Senate
4 August 1915

6th Parliament · 1st Session



The President took the chair at 3 p.m., and read prayers.

page 5538

ASSENT TO BILLS

Assent to the following Bills re ported : -

War Loan Bill (No. 2) (United Kingdom).

Loan (Kalgoorlie to PortAugusta Railway) Bill.

Appropriation Bill 1914-15.

page 5538

EUROPEAN WAR

Anniversary of Declaration

Senator PEARCE:
Minister of Defence · Western Australia · ALP

– By leave, I move -

That we, the representatives of the Commonwealth of Australia, in Parliament assembled, do, on the expiration of a year of war, present to His Majesty our most loyal service, and record our unchanging determination to continue to a victorious end the struggle for the maintenance of the ideals of Liberty and Jus tice which are the common and sacred cause of the Allied Nations.

I think that, even if no motion of this character were moved in any Parliament of the Empire, there would be very little doubt as to the sentiments embodied in it being the sentiments of the whole British people. But Parliament expresses the people’s voice, and it is fitting that, at the conclusion of one year of a terrible war, the British people throughout the world should have an opportunity, through their Parliaments, of expressing their determination as it is expressed in the motion. With the fragmentary knowledge that we are able to get, the war still seems to be far from its end, to be increasing in its intensity, and the continuance of it is being more and more impressed upon us as necessary for the safeguarding of our liberties and the liberties of humanity generally. When in the first place, Britain took up the cause of Belgium, and of the rights of independent nations. I do not think that there was any doubt in the minds of the people of the British Empire as to the justice of her cause. If anything were wanted to affirm that resolution, subsequent events have proved it up to the hilt. The brutality and inhumanity with which

Germany and her ally, Austria, have pursued the war have been an ample justification of everything that was said as to the immoral causes which led up to the commencement of the war. Our enemies have conducted the war with a brutality and inhumanity that are, I believe, unparalleled in the history of nations. Surely when we see that, we can have no doubt as to what would be the effect on humanity and the world at large if those who have been guilty of such inhuman practices were to be successful and victorious !

Senator Keating:

– Scientific savagery!

Senator PEARCE:

– It would be a reversal to savagery. The success of Germany would undoubtedly set back the clock of time to the age of the barbarians. Whatever political views we may hold, and whatever” views we may have on in:,ternational relations, they sink into insignificance when we come to realize that the welfare of humanity is challenged in this war. And the greatest attribute, I think, to the realization of that fact is that nations which; previous to the war, were to a certain extent jealous of, and bickering with, each other, have thrown in their lot with the Allies, realizing, as they do, that the war challenges their position in the roll of nations, although they, perhaps, had no particular interest in the causes that led up to the war. It has called for sacrifice from every part of the British Empire, and is going to call for greater sacrifice. I feel, however, that I am voicing the sentiments of every honorable senator when I say that, no matter what the sacrifice may be, Australia is prepared to bear her part of it, and to pursue the matter to the end. We feel that Australia has done much ; it can do more, and will do more. And, in -submitting this motion and passing; it, as I am sure it will be passed unanimously, we are but expressing in simple language a feeling which is in the heart of every man and woman in Australia, and which is held by them tenaciously, and that it represents, so far as words can do, our determination, and theirs, to do everything to assist the allied nations to bring the war to a successful conclusion in the interests of humanity at large. I have pleasure in submitting the motion.

Senator MILLEN (New South Wales) (3.8]. - In seconding the motion, I desire to express the opinion that I regard it, not only as an entirely right and proper one, but as an extremely desirable one to move at this juncture. It is but an hour or so more than twelve months since news was received that the British Empire was engaged in war, and, without a moment’s hesitation, Australia, speaking through its public men of all shades cif opinion, declared that it was in the war with the Empire, for good or for ill. Since then we have had a year of ghastly conflict, with results which, I venture to say, speaking with entire frankness, are somewhat disappointing to us. It is, therefore, not inappropriate that, having to-day the clearer vision which comes as the result of experience, and enables us to put our ideas in better perspective, we should calmly and deliberately, in the sight of the world, reaffirm the declaration which we made twelve months ago when it was known that the Empire was engaged in war. This motion makes that declaration. The British Bull Dog is slow to be hustled into war. But when he is, it is just as difficult to hustle him out, and this declaration will go forth, not merely to our friends and allies, from whom we would expect, and indeed have received, a similar declaration, but it will find its way, I have no doubt, even to the peoples of the nations with whom we are at war, and convey to them to-day, as of old, the intimation that the British people can steel themselves to face any adversity rather than yield one iota of those principles of liberty for which the Empire stands. It is going to be, I venture to say, a part of the history and the pride of Australia that in this conflict she will have done something to maintain those principles. Question resolved in the affirmative.

MR. R. McC. ANDERSON’S REPORTS.

Senator MULLAN:
QUEENSLAND

– I ask the Minister representing the Postmaster-General why honorable senators are kept in the dark concerning the report of Mr. McC. Anderson on the Post and Telegraph Department ? .

Senator Stewart:

– Why has the report been bowdlerized?

Senator GARDINER:
Vice-President of the Executive Council · NEW SOUTH WALES · ALP

– I am not aware that honorable senators have been kept in the dark concerning the report.

Senator STEWART:

– Is it the intention of the Government to cause the various reports made by Mr. Anderson to be published in full, and if so, when?

SenatorPEARCE. - In regard to Mr. Anderson’s report concerning the Defence Department, I have to say that, in the main, it was of a confidential nature.

Senator Stewart:

– But there were other reports.

Senator PEARCE:

– Yes ; and I am dealing with one at a time. Part of the report relating to the Defence Department was confidential, and referred to certain officers by name. It was not deemed advisable that that part should be made public, and it was not intended that it should be made public. When he presented it, Mr. Anderson was under that impression. Such parts as were made public contained the essential portions and all the recommendations. I am not in aposition to answer for the report concerning the PostmasterGeneral’s Department, because, although the Postmaster-General has seen it, it has not come before the Government, and the Postmaster-General does not intend to publish it until it has been considered by the Government.

page 5540

QUESTION

WAR TAXATION

” Argus “ Leadingarticle.

Senator READY:
TASMANIA

– I desire to ask the Minister of Defence whether his attention has been called to the unpatriotic, partisan, and mendacious leader in to-day’s issue of the Argus on the question of the war tax; and, if so, will the Minister take into consideration the advisability of preventing in future the publication of misleading and untrue statements on the incidence of the impost, and on the motives which prompted the Government in proposing the war tax?

Senator PEARCE:
ALP

– I have had time to read the article in question, and I can only say that it is in many respects exceedingly misleading. It was certainly written from a very biased view-point ; but we have had many examples in the past, and especially in the recent past, that the Australian people have reached that state of intelligence and education which enables them to sift the false from the true. In considering this question, and the article referred to, I have no doubt that the people of Australia will bo quite capable of judging for themselves.

Senator de Largie:

– Why single out the Argus?

The PRESIDENT:

– Order ! Perhaps I should have prevented SenatorReady from making his comment when asking the question. The Minister of Defence will not be in order in arguing the matter in reply.

Senator Findley:

– Why take any serious notice of “ Granny “ ?

page 5540

QUESTION

RECRUITINGINSYDNEY

Medical Examinations

Senator MILLEN:
NEW SOUTH WALES

– As the result of some newspaper cuttings which I placed before him relating to recruiting conditions in Sydney, the Minister of Defence recently promised that he would have inquiries made. I should like to know if the Minister is in possession of that information, and, further, if he saw the statement in the Sydney papers yesterday morning that over 200 recruits were waiting there after the office was open, and that there was no doctor in attendance to examine them?

