into a solid brick wall in his attempts to get finance. In the first place, the milling combine will not let him get into production, because it holds mortgages against him in other banks. The Development Bank will not help him. He has approached it. When he talks about the scheme to expand his piggeries and increase his production of pig meats, the bank does not treat him in the manner which the charter provides. He is finding it extremely difficult to get set. I believe that restrictive practices are preventing this bank from treating genuine cases on their merits.

The Development Bank was established to help people who had good propositions. A man should not be required to have collateral for a loan, if he has the spirit and the will to succeed; he should be looked upon as a good risk. I shall develop this theme on another occasion. Perhaps this is not the appropriate time to do so. The man to whom I have referred has a sound project for an export industry. He was undoubtedly good for the money he wanted to borrow but he has not been allowed to get it. Shall I tell the House why? It is because there is a gentlemen’s agreement between the trading banks and the Commonwealth Bank. People are told that they must stay with the banks with which they have been dealing. Although the bank of your choice in 1931 may not be the bank of your choice in 1951, you are stuck with it. That is a stultification of banking. We read the gobbledygook in these reports about how free the Development Bank is to be and about how every application for finance is to be treated entirely on its merits, but that is not happening. The philosophy of the trading banks, “Just get the profit and let the credit go “, still operates, and under this Government it is operating in the Development Bank. That ought not to be sp. As custodians of the people’s “money, we should not let this bill go through without some comment. We know that the bank is being used as a gimmick. The Government dare not take the Commonwealth Bank away. It was created by the Labour Party and developed to the nth degree by the Chifley Government. The Government does not want to interfere with the rampaging, free enterprise banks. This little wedge between the two sides is there only to gull the public.

I rose to answer the honorable member for Barker and to support the statement of the honorable member for Melbourne Ports. We do not think that, in principle, there is anything wrong with the Development Bank, but we say that it is wrong to circumscribe the bank by giving it a miserable allowance such as this and then to talk in grandiose terms about the tremendous job it is doing. If the Development Bank were used to foster the growth of rural products for export, it would be an enormous thing. As it is, it is a weak thing and it does not become very much stronger by being given another £5,000,000. The argument of the honorable member for Melbourne Ports is completely valid. We should not only increase the capital of the bank. We should, in addition, make it easier for those who have no collateral to borrow from the bank, providing they are engaged in rural industry. We should not come down too much on the side of industrialization, but that is happening. Those people who have industrial collateral can get money from the bank. In a few years they will have got more money out of it than will the ruralists. That is where the trouble lies. You can get accommodation more quickly with industrial collateral, as the honorable member for Melbourne Ports has said. The measure should not be treated in this House as if it were. something miraculous. It is a miserable little alternative to banking properly rationalized by the Labour Party.

Mr DRUMMOND:
New England

– I have listened with. great care to. the discussion on finance on which the honorable member for Parkes (Mr. Haylen) embarked. Quite frankly, with the greatest will in the world I found it very difficult to make up my mind on exactly what he wanted and what he expected tq happen. In the first place, he virtually condemned the Development Bank, root and branch. Then he said that Mr. Chifley had introduced certain banking legislation which, according to him, was ever so much better than the banking legislation as it has evolved under the present Menzies Government and the previous Menzies Administration in which Sir Arthur Fadden was Treasurer.

I have checked a statement that I heard the late right honorable member for Cowper, Sir Earle Page, make on more than one occasion. He said that when the Chifley banking legislation went through the functions of the Commonwealth Savings Bank were completely altered. Sir Earle said quite clearly in private conversation that he did not think that Mr. Chifley fully realized what his own legislation was going to do. He went on to say that the Commonwealth Savings Bank had ceased to operate according to the original intention - which was to use the savings of small depositors for the benefit of home builders, small farmers and so on - and that its original function had been completely lost when the bank started to be used as a pool from which money in large amounts was drawn for the financing of activities other than those I have mentioned. There is not the slightest doubt about the truth of that statement by the veteran statesman, Sir Earle Page, who knew this whole matter from beginning to end, because he took an active part, as a member of the first Commonwealth Bank Board, in the formation and development of the Commonwealth Bank. What was evolved from the original Commonwealth Bank of Australia was a banking corporation, of which the Development Bank is a department.

The purpose of this bill has been made quite clear by the Treasurer (Mr. Harold Hold). It is the provision of a further sum of £5,000,000 for “the Commonwealth Development Bank, which, with the £5,000,000 already provided for in the Commonwealth Banks Act enacted last October, will bring the banks additional capital to £10,000,000. The result of those two increases is that the capital of the bank will now be £25,857,000, in addition to which, as the Treasurer said in his second-: reading speech, the bank has substantial reserves of its own and also employs considerable sums borrowed from the Commonwealth Savings Bank.

I have no great wish to develop my argument on a purely party political basis. It is quite obvious that, no matter what may be said on either side of the House, there is agreement that the measure should be passed. Of course, when it comes to the question of whether or not the measure makes adequate provision, it is the traditional function of the Opposition always to claim that what the Government does is not adequate and that what the Opposition would do, were it in power, would be magnificent. Experience shows that when an Opposition making such a claim does attain power the promised magnificence fades to a tinselled sheen with no pure gold in it. We will ho doubt hear quite a lot from the Opposition on those lines.

I do not intend to argue on this measure merely for the sake of argument. It is most interesting to examine the Commonwealth Banks Act 1959-61, which the present bill will amend. According to section 72 of that act the functions of the Commonwealth Development Bank of Australia are as follows: -

to provide finance for persons -
1. for the purposes of primary production; or
2. for the establishment or development of industrial undertakings, particularly small undertakings, in cases where, in the opinion of the Development Bank, the provision of the finance is desirable and the finance would not otherwise be available on reasonable and suitable terms and conditions; and
to provide advice and assistance with a view to promoting the efficient organization and conduct of primary production or of industrial undertakings.

This is particularly apropos to what I have to say. Section 73 (1.) of the same act provides as follows: -

In determining whether or not finance shall be provided for a person, the Development Bank shall have regard primarily to the prospects of the operations of that person becoming, or continuing to be, successful and shall not necessarily have regard to the value of the security available in respect of that finance.

Let me take the last few words of that provision in order to refresh the memories of members who were present when that legis lation was debated. A strong point made by the Treasurer of the day, Sir Arthur Fadden, and by speakers on the Government side was that the supreme purpose of the bill as applied to rural production was assistance to people who had small resources and had experience, in some cases, of operating the necessary plant, but did not have the money to make their operations on the land a success.

Having directed the attention of the House to those points I shall pass on at this stage to the question of how far the activities of the bank are helpful to those engaged in primary industry. Anything I may say which may appear to reflect upon the head of the Development Bank or his officers is said not in the way of captious criticism but in order to express my views on why, in my experience at least, this bank has not always proved as successful as my friend from Barker (Mr. Forbes) claims it has proved in that well-ordered and extraordinarily well-governed state, South Australia. I believe that the first great difficulty that the founders and organizers of the bank were met with was the lack of trained personnel to handle the kind of business which the bank was established to carry on. When they had the business and the personnel to carry it on they did not have sufficient finance to do what they wanted. Prior to the passing of the Commonwealth Banks Act the position was that the great private trading banks provided, not as long-term loans, but as their equivalent, overdrafts which carried the man on the land through a great part of the developmental stage on his farm. When such financial assistance was not available the storekeepers carried the man on the land until times improved. At other times, because of extraordinary circumstances, the Rural Credits Department of the Commonwealth Bank came to the assistance of the farmer. At one time the Government Savings Bank of New South Wales granted loans to farmers. As the result of action taken by various governments in New South Wales, many men were saved from ruinous bankruptcy. The men who were helped by the bank had no security to offer. Their entire equity was pledged among the bank, the store and the firm handling their wool. They had no reserves of finance and the money lent to them by the bank was designed to carry them through a particularly difficult period. Unfortunately, the restrictive deposit policy followed by the Commonwealth Bank right up to the time when this Government gained control of the treasury bench killed the capacity of the private banks to finance long-term primary development as they had been financing it in the the past. Something was needed to fill the gap.

I propose to refer to some remarks passed by Professor J. N. Lewis, Professor of Agricultural Economics at the University of New England. Professor Lewis’s appointment is the first that has been made to the Faculty of Agricultural Economics in Australia. That this should be so is an eternal disgrace to a country that is so dependent on primary production. Professor Lewis’s statement appears in the current issue of the journal of the Australian Institute of. Agricultural Science. The statement reads -

Three major trends are affecting the ability of primary producers to undertake development of their own properties.

That statement has special reference to the measure that is before this House. The question arises whether some additional amount should be provided to the Commonwealth Bank over and above the amount provided in this bill. Professor Lewis’s statement continues -

These are: The greatly increased amount of capital required for modern farming.

Any one who has paid regard to farming will know how step by step the horse, the bullock and the plough have been replaced by tractors and complicated modern machinery. The second trend referred to by Professor Lewis is -

The reduced ability of farmers to finance development expenditure out of current income as a result of the cost-price squeeze being experienced by major rural industries.

The third trend is -

The withdrawal of the trading banks from long and medium-term financing of development undertakings and their increasing tendency to confine their operations to providing short-term working capital.

Those are major reasons not only why we should increase the capital of the Commonwealth Development Bank but also why we should take an even wider view. I am not foreshadowing an amendment to the bill, but I do suggest that the Government give earnest consideration to my remarks. The article from which I have quoted continues -

Pointing out that larger amounts of capital will almost inevitably have to be employed in agriculture if the average earnings in that industry are to remain comparable with those in urban occupations, Professor Lewis says that “ without a high rate of capital formation Australian agriculture will come to be characterized by low-income rural communities, such as those existing in many parts of the United States and typical of peasant populations of many other advanced industrial economies.”

That is not a situation that we can lightly overlook. Professor Lewis points out that there is a tendency to-day for big concerns to buy up farms. He warns that unless we are careful a new serfdom will develop in this country and that the individual farmer with reasonable financial strength, guiding the operations of his property and providing for the future of his family, will be replaced by people who will be working virtually under contract conditions. That will inevitably lead to a reduction in the status of the man on the land. I agree with Oliver Goldsmith that the decay of the rural population as compared with the rest of the population is the beginning of the decay of a nation. Professor Lewis states -

In the long run either rural credit facilities will be improved, preserving our traditional familyfarm organization of agriculture in the face of greatly-increased capital requirements, or some other organization will tend to emerge in which the farm family is likely to have less independence and considerably less control of management decisions.

That statement has extreme relevance to the measure that we are now debating. The honorable member for Barker said that the farmer will never be content to borrow money for developmental purposes when he cannot reasonably expect to be able to develop his property by investing his income. The problem associated with development from income is the inability of the individual to provide reserves as in the case of companies. I have great admiration for the thrift, courage and enterprise of the people in my part of the country. They have set aside money that they cannot now touch. Their problem is not confined to increasing their development from income. On the contrary their problem is to find sufficient money and sufficient faith in what they are doing to make good on the land,

We are indebted to the Faculty of Agricultural Economics at the University of New England arid to” Professor Lewis for the work that they have done. Professor Lewis was able to induce a bank in the New England district to lend £13,500 to a man for development of his property. The man concerned raised the income of that property in a dry year from £2,400 to £15,000. He changed the cost-income ratio from about 60 per cent, to 32 per cent. That is understandable. If you are not over-capitalized and if you produce a greater number of animals and fatten them, the proportion of cost to income will fall. The trouble is that it has not been found possible to do this in many cases.

I suggest that there may be some vacillation, not only in government circles, but also in banking circles, as to what is to be the real policy of development in Australia. In the first place, I think that, on the banking side, it is utterly wrong to tie the Development Bank, which is designed for rural development, in with, industrial development. There ought to be provision for industrial development, but the two things are entirely different. Rural development is long-term development to a greater extent than is industrial development.

What is really necessary is a land mortgage bank to take care of that side of development while the Development Bank carries out the functions which we ourselves forecast would be necessary. It would attend to the needs of share-farmers who had the know-how to farm their own properties. It would provide the capital they needed to purchase properties and plant, so that they could know that feeling of security that freehold gives. It would assist junior farmers - young men bred to the game who understand the work of a farmer. Men whose land was not properly developed but who had some assets would be able to get money to expand their production.

But all that means expanded rural production. What does this nation want? Is there some vacillation on this matter? We need all we can get from our major source of exports and that is land production, which provides 80. per cent., or slightly more, of our exports. We want all that; but if we get it, may we not be faced with the necessity to sell our produce at unpayable prices?

I put some ideas on paper, a little crudely perhaps, a few years ago under the title “ Australia’s Dilemma “. I pointed out that unless the problem of making primary production more profitable was faced, we would find a decline in the returns to primary producers. This would throw them out of line with those in secondary and tertiary . industries and we would have exactly what we have now - a considerable amount of unemployment. It is not a matter of what this Government has done or has not done. The trouble is this imbalance between the primary producers’ returns and his costs, and between his returns and those offering in other avenues of employment. As soon as the income of the primary producer is affected, the impact is felt throughout the economy.

I hear the constant claim from the Opposition that the present unemployment in Australia could have been avoided, but if members of the Opposition study the calamitous events that took place in tha thirties, they will find that it was the imbalance between the returns of the primary producers and those of the secondary producers that brought about the crash. In New South Wales alone, we had 250,000 persons unemployed, although the population was only half of what it is to-day. The rest of the Commonwealth was similarly affected.

This is something that we must face up to. We have to decide where we are going. We cannot face up to this problem unless the Development Bank, which we are gradually building up, is trained and organized to meet the responsibilities that it should accept. It must be apart from normal banking and yet have certain banking responsibilities to assist primary producers. It is up to the nation to provide the wherewithal to ensure that the farmer who increases his output will not find himself depressed by what has been achieved on the one hand with the assistance of the Development Bank and, on the other hand, by his own . initiative. In other words, he must be sure that his own efforts will not rebound against him and produce a depressed condition in his industry.

I do not wish to prolong the discussion except to quote one final passage from the report of the Commonwealth Development

Bank, which I think is very significant. The report for 1961 states -

During the year, assistance by way of loan was approved for 2,060 applicants for a total of £10.8 million. This compares with the aggregate for the full year 1959/60 of 770 advances for £5.3 million. The total loan balances of £21 million outstanding at the end of the year comprised £10.7 million rural and £10.3 million industrial. This compares with the 30th June, I960, figures totalling £15.6 million (rural £6.8 million, industrial £8.8 million).

This is but an infant enterprise. 1 think its objective is worthy of the support of all parties in this House. I congratulate the Treasurer and the Government on having brought down this measure to provide additional capital, but I ask them to look at some of the aspects of the matter I have raised and to ensure that something that was started off with good intentions shall not founder on an imbalance between the returns to primary producers and those obtained by other sections of the community. There are obligations that must be accepted if the community is to get the full benefit of this measure.

Mr RIORDAN:
Kennedy

.- 1 rise to support the bill. I listened with interest to the speech of the honorable member for Barker (Mr. Forbes). The honorable member for Parkes (Mr. Haylen) has already replied to many of his statements. All I want to say in answer to him is that I have yet to learn that the constituents of any other honorable member have been able to go to any bank - the Development Bank included - with a request that has been completely successful. The statement of the honorable member for Barker to that effect was too silly for words. Apparently the honorable member for New England (Mr. Drummond) is following the line that the Australian Country Party has adopted in similar debates previously. The honorable member for Parkes told the honorable member for Mallee (Mr. Turnbull) that this baby was left by the Country Party on the Liberal Party’s doorstep, and the Liberal Party has not yet woken up to the fact that it is there.

The attitude of the Labour Party has not altered since 1959, when the Commonwealth Development Bank was established. Obviously the bank was born because of the success of the Industrial Finance Department and the Mortgage Bank Department of the Commonwealth Bank at the end of the Second World War. The Industrial Finance Department did a great deal towards the rehabilitation of many men coming out of the services. In my own electorate many ex-servicemen, with the assistance of the bank, were able to become re-absorbed into industry quickly. In other words, the two departments to which I have referred assisted both in the industrial and the rural fields when a quick switch-over from a war-time economy to a peace-time economy was necessary.

It was obvious to the Government - and apparently also to the trading banks - that if these departments of the Commonwealth Bank were allowed to continue to prosper, they would present a very serious challenge in the banking field to the trading banks. So was born this Commonwealth Development Bank which had imposed upon it the restriction of capital to which the honorable member for Melbourne Ports (Mr. Crean) has referred.

I propose to deal with the activities of the bank in the last twelve months. The bank is to be congratulated for the degree of success that it has achieved. But it has achieved its success not because of the assistance that this Government has given it but in spite of this Government’s action in allowing it a meagre capital with which to operate. The Government told the bank that it could accept deposits, but we know that it receives no deposits other than those which come to it from the Commonwealth Savings Bank which help to provide capital for its operations.

The Labour Party wants a Commonwealth Development Bank. This country is crying out for development. But- we do not want an organization which is misnamed development bank. We do not want an organization which is hamstrung and restricted. As the honorable member for New England has stated, only 2,060 applications for assistance were granted last year. Good Lord, do you think for one moment that if we had a real development bank we would receive only 2,060 applications for assistance from the whole of Australia? It is too silly for words. The Labour Party wants a development bank in the real sense of the term. We would like to see the Industrial Finance Department and the Mortgage Bank Department continue to expand as they were expanding at the end of the war. We do not want the Commonwealth Bank to have foisted on it a development bank which is so restricted and hamstrung that it cannot become a serious competitor of the trading banks.

The legislation provides that the trading banks shall become agents for the Development Bank. If a man has reached the limit of his overdraft with a trading bank and wants to buy a piece of machinery or some plant, if he has an industrial undertaking, or a tractor or farm machinery if he has a farm, do you mean to say that the trading bank would allow that client to go through its door? He would be sent to the end of the counter in the bank and told that he could obtain the equipment and plant that he needed under hire purchase. We know that practice has been going on because the trading banks are associated with hire-purchase firms. What grounds, then, has the Development Bank for expecting that the trading banks will act as agents for it?

Last year, when the credit squeeze was upon us, the trading banks took the opportunity to get rid of accounts that they did not want. Any client who sought financial accommodation from the trading banks at that time was told in a very courteous way that funds were not available, but that he would be given a letter to the Development Bank. That letter would inform the manager of the Commonwealth Development Bank that the trading bank, acting as its agent, had recommended the client for accommodation. The manager of the Development Bank then would take the necessary action. The legislation provides also that the Development Bank need not worry unduly about security, although security is necessary. In other words, the Development Bank need not take as strict a view of the security offering for the loan sought as does any other bank.

According to the honorable member for Barker, no one who has ever sought financial accommodation from the Development Bank has been refused because funds were not available. Following that line of reasoning, can we assume that when a man approaches the Development Bank with a letter from a trading bank, the risk, if the loan is made, will be borne by the Development Bank? The manager of the Commonwealth Development Bank is restricted in his activities by an act of Parliament. It is true that he looks to the success of the business for which the assistance is sought, the integrity of the individual and the possibility that the business will continue to succeed before considering the matter of security, but security is necessary. To suggest, as has been suggested, that this amendment to the act is marvellous from the point of view of primary and secondary industry is carrying things too far. We know that the legislation has been amended only because the Industrial Finance Department and the Mortgage Bank Department of the Commonwealth Bank were so successful.

From its inception, in 1959, the Commonwealth Development Bank became an instant success, as indicated in the report of the Commonwealth Banking Corporation, to which I shall refer later. Australia is not the only country in the Western world which has a development bank. Eighty countries have development banks, the ultimate - goal of which is to foster development in much the same way as the Commonwealth Development Bank seeks to do in Australia. The legislation empowers the bank to provide finance for primary industries as well as for industrial undertakings. We support the purpose of the bill. Our main objection is to the restriction which has been imposed on the undertaking’s capital.

In the last twelve months in particular, this Government has made money available for beef roads, as they call them, in Queensland, and the money has been readily accepted. The first definite signs of interest by this Government were in connexion with beef roads. It is interesting to note that our local consumption of beef per head of population is dropping. This is important, because 80 per cent, of our total production is consumed in Australia. The reason why that money is going to Queensland for beef roads is that the Government is conscious of the fact that we must depend upon our primary industries for the building up of our overseas balances and that therefore every possible assistance should be given to them. The Labour Party contends that if we are really interested in development, if we really want increased production, the only restriction that should be imposed on the capital of this bank is inability to use it..

I do not say that the Development Bank should throw money about willy-nilly, but while it can use capital, following the same lines as it follows to-day in the granting of loans, it should have that capital. We have to increase production to build up overseas balances. The need for money for development is obvious when you go into Queensland. It is true that the rural industries have increased their production by about 40 per cent, in the last ten years, but production could be stepped up further if the necessary money were available. As the population increases, the demand for primary products rises. The growing internal demand makes it necessary for every encouragement to be given to primary production.

I believe that the Development Bank should be closely associated with the Commonwealth Scientific and Industrial Research Organization. I know for a fact that at this very moment in Neebo, near Mackay in Queensland, in the Isaacs River area in that State, field parties from the C.S.I.R.O. are investigating the area. I know also that the C.S.I.R.O. has information concerning what have come to be known as the Dawson and Fitzroy River basins in Queensland. A couple of years ago a senior officer of that organization told me that the primary production potential of those two areas is enormous - the best in the Commonwealth. Capital is required for their development. If there was a real development bank, not one hamstrung by the limitation of capital so that it can deal with only 2,060 applications in twelve months - those applications were spread over the Commonwealth, not coming from only one area - and if the bank was working in close association with another government instrumentality, we would get that substantial increase in primary production for which we are all looking and in which, to all intents and purposes, the Government also is interested. Though the Development Bank was subject to all the restrictions that were imposed by this Government, through the credit squeeze, on the banking system last year, its resources were fully employed. If the Government believes in a development bank, let it lift all those restrictions, and let the institution be a real development bank.

It is true that the trading banks could use this bank to enable them to withdraw their support from some primary producers if they wanted to do so. But the position of the trading banks to-day, as disclosed through the very substantial support for the recent Commonwealth loan, is such, apparently, that they have more deposits than people looking for overdrafts, or else that their customers are cutting back on their bank overdrafts, following a direction to the banks in November, 1960, as part of the credit squeeze. It is quite obvious from the development of the companies and institutions on the fringe of the banking system that the old order is changing, giving place to the new. Apparently the trading banks, by virtue of their association with the hire-purchase companies in a very substantial way, are appreciative of the changes that are taking place within our national financial organization. If this Development Bank is to play its part amid these changes taking place in the financial organization of the Commonwealth, the Government must lift all these restrictions on it and give it capital so that those who are desirous of developing their properties or their undertakings can get the necessary accommodation from that bank, if they cannot get it from the trading banks. Many farmers have told me personally that the Development Bank is conservative in outlook. This conservatism has been brought about purely and simply through the limitation of its capital.

Another matter to which the Government should give serious consideration is the interest rate. According to the report for the year ended 30th June, 1961, the interest rate on moneys received through the Development Bank at present is 7 per cent. - the maximum rate for bank overdrafts in most banks throughout Australia. If the Development Bank is to be a real development institution, and if it is to serve that purpose, it must lend at low rates of interest. The cheaper the money, the greater the use that will be made of its services. To-day the primary producer faces high costs all around him, and receives low prices for his products, by comparison with his costs of production. . If you propose to load a 7 per cent, burden on him through the interest charge on a loan for development, he simply will not borrow the money and the development will not take .place. The piece of machinery will not be bought. If the man concerned is a farmer, the whole community suffers, because there is a loss in production. .On the other hand, cheap money would mean extra production and development, and work for those who to-day are unemployed. All that is bound up with this question. The objections that we of the Labour Party have to this measure relate to the restriction on capital and the high interest rate of 7 per cent. That rate should be cut back. Then we would get the production and development so sorely needed. Incidentally, a reduction in the interest rate might well mean the difference between a man being able to borrow money to remain on his farm and having to go off it. Many farmers, as a result of their experience in recent times - and particularly last year, when bank overdrafts were called up- have had a pretty bad fright.

Now I turn to the report for the year ended 30th June, 1961, of the Commonwealth Development Bank . of Australia. On page 30 we find the following statement: -

Full use of the Bank’s present resources is being made, and it is already clear that in the national interest the present resources will require to .be augmented substantially.

The honorable member for Barker said that no applicant had been knocked back; but the bank’s report states that full use of the bank’s resources had been made, with 2,060 applications granted throughout the length and breadth of Australia, and the batik stated clearly that its present resources will require to be substantially augmented. ‘

I suggest also that as this bank, was not set up for the purpose of making a profit for shareholders, as is the case with the private trading banks, then the interest rate charged could be reduced, and cheaper money made available to those seeking loans. The report also says - - During the year, assistance by way of loan was approved for 2,060 applicants for a total of £10.8 million. This compares with the aggregate for the full year 1959/60 of 770 advances for £5.3 million.

There is an urgent need for. the services of the bank to be expanded. . Customers are waiting to avail themselves of these services. This is borne out by the report - which shows that the number of people, who secured accommodation increased by 250 per cent, between 1959-60 and 1960-61..

