Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Wednesday, 6 October 1971
Page: 1984


Mr CONNOR (Cunningham) - In the limited time at my disposal I want to draw the attention of the Committee to certain aspects of the Budget which I consider to be nothing short of a swindle sheet. I refer in particular to the role of the Loan Consolidation and Investment Reserve. In Hitler's day the technique was to tell the big lie; so big that it could not be controverted and therefore, would be accepted. In just the same way, the manipulation of surplus taxation by this Government is nothing short of a national scandal. The Loan Consolidation and Investment Reserve, of course, is a euphemism for a means of channelling surplus taxation ultimately into Commonwealth bond holdings. In other words, the Commonwealth

Government arrogates to itself the right to do what no private company can do. Under the company law of any of the States no company can buy in its own shares. But the Commonwealth Government can mulct the people in taxation and then divert a substantial proportion of it into Commonwealth bond holdings.


Dr Everingham - Double tax.


Mr CONNOR - Yes. For example, the so-called domestic surplus for the current financial year will be $630m. It is up from $550m last year, and of that $550m, after a bit of bad luck on certain aspects of the Government's administration, the Government is still able to siphon $280m into Commonwealth bonds. The situation is that in 1966-67 there was a sum of $915m in the Loan Consolidation and Investment Reserve. In 1970-71 the amount was $2,246m. With a total Commonwealth debt of $3,800m a goodly proportion, 70 per cent or 80 per cent, is held by the Government itself. Worse than that, it is being lent back to the States and interest is being charged on it. If we accept the official estimate of an interest rate paid on Commonwealth borrowings of 4.99 per cent, the interest being charged on this alone is a little matter of another $112m.

In our respective constituencies we are being assailed by the public and representative education organisations, parents and citizens associations, pensioners, people who are interested in hospitalisation and people who bitterly resent the swingeing increases in taxation which are being imposed on them by the State governments. It is nothing short of a major national scandal that this situation should exist. If surplus taxation is levied on this scale it could at least be put into national development. This Government, of course is maintaining quite a sham in controlling the Australian economy because, if any member of this Parliament chooses to examine the recorded speeches of Dr Coombs he will find that in 1953 over 70 per cent of the money flow of the Australian economy was under the control of the banking system. From 1953 to 1960 it has dropped from 70 per cent to 53 per cent! Today it is less than 48 per cent. Yet we have a government which has the gall to tell us that it is able to control the Australian economy. It can do nothing of the sort.

The proof of it is this: It was the Prime Minister (Mr McMahon) who recently, in answer to a question from the honourable member for Oxley (Mr Hayden), admitted that under the terms of the concrete pipes case this national Parliament has the power to move against the hire purchase institutions. Hire purchase institutions can serve very useful functions at fair and reasonable rates of interest, but it is time that they were curbed because today we face the situation where they are almost ranking with the banks in terms of their advances. As a matter of fact, the figures are these: The total overdraft advances by the collective trading banks of Australia are $4,655m. The hire purchase company advances are $3, 801m; and this is being tolerated. The rates of interest are beyond all dreams of rapacity. It is quite a common thing not only for interest to be charged at a flat rate but also for other fringe charges to be made as well. Research shows that at the present time the average interest rate that is being charged is between 18 per cent and 20 per cent, and that is a very conservative estimate. In fact, research has been undertaken by one gentleman from the University of Western Australia who put the figure as high as 23 per cent.

What does the Government offer? For example, let us take the case of interest on overdrafts since 1949. Interest rates have gone up from 4£ per cent to 8i per cent. Yet this is a Government which says that it is a businessman's government. It is being assailed by some of its most fervent and loyal supporters of recent years - by the Associated Chambers of Commerce, by the Associated Chambers of Manufactures - 'because it is not prepared to let money go that ought to be put into circulation. The inflation that exists today is the responsibility of this Government. When in 1953 this Government chose to attempt to put some curbs on hire purchase companies by refusing to allow the banks to continue to discount their bills, their promissory notes and their hire purchase agreements, the hire purchase companies immediately said: *We will thumb our noses at you. We will borrow directly from the general public'. This racket and ramp has gone on ever since. Finance is government and unless the Government is prepared to govern and to control the totality and flow of finance within the economy it ceases to be a government and it ceases to have the respect and will ultimately cease to have the support of the Australian community.

I want to touch on one other matter. There has been quite a remarkable inflow of foreign exchange funds to Australia - a little matter of between $900m and $ 1,000m in the last 12 months. This Government has made no attempt whatever either to identify its source or to quantify it or to decide what is to be done with it. It is a dangerous situation. Undoubtedly some of that money has come in here for legitimate purposes, but the Government does not know because the Government never had a financial policy. It never had a policy on national priorities. It governs by guess and by God. It plays by ear, not to music. It is an empirical government and a government that improvises, a government that is at the will and caprice of its own supporters. The time has arrived when there needs to be a real government and a real concept of an Australian national economy. This Government' has failed to do what ought to have been done. Australia is the world's 12th ranking trading nation. It has failed to join the group of Ten. It has just crawled by the skin- of its teeth into the Overseas Economic Commission for Development. It has failed to make any reasonable forecast of future problems, and a very substantial proportion of our contracts for exports have been nominated in United States dollars.

What is to be the situation today if the advice of 14 leading economists as reported in the 'Australian Financial Review' and the 'Sydney Morning Herald' and other leading journals is to be accepted and the Australian dollar is to be upvalued? I think there is a case for its upvaluation, a moderate one, and preferably for it to be determined by allowing it to float. What provision is this Government prepared to make to allow this Parliament to come to grips with the real matters that concern people in Australia today? The honourable member for Balaclava (Mr Whittorn) made quite a dismal forecast of the future of unemployment. He is correct, and the figure is this: The Government expects an unemployment rate of 2i per cent because that is pre cisely the amount by which it wants to mulct the ordinary wage earner of extra wage tax.

In conclusion I pay a special tribute to the role of the credit unions in combating to some extent the rapacity of the hire purchase organisations. The credit unions of course have earned the opprobrium of this Government. They are workers banks. Workers themselves can understand the principles of banking, the principles of credit assessment, and the credit unions are doing a mighty job. Of course it is only to be expected that the Government would refuse to recognise them in relation to homes savings grants.

The DEPUTY CHAIRMAN (Mr Drury) - Order! The honourable member's time has expired.







Suggest corrections