Senator PEARCE:
ALP

-Reports have been called for, but are not yet available. I have not seen the further statement which the honorable senator has referred to, but I shall have inquiries made on that matter also, and endeavour to find out who is responsible for the state of affairs complained of.

page 5540

QUESTION

NURSES’ OUTFIT

Senator MILLEN:

– Has the Minister of Defence yet obtained the information which he promised to get concerning the instructions which it was stated had been issued to the nurses with regard to their uniforms and equipment?

Senator PEARCE:
ALP

– Inquiries have been made, and so far as the district of Victoria is concerned we have been able to ascertain that no such instructions were given. Colonel Featherston, the Director-General of Medical Services, went to Sydney, and made inquiries there, but was not able to find that any definite instructions had emanated from any responsible officer there. He was, however, able to get hold of a circular which had been issued by somebody, but was not signed, stating that uniforms could be obtained from David Jones and Company by contract. Up to the time of his departure he was unable to find any evidence, and there is no evidence regarding the alleged contract at the Central Headquarters. The Commandant has been instructed to make further inquiries. We have not been able to find any other instructions issued by any responsible officer.

Senator Millen:

– Were the circulars issued by some one in the Department ?

Senator PEARCE:

– We cannot find any evidence as to who issued them. The copy we obtained was not found in the Department, but in the possession of a friend of one of the nurses.

page 5541

QUESTION

POST OFFICE, MOUNT BALFOUR

Senator LONG:
TASMANIA

– Will the Minister representing the Postmaster-General say when, in pursuance of a motion carried about a fortnight ago, the papers concerning a contemplated change in the management of postal and telegraphic business at Mount Balfour, Tasmania, will be laid on the table, and made available to honorable senators?

Senator GARDINER:
ALP

– I have a communication to the effect that the papers are not yet available, because the information had to be received from Tasmania. .

page 5541

QUESTION

EXPEDITIONARY FORCES

Pension of Mother

Senator NEEDHAM:
for Senator McDougall

asked the Minister representing the Treasurer, upon notice -

Is a widow who has lost two sons at the front, each of whom has allotted her the pension provided for by the Act, entitled to both pensions, or only one?

Senator RUSSELL:
Assistant Minister · VICTORIA · ALP

– The reply is as follows : -

It is intended to give one pension only. The amount would depend on the extent of her dependence on both sons.

page 5541

QUESTION

GERMAN PATENTS

Senator DE LARGIE:

asked the Minister representing the Attorney-General, upon notice -

  1. Is the Attorney-General aware of the fact that H. Teesdale Smith, the contractor for the construction of the Melbourne-Hawthorn electric tramway, is using and making profit out of the German patents 9,063/1907, 12,807/1908, No. 11,383 New South Wales, and No. 18,559 Victoria, all of which were suspended in favour of the Engineer-in-Chief for Commonwealth Railways?
  2. Has the Attorney-General granted a licence or permit to H. Teesdale Smith to use any of the above-mentioned patents, notwithstanding he has already stated he would “ not issue to any private citizen a licence to use the patents in question,” and has already refused a licence to another person, as reported in Hansard of 25th June, 1915?
  3. Has the Attorney-General granted a licence or permit to the Hawthorn Tramway Trust? If so, does such licence or permit empower the Hawthorn Tramway Trust to give permission to a contractor to use the said suspended patents, enabling the contractor thereby to make profit, to the exclusion of all other persons?
  4. If the Attorney-General has not granted a licence or permit to H. Teesdale Smith to use these patents, will he institute proceedings against H. Teesdale Smith for infringing the rights now vested in the Commonwealth EngineerinChief, in accordance with the Act empowering him to do so?
Senator GARDINER:
ALP

– The answers are -

  1. No.
  2. No.
  3. No. The Hawthorn Trust has applied for a licence, and the matter is under consideration.
  4. Inquiries will be made.

page 5541

QUESTION

WHEAT EXPORT

Is it a fact that the Government has appointed Messrs. Elder, Smith and Company, and Gibbs, Bright, and Company exclusive agents for arranging freights for the transport of the forthcoming wheat harvest?

If so, why have these particular firms been so favoured?

Were any other shipping companies consulted in the matter, and, if so, what firms?

Senator GARDINER:
ALP

– The answers are -

  1. The Commonwealth Government, acting on behalf of the State Governments, are arranging frieghts for forthcoming harvest. Messrs. Elder, Smith, and Gibbs, Bright, are their agents for this purpose.
  2. No favour has been conferred. It was necessary that the Commonwealth Government should have agents through whom they could act.
  3. See No. 2.

page 5541

QUESTION

FRUIT EXPORT: TRANSPORTS

Senator READY:

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

  1. Has the Minister for the Navy yet considered the representations ofthe Premier of Tasmania to the Prime Minister to the effect that there will be something like 2,000,000 bushels of apples requiring cold storage space for the overseas market next season?
  2. Will the Minister endeavour, if at all possible, to arrange for space in the steamers controlled by his Department, so that the fruit-growers of Australiashall be able to market their products?
Senator PEARCE:
ALP

– The answers are-

  1. Yes.
  2. Every endeavour will be made to meet the requirements of Australian trade in transports. It must, however, be understood that Military requirements must have first consideration.

page 5542

PAPERS

The following papers were presented : -

Customs Act 1901-1914- Regulations amended, &c- Statutory Rules 1915, No. 87.

Defence Act 1903-1915 - Regulations amended, &c- Statutory Rules 1915, Nos. 123, 124, 125, 126.

Public Service Act 1902-1913- Appointments, Promotions, &c. -

Department of the Treasury -

Fourth Class, Governor-General’s Office.

Department of Home Affairs -

Postmaster-General’s Department -

Regulations amended, &c. - Statutory Rules, 1915, No. 131.

page 5542

CONDUCT OF BUSINESS

Standing Order 68

Motion (by Senator Pearce) agreed to -

That standing order No. 68 be suspended up to and including 13th August, 1915, for the purpose of enabling new business to be commenced after half -past ten o’clock at night.

page 5542

ESTIMATES AND BUDGETPAPERS, 1914-15

Motion (by Senator Pearce) agreed to -

That the following Order of the Day be discharged : -

Estimates and Budget-papers, 1914-15. - Adjourned debate on the following motion moved by the Minister for Defence (Senator Pearce) - That the estimates of revenue and expenditure for the year ending 30th June, 1915, and the Budget-papers 1914-15 - laid on the table of the Senate on 3rd December, 1914, be printed.

page 5542

INSURANCE BILL

In Committee (Consideration resumed from the 7th July, vide page 4618) :

Clause 19 agreed to.

Clause 20 (Deposit in case of foreign company).

Senator GARDINER:
Vice-President of the Executive Council · New South Wales · ALP

– Even if the amount of deposit required from foreign and local companies be the same, no hardship will be inflicted, because, owing to the largeamount of securities these companies possess, the amount deposited by way of guarantee to the public will be no serious difficulty to them; but in the case of small local companies special conditions are provided in clause 19.

Senator KEATING:
Tasmania

– Clause 19 lays down the scale of deposits required from companies, whether local or foreign, carrying on business at the time of the passing of the Act. And clause 20 makes provision for a similar scale in the case of foreign companies not” carrying on business at the commencement of Che Act who desire to commence business in the Commonwealth, the distinction between the two classes being that if the Commissioner considers the deposits too high in regard to existing companies, he may in exceptional cases reduce them. By clause 19 recognitionis given to the fact that small companies have been carrying on, and, there being no desire to turn them out of business, . power is given to have the deposits lessened in their case. But at the same time foreign companies are not to be allowed to commence business in the Commonwealth unless they comply with all the conditions as to deposits ordinarily laid down for existing companies.

