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Thursday, 8 December 1960

Mr BANDIDT (Wide Bay) .- In supporting this measure I feel it necessary to refer to the charges levelled by some members of the Opposition against the pastoral finance companies. I was very surprised to hear the honorable member for Lalor (Mr. Pollard) make charges against those companies. There is no doubt that the pastoral finance companies have played an important part in the development of Australia, especially in the pastoral areas. I do not think there is a general appreciation of how well the companies have operated. It is well known that livestock are looked upon as poor security. Yet, many a man in Queensland who has contemplated entering the grazing industry has been enabled to buy livestock with the aid of finance provided by these companies at the rate of £1 for every £1 contributed by the borrower. This has meant that, instead of entering the industry with 500 head, the client has been able to begin operations with 1,000 head. That has been of tremendous advantage throughout Australia to those people whose finance was limited.

It is only fair that the companies should be entitled to charge reasonable rates of interest for the money that they have provided, and which they will provide in future. I think the honorable member for Lalor would be the first to admit that it is better for a man to be able to finance the purchase of his cattle on the basis of £1 from the company for every £1 provided by himself than to have to seek accommodation from the hire-purchase companies on much more difficult terms.

There is very little money that can be obtained under hire-purchase agreements for less than 6 per cent. flat. Honorable members of the Opposition who rail against pastoral finance companies will find that an interest rate of 6 per cent, flat is the equivalent of more than 11 per cent, per annum on a monthly reduction basis. The pastoral finance companies, up to date, have charged in the vicinity of 6 per cent, and if they now propose to charge 6i per cent, that is still a reasonable rate of interest. Let me point out, also, to members of the Opposition who have said how good it is to get finance from the Commonwealth Development Bank that if that bank charges 4 per cent, flat for hire-purchase finance, which is regarded as reasonable by many people, that rate is greater than the 6J- per cent, which the honorable member for Lalor says that pastoral finance houses will charge because the 6} per cent, is not a flat rate.

Mr Pollard - The rate of 61 per cent, is not a hire-purchase rate.

Mr BANDIDT - It is not a flat rate. I am pointing out that if you pay 4 per cent, flat for hire-purchase finance you are, in effect, paying more than the 6} per cent, to be charged by the pastoral finance companies on a monthly reduction basis. So, their interest charges are reasonable. But it is not only a matter of the interest charged. It is a matter of being able fo get finance to develop a property. There is many a grazier in Australia who can thank the pastoral finance companies for helping him along the road. I think that even some honorable members of this chamber will be glad to acknowledge that they have been helped in this way although, of course, they have paid interest. So I think it is a mistake for honorable members, however wellintentioned they may be, to criticize the activities of pastoral finance companies.

Those companies have served a useful purpose in the past and they will continue to serve a useful purpose in the future.

There is a further point to which I would like to refer: At a time when it is customary for everybody in the country to criticize the Commonwealth Government, we should place the responsibility for control of hirepurchase finance where it belongs. In spite of the fact that the State governments have the power to take steps that would help to curb any hire-purchase excesses, they have not done so. The States of the Commonwealth have the power to meet together to decide, for example, what minimum interest rates should be. They have not done so and now everybody is trying to blame the Commonwealth for taking other steps to correct an unfortunate situation. The Government, in spite of its difficulties and in spite of the fact that the States have not taken the steps that they could have taken, has introduced a measure which should meet with the approbation of this committee.

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