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Tuesday, 18 April 1961

Mr BANDIDT (Wide Bay) .- The subject of export payments insurance is a rather dry subject, as we have discovered in this debate, although I will say that the honorable member for Lalor (Mr. Pollard) did introduce one or two interesting but irrelevant ideas. He tried to show us that we should nationalize all insurance.

Mr Pollard - I did not say all insurance; I said fire insurance.

Mr BANDIDT - I understood the honorable member to say that all insurance should be nationalized. If he meant that only fire insurance should be nationalized then. 1 should like to know how he was connecting his remarks to export payments insurance. I think we might look for an analogy to the nursery rhyme, which, could be parodied as follows: -

When the pie was opened The Lalor bird began to sing, " Now wasn't that a dainty dish? We'll nationalize the thing."

The honorable member for Lalor has executed a remarkable feat. He has said that when a Government undertakes something that nobody else will do; that is nationalization. I suggest that the meaning of nationalization is to take over a business that is already being run privately. That is to say, it is necessary to have an existing business to take over from private enterprise before it can be said that a business is being socialized. But the honorable member for Lalor says that by doing a job that nobody else is willing to do, the Government has nationalized a business. That is a new definition of the word nationalization. I wonder whether the honorable member will see 'hat that definition is inserted into' Labour's socialization plank. My mind goes back to the time when Labour decided to nationalize another field of activity in the community - banking. That was not a case of running something that nobody else would run. It was a case of taking over something that was already in existence. It meant depriving the existing concerns of finance and socializing them.

I should like to read to the House section 13 (3.) of the Export Payments Insurance Corporation Act. because some of the honorable members who have interjected obviously are not capable of reading it for themselves. It states -

The Corporation shall not enter into contracts of insurance under this section against risks that are normally insured with commercial insurers.

Recently, in Queensland, the high rate of claims against insurance companies in respect of motor car accidents had brought the insurance companies to the point at which they considered that they could not continue to undertake motor vehicle insurance. As it happened, they were permitted to increase their premiums. Had they not been permitted to do this, the private companies would have had to go out of this field of insurance, and it would have been left to the Queensland State Government Insurance Office. According to the definition put forward by the honorable member for Lalor by implication, that would have meant the nationalizing of motor vehicle insurance in Queensland, which, I think, is a rather novel idea of nationalization. I have cited section 13 (3.) of the principal act in order to indicate that the important thing is that the insurance undertaken by the Export Payments Insurance Corporation under the principal act permits transactions that could not otherwise have taken place, since private concerns would not insure them.

The honorable member for Lalor, in addition to treating this as a policy of nationalization, put forward a further proposition. I should be interested to know whether it represents Labour policy. He said that, in addition to selling wheat on credit, we should, give it to countries such as mainland China in the existence of circumstances similar to those which are to be found at present in that, country. The Australian Labour Party, so far as I know, has never yet given away wheat in such circumstances when it has been in office. I admit that the Labour Government on one occasion went close to giving away wheat to a neighbour when it entered into a transaction with New Zealand at low prices. But at no time has a Labour government given any grains to needy countries.

I think it is worth while to consider for a moment the proposition advanced by the honorable member for Lalor. When we talk about giving away our grains to other countries, the first question that arises is: How much should we give them? Should we give them only the surplus that remains after our normal sales have been made, or should we give them what they need? For example, if we have a small surplus of wheat this year - assuming that our sales go well, as they seem to have been going - should we be satisfied to give to mainland China a mere 100 tons of wheat? What, would be the use to China, in her present plight, in which she needs hundreds of thousands of tons of wheat regularly, of just a few tons of wheat given by us? So we are faced with the very difficult question: Mow much should we as a nation give to mainland China? Then there is another difficult question: To what countries should we give grains? Should we give them just to mainland China or should' we draw up a list1 in order of priority of the countries that need grains? In short, we would not have enough grains in this country to give what other countries needed, let alone to sell in order to make our living, if we adopted that policy. By developing this idea of giving away wheat, we would use up the resources of the nation in order to give something to other countries, needy and all as they may be, without helping ourselves. The history of Australian trade bears out the proposition that charity must necessarily begin at home.