Clause agreed to.

Clause 21 (Deposit in case of new companies) .

Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [3.381.- A company which may have been established a day or a year before the passing of the Act will be liable to deposit £20,000 if it is anxious to still carry on insurance business, but this clause provides that a company formed within the Commonwealth which has not been carrying on insurance business prior to the commencement of the Act shall make a first deposit of £2,000 if it desires to commence life insurance business after the commencement of the Act. The question is whether the discretionary power given to the Commissioner under clause 19 will enable him to give a similar opportunity to the small company carrying on insurance -business before the passing of the Act. No matter whether such a company is proprietary or mutual, it must deposit £20,000. The whole merit of mutual life insurance companies is that there are no shareholders in the ordinary sense, and no debenture-holders, and whatever profits are made go entirely to the persons who have joined in establishing the company. A life policy is not like a fire policy, which is simply a contract for a year. A life assurance company is not under the same risk to be called upon to redeem its policies at an early date after issue as is a fire assurance company. If there is any means made to enable a company to be established on a purely mutual basis, it will need to have debenture or share holders. If the law requires a sum of money to be deposited with the Commonwealth, the men who put up the money may say, “ “We will be the shareholders, and, as such, we will have the conduct of the business and the right to make the appointments.” They may do as we are told some proprietors of like insurance companies in America have done when called upon to put up a -deposit of £20,000, and constitute themselves the debenture or share holders, and -although unable to pay more than a fixed rate of interest they get over that difficulty by making appointments from amongst themselves and their friends to very remunerative and good billets, and the salaries are paid by the policy-holders generally, :nd not by the men who put up the deposit. I suggest to the Minister that he should look into this matter carefully, and see whether a provision could not be made under which purely life assurance companies could be established at’ the commencement. Take the case of the Australian Mutual Provident Society. It was started by a few individuals who put up their money and insured their lives on the mutual principle, and the insurers paid nothing more than the amount of their several premiums. In Victoria, a great company, the National Mutual Life Association, was started in a similar way, and other companies have followed, that example. But we have not found one of those companies making default. They have been able to meet their engagements without having provided any initial deposit. I would impress on the Minister, too, that some step ought to 1 e taken to make it clear that a small fire insurance company starting business shortly before the passage of this Bill will have the advantage of this provision. Let it be clearly embodied in the Bill that, if the Commissioner thinks that such a company ought to put up a deposit of £5,000 or £10,000, it may be done, and then there can be no difficulty with regard to such companies.

Senator SENIOR:
South. Australia

– This is one of the clauses to which I took exception on the second reading. No provision is made in the Bill for new societies to begin business. The experience of Australia has been that societies which started on a very small basis have grown to be exceedingly large and very useful to the States. But the framers 6i this clause seem to assume that what has taken place hitherto will not take place in the future, and apparently the idea of. the framers of the Bill is that all development in Australia is at an end ; that it is unlikely in the future that such companies on the lines of the Australian Mutual Provident Society, the National Mutual Life Association, the Temperance and General Insurance Company, and several others will be started. The requirement of a deposit will completely bar the way, unless, of course, it should become a proprietary company. In other words, the effect of the clause will be to prevent mutual companies from being started. It is an unthinkable proposition that any mutual office could start with a sufficient number of applicants to provide the required deposit. The effect of the Bill, therefore, will be to create a close corporation of existing offices, and to prevent new competitors from arising. Even under the provision in clause 19 the whole thing will rest entirely with the Commissioner. He is to be the sole judge, and with that exception the position will be exactly the same as with a foreign office wishing to start here. There will not be the slightest incentive to any persons desiring to start a mutual office here in time to come. I ask the Minister whether, if the Australian Mutual Provident Society were not in existence, there would be any chance of it becoming an actual fact under the measure? I ask the honorable senator, further, to consider the amount of money which has been circulated by that society, and the good that has accrued to insurers therein. Is he prepared to take the responsibility, through the Bill, of saying that on Australian soil no such institution shall be established hereafter? Otherwise, he must modify, and modify very greatly, the provision made for the formation of new societies. In my secondreading speech I pointed out that in Australia there are societies doing business whose ambit is comparatively limited, but that over that ambit they are absolutely solvent and quite prepared to carry out a guarantee to the insurers, as regards fire and disablement, and such matters. These offices are quite capable of doing the business which they have undertaken to do, but if the payment of this deposit is insisted upon, they will have, to close, and the effect will be to throw their business into the hands of the larger companies. Stripped of all garnishing, let us know whether the proposition of the Government in this clause is to sweep out of existence the small societies, though they may be just as useful as the larger ones, to do away with the possibility of any large society being started on the mutual principle in time to come, and to make the insurance business practically a close corporation for a smaller number of offices than exist at present.

Senator GARDINER:
Vice-President of the Executive Council · New South Wales · ALP

– I rather congratulate Senator Senior on the force with which he has put his case. Why he should think that the Government desire to wipe out small companies, I do not know. Why he should think that we would want to make the insurance business of Australia a monopoly for existing companies, I am at a loss to understand. Why he should imagine for a moment that we would not permit the creation and development of another such splendid institution as the Australian Mutual Provident Society, is beyond my comprehension. But so much am I impressed with the logic and reason ing of my two honorable friends Senators Gould and Senior, that I intend to ask the Committee to postpone this clause, as neither of them, although offering excellent suggestions, has brought forward any amendment. I do not blame them, however, for that, because I unexpectedly brought on the consideration of the Bill without giving the usual notice. In dealing with the Bill, and with this clause in particular, I recognise that care must be taken not to unwittingly do an injury to companies which are likely to come into existence, and not to do anything which would prevent companies from being formed. With regard to mutual companies, I do not know whether I informed the Committee before that I attended several meetings of people interested in such companies. Having heard Senators Senior and Gould, and I think, Senator Millen, ou the same question, I intend that a clause shall be prepared under which such companies will be exempt from the provision of the Bill as regards deposits and payments. I refer to the mutual companies, which, I think, Senator Senior had in his mind, such as those which, by mutual organization, provide for fire risks and claims under the Employers Liability Acts in the different States. If honorable senators should have any amendments to suggest, I would like to see them .before the consideration of the clause is resumed.

Senator KEATING:
Tasmania

– I am very glad to hear that the Minister intends to consider the clause further. I think it must be apparent to all of us that there has been an oversight. I suggest to the honorable senator that something similar to the proviso contained in clause 19 might very well find a place in this clause, leaving a discretion to the Commissioner to deal with cases such as those referred to by Senators Gould and Senior. I recognise, of course, that it would be almost impossible to lay down in the Bill a hardandfast scheme that would meet every conceivable case which would arise. The Minister might also consider the advisableness of leaving a certain amount of latitude to be denned only by elastic provisions in the regulations. Then, as cases arose, they might be dealt with under the regulations. If the provisions did nob always meet the necessity, it would be possible for them to be amended, much more summarily and readily than they could be amended by an Act. And finally, when it was seen that they did meet every likely case, it might be possible years hence to make the provisions part of the enactment.

Clause postponed.

Clause 22-

Every company which makes any deposit with the Treasurer in pursuance of this Act shall obtain from the Secretary to the Treasury or other proper officer a certificate in writing of the deposit made, and shall lodge the certificate with the Commissioner.

