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Wednesday, 5 May 1920

Mr FENTON (Maribyrnong) . - In reference to the amount of £10,000,000 mentioned in the Bill, it is no doubt necessary for the Treasurer to put his hands on a certain sum of money in order that it may be beyond the reach of the State Treasurers at the end of the financial year, but I hope that we shall have no repetition of the action of a previous Treasurer in taking £3,000,000 from the Trust Fund in order to make his annual balance-sheet appear a little better.

Sir JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) (Minister for the Navy) - When was that done?

Mr FENTON - A few years ago. When Parliament has granted a certain sum of money to be paid into a Trust Fund, it seems peculiar that the Treasurer should be able to draw upon that fund in order to present a more favorable balance-sheet. It will be remembered that the Finance Committee reported upon the investment of large Government balances held at current account in the banks. The Commonwealth Bank has made considerable sums of money because the Treasurer of the day has not seen fit to arrange for the investment of these balances, so that the Treasury might get the benefit of any interest they earned.

Mr Riley - It is only a matter of bookkeeping.

Mr FENTON - At any rate, this bookkeeping has resulted in the Governor of the Commonwealth Bank adding considerably to the profits of the Bank.

Mr Riley - Where do those profits go?

Mr FENTON - The honorable member may think that this Parliament has the handling of money earned by the Commonwealth Bank, but that is not so.

Mr Tudor - I would sooner that the Commonwealth Bank earned the money than that the private banks should do so.

Mr FENTON - So would I. It was pointed out by the Public Accounts Committee that in New South Wales, and, I believe, in other States, the Treasurer, when he has large sums of money, places them with the banks, and arrangements are made whereby he participates in the interest earned. I hope that our Treasurer will see that money which is not to be used immediately is made to earn interest for the Treasury, and not only for the bank, for the whole of the people benefit by the interest thus obtained. In war time loans for £20,000,000 or £30,000,000 were floated, and large sums of money came into the possession of the Treasurer. In the past it has been the practice to deposit these sums of money at current account, mostly with the Commonwealth Bank, and the Governor of the Bank very naturally did not allow it to lie idle.

Mr Riley - What does it matter, so long as the Bank is using the money profitably?

Mr FENTON - But the money does not come intothe same till, and it is far better for it to go to the Treasury than into the coffers of the Bank, which, I am glad to say, is earning enough without it being necessary for it to earn more out of Treasury money. I believe that the Department has, to a great extent, been acting on the recommendation of the Public Accounts Committee, and that the interest earned does not now go exclusively to the Bank.

Clauses agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

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