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Thursday, 17 June 1915

Senator READY (Tasmania) . - We are entering a new arena of Commonwealth legislation with this Bill. I hope that, although it has met with a good deal of friendly criticism from supporters of the Government, it will be the first of a series of measures dealing with this important subject.

Senator O'Keefe - The criticism from Government supporters has been more destructive than friendly.

Senator READY - I admit that it has been stringent and thoroughly live criticism, but when the arguments of these friendly critics are summed up, it will be seen that the fault they find with the Bill is not so much that it contains any inherent defects as- that it is such a little bantling so far as insurance legislation is concerned, and does not go far enough to suit their views, especially the views of Senator Senior.

Senator Findley - That is hardly correct. It is because it embodies bad principles to be found in the various State Acts.

Senator READY - If the honorable senator contends that some of the principles of the Bill arc not sound, I think the Government will be prepared in Committee to take into consideration any arguments adduced against particular clauses, so that if any of these alleged evils are in the Bill they may be removed.

Senator Senior - My complaint is that there is nothing in the Bill.

Senator READY - Then let us put something in. I am desirous at all times, not only to protect the interests of the companies - and it was one of Senator Senior's many arguments that the Bill did this - but to protect the interests of the general public. I would remind the honorable senator that a good many companies in Australia arc founded on the mutual principle. We have to remember that a great many of the working people of Australia are interested in these companies.

Senator Senior - Will this Bill confer any advantages upon an insurer?

Senator READY - I believe that in some respects it will, and during its progress through Committee I think that fact will be established. I am of opinion that any Bill which will enable an insurance company to conduct its business more efficiently and more expeditiously cannot but be of benefit to its policy-holders. There are a great many workers in Australia who in perfect good faith have taken out policies in various insurance companies.

Senator Senior - Because they had nowhere els© to go.

Senator READY - I admit that that has been their misfortune. I hope that this Parliament will no longer be open to that reproach. The Bill will make for the more efficient control of insurance companies, and in that respect it is worthy of our commendation.

Senator Senior - Is that a condemnation of the States for having failed to exercise a more efficient control over the insurance companies under their charge?

Senator READY - If the States have erred at all, it has been on the side of the companies,- and not on that of the share -holders. As a matter of fact, the insurance legislation enacted by the different States has been enacted at the instance of the party represented by my honorable friends opposite. This is the first occasion upon which a Parliament elected on the most democratic franchise in the world has been able to exercise its legislative functions in respect of insurance.

Senator Senior - And the Bill has slavishly followed the example set -by the States.

Senator READY - I do not think so. In the course of his extremely interesting speech the other day, Senator Senior referred to this measure as a " flimsy " one, and as "a ramshackle structure." I scarcely think that these were fair similes. I regard the Bill as one which provides us with a rather sound foundation. I do not think that it can reasonably be regarded as a superstructure. It represents but the beginning of insurance legislation. It provides us with a sound, almost, perhaps, a conservative foundation, but one upon which we can construct an edifice of national insurance - an edifice which, I hope, will be crowned with the cupola of social insurance, and which will give us an insurance system from which the people will derive great benefits.

It is scarcely fair for Senator Senior to argue that because a Bill does not go far enough it is necessarily bad. I would remind him that many Bills have been introduced into this Chamber, which honorable senators upon this side have supported as an instalment of reform with a view of securing a better and more far-reaching measure in the immediate future. Coming to Senator Senior's chief complaint - that this Bill does not deal with compulsory insurance - I would point out that, from information supplied to me by competent constitutional authorities, there is at any rate a doubt as to whether we can constitutionally enact legislation providing for a complete and comprehensive system of national insurance. That is the opinion which I have formed after consulting the best authorities upon this matter. Some of them think that we can institute such a system. But even these point out that, as on numerous other occasions, the High Court might take an entirely contrary view, with the result that a Bill providing for such a system might be adjudged to be partially ultra vires. On the other hand, there are those who frankly maintain that we have not the power to do what the honorable senator suggests.

Senator Senior - Therefore, in great fear, do nothing.

Senator READY - I am not putting forward that view as an argument.