Senator ALBERT GOULD:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913

-Colonel Sir ALBERT GOULD (New South Wales) [3.54].- It appears to me that the deposit is to be held by the Government until the company becomes insolvent or in bankrupt circumstances. I want to point out to the Minister that, while it is perfectly true that the deposit of £20,000 - in certain cases it will go up to £100,000 or £120,000 - will be available in the event of the bankruptcy or the winding up of the company, it might unduly hamper its prospects while pursuing its ordinary course. Take, for instance, a life or fire insurance company which meets with a very bad year, and has an undue amount of money to pay out in order to meet its policies. It might be that the company would have to apply for a portion of the deposit in order to carry on its business. It would not necessarily become insolvent or bankrupt because it wanted to use that money, for its position would only be due to some very unfortunate circumstances in connexion with its policies. The average liability to accrue in each particular year amounts to a certain sums and the premiums are apportioned to cover the estimated losses, to leave a margin for ordinary losses, and also to build up the reserve.

Senator Lynch:

– Based on the law of averages ?

Senator ALBERT GOULD:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913

-Colonel Sir ALBERT GOULD. - Yes. I want to point out that in the case, say, of tremendous fires in a locality in which a fire insurance office is heavily represented, if a company were in the position that it could not nay its debts without coming to the Government to get the amount deposited, the Government might, under the Bill, feel impelled to say: “While we are willing to give you the money to meet this loss you must make the amount up immediately, or else we cannot allow you to carry on your business.” I admit it is desirable to have a certain amount as a deposit, to create confidence in the minds of the public, and I do not suppose that in the whole of Australia there is a proprietary office which has not large sums of moneys placed as reserves. This money is readily available in various forms, such as fixed deposits in the bank, Government or Treasury-bills, and may be easily obtained to meet any emergency. If the money were placed in the hands of the Government, unless there were some power to regard it as liquid assets, the use of which would not necessarily bring about the winding up of the company, we should be creating a rather dangerous position for some of the companies, and possibly the smaller companies that we desire to see carried on.

Senator Lynch:

– Will not the Government pay interest on the deposits?

Senator ALBERT GOULD:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913

-Colonel Sir ALBERT GO OLD. - I presume they will.

Senator Guy:

– It is provided for.

Senator ALBERT GOULD:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913

-Colonel Sir ALBERT GOULD. - The Government are now issuing a war loan. Suppose the insurance companies took £20,000 of that loan, and deposited that money with the Government, they would get 4£ per cent, for it. If, instead of that, the companies paid over the gold in the banks to the Government, I assume the Government would pay interest on that sum, as upon the ordinary debentures. But that would not get over my difficulty. I want to see this money regarded as a liquid asset, so that it may be available to meet liabilities without necessarily placing the company in liquidation, or having a winding-up order issued against it. As it is now, the Bill provides that while the money may be applied to pay the debts and liabilities of the company, the company must nevertheless make up the amount almost immediately. If the company went into liquidation that, of course, would be a valuable provision.

Senator DE LARGIE:
Western Australia

– I am afraid Senator Gould’s suggestion is of such a nature that if it were adopted it would destroy the very principle involved in requiring the companies to lodge these deposits with the Government. The deposits are demanded in order to maintain the solvency of the companies, and if we allow them to be regarded as liquid assets, available for the companies to draw upon at any moment they chose, we might as well have no deposits at all.

Senator Lt Colonel Sir ALBERT Gould:

– A deposit would not be withdrawn except for an emergency, such as the big fire in America, when Chicago was practically destroyed.

Senator DE LARGIE:

– That is a danger which all fire insurance companies must face when they enter into the business. We know that an extraordinary fire, such as would destroy Melbourne or Sydney, would knock out the strongest fire insurance company in existence, but these deposits are required as deposits equivalent to the losses by an ordinary fire, and not an extraordinary fire, such as that which destroyed Chicago. We are insisting upon the deposits being lodged with the Government as a guarantee to insurers. If this matter were left in the hands of the managers of the companies, and they were able to draw upon the money as they thought fit, the whole thing would be a sham. I do not see that the Government can meet the suggestion made by Senator Gould.

Senator Lt Colonel Sir Albert Gould:

– The honorable senator will know that large reserves held by the various companies are really in liquid form, so that they can be drawn upon at any time if the necessity arises.

Senator DE LARGIE:

– But the position is different with these deposits. We are providing for the deposits as a guarantee of security to the policy-holders, and if we allowed any company to draw on them at any time we would destroy th8 principle altogether.

Senator GUY:
Tasmania

.- The contingency mentioned by Senator Gould is a somewhat remote one.

Senator Lt Colonel Sir Albert Gould:

– I hope so.

Senator GUY:

– It appears to me that these societies will have their funds invested in ‘mortgages and other securities. These would not be easily liquidated, but they could be used, I presume, as deposits with the Government to meet the demands of this Bill. An insurance company, if it exercised ordinary wisdom, would see that there was enough security of a liquid character to meet all possible contingencies, and that security would be in a form in which it could be easily liquidated.

The contingency mentioned by Sir Albert Gould is so remote that it hardly need receive very much attention. We must not overlook the fact that the primary purpose of the deposits is to give security to the insurers in Australia, and if we whittle it down we shall interfere with the whole purpose of the Bill.

Senator GARDINER:
Vice-President of the Executive Council · New South Wales · ALP

– I have been looking through the clause to see what bearing the discussion has upon it, and I have come to the conclusion that, although the point raised is worthy of consideration, so far as this clause is concerned, we can let it go. The chief purpose of the deposits is to secure such money as may be necessary to meet an emergency, remote as we all hope it will be. I do not think any Government would be justified in insisting upon the full deposit during a time of special strain upon a society, when the use of part of the deposit would tide the company over difficulty and danger, and enable not only those who were insured to obtain relief which their insurance guaranteed them, but also enable the company to carry on. While the contingency is a remote one, it should be provided for, and the chief purpose of the clause requiring deposits, is to give that security to the public.

Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [4.7].- Perhaps the Minister is correct that the discussion has no bearing on the clause, but I mentioned the matter in order to draw attention to the difficulties I saw in connexion with it. I am urging that there should be some amount of elasticity, so that in the improbable event of any such difficulty arising that it should become necessary to resort to the use of portion of the deposit held by the Government, that use should not necessarily mean the winding-up of the company.

Clause agreed to.

Clause 23 agreed to.

Clause 24-

  1. If the Commissioner is satisfied that, by reason of depreciation in the value of securities, or other cause, the amount of money and approved securities deposited by a company with the Treasurer falls short of the amount required by this Act, he may, by notice in writing, require the company to deposit with the Treasurer money or approved securities, or both, to an amount deemed by him to be sufficient to bring the amount of the deposit to the correct amount.
  2. A notice under this section shall not be issued until after the Commissioner has given an opportunity to the company to be heard in connexion with the matter.
  3. If any company fails to comply with any notice given under this section within a reasonable time after receipt of the notice, the failure shall be a good ground for cancelling the licence to the company.
Senator KEATING:
Tasmania

– There is one matter to which I should like to direct attention. The words “to be heard “ in sub-clause 2 are somewhat novel in legislation, and I think it is desirable that there should be some method prescribing what the opportunity should be. It should not be left entirely to the Commissioner himself to furnish the opportunity. Perhaps the Minister will meet requirements by having inserted somewhere in the clause the words “ as prescribed.” Then the regulation would prescribe the nature of the opportunity and the time and manner of notifying it. Probably the time would vary according to the distance of the head office of the company from the Commissioner, and other factors of that kind.

Senator GARDINER:
ALP

– “We might insert the words “ as prescribed “ after the word “notice” in sub-clause 2.

Senator KEATING:

– I do not know that that would meet the difficulty. What I desire is that the opportunity provided for shall not be according to the whim of the Commissioner, but shall be defined in some way by regulation.