On page 31 of the report appears a table headed “ Classification of Loans approved according to Amount”. The total number of loans was 2,060. Of these, 1,469 were for amounts under £5,000. Five loans were made in the industrial field for amounts over £50,000, of which two were for £100,000 or more. The important point emerging from the table is that 1,469 loans were for less than £5,000. If a farmer buys a tractor to-day, half of his £5,000 has gone before he can turn around. By the time he buys a few sheets of iron to put up a shed to house the tractor, and makes a few urgent repairs to fences and other installations, he has very little left out of his £5,000. the report says on page 31 -

The average amounts of the loans approved during the year were Rural £4,300 and Industrial £13,025. The table shows that more than 90 per cent in number of all loans approved during 1960/61 were for amounts of £10,000 or less.

It is only six months since the bank’s capital was increased by £5,000,000, and the report shows that all the resources of the bank were fully utilized. As the Treasurer (Mr. Harold Holt) said in his speech, this increase of the bank’s capital by £5,000,000 was part of the plan to rehabilitate the economy and get it back onto something like an even keel. There is no question that this new money will prove of great benefit, not only to the Development Bank itself but also to the economy as a whole, and particularly to those people fortunate enough to get some of the money to meet their requirements.

The economy of Australia is a developing economy, and a country either progresses or retrogresses according to the level of capital investment, whether in the private sector or the public sector. The credit squeeze of last year applied the brakes to the expansion of Australia’s economy. Consider the chaos that followed. The number of bankruptcies increased and wholesale unemployment followed, and the Government was forced in January last to make available by way of grant extra money to the States in an attempt to reduce the level of unemployment, which had risen to more than 130,000 persons. I hope this additional capital will be quickly employed, and that we will see, as a result, a further step along the road to development.

I support the bill, because the Development Bank is vital from the point of view of Australia’s progress. It is vital for increased production in the future, particularly primary production, and it is vital from the point of view of employment in primary industry.

Mr Forbes:

– I wish to make a personal explanation, Mr. Speaker. I claim to have been misrepresented both by the honorable member for Parkes (Mr. Haylen) and by the honorable member for Kennedy (Mr. Riordan). They both said that 1 had been stupid enough to get up in this House and say that every applicant for a Development Bank loan in South Australia had been accepted. I shall read to the House what I said. It is contained in a “ Hansard “ proof which I have before me, and which has been unaltered. I said -

have been pretty closely in on a large proportion of the transactions made by the South Australian Branch of the Development Bank with rural industry in that State, because the electorate of Barker is the area in South Australia in which the greatest amount of rural development is taking place - in a State in which the high rainfall zone is fairly restricted. I can- therefore say, without fear of challenge, that the bank in South Australia has never, since its inception-

And this is the point - refused a loan to an applicant on the ground that it. did not have sufficient funds available.

If the honorable member wants to know the actual proportion of applications granted in South Australia, it is four-fifths.

Mr WENTWORTH:
Mackellar

. - It seems that this bill should have the unanimous support of all honorable members, and we are, I think, on both sides of the House endeavouring to approach it in a constructive manner. This measure has been brought down as part - and a very desirable and appropriate part - of the Government’s policy to expand employment. It is part of the Government’s policy to push on as quickly as possible with the development of this country. The extra £5,000,000 allocated by this bill will bring the capital of the bank up to about £20,000,000. In terms of banking capital this is a large amount. It is comparable with the capital of the biggest of the private trading banks, and I think it is about double the capital of any of the other banks. It is perfectly true, as the honorable member for Melbourne Ports (Mr. Crean), I think, pointed out earlier in this debate, that the Development Bank does not have access to large deposits, although under section 74 of the principal act it does have the right to receive deposits, and the fact that it does not get them is simply a result of the exercise of choice by the public.

I think it is appropriate that when we decide to provide this extra capital, which is necessary and desirable, we should do so by an act of this Parliament. It is true that the bank can borrow. It can borrow from other banks. Directly, or indirectly, this is a grant of money, repayable, perhaps, by those who borrow it indirectly. Nevertheless, it is a hypothecation of Commonwealth credit to those who would not otherwise qualify for that credit. It is thereforeappropriate for the resources of the bank to be increased, when this is to be done, openly by an act of this Parliament and not by any borrowing or transfer from other banks. Honorable members will remember that section 85 of the principal act states -

The Treasurer may, from time to time, out of moneys appropriated by the Parliament for tha purpose, but not otherwise, lend to, or deposit with, the Development Bank such amounts . . . as are agreed . . .

That provides another way of giving the bank extra capital. I think that in point of fact it might have been more appropriate to use the machinery of that section rather than the machinery envisaged in the present bill to make additional capital available to the bank. I do not say that the extra capital should not be provided. Let me not be misunderstood on that point.

When we read the annual reports of the Commonwealth Development Bank, and particularly the last one, of course, we see a conspectus of its activities. But the reports do not, I think, really disclose the nature of the functions which the bank is discharging. May I remind honorable members of the bank’s real functions. Section 72 of the principal act provides -

The functions of the Development Bank are -

to provide finance for persons -

for the purposes of primary production; or

for the establishment or development of industrial undertakings, particularly small undertakings, in cases where, in the opinion of the Development Bank, the provision of the finance is desirable and the finance would not otherwise be available on reasonable and suitable terms and conditions; . . .

Section 73 (1.) states -

In determining whether or not finance shall be provided for a person, the Development Bank shall have regard primarily to the prospects of the operations of that person becoming, or continuing to be, successful and shall not necessarily have regard to the value of the security available in respect of that finance.

I have summarized the provisions of the act a little, but that is, briefly, the charter of the bank. The Development Bank is not to take over the proper functions of the other banks. That is not what it is for. I think that the prime purpose of the bank is to channel resources and money into directions which are desirable from the national point of view - into fields in which, for some reason or other, there is not the financial backing which gives the security required in a normal banking operation, or in which the money would not be available from some other source on reasonable and suitable terms and conditions.

I come now to the matter to which, I think, the honorable member for New England (Mr. Drummond) was turning his mind. As the position is, we have various requirements to enable us to make the best of our available resources in Australia. I agree with honorable members on both sides of this House who say that making the best of the available resources requires a measure of full employment as well as everything else. I think that honorable members will agree that, when one looks at the Australian economy and at what has happened in the last two or three years, one sees that the most significant frontier of development - the field in which we can get the best results from the employment of additional resources - is almost certainly the development of mineral resources. Here we have our great opportunity both to increase exports and to replace imports. Looking at the matter from the standpoint of applying our resources in a way which will do most to raise the standard of living of the Australian people, one would say that a higher proportion of our resources ought to be channelled into the field of minerals.

I think it is rather a pity, then, that there is some doubt about the functions of the Commonwealth Development Bank under section 72 of the principal act, part of which I read a moment ago. It states that one of the functions of the bank is to provide finance for the purposes of primary production. The act does not, I think, define the term “ primary production “. If one looks at the definition of this term in other acts, one finds that in all probability this expression does not include mining. Certainly, as defined in the Income Tax and Social Services Contribution Assessment Act, the term does not include mining. Nevertheless, mining, in one sense of the term, is primary production. Again, is a mine an industrial undertaking? One of the functions of the Development Bank stated in section 72 of the principal act is to provide finance for the establishment or development of industrial undertakings. I suppose that a mine is an industrial undertaking. It would have been better if these things had been explicitly expressed in the act.

I regard this point as being of particular importance because of the need to obtain from Australian sources more money for the promotion of oil drilling and prospecting in this country. Some time ago, I wrote to the Treasurer (Mr. Harold Holt) about the provision of finance for the search for oil, and the right honorable gentleman very courteously referred the matter to the Commonwealth Development Bank. On 16th May, 1960, he transmitted to me the result of that reference to the bank. His letter was in these terms -

I have now received advice from the Managing Director to the effect that the provision of finance by the Development Bank for oil search purposes is regarded as being beyond the scope of that Bank’s activities.

Under the provisions of section 73 of the Commonwealth Banks Act 1959 it is incumbent on the Development Bank in providing finance to be satisfied that the enterprise financed has a reasonable chance of becoming, or continuing to be, successful. The Managing Director has pointed out that oil prospecting ventures are necessarily speculative in character, and that it would not be possible for the Development Bank to satisfy itself with regard to section 73 of the Act in relation to particular oil-prospecting ventures.

I feel that there is perhaps some straining in the managing director’s interpretation of section 73 of the act. That section provides that the bank shall have regard primarily to the prospects of a venture, and the managing director has taken the word “ primarily “ to mean that it is incumbent on the bank to have regard to the prospects of a venture. The words “ primarily “ and “ incumbent “ are different and they have different meanings. This is particularly apparent since, when one reads section 73 of the act, one sees that the draftsman inserted the word “ primarily “ in opposition to the word “ necessarily “, which appears later in the section. The proper construction of this section, I think, is a little different from that set out in the letter which I have just quoted. lt seems to me that we have here a case in which Australia’s interest in seeing that capital is available for the search for oil justified action which would be unorthodox in banking terms. The Development Bank, however, by its very nature and by definition, is an unorthodox bank. It exists to do things which an orthodox bank does not do - particularly to have regard to the national interest.

I suggest that the bank has three functions in this regard. The first relates to risk capital. I know that honorable members will say that the provision of risk capital is not a banking function. It is not an orthodox banking function, most certainly. I know that honorable members will say that this sort of capital should come from the market in various ways. So it should, indeed, and one hopes that it will. But when it is not available from the market, and when Australia’s interests require that it be made available in some way, the Development Bank, it seems to me, should properly step in and undertake the venture. The terms on which it does so might have to be non-orthodox banking terms, because participation in a risk venture necessarily implies participation in the profits should the venture succeed. Of course, normal bank interest does not cover that kind of thing. Perhaps we do not want the Development Bank to be the equity-owner of large slices of risk capital. [Quorum formed.] As I was saying, the provision of risk capital might be made acceptable to the bank by some kind of machinery taking up rights which could be sold, so that the bank could recoup itself from those ventures which were successful and write off the losses of those which were not successful, and still balance out.

The first of the three functions seems to be to provide risk capital, the second to provide capital to help our exports - or at least our balance of payments - and the third to provide re-adjustment capital, particularly for those rural industries where there is a reason why producers should be helped to remain prosperous on the land. The reason may be that owing to a shift of world markets, or methods of production, the producers are not in a position to carry on profitably under their previous methods of production. Let me give examples of these three things.

Dealing, first, with risk capital, I give the example of oil. I do not think I need go beyond that. It is eminently desirable for Australian capital to be available for the development of our oil potential. It might be said, “ Surely the Stock Exchange can provide this capital?” Perhaps the Australian investor has been lax in not grasping the opportunity to accept the risk. I do not think that any impediment will occur in the future, whatever may have occurred in the past, but it was desirable, and it is desirable for risk capital to be available from Australian sources for oil development.

The second function is to provide capital for export opportunities. I think I mentioned earlier this week in the House the necessity to build up buffer stocks in our export industries. Let me again give one example. I cite our steel industry as a typical example; it is becoming a source of major export income for Australia. We hope that it will continue as such, but if it is it will need to carry large buffer stocks. These stocks are necessary for a combination of two reasons. First, overseas export orders cannot be obtained unless continuity of supply can be assured, and secondly, the internal market fluctuates. Unless we have considerable buffer stocks we cannot be as effectual as we should be in the steel export field. 1 am well aware, of course, of the technical difficulties of holding steel buffer stocks. Most of the stock would not be held in the form of finished products, except in some of the main breadandbutter lines. They would be held further down the production list in the form of ingots or something of that character.

With an Australian production of 4,000,000 tons of steel a year, now rising to 4,500,000 tons a year, one would think that buffer stocks to the order of 1,000,000 tons a year, representing a value of £20,000,000 or £25,000,000 worth of production - not including, of course, the fixed charges - would be needed. This is the kind of thing which we surely should have done in the last six months. If we had built up these stocks we would have provided a much higher level of employment in the industry at a time when employment was needed, and we would be emerging in this period with a much greater capacity to export, and a much greater capacity to earn future export income. I mention this simply as an example of the kind of thing which can be done, and should be done. If the finance is to be obtained, perhaps the Development Bank is one of the places from which this kind of finance might be obtained.

I come now to the third kind of thing I had in mind, namely, re-adjustment capital. This is something which is required particularly for our primary producers, who need it and have merited it and should get help. One thinks particularly of the dairy industry, which is facing difficulties that are likely to be of longterm duration. We should be helping the individual man on the dairy farm. In the last few years we have provided, through price support and direct subsidies, some hundreds of millions of pounds for this purpose, and yet, in many cases - particularly in New South Wales, but not so much in Victoria - the dairy industry remains a depressed industry. We should not tolerate a position where a large group of people are permanently condemned to low incomes, particularly since, with the prospects of meat expansion - if one were to go at it on a big scale, and look at it in a constructive way - some part of this industry could be converted to a condition where there would be no hardship to the dairyproducers, but very much the opposite. Instead of being low-income people they would become high-income people.

This process of re-adjustment is something which requires large capital. The Government has been granting subsidies and not getting returns from those subsidies, and also not giving to the dairy-farmers the return to which they are really entitled. Surely this is the kind of field in which the Development Bank might provide readjustment capital for the help and the expansion of production in areas where real opportunity for development still exists, but there needs to be some change in outlook away from the traditional patterns.

I have tried to put a few very basic, very sketchy, but constructive ideas. The Development Bank is not and should not be regarded as a substitute for a normal trading bank, whether it be the Commonwealth Trading Bank or a private trading bank. It is an unorthodox bank, established for a purpose that is not entirely a banking purpose. But it is nevertheless a desirable bank in the national interest. It is for the purpose of giving employment in this situation that we are now being asked to increase the capital of the bank by £5,000,000.

Mr LUCHETTI:
Macquarie

.- The Australian Labour Party believes that there should be a blueprint for the continuing development of Australia and that full employment should be sustained. We believe that such a programme should not be halted, hindered or disrupted because of a shortage of finance, and that the developmental and financial policies of Australia should harmonize in resolute action leading to rural and industrial expansion. The honorable member for Mackellar (Mr. Wentworth) has offered some criticism of and advice to the Government. He has expressed the view that the people should have higher incomes. The Australian Labour Party declares that all people should be given a chance to earn a living, that there should be full employment, that there should be a continuing rise in the standard of living and that all the proceeds from production in this nation should be spread over the whole community. ..

The honorable member has expressed his views as to how additional finance for the Development Bank might be expended. We are glad to hear some one on the Government side say a word in favour of the Development Bank’. ‘ When it started, it was damned with faint praise by most members of the Liberal Party who, on a number of occasions, expressed their fears as to what the bank was likely to do to the private trading banks. If full consideration is to be given to this measure, we should go back to the beginning - to legislation introduced into the Parliament by the former Treasurer, Sir Arthur Fadden, and to later legislation introduced by the present Treasurer (Mr. Harold Holt). The purpose of this legislation was to dismember and divide the Commonwealth Bank. At that time, it will be remembered, the Commonwealth Bank had a charter. I regret to say that the charter has been departed from in recent years. For the edification of honorable members, and so that these important words will not be forgotten,. I propose to read’ the charter to the House. Upon these words, the case of the Opposition rests. We support the proposal to increase the capital of the Development Bank by £5,000,000, but we point out that there should be continuing growth in this country. This growth should not be piecemeal or haphazard; it should not be in dribs and drabs. There should be a blueprint for development and a blueprint, for the finance that will keep the development proceeding, with all available people fully occupied.

The charter of the Commonwealth Bank as we knew it prior to 1959 said -

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.

We would like to think that we were returning to those fundamental principles. Instead, we have haphazard additionsof sums of £5,000,000 to the capital of the

Development Bank. Instead of this hit and miss, stop and go, eccentric financial policy of the Government, our requirements should be measured, but not only for the next six months or twelve months. We should say to the Development Bank, and the other banks serving the nation that adequate funds will be available to provide for the full employment of our people and the development of our country.

This Government finds itself in an extraordinary situation. Only a short time ago, it introduced the measures which resulted in what has become known as the credit squeeze. The credit squeeze became the policy of the Government and of the banks. The Development Bank also adopted this policy. Mr. Warren McDonald, Chairman of the Commonwealth Banking Corporation, was concerned about what was happening and expressed his opposition to it. He made the plea that something be done to save the Development Bank and that it be given an opportunity to serve the people in the way that some of the more wishfulthinking members of the Australian Country Party probably hoped the Government intended. I believe that when the Development bank was established some members of the Country Party thought it would be the panacea for all the ills of people living in country areas. They hoped that this bank would solve their problems and country people would have no further need to worry about the money required for fencing, pasture improvement and well sinking. Of course, members of the Liberal Party had an entirely different philosophy.

Mr. Warren McDonald, in the course of comments published in the “ Journal of Industry “ of March, 1961, said -

Development Bank finance is designed to assist those whose needs are not met by the other lenders …

That, of course, is well known to us. all. He went on to say -

If might have been felt that a time of financial difficulty . would be the very time at which such a bank would function to the maximum. There is plenty of evidence that the community is not aware that we suffer from the same restrictions as the other banks.

Thatis the opinion of Mr. Warren McDonald, the person in charge of the bank. He made that protest then, and it was not new. He had protested on other occasions at the harmful policies of the Menzies-McEwen Administration. He had pointed out that the Development Bank had been established to help people on the land and had been held out as the one institution that would overcome their great problems. He had also pointed out how necessary it was for finance to be made available. The “Sun-Herald” of 12th February, 1961, reported -

CREDIT RESTRICTIONS SHOULD BE EASED FOR DEVELOPMENT BANK: CHAIRMAN.

Legislation Amendment Urged as Necessary.

The Reserve Bank should be given discretionary power in applying credit restrictions to the Commonwealth Development Bank, the chairman of the Commonwealth Banking Corporation (Mr. W. D. McDonald) said last night.

He went on to support his contention with quite a number of other expressions. If one reads the various statements about the Development Bank, one finds that some of the difficulties are referred to by Mr. Warren McDonald in the report of the Commonwealth Banking Corporation for 1961. He dealt with the fact that the Development Bank was subject to the credit squeeze. He said -

During the year the Bank was required to observe qualitative and quantitative restrictions imposed by the Reserve Bank of Australia in its supervision of the banking system as a whole, for it must be realized that the law, as it stands, requires that the Development Bank shall be subject to controls similar to those applicable to any other bank.

We live in an extraordinary land of fantasy and make-believe where the people are told, “We have the Development Bank and all these avenues to help you overcome your problems “. But at the same time a financial institution, which should have been used to help build up our important primary and secondary industries to provide goods for sale and for the winning of new markets, was being hamstrung by legislation introduced by this Administration. “ Banking Corporation to inspire ‘ bold new schemes ‘ “ was the heading of a newspaper report of another statement by Mr. Warren McDonald. He must have been very depressed when he found that this Government - a Liberal-Country Party Government, a coalition government - had so harmed this important financial institution. Mr. Warren McDonald, who is the Chairman of the Commonwealth Banking Corporation, was formerly a Country Party election candidate, so his words ought to be heeded and respected by all members of the Country Party and other members on the Government side of this House. “The Commonwealth Development Bank has been set up to fill a special need in the economy “, said Mr. Warren McDonald. How disillusioned many people have been in regard to that aim. We all know, Mr. Deputy Speaker, that the Development Bank could play an important part in the development of Australia if it were freed of the shackles that are holding it back at the present time. The honorable member for Melbourne Ports (Mr. Crean), in a very carefully thought out and exceptionally fine speech this afternoon, dealt in detail with the structure of the bank and the fact that the bank is hindered at present because it is not allowed to do what most other banks do, that is, accept deposits from its customers and those with whom it deals. If that is to persist and if this important bank, which should play such an important role in the economic expansion of Australia, is to be denied the right to receive deposits for the purpose of expanding and developing its activities, the Government has something for which to answer. This is one matter that ought to be cleaned up immediately. The Development Bank should be permitted to accept deposits.

Another matter which urgently requires attention is that the Development Bank should have more direct contact with the people. The relationship that exists very largely to-day whereby the private trading banks and other banks become the agents of the Development Bank should be removed and a new outlook should appear under which the Development Bank will go into the country towns and villages and make direct personal contact with the people, know their problems, appreciate their difficulties and help to meet their requirements. If that were done, I believe that a much greater service would be rendered to the country people who need finance at present for either primary or secondary industry. I ask honorable members to have regard to the fact that the private trading banks have their own special interest in these matters. Various speakers, including Mr. Warren McDonald, have expressed the view that the private trading banks were suspicious of the Development Bank. That is an important consideration.

What happens when a customer in Bathurst, Orange, Dubbo, Inverell, Albury, Wagga or anywhere else goes into a private trading bank seeking financial help for the purpose of expanding or developing his property? Very often he is told, “ There are no funds available “; and the Government is blamed immediately because of its restrictive measures. The customer is told that no funds are available because the banks have had to curtail credit. He is not given overdraft accommodation, but is sent to another part of the bank where he is offered money at hire-purchase interest rates.

Every one who has given any thought to the problems of the man on the land appreciates that his fight to make things go and show a profit on his property is more difficult to-day than ever before. Yet farmers have been compelled to seek funds from the hire-purchase partners of the private trading banks, or sent along to receive money from solicitors’ trust accounts. In that case they have to pay through the nose for the money they require to develop their properties. What I am saying, Mr. Deputy Speaker, is not hearsay; it consists of facts and information that I have received from my own constituents. One of my constituents came to me with his tale of woe. He was a good customer of a bank. He sought additional finance for the development of his property. When he asked for that money, he was told that the bank did not have the money, but it could be made available by the hirepurchase branch of that bank. On another occasion he was sent to a solicitor so that he might receive money from a certain trust fund at a prohibitive rate of interest. Is that sort of thing to be tolerated in this country? Is that the way we will help the man on the land? Is that the way we will expand production. Is that the way we will win the fight for the development of our land? If that is to be the way, Sir, it is no wonder that Australia has gone backward over the last fifteen months or so, that there has not been development and that there has been a drift of people from the country areas to the great capital cities and other cities along our coastline.

We need financial leadership, and 1 believe that the Development Bank could help to give the financial leadership that is required in Australia at the present time. Most people in country areas are doing all within their power to try to attract new industries. Some of them are offering land; others are offering assistance in various other ways. They all want to see their areas developed and the population increased. But the recent census revealed the unhappy state of affairs that quite a number of centres have not managed to retain the excess of births over deaths and that people are leaving the country areas and going to the great capital cities. There is need for financial leadership if we are to have decentralization and development in reality. The honorable member for Cowper (Mr. McGuren), in a very fine speech to-day, dealt with the work that could be performed by the Development Bank and how it could serve the people in country districts by helping to establish new industries and safeguard old industries. I believe that if the know-how and experience of the Development Bank were extended along those lines very substantial progress could be made.

I think of the promises that have been made. When I look at the speech delivered by the Treasurer (Mr. Harold Holt) when he introduced the 1959 banking legislation, I see that he said that the Development Bank would have adequate resources. Every member of this House must know, Mr. Deputy Speaker, that adequate resources have not been made available. These words of the Treasurer seem to have a very hollow ring to-day -

The Development Bank will have the powers and resources necessary for the purpose of its important functions.

He said nothing about its being subjected to the credit squeeze; he said nothing of the fact that there had been a continuing demand for funds, as is revealed in the report of the Commonwealth Banking Corporation. He went on to say -

I wish to stress, however, that none of its powers or resources will be capable of use except for the purpose of the functions I have described.

All of those purposes and functions are quite all right, but what is required is the essential money to do the job. The former Treasurer, Sir Arthur Fadden, no doubt would have made us all very happy. In the course of his speech to the Parliament when introducing the banking legislation in 1957, he said this with regard to accepting deposits -

The bank will have power to accept deposits from the public, but it is not envisaged that the bank will rely on deposits as a major source of funds. The Treasurer will have power to make advances to the Development Bank.

It would be a good thing if the Development Bank were permitted to function as was originally intended by the former Treasurer of the Commonwealth of Australia. It would be a good thing if it were permitted to accept deposits from its customers and so augment its reserves and be able to expand its activities.

I have been looking over the “ Hansard “ reports of that time. I was very interested to read the wo.’ds of the honorable member for Melbourne Ports (Mr. Crean) and to listen to his speech to-day. I was very interested in the way in which he clearly divided the attitude of the Australian Country Party from that of the Liberal Party. Undoubtedly, this Government is facing a very serious problem. The greatest evil in the Administration now - as it has been ever since the coalition began - is the unholy alliance that exists between the Liberal Party and the Australian Country Party, for their ideas on some of these matters are diametrically opposed. Their views are completely divorced; they think in different terms entirely about many things. When I read of the extraordinary views of some of the members of the Government parties, the wishful thinking of members of the Country Party hoping that this legislation would solve all their problems, and when I think of the attitude of some of the members of the Liberal Party in regard to it, I realize that that division is greatly emphasized. For instance, at page 497 of volume 22 of the “Hansard” report for 11th March, 1959, the honorable member for Wannon (Mr. Malcolm Fraser) is reported as having said -

Therefore, the scope for the. operations of the Development Bank becomes increasingly smaller as’ the profits from rural enterprises generally decrease.

According to the honorable member for Wannon, we should not be to-day voting an increase of £5,000,000 to the funds of the Development Bank because, instead of requiring additional funds to develop, this institution should now be requiring less money than ever before. The honorable member for Wannon went on to say -

We will serve no useful purpose if we do not recognize the limits to the functions of the Development Bank at present.