Senator Senior - But as a defence 1

Senator READY - No. I believe there is a stronger reason why a compulsory insurance system should not be undertaken at the present juncture. Senator Senior himself probably put the position with more force than I can do. He affirmed that before a Bill providing for social insurance was introduced, a comprehensive inquiry should be conducted, and the whole of the available data' studied, with a view to the drafting of a measure which would be acceptable to the Democracy of Australia. Senator Guy expressed a similar opinion. Indeed, that, opinion is generally held by honorable senators upon this side of the chamber. Senator Guy has had a large experience of the work of friendly societies - work which in its incidence is closely allied to that of insurance companies. In Tasmania, indeed, these organizations have notably contributed to the welfare of the workers. Senator Guy stated that we ought to conduct an exhaustive inquiry into the question before introducing legislation providing for compulsory insurance.

Senator Senior - I admit that.

Senator READY - Surely my honorable friend did not expect that a measure' providing for a complete and scientific system of social insurance would be submitted for our consideration at this juncture.

Senator Senior - There is not a suggestion that any such Bill is likely to be brought forward.

Senator READY - I do not expect the Government to essay such a difficult task until we have solved the more immediate problems with which we are confronted in this time of stress. This Bill is largely in the nature of a machinery measure which is based upon State Acts, and which, at any rate, will provide 'us with some meed of progress. It is a consolidating Bill, the effect of which will be to put all matters relating to insurance upon a more business-like basis.

Senator Senior - Benefiting the larger insurance societies, and crippling the smaller ones.

Senator READY - That is a point which my honorable friend mentioned in his speech, and one on which I will be pleased to hear him again at the Committee stage. In speaking of national insurance a large number of matters occur to one's mind. There is no question of the woeful waste which goes on at present. My honorable colleague from Tasmania stressed that point in his speech, and it was mentioned, too, by the VicePresident of the Executive Council in introducing the Bill. Senator Guy pointed out pithily that, in England, 10s. per annum is the average charge for a £10 industrial insurance policy. Surely that is a very heavy and a very wasteful premium ! On this subject, I have had conversations with friends who are interested in insurance questions. They told me that a similar state of affairs pervades Australia; that industrial insurance is not only highly costly, but is a class of insurance which necessitates a duplication of organizations by the various companies.

Senator O'Keefe - I see an ablebodied man collecting 6d. or Is. fortnightly from perhaps twenty or thirty men a day in this city.

Senator READY - Probably one will find half-a-dozen men on the same errand in the one street.

Senator O'Keefe - It is a waste of energy.

Senator READY - That is so. If we could organize, as we could with a system of national insurance, there is no doubt that great savings could be made in that direction. I believe that this measure will do something to pave the way for the introduction of social insurance. I hope, too, that it will cause friendly societies, and persons who are more directly concerned in insurance legislation, to take an ever increasing interest in social insurance. If the addresses of my honorable friend Senator Guy and other senators who have spoken, have that effect, I think that good will come out of the measure there, because we certainly have to work, as far as possible, in' consonance with the views of friendly societies, in introducing legislation such as social insurance. Their help and assistance, and I make bold to say experience, will be of immense value to us. Before leaving this phase of the subject, I turned up a valuable report by Mr. Knibbs on social insurance. He gives such a splendid summary of the benefits of social insurance that I cannot refrain from quoting his words. Under the heading of, " The Desirability of State Insurance," he sets out the advantages so lucidly that no words of mine could assist to convey their meaning more clearly. He says -

If freed from the prevailing circumlocutory methods, a State institution would have manifest advantages over those privately organized and managed, (a) In the first place, it could offer security impossible to be obtained by a private corporation, and this security could be attained without the accumulation of any reserve. The State must endure through all ordinary vicissitudes in political and financial affairs. (6) Secondly, the State, subject to the same proviso, could provide insurance at a minimum cost, being able to gain the attention of working men without the expenses of agents' commissions, .advertising, fees, &c. Further, a Government institution docs not require to make profits, (c) Thirdly, the actuarial questions involved in a scientific system of social insurance are difficult and intricate, and require the mathematical analysis of complicated statistics. These statistics the State is best qualified to procure with economy and accuracy, and to prepare reliable tables of mortality, morbidity, and accident-frequency. Already the Commonwealth is partially equipped for such work, and procures for other purposes some of the data required. With the exorcise of the full powers conferred by the Constitution Act in respect of statistics, and a careful determination of the scope of the data required, all other necessary particulars could readily bo collected. (

Senator Senior - With all that I thoroughly agree, and that was my reason for criticising the Bill.