Senator de Largie:

– I think the clause is all right. It gives the company an opportunity to be heard.

Senator KEATING:

– What the Commissioner may consider an opportunity may not be a sufficient opportunity.

Senator Guy:

– The point is what constitutes “ being heard.”

Senator KEATING:

– That is so. What is “an opportunity”? I suggest that the clause should be amended by the insertion of the words “in the manner prescribed “ at the end of sub-clause 2.

Senator DE LARGIE:
Western Australia

– I think that only a legal mind could discover any looseness in the drafting of the clause as it stands. I should imagine that an opportunity to be heard involves a reasonable opportunity to the company to explain its position. There may be something in the suggested amendment, if it is considered necessary that a company should know, from a regulation in black and white, the nature of the opportunity to be given to explain its position.

Senator Guy:

– Suppose only a week’s notice is given, and it could not be complied “with under a fortnight.

Senator Keating:

– Suppose the notice is given by letter or telegram.

Senator DE LARGIE:

– The clause provides that the company shall be given an opportunity. If it is thought that that may not be a sufficient opportunity, I should have no objection to the suggested amendment.

Senator Keating:

– I want to place the company in such a position that it will be unable to say that it did not have an opportunity.

Senator GARDINER:
Vice-President of the Executive Council · New South Wales · ALP

– I was at first inclined to accept the suggested amendment, but I think that if the three sub-clauses are read in conjunction it will be seen that it is not necessary. Under the first subclause, if the Commissioner is satisfied that the amount of the deposit is short, he may, by notice in writing, require the company to bring it up to the amount required by the Act. That seems to me perfectly clear and distinct.

Senator Keating:

– But he cannot issue that notice until he has previously given to the company an opportunity to be heard.

Senator GARDINER:

– The first subclause must be read in conjunction with the second, which provides that a notice given under the clause shall not be issued until an opportunity is given to the company to be heard. Then the third subclause completes the provision, and says that if the company fails to comply with the notice to bring the amount of its deposit up to the amount required by the Act, that failure should be a good ground for cancelling its licence. When the three sub-clauses are read together, I do not think the provision would be improved by the proposed amendment. These companies will be conducted by serious business men, and if there is any doubt in the mind of the Commissioner as to the value of the securities they have deposited, a notice in writing to that effect is sent to them.

Senator Keating:

– That is the only notice provided for in the clause.

Senator GARDINER:

– That notice will be definite and clear, and then, after the Commissioner has given the company an opportunity to be heard, the third subclause makes it plain that if the company fails to comply with the notice within a reasonable time after its receipt, the failure shall be a good ground for cancelling its licence.

Senator Keating:

– The clause refers only to the one notice all the time.

Senator GARDINER:

– I think that it contains all that is necessary. I suppose that the regulations will prescribe in detail how the Act is to be administered, and I do not think it is necessary to make provision for a special regulation in connexion with the operation of this clause.

Senator KEATING:
Tasmania

– When I first looked at the clause I read it as the Minister has done. I thought that it provided for more than one notice, but, as a matter of fact, it does not. There is only one notice provided for, and its consequences may be very serious. A company is given notice to increase its deposits, and is told that if it does not, under sub-clause 3, its licence will be cancelled. The important point is that sub-clause 2 provides that the notice shall not be issued until the company is given an opportunity to be heard. What is the opportunity to be given to the company? A representative of a company may be in the Commissioner’s office, and the Commissioner may say to him, “I am inclined to think your deposit is not up to what it ought to he.” The representative of the company may say, “ Oh, yes, it is.” The Commissioner may then say, “Unless you satisfy me before next Wednesday, at such a time, I shall issue a notice to you to increase your deposit; and if you fail to do so I shall cancel your licence.” That might be regarded by the Commissioner as “ an opportunity” within the meaning of this clause. But the representative of the company might hot so regard it. It would have been better if sub-clause 2 had taken the place of sub-clause 3, and had provided that the opportunity to be given to a company should be given in some prescribed way. I wish to secure to these companies an adequate opportunity to he heard. I wish the Commissioner to be in a position to say that an opportunity in some prescribed way has been given to a company before he issues his notice calling upon it to increase its deposit. I desire that the company shall not be in a position later to say that it did not get a sufficient opportunity. I repeat that only one notice is provided for in the clause, and that is not to issue until the company has been given an opportunity to be heard. It is necessary, in my opinion, to define that opportunity, and that should be done in the regulations. The words “in the manner prescribed” should be inserted in sub-clause 2, because there is nothing in the clause providing that notice should go to the company in order to give it the opportunity of being heard. The only notice referred to is the final notice, failing compliance with which the Commissioner may cancel the company’s licence.

Amendment (by Senator Gardiner) agreed to -

That after the word “ given “ in sub-clause (2) the words “in the prescribed manner” be inserted.

Clause, as amended, agreed to.

Clauses 25 to 29 agreed to.

Clause 30 (Value of securities).

Senator KEATING (Tasmania) [4.291. - This clause, which provides that in all matters relating to the value of securities deposited under the Act “the decision of the Commissioner shall be binding and conclusive, met with some criticism, on the second reading, from supporters of the Government. Does the Minister in charge of the Bill propose to adhere to the clause as printed, or does he propose to afford any opportunity to have the Commissioner’s decision reviewed by “either the Minister or some judicial officer?

Senator GARDINER:
Vice-President of the Executive Council · New South Wales · ALP

– I think that this is one of the matters in which the Commissioner should have full power. We shall not have a man in the position who will not value a sovereign at 20s. If it is found that he has undervalued securities which he has accepted, he must accept ‘the responsibility. It is admitted that he may undervalue, but to submit his decisions to review would benefit no one but the insurance companies. They, no doubt, would have a grievance if provision were made for an appeal from the Commissioner’s decision. However, as ordinary securities are estimated quite easily, I see no reason why we should not give the arbitrary power to a man to whom the Bill gives so much power. There can be no responsibility unless, also, power is given. I stand by the clause as it is printed.

Clause agreed to.

Clause 31 agreed to.

Clause 32 (Income from deposits).

Senator LYNCH:
Western Australia

– It would appear that this clause places on the Commonwealth Treasurer the obligation to pay interest, not only on money lodged by insurance companies by way of security, but also on approved securities. It will be an easy matter to assess the interest payable on cash deposited, but it will be a difficult matter to assess the face value of other forms of securities deposited, and say what interest they should command on the market. Before I agree to this clause, I should like some explanation from the Minister as to the invidious position in which the Commonwealth Treasurer will be placed in having to assess the value of securities and act as responsible business agent for insurance companies.

Senator GARDINER:
Vice-President of the Executive Council · New South Wales · ALP

– The clause states quite clearly that the insurance companies will only receive interest on the incomeearning securities which they deposit. When an insurance company deposits valuable deeds of land which may be accepted as security, it will still hold the land, and use or earn an income from it. In such circumstances the Government could no< be expected to pay interest on those deeds. There is a very clear distinction between the two classes of security. Title deeds, while being good security, may not be profit-earning. The Government will not be called upon to act as agents for companies depositing such securities. Government bonds deposited as security will earn interest, which will be payable to the companies.

Senator LYNCH:
Western Australia

– The clause does not seem clear to me. Insurance companies may put up composite deposits, say, £1,000 in deeds and £1,000 in cash, but, though the cash will bear interest payable by the Government to the company, according to the clause, deeds which may or may not be earning interest will bear -interest payable by the Government to the company. The clause says that every company shall be entitled to receive the income derived from the securities deposited. From whom ? From the Government. It seems to me that under the former part of the clause it will be obligatory upon the Government to pay to the company interest on deeds which, are not producing any interest.