The honorable member clearly indicated the point of view of the members of the Liberal Party on the Government side.

I often think of the views expressed by the radicals of those days who were members of the Country Party. The two outstanding radicals of those times were the honorable member for New England (Mr. Drummond), who is still in this Parliament, and the late Sir Earle Page. They dazzled their colleagues in the Country Party with their views about what should be done. They had the vision splendid and they wanted the requisite funds to get the job done. They suggested such works as the Nymboida Gorge scheme and new States, and they were prepared to make money available to do those jobs. Sir Earle Page, in referring to these objectives, said that the real triers should get the opportunity to reach them. I made representations on behalf of one real trier of Australia who was seeking assistance from the Development Bank. I wrote to the Treasurer (Mr. Harold Holt), but it did not help this man’s case very much because the Treasurer does not take a personal interest in the affairs of the small people. To him, representations by way of letter represent merely a piece of paper to be referred on, and that seems to be the end of it. The man on behalf of whom I acted is a man of substance, a hard-working man, a man who has built up his assets by the sweat of his brow. He owns 650 acres of land at Mount David valued at £5,400. He paid cash for the land. He owns it; it is unencumbered. It has a building erected on it, and he wants to erect other buildings, put up a fence and improve his pasture. He owns a. home at Bathurst valued at £5,200, and he has an overdraft from his bank of a mere £290. He owns a tractor, a truck and all the natural assets of a man who has worked all his life on the land, but he cannot get twopence from the Development bank to get on with the work of increasing production and of building a stake for himself there. Both he and his wife have- been reared on the land and could have played an important part in its development. What are the views of honorable members opposite about the Development Bank. The honorable member for Maribyrnong (Mr. Stokes) in this place said there would be no lack of capital for it. The honorable member for Macarthur (Mr. Jeff Bate) was afraid that the bank would interfere with the private trading banks, arid for that reason, he expressed very grave concern about the development of this grand institution. He said that it would have unhindered access to the whole of the financial resources of the Commonwealth Bank, aggregating £734,000,000. He also made other statements. For instance, he said -

I believe that the Development Bank should aim at certain objectives. The first should be to increase efficiency. ‘

He was not concerned about anything else. The honorable member for Bradfield (Mr. Turner) also expressed very great concern about the bank and the possible dangerous’ effects of its operation on the Commonwealth Bank. He said -

The short-term danger is that money poured into’ the Development Bank and pushed out to various borrowers ‘may well have an inflationary effect on the economy.

Fancy making a.,.statement like that in this day and generation, with all of its problems! Again, he said -

Mr. Deputy Speaker, for the reasons which I have stated, I support the general purport of the legislation, but I have grave fears that the Commonwealth Development Bank could be twisted right away from its purpose and used to destroy an institution.

To provide advice and assistance with a view to promoting the efficient organization and conduct pf primary production or of industrial undertakings.

That advice and assistance are badly needed in both industry and primary production to-day. Recently, when Mr. Warren McDonald was addressing the Agricultural Bureau of New South Wales at Hawkesbury Agricultural College, he stressed this side of the bank’s charter. I shall read part of his speech because I think it is something which we should consider and bear in mind. He said -

The assistance which a primary producer needs goes beyond specialist advice which will assist him with a specific problem. . . . What is needed is for some form of assistance which will help him in the general problem of managing his farm as a complete unit. It is important that a farmer has a clear idea where his farm is heading and whether, by use of different methods and techniques, it can be further developed and made more profitable. In some countries, much use is made of farm management consultants whose job it is to give advice as to the potential of the property and the work necessary to achieve maximum results. In many cases these consultants are employed by farmers who themselves pay for the necessary investigation and report. Such a system has much obvious merit. … By using highly skilled consultants who are familiar with both farming practices and financial management, it is far more likely that greater results will be achieved.

He finishes by saying -

Some work of this nature is already being carried out in Australia but as yet it is relatively Insignificant

In my own electorate we are attempting at the present moment to form a farm management committee of this sort which will give advice of a technical, scientific and economic nature to farmers in the Holbrook district. As a matter of fact, the meeting takes place in the Holbrook Shire Hall at 8 o’clock to-night. I mention the meeting in case some of my constituents happen to be listening. I think this form of farm management club is something which could and should be encouraged in every way by the Government and by the Development Bank, because 1 see a greater potential for it improving the efficiency of farming than any other method I know of. We must realize that it is essential that we try to step up the quality of farming.

We cannot go around thinking that everything is all right and that every one farms to the best of his ability, because surveys have shown that some and probably the bulk of the farmers are remarkably inefficient. This goes, of course, not only for the farmers but also for industry in every shape and form. I would not say that they are inefficient; some are more efficient than others. A recent survey made, I think, in the electorate of Indi by some Melbourne university students showed the necessity for this type of advice from banks or from any system from which it is available. In the Benalla district these students carried out a survey and visited some 147 properties to get an idea of how effective they were and how efficient in carrying out their production. It was rather remarkable to note that in an area of high rainfall and one which is naturally short of phosphate and therefore lends itself readily to pasture improvement, there were some 20 per cent, of the farms visited upon which not one hundredweight of super, had been applied in the life of the farm. Honorable members know it is a matter of putting, not one hundredweight of superphosphate per acre on the land, but something like half a ton to the acre in some districts, and you see the remarkable results in increased production.

It was not only in respect of pasture improvement that it was discovered that there was so much to be done. For example, the students said 60 per cent, of the farms visited were unable to water more than 60 per cent, of their farm areas when stocked at the rate of more than one sheep to the acre. Twenty per cent, of the farmers made no provision at all for the supplementary feeding of stock, and on 25 per cent, of farms the standard of household water supply was so low that usage was limited to ten gallons or less per person a day. The students, in this and other ways, show the incredible backwardness of the farms in Australia in a modern age. One could understand this, perhaps, if it was in the outback of the Northern Territory. But I think it shows enough to stress my point that there is still a tremendous area that needs improved efficiency and better management on both the farming and the industrial sides. I am glad that this charter has been given to the bank, and I do not doubt that it will assist in this way.

I recommend the bill to the House and congratulate the Government on making available yet another £5,000,000 for the Development Bank.

Mr BRYANT:
Wills

.- The honorable member for Farrer (Mr. Fairbairn) at last enlightened me upon the reason for the existence of the Country Party. He has pointed out the incredible backwardness of some of the members of the farming community and that accounts for some of the representatives they send here and for the political philosophies they espouse. I would like to take up the honorable member for Farrer on several points which he made in his speech. First of all, he questioned the honorable member for Macquarie (Mr. Luchetti) who had challenged the Treasurer (Mr. Harold Holt) to do something in a particular case. The honorable member for Farrer considers this Parliament is not the place in which to air the disabilities of the private individual or the single individual. That remark is odd, falling as it does from the mouth of a man who has so long and so willingly supported a very distinguished Australian - and his rights and privileges - in the person of Mr. Reg. Ansett. All public legislation should reflect the attitude that a man is worthy of proper consideration irrespective of his estate.

Of even greater importance is the fundamental duty of the Treasurer in administering any act of Parliament for which he is responsible. The charter of the Commonwealth Development Bank is set out in sections 72 and 73 of the Commonwealth Banks Act 1959. Section 73 provides -

In determining whether or not finance shall be provided for a person, the Development Bank shall have regard primarily to the prospects of the operations of that person becoming, or continuing to be, successful and shall not necessarily have regard to the value of the security available in respect of that finance.

If the Treasurer, who is the custodian of this legislation, will not apply himself to the detail involved in the administration of it, what is the use of the parliamentary system? The Treasurer cannot abdicate his duty to ensure the implementation of legislation governing the administration of statutory corporations, just because of some “ hifalutin “ philosophy of non-interference.

This approach was demonstrated just recently by the Prime Minister (Mr. Menzies). He was asked by my friend, the honorable member for Gellibrand (Mr. Mclvor), whether he would give some attention to the obtaining of financial assistance for some of the municipalities in Melbourne. In reply, the Prime Minister said that he could not force the banks - no doubt he could not even ask them - to give a loan or to lower their interest rates. In the field of restriction the Government and its supporters have no hesitation about applying their power. In the field of expansion they are unduly hesitant. The honorable member for Farrer attempted to mislead any people who may be listening to the debate, and to have a misleading impression conveyed by the record, in giving his interpretation of the parliamentary procedures that were followed in 1957 when the Government attempted to force through a fundamental alteration to the structure of the Commonwealth Bank for the benefit of the private banks. In that regard the honorable member’s statements are refuted.

Let me refer briefly to the bill now before us and its relevance to the aims of the Government. I should like to discuss the likelihood of the measure fulfilling those aims, and whether it is in line with the Government’s duty to see that the Commonwealth Development Bank becomes a major banking institution. This has been a great debate for platitudes. We are all very keen about development. I do not know exactly what honorable members opposite mean by the term “development”. It would seem that it is something which must be carried out but which cannot be carried out with sufficient profit to private investors and therefore is a public duty. Therein lies the fundamental difference between the philosophies of honorable members of this side of the House and those on the Government side.

The Treasurer said -

This measure therefore represents a further step for the promotion in a tangible way of the objectives of national growth and development, to which the Government is firmly committed . . .

What is involved in the measure? The capital of the bank is to be increased by £5,000,000. That is a very small part of the sum total of Australia’s national wealth, or even of the funds held by the banking system itself. The latest statistics available indicate that altogether approximately £2,000,000,000 is involved in the banking system and that approximately £400,000,000 is involved in hire-purchase agreements. Yet the Government thinks that, when it invests a further £5,000,000 in this Commonwealth instrumentality, it is introducing dynamism into the drive for development, a return of prosperity, and a regaining of employment. When we say that, we are not knocking the bank; we are knocking only these people opposite who cannot see that they have a duty to use the resources of this nation in a more visionary and expansionist manner.

Despite the fine phrases that were used in describing the functions of the Commonwealth Development Bank when it was established a couple of years ago, the fact is that, when it is compared with the whole Australian financial structure, it represents another fading vision. The same is true of so many other proposals that this Government has implemented or other instrumentalities which it has set up within the last few years. We on this side of the House appeal for a new approach to the activities of the Commonwealth Development Bank and to banking generally. There is no doubt that this bank could be a great instrument for the development of the nation and for meeting the needs of the individual citizen. Unfortunately, honorable members opposite fail to adopt that attitude in their approach to the activities of the banking system or to government generally.

To assess the value of this sum of £5,000,000 by which it is proposed to increase the capital of the Development Bank, we must relate it to the general financial structure. I find it handy these days, Mr. Speaker, to refer to Boeing aircraft, which we buy in fairly substantial numbers and each of which costs £2,500,000. The Viscount and Electra aircraft which bring us to Canberra each week cost £1,000,000 and £1,250,000 respectively. In this country we are used to dealing in multimillions of pounds; but when we come to an issue such as the present one the Government confines itself to a very frugal sum indeed. We of the Opposition approach this matter not in an attempt to knock the Development Bank or to stifle it, but in the hope that we may be able to press the Government into adopting a more visionary approach.

The honorable member for Farrer said that the bank was expanding beyond the wildest dreams of, presumably, an unlimited number of people. The 1961 report of the Commonwealth Banking Corporation states, at page 31, that the Development Bank had made 2,060 loans. Of that number, 508 were for amounts between £1 and £2,000; only two were for amounts over £100,000; and 429 were for amounts between £5,001 and £10,000. Only 2,060 loans had been made up to 1961, yet the honorable member for Farrer said that the bank was expanding beyond people’s wildest dreams. It would not be difficult to find dozens and dozens of ordinary banks in the cities of Australia with more than 2,000 accounts on their books. The Government has not displayed a visionary, expansionist or flexible approach to the activities of the Development Bank. To use a colloquialism, the proposed increase of capital is only chicken feed.

The proposed increase will not meet the bank’s own requirements. At page 30 of the 1961 report of the Commonwealth Banking Corporation, in a reference to the Development Bank, this passage appears -

Full use of the Bank’s present resources is being made, and it is already clear that in the national interest the present resources will be required to be augmented substantially.

That is the view not only of people on this side of the House and of the casual observer, but also of the officers and board of the bank, for whom our friends opposite have such a high regard and to whose views, therefore, we must pay some attention. So, judged on the report of the board, which was handed to the Treasurer and submitted to the Parliament under the terms of the relevant legislation, this measure fails to meet the requirements of the bank. At the present stage of Australia’s development, we cannot regard £5,000,000 as being a substantial augmentation of the bank’s funds. As I pointed out earlier, it is a comparatively small sum when considered alongside what the Government hopes to achieve by this measure. We have become accustomed to the Treasurer and his colleagues, to the accompaniment of optimistic phrases, introducing measures which we know full well cannot possibly achieve the results that it is so desirable to achieve for the national well-being.

The Development Bank has to be expanded substantially. Its charter has to be widened. Opposition members are convinced that it has to apply itself more vigorously to the charter which it has been given and expand into the community generally. So, Mr. Speaker, we say that the measure does not meet our requirements. The bank itself is failing to be developed in the way in which we thought it would be developed. Everybody was prepared to have high hopes for it a couple of years ago. We have looked in vain to members of the Australian Country Party to support us. Operating as they do as another satellite of the Liberal Party of Australia, the country person can look in vain for assistance from the Country Party in developing resources.

I should like to examine for a moment section 73 of the Commonwealth Banks Act to which reference has been made. This gives to the bank its charter to provide finance to persons for the purposes of primary production or the establishment or development of industrial undertakings, especially small undertakings. Section 73, sub-section (1.) of the Commonwealth Banks Act reads -

In determining whether or not finance shall be provided for a person, the Development Bank shall have regard primarily to the prospects of the operations of that person becoming, or continuing to be, successful and shall not necessarily have regard to the value of the security available in respect of that finance.

I do not represent an electorate in which many people go to the Development Bank for support. But I happen to come across instances as does every honorable member, I presume. Honorable members on this side of the House are convinced that the principle stated in this section is not being applied any more than the spirit of section 47 of the Repatriation Act is being applied. The honorable member for Parkes (Mr. Haylen) and the honorable member for Macquarie raised this point this afternoon. We feel pretty certain that the Development Bank is applying ordinary banking principles to applicants for loans. Of course, the Development Bank was established to apply a different principle - a new principle - and bring a new concept into the field of banking.

This is a field which could have offered the greatest possible opportunity to the Government to do something rather spectacular. Banking, I believe, has failed to take up the slack in the community. This is a changing world. I believe that the philosophy of the Liberal Party, based on a materialistic concept of evaluating a person’s place in the community by his assets, is failing to meet the needs of the community. We have only to examine the difference between the approach to hire purchase and the approach to banking finance to see this. A citizen goes into a bank and applies for finance and he is asked for security. It is obvious that that occurs in the Development Bank also. In this age, the banking system should be able to invest in the integrity of the ordinary citizen. That is what the hire-purchase system does. A person can go into a car show-room with a deposit of £400 or £500 and drive out a £2,000 motor car simply by signing on the dotted line. He is taken at his face value. The law of averages will prove that the average citizen, when faced with responsibility, will measure up to it. This has brought great dividends to the hire-purchase companies. They are investors in the integrity of the ordinary citizen. They are putting their faith in the ordinary citizens’ stability and integrity. But the banking system is not doing that. I believe that this is where it is lagging.

This is a field into which the Development Bank could venture in a more spectacular way. I hope honorable members opposite, encouraged by members of the Country Party, will do something of this nature. The honorable member for Mackellar (Mr. Wentworth) pointed out this afternoon that this bank could move into the field of unorthodox banking where ordinary banks will not venture. It could be an equivalent of the Export Payments Insurance Corporation, lt could be an extension of the attitude exemplified by the National Shipping Line and of that which has occurred in the airline industry in which the Government uses the resources of the community, not necessarily or specifically for the community’s benefit, but to protect private enterprise. It uses the community’s whole resources as a subsidy for private owners of the means of production. This is one of the great dangers that we face in the oil industry. That industry, was handed over to private exploiters. So we find that subsidies have been given for oil search but the Government will not own a pint of the oil which has been discovered.

The honorable member for Mackellar (Mr. Wentworth) expressed an attitude which I am afraid is fundamental to the philosophy of the Liberal Party. He said that when the private enterprise magnate does not feel there is any dividend to be gained in a certain field it should be left to a Government instrumentality and public enterprise. When the field has been ploughed and the crop planted, along will come others to reap the benefit. We believe that this is something to which the citizens of Australia should give close attention.

There are some fields to which I think the Commonwealth Development Bank ought to turn its attention. I cannot understand why development should always mean something far beyond the horizon. It seems that it must always be rural development. It must be as far away from where people live as possible. National development should include everything in the community. To make a street in a metropolitan area is just as much national development as to put a beef road through the back-blocks of Queensland or the Northern Territory. There is a field for the Development Bank. I believe that it should be a great support for municipalities. Local government in Australia is struggling under a tremendous burden with insufficient funds. It has to pay high interest rates. Of course, this is a high interest government. Local government and community development could well be fields in which the Development Bank could expand. It might also expand in other fields such as housing.

If we must remove certain sectors of the economy from the ordinary banking procedures so that the bankers themselves apply different sets of values there is ample scope for us to do so in an imaginative way. There is one field in which the Development Bank could have more flexibility - the Commonwealth’s own activities. It has been mentioned on the other side of the chamber that there should be another steel industry in Australia. There is no private firm in Australia which could embark on the establishment of a new steel industry. It is doubtful whether any State government has the resources to do so. But the Commonwealth Bank and the Development Bank could well support a State government which desired to embark on this kind of industrial venture.

I believe the time has come to apply a new principle in banking. First of all, we have to depart from the materialistic concept that a man is only as good as the security he owns. This concept has turned the Commonwealth Bank into another rich man’s bank. If you go into a bank in a country town, as I have done, and inquire on behalf of some people how much money they would need to buy an £11,000 or £12,000 property in the district, you are told that they would need £8,000. That might be a small sum to honorable members opposite but it is a large sum to the average Australian.

I believe that the Development Bank and the principles which have been written into its charter are sound. We have to invest in the integrity of the every-day citizen which is apparent every day of the week. You walk into a shop and you may cash a cheque. You walk in somewhere and you can buy something on terms. This exemplifies the reliance placed on the face value of the ordinary citizen. The banking system will fall behind in the role that it has to play in the community unless it, too, accepts these values.

In support of the honorable member for Macquarie (Mr. Luchetti), who cited an individual case, I also shall cite one. A friend of mine in Victoria, who has for 23 years been share-farming a property and has proved his capacity to produce and to farm effectively, has had suddenly fall before him a proposition under which he may purchase the property. He has no capital other than what he has invested in the property to turn it into a productive unit, plus £1,500 or £1,600. He needs £9,000, but go where he will, he cannot get it. 1 can telephone the kindliest of people, all of whom are courteous and friendly and will advise him to go somewhere else. Unfortunately, I am afraid, the Commonwealth Development Bank is included amongst these. When I, as the representative of an industrial electorate, can cite such an instance, I am sure that people from the other side of the House and also people from this side who have come newly to the Parliament from all over Australia can cite dozens of other cases.

I challenge the Government and the Treasurer to follow up the statement in the bank’s report to the Parliament, to the effect that its present resources require to be augmented substantially. We do not expect that we shall develop this nation by talking platitudes or generalities, or by using such phrases as that which was used by the honorable member for Farrer - “ Expanding beyond the wildest dreams “ - or that of the honorable member for Mackellar - “ This is to operate only in the fields of unorthodox banking”. I hope that the Government will take a second look at the very miserly capital it has advanced to this bank, which runs to some £45,000,000. This is a country in which some of the biggest industries are making almost as much as that annually in profit. If honorable members opposite turn their glances more closely to the ideals that they espouse - enterprise, vision and development - and do something about the Commonwealth Development Bank, they will be playing a much more constructive role in the nation’s future.

Sitting suspended from 5.57 to 8 p.m.

Mr BARNES:
McPherson

.- Mr. Speaker, I support this bill, and I congratulate the Government on making these funds available to the Development Bank before its existing capital becomes exhausted. Honorable members opposite suggest that loans have been refused by the bank because it has suffered from a shortage of funds. That is untrue. The words used to describe the present capital position of the bank have been misinterpreted by the honorable member for Kennedy (Mr. Riordan) and others as an indication that its funds are exhausted. I direct the attention of those honorable members to the following quotation from the report of the Commonwealth Banking Corporation -

Full use of the Bank’s present resources is being made, and it is already clear that in the national interest the present resources will require to be augmented substantially.

That does not suggest that the bank has been completely devoid of funds. If the bank were devoid of funds the word “ funds “ would have been used instead of the word “ resources “.

It is also very interesting to hear the comments of some honorable members opposite in view of the statements contained in the policy speech that the Leader of the Opposition (Mr. Calwell) delivered during the last general election campaign. That honorable gentleman gave an undertaking that bank nationalization would not be contemplated by a Labour government; but if we listen to honorable members opposite we can observe how readily they could achieve bank nationalization, probably by some back-door means. For instance, the honorable member for Wills (Mr. Bryant), who spoke before the suspension of the sitting, said -

We do not want a hifalutin’ philosophy of noninterference as adopted by the Government.

I think we may conclude, from those words, that if honorable members opposite were in power there would be quite a lot of interference with the banking structure. It is interesting to have our opinions of the Opposition’s real policy substantiated in that way by a member of the Opposition.

Mr Beazley:

– What of your credit squeeze?

Mr BARNES:

I remember that in northern Queensland some years ago there was a strike of the meat workers and the entire fat cattle turnoff of northern Queensland for the year remained on the properties, lt must be remembered that in northern Queensland we have only one season and, if we miss the opportunity to market, we must hold the cattle for another year. That would mean a loss not only to the pastoralists but to the community of northern Queensland in particular and the community of Australia in general. Those are some of the uncertainties that confront the man on the land.

The honorable member for Barker quite rightly said that the man on the land looks to his income to provide developmental funds. The man on the land is in a very difficult position. Unfortunately, many farmers are misled about the terms of the charter of the Commonwealth Development Bank. I am afraid honorable members opposite do not do much to enlighten them. I know that people in my electorate feel that the Development Bank is designed to provide finance to people who have sufficient collateral to obtain finance from the existing trading banks. That is not the purpose of the Development Bank.

We do not want to displace the private banks. They are part of the great economic structure not only of Australia but of the British Empire. No other banking system can boast a reputation as high as that of the English banking system. During the war years the banks were under very strict control and since the war they have had a very hard row to hoe. They have been controlled in many ways. Interest rates have been controlled. Unfortunately, the Government has no control over the fringe banking system. Prior to the introduction of the Government’s economic policy the financial institutions outside the traditional banks were lending money at 10 per cent, on call. Such finance is readily usable in city areas, where it is easily repaid, but in rural areas it is useless because owing to conditions beyond his control - falling export markets and rising internal costs - the fanner is in a serious plight. The 40-hour week, for instance, was a grave set-back to the primary industries. Do not let it be thought that I am advocating a reduction of hours. In my remarks a few weeks ago I did not advocate a reduction in working hours. I have asked honorable members opposite what is their attitude to a 35-hour week, which we would have had if Labour had been able to form a government. The difficulties to which I have referred are those which confront the farmer when he seeks finance.

Mr SPEAKER:

– Order! I remind the honorable member that the subject before the Chair is the increase of funds for the Commonwealth Development Bank.

Mr BARNES:

– Many people look to the Development Bank to provide them with necessary funds, but the bank’s charter is very limited. The farmer cannot pay high rates of interest. Figures compiled by the Division of Agricultural Economics show that in Queensland the average pastoral holding is 35,000 acres and the capital employed is £79,000. The income earned on that capital represents 3.9 per cent. Obviously the pastoral industry cannot afford to pay high interest rates for finance. In New South Wales the average holding for wheat and sheep is 21,000 acres. The capital employed is £45,000, on which the return is 3.5 per cent. In Victoria the average holding for wheat and sheep is 1,800 acres. The average capital employed is £27,000, on which the average return is 9 per cent. In South Australia the average holding is 60,000 acres and the average capital employed is £48,000, on which the average return is 4.8 per cent.

Those figures will serve to indicate the so: ry plight of the industry. We must restore the industry’s ability to pay reasonable rates of interest. I remember that in the years prior to the great depression the primary industries could afford to pay interest at the rate of 7 per cent. or. 8 per cent., but to-day that is impossible. - We must find a way to restore a more profitable climate to the primary industries. That cannot be done by adopting the Opposition’s suggestion of compelling the banks to lend money to primary producers. The right way to increase the ability of the farmers to pay reasonable rates of interest is to restore their prosperity.

The honorable member for Barker said that increased efficiency has been made possible by the 20 per cent, income tax allowance granted in the early 1950’s in respect of plant and improvements. I agree with the honorable member. But for that allowance many primary producers would be out of existence to-day. We must go further and enable the primary producer to keep more of the money that he earns from the land. I do not think an allowance of 40 per cent, in respect of plant and improvements would be too great. I think all honorable members realize that the measures that were adopted in November, 1960, were designed to assist the primary industries by preventing costs from rising. That has been acknowledged by the National Farmers’ Union. The rise in costs has been arrested and we must now find some way by which to restore prosperity to the farmers. I commend the Government on bringing down this bill.