Senator READY - The Government, I take it, will agree with every word of that summary, and at' the proper time I hope to be able, as my honorable' friend does, to support a Bill in that direction.

Senator Watson - But it is premature at this stage.

Senator READY - I think so. That lias been the trend of my argument. I would point out that even compulsory insurance has to be watched very carefully, and subjected to the closest scrutiny by Labour members before it is introduced. In his speech, Senator Senior stated that in England the worker contributes 3d. per week, the employer 3d. per week, and the State Id. per week when the daily wage is over 2s. 6d.

Senator Senior - -No: when it is over 2s. and under 2s. 6d.

Senator READY - What is the position as regards the payments? It is most unsatisfactory to me as a supporter of Labour. In England I have heard of many Labour leaders who criticise strongly the legislation and the basis of the scale of payments. Why ? It has been, and still is, pointed out that under our present economic wage system practically the whole of that 7d. per week falls on the shoulders of the worker. Why does it? The payment of his own contribution of 3d. per week he cannot escape. The 3d. per week which the employer pays is promptly passed on in the shape of increased profits. Any person who is acquainted with mercantile economy and has had experience of a costing system is aware that when an employer of labour, or a manufacturer, or a business man, makes up the cost of an article there is always so much per cent, added for every contingency which is likely to arise, even fire insurance.

Senator Guy - Would it not be fairer to say that, instead of 3d. being passed on, the amount is nearer 5d. ?

Senator READY - As my honorable friend interjects, an additional 2d. is passed on to the consumer, and, therefore, the worker pays the whole 6d., and sometimes an extra profit of 3d. Surely the system is Dot as economically sound as we would wish, especially when we remember that, in addition, the bulk of the money which is contributed by the State is derived largely from taxation paid by the workers. The probability is that the worker pays the greater share of the penny. When the time comes to deal with the question of national insurance, we ought to look very carefully into the contributory basis, because that is the very bedrock of the scheme. The closest investigation should be made, because, to my mind, this is one of the most important points of the whole system. One is tempted to speak on this very fascinating subject at some length.

Coming to the provisions of the Bill, I wish to refer to one or two matters which arise out of certain clauses. It has been, stated to me by representatives of fire insurance companies whom I happen to know that more than one set of returns will have to be made under the measure. They may not be right in their view, and, as I- read the Bill, they are not right. It is provided very clearly in clause 5 that various State Acts shall, subject to this measure, cease to apply in relation to insurance business; but an impression has got abroad that the companies will have to make returns to the States as well as to the Commonwealth, though I do not think so.

Senator Keating - Certainly not under any of the State Acts which will be superseded by this measure. But there may be some» other Acts of the States not directly called Insurance Acts which require certain returns from insurance companies.

Senator READY - The representatives of these companies might have been referring to that point. One of the advantages of the measure is the codification of the State laws and the simplification of the duties of insurance societies. In future the societies will only have to deal 'with one authority, instead of with six conflicting authorities. But I think it ought to be made clear that the companies will only have to deal with one authority. I desire to get a little light in regard to clause 17. When I was engaged in business I had some little connexion with fire insurance, being the representative for various companies. The clause reads -

(   1 ) Where it is proposed to amalgamate two or more companies or to transfer the insurance business from any company to another, notice of the proposed amalgamation or transfer shall be given to the Commissioner and to the shareholders (if any), and, unless the Court otherwise directs, to each policy-holder of each company concerned.

That is a very excellent provision so far as life policies are concerned. Eire policies are of short duration, sometimes lasting only three months. They are continually lapsing, and continually being taken up again ; there is no continuity about such policies. Will a fire insurance society have to give notice of amalgamation to every one of its policy-holders? I take it that under the Bill it will. I hope that the Vice-President of the Executive Council will look into this point, because I do not think that the companies should be required to serve all these notices on persons who are only taking up policies for very short periods, and continually allowing them to lapse, and taking them up again.

Senator Mullan - A man would have the right to receive a notice if the amalgamation was to take place before the maturity of his policy.

Senator READY - That is the question, seeing that some of these policies are of very short duration.

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