Mr Pollard - The honorable member has not yet heard of the Food for Peace Campaign.

Mr BANDIDT - The suggestions made by the honorable member for Lalor have diverted us from the main theme, Mr. Deputy Speaker. It is very clear that the original Export Payments Insurance Corporation Act, which was passed in 1956 in order to assist the export of various goods, has had1 remarkable success. The honorable member for Yarra (Mr. Cairns) spoke about losses. In all the transactions that have taken place under this scheme since 1956, there has not been one loss. To say that there are losses because in a particular year the premiums charged totalled less than did the expenses of the corporation is merely to split straws and quibble. The honorable member said that in 1960 the premiums charged totalled less than did the expenses. If we set off the expenses each year against the premiums each year, we shall find that, on the whole there is still a profit. The point to remember is that, regardless of the total brought in by premiums and regardless of the purely administrative costs of running the business, the transactions that have taken place since 1956 have not involved Australia in any loss, because the deals that have been made have, remarkably, all been successful.

We must pay tribute to the men who administer this scheme for the great skill that they have shown. The face value of the policies issued so far totals more than £75.000.000 and the cover under current policies totals more than £24,000,000. In addition to increasing trade, the export payments insurance scheme has done one further thing: It has protected traders against loss. A trader who wishes to em bark on a big export venture goes to the Export Payments Insurance Corporation and, in next to no time, he finds out whether the potential buyers are or are not satisfactory. If in the eyes of the experts of the corporation they are not satisfactory, no transaction is entered into. Before this scheme was instituted an exporter who wished to sell goods overseas took the risk himself. He did not have access to any of the information and expert knowledge that the officers of the corporation have. This scheme has had very fine results because it has prevented great losses which would otherwise have occurred in the normal course of trade. The prevention of these losses has been made possible because the experts of the corporation know where the bad risks are.

The honorable member for Melbourne Ports (Mr. Crean) made a very thoughtful contribution to this debate. He said that there were no small transactions in this field, but he did not mention, as it would have been desirable for him to do, that small transactions are no use if they involve losses. He did not mention that there being no small transactions could possibly have been associated with the fact that a lot of deals that may have been suggested would not be satisfactory because they may have involved doubtful risks overseas. I think it is worth keeping that in mind, because it is not a bit of use having a scheme if it merely involves the Government - the people of Australia - in loss. Surely, whether the deals are big or small, the result is what counts and the result is to the credit of the corporation.

Clause 5 of the bill seeks to introduce a new section 16a, and I think it is worth while reading part of the proposed newsection. It states -

Subject to the next succeeding sub-section, where -

(b)   the proposed contract would impose upon the Corporation a liability that the Corporation is not authorized to undertake, or would not undertake in the ordinary course of business, the Corporation may refer the application to the Minister for consideration under this section.

Then it goes on to say that the Minister may give directions to the Corporation. Although the bill perhaps is not perfect, it does two things. It enables sales that would not otherwise be made in the ordinary course of business and it also enables quite a number of sales on credit extending over a period of years, if they are in the national interest.

I think the future will decide just how far we will have to go in the normal course in order to develop our trade satisfactorily. Instead of taking the Government to task for being careful in its amendments to the act, we should commend it for hastening slowly, because I think that the success that has been achieved so far is a good augury for the future.

Mr.WHEELER (Mitchell) 19.431.- The honorable member for Wide Bay (Mr. Bandidt) said during the course of his speech that this was not a bill to become overexcited about, and with that I agree. But I think the honorable member for Lalor (Mr. Pollard) and the honorable member for Mackellar (Mr. Wentworth) made some thought-provoking contributions to the debate. I do not wish to misquote my old friend, the honorable member for Lalor, but 1 think he re-affirmed his belief in nationalization. Here was no namby-pamby declaration of faith and no pandering to the finer susceptibilities of democratic socialism, whatever that may be - I do not know. I understood the honorable member for Lalor to say, and this was characteristic of his bluntness and candour, that if he had his way he would nationalize insurance companies. I think the House agrees that that is what the honorable gentleman said. He was supported in those remarks by other honorable gentlemen opposite.

Mr Curtin - It is the Australian Labour Party's policy.

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