Mr REYNOLDS:
Barton

.- In a speech lasting nearly twenty minutes - 30 minutes were available to him - the honorable member for McPherson (Mr. Barnes) traversed everything except the Commonwealth Banks Bill. He covered everything from the sequel to “ My boomerang won’t come back” to the present banking set-up, which he seems to regard as ideal.

That opinion will not be shared by many of his constituents or by the people of Australian generally.

I think we can say that the Australian Labour Party supports the concept of the Commonwealth Development Bank in principle. However, we have four main points of criticism of the bank as it is at present constituted and operating. The first criticism is that the bank is hampered in its operations because of restrictions placed on it by its charter. Secondly, we say that the bank has been, and probably still is, under-capitalized. Thirdly,’ we say that in its lending pOliCy it has been too pre-occupied with conventional’ ‘banking considerations regarding collateral and other security, instead of being the bold, imaginative and enterprising institution that most people hoped it would be. Fourthly, we believe that there has been no attempt whatever to relate the functions and the concept of a development bank to an overall plan for Australia’s national development. The concept of a development bank should be inspiring and challenging to Australia in its present stage of development, but nobody can suggest that this bank, when its capital is so restricted, can arouse any great excitement.

Let me return to the first point I made: That the Development Bank is hampered in its operations by the restrictions imposed by its charter. We heard the honorable member for McPherson expressing the conservative, cautious attitude that has prevailed in vested banking interests and among the conservative people who support them. We have : heard of the fear that a vigorous national development bank would be a challenge to private banking in. Australia. I do not think many people would be terribly worried if the Development Bank did develop into something that offered a strong challenge to the kind of policies that have been used in the past by the private banking system, the effects of which primary producers, among others, have had to endure. Primary producers would be glad, knowing the vagaries of primary production, that such a bank was available, not as a last resort but as a prime resort, and as a bastion for them in their troubles. I do not think there are many primary producers in Australia who fail to remember the past.

To-day, the banks can be excused for their shortcomings because of the policies of the Government, but primary producers can remember when the banks were not particularly helpful to the primary industries in times of bad seasons, floods and bush fires. Many of these people had high hopes that the Development Bank would be an inspirational institution that would give the kind of security that those engaged in primary industry, above all, have missed so much. Most of us in other walks of life have tried to surround ourselves with a measure of security, and we have been able to do so much more than have the primary producers. As a result of lack of security, many- people have left primary industry. I am one such person. My background and that of all my relatives is primary industry, work on the land. I realize the insecurity of such an existence. Men and women, and whole families, devotedly worked their farms from daylight to dark and still ended their days not much better off than when they started, mainly because they were forever in the hands of financial institutions which extracted from them the greater part of the proceeds of their labour and sweat.

The concept of a national development bank was that of a bank which would give reasonable terms and reasonable consideration to the adventurous, the imaginative and the hard working; but this Development Bank has not yet materialized in that form, and I shall give a few reasons for that statement. The Commonwealth Bank has been divided. The Australian Labour Party believes that it has been divided to prevent it from becoming a challenge to other institutions, or the back-door to socialism, as some people would have us believe. The Commonwealth Bank has been divided in its “ structure, and this had impeded the Development Bank in the amount of finance it has been able to make available to those who wished to borrow from it. The Development Bank has been defined as a bank of last resort. The charter of the bank has been so written that you cannot get accommodation from it unless other sources of finance are not available to you. Thus, it is a bank of last resort.

It is left to a comparatively few people to determine that it is, in fact, your last resort, to determine that the other sources available to you - if any are available - do not offer reasonable terms or terms that are satisfactory for the enterprise upon which you are engaged. I have distinct qualms about putting so much power into the hands of so few people. The charter of the Development Bank states -

The functions of the Development Bank are-

to provide finance for persons -

for the purposes of primary production; or

for the establishment or development of industrial undertakings, particularly small undertakings, in cases where, in the opinion of the Development Bank, the provision of the finance is desirable and the finance would not otherwise be available on reasonable and suitable terms and conditions;

I know of cases - and so do others - in which the Development Bank has said that applicants for loans must seek accommodation from some other institution. When another institution has indicated that it will make accommodation available under very stringent and costly terms, the borrower has been obliged to go to that institution. The fact is that in the year 1960-61, the Development Bank provided in all £24,900,000, of which £10,800,000 was in loans and £14,100,000 on hire purchase, mainly to buy farm equipment.

The other point I want to make while I am dealing with the restrictions imposed by the charter of the Development Bank is that the bank is subject to the same restraints by the Reserve Bank - which means, in the ultimate, this Government’s policy - as is any other bank. Let us examine that point. During the credit squeeze we recently passed through, the Development Bank was subject to the same restrictions in the issue of credit as was every other bank. But this was supposed to be a different kind of bank. It was supposed to help to develop Australia, but it was subjected to the same kind of restrictions as were imposed on other banks. The credit squeeze was imposed on the banking structure generally, first, to dampen the demand for the goods that were flooding in from overseas, including consumer goods, and particularly imported consumer goods. The second purpose of the squeeze was alleged to be to divert capital, materials and labour to more essential needs. It was said that some luxury or less essential industries were making great demands on men and materials. The thesis was that we had to have a credit squeeze so that, on the one hand, we could dampen the demand for consumer goods and, on the other hand, we could divert men, capital and materials into more essential industries.

What happened? The credit squeeze certainly dampened demand for consumer goods. It hit both essential and non-essential industries and it depressed demand for overseas commodities; but the second objective did not materialize to the extent that At, should have. Men were disemployed-

Mr SPEAKER:

-Order! I think the honorable member is getting away from the bill. This is a measure dealing with the Commonwealth Development Bank.

Mr REYNOLDS:

– I am speaking to a point raised-

Mr SPEAKER:

– Order! I ask the honorable member not to allow a point to supersede the subject-matter before the Chair. He is within his rights in making a passing reference to the point, but he must not develop it.

Mr REYNOLDS:

– I shall not labour the point that the bank has been subjected to the same disability as were the other banks as a result of the credit squeeze. The Development Bank, which should have been able to stimulate the development of worthwhile essential community projects, the resources having been diverted or disemployed from non-essential industries - or what the Government considered to be non-essential industries - was inhibited in carrying out the second important function, to employ these people in nationally desirable projects. The Chairman of the Commonwealth Banking Corporation went to some length in newspaper reports, in public addresses and in the corporation’s own report, to direct the attention of the Parliament to the fact that the bank should not be subjected to the same restrictions as were the other organizations. He begged that the bank should be placed in the position of having discretion to make money available to assist nationally desirable projects.

The second criticism I make against the bank as at present constituted and functioning is that it has been under-capitalized. If we think of a national development bank we think of something which is commensurate with the task of developing Australia. After all, we have a budget of something like £1,700,000,000 but the capital of the bank as at June last was £15,800,000. Since then there has been an increase in its capital of £5,000,000 and the measure now before us proposes a further increase of £5,000,000. I suggest that £5,000,000 is an awfully small amount of money when’ one thinks in terms of national development. I am grateful to my colleague, the honorable member for Wills (Mr. Bryant), for the comparisons he gave prior to the suspension of the sitting for dinner. To bring into perspective what £5,000,000 means in terms of national development one has only to look round this city of Canberra in which one high school alone has cost almost £500,000. The Canberra lakes scheme, to which I have no objection, will cost £2,000,000. One simple little project among many in the National Capital will cost almost one-half the increase in capital proposed under this bill for national development.

When I, with my colleagues, went to the Northern Territory and the north-west of Australia last year to look at what was going on, we learned that the Brunette Downs cattle station had spent £250,000 in two years on erecting fences, subdividing paddocks and sinking bores. So the Australian Labour Party states now, as it stated when previous bills of this kind were before the House, that the proposal contained in this bill is totally inadequate to meet the scale of national development which we envisage. We have set up the Commonwealth Development Bank. It should have a capital commensurate in some measure with the great task which confronts it.

The Chairman of the Commonwealth Banking Corporation had this to say on page 8 of the corporation’s report for 1961 -

There are compelling strategic and political reasons why Australia’s population must continue to expand at the greatest possible rate and, as full employment must be maintained, this necessarily involves corresponding growth in the economy. Now a new influence-

I think a very important influence - towards expansion is just beginning to appear in the form of additional children leaving school and seeking jobs. This is a result of the high post-war birth-rate, and the next few years will witness an exceptionally large increase in the number of young people entering the work force.

And, I add, an exceptionally large number of people who would like to take up a block of land and thus play their part in developing Australia. Thousands of youngsters to-day who have imagination, zest and the will to do the job are being inhibited simply because capital and the opportunity are not available for them.

Mr. Callaghan, General Manager of., the Commonwealth Development Bank, went on record on 4th November, 1960, in an address to the pasture and animal husbandry school at Gundagai as saying -

Australia needs increasing farm efficiency and higher productivity to combat narrowing net rural incomes.

The honorable member for Mcpherson made the point that farmers usually are limited in their developmental projects by the extent of their own income. I do not think that should be the case. Why should people in rural pursuits be treated differently from people in any other enterprise? Why should they be dependent on their own income? Why are not the same opportunities available to them to raise credit as a capital investment for the development of their farms? Why should they have to depend solely on depreciation grants? I have no objection to generous depreciation grants to primary industry, but the simple fact is that many of these people who want to launch out - that is what development seems to connote - do not have the opportunity to obtain capital at reasonable rates. The Development Bank has been their hone, but for many that hope has not yet materialized.

Primary industry generally and members of the Country Party in this House often complain and direct attention to the problem of costs in primary production. Costs have been increasing but unfortunately we do not hear very often from members of the Country Party any reference to the high burden of interest rates which is an important component of primary production costs. This is a most insidious item going through the whole structure of the enterprise. A good deal of this cost structure could be affected if more reasonable interest rates were available to people who are engaging in what, after all, is very important for their own and for this country’s welfare.

I suggest that the Commonwealth Development Bank has not kept pace with new ideas and practices and modern farming methods, to say nothing of industry. I am acquainted, and recently was reacquainted, with what is happening on farms not very far from here in the southwest of New South Wales. One sees lucerne growing on the sides of hills where in days - gone by one would never have dreamed of seeing it. One sees rich fodder growth as a result of the expert scientific advice which has been made available. One sees groups of 40 or 50 young farmers in a district not very far from here engaging a full-time professional scientific adviser, part of his function being to act as an agronomist, to give advice on soil and pasture improvement. On almost any fine morning while travelling through the countryside one sees aeroplanes scattering fertilizer and dusting crops to get rid of pestilence, weeds and so on. These are new developments which demand capital and something different from the conventional forms which we knew in days gone by. This is the new era in the development of Australia’s primary industries. Go up north and you find the same thing. It is no longer the old business of droving cattle across a continent and of allowing cattle to stray for miles. No! New capital costs are being incurred. There is regular dipping, controlled breeding, sub-division of paddocks and pasture conservation. These things now are dominating the scene and they require additional capital, which must be provided on reasonable terms if Australian primary products are to hold their place in world markets. No doubt the Government supporters who went on their separate trip north must have come up against the same complaints as the members of the Opposition received when they visited the Northern Territory. People everywhere said, “This so and so Development Bank! What’s wrong with it? I can’t get any money. I have £100,000 of collateral, and I only wanted about £2,500 to put in a bore, but I could not get it.” Some one would say “ I believe Warren McDonald was on that plane. I want to see him.” We ran into these complaints everywhere. Of course, one does not have to go to the Northern Territory to hear them. They can be heard virtually on any farm in this local community. Everywhere it is the same - the farmers are being forced into the hands of the usurers for loans, though usually it is only short-term accommodation that they need. This socalled Development Bank is stunted and inhibited in what should be its function and purpose. This is not the dream that many young enterprising Australians had when they heard of the creation of a development bank which allegedly would give particular help to the man on the land and ‘also to the man in small-scale industry. That dream has not materialized, and I do not think it would be appropriate for this Parliament, in any mood of self-satisfaction, to pass this bill without realizing that as part of the process of growing, this Development Bank will have to be capitalized to a far greater extent than it is to-day if it is to be the institution we would like it to be.

The bank’s report indicates a total of 2,060 approved applicants for loans in a twelve-month period - not a great many really when it is spread over primary and secondary industry. I suppose that naturally, one hardly expects to receive in such a report advice on how many applicants were not satisfied - ‘how many were knocked back. But I can retail stories from my own experiences. The honorable member for New England (Mr. Drummond) who has no political axe to grind, frankly told the House this afternoon that he had many unsatisfied clients of the Development Bank among his constituents. If every honorable member were frank enough he would acknowledge the same sort of thing. It is true that in many instances, applicants are not entitled to loans as they could get accommodation elsewhere. But many are not in that position and I have in mind at the moment particular cases, one of which I have told honorable members about before. I will tell the story again because it has progressed further.

A young chap who lived in southern New South Wales and whom I know very well went into a ballot conducted by the Queensland State Government for a block in a subdivision in central Queensland, up around Urunga. Only four blocks were available for the 500-odd applicants. This is what I was referring to before when I. spoke about all the youngsters who would like to get on the land. The list of applicants was whittled down to something like 325, because some of them were not regarded as suitable persons for the ballot; they lacked the necessary experience of farming and generally did not conform to the standards required by the State department in control of the ballot. Finally, 300-odd went to the ballot and this close friend of mine was one of the lucky ones. But he could not get a penny from the Development Bank, after having passed the scrutiny of the. State Government and of its instrumentalities. The bank officials raised all the conventional problems that a bank does raise: What would happen if there were floods or bush fires?

Here was a nationally desirable project - the subdivision of a big area of land that was being virtually wasted. Successful applicants for blocks would be required to carry out certain improvements including fencing, water conservation, the building of sheds, the provision of dipping troughs and other things of that sort. All these things had been stipulated and these young fellows who won the ballot were willing and indeed desperately anxious to get on the land. But my friend could not get one penny from the Development Bank! In the long run, he got some money from the Queensland Agricultural Bank. He has gone on with the job, but he was not put on the property by the Development Bank. He has been there for two years now and he is going along quite O.K., though not as well as he could. He has had to provide agistment - other people have been renting parts of the property. He is progressing; he is buying as much cattle for breeding purposes as his funds will allow, but the land is not being utilized to its full capacity, to the disgrace of Australia and to his own frustration. This young fellow will get by. He will meet his commitments all right. But he received no encouragement from the Development Bank.

That sort of story is, unfortunately, too familiar. I am hoping that what is said in this Parliament will seep through to the Development Bank. It is all right for bank officials to say that politicians cannot make judgments about what is a good project for a bank to finance, but there must be some checks, for nobody supposes that the bank officials are the final authority in these matters.I dare say that they will appreciate comments coming back to them and that, perhaps, there will be an easing of the policy and a bolder and a more imaginative approach. What is more, if the bank did this it would have the support of the Australian people and the Australian Parliament.

Just as our speeches here had, I am sure, some effect in getting additional capital of £5,000,000 on two occasions recently, I am hoping that our remarks here to-day will lead to the Development Bank taking a less cautious approach in these matters. It is merely begging the question for Government supporters to say that there is no shortage of funds; that there is money in the bank and no excessive demand for money. Of course there will be money left in the bank if you disqualify a lot of the applicants. That is one certain way of ensuring that all the funds will not have been expended at the end of the year.

I hope that there will be a bolder and more imaginative approach by the Development Bank to its task and that such an approach will have the sanction of this Government. I strongly suspect that at least the Leader of the Australian Country Party, with whom I have had some interesting and informative conversations about this matter, would be much our way In supporting such an approach. I believe - and I do not say this as political banter - that the Development Bank has been held back principally by the Liberal Party and the interests that it represents. This is something that is inhibiting Australia’s development.

My final point is that the whole concept of a Development Bank ought to have been related to the broader concept of Australian development; it should have been an integral part of an overall plan for national development. How marvellous it would be if, instead of scraping along with successive credit squeezes and ad hoc decisions, merely edging our way along the road towards development, we were to set up national targets for Australia’s development and back them with a strong Development Bank.

Mr MACKINNON:
Corangamite

– Mr. Speaker, the purpose of the bill before the House is to increase by £5,000,000 the capital of the Commonwealth Development Bank. This is really a second instalment, making a total increase of £10,000,000 during the current financial year. So that we may get our facts quite straight, let me say also that this brings the immediate resources of the Development Bank to close on £26,000,000. Of course, the bank has many other resources at its disposal. It has power, for instance, to borrow from the Commonwealth Savings Bank. When all these financial resources are taken into account, it will be readily realized that the Development Bank must exercise a very substantial influence on the kind of lending for which it was designed.

I agree with the honorable member for Barton (Mr. Reynolds) that the conditions applying to other financial institutions, in regard to the previous twelve months’ transactions, have applied equally to the Development Bank. In other words, the bank’s policy has been of a slightly restrictive nature, perhaps, compared with what their normal lending activities would be.

First of all, we must fix clearly in our minds the object of this bank. The establishment of the bank constituted a novel departure. As we know, it took over the activities ofthe Mortgage Bank Department and the Industrial Finance Department of the Commonwealth Bank at the time of the re-alignment of the Commonwealth banking institution. In the first annual report issued by the bank, which is now before honorable members, while the bank accepts the possibility, and even foreshadows the probability, that it will require more resources, it appears that so far the funds at the bank’s disposal have been sufficient. At the same time, if the bank is to develop as we hope it will, and play an increasingly important part in the progress of our rural and smaller secondary industries, then it is obvious that it must require additional financial assistance in the future.

It is interesting to consider the attitude of the Opposition to the reconstruction of the Commonwealth banking institution which took place in 1959. The Opposition completely rejected the legislation when it was introduced in 1959. On page 811 of “Hansard” of 19th March, 1959, the Leader of the Opposition (Mr. Calwell) is reported as having said -

The title of the bill ought not to be “ The Commonwealth Banks Bill” but “A Bill to strangle the Commonwealth Bank “.

How wrong he was? Since that legislation was enacted, not only the Development Bank but also the various other sections of the Commonwealth Banking Corporation have gone from strength to strength. On page 812 of the same volume of “ Hansard “ we find that the Leader of the Opposition said: -

This is not good legislation. These bills are not brought forward to reform the banking legislation but to deform and mutilate the Commonwealth Bank.

How wrong he was again! I think he must have known, when he made that remark, that with normal developmental progress in banking in Australia such things do not happen in the way that he foreshadowed. In fact the Commonwealth Banking Corporation, in all its activities, including its Reserve Bank function, has achieved signal success.

I ask honorable members to cast their minds back to the slightly more imaginative approach to financial matters of the late King O’Malley, who is credited with being the Labour progenitor of the Commonwealth Bank. He had a much wider conception of these matters than any of the honorable gentlemen opposite have to-day. He was a man who was essentially an Australian, and who was not loaded down with socialistic banking theories. When he advised his government to establish the Commonwealth Bank, he visualized it, not as an institution designed to capture financial control of the economy, but as an organization which would be of value in the development of Australia. King O’Malley would be turning in his grave if he could hear the speeches of some honorable members opposite.

As I said, the bank took over the activities previously carried on by the Mortgage Bank Department and the Industrial Finance Department of the Commonwealth Bank. It was specially designed for small undertakings, as a source of finance supplementary to those existing in the ordinary financial structure of the country. I would like to refer to several remarks made by the honorable member for Parkes (Mr. Haylen), who sits on the front bench occupied by members of the Australian Labour Party. He said that during its period of operation the Development Bank - and I remind the House that we have before us the first report of the bank covering a full year’s operations - had been strangled because it had not been provided with enough funds. I suggest that the people of Australia, who are interested not only in the activities of the bank in promoting the future development of Australia, but who are also vitally interested, from the pocket angle, in the successful conduct of the bank’s financial operations, would support the contention that a novel institution like this one should hasten slowly, and establish its pattern of lending so that its resources will be distributed in the most effective way. The honorable member for Parkes, in my opinion, did not make any valuable contribution to the debate when he voiced those remarks.

I would like to make another point in connexion with the criticism that has been offered by honorable members opposite. First of all, let me say that it is rather embarrassing for me to try at this stage to make some sort of a reply to the honorable member for Barton, because, in my opinion, the honorable member had absolutely no conception of the purpose of this institution. He made a very emotional speech, I agree, but he was completely irrational when he talked about inspiration, for instance. I do not think we should dwell too much on inspiration when talking about banking. Banking is not a matter to be played around with by emotional Labour politicians. Matters such as those affecting the Development Bank must be considered from the point of view of benefit to be derived not only by those borrowing the money but also by everybody else in Australia.

Therefore, I believe, we can disregard the comments of the honorable member for Barton. He appeared to regard this institution, which, as its charter clearly shows, is designed to assist small undertakings, as one which should make loans for public works purposes, and play a role in providing finance for national developmental schemes. That is, perhaps, a pleasant anticipation. Possibly in the distant future the bank’s functions will be widened to cover such activities. At the moment, however, we have other well-established institutions, such as the trading banks and the Reserve Bank itself, which have funds that can be made available in very large amounts for the kind of project that the honorable member evidently visualized. Let us, then, dismiss that kind of completely irrelevant comment from our consideration of this legislation.

I think it would be well for us to refresh our minds about the lending policy of this bank. I shall refer to a directive that has been made available to most honorable members in this chamber, concerning the bank’s lending policy. I know, and I think all honorable members know, that there have been some disappointments among persons who have approached the bank. It is obvious that when an institution such as this opens its doors for the first time many people will gather at those doors who have had their applications for finance rejected by other institutions. They say to themselves: “ Here is the rich uncle from Borneo. Let’s see how we get on with him.” It is quite likely - in fact, it is inevitable - that many people who have had an incomplete knowledge and understanding of the bank’s lending policy have been disappointed.

Clause 6 of this directive says -

It will be necessary for prospective borrowers to establish to the satisfaction of the Development Bank that the finance sought is not otherwise available on reasonable and suitable terms and conditions.

I suggest to my honorable friend from Barton that possibly the young man he mentioned, who had the selection in Queensland, came within that category. It appeared from what the honorable member said that this man had not tried to raise finance through normal channels and finally was accepted by the Queensland rural bank, or whatever it is called. Furthermore, Mr. Speaker, let me suggest to you, with your knowledge of the cattle industry, that the young man in question was probably extremely lucky that he did not buy a lot of expensive cattle on the market of a couple of years ago, because he might have found himself in very serious financial trouble if he had done so.

Clause 8 of the directive refers to the prospects of the industry in question and it says -

Efficiency, managerial capacity and integrity of the applicant, as well as the prospects of tha industry in which the applicant is engaged or intends to become engaged will be important considerations in the assessment of proposals.

Well, I think that is reasonable. I do not think that in this country of ours we should encourage people to go into some small redundant secondary industry which will operate on a marginal cost basis. Nor do we want to encourage people to take up rural lands in a marginal cost area, producing commodities that are already dependent upon an uncertain export market, as we know is the case with certain of our export industries at the present time. I think that precautions in this respect are wise. I have had referred to me cases of young men who wanted loans to assist them in marginal enterprises in an export industry which was having a struggle at the time.

Clause 10 of the directive on lending policy states that the need to ensure that the bank’s funds are available for developmental purposes will mean that except in special circumstances the bank will not be able to approve applications which do not have any developmental features and which merely involve a change of ownership of land or other assets or the taking over of debt from another lender. Probably we all have been concerned with cases in which prospective borrowers have been disappointed about the interpretation of this clause. It is quite obvious that if the bank is to be developmental, the taking over from somebody else of a debt on land that had not any particular developmental prospect is outside the meaning of the interpretation of the bank’s activities.

I refer also to the method of lending. Clause 11 of this directive states that finance will usually be made available by way of a term loan repayable over periods suited to each individual case. The repayment will normally require to be made by instalments at half-yearly intervals. The instalments will be of equal amounts covering principal and interest or, alternatively, of equal amounts of principal, plus interest But where a new enterprise is involved- this is important, because it is a major consideration to the borrower - or in other appropriate cases, the first instalment date will be a matter for special consideration. In other words, it is not intended that these loans by the Commonwealth Development Bank shall be long-term ones such as loans on first mortgage. I think that in that respect again some disappointment to prospective borrowers may occur if they are seeking a fixed loan which does not involve any immediate repayment. They are seeking a loan which would be treated as an encumbrance on the property, rather than a loan of short term to be repaid within a reasonable time. These are important matters, and I think that, obviously, many people who do not understand the principles involved will be disappointed.

Clause 18 of the directive states that the Development Bank will, in appropriate cases, provide hire-purchase facilities for the acquisition of producer goods such as machine tools, factory equipment, farm tractors, agricultural implements and transport vehicles other than passenger-carrying motor cars. The maximum available term of hire will depend on the type of goods financed. I believe that this is one field in which the bank can and will play a very important part in the future, because I think it will relieve the farming community particularly, and, to a lesser degree, the small man in secondary industry, of some of the very costly interest involved in hirepurchase agreements. This is a particular element of the bank’s activity which should be, and will be, extended.

Another point arises, Mr. Speaker, in relation to the type of loan. The Development Bank will be prepared to accept second or subsequent mortgages over and above an existing debt. I think that some of us have probably dealt with cases of this kind where there is a considerable encumbrance on land or on a business and sufficient working capital is not available to keep the enterprise going, although it has possibilities for development, and the bank has come to the rescue by lending an additional amount over and above the existing encumbrances.

