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Wednesday, 9 March 1932

Mr BEASLEY (West Sydney) .- Had the Assistant Treasurer (Mr Bruce), when moving the second reading of this bill, explained the real motive for its introduction, honorable members would have been treated as intelligent adult's rather than as children. The right honorable gentleman, in emphasizing the need for protecting policy-holders, dealt at length with the failure of insurance companies in the United Kingdom. What he said may be quite true, but the purpose of those statements was only to mislead honorable members and the public regarding the real reasons for this legislation. Those of us, however, who have watched closely recent events, understand very clearly why the bill has been introduced. We have been told that there is need for a uniform insurance law throughout the Commonwealth. If that be so, the uniformity should be in regard to insurance generally, and not merely in regard to that one phase of insurance with which the bill deals. If deposits are to be made by insurance companies with the Commonwealth Government, that obligation should apply to all States. The mere declaration of the amount of deposit to be made by each company engaged in insurance business is not uniformity. Reference has been made to tlie fact that on two previous occasions a comprehensive insurance bill was placed before this Parliament, and not proceeded with only because elections intervened. So much lime having been given to proposed legislation of this character, the Government must have had at its disposal all the data necessary for the introduction of such a bill as the right honorable member for Cowper (Dr. Earle Page) has declared to be necessary. Why then has the Government not introduced such a bill? If a uniform and comprehensive insurance law for the whole of the Commonwealth, was necessary when the earlier bills were introduced, it is equally necessary to-day, and if the Government were sincerely desirous of dealing with this matter, it had the draft legislation at hand, and the requisite majority in both chambers to enact it. If the public is so much in need of protection against the occurrences in the United Kingdom and Australia, which were referred to by the Assistant Treasurer, why did not the Government' legislate on those lines? The answer is obvious. The Leader of the Country party said that it is necessary to give this measure a speedy passage, but he did not explain why, because he wished to hide the reason for haste. We are entitled to expect reasonable frankness from honorable members. What have they to hide? Why do they not state candidly the undeniable reason for this bill? As soon as it was mooted, mild, consternation was caused amongst State Governments already holding cash deposited by insurance companies. They complained of the serious embarrassment which would be caused to them if this Parliament enacted those provisions of the bill which would necessitate the transfer to the Common wealth of the deposits held by them. The Premier of Queensland and others expressed great concern, and apparently as a result of representations to members of the Senate the bill was amended to relieve State Governments of the obligation to hand over to the Commonwealth deposits they have already received. The explanation is that they could not hand over those moneys because they have applied them to other purposes. I quote the comment of Mr. Barnes, the Treasurer of Queensland; dealing with repudiation, and the financial position of this State, he is reported in the Brisbane Courier of the 26th February, as having said -

Certainly if the Federal Government were to insist on proceeding with those provisions in its insurance bill which would require Queensland to pay over certain moneys held as deposits from companies, the finances of the State would be weakened very materially.

Queensland is one of the States which, according to Commonwealth Ministers, are honouring their obligations, and faithfully adhering to the Premiers plan; because of such conduct they must be given every help to tide over their difficulties. They would not be so dishonest as to use for other purposes moneys deposited with them to guarantee the rights of insurance policy-holders! They may boast of their cash balances, and claim that they have balanced their budgets; they may slug their own praises at meetings of the Loan Council ; but the Treasurer of Queensland has admitted candidly that his Government has used for other purposes money received to safeguard the interests of insured persons. Probably a similar situation exists in other States, and I do not wonder at their refusal to let the honorable member for Darling (Mr. Blakeley) know the exact amount of cash deposits actually in their possession. It would be unwise on their part to make such information public, because it might be utilized in connexion with further representations that must be made at future meetings of the Loan Council and Premiers conferences. We have been told that New South Wales was particularly backward in legislating to protect the public against " go-getters " and tinpot insurance organizations formed for purposes of exploitation. Previous State Governments may deserve condemnation for not having provided.,this protection which is declared by the right honorable member for Cowper to be necessary; I do not condone their laxity, but I remind the House that not until the present Government in New South "Wales introduced a measure to correct that omission were steps taken to induce the Commonwealth Parliament to legislate in this field. The organizations with which the right honorable member for Cowper is associated took action to cause the Legislative Council to prevent the necessary protection being afforded to policy-holders. While anti-Labour sections complain that New South Wales is still the happy hunting ground for insurance exploiters, they use their political organizations to prevent the enactment of corrective measures. Many of the antiLabour members of the nominee Legislative Council are deeply interested in insurance companies, and they have their own interests to serve. Self interest has been the guiding principle of their parliamentary careers. Having been appointed for life they have not to go before the people periodically to give an account of their stewardship, and they take particular care to protect the interests of themselves and the associations with which they are connected. Therefore their opposition to the insurance bill introduced by the Lang Government was to be expected. When the interests which were disturbed by Mr. Lang's bill got into touch with their representatives in this Parliament all that had been said in years gone by of the need for a comprehensive insurance measure went by the board, and the Government decided that this Parliament must legislate quickly to prevent the New South Wales Parliament from demanding deposits from the insurance companies as other States have done. Of course the Commonwealth Government has declared very definitely its attitude towards New South Wales, and the Government of that State; it is prepared to adopt any means to prevent the New South Wales Parliament from functioning as it thinks fit. But obstacles will have to be overcome before even this bill, which discriminates between States, can operate. The New South Wales Government will not stand idly by while this Parliament exercises its legislative powers, not to protect insurance policy-holders, but to prevent the State Parliament from doing what it is justly entitled to do. That is proved by the fact that great care has been taken to provide that the bill shall operate from a certain date. Retrospective legislation is to be passed providing that the Commonwealth law shall override that of a State. Sub-clause 2 of clause 6 gives power to the Treasurer to call upon a State government, at any time, to hand over to the Commonwealth any deposits by insurance companies that it may have in its possession. If, at the next general election in Queensland, a change of government took place, as appears likely, and the new Government refused to follow the bankers' policy of so-called financial rehabilitation, the Treasurer of the Commonwealth could, for political reasons, demand that the Queensland Government should hand over £1,400,000 now deposited with it by insurance companies. If a new government were called upon to pass over such a large sum to the Commonwealth Treasury, it would probably be seriously embarrassed in giving effect to its policy. If my opinion on this matter is correct, I have drawn attention to a serious aspect of the bill. I am satisfied that the financial policy that the State Governments generally have followed up to the present time has failed, and a drastic change must necessarily be made. I object to the power given under this clause to do something that would embarrass a State government that had the temerity to launch out upon a financial policy opposed to that of the Commonwealth Government.

It is not necessary to consider in detail the provisions for the protection of depositors. Those who put their savings into institutions of the kind referred to in this bill should receive all possible protection; but insurance should be provided on national lines. That is th, policy of the Labour party. New South Wales has a government insurance scheme in operation, and it is working very satisfactorily. It has resulted in a considerable reduction of premiums, and has been of benefit to the whole community. Since the object of this bill is to embarrass the Government of the State from which I come, I shall oppose it.

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