Senator GARDINER:
Vice-President of the Executive Council · New South Wales · ALP

– The clause provides that every company shall be entitled to receive the income derived from the securities deposited. ‘Suppose, for instance, that an insurance company wants to put up a deposit of £30,000, and hands over to the Commissioner the title deed to offices in Collins-street, Melbourne, and that the security is considered by the Commissioner to be sufficiently -good, the company will use the offices for its own particular business. The Government would not interfere or demand rent or interest from the company. They would simply take the title deed as security, and as it would not be returning any income the Government would have no income to return to the company.

Senator de Largie:

– Suppose, however, that the offices were not occupied by the company, but let to tenants.

Senator GARDINER:

– The Government would not bother about what the company did with the building, so long as they held a security, namely, the title deed. All that the clause refers to is incomeearning securities - that is, cases where the income will go directly to the Government. There is the other class of security from which the company would derive a profit, and that is the title deed to a big building in Collins-street. It might be convenient to the company to deposit a security of that kind, but the Government would not pay interest on a dead security. I remember when this question was first sprung upon me by Senator Senior. I answered the inquiry across the chamber in a doubtful manner, because I had two classes of security in my mind. There was no opportunity, by way of interjection, to distinguish between those classes. Where there is no income coming to the Government from a security there will be nothing for them to hand back to the company.

Senator GUY:
Tasmania

.- I have no difficulty in interpreting the clause. It seems to me that where the Government derive an income from the securities the income will necessarily belong to the society. Whenever I have wanted to get an overdraft of £500, the bank has always required of me securities to the value of £1,000 or £1,200. I deposited the securities with the bank, but it never drew a penny of the income derivable from them. I always drew the income. The bank had nothing to do but to hold the bare securities. The Government will be in a similar position under this clause, I presume. The deposit will be simply a security to the insurers that the company will have sufficient funds to meet all claims. I cannot call to mind a particular case where a security would return an- income to the Government, though possibly there are such cases. If such a case does arise, it is clear from the clause that the income will necessarily belong to the company, and that the Government will have no responsibility except as regards the interest.

Senator DE LARGIE:
Western Australia

– I think that, for their own safety, it would be wise for the Government to divide the clause, in order to make quite clear their responsibility in holding securities. The clause is ambiguous. It does not distinguish between a certificate of title to land, from which there is no return, and a deposit of hard cash. Unless we make such a distinction between different kinds of security, I feel quite satisfied that the clause will be very ambiguous and hard to understand. If there is a certain amount of cash in the hands of the Government, it is quite clear that they will have to pay the amount of interest which it would earn through a bank or other means. But a certificate of title to land which is not returning any interest and a national bond are different kinds of security. In one short clause different kinds of securities are dealt with. In my opinion it would bo wise on the part of the Government to make the provision much clearer than it is. Otherwise I can see where they will have placed upon them the responsibility of collecting the interest.

Senator Guy:

– I am afraid that the Commissioner will not accept that responsibility.

Senator DE LARGIE:

– I do not think that the Government should accept it either; but unless such a distinction as I have suggested is drawn, undoubtedly it will be placed upon them.

Senator GARDINER:
Vice-President of the Executive Council · New South Wales · ALP

– I think that nothing could make the meaning of the clause clearer than the simple words the company “ shall be entitled to receive the income derived from the securities.” If the Government are given the custody of certain securities, no matter how valuable they may be, if they are not earning an income, the company will get no income from them. The responsibility is on the Commissioners to take only approved securities. Those deposits, being in the . hands of the Government, the companies might ask the Government toinvest them in certain profit-earning securities, and in such cases where the money was invested at the request of the company, there would be no difficulty in transferring the interest to that account, or in handing it back to the companies concerned. I can quite understand that Senator Lynch and Senator de Largie should be anxious that the Commissioner should not be in a position of being in any difficulty when dealing with these securities. To my mind, the clause is satisfactory and clear.

Senator SENIOR:
South Australia

– Let me put a case for the consideration of the Minister: In one of the States there is a building society whose bonds might be deposited with an insurance society for the time being and be transferred to the Government when this Bill becomes an Act of Parliament. This society is enabled to make grants to subscribers by mortgaging the security, and making it a negotiable asset, thus increasing the amount that can be distributed. Probably, under this Bill, the society will be required to make deposits. Here, therefore, is a case in which, whilst money is in the hands of the Government, it would be earning nothing, and, therefore, would pay nothing; but, in the hands of thesociety, it would be earning something. There is no provision for such a that.

Senator Keating:

– The next clause says that the Government may invest funds.

Senator SENIOR:

– But I think that refers to cash only. I do not know that I can suggest an amendment at the present time, hut I can see that there is some force in what the honorable senators have brought forward.

Senator DE LARGIE:
Western Australia

– I would like to put a case in point. Supposing there was £1,000 cash deposited on behalf of a company, and also £1,000 worth of Treasury-bonds. The Treasury-bonds would bear interest at 4£ per cent. Would the Government pay the interest on those Treasurybonds to the company, or would the Treasurer pay the interest through the company to the holders of the bonds?

Senator GARDINER:
Vice-President of the Executive “Council · New South Wales · ALP

– If no income is earned, the Commissioner will have nothing to pay. It will all depend on how the securities are placed in the hands of the Treasurer. If somebody else’s Treasurybonds are deposited, and that somebody else is drawing interest on those Treasurybonds, there will be no liability on the Commissioner to pay interest. His liability is simply to pay the income back to the company. That, to my mind, is clear.

Senator de Largie:

– Suppose the securities were bank shares, and those bank shares entitled the holder to a certain amount of interest in the bank, -would the Treasurer or the insurance company draw the interest?

Senator GARDINER:

– The insurance company would still draw the interest. It would be the same as if I handed the deeds of my house to a bank, let the house and received the rent. As far as the Commissioner is concerned, the Commissioner will only take approved securities, and if any of them happen to be income-earning securities, the income earned will be handed back to the company. If the .securities are earning no income, no notice will be taken of them.

Senator O’Keefe:

– It is not mandatory on the Commissioner to invest them, except, at the request of the company.

Senator GARDINER:

– Exactly ; and if the securities are approved, they will be invested as directed by the company.

Clause agreed to.

Clauses 33 to 33 agreed to.

Clause 39-

Every life insurance company shall, once in every three years, or at such shorter intervals as are prescribed by the constitution or rules of the company, cause an investigation to be made at its own expense into its financial condition by an actuary, and shall cause an abstract of the report of the actuary to be made in the form set forth in the Fifth Schedule to this Act, and applicable to the class of insurance business carried on by the company.

Senator SENIOR:
South Australia

– In this clause it is provided that every insurance company shall once in every three years, or at such shorter periods as are prescribed, have an actuarial investigation. It has been the practice with some life insurance societies to have this actuarial investigation once in every five years, and I would like to have stated the reason for shortening the term.

Senator O’Keefe:

– It will make for the safety of the insured public.

Senator SENIOR:

– I do not know that any charge of want of safety has been levelled against companies which have had the actuarial investigation once in every five years. In the early days of insurance business in Australia, the term fixed for actuarial investigation was once in ten years, and then it came down to once in five years. Whilst some offices do really make what is equivalent to an investigation annually, the majority of offices make it once in five years. I would like to know from the Minister, therefore, what is the reason for this alteration.