My friend, the honorable member for Farrer (Mr. Fairbairn), gave a very good account of the extension activities of the bank, and I think that its efforts in this field will be of tremendous value, particu larly where a farmer or a man engaged in a small industrial venture is in a marginal position financially and is having trouble in directing and developing the enterprise to the best advantage. The work of the bank in this respect, I believe, will be of tremendous value to industry as a whole. This extension work, of course, is not confined to the Development Bank. The Commonwealth Trading Bank and the private trading banks engage in it. This work represents a great contribution to industry generally.

I sum up in this way: The Development Bank provides finance for farming , or secondary-industry ventures which give promise of increased production or productivity. It is a supplementary source of finance to be taken advantage of only when finance is not available from conventional sources or would be available from those sources only on unreasonable or unsuitable terms and conditions. The objects of the bank demand that the development aspect of the enterprise for which the lending is undertaken must be treated as fundamental. The bank must have regard to the venture’s prospects of success. Finally, Sir, borrowers must give the maximum security available, but the bank will adopt, and, I believe, is adopting, a flexible approach. I commend the bill to the House. I think that honorable gentlemen opposite also, despite their criticisms, regard the Development Bank as a valuable institution.

Mr CAIRNS:
Yarra

.- Mr. Speaker, the Opposition supports this bill, which will increase the capital of the Commonwealth Development Bank of Australia by £5,000,000. Although we support the measure, we are very critical of a number of aspects of the bank’s operations, and particularly of the fact that the bank has not been permitted or encouraged to develop fast enough. Had it been permitted and encouraged to develop fast enough, its capital up to the present time would not have been sufficient for the demand that the bank would have had to meet. Nor would it be sufficient now, even with the additional £5,000,000.

Earlier in this debate, honorable members on this side of the House asserted that the Development Bank had not been able to enter sufficiently into the provision of finance for quite a number of people who had sought funds from it. Speakers on the Government side of the chamber answered those assertions in various ways. I recall that the honorable member for Barker (Mr. Forbes) this afternoon said that the bank had never refused to lend money to any person because of a shortage of funds. I do not think that any speaker on this side of the House asserted that the bank had done so. We have always said that the Development Bank had failed to lend to applicants because it applied conservative commercial standards to lending - that it had eliminated applicants by applying to them standards similar to those applied by the ordinary commercial banks. “We have never said that the bank had turned away anybody on the ground that it had insufficient funds to lend.

We submit now, as we submitted continually in 1960 and again in August, 1961, that the capital of the Development Bank is insufficient for the purpose of making the real contribution to national development that such a bank ought to make. The honorable member for Barton (Mr. Reynolds) made that point very clear by citing a number of cases. I, too, can cite cases. I have records of ten applications to the bank, eight of which were refused and two of which were accepted. In none of the eight cases in which the applications were refused were any of the conditions mentioned by the honorable member for Corangamite (Mr. Mitchell) present or applied. Those eight applicants were refused loans because they did not have enough security. One aspect of that, of course, was the impact of the Government’s restrictive policies over the last twelve months. Certainly, when a bank or any other lending authority is considering the security that a borrower possesses, it takes into account the market prospects for the sale of the goods that he produces. The prospects of borrowers have been considerably depressed by this Government’s economic policies. In each of the eight cases that I have mentioned, the ordinary standards of security, property, income and prospective income were applied. What was needed in that situation was not a bank that was applying the somewhat conservative commercial standards that are applied everywhere but a bank which would introduce a catalyst or dynamic into the situation that would enable those people who can to go into production and produce up to their potential, without having regard to their existing security, or even to the prospects .of the market.

The honorable member for Corangamite made a number of points. He referred to the attitude which the Opposition adopted at the time of the establishment of the Commonwealth Banking Corporation. He referred to a statement made by the Leader of the Opposition to the effect that the splitting up of the Commonwealth Banking Corporation was something to which the Opposition was opposed. Of course, we opposed that splitting up. We said it was unnecesary and those who were in the House at the time will recall that we quoted some excellent authorities. We quoted extensively the Prime Minister (Mr. Menzies), and the Treasurer at that time, Sir Arthur Fadden, who had said exactly the same thing during the four or five years preceding their successful attempt to dismember the Commonwealth Bank. Our submission then was that the action being taken was harmful to the Commonwealth Bank; and our submission now is that the Commonwealth Bank would be greater if those things had not been done. That was where we stood at the time, and that is where we stand now.

The honorable member for Corangamite referred to the honorable member for Parkes (Mr. Haylen) who said that the Development Bank had been strangled because it had not been provided with sufficient funds. I have already referred to that matter. What the honorable member for Parkes was saying was that the Development Bank had not been provided with sufficient funds to do all the work that was needed to be done by such a bank, that it had been restricted and that as a result it had applied ordinary banking standards.

The last point raised by the honorable member for Corangamite to which I want to refer is one that I expected that honorable gentleman would make. He criticized the honorable member for Barton (Mr. Reynolds) for saying that what we needed in banking was a bit more inspiration. I can understand the honorable member for Corangamite objecting to that proposition because, if any member in this House lacks inspiration in financial and banking matters, it is the honorable member for Corangamite.

What this country needs, particularly in its financial, economic and banking policy, is some imagination and inspiration, and the honorable member for Barton was completely right in making the submission which he did. We want less of the pinch-penny, narrow attitude that has been prevailing in these conservative financial institutions that are admired so much by the honorable member for Corangamite, and with which, from time to time, he has had very close association.

The Development Bank is a specialist bank. It was established on a principle with which the Australian Labour Party approves. Broadly speaking, its purpose is to provide loans at relatively low interest rates for those who do not have the income, assets or security necessary to obtain funds from the commercial banks in the ordinary way. That is why the Opposition approves of the extension of the capital of that bank by £5,000,000. But we criticize this provision because the Development Bank has been restricted. It is, as the honorable member for Barton said, clearly now a bank of last resort. The people who want to borrow from it have first of all to be turned down, in effect, by the trading banks. This means that the Development Bank enters into the field of lending on low interest rates in competition not with the trading banks themselves but with their hirepurchase subsidiaries and the fringe institutions.

I think that some honorable members opposite fear the power of such a public bank. They fear that if this bank is freed from the restrictions that have been put upon it, if the wraps are taken off a bank of this sort, and it is allowed to operate without restriction, then the higher-profit and higher-interest competitors will face some real competition. Honorable members opposite, of course, occupy two roles in this respect. Some of them are directly concerned with primary production - farming or pastoral activities - and some of them are business people. In the first of those roles they want to borrow money, and they have the incentive to want to borrow it at low rates of interest. Then again, honorable members opposite represent commercial interests and they are in the position also of being money lenders themselves, and they want therefore a system which will circulate money at a high rate of interest. So there is something of a split personality in their attitude to a measure of this kind. Looking at the position as farmers they see the Development Bank as a good proposition because it is a powerful public bank that can lend money at a low rate of interest; but looking at the position as investors they see this bank as a competitor with organizations in which they invest their money - perhaps one of the trading banks, if they have been at the game long enough, or one of the hire-purchase companies ‘that have come in within the last ten years, or one of the fringe institutions that have come’ in during the last two or three years. This is not a simple proposition from their point of view.

The Development Bank is supposed to look at the possibilities and at the enterprise of the situation rather than at what has already been achieved. The essence of development is that we have to weigh up the things that are possible, the things of the future. The essence of a commercial banking proposition is that you look at the past, at what you have accumulated already, and at what security you have. I repeat that the essence of the proposition from the point of view of the Development Bank is that we look into the future and we ask in effect, “ What are the possibilities in this position or in that position? “ Such things as the cost of land enter into the situation, and I think in a number of the cases that were mentioned by the honorable member for Corangamite this is the essence of the problem. In so many cases the real difficulty of getting development in Australia is that in the place where development is really possible you cannot have that development because of the high price of land, and so development is forced out into marginal areas of production. We put people who have development prospects in some cases into an uneconomic situation by putting them only in places where they can afford to buy land. It is not surprising that we have developmental problems in a situation such as that.

Of course, that those problems exist and that the commercial lenders are unable to meet the situation is well recognized. The honorable member for Melbourne Ports (Mr. Crean) some time ago in this debate quoted Dr. H. C Coombs, the Governor of the Commonwealth Bank. Dr. Coombs said -

Banks generally regard lending to rural producers as good and safe business, particularly in good seasons, high commodity prices and appreciating land values.

Those are circumstances when the ordinary commercial banks are able to lend, but something new and something quite different was required. That this new requirement has not been met completely was emphasized by a statement made by the honorable member for Melbourne Ports earlier : to-day. He quoted Sir John Crawford who at one time was secretary of the Department of Trade and is accepted, in this field, as an authority. Sir John Crawford said -

It did seem to me that the paper went very close to admitting that the most profitable lending for the banking system, at least under existing economic conditions, is not in the rural field, except to the extent that hire purchase is associated with banking.

That proposition simply means that in the rural field the ordinary banking system under existing circumstances is not finding opportunities for profitable investment, except if it operates under the hirepurchase method. We know very well that the trading banks have not been anxious to lend in the rural field and we know also that what happens is that the bank manager says, in effect, “ Go around the side of the bank where you will find another door with another name over it; you will be able to borrow there at two or three times the bank rate of interest”.

Some time ago in an earlier debate on this matter, I pointed out to the Treasurer (Mr. Harold Holt), who happened to be in the House at the time, that this was happening. I refer honorable members to “Hansard” of 18th October, 1961, at page 2217. I had been arguing that the capital of the Development Bank was insufficient to meet the needs of rural producers, who were in the position I have just described. I pointed out that the statistics showed that the amount of money lent by the trading banks in this field in a preceding period had fallen by £11,800,000. The Treasurer interjected-

In recent months their approvals of overdrafts have increased substantially.

I said -

That still remains to be seen. We still have to find out what “ substantially “ means.

I had been arguing that it was insufficient to rely on the trading banks because they were not lending in this field, and therefore the Development Bank should be pushed harder and further. The Treasurer said that that was not so, that the trading banks were meeting the requirements and the amount they were lending was increasing. We can now look back over the period and ascertain whether the Treasurer was right or I was right.

The proposition can be proved quite easily. I refer to the “ Monthly Review of Business Statistics “. When the Treasurer and I were making these statements, the amount of money lent by the private trading banks in August was £865,800,000. The Treasurer said it was increasing. What was it in September, 1961? It was £856,000,000! In October it was £861,000,000 and in November it was £852,000,000. The Treasurer was proved to be wrong on that occasion. Of course, his proposition was based on what had happened in July, the month before he spoke. He had these figures ahead of me, because he gets them in a different way. In July, 1961, there had been an increase on the month before. In June, the figure was £874,000,000 and in July it was £884,000,000. This was the time when some optimism was coming back to the Government. It thought a recovery was taking place and it was feeling confident and optimistic. This was influencing the Treasurer. But he was proved wrong then and I submit he will be proved wrong now.

The methods of the ordinary commercial banks are not the catalyst for the development that is needed, and will not lift the Australian economy as it needs to be lifted. There has been a decline in loans by banks over the last twelve months, almost consistently but with one or two variations. The trend with every bank except the Development Bank has been a decline. The decline with the Commonwealth Bank from January, 1961, to the last figures I have - those for November, 1961 - has been from £153,000,000 to £146,200,000, or 5 per cent. But the decline of the private trading banks has been from £942,000,000 to £852,000,000-10 per cent. - twice the rate of decline of the Commonwealth Bank.

As I said, the Development Bank is the only bank that has increased its loans and the question we must ask is whether in the provision of new money for development we need to get increasingly outside the ordinary commercial, conservative tests that are being applied predominantly by the financial system to-day. Recovery demands a catalyst from outside the ordinary commercial system. Commercial loans are, of course, not outside the system; they are part of it. But the Development Bank is outside the system. It can help to provide the money that is needed. It should lend more; it can lend more; it must lend more. It is not doing enough. We do not suggest it is limited only by the amount of capital. It has about £25,000,000 worth of capital and it has borrowed about £16,000,000 from the Commonwealth .Savings Bank, a total of over £40,000,000. Altogether at November, 1961, it had lent only £44,300,000. Of that amount, a substantial part was on hire purchase. This was really lent in another department of the Commonwealth Bank, which was subsequently coupled to the Development Bank - after it was formed.

In November, 1961, loans on hire purchase had reached £20,400,000 compared with about £17,000,000 or £18,000;000 when the Development Bank was formed. Therefore, it has lent only another £3,000,000 on hire-purchase contracts since it has been established. Its other advances have risen not from zero to £23,900,000, where they were in November, 1961, but from about £15,000,000 or £16,000,000, where they were soon after its establishment. The net increase in that period is only between £8,000,000 and £10,000,000. Obviously the bank is not doing the work it can do and obviously some persons in positions of responsibility have no intention of allowing it to do the work that it can do.

I do not intend to go back over the debate. However, I want to point out that the honorable member for Melbourne Ports was able to anticipate this position when the bank was established. He said that this state of affairs would arise and what he said on that occasion has been proved by the circumstances to be true.

We are not, of course, criticizing the Development Bank for what it has done; wc are criticizing it for what it has not been allowed to do. We ask that it should do what, in fact, it can do. The question really is whether the Development Bank will function particularly as a nonconservative commercial lender, operating with the principles and priorities of development in mind, or whether it will be substantially coloured by the ordinary banking standards and practices . that are continuously applied. The Development Bank was established on a sound principle, but that principle has not been fully applied. The Development Bank has been unduly restricted. Its capital is probably sufficient for the limited field it has been allowed to enter, but its capital is not sufficient for the field it should enter. It does not enter this field because honorable members opposite and no doubt those in control of policy are afraid of what they call public enterprise or socialism.

Therefore, people are forced into the hands of the usurers, as the honorable member for Barton said. It should be compulsory for the hire-purchase companies and other fringe banking institutions to place pawnbrokers’ signs over their doors so that people can really understand what kind of concerns they are. That would make it clear to people that the public bank, the Development Bank, is the place where money can be obtained at low rates of interest - not just a place where it should be able to be obtained at low rates of interest - instead of from the modern twentieth century usurers. Usurers had a stinking reputation in mediaeval times and it has hardly improved since then.

It is because members of the Country Party and others have a split personality on this matter that this bank does not really develop properly. They oppose a banking system that would be of great advantage to them as farmers, because they do not like public enterprise and socialism. They are scared away from the practical, economic, financial function of a bank by words. Until they can become accustomed to testing what is done by the actual conditions and not by the hypnotic effect of words, this problem will remain unsolved. The solution is only a matter of using public enterprise more and more significantly, despite the fact that it is called socialism and is regarded as a scare device, as though it were hot or possessing an electric current so that one is repelled from it every time one thinks of it. Therefore, one is unable to see the way in which it functions in practice and the significant difference between the high interest, exploiting, usury type of financial operation and the ones that can be fitted effectively into an economy such as ours. “I conclude, as the honorable member for Barton concluded by saying that what is necessary in this country is a national plan, a plan that will have projections and targets of what can be achieved in this field and what can be achieved in that field, so that the people, through their democratic vote at election time, can vote on what will happen to the country economically and not on matters that have nothing whatever to do with the real, practical problems upon which their lives and the lives of their families depend. We need to bring to the minds of the Australian people the fact that we must have priorities; we cannot have unlimited spending even on motor cars, beer or television and at the same time have the fundamental things upon which national strength depends. We have to make decisions on these matters. We cannot hope to have some kind of steady development unless we have concerted action by the people who are making the decisions on these matters.

Of course, everything that the Governmnent has pretended to do in the last four vor five years in the nature of public policy :or national planning has had none of those things in it. The Government has become characterized by its stop-and-go, hit-or-miss methods. If we want to choose that kind of action under the name of laisser-faire or free enterprise, or under the name of acquisition and getting in for your cut, we are free to make that choice; but we will not develop national strength and a spirit of common action in those circumstances.

– The honorable member for Kingsford-Smith is one of those who subscribe to the idea that if you want more money you just print it and do not worry about increasing production.

As we all know, the Development Bank was established only two years ago - on 14th January, 1960. It resulted from what was virtually an amalgamation of the old mortgage bank and industrial finance departments of the Commonwealth Bank. That amalgamation gave greater flexibility of operation, more capital and wider borrowing powers. What was most important of all was the fact that this was an unorthodox bank, as the honorable member for Mackellar (Mr. Wentworth) has said. It was something new. It was a courageous venture by the Government to help the development of Australia. In considering applications for a loan, the important factor was not the security an applicant had to offer but his integrity, his character, his past performances in his chosen sphere, his past performances in meeting his financial commitments and his chances of success in the proposed undertaking. In other words, this Government was prepared to back the judgment of its qualified officers as to the character, courage and intelligence of applicants rather than consider the security which applicants had to offer.

The question of lower interest rates has been mentioned. At least, in the hirepurchase field, the Development Bank does advance money at reduced rates of interest. On such transactions it charges a flat rate of 4J per cent.

The honorable member for Yarra (Mr. Cairns) said that the Development Bank has not done as much as it could do. What did honorable members opposite expect the bank to do in its two short years of existence, especially having regard to the fact that many of the other banking institutions have been established for over 100 years? When the Government first introduced this legislation, the idea was to start with a nominal capital of £15,000,000 and then see how things went. That was a sensible attitude to take. Instead of rushing into the venture and providing a huge amount of capital for it, the Government decided to put £15,000,000 into it and see what eventuated. The Government has recognized that the Development Bank’s funds are required and desired by the people, and, in its wisdom, it decided within the last six months to make another £10,000,000 available. This bill proposes to make available a further £5,000,000. I remind honorable members that an additional £5,000,000 was provided for in the Budget last year.

There has been some talk about the number of applications for advances which have been refused by the bank. It is interesting to note that 2,060, or two out of every three applications made to the bank were approved during last financial year. The important fact is that nine out of ten of the loans advanced have been made to rural industries. The Development Bank has played an important part in ensuring the future of Australia and has contributed to the welfare of primary producers who, as we all know, are faced with enormous problems due to constantly rising costs and declining overseas prices. The establishment of a special bank to provide funds for these people is of great practical assistance to them.

The honorable member for Kennedy said that there should be co-operation between the Development Bank and the Commonwealth Scientific and Industrial Research Organization. Co-operation with a scientific organization would be good, but, as other honorable members have pointed out, one of the most important functions of the Development Bank is to provide rural specialists and industrial consultants to assist its borrowers. I remind honorable members of the scholarships that have been awarded by the Development Bank to business executives and people wishing to undertake university courses. In other words, this is not only a financial institution; it is a far-reaching, far-seeing project which has been and will continue to be of great benefit to Australia.

On the subject of rural advisers, I was very pleased to hear the honorable member for Farrer (Mr. Fairbairn) speak of the need for the establishment of farm management clubs. That is a subject which has keenly interested me personally. If we cannot do something along those lines through the Development Bank and the Treasury, then the Government must assist in the establishment of these clubs through the Department of Primary Industry. I should like to recall to honorable members some of the statements I made on 29th September, 1960, on this subject. When speaking on the Estimates for the Department of Primary Industry, I said -

I should like the Minister- that is, the Minister for Primary Industry - to investigate a special project that I have in mind and to consider whether it would be possible to contribute a sum from that £50,000 to pay the salaries of farm experts attached to farmers’ clubs or groups.

I was speaking about the extra £50,000 that is made available to the Minister from primary industry to be used at his discretion for special projects. The honorable member for Wilmot (Mr. Duthie) interjected -

The honorable member has mentioned this before, has he not?

I replied -

Yes, I have, and I want to stress it further now.

I went on to speak in terms similar to those used by the honorable member for Farrer, and I pointed out how in the United Sates of America an experiment was conducted along these lines. I think the story beats repeating. For the purposes of the experiment, two groups of twelve farms were taken. One group of twelve farms was given the benefit of the services of farm management experts, while the other group of twelve farms was not. At the end of twelve months, the financial results of the two groups were calculated. It was found that the incomes of the farms that had the advantage of scientific and expert knowledge had increased by 50 per cent., while those of the farms which did not have this benefit decreased by 25 per cent. My authority for this statement is the Director of Rural Broadcasts, Mr. Douglas, who is employed by the Australian Broadcasting Commission. I join with the honorable member for Farrer in making a plan to the Government, to the Minister for Primary Industry, and to the Treasurer, to have another look at the proposal that, in the interests of the future of our primary producers, we should subsidize the payment of salaries of farm experts to be attached to groups of farms throughout Australia. Perhaps an experiment could be conducted, as it was in America. We could take two “roups of farmers in similar localities and farming under similar conditions. We could see what the financial results were of the two groups, one having the benefit of scientific advice and the other without such advice.

In conclusion, Mr. Deputy Speaker, I say that this bill is another move on the Government’s part for which it deserves to be congratulated. I listened to the speeches of honorable members opposite, including those of the honorable members for Melbourne Ports (Mr. Crean), Macquarie (Mr. Luchetti), Barton (Mr. Reynolds) and Kennedy (Mr. Riordan). They tried to insinuate into the minds of the people of Australia the impression that there was a rift between the two Government parties on certain aspects of this Development Bank bill. They tried to make out that there was a disagreement and that certain members of the Liberal Party were worried because they thought that the bank was going to do a lot of harm, while the supporters of the Country Party were against that attitude. I want to assure the House, that there is no basis for such a suggestion. It was made, as I have said, by more than one honorable member opposite. To my mind, it was simply an attempt to break up the unity on this side of the House and to try to drive a wedge between the Government parties. I assure honorable members opposite that their attempt did not run a drum and never will.

Mr DUTHIE:
Wilmot

.- I wish to make two points before I launch into my speech. I have been shocked, in listening to the proceedings this afternoon and to-night, as the poor old Whip must, to find a certain trend in the speeches of some of the supporters of the Government. They implied that farmers who have not been assisted by the Development Bank are no-hopers.

Mr Nixon:

– That is a poor statement. Do not twist.

To provide finance for persons -
1. for the purposes of primary production; or
2. for the establishment or development of industrial undertakings, particularly small undertakings, in cases where, in the opinion of the Development Bank, the provision of the finance is desirable and the finance would not otherwise be available on reasonable and suitable terms and conditions; and
To provide advice and assistance with a view to promoting the efficient organization and conduct of primary production or of industrial undertakings.

Those are the functions of the bank as set out in section 72. Section 74 deals with the powers of the Development Bank which, in sub-section (ii) are set out as follows -

to receive money on deposit;
to borrow money;
to lend money;
to buy, sell, discount and re-discount bills of exchange, promissory notes and Treasury bills;
to buy and sell securities issued by the Commonwealth and other securities;
to establish credits and give guarantees;
to issue bills and drafts and effect transfers of money;
to underwrite loans and issues of capital; and
to do anything incidental to any of its powers.

This all sounds very big, but the inadequacy of the capital granted to the bank greatly restricts its functions and powers. How has the bank carried out these functions which I have outlined? The report of the Commonwealth Banking Corporation is very well produced, and I give the corporation credit for it. It was issued towards the end of last year, but it is a cold and statistical document. What is missing from it is the vast human side of the bank’s work - the thousands of interviews between bank officers and prospective customers, the rejections and personal difficulties and personal tragedies. This aspect does not appear in the report. It is the great unwritten story of the Development Bank. It is the really true picture which is missing from the frame, and the frame is the statistical story in the report. Many of the rejections would probably be tragic. I know of some of them from my own experience in my big rural electorate in Tasmania. It covers half the island, and has 21 different rural industries and, of course, a great variety of agriculture. I know of many applicants who have asked for help from this bank and I know of some cases where the applications have been rejected. I know the tragedy and the disappointment that has occurred, but this part of the story is not written into the corporation’s report.

Many of Tasmania’s small farmers, because of their inability to get money with which to carry on, are forced to work on other jobs outside their farms. What a fantastic story in this twentieth century. It is the sort of thing you might expect in the middle of a depression - farmers having to go out and work on public works to keep their farms going. The farms are not keeping them; they are keeping the farms because they have not been able to get the capital they desire from this bank or from any other source. It is a tragic story.

Mr Davies:

– And money is too dear.

Mr DUTHIE:

– As my colleague, the honorable member for Braddon, has reminded me, money is too dear. That is the case. These men could not meet the interest rates which I have outlined. They could not meet the interest bill each year and they have had to give it away. The corporation’s report tells of 11,586 hire purchase customers who have been helped to the extent of £14,100,000 in 1961. In 1960, 12,764 customers were helped, to the extent of £14,400,000. Is it not fantastic that the Development Bank has had to enter the hire purchase field? I do not believe this was its original intention at all, but in an endeavour to get short term profits from its loans it has gone into the hire-purchase field in which a tremendous amount of debt has been created throughout Australia. This field has been extended by a bank designed to help agriculture and small industries. I was appalled when I learned that this bank had entered the hire-purchase field to get quick profits. It is evidently more concerned with that activity than with widening its field of assistance to primary producers. Last year straight out loans were granted to 2,060 customers to the extent of £10,800,000. I looked up the number of rural holdings in Australia, and in 1959-60, according to the Commonwealth Year Book, the number was 262,242, reduced by 600 in the four years since 1956. These holdings involved 241,247 owners, lessees or share farmers. Yet out of that vast number of rural holdings only 2,060 were assisted by loans from the Development Bank last year. I do not think that is good enough.

