Mr RONALDSON (10:35 AM) —I thank the honourable member for Cunningham (Mr Martin) for his support of these pieces of legislation. He is quite right; the Payment Systems and Netting Bill 1998 , the Cheques and Payment Orders Amendment (Turnback of Cheques) Bill 1998 and the Cheques and Payment Orders Amendment Bill 1998 are important and they are long overdue. I would like to thank the member for Wills (Mr Kelvin Thomson), the member for Forrest (Mr Prosser) and the member for Cunningham for their contributions.

The member for Wills raised in his discussion this morning the question of a report of the Standing Committee on Financial Institutions and Public Administration in relation to cheque clearing times and some criticism that they had made of that. He asked what had happened regarding that question. I understand that they considered cheque clearing times in their report in September 1997 when they examined the Reserve Bank's annual report. I also understand that at the time it was the intention of the committee not to pursue that question as a separate reference, if I am correct in the advice that I have been given, but that they would again examine it when they were looking at the next RBA annual report.

The question of cheque clearing times, of course, is very much in the hands of the banks themselves but there is nothing in the Cheques and Payment Orders Act or any other legislation that would prevent banks reducing cheque clearing times. In fact, I understand that the truncation provisions in the cheques act actually facilitate the reduction in cheque clearing times. I understand the banks are also working with the Australian Payments Clearing Association to look at computer systems and other measures which may address some of the matters raised by the honourable member for Wills and, indeed, I suspect, other members as well, in relation to cheque clearing times.

The Payment Systems and Netting Bill 1998 , the Cheques and Payment Orders Amendment (Turnback of Cheques) Bill 1998 and the Cheques and Payment Orders Amendment Bill 1998 —I will sum them up, if you like, in cognate before we deal with them individually—are part of the government's drive to have a modern, accountable financial system as well as providing legal certainty. The honourable member for Cunningham and, indeed, the members who spoke before, especially the member for Forrest, referred to the fact that the world is changing rapidly, and, indeed, that the Australian financial system and payment systems need to not only keep up to date with that but indeed stay well ahead of it.

I think that we have a unique opportunity to drive in this country our position as a regional financial centre. It is incumbent upon the Australian financial system—indeed, incumbent upon the government and the whole parliament—to make sure that we facilitate whatever is required to drive that and provide the confidence for those overseas who are wishing to invest in Australia, establish in Australia and deal with Australia that we are up to speed with the rest of the world. It is a highly competitive area globally. There are some significant uncertainties in a legal sense right across the matters addressed in these three bills. If we do not address those we are not keeping pace with the requirements of a modern financial system.

The Payment Systems and Netting Bill 1998 especially extends into the payment system and close out and market netting the existing rules on set-off. Those set-off rules, I suspect, as most honourable members would know, have been dealt with by the common law for a long time, but there are problems that need to be addressed urgently in a legal sense where there is no case law in relation to the question of the effects of liquidation of one party. We need to make sure that in this financial context those set-off rules are extended in a legal and legislative sense and the government has addressed that with this particular piece of legislation.

Honourable members will see also in the bill reference to the zero hour rule and the financial payment system. Again, that is addressing another potential area of concern expressed by many within the financial markets about the need to modernise where we are going.

In relation to the Cheques and Payment Orders Amendment (Turnback of Cheques) Bill 1998, honourable members will have heard discussions about that matter today. Basically, this is extending the normal commercial arrangements between financial institution and customer to arrangements between financial institution and financial institution in the event of liquidation. Again, this is another matter that in some respects has been left up in the air, not because of any court cases or legislative provision but rather because of the lack of that protection. This bill seeks to address concerns that have been raised in that regard.

There has been reference to the Cheques and Payment Orders Amendment Bill by honourable members. In particular, the member for Cunningham drew to the attention of the House the question of rural and regional areas. If I can get my short-term Treasurer's hat off for a second and put on my regional and development parliamentary secretary's hat, let me say that there is absolutely no doubt there are two burning issues in regional Australia at present. One is the lack of access to doctors, and the government is addressing that and has put in considerable funds in this particular budget. And the other issue concerns the withdrawal of financial services in the bush.

There would be some members in this House who would not be able to comprehend not having easy access to a bank or other financial service. There would be many who would not be aware of the physical and emotional traumas that can be involved. For example, after closing his or her small business at 6 p.m. a person might then be required to drive for an hour to a safe deposit box in a major centre to deposit the day's takings. Alternatively, if that person decided to keep the takings at home, that person could lie awake all night wondering whether someone was going to come through the front door and remove those takings.

It is a totally different world out there. Those from regional and rural areas on both sides of the House fully appreciate what the problems are, but there would be many from metropolitan areas who would not appreciate that something as simple as depositing the day's takings can require a two-hour drive at the end of a very busy day. There would be some who cannot understand the implications for that in the economic sense, if their funds went astray somehow, and also in the physical sense of having to drive for a couple of hours at the end of a busy day.

The government, as you are aware, has moved in relation to extending funds for creditcare. Creditcare is about encouraging credit unions to open up branches in regional and rural areas, or to provide facilities.

I have a different view from some. I think there is a unique opportunity for financial institutions such as credit unions to talk to local communities about what their requirements are. Some credit union facilities have been very successfully established in regional areas, where something quite simple has happened. There has been a very healthy dose of commonsense. The institutions sat down with the communities and asked, `What are your requirements?' They did not try to pre-empt what the requirements were and therefore didn't say, `We can't provide a five-day facility; therefore, we won't provide a thing'—which is what some of the banks did say.

The credit unions sat down and said, `Right, what are the requirements of this community?' They listened to small business and they listened to people who require funds or receive government funds on a fortnightly basis. They also spoke to many others in the towns and asked, `What are your requirements? Let us see if we can meet them.' When we had that deathly all or nothing approach from some of the banks—where it was either five days and the lot or nothing at all—it really destroyed a lot of small country towns. There is absolutely no doubt that, from a regional development point of view, one of the key things that we need to be able to offer potential investors in smaller centres is banking facilities or banking type facilities.

One of the real difficulties in Australia at the moment with the decentralisation approach is convincing metropolitan based businesses, or people who wish to start a business in a country area, that we are further down the track as a community, as a government, as a parliament—whatever it might be—and that we will be able to provide them with financial services. This is a very important aspect for them, and quite obviously so and quite reasonably so.

This is an extremely important measure to enable us to give credit unions and rural communities the opportunities to talk. Further to that, by extending these moves in relation to the provision of cheque facilities for other financial institutions, we will start to fill the gaps in the financial services that have been left by the banks closing their branches.

This is very important legislation from, if you like, the big picture point of view. The government is absolutely committed to making Australia a regional financial centre. I think recent events have shown that we have a unique opportunity to sell our bona fides around the world as a safe and secure investment place. On the local level, if you like, provisions such as the extension of the cheque facilities to credit unions and other institutions is extremely important for the people that we all represent in this House. I thank all those members who have made a contribution today.

Question resolved in the affirmative.

Bill read a second time.

Mr DEPUTY SPEAKER (Hon. N.M. Dondas) —If no member wishes to consider the bill in detail, I will put the report question forthwith. The question is that the bill be reported to the House without amendment.

Question resolved in the affirmative.