Senator GARDINER:
Vice-President of the Executive Council · New South Wales · ALP

– If the honorable senator will make inquiries, he will find that a number of companies have actuarial investigations at shorter periods than that fixed in this measure, and in fixing the time at three years we struck what we regarded as a happy mean. In dealing with the business of all the States, as we are in this Bill, we cannot have the system exactly as it was found in any of the six States. If any good reason can be advanced why three years is too short,

I shall be prepared to listen, and, if necescary, give favorable consideration to a proposal to lengthen the period ; but I do not think that it “would be any advantage. From my point of view, three years is quite a sufficiently long period at which to fix the actuarial investigation.

Senator SENIOR:

– This clause is drawn from the English Act of Edward VII., and not from a Colonial Act.

Senator GARDINER:

– I can assure the honorable senator that the whole of this Bill has been drawn, after the most careful investigation, by a Royal Commission, which brought to bear upon it a great deal of consideration.

Senator Senior:

– Do not say too much.

Senator GARDINER:

– I am not the least bit alarmed about giving the authority from which the Bill derives its being. The Commissioners went exhaustively into the question of the kind of Bill we should have. They had some valuable information at their disposal, and, as far as this is concerned, three years, to my mind, is a reasonable time.

Senator Guy:

– It is only a matter of expense.

Senator GARDINER:

– Once the valuation has been taken, there may be a little additional expense in preparing the returns, but no extraordinary expense is incurred in making the valuations. Take our municipalities: In the State I come from, the municipalities revalue town allotments and buildings each year. More recently, the valuations were taken every three years. Surely, then, we can ask insurance companies to have an actuarial investigation once every three years.

Senator SENIOR:
South Australia

– Several companies operating in Australia have made it a rule to have actuarial examinations once in five years. This involves a close scrutiny of every life policy issued, and a scrutiny also of the probable duration of the life of each insurer. It is too much to require all the companies in Australia to conduct such an investigation every three years for the purposes of this Bill, especially in view of the fact that the Commissioner will have before him the ordinary balance-sheets of each company, showing its financial position.

Senator Lynch:

– Has the holder of each life policy to be medically examined upon each actuarial investigation ?

Senator SENIOR:

– No, but his probable duration of life has to be actuarially examined. This is not judged by one class of statistics, or by one standard. It may be judged by three or four different standards. If the Minister will consider how microscopical is the examination required for a complete actuarial investigation, he will see that it involves an almost continuous supervision of every policy issued. I hold no brief for any insurance company, but bringing a little common sense to bear on the question, it occurs to me that it is unnecessary in so short a term as every three years to call for the minute investigation required by this clause. It is right and proper that the public should be informed of the actual financial position of every one of these companies, but once in five years would be sufficiently frequent for an actuarial investigation.

Senator GUY:
Tasmania

.- I am disposed to agree with Senator Senior. It will be admitted that to require this investigation once in three years rather than once in five years must largely increase the expense of conducting these companies, and as they are for the most part mutual companies, it must involve an increase in the amount of the premiums. We propose to compel a company to submit to the Commissioner an annual statement and balance-sheet. The Commissioner, after scrutinising the balance-sheet of a company, is given the power, if he thinks it necessary, to demand an increase in the amount of securities deposited with him. The Minister has made a comparison with the valuation of properties under various municipal authorities, but that is comparing things that are scarcely comparable. I have had a good deal of experience in the management of friendly societies. I know that an actuarial investigation of the affairs of such a society is a difficult piece of work; and such an investigation of the affairs of a life assurance society would be much more difficult. It must involve the expenditure of a very big sum of money if applied to all the societies doing business in Australia. We might provide that this investigation should take place once in every five years, and give the Commissioner power where he had doubt as to the soundness of the position of a society to call for an investigation within a shorter period. I should like to hear something more from the point of view of the Minister in charge of the Bill to convince me that Senator Senior is not justified in his contention.

Senator LYNCH:
Western Australia

– I can appreciate the criticism of Senators Senior and Guy. They do not wish to impose upon insurance companies the obligation to perform work without any beneficial purpose. I remind the Committee that the insurance companies have been provided with copies of this Bill, and it is quite certain that those concerned in them have digested every line of it. If any clause of it imposed upon them an expensive and purposeless obligation, they would have expressed their views upon it very clearly. The object of the Bill is to give the Commissioner power to see that every company carrying on business in Australia is continuously in a sound financial position. In the absence of any complaint from the insurance companies, I think we can well afford to pass this clause in its present form, requiring a triennial review of the operations of each company.

Senator SENIOR:
South Australia

– I remind honorable senators that, unintentionally, this provision will give an advantage to the large companies over the smaller companies. The clause may not involve a very considerable increase in the expense of managing a large company that is able to employ an actuarial staff continuously in connexion with its own business, but it may involve very considerable additional expense in the case of smaller companies that do not now find it necessary to keep an actuarial staff in continual employment. In years- gone by, when the Australian Mutual Provident Society carried out quinquennial actuarial investigations, policy-holders did not receive notice of their bonus additions until perhaps six months after the year to which they applied.

Senator Guy:

– I think that is still the practice.

Senator SENIOR:

– I believe that is so. I think that the provision will impose a very considerable and unnecessary burden upon the smaller societies. I am inclined to test the feeling of the

Committee on the subject, and I therefore move -

That the word “three” be left out, with a view to insert in lieu thereof the word “ five.”

Senator GARDINER:
Vice-President of the Executive Council · New South Wales · ALP

– If honorable senators are agreed that three years is too short a term for this investigation, I am not very keen about insisting on it. It is not the object of this Bill to mako matters more difficult for small companies or easier for big companies. The object is to give the Commonwealth control of the business of insurance in the interests of the people. I believe that the three years’ term would meet the convenience of most of the insurance companies. The greater number of them keep very full and accurate business accounts. They know the expectation of life of every policy-holder. We have reached such a stage, so far as these companies are concerned, that only the most highly-organized and carefullymanaged companies can continue in the competition for business. If the Committee considers that the term should be five years, instead of three, I shall not press the clause as it stands. My only object is that the Bill shall leave the Senate in the most complete form possible.

Amendment agreed to.

Clause, as amended, agreed to.

Clauses 40 and 41 agreed to.

Clause 42 (Commissioner may make comments and queries on abstracts and statements) .

Senator SENIOR:
South Australia

– I cannot understand the purpose of this clause, which seems to be an original proposition, seeing that no mention is made of any similar clause appearing in an existing State measure. What is the purpose of making comments; what benefit will be derived from the Commissioner’s comments, and how will the working of the Statute be affected by these comments?

Senator GARDINER:
Vice-President of the Executive Council · New South Wales · ALP

– Among other duties the Commissioner will receive abstracts and statements of companies. In other words, the manner in which companies are conducting their business will come before him for review, and this clause will give him power to make comments upon their methods of conducting their business. I venture to say that any comments he may make will be those of a business man. If he considers that a company’s methods are undesirable, he will comment to that effect. Possibly in any case he would have the power to make comments, but this clause puts the matter beyond doubt.

Senator SENIOR:
South Australia

– I do not question the right of the Commissioner to make comments, but surely there is some purpose underlying that right; otherwise the clause is a blind alley for the Commissioner. If the companies take no notice of his comments, what further step can he take? The clause does not state that if the comments are not obeyed the Commissioner can do anything further. The matter seems to be quite nebulous, but I am with the Minister if he can show me that the power of the Commissioner to make comments on the conduct of the business of insurance companies, or on the character of the fire insurance covered by companies, or on the kinds of life assured, will lead to increased security. Otherwise there seems to be no goal or aim in giving to the Commissioner the power to make comments.