The corporation’s report does not mention the thousands of rejected, disappointed and disheartened farmers and industrialists and the shattered hopes of many people. The method of selection of customers is a very interesting feature of the act which established the bank. Section 73 provides -

In determining whether or not finance shall be provided for a person, the Development Bank shall have regard primarily to the prospects of the operations of that person becoming, or continuing to be, successful and shall not necessarily have regard to the value of the security available in respect of that finance.

This is a completely revolutionary provision in banking legislation. I believe it restricts the officers of the bank in their interviews with prospective clients. But it does more than this; it demands that the officers make a searching check of each applicant’s character, ability, background, business acumen, and so on. As I have said, this section provides that -

. the Development Bank shall have regard primarily to the prospects of the operations of that person-

The applicant - becoming, or continuing to be, successful and shall not necessarily have regard to the value of the security available in respect of that finance.

Would this not be the first time that such conditions have been laid down in banking practice, with emphasis not on security but on the chances of economic success and on character? I believe that the emphasis on character before hard cash is good. It is excellent. It is an important change in emphasis, and we do not condemn it out of hand. But I maintain that this condition, taken in isolation, opens up a wider margin for errors of judgment than the checking of security as a condition of a loan. Here is a customer, Jim Smith, wanting £3,000. He is a dairy farmer who wants to increase his pastures and sow them with clover and re-fence his property, and an examination almost as thorough as a security test is made of his whole background, his farming methods and ability to make his dairy farm a success. Even if he passes this character test the prospects of his industry must also be examined.

An excellent farmer who is heavily capitalized can be ruined by market fluctuations, sudden ill health, bad seasons, or disease in his crop or herd, as the case may be. What I am getting at is that so many imponderable factors can crowd in upon a farmer that his chances of success in the future can be destroyed. Therefore, the officers of this bank must be specialists in reading and assessing personality values far outside the realm of royalties or the field of finance. Precise judgment of human values is a matter of top priority in the work of these officers. That is why I say that the possibility of errors of judgment in assessing the success potential of applicants is very real. No doubt hundreds of farmers and business applicants have been rejected under the terms of the charter set out in section 73 of the Commonwealth Banks Act.

Assessment of security as a prerequisite to the granting of loans is easy when compared with the assessment of the prospect of success. Assessment of security is primarily a matter of economic and financial statistics. For example, an investigating officer would ask, “What is the value of Jim Smith’s farm and plant? What is his bank balance?” Such matters can be checked easily, and probably can be ascertained in a day. Mistakes or errors of judgment in the field of security are improbable. So the Development Bank has had its activities limited by the conditions under which applicants can be accepted. That is its first limitation.

The second limitation is set out in the bank’s charter, which provides that the bank shall help farmers and industrialists only when they cannot get help from private banks or insurance companies. This is certainly a very good provision from the applicant’s point of view. It provides an avenue of assistance when other avenues have been closed. But up to a point, it ties the hands of the Development Bank.

A few years ago the Government carved up the Commonwealth Bank into four or five different segments. In doing this, the Government weakened the overall impact of the great Commonwealth Bank on the nation. It turned the Commonwealth Bank into a bankers’ bank when it re-created the Commonwealth Bank Board, which had been the curse of the bank from 1924 to 1930. The competition value of the bank has definitely been reduced. The Development Bank has had its wings clipped. As the honorable member for Yarra (Mr. Cairns) pointed out to-night, there is no fullblooded competition between the Development Bank and the private banks. The old form of competition no longer exists. The Development Bank has had its hands tied behind its back by the limitations that have been imposed upon it under the act. It has been confined, combined and circumscribed. It can deal only with cases that have been rejected by the private banking organizations. Perhaps that puts it a little bluntly, but there is a lot of truth in the statement. I repeat that the Development Bank to a large extent can deal only with cases that have been rejected by other sources of financial assistance. Therefore, where does the competition come in?

The third limitation placed upon the Development Bank is vital. I refer to its lack of capital. That is evidenced by the bill now before us, which is designed to increase its capital to £25,000,000. That sum still falls far short of what we would like to see in a full-blooded development bank. The bank is still playing around with the mighty task of rural development. I do not intend to go into all the ramifications of rural development; that subject has been covered splendidly by my colleagues on this side of the House and some of the members on the Government side. The need for rural development is as obvious as the fact that the sun will rise to-morrow morning. In spite of all that has been said about it, in spite of the terms of its charter, in spite of the notes of praise that have been raised by honorable members opposite, in spite of the introduction of this bill to raise its capital by £5,000,000, the Development Bank is still only playing around with the tremendous task of fully developing the primary and secondary industry potential of Australia. It is like a very shiny, expensive Cadillac which has only a model T Ford engine in it.

Mr James:

– Then it would be a bomb.

Mr DUTHIE:

– It may well be a financial bomb, as my friend from Hunter suggests. The Development Bank has the capacity to do what we would like to see it do, but it has not the necessary capital. It may even have the necessary personnel. I believe that the men who are running this bank are earnestly trying to make it work. I have not heard of any instances of bullying or discourtesy on the part of the bank’3 officers. I repeat that, although it has the capacity outwardly, it still has not sufficient capital to enable it to give the boost to development that we of the Opposition would like to see. For all those reasons, the Development Bank is but a shadow of the institution that Labour will make it when we assume office within the next twelve months.

Mr TURNBULL:
Mallee

.- Mr. Deputy Speaker, if I had expressed an opinion about the Commonwealth Development Bank similar to that which has been expressed by the honorable member for Wilmot (Mr. Duthie), I certainly would not be voting in favour of this addition of £5,000,000 to its capital. If the bank is not more efficient than the honorable member suggests, surely he should not vote in favour of the bill. All sorts of speeches have been delivered by Labour members on this subject. Some honorable members have praised the bank, some have praised its officials, and some have found fault with the institution; but the speech delivered by the honorable member for Wilmot was a gem-

Mr Peters:

– It was.

Mr TURNBULL:

– Just wait a moment. It was a gem of disparagement of the actual working of the bank. Surely to goodness the honorable member for Wilmot cannot now support the proposal to give another £5,000,000 to this “ shadow of a bank which is only playing around “.

Mr Einfeld:

– You know its shortcomings.

Mr TURNBULL:

– I know what the honorable member said. He expressed his own opinion. We know that if people are fearful about something they immediately try to disparage it. The honorable member for Wilmot ridiculed the idea that members of the Australian Country Party were the champions of the farmers. Somehow ot other, this idea about members of the Country Party being the champions of the farmers is in the mind of the honorable member. Thinking that probably the people of Australia have the same idea, apparently he said to himself, “ I had better deny this “. And, of course, he did deny it. It would be almost impossible to point to any progressive rural achievement without associating with it the Australian Country Party organization and its parliamentary representatives. The honorable member realizes the great political work of the Country Party. He knows that the Labour Party has not a chance of winning rural seats while the Country Party is in existence. However, I do not wish to spend all the time available to me in referring to the honorable member. When all is said and done, he is a very decent fellow. I am sorry that he has gone off the rails on this occasion.

I want to refer to one or two statements made by the Treasurer (Mr. Harold Holt) in introducing the bill. If any man knows the position with regard to such matters as capital it should be the Treasurer, not for any reason other than that he has access to information that we back benchers have not. What did he say? He said, first of all -

This contribution of a further £5,000,000-

That is the money that we hope to vote shortly - will bring to a total amount of £10,000,000 the additional capital provided for the Development Bank during this financial year. Honorable members will recall that one increase of £5,000,000 has already been provided for in the Commonwealth Banks Act 1961, which was enacted in October last. As a result of these two increases the capital of the bank will now be £25,857,000, in addition to which the bank has substantial reserves of its own and also employs considerable urns borrowed from the Commonwealth Savings Bank.

I have heard described as insignificant the amount at the disposal of the Development Bank. I think that a Government supporter said that the bank had been in operation only for two years. The Treasurer dealt with that matter. He said -

The Bank has now been operating for just over two years, and its record in its allotted field is already an impressive one. During those two years the Development Bank approved loans to primary and secondary industry amounting to ova £22,000,000, and in recent months its rate of loan approvals has been in the vicinity of £14,000,000 per annum.

It is increasing. I think that is very good. The honorable member for Barton (Mr. Reynolds) said that the Opposition wanted something spectacular - a bold approach. I think that we want a sensible approach. We have seen many spectacular and bold approaches that did not have the backing of common sense. In finance you must have the backing of common sense in order to make a success of any proposition. I am not concerned about how much money will be available to the bank because the Treasurer has said that whatever amount is necessary will be made available. He made that statement in this House in answer to a question. That is good enough for me. If it can be shown that the bank has not sufficient funds and that people are not being granted loans for that reason, I will be one of the first to bring it up in this House and I hope that members of the Opposition, members of the Liberal Party of Australia and members of the Australian Country Party will do likewise.

What does concern me is a subject about which I have asked a question and which has been mentioned to-night. Section 73 (1.) of the Commonwealth Banks Act reads -

In determining whether or not finance shall be provided for a person, the Development Bank shall have regard primarily to the prospects of the operations of that person becoming, or continuing to be, successful and shall not necessarily have regard to the value of the security available in respect of that finance.

I think members of the Labour Party said that if this provision were not put into operation a small amount of money would probably do to finance the bank. I agree with that opinion. Of course, if this provision is not put into operation the very people whom we intended to assist when we supported the bill to establish this bank will not receive the loans that they require. On several occasions I have asked the Treasurer in this House whether section 73 (1.) of the act is being implemented. On every occasion the Treasurer said, “Yes”. He has made a study of the subject. On one occasion, after I had asked a question, he went so far as to make a supplementary reply after he had had investigations made, and he said that he was quite satisfied that the bank was implementing this sub-section.

I have found out that when somebody fails to obtain a loan it is not prudent to make the general statement that his application has been wrongly rejected. It is necessary to investigate these cases in order to ascertain the details. The honorable member for Barton asked who decides these things. He asked whether loan applications were rejected, due to the opinion of the bank. He said that that was not good enough. Then whose opinion should be given?

The Development Bank has special officers who have been selected for their knowledge and ability to decide these questions. Who should decide the matter? Should some member of Parliament be able to influence the decision? Who should decide? Surely to goodness the men who have been selected for their knowledge of these matters should make the decision! The members of Parliament in this House represent all of Australia and people who have been refused a loan can easily come to them. Members can then go to the Commonwealth Bank and find out the reasons why applications were rejected. There is nothing in the wide world to stop them from speaking in this House in an adjournment debate or on some other occasion and publicizing what they consider is an error of judgment.

– I was saying that there is little ‘hope of getting people to go out into the country to develop land if. the Labour Party continually describes the representatives of the country people as hillbillies. Surely I can answer what has been said. We have heard some grand speeches about setting targets in the future for great national development. That sort of thing cannot be done. Targets for the future cannot be set accurately. We have to depend upon the amount of money that becomes available. As I said in answer to a question a few nights ago, the amount of money that is available - the amount we can win from the land - depends largely upon the seasons and other unpredictable things.

The honorable member for Parkes (Mr. Haylen) objected very strongly to the trading banks being agents for the Development Bank. He asked whether, if a man went to a trading bank for a loan and his security was good, the trading bank would miss that lush lending or that lush proposition. Such a man would not be eligible for a loan from the Development Bank, which is restricted to lending money to people who cannot get accommodation elsewhere. A man who is in a position to get accommodation in another place would not be able to get money from the Development Bank.

Many things have been said about this matter. Most of them have been read from books, from notes, or from “ Hansard “. It is not my idea to do that. Let me say that the bill will provide the bank with an extra £5,000,000. If the enlarged capital proves inadequate to meet the demand, we expect the Treasurer, who I am pleased to see in the House now, to provide additional money. All these things have been made clear by members to constituents and they have been made clear to members by the Treasurer. This bank really fills a want in Australia by giving opportunities to young men of ability who want to go on to the land. It is not intended to broadcast the money among all school leavers in an effort to put them on the land. The men who control this bank are charged with a great responsibility. First, they have to lend the people’s money, and that is a very heavy responsibility. Secondly, when they make a loan, they have to be as sure as they possibly can be that the borrower will make a success of his venture. Otherwise, the loan would only hinder him in getting on in life and would not help him at all. As one honorable member said, the rejection of applications is sometimes in the best interests of the applicants. That is very often the case.

When it is said that many people have been rejected, honorable members should look into the cases individually. If they do that, they will find that some of the people who have made applications are not suitable. The honorable member for Wilmot said that we on this side have implied that people whose applications are rejected are no-hopers. I want to nail that one straight-away. Some of those people are too successful and too prosperous and have done too well to qualify for loans. The question of development is most important. A man cannot get money from the Development Bank to buy a farm that is already developed. Some time ago I had a case concerning a man who wanted to buy a certain farm. He told me where it was, and I said, “ It is all cleared. It is a wheat property in full production.” He said, “ Yes, I know it is. That is why I want it.” He could not get a loan from this bank. The provisions in this act in relation to development are of the greatest importance. The act is designed to help young Australians to develop the land. That is why this money is being made available. I compliment the Treasurer and those people who are administering the legislation, because I believe the implementation of the act, especially of the provision that I have read, is in the best interests of Australia and Australians.

Mr PETERS:
Scullin

.- I gave the most careful attention to the speech of the honorable member for Mallee (Mr. Turnbull) and I am still convinced that he makes his best speeches on the subject of skeleton weed.

The honorable member for Melbourne Ports (Mr Crean) in discussing this bill made it clear that the Development Bank is not a bank at all. It is only a moneylending institution - a kind of pawn-broking establishment that is glorified with the title of bank. He said that banks receive deposits and utilize them for the purpose of making advances to borrowers. The receipt of deposits is an essential of banking, and this institution, the Development Bank, does not receive deposits. It is a simple and undisputed rule of banking that advances create deposits. I have no time to go into the A.B.C. of banking. It is also a simple rule of banking that banks can lend amounts equivalent to at least seven times the amounts of the deposits they hold, without any danger of insolvency. That, of course, is because advances create deposits.

The banks that operate this system ot advances and deposits make big profits) that enable them to expand. A lending institution or a pawn-broker either lends out money that it or he possesses or borrows from banks the money to lend out. This limits its or his operations compared with the bank. There existed no need for this money-lending institution which the Government calls a bank. The Commonwealth Bank, whose policy is still subject to the Government, could have been directed to operate as a rural development bank and as a hire-purchase organization. The primary industries of this country must be developed, and they could be developed through the instrumentality of the Commonwealth Bank.

Our friend, the honorable member for Mallee, has pointed out that there would be risks in making advances from this institution because, he said, it might make advances to people who previously were rejected by the private banking institutions.

Mr Turnbull:

– I did not say that.

Mr PETERS:

– I thought that the honorable member said it. However, if he did not say that, it could still be a danger. Such a danger could exist in some, or even many, of the operations of this money-lending institution, and the people of the community would have to bear the burden of the losses. That would be a subsidy to development made by the community generally. But such a subsidy could be paid direct to the Commonwealth Bank, and the Commonwealth Bank, by engaging in the developmental and lending operations to be undertaken by this so-called Development Bank, could at the same time immensely increase its hire-purchase operations in competition with the private banking institutions, and make big profits for the people of this country. That would reduce the overall subsidy to general development.

Of course this country needs development! We need more farms. As the honorable member for Wilmot (Mr. Duthie) pointed out, there are fewer farms to-day than there were ten years ago. In order to put people on the land so that we may develop the hinterland of this country we need an institution that will finance people who have the necessary knowledge - the sons of farmers, people who have been rural workers all their lives and who want farms. We could enable them to secure farms of their own. That is what is wanted.

Are there many such people? Prior to coming to this honorable House and being in my present distinguished company I worked in a place called the Victorian Department of Lands. I have made inquiries there about how many Victorian civilians have lodged applications for farms. The number is 20,000. There would be probably 30,000 such applicants in New South Wales. Let us say that a conservative estimate of the number of applicants throughout Australia is 50,000. What amount of money would be needed to put 50,000 people on farms? Five million pounds? Why, to put one soldier settler on a farm in Victoria costs, on the average, £20,000. So, to put 50,000 men on the land would cost £1,000,000,000. Yet this Government comes forward and says that in order to remedy the drift from the country to the town, in order to develop our rural industries so that we can increase the primary production which is essential for the development of our secondary industries, and the sale of which abroad is so necessary to enable us to meet our commitments to overseas lenders and to private institutions that have invested their money in this country, it will increase the capital of the Development Bank by £5,000,000. This Government, with the greatest degree of national vision that it possesses says, “ We will give the bank another £5,000,000.” What will £5,000,000 do? Why, £5,000,000 is only a means of providing petty cash for those who already occupy rural holdings. It is not enough to expand existing holdings, which will continue to diminish as rapidly as they have diminished in the past ten years - at the rate of thousands of farms a year.

That is the unenviable record of the Government in connexion with primary production. Yet here it makes a big to-do about what it calls a development bank - a pawn-broking institution, in effect, whose operations will be limited. It will not be permitted to operate in the hire-purchase field which gives such vast profits and huge returns. No. Its operations will be confined to making some niggardly advances to some primary producers who in my opinion, will need big advances.

If this Government is to remedy in any way the results of its maladministration of primary and rural industries over the last ten years it must expend more than £5,000,000 - and the expenditure should be through an institution with more of a banking character than the character of a pawnbroking institution.

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

– The self-appointed Treasurer of the Opposition has tried, within the last few minutes, to paint a picture of a relatively barren countryside. He has tried to paint a picture of a countryside with fewer farms and fewer people employed, with that trend increasing as the years go by. He well knows that this is not the true picture. He knows that even if the number of people directly employed in the farming industry is no more than it was several years ago, when production was much less, the number of people employed in the secondary and tertiary industries servicing the farming and pastoral community in Australia has increased many fold. Production has also increased compared with production ten or fifteen years ago, and this is directly and indirectly leading to employment of a much greater number of people than was the case earlier. 1 am glad that all honorable members who have spoken in this debate support this measure to increase the. capital of the Development Bank. I can well understand the difficulties of honorable members opposite, because they realize the benefit that the Development Bank has been, and will continue to be, under the present Administration. But, because it is the creation of the present Government, they are not prepared to concede that the bank provides a benefit. When measures such as the one we are now debating come before this House honorable members opposite endeavour to show that the Development Bank is not performing the functions for which it was intended when the legislation was passed in 1959.

The honorable member for Melbourne Ports (Mr. Crean) criticized the capital structure of the bank. He implied that the Government was hamstringing the bank because the bank had relatively no deposits and because its capital structure was different from that of the normal trading banks. The honorable member contended that the Development Bank had been forced into the field of hire purchase so that it could continue to make loans to primary producers and small secondary industries. From his extensive knowledge he must know that that is not a correct representation of the facts. The capital structure of the bank is different because its purpose is different. The functions of the Development Bank demand some degree of risk in the advances that it makes. It is unlikely to attract deposits in the way that other trading banks attract deposits. The Development Bank is designed to fill a gap that the other banks do not fill. It is not designed to take the place of other banks and to spread its activities over the entire field of banking. The honorable member knew that his criticism was incorrect because he knew that the Development Bank is an amalgamation of the Industrial Finance Department and the Mortgage Bank Department of the old Commonwealth Trading Bank. It was left to this Government to make available to the rural industries the advantages that the previous Labour Administration made available to secondary industries but which it denied to the rural sector of the community. The present Government rectified the position and placed the rural industries in a position of equality with secondary industries.

The honorable member for Yarra (Mr. Cairns) claimed that the lending policy of the Development Bank was conservative. He implied that its policy did not differ from that of the normal trading banks. That is incorrect. However, although the bank’s policy is more liberal than the policies adopted by the trading banks, I think that at times it tends to err by adopting an over-cautious attitude. I think that after it has been operating for a number of years the bank will become a little bolder in its lending policy. It is very natural lor a bank of this kind to show a degree of caution in its early years of existence while it feels its way. It may not need to exercise so much caution after it has been operating for some time. The honorable member for Yarra argued without logic. On the one hand he said that the bank needed more money in order to do the job that he wanted to see done, but on the other hand he said that he did not want the Development Bank at all. He regretted that the Government had seen fit to introduce legislation changing the structure of the Commonwealth Trading Bank and establishing the Development Bank. The honorable member cannot have it both ways. Either he accepts the alterations made in the legislation or he does not. One has only to compare the security provisions of the Mortgage Bank Department with those of the Development Bank to know that loans made by the bank to the rural community could not have been made by the old Mortgage Bank Department and that therefore the loans that have been made are directly the result of legislation introduced not so long ago by the present Government.

This afternoon, when I was absent from the chamber, the honorable member for Macquarie (Mr. Luchetti) quoted from a speech that I made in 1959 on the .Reserve Bank BilL He has since spoken to me and told .me that he had paraphrased what I said, claiming that I had said that the rural industries were saturated so far as finance is concerned, and therefore there was no need to increase the funds of the Development Bank. I do not propose .to re-read the speech that I made on that occasion, but the honorable member will know that his summary of what I said was quite incorrect. A check of “Hansard “ will show that it was incorrect. On that occasion I was submitting that at a time of falling prices in the rural community, projects that would otherwise be profitable become unprofitable, and since the Development Bank must look to the profitability of a possible enterprise as the main criterion for granting a loan, clearly at a time of lower prices propositions for which the bank could have advanced money in a period of greater profitability would be outside its scope of operations in a period of lower prices. That is quite clear and in no way implies, as the honorable member suggested, that the position of the rural industries has become saturated so far as finance is concerned. That was the term used by the honorable member to me in conversation. Changing the meaning of an honorable member’s words has become characteristic of the honorable member for Macquarie. It is something that we on this side of the House have come to expect from him.

Primary producers in particular should be heartened by the last annual report of the Development Bank. For the year 1960-61, of a total of 2,060 loans, 1,997 were for amounts less than £20,000. The bank was designed primarily to assist small undertakings. Quite clearly, that is being done. Of the 2,060 loans granted in the last financial year, 1,876 went to the rural community. Clearly great emphasis is placed on the rural community by the Development Bank. The average loan has been between £4,000 and £5,000. The purposes for which those loans are made are well known to honorable members and do not need re-emphasis.

– I quote from “ Hansard “, Volume 22, of 11th March, 1959, at page 497. The honorable member for Wannon stated -

Therefore, the scope for the operations of the Development Bank-

Mr SPEAKER:

– Order! The honorable gentleman will not be in order unless he is referring to the matter in which he was misrepresented. He will not be in order in debating the matter.

Mr Luchetti:

– I am not debating the matter. I have been misrepresented in respect of the words that I quoted earlier to-day. To put the record straight and to clarify the position it is essential that I repeat these words.

Mr SPEAKER:

– Order! The honorable member is entitled to refer only to the words that he used to-day.

Mr Luchetti:

– I propose to read the words that I quoted. The honorable member for Wannon said -

Therefore, the scope for the operations of the Development Bank becomes increasingly smaller as the profits from rural enterprises generally decrease. It may be that some other means will have to be sought to overcome this difficulty, but we will serve no useful purpose if we do not recognize the limits to the functions of the Development Bank at present.

Mr Cairns:

– Mr. Speaker, my friend has been misrepresented by the honorable member for Wannon and as we are setting the record straight on that misrepresentation I would like the Leader of the House (Mr. Harold Holt) to make an explanation.

Mr SPEAKER:

– The Leader of the House is not concerned. I wish to make the position quite clear to all honorable members. If an honorable member claims to have been misrepresented in respect of something he said in a debate, he is entitled to ask that he be allowed to make a personal explanation, but he cannot enter into another debate or refer to other matters. I hope that is clear to the honorable member.

Mr Cairns:

– I realize the position. I wish to make a personal explanation as I, too, have been misrepresented.

Mr SPEAKER:

– The honorable member may make a personal explanation if he claims to have been misrepresented.

Mr Cairns:

– I do. The honorable member for Wannon said that I had criticized the Government’s move in establishing the Commonwealth Banking Corporation and other banks and that this meant that I had opposed the establishment of the Development Bank. That is not so. I did not oppose that establishment and that was not implied by any means in what I had to say.

Question resolved in the affirmative.

Bill read a second time.

In committee:

The bill.

Mr HAROLD HOLT:
HigginsTreasurer · LP

– A query has been raised as to whether the additional £5,000,000 being made available by way of capital to the Commonwealth Development Bank under this bill carries any interest obligation. I point out for the information of the committee that neither this £5,000,000, the £5,000,000 provided in the Budget nor the £5,000,000 provided by the Reserve Bank previously to the Development Bank carries any interest obligation on the part of the Development Bank.

Bill agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 696

ADJOURNMENT

Defence Equipment - Communism - State Elections

Motion (by Mr. Harold Holt) proposed -

That the House do now adjourn.

Mr GRAY:
Capricornia

.- I trust you will bear with me, Mr. Speaker, if I raise again the question of the Centurion tanks. I think you will agree with me that the matter on which we sought information in this connexion is rather important, and also that the information given to us has been totally inadequate. It is not just a matter of whether one of these tanks can be moved from Victoria to Canberra or to some other point. What we want to know is this: Can they be moved as a fighting unit in an emergency?

We are told that we have 100 Centurion tanks, costing £9,000,000. The position regarding the movement of these tanks would not have changed very greatly in the past decade. It is not a question of whether we can move an individual vehicle but whether we can move it in an organized way and use it for combat purposes. There are many details of this matter which have not been made clear to us by the Minister for the Army (Mr. Cramer).

