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Thursday, 26 November 1959

Sir WILFRID KENT HUGHES (Chisholm) . - The honorable member for Melbourne Ports (Mr. Crean) started off in quite a good strain, but wandered off in a socialistic wonderland, somewhat like Alice did, and allowed his bitter opposition to the private banking system to outweigh his reason. After all, who provides the money that the private banks lend? It all comes from the pockets of the people. On page 18 of the "Treasury Information Bulletin ", from which the honorable gentleman himself quoted, are set out the number and the amounts of interestbearing and other deposits, and from whom they came. However, I am not going to spend my time arguing with the Opposition about the private banks, because I do not think that subject really concerns the bill.

Mr Bury - It is just a red herring.

Sir WILFRID KENT HUGHES - Yes, it is just a red herring drawn across the track. I should like to congratulate the Government on the financial position of our Treasury. As a result of careful husbandry and shrewd accounting, and of wise Government policy, it is probable that no other country's treasury is in a stronger position than ours. This is the result of the policy that has been pursued, even though I do not agree that we will actually have a deficit this year. I think that the Budget drawn up in order to try to curb the horse of inflation, and prevent it from getting into a gallop or even a trot, is a very wise one.

This bill is merely a bill to authorize the Government to increase its overdraft by £61,000,000, if necessary. Whether or not it will be necessary to do so, I do not know. The last Premiers' Conference discussed the question of the loan funds which are dealt with in this bill. Subsequently, one of the State Treasurers said in a speech to a State Parliament -

I think the Commonwealth Treasury are hagridden with the fear that they will run out of money and they do not know just how wealthy they are and how strong their finances. Every time I go to a Loan Council meeting I spend all my time and ingenuity trying to show them just where they have their money hidden away and how rich they are.

Mr Calwell - Who said that?


Hiley, the Queensland Treasurer. It was not said by a member of the Opposition. I think that to a large extent this is a matter for congratulation of the Government and not for criticism of it, although, on the other hand, I think we might be a little more generous in the way in which we distribute some of that money and in the manner in which it is spent.

Actually, this bill deals with two things - the £37,000,000 loan fund for defence expenditure and £24,000,000 to finance redemptions of Commonwealth securities issued for war purposes. When the Prime Minister (Mr. Menzies) introduced the bill, as acting Treasurer, he said -

It is estimated that, in addition to utilizing thi current receipts of the National Debt Sinking Fund, it will be necessary to call on the balances in that fund and in the Loan Consolidation and Investment Reserve to the extent of £24,000,000 to finance redemptions of Commonwealth securities issued for war purposes.

As honorable members know, the Loan Consolidation and Investment Reserve is, if we are frank with ourselves, rather a confidence trick, supported by legal technicalities, which makes the Constitution a farce as far as federalism is concerned, and makes it entirely a means of unification. Section 94 of the Constitution provides -

After five years from the imposition of uniform duties of customs, the Parliament may provide, on such basis as it deems fair, for the monthly payment to the several States of all surplus revenue of the Commonwealth.

Then when we use section 96 of the Constitution and hand out funds which we require to be applied to a specific purpose only, we are bringing about unification at such a rapid rate that the people can hardly see the way it is going. I know that unification is the policy of the Opposition, but it is not the policy of this side of the House.

At the conference of Commonwealth and State Ministers held on 4th and 5th March of this year Mr. Hiley directed attention to the fact that the Commonwealth is reducing its indebtedness at an average rate of f 137,000,000 a year. The following appears in the report of the conference: -

Mr. HILEY.; . . . You reduced your indebtedness last year by ?189,000,000.

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