Senator GARDINER:
Vice-President of the Executive Council · New South Wales · ALP

– I thought that I made clear on the second reading the fact that of the two principles under which insurance was controlled - supervision and publicity - this Bill was following the principle of publicity. If Senator Senior will read the Bill, he will see that in clause 44 the Commissioner is given power to publish any comments or queries made by him on the abstracts and statements of insurance companies; and the fact that these comments, if they are not obeyed, may be made public should weigh considerably with the companies. The clause which gives the power to make comments should be read in. conjunction with the clause which gives the power to publish the comments. Effect is given to the comments by the fact that they may be published. The principle underlying the Bill is to give full publicity to the manner in which insurance companies conduct their business, and the power given in this clause is not only useful, but also follows the principle of the Bill. When the conduct of the affairs of an insurance com pany is to stand the test of the fullest publicity, its management must be good. Thus we should get the best possible results.

Senator SENIOR:
South Australia

– If it were not for clause 44, clause 42 might well be eliminated as having no part in the Bill, but the Minister has now committed himself to the reasons for giving power to make these comments. If comments are not obeyed, they may be published. It was in order to draw from the Minister a statement as to the direction in which clause 42 was leading that I rose to ask for information. Without the explanation given by the Minister there would seem to be no connexion between the two clauses. I should not be surprised if in another place clause 44 is made a sub-clause of clause 42.

Clause agreed to. Progress reported.

page 5554

WAR PENSIONS BILL (No. 2)

Bill received from the House of Representatives.

Senator PEARCE:
Minister of Defence · Western Australia · ALP

– I move -

That so much of the Standing and Sessional Orders be suspended as would prevent the Bill being passed through all its stages without delay.

It is not proposed to put the Bill through all its stages to-night. What is proposed is to ask the Senate to agree to the first reading to-night, and then I will move the second reading, and will be prepared to allow an adjournment of the debate until to-morrow.

Question resolved in the affirmative.

Bill read a first time.

Second Reading

Senator PEARCE:
Minister of Defence · Western Australia · ALP

– I move-

That this Bill be now read a second time.

This is a Bill to amend the War Pensions Act. At present the Act provides for the investigation of claims by a War Pensions Board, which is located in Melbourne, and in that connexion the Act differs from our other Pensions Acts. We have had a little experience of the machinery of the War Pensions Act. There have already been some claims made, and the Treasury Department have come to the conclusion that it is advisable to get the machinery of the Act on the same lines as the machinery of our other Pensions Acts. The Bill, therefore, does away with the Pensions Board, and provides for the appointment of an Assistant Commissioner, Deputy Commissioners, and Registrars of Pensions. The Deputy Commissioners and the Registrars will be located in the various States, and, just as is done with claims for an invalid or old-age pension, they will deal with claims for a war pension, referring, of course, matters of principle to the Commissioner. The Registrars will receive and investigate the pension claims.

Senator Ready:

– Will that mean a more speedy attention to claims?

Senator PEARCE:

– It is believed that it will, and I think it is fairly obvious that it should. One objection to the proposal is that we may not get uniformity of decisions in the various States.

Senator Ready:

– Owing to the decentralization ?

Senator PEARCE:

– Tes. Still, there is provided the machinery by which cases of apparent injustice in a State can be referred to the Chief Commissioner, so that through that officer - and all of them, of course, will be subject to his review - we shall have the means of getting uniformity, just as we have now with regard to invalid and old-age pensions.

Senator Guy:

– It ought to be as uniform as it ib with the old-age pensions.

Senator PEARCE:

– It ought to be; but this is a pension of a different kind. With the other pensions, we are dealing with the question of age, but with this pension we are dealing with the relative degree of incapacity, which is always a difficult thing to determine.

Senator Keating:

– And with a relative degree of dependency.

Senator PEARCE:

– Tes. The two things are extremely difficult of determination. Still, it is felt that in all the circumstances, with the power of ‘review given to the Commissioner, we shall be able to get uniformity, and certainly we should be able to secure a more speedy treatment of cases. In the framing of the parent Act, certain things were overlooked which experience, short though it has- been, has revealed. Take, for’ instance^ the case of a person in receipt of a .pension being imprisoned for an offence. Obviously, the country would not desire that whilst he was serving a sentence his pension should be continued. That act will not forfeit the pension, but during the term of his imprisonment the pension will be suspended. The Bill also provides for the payment of the pension fortnightly, or, if necessary, sooner, which again puts the measure on all-fours with the other Pensions Acts.

Senator Guy:

– That will not necessarily deprive a dependant?

Senator PEARCE:

– No. In the case of a person who is imprisoned, the pension will be suspended in regard to him, but not in regard to any one who is dependent upon him. Again, a dependant under sixteen years of age receiving a pension will, on attaining that age, cease to be eligible for a pension.

Senator Lynch:

– Have you made any provision for a pension in a case of partial incapacity ?

Senator PEARCE:

– That is provided for in the main Act. Except as provided in proposed new section 9a, pensions will not be payable for a period exceeding two years to dependants whom the Commissioner considers able to earn a livelihood. That is to say, a person’ who, at the time of the claim, may have been a dependant for a certain period, but who would not in the ordinary course of events be a dependant, may have become of an age when he is capable of supporting himself. Of course, it never was the intention that that right should continue. It is a right contingent upon a certain condition of affairs, and that is dependency. There is rather an important and, I think, a welcome addition made by the Bill. In the parent measure we left out the Army Nursing Staff. They, of course, do not take the ordinary risks of the firing line, but they are open to very many risks to which a soldier is liable.

Senator Findley:

– Several of them have lost their lives in treating the wounded.

Senator PEARCE:

– Unfortunately, there have been such cases, but the chief danger to which they are subject is that of infection. Therefore, it is thoughtwell that we should amend the gap in the Act by including the Army Nursing Staff within its provisions. As some of the members of the Forces were entitled’ under the Naval Defence Act or the Defence Act to recompense by way of compensation, it was provided in the Act that they should not be eligible- to claim under those Acts and also under its provisions. They could take one remedy or the other, but they could not take both. In making that provision however, we excluded another class of persons, because we provided that if they -claimed under any other . Commonwealth Act, they could not claim under the War Pensions Act. We excluded old-age and invalid pensioners. An invalid or oldage pensioner might be dependent to a certain extent upon one of the soldiers at the front. Such a person is now debarred from getting any benefit under the War Pensions Act. That, of course, was never intended. The Bill excludes those two Acts from the provision of the principal Act, so that a person who is an old-age pensioner, and who would be a dependant and a rightful claimant to relief under the Act, will be enabled by the proposed amendment to receive that relief. The Bill amends another provision in the principal Act. Under the Public Service Act, public servants on completing twenty years’ service are entitled to six months’ furlough, and if they retire without taking the furlough they are entitled to six months’ pay in lieu thereof. The object of the amendments contained in clause 4 of the Bill is to make it clear that such public servants will not lose their right to a war pension, because that, again, is a claim under another Act of Parliament. Those are the main amendments proposed to be made in the Act, and I think that with their enactment the Act will be made more watertight and more liberal. They are chiefly, as I said, the result of our very brief experience, and as claims to pensions are now coming forward in considerable numbers, it is advisable that the Act should be amended as early as possible, in order that the claims may be dealt with promptly, and that slight injustices already discovered may be remedied.

Senator Findley:

– Can you state, approximately, how many claims have been made 3

Senator PEARCE:

– I cannot give the number exactly, but I believe that it is already getting into the hundreds; but, of course, the claims will increase very largely in the immediate future.

Senator O’Keefe:

– They are increasing all the time.

Senator PEARCE:

– That is so.

Debate (on motion by Senator Millen) adjourned.

Senate adjourned at 5.52 p.m.

Cite as: Australia, Senate, Debates, 4 August 1915, viewed 22 October 2017, <http://historichansard.net/senate/1915/19150804_senate_6_78/>.