If a regiment, a brigade or a division of these vehicles is to be moved a vast amount of other equipment is required. They could not be moved for fighting purposes on their own, and they could not be moved over our vast spaces without other services.

Mr Mackinnon:

– That is elementary.

Mr GRAY:

– Of course it is elementary. Fuel, oil and rations are required as are recovery equipment and workshops. It is obvious that the number of vehicles involved would greatly exceed the number of fighting vehicles that had to be moved. If they had to be moved by road, they would have to be taken by tank carriers. It would not be feasible to move them under their own power. Therefore, the bridges to be crossed would have to be strong enough to carry not only the tanks but also the carrying vehicle. If they were to be moved by rail, in all probability they would have to be moved at a time when they would not be subject to enemy action.

If we were likely to use these vehicles in Australia, it would be under conditions of emergency when we were threatened with invasion or when invasion had actually begun. If you glance at a map of the railway system, Mr. Speaker, you will agree with me that it would be no great problem for an enemy to interfere with the movement of these tanks by rail. Also it would be necessary to have terminal points and other locations where equipment was to be stored suitably constructed to disembark the tanks. To move the tanks across country would require other equipment.

Some of the watercourses we have in Australia would be nothing less than tank traps. Most of the bridges would not carry a major load. We are very pleased to have 100 Centurion tanks. We are entitled to this information and the assurance that these vehicles can be moved as a fighting force.

In addition to the auxiliary equipment which they would require in such movement, tanks would require also very highly trained and skilful crews. I could not imagine that we would see a column of these vehicles proceeding along the road with yellow signs fore and aft indicating that they were being driven by learners. Driving these tanks is no job for learners. I have driven these vehicles in circumstances in which there was no room for amateurs. One must be a highly skilled member of a crew to do anything with them. I am sure every one in this House realizes that in addition to possessing the tanks we require highly skilled personnel to handle them.

I do not put this forward as criticism of the Minister or his department. I expect that the Minister will have answers to these questions. He will realize, as every one else does, that the first duty of any government, whether it is the present Government or a succeeding government, is to protect the security of the population that it governs. That is the first thing that we must do. If we neglect that aspect anything else that we do could be lost within a very short time. If you cannot defend your country you cannot hold it.

It is no use the Government saying that we have treaties with this and that country, no matter how powerful they may be. You have potential allies and you have potential enemies. If you did not, you would not need a Department of Defence. How do we know that hostilities will not break out in such a way that our potential allies themselves will be immobilized and the only defence on which we can finally rely is that which the Government builds and maintains in this country?

Admittedly, armoured fighting vehicles are an essential part of our defence system. I trust that we shall receive the assurance of the Minister for the Army that not only can we move these fighting vehicles from place to place but also that we can move them in bulk; that we can move them as fighting units and that we can provide them with all the ancillary fighting equipment that they need, which includes mechanized infantry and mobile guns, because, in certain circumstances, tanks are very vulnerable weapons. They themselves need protection. As we possess only a few of them we cannot afford to run any risk that we might not be able to move them to the critical position or that we might lose them either on the way or on their arrival.

I ask the Minister, not in any spirit of criticism of himself or his department, to give us some further information on this aspect. I make this request purely in the spirit of obtaining reassurance for the people of this country that we have a chance to stand on our own feet in an emergency and do not have to rely on other people to defend us.

Let me remind honorable members that in the two major wars in which we have been involved in this country we had some one to stand between us and our enemies while we prepared to do our fighting. Can any one in this place give any guarantee that that will happen a third time? There is no such guarantee in the wide world. We want the assurance that this country can stand on its own feet and that if it is threatened it can put up a reasonably good defence system of its own. To-day, as years ago, we have the man-power capable of defending this country if it is given a reasonable deal in the matter of equipment and training.

Mr IAN ALLAN:
Gwydir

.- The honorable member for Capricornia (Mr. Gray) has been speaking about a very important subject - defence. He has reminded us that we are facing a threat of war. We are constantly reminded of the danger of Communist imperialism, as evidenced by open warfare, by subversion or by the more insidious form of destroying civil liberties. No amount of propaganda will remove this threat from Australia; no amount of voluntary curtailment of our civil liberties will prevent subversion, and no amount of military preparedness will protect us. The only real way in which we can meet this menace of imperialist communism is by cutting the tap-root of the Communist system. We shall not meet it by building up defence forces, by building up a great store of rockets or war machines of one kind or another, by having a much more effective security service than we now have, by any amount of propaganda or by any number of agreements that we sign with other countries. As I have said, we can defeat this great menace only by cutting its tap-root, destroying it and removing it from the scene completely. The way to do that is to out-produce the Communists.

Within the last few days Mr. Khrushchev pointed to this matter of production as being the crux of the problem. We would be wise to take his words to heart on this occasion because they are as vital to us as he regards them to be to his own cause. When addressing a group of farmers and agriculturalists in the Soviet Union for a period of seven hours Mr. Khrushchev sharply criticized the state of Soviet agriculture. He said -

We sharply criticize the present state of agriculture. In the shortest possible time it must double or treble its output of the most important products . . . This is demanded by life itself; this is in the interests of building communism.

Now comes the punch line. Mr. Khrushchev is reported as having said that the party’s task was the creation of abundance. Once Russia and its allies overtook the most advanced capitalist countries nothing would stop the victorious march of Communist ideals.

That is precisely the way by which we shall overcome and remove this threat to world peace and world security - by outproducing the Communists. We should look now to the handicaps which we in the free world have in this task of raising production. We have two prime handicaps. One is the hangover from the bad old days of extreme nationalism which is preventing trade from flowing evenly through the world and preventing us from using our natural resources to the most effective extent. The other, of course, is the existence of prejudices within industry which limit production. We hear a good deal of those prejudices in debates in this chamber.

I want to speak to-night of the most pressing problem of all at the present time, the production of foodstuffs. The great handicap limiting the production of foodstuffs in the world to-day results from the failure of the various producing nations to get together and rationalize the production and distribution of food. It is of vital importance that some sense of order be brought into the production and distribution of foodstuffs. The population of the world is going to double within the next 40 years. That will be within the lifetime of many honorable members of this Parliament. Within the next 40 years we will have three-quarters of the world’s population living in the Asian area. The population of that area is now largely undernourished, according to present world standards. It is a population that will demand ample supplies of food. It will demand, next, plenty of the fibres that are needed to make clothing, and, finally, it will demand a plentiful supply of the raw materials that form the basis of industry.

Here is our prime task at the present stage, and we must appreciate its vital importance in the present scheme of things. It is primarily by the production of ample quantities of foodstuffs that we are going to destroy communism in the world. We will not do it by building up great defence forces or by any other such means. This is, as Mr. Khrushchev has pointed out, the crux of the whole cold war.

The French Government has recently advanced a plan for the rationalization of the production of wheat. Wheat is probably the most important of all the foodstuffs in the world, and it is the intention of the French Government, and of the other governments taking part in the discussions, to use the plan for this commodity as the basis for other commodity plans which it is hoped to devise during the next two years. Unfortunately, very little attention has been given to this plan. Admittedly it has not reached a very advanced stage, but it certainly is on the stocks right now. If the French plan could be brought to fruition, it would mean that the resources of the free world for the production of wheat would be used to the maximum advantage, and there would be an ample surplus for disposal in the distressed, over-populated areas of the world.

This, surely, is a plan to which we can give support in this chamber. It is something that we should talk about outside the chamber. We should try our utmost to influence public opinion -in Australia in its favour. We must, in the interests of the security of Australia, and in the interests of the security of all the free world, seek a rationalization of the production and distribution of foodstuffs, fibres and raw materials. We should then go on to try to remove the handicaps which are now limiting production in the field of secondary industries. This is where we will win the cold war. This is the way we will win friends throughout the world. We can argue the point on humanitarian grounds; we can argue it on grounds of necessity. But from the point of view of winning the cold war and wiping the scourge of communism from the face of the earth, I believe every member of this Parliament should do what he can to understand the principle behind the plan put forward by the French - which 1 have reason to believe was originated in Australia - and give it all the support that he can.

Mr GALVIN:
Kingston

.- I desire to speak of the two elections that were held in this country last Saturday. One was in New South Wales, in which the Labour Party recorded a magnificent victory, increasing its representation in the State Parliament by ten or twelve seats. The other was in South Australia, where we have been faced for years with the most blatant gerrymander in the history of Parliaments, and by far the worst political gerrymander existing in the British Commonwealth. For many years the majority of the electors of South Australia have been denied the right to elect the government of their choice. Last Saturday it appeared that at long last, the people of South Australia, having become so incensed by this Commonwealth Government and by the Playford Government in South Australia, had decided that once and for all the gerrymander should be removed. The election resulted in a gain of two seats for Labour. A record proportion of 56 per cent, of the votes went to the Australian Labour Party candidates, and only 34 per cent, went to the Liberal Party. In the final result, A.L.P. candidates won nineteen seats, Liberal-Country Party candidates won eighteen seats, and Independents won two seats.

It appeared that at long last the majority vote in South Australia would decide the Government. It was with great interest, therefore, that the people of South Australia waited for the Premier - who, like the Prime Minister of this country, was so struck dumb by the vote that he could not say anything about it for some time - to make a statement. I took the opportunity of listening to his statement on the radio. He said he had reached a situation in which three avenues were open to him. He said it was unfortunate that the people had not given sufficient votes to either the Labour Party or the Liberal-Country Parties to enable either of them to govern South Australia and to enjoy the confidence of the House. He said that one course open to him was to govern and take a chance on what might happen later. Secondly, he could, as he said most people seemed to suggest - and as I think most fair-minded people in the State would suggest - inform the Governor of South Australia that the majority of the people disagreed with his policy, explain that Labour had a clear majority in the State, hand in his commission and suggest that the Governor send for Mr. Frank Walsh, as the leader of the Australian Labour Party.

Then he dealt with what he said was the third avenue open to him. He said, “You know, there are two Independents elected, and if I were to suggest that Mr. Walsh be given a mandate, it would disfranchise these two electorates “. He said that their representatives would not have a chance to decide who should govern the State. There are, as he said, a couple of events that will occur shortly. There is, for instance, a festival of arts to be held soon, which would normally be attended by the Premier, his Ministers and their wives. No doubt great pressure was exerted by many of them in an effort to hang onto their offices until after this festival of arts, so that they could attend important social functions. Therefore, the Parliament must be put off until the festival is finished. What will happen then? Easter follows, of course, and perhaps some time after Easter the Premier will call Parliament together and let the Independents decide what should be done.

Mr. Speaker, whatever may have been the result of the election on 3rd March in South Australia, when nineteen Labour Party candidates were elected, as against eighteen Liberals, it is obvious that in the electorates which returned the independent candidates the people made it crystal clear that they rejected Playford and his Liberal policy, because the Liberal candidates in both of those electorates were beaten candidates. It is quite obvious that the electors in Ridley and Burra want nothing to do with Playford and his policy. So this Premier of South Australia, who has for so long denied the people, democracy in that State, is to hang on to office. I do not suggest what he may try to do in the next few days, but at least he intends to hang on to office, accept ministerial salary and carry on. He. should do the honest thing and hand in his commission.

Time and time again in this Parliament and elsewhere, Mr. Speaker, we condemn the rulers of the Soviet Union, China and Spain and other countries because they will not give their people the right to elect their own government. The people of Asia who aspire to democracy look to Australia as a beacon of democracy. They look to us to set an example, but we now have the Premier of South Australia adopting the principle of guided democracy. Evidently, he proposes to teach Soekarno a lesson. Playford wants to institute guided democracy, and so he tries to cling to office. I have heard members of Parliaments in India, Singapore and other parts of Asia ask questions about this undemocratic State of South Australia, trying to ascertain why the undemocratic situation there is tolerated. What do honorable members think those people will say when they see the example now being set in South Australia? A really Communist policy is being adopted. That policy is: The end justifies the means. What is now happening in South Australia gives the Communists a classic argument to use against our way of life.

The South Australian Premier has built up a legend for himself as “ honest Tom Playford”. He is more dishonest politically than any other member of Parliament in this country or any Premier of any State has been. It is a sorry state of affairs when the Premier of South Australia refuses to heed the voice of the people and accept their decision as recorded by their vote. Whatever good Sir Thomas Playford has done during his long term of office - I do not deny that he has done some good for South Australia - history will record that he not only relied on a gerrymander to defy the will of the people but also refused to heed the voice of the people when they gave their decision clearly under the parliamentary system in vogue in this country. The lights of democracy have been flickering for a long time in South Australia, and Tom Playford will snuff them right out if he has his way. His actions, as demonstrated by the statement that he has made to-day, set a poor example to the people of Asia whom we are trying, by means of the Colombo Plan and in other ways, to encourage to adopt our way of life. The South Australian Premier has joined the ranks of the great dictators alongside Khrushchev, Stalin, Franco and Mao Tse-tung. He has joined the dictators who deny their people the right to elect a government of their own choice.

By all the rules of fair play, Playford should follow the traditional custom of countries of the British Commonwealth of Nations and hand in his commission when his Government is beaten in an election. He should accept the will of the people. Unfortunately, he chooses to hang on to office at all cost. The people will not tolerate this, Mr. Speaker. He has got away with the gerrymander because they have been fairly easy-going, but-

Mr SPEAKER (Hon Sir John McLeay:

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

Mr FORBES:
Barker

.- Mr. Speaker, honorable members will recall that about eighteen months or two years ago there appeared in the press speculative stories which many people - with good foundation, I believe - thought were put about by the honorable member for Kingston (Mr. Galvin). He aspired to leave this Parliament and lead the Australian Labour Party in South Australia to victory in a State election. The stories gained great currency. The honorable member, in a television programme, denied them at the time - as, indeed, he had to do. This evening, he has listened eagerly on the radio here in Canberra to Sir Thomas Playford’s statement, and he has greeted with fury the news that Sir Thomas does not intend immediately to rush to the Governor of South Australia and resign his commission. I think that this attitude on the part of the honorable member for Kingston will raise anew the speculation which I have men tioned. Obviously, the reason for the honorable member’s attitude is that he expects, and no doubt is plotting and planning to get, the call to return to the State sphere in the very near future. He now sees the prospect of this being put off.

While I am talking about this subject, Sir, I would like to say something about this curious view of the tradition in parliamentary democracy which has been mentioned this evening by the honorable member for Kingston. Honorable members opposite trot it out whenever the circumstances suit them. Whatever the honorable member may say, under parliamentary democracy based on the British model, which we in this country and the people of most other countries of the Commonwealth of Nations accept, the traditional view is that the party which commands a majority in the Parliament forms a government. Whatever the honorable member for Kingston may do to try to hide this fact behind a smoke screen, until the position is determined the Australian Labour Party does not command a majority of the members in the South Australian Parliament All that Sir Thomas Playford said this evening was that he would let the Parliament decide. In other words, he will call the Parliament together as soon as is practicable, and he will accept the Parliament’s decision. If the honorable member for Kingston were a good parliamentarian, he, too, would take that attitude.

However, Sir, I did not rise to deal with the trivialities, aspirations and ambitions of the honorable member for Kingston. I rose principally to deal with a subject that was discussed last evening. It has been raised again this evening by the honorable member for Capricornia (Mr. Gray). I think that the House owes a debt to the honorable member for his contribution to the debate on this subject. Unlike the honorable member for Grayndler (Mr. Daly) and the honorable member for Wills (Mr. Bryant), who discussed this matter last evening, and to whom the House is not indebted for their remarks, the honorable member for Capricornia at least exhibited an absence of heat and a sense of responsibility in his discussion of a matter which is very important to the defence of this country.

I do not agree with the point of view that the honorable member put. I would agree with him if his argument about the Centurion tanks were designed to establish that our roads and bridges are not good enough to enable us to transport them and that the break of gauge on our railways prevents us from moving them about the country, or that we could more easily move these tanks from point to point if we had better roads and bridges and a better railway system. But that was not the argument honorable members opposite put forward. The argument put forward by the honorable member for Grayndler and the honorable member for Wills last night was that there had been mismanagement and bungling in the approach to our defence policy for the very reason that we had acquired the Centurion tanks at all. As I said last night, if the matter is to be looked at from that point of view, consideration must be given to how we expect to use our defence forces, and in particular our tanks. After all the tanks are only a support weapon to the infantry arm.

The view of the Government, firstly, is that it is not within our capacity to defend ourselves from a major threat by our own unaided efforts. That point of view would appear to me to have been challenged by the honorable member for Capricornia tonight. Quite clearly his view is that Australia should build up its defence forces to the point where we will be able, by our own unaided efforts, to defend this country. I should like to know whether that is the official view of the Opposition because if it is, we would be delighted to hear it. We would be delighted to know that gradually the Opposition was coming around to our view, namely that this country must be defended adequately. We would be delighted to know also that the Opposition was prepared to vote sufficient money to achieve adequate defence.

I suggest to the honorable member for Capricornia that not one member of the Opposition would be prepared to vote a penny more for defence than the Government is spending at the present moment, let alone approve the astronomical amount that would be required to achieve the state of affairs which he regards as desirable.

His criticism in relation to the Centurion tanks was based on the assumption that we should be able to defend this country by our own unaided efforts. If the Centurions are used they will not be used on Australian soil but somewhere to the north of Australia where we envisage we may be called upon to defend ourselves. Therefore, they will be transported by sea. The honorable member said that he has had something to do with tanks. No doubt he has been in positions such as I have been in. He knows that even in the thickest jungle country, if by a superhuman effort it is possible to get a heavy tank in front of the infantryman, he values it as he does his life. If we have the means to take even one Centurion tank to the point at which we have to fight a future war, it is well worth having such a tank.

Motion (by Mr. McMahon) put -

That the question be now put.

The House divided. (Mr. Speaker - Hon. Sir John McLeay.)

AYES: 59

NOES: 57

Majority . . 2

AYES

NOES

Question so resolved in the affirmative.

Original question resolved in the affirmative.

House adjourned at 11.53 p.m.

page 703

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Employment

Mr O’Brien:
PETRIE, QUEENSLAND

n asked the Prime Minister, upon notice -

Has the Government sought to transfer the responsibility for employment from itself to local authorities?
If so, can he say whether this action by the Government has made it obligatory for ratepayers to borrow excessively to provide employment, and has caused many local authorities, particularly in Queensland, to become incensed?
Is the Government placing on citizens a responsibility for creating employment which it should itself carry?

Mr Menzies:
LP

– The answers to the honorable member’s questions are as follows: -

No. Whilst the Commonwealth is itself a substantial employer of labour, it is quite contrary to the Government’s views to suggest that the Commonwealth should assume the sole responsibility for providing jobs in Australia. My Government does, however, accept the responsibility for creating conditions favorable to the achievement of the highest possible level of employment compatible with rapid growth and the maintenance of reasonable stability.
See answer to 1.
No. This is a task for both private enterprise and public authorities. It will be apparent from the statement I made on 7th February last that the Commonwealth Government has acted decisively in a number of ways to promote the growth of employment and the economy generally. Such measures as the 5 per cent, rebate of personal income tax for 1961-62, and the reductions in sales tax, which are already operative, are examples of such action by the Commonwealth. Further, the Commonwealth has agreed to make available to the States a non-repayable grant of ?10,000,000 for employment-giving activities. In addition, the Loan Council agreed to accept the Commonwealth offer to increase the moneys payable to State governments for housing activities. It is certainly hoped that, within the context of these general measures, local authority employment may also be stepped up. To that end the Loan Council decided to increase the borrowing allocations to those authorities with borrowing programmes of more than ?100,000 in the current financial year, and to allow those authorities with borrowing programmes of less than ?100,000 to make further borrowings up to ?100,000 within the current financial year, subject to the approval of the State government concerned. The local authorities concerned are not, of course, obliged to increase their borrowing by reason of this decision, but it was represented to the Commonwealth that many of them were not only able but willing (indeed eager) to do so in order to carry out works within their competence.

Local Government Finance

Mr Reynolds:

s asked the Prime Minister, upon notice -

Is he able to say whether severe and generally increasing burdens are being placed upon ratepayers by the continuance of the outmoded system of financing local government substantially through levies on property owners?
Have the New South Wales Government and the Local Government Association requested the Commonwealth Government to convene a threetier conference of federal, state and local government authorities for the purpose of discussing proposals for a more effective and equitable means of financing local government?
If so, has the Government given consideration to this request?
Does the Government propose to convene this conference?
If not, under what circumstances would it consider doing so?

Mr Menzies:
LP

– The answers to the honorable member’s questions are as follows: - 1 to 5. The Premier of New South Wales wrote to me on 5th May, 1961, asking me to make arrangements for such a meeting. The Australian Council of Local Government Associations and other local government bodies have also asked the Commonwealth to convene a conference of this kind. The Commonwealth’s attitude on this matter is, I think, well known. Since local authorities are constituted and function, under

State legislation, the Commonwealth’s firmly held view is that any action on matters affecting local government finance should originate with State governments. For this reason, the Commonwealth Government believes that the Commonwealth should not sponsor arrangements for a conference of this nature. However, if the State governments should collectively agree to engage in such a conference with local authorities, the Commonwealth would also be willing to participate.

Commonwealth Scientific and Industrial Research Organization

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

r asked the Minister representing the Minister in charge of the Commonwealth Scientific and Industrial Research Organization, upon notice -

To what extent have the Commonwealth Scientific and Industrial Research Organization’s discoveries in relation to solvent-degreasing, carbonizing, shrink-proofing, melange printing, combing control and fellmongering been adopted over the last ten years in Australia and abroad?
Have the organization’s Si-Ro-Moth’d, Sironized and Si-Ro-Set process ‘been widely and successfully adopted?
Have there been production difficulties in the adoption of any of these processes; if so, why?
Is Si-Ro-Mark branding fluid now exclusively used by wool-growers; if not, why not?

Mr Freeth:
LP

– The Minister in charge of the Commonwealth Scientific and Industrial Research Organization has supplied the following information: -

Solvent degreasing of wool. - The only commercial unit at present using the solvent degreasing process is that of G. H. Mitchell and Sons Limited, Hindmarsh, South Australia. The plant has a capacity of over 2,500 lb. of wool per hour and is currently treating about 20 per cent, of Australia’s total production of wool tops. Production in 1961 was nearly 8,000,000 lb., and about 33,000,000 lb. have been produced since the plant began operation. Other Australian firms are considering adoption of the method. Considerable overseas interest has been shown in the solvent degreasing process. Wool textile firms in the United Kingdom, Italy, Japan, the United States of America and Germany have sent representatives to study its operation in Australia. However, installation of plant for solvent degreasing involves a large capital outlay and for this reason the process is likely to be adopted only when new plants are being built or worn-out scouring units are being replaced.

Carbonizing. - The amount of fibre damage that occurs in the C.S.I.R.O. modification of the acid carbonizing process is very much less than that in conventional processes. During subsequent spinning and weaving this shows up in reduced yarn breakage and a better product. The process has, therefore, been most readily accepted by vertically integrated mills in which the wool under goes further processing after carbonizing. Commission carbonizers do not show the same direct advantage from using the process; however, there is some slight increase in yield of wool. Although no exact figures are available it is estimated that the method is used by about half the carbonizers in Australia. It is known to be in use in some foreign mills but no data are available to permit an assessment of the extent of the adoption overseas.

Shrinkproofing Treatment. - Blankets treated by the C.S.I.R.O. shrinkproofing process are now being produced by several Australian mills and are being widely used in hospitals, since they can be sterilized many times by boiling without shrinking, felting, or discolouring. Woollen knitwear treated by this process is being produced by two leading Australian manufacturers and wool in top form is being shrinkproofed by several firms. As a result of a recent visit to the United States of America by one of the officers from the C.S.I.R.O. Division of Textile Industry who worked in cooperation with the Wool Bureau Incorporated, several large American knitwear manufacturers are operating the process. Other American firms are to use this method of shrinkproofing for the treatment of woven fabrics. The same CS.1.R.O. officer is now assisting the International Wool Secretariat to extend the using of the process to the United Kingdom and continental Europe.

Melange Printing. - The modified technique developed by C.S.I.R.O. is now the basis of most melange printing in Australia. The process is also being used overseas.

Noble Comb Control Unit. - The automatic controller for Noble combs has now been manufactured in considerable numbers by an Australian firm. The device is installed in every major worsted mill in Australia and New Zealand. When current orders are fulfilled, 132 units will be operating in Australian mills. A total of 25 controllers has been exported to New Zealand, the United Kingdom and the United States of America. Further units for export are on order.

Fellmongering. - The C.S.I.R.O. process for recovering wool from damaged sheepskins and from sheepskin pieces is being applied very successfully by two Australian fellmongers. There has been some reluctance by other fellmongers to use the process. One reason that has been given is that its adoption requires some expenditure on plant. It appears that there is a good prospect for wider application of the process in the future. As far as is known this process is not used by many overseas fellmongers; however, one firm in Scotland is known to be using the method.

