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Thursday, 27 May 1926

Senator FOLL (Queensland) . - I have listened very carefully to the explanation of the Minister (Senator Pearce), and to the remarks of the Leader of the Opposition (Senator Needham), but I have seen the effect of similar apparently water-tight provisions on the indebtedness of other Commonwealth activities to the Treasury. I notice that by these sub-clauses the Treasurer will have practically unlimited power to fix the rate of interest to be charged, the date at which interest is to be paid, and the amount to be charged to the commission for underwriting loans. A few days ago I had the opportunity of learning that another Commonwealth activity, controlled by a Board, has at no time paid interest to the Treasury, and that the Treasurer, without referring the matter to Parliament, has permitted this particular activity to waive the paying of interest. As a matter of fact, this has occurred in the case of two activities, and in respect of one of them, the interest unpaid amounts to over £650,000. Consequently the interest that should have been paid out of the revenues of this particular activity has not been paid, and the indebtedness has been allowed to accumulate. We may find ourselves in an exactly similar position in regard to the North Australia Commission.

Senator Drake-Brockman - In the initial stages that is unavoidable.

Senator Needham - The position would have been -worse without these safeguards.

Senator FOLL - Yes; but tlie honorable senator will agree with me that by these amendments we are' telling the Treasurer that, if he desires to do so, he may exempt the commission from paying interest and contributions to the sinking fund for any period he may fix.

Senator Needham - But a sinking fund is provided for iu this amendment.

Senator FOLL - The Treasurer, if he so desires, may, however, waive the payment of interest. It is provided that the interest shall be payable on such terms and at such times as are required by the Treasurer. It seems to me that it would be far better to fix a definite half-yearly period for the payment of interest. If that payment is to be waived, this Parliament should have some voice in the matter.

Senator Needham - What if the commission has no money to enable it to make the payment?

Senator FOLL - The honorable senator is well aware of. a particular governmental activity which is now the subject of investigation, and in which the interest has been allowed to accumulate to such an extent that the debt has become most formidable, on account of the Treasurer having waived the halfyearly payments.

Senator Pearce - The honorable senator is presumably referring to the Australian Commonwealth Shipping Line?

Senator FOLL - Yes. We might find the North Australia Commission in a position similar to that of the Shipping Line, and its debts might exceed the value of its assets. The position should be safeguarded by definitely stipulating in the bill that the repayments shall be made half-yearly, unless Parliament grants an exemption.

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