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Tuesday, 23 October 1956

Dr EVATT (Barton) (Leader of the Opposition) . - I do not wish to speak at length on this measure, but I should like to take the opportunity to refer to proposed new section 6a of the principal act, which reads -

Where under an Act the Treasurer has authority to borrow moneys, the Governor-General may authorize the Treasurer to borrow the moneys in whole or in part in currency other than Australian currency, and, in that case, the Treasurer is empowered to borrow the moneys accordingly.

Since the Governor-General in form is the Treasurer in fact - he acts on the advice of the Treasurer - this means that if the Treasurer has authority to borrow moneys he can borrow them anywhere in any foreign currency. I do not think that is merely a matter of procedure. It is rather a matter in which great power is involved. I think the Parliament should have some authority over loans from other countries. It has been pointed out in favour of the Government's proposal that borrowings may be made in a foreign currency under the Financial Agreement. That is correct, but if the Commonwealth is borrowing for itself or the States it always does so under the authority of a statute of this Parliament. Is there anything wrong in that? I think the honorable member for Balaclava (Mr. Joske) really sees the value of it. A borrowing in foreign currency means some reference, implied or direct, to a loan from another country and the status of the currency of that country in relation to our own.

The Minister for Labour and National Service (Mr. Harold Holt) pointed out in his second-reading speech that, in some instances, specific legislative authority is sought for borrowing in a foreign currency. The Canadian loan of 1955 was authorized by a special act of this Parliament. During the consideration of that measure in a very lively and important debate the terms of the loan were discussed, and it was shown by my colleague, the honorable member for Melbourne Ports (Mr. Crean) and other honorable members that a very high rate of interest was being charged. If this measure is passed, the expression of opinion and criticism will be practically impossible in future, except perhaps after the event. It was pointed out by the Minister, also, that borrowing in a foreign currency has taken place in instances in which no specific legislative authority has been sought. But this is the gist of the argument, and 1 should like to drive the point home: The Minister said in his second-reading speech substantially that Australian governments have borrowed overseas for many years and there has never been any doubt that if the Parliament authorizes the borrowing of a sum of money that amount may be borrowed either in Australia or in foreign currency. That is perfectly true. There is power to borrow on the security of the Commonwealth from overseas in any currency if the Parliament authorizes it. The present Government has borrowed overseas for a number of years.

Mr Duthie - It was not done by the Labour government.

Dr EVATT - Under Labour's administration for nearly nine years there was no borrowing from overseas. So I think it is wrong for the House to assume that these matters will be merely routine in the future. One can understand borrowing in established currencies such as the American or the Canadian dollar, but under the powers conferred by this bill the Government will be able to borrow anywhere under any conditions and under any provisions for the payment of interest and redemption. No one can say what may be the relationship between Australian currency and that of the country from which the borrowing is made. The relationship may be all right at the time of borrowing, but it may become very unsatisfactory to Australia later. I suggest that this matter be reviewed so that the National Parliament may have some say in these loan transactions and in the question of whether borrowing in the particular currency should be authorized. Of course, the Opposition goes further. It is opposed to overseas borrowing except in rare instances in which the purpose of a loan is to enable Australia to purchase equipment essential to its development.

Mr Crean - Equipment which cannot be obtained in any other way.

Dr EVATT - In instances in which it is impossible to obtain the equipment otherwise. We look behind the loan to the transaction implicit in it. We have heard Government supporters claiming to speak for the liberal tradition declare that the Parliament must not delegate great powers entirely to the executive. That is what is to be done in this instance. This, bill will empower the Government to borrow money in the currency of any country in Europe. Asia, or elsewhere, and to commit Australia to a loan without the Parliament having any say in it.

I hope this proposal will be reviewed and that the Minister, in reply, will inform the House of the currencies in which it is expected to borrow. I could understand a proposal such as this being made in relation to currencies in which borrowings have previously been made, including the Swiss franc, a currency in which Australian recently obtained a comparatively small loan. Should the Parliament not be able to impose some limitation on these borrowings? These are not merely matters of routine and form. They are important, and the House should consider them very carefully.

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