Si-Ro-Moth’d Mothproofing Process. - This process has been widely adopted in Australia. Seventeen firms are authorized to use the trade mark Si-Ro-Moth’d. About two-thirds of the Australian production of apparel wool is being treated. It is believed that most Australian production of knitwear and blankets and about 90 per cent, of carpet wools are now mothproofed with dieldrin, which is the basis of this process. In overseas countries the trade mark Si-Ro-Moth’d is not used. Treated goods are identified by several different trade marks. There are about 100 textile mills in the United States of America producing woollen goods mothproofed by the process, more than 200,000,000 lb. of wool being treated per annum. In Great Britain, about one-quarter of woollen goods produced are similarly mothproofed. The process is also being used in Europe, Japan, and elsewhere. It has provided an economic answer to the problem of moth attack on wool.

Sironized Washable Non-iron Effects. - Ten Australian firms are authorized to use the trade mark Sironized. The process was first introduced only two years ago. At present the garments being manufactured are mainly men’s shirts, girls’ school tunics and boys’ knickers. Current production is estimated at about 33,000 garments per annum. The Sironized treatment comprises two operations - shrinkproofing followed by flat setting. As mentioned in connexion with shrinkproofing, an officer of the C.S.LR.O. Division of Textile Industry has recently spent six months working with the Wool Bureau Incorporated in the United States of America and is now with the International Wool Secretariat in London. He has assisted overseas manufacturers with the introduction of the Sironized process. The method is that being used in Britain and Holland and it is anticipated that its use will increase as a result of this collaborative extension work.

Si-Ro-Set Durable Creases and Pleats. - Si-Ro-Set is now established throughout the trade in Australia as a simple, cheap and effective process. Sixty firms are now licensed to produce garments with Si-Ro-Set durable creases, principally women’s pleated skirts, men’s and women’s slacks, men’s suit trousers, and schoolwear. Practically all the Australian production of women’s pleated wool skirts is now being treated with Si-Ro-Set. There are firms in each capital city and at Bendigo, Victoria, operating on a commission basis for the clothing trade and more than 200 clothing manufacturers are handling Si-Ro-Set garments. About 3,500,000 garments have been treated since the process was introduced in 1957 and at present more than 1,250,000 garments are being treated annually. Nearly all Commonwealth and State Government departments and instrumentalities are now using Si-Ro-Set treated garments for their uniformed staff. In America a modified reagent is employed in a Si-Ro-Set type treatment. There are now more than 90 treatment plants in the United States of America and Canada, and there are 130 manufacturers supplying treated garments. Nearly 4,000,000 treated garments are being produced per annum, mainly men’s suit trousers, and men’s and women’s slacks. No recent production figures are available for other countries but the International Wool Secretariat reports that considerable quantities of treated garments are being produced in the United Kingdom, Holland, Germany, Japan, and New Zealand. Smaller quantities are being produced in South Africa and various other countries. In the United Kingdom there are 20-30 firms using the process and 1,600- 1,700 retailers selling treated garments.

There have been no unusual production difficulties in the adoption of C.S.I.R.O. wool textile processes in industry. Some problems have arisen and have been overcome, but these would not be considered unusual in the application of any sew process in the wool textile industry. The SiReMoth’d process has probably been introduced into industry more widely and with less difficulty than any other major new wool finishing process. The problems met initially in the use of the Si-Ro-Set process were such as might be expected in introducing a new technique into the clothing industry. which hitherto had not been required to adopt procedures of this nature. The greatest difficulty arose from lack of technical staff to extend this process into industry and to ensure that recommended procedures were followed. However, the recent addition of technical staff to the Australian Wool Bureau has greatly altered this situation. Similarly, initial difficulties in the use of Sironized treatment have been overcome by the work of the bureau’s technical staff, who advise industry as to suitable fabrics and the procedures necessary for making up garments from treated materials. The wool industry has, in the past, lacked these technical service facilities and the extension of the results of C.S.I.R.O. research should be greatly facilitated as a result of such services becoming available in Australia and overseas.
There are fourteen Australian firms licensed to produce Si-Ro-Mark branding fluid and over 125,000 gallons of fluid is being produced per annum. About 95 per cent, of the brands on Australian sheep are Si-Ro-Mark. This fluid is usely exclusively in those States where legislation requires the use of scourable sheep brands.

Desalination of Water

Mr Webb:

b asked the Minister representing the Minister in charge of the Commonwealth Scientific and Industrial Research Organization, upon notice -

Can he furnish any further information regarding experiments being conducted by the Commonwealth Scientific and Industrial Research Organization into the production of fresh water from salt and brackish water?

Mr Freeth:
LP

– The Minister in charge of the Commonwealth Scientific and Industrial Research Organization has supplied the following answer: -

There are a number of processes which can be used to convert salt or brackish water into fresh water. At present, however, all these processes are too expensive for general use. In some cases this is due to the initial cost of the equipment and, in other cases, to the running costs, generally electrical power or fuel. An extensive programme on water desalting is being conducted by the United States Department of the Interior and, in the financial year just completed, over 3,000,000 dollars were spent on this work. C.S.I.R.O. officers are in close touch with officers of the Department of the Interior, and each new development made under that department’s programme is assessed in C.S.I.R.O. to estimate the cost of its possible application under Australian conditions. There would be no point in duplicating in C.S.I.jR.O. experimental work which is already being done on a most impressive scale in U.S.A. The approach in C.S.I.R.O. is therefore to concentrate on some promising leads that have originated in C.S.I.R.O. and that are not being worked on elsewhere. In the Engineering Section, research on solar distillation is in process. The solar still is a simple apparatus which uses the heat of the sun and therefore requires a minimum of running costs. A number of small units to a C.S.I.R.O. design. yielding a few pints of pure water daily, have been installed throughout the country. Stills made to the designs known at present are convenient for some installations; on a larger scale, it is usually cheaper to use a conventional distillation apparatus, fired by fuel oil or some similar fuel. Attempts are therefore being made to improve the efficiency of solar stills by developing what are known as multiple-effect solar stills. In the Chemical Engineering Section, a study is being made of some new methods of removing scale that forms on the inside of boilers used in distilling salt or brackish water. This scale reduces the efficiency of the distillation process and contributes very largely to the cost of the fresh water produced. While it has not yet been possible to prevent scale forming, a method has been developed for producing the scale in a form which is very brittle and easily removed. Work is now in progress to exploit the practical applications of this development. Another process which is being studied involves the use of ion exchange resins to remove salt from water. The ion exchange process is very simple to operate but at present it is expensive, mainly due to the high cost of removing salt from the used resin, so that it can bo re-used. In the Division of Physical Chemistry, the properties of ion exchange resins are being studied, and attempts are being made to synthesize new resins from which the salt could be removed by a cheap electrical treatment. This work is at an early stage and is highly speculative in nature. At this stage it could not be said whether it will lead to a development of a practical method for water desalting. Finally, may I also mention that water desalting research is only one aspect of a wide variety of research projects that are spread throughout the whole of C.S.I.R.O., and that are aimed at finding ways to increase our available water resources, or to improve the efficiency of utilization of existing resources.

Television

Mr Ward:
EAST SYDNEY, NEW SOUTH WALES

d asked the Postmaster-General, upon notice -

Can he say whether the British PostmasterGeneral, Mr. Reginald Bevins, earlier this year directed that £430,000 of the Independent Television Authority’s 1960-61 profit be paid into the Exchequer?
Is it a fact that, under the terms of the United Kingdom Television Act, the Independent Television Authority is obliged to apply any annual excess of income over expenditure as the Post master-General directs?
In view of the extent of the profits which have been and are being made following the introduction of commercial television into this country, will he examine the British legislation with a view to the introduction of legislation into the Commonwealth Parliament to ensure a greater return to consolidated revenue by the privileged private interests operating Australian commercial television stations?

Mr Davidson:
CP

– The answers to the honorable member’s questions are as follows:-

Yes.
The Independent Television Authority ls required to allocate any surplus revenues in such manner as the Postmaster-General, with the approval of the Treasury and after consultation with the Authority, may direct. Such direction may require the whole or any part of such surplus to be paid into the Exchequer.
The Independent Television Authority has no parallel in Australia. The Independent Television Authority owns the stations and contracts with independent programme contractors for the provision of programmes, whereas, in Australia, the commercial television service is provided by stations owned and operated by companies under licence from the Postmaster-General. The legislation respecting the finances of the Authority is not relevant to the question of licence fees lor Australian stations.

Mr Beaton:
BENDIGO, VICTORIA

n asked the Postmaster-General, upon notice -

What is the approximate date for the commencement of transmission by the proposed national television station at Bendigo?

Mr Davidson:
CP

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

It is expected that the national television service for the Bendigo district should be operating by about April, 1963. The establishment of national television services has entailed a great deal of effort by private and public enterprise. The magnitude of the work has ranged from the technical planning for the selection of transmitter sites, construction of access roads, erection of transmitter relay and other buildings and the manufacture and installation of transmitter, relay and, where appropriate, studio equipment. As there are many factors, including the date of delivery of equipment from manufacturers, which could affect the opening date, I cannot let the honorable member know of the actual date of opening at this stage. However, I can assure him that work is proceeding in accordance with the overall planning for the various services and I shall let him know when it is possible to arrange for the official opening of the service for the Bendigo district.

Postal Services

Mr Beaton:

n asked the PostmasterGeneral, upon notice -

How many non-official post offices are situated in the Bendigo electorate?
Where are these offices located?
For what hours are these offices open to provide the various post office services?
Upon what basis are the salaries of the nonofficial postmasters fixed?

Mr Davidson:
CP

– The answers to the honorable member’s questions are as follows: -

Ninety-seven non-official post offices, six telephone offices.
Non-official post offices. - Avonmore, Axedale, Bagshot, Bagshot North, Barker’s Creek, Barnadown, Bendigo East, Bendigo Markets, Bendigo

North, Bendigo South, Bendigo West, California Gully, Campbell’s Creek, Carlsruhe, Chewton, Corop, Costerfield, Derby, Derrinal, Dingee, Drummond, Eastville, Edgecombe, Elphinstone, Eppalock, Epsom, Fosterville, Fryerstown, Glenaroua, Glenluce, Goornong, Green Hill, Guildford, Harcourt, Harcourt North, Heathcote South, High Camp Plain Rail, Hunter, Huntly, Junortoun, Kamarooka North, Kamarooka, Kangaroo Flat, Kangaroo Flat South, Kennington, Knowsley, Laanecoorie, Langley, Lauriston, Leichardt, Lockwood, Lockwood South, Long Gully, Longlea, Maiden Gully, Malmsbury, Mandurang, Marong, Metcalfe, Metcalfe East, Mia Mia, Muckleford. Myers Flat, Neilborough, Neilborough East, Piper’s Creek, Puckapunyal Town, Pyalong, Quarry Hill, Ravenswood, Raywood, Redesdale, Ruffy, Sandhurst East, Sebastian, Sedgwick, Seymour South, Seymour West, Shelbourne, Specimen Hill, Spring Gully, Spring Hill, Spring Plains, Strathfieldsaye, Sutton Grange, Tallarook, Taradale, Tarilta, Tooborac, Toolleen, Trawool, Tylden, Tyson’s Reef, Vaughan, Warragamba, White Hills, Wild Duck Creek.

Telephone offices. - Baynton, Pastoria East, Ravenswood, Shelbourne, Sidonia, Vaughan.

Normally from 9 a.m. to 5 p.m., with one hour for lunch, on week days, and from 9 a.m. to 12 noon on Saturdays, for general postal business. In some cases, these hours are varied slightly to meet local convenience. At a number of offices extended or continuous telephone service is provided and special payment is made for provision of this additional service.
The payments made to non-official postmasters are in accordance with the terms .of an arbitration determination issued in favour of the Non-Official Postmasters’ Association of Australia. These payments are directly related to the volume of business transacted at each particular office. In addition to the payments accruing in relation to the actual transactions at each office, separate allowances are payable in respect of the accommodation provided by the non-official postmaster for postal purposes, and also for attendances outside normal office hours to provide attention at the telephone exchange, or to deal with outward and inward mails.

Mr Hayden:

n asked the PostmasterGeneral, upon notice -

As the vast majority of business houses operate a five-day working week, will he consider abolishing Saturday morning mail deliveries and so enable postmen to enjoy the shorter working week in common with most other sections of employees?

Mr Davidson:
CP

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

The department is anxious to improve staff working conditions to the greatest extent possible, but its obligations to provide a reasonable standard of postal service to the community generally must also be taken into consideration. I am, however, receiving a deputation from representative service organizations in the near future and the aspects raised will then be fully discussed.

Mr Hayden:

n asked the PostmasterGeneral, upon notice -

Will he consider carrying out a survey with the object of establishing and operating post offices on the basis of a five-day working week so that the employees may enjoy the benefits of the shorter working week in common with most other employees to-day?

Mr Davidson:
CP

– The following is the answer to the honorable member’s question: -

At an early date, I am receiving a deputation from representative service organizations and the matters raised will then be fully considered in the light of the information presented by the organizations concerned, with due regard, of course, to the interests of the staff and the department’s responsibilities to the public generally.

Taxation

Mr Hansen:

n asked the Treasurer, upon notice -

What taxation remissions, similar to those granted to Australian manufacturers to encourage overseas export trade, can be extended to maizegrowers in the Burnett area of Queensland who are endeavouring to develop a maize export market to Japan?

Mr Harold Holt:
LP

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

The taxation incentives designed to encourage the development of the Australian export trade are not limited in their application to manufacturers. A maize-grower who incurs export market development expenditure in promoting the sale overseas of his product would be eligible for a special income tax deduction on the same basis as other taxpayers incurring expenditure to promote exports. So far as the pay-roll tax rebate is concerned, it is improbable that a maize-grower would become liable for pay-roll tax but, if the maize is marketed through a marketing board which has elected to be classified as a producer for export that board is entitled to claim the rebate.

Banking

Mr Haylen:

n asked the Treasurer, upon notice -

Can he say whether the private trading banks have a gentleman’s agreement that they will not take over an existing overdraft in another bank no matter how good the account?
If this restriction on the freedom of choice of the customer exists is the propaganda of the trading banks on this matter so much expensive, unnecessary and misleading nonsense?
Has the Commonwealth Bank been instructed to follow the same line as that followed by the private trading banks whereby the customer is obliged to stay with the bank of his choice when it is no longer his choice?

Mr Harold Holt:
LP

– The answers to the honorable member’s questions are as follows: - 1 and 2. I have no information that any such agreement exists. On the contrary, movements of overdraft accounts between banks are known to occur quite frequently.

No instructions of the nature suggested have been or could be issued to the Commonwealth Trading Bank. Section 28(3.) of the Commonwealth Banks Act 1959-1961 provides that the Commonwealth Trading Bank “ shall not refuse to conduct banking business for a person by reason only of the fact that to conduct that business would have the effect of taking away business from another bank”.

Sales Tax

Mr Don Cameron:
LILLEY, QUEENSLAND · ALP

n asked the Treasurer, upon notice -

What amount of revenue was collected during the last financial year from sales tax on basic foodstuffs?
As the reduction of sales tax on motor vehicles benefits only certain members of the community, will consideration be given to the abolition of sales tax on foodstuffs as a benefit to the entire community?

Mr Harold Holt:
LP

– The answers to the honorable member’s questions are as follows: -

The main basic foodstuffs are exempt from sales tax. These include meat, poultry, fish (other than imported canned fish) bacon and ham, small goods, fruit (including dried fruit), vege tables, flour, bread, milk and milk products, butter, cheese, jam, honey, sugar, rice, sago, tapioca, prepared breakfast foods consisting of processed grain, tea, coffee, cocoa, and food for infants and invalids. Sales tax is payable only on a limited range of comestibles which include cakes, cake mixes, pastry, biscuits, ice cream, confectionery, jelly crystals and certain flavourings and condiments. The tax collected in respect of these foodstuffs in 1960-61 is estimated at £14,000,000.
It is the custom of the Government to review taxation in the course of its preparation of the Budget. An assurance is given that representations which have been made for sales tax exemption of all edible commodities will be considered during the next Budget review, together with the very numerous requests which have also been made for exemption of a very wide range of other goods.

Government Securities

Mr Cairns:

s asked the Treasurer, upon notice -

What amounts and percentages of Commonwealth Government securities were held at the 30th June in each of the years 1958, 1959, 1960 and 1961 by (a) the Commonwealth Trading and Savings Banks, (b) all other banks, (c) life assurance offices, (d) other insurance offices, (e) government provident and pension funds, (f) other pension and provident funds, (g) Commonwealth State, local and semi-government bodies, (h) marketing boards and funds, (i) trustee offices, (j) companies and (k) other holders?

Mr Harold Holt:
LP

– The information sought by the honorable member is as follows: -

West New Guinea

Mr Cairns:

s asked the Minister for External Affairs, upon notice: -

Did the Government assure Dr. Subandrio, Indonesian Foreign Minister, on his visit to Australia, that the future of West New Guinea was a matter to be settled peacefully between his country and Holland and with which Australia would not interfere?
If not, what was the understanding reached with Dr. Subandrio?
Is it recognized that any hostilities between Indonesia and Holland might lead to an AfroAsian line-up against Holland and her allies?
If so, can he say whether this has led the Governments of the United States of America and Great Britain to conclude that it would be better to make concessions to Indonesia rather than risk hostilities?
Does the Australian Government share this conclusion?

Sir Garfield Barwick:
LP

– The answers to the honorable member’s questions are as follows: -

The Government’s attitude was set out in its official statements at the time.
See answer to question 1.
The particular situation has not arisen ana the Government does not propose to speculate publicly on it.
It would be quite inappropriate for the Government to attempt publicly to state or interpret the attitudes of any of the countries mentioned towards the matter, or their reasons for any of their attitudes.
See answer to question 4.

Cite as: Australia, House of Representatives, Debates, 8 March 1962, viewed 22 October 2017, <http://historichansard.net/hofreps/1962/19620308_reps_24_hor34/>.

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House of Representatives 8 March 1962

QUESTION

CANBERRA-TUMUT ROAD

Mr FULLER:HUME, NEW SOUTH WALES

Mr SPEAKER:

Mr FULLER:

Mr MENZIES:Prime Minister · KOOYONG, VICTORIA · LP

QUESTION

INDONESIA

Sir WILFRID KENT HUGHES:CHISHOLM, VICTORIA

Sir GARFIELD BARWICK:Attorney-General · PARRAMATTA, NEW SOUTH WALES · LP

QUESTION

URANIUM

Mr RIORDAN:KENNEDY, QUEENSLAND

Sir GARFIELD BARWICK:LP

QUESTION

POST OFFICE, ESSENDON

Mr STOKES:MARIBYRNONG, VICTORIA

Mr DAVIDSON:Postmaster-General · DAWSON, QUEENSLAND · CP

QUESTION

BROADCASTING

Mr EINFELD:PHILLIP, NEW SOUTH WALES

Mr DAVIDSON:CP

QUESTION

PAPUA AND NEW GUINEA

Mr DRUMMOND:NEW ENGLAND, NEW SOUTH WALES

Mr SPEAKER:

Mr DRUMMOND:

Mr SPEAKER:

Mr DRUMMOND:

Mr HASLUCK:Minister for Territories · CURTIN, WESTERN AUSTRALIA · LP

QUESTION

SALES TAX

Mr THOMPSON:PORT ADELAIDE, SOUTH AUSTRALIA

Mr HAROLD HOLT:Treasurer · HIGGINS, VICTORIA · LP

QUESTION

KANGAROO MEAT

Mr CHANEY:PERTH, WESTERN AUSTRALIA

Mr ADERMANN:Minister for Primary Industry · FISHER, QUEENSLAND · CP

QUESTION

SHIPPING LINE DIRECTORSHIP

Mr COSTA:BANKS, NEW SOUTH WALES

Mr DOWNER:Minister for Immigration · ANGAS, SOUTH AUSTRALIA · LP

QUESTION

SOUTH-EAST ASIA

Mr MACKINNON:CORANGAMITE, VICTORIA

Sir GARFIELD BARWICK:LP

QUESTION

LAOS

Mr BEAZLEY:FREMANTLE, WESTERN AUSTRALIA

Sir GARFIELD BARWICK:LP

QUESTION

COMMONWEALTH OFFICES

Mr IAN ALLAN:GWYDIR, NEW SOUTH WALES

Mr McMAHON:Minister for Labour and National Service · LOWE, NEW SOUTH WALES · LP

QUESTION

APPRENTICESHIPS

Mr E JAMES HARRISON:BLAXLAND, NEW SOUTH WALES

Mr MENZIES:LP

QUESTION

COMMUNISM

Mr HAWORTH:ISAACS, VICTORIA

Mr MENZIES:LP

QUESTION

DISARMAMENT

Mr CAIRNS:YARRA, VICTORIA

Mr MENZIES:LP

QUESTION

RECOGNITION OF AUSTRALIAN DIPLOMAS IN MALAYA

Mr CLEAVER:SWAN, WESTERN AUSTRALIA

Sir GARFIELD BARWICK:LP

QUESTION

ELECTORAL

Mr MINOGUE:WEST SYDNEY, NEW SOUTH WALES

Mr FREETH:Minister for the Interior · FORREST, WESTERN AUSTRALIA · LP

QUESTION

MARRABOOR WEIR

Mr TURNBULL:MALLEE, VICTORIA

Mr MENZIES:LP

Mr Turnbull:

House of Representatives
8 March 1962

Mr FULLER:
HUME, NEW SOUTH WALES

Mr MENZIES:
Prime Minister · KOOYONG, VICTORIA · LP

Sir WILFRID KENT HUGHES:
CHISHOLM, VICTORIA

Sir GARFIELD BARWICK:
Attorney-General · PARRAMATTA, NEW SOUTH WALES · LP

Mr RIORDAN:
KENNEDY, QUEENSLAND

Sir GARFIELD BARWICK:
LP

Mr STOKES:
MARIBYRNONG, VICTORIA

Mr DAVIDSON:
Postmaster-General · DAWSON, QUEENSLAND · CP

Mr EINFELD:
PHILLIP, NEW SOUTH WALES

Mr DAVIDSON:
CP

Mr DRUMMOND:
NEW ENGLAND, NEW SOUTH WALES

Mr HASLUCK:
Minister for Territories · CURTIN, WESTERN AUSTRALIA · LP

Mr THOMPSON:
PORT ADELAIDE, SOUTH AUSTRALIA

Mr HAROLD HOLT:
Treasurer · HIGGINS, VICTORIA · LP

Mr CHANEY:
PERTH, WESTERN AUSTRALIA

Mr ADERMANN:
Minister for Primary Industry · FISHER, QUEENSLAND · CP

Mr COSTA:
BANKS, NEW SOUTH WALES

Mr DOWNER:
Minister for Immigration · ANGAS, SOUTH AUSTRALIA · LP

Mr MACKINNON:
CORANGAMITE, VICTORIA

Sir GARFIELD BARWICK:
LP

Mr BEAZLEY:
FREMANTLE, WESTERN AUSTRALIA

Sir GARFIELD BARWICK:
LP

Mr IAN ALLAN:
GWYDIR, NEW SOUTH WALES

Mr McMAHON:
Minister for Labour and National Service · LOWE, NEW SOUTH WALES · LP

Mr E JAMES HARRISON:
BLAXLAND, NEW SOUTH WALES

Mr MENZIES:
LP

Mr HAWORTH:
ISAACS, VICTORIA

Mr MENZIES:
LP

Mr CAIRNS:
YARRA, VICTORIA

Mr MENZIES:
LP

Mr CLEAVER:
SWAN, WESTERN AUSTRALIA

Sir GARFIELD BARWICK:
LP

Mr MINOGUE:
WEST SYDNEY, NEW SOUTH WALES

Mr FREETH:
Minister for the Interior · FORREST, WESTERN AUSTRALIA · LP

Mr TURNBULL:
MALLEE, VICTORIA

Mr MENZIES:
LP

Mr WEBB:
STIRLING, WESTERN AUSTRALIA

Mr CRAMER:
Minister for the Army · BENNELONG, NEW SOUTH WALES · LP

Mr FAIRBAIRN:
FARRER, NEW SOUTH WALES

Mr ADERMANN:
CP

Mr McGUREN:
COWPER, NEW SOUTH WALES

Mr DAVIDSON:
CP

Mr FORBES:
BARKER, SOUTH AUSTRALIA

Sir GARFIELD BARWICK:
LP

Mr MONAGHAN:
EVANS, NEW SOUTH WALES

Mr SWARTZ:
Minister for Repatriation · DARLING DOWNS, QUEENSLAND · LP

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

Mr ADERMANN:
CP

Mr JAMES:
HUNTER, NEW SOUTH WALES

Mr DAVIDSON:
CP

Mr FALKINDER:
FRANKLIN, TASMANIA

Mr FREETH:
LP

Mr DALY:
GRAYNDLER, NEW SOUTH WALES

Mr MENZIES:
LP

Mr SWARTZ:
LP

Mr SPEAKER (Hon Sir John McLeay:
BOOTHBY, SOUTH AUSTRALIA

Mr TURNER:
Bradfield

Mr COLLARD:
Kalgoorlie

Mr CHANEY:
Perth

Mr COUTTS:
Griffith

Mr LUCOCK:
Lyne

Mr DEPUTY SPEAKER (Mr Failes:
LAWSON, NEW SOUTH WALES

Mr HANSEN:
Wide Bay

Mr SNEDDEN:
Bruce

Mr McGUREN:
Cowper

Mr JEFF BATE:
Macarthur