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Thursday, 3 November 1927


Senator FINDLEY (Victoria) . - I had hoped that such an important measure as this would receive the serious attention of honorable senators or. both sides of the chamber ; but apparently the supporters of the Government do not intend to debate it on the motion for the second reading.


Senator Sir Henry Barwell - There is ample- time to do that.


Senator FINDLEY - Had I not risen the second reading would have been agreed to without further debate. The Leader of the Opposition (Senator Needham) dealt very fully with the operations of the Commonwealth Bank since its inception, and referred to the magnificent work which this great institution, a monument to the untiring energy and . capacity of the Labour party, has done. The bank proved a veritable Bock of Gibraltar to the Commonwealth and the Australian people during a period of national emergency: It was established in spite of the vigorous and bitter opposition of the supporters of honorable senators opposite, and when its establishment was first suggested many financial authorities said things concerning it which could hardly be believed.

If there is one section of the community more than another that should be grateful to the Labour party for establishing the Commonwealth Bank it is the primary producers, many of whom are in a sound position to-day only because of the assistance they received from it when help was not forthcoming from, other financial institutions. The Australian Commonwealth Line of Steamers was materially helped by the Commonwealth Bank, and without the assistance of Commonwealth ships our primary producers during the war would have been at the mercy of mice and rats. All the primary produce pools in operation during the war and after were financed by the Commonwealth Bank, and, asthe Leader of the Opposition has said, while that institution was under the control of a Governor, a Deputy Governor, and a capable staff. The Government now proposes to separate the savingsbank business from the general banking business. For what purpose? The Prime Minister in his policy speech said thatthe

Government intended to undertake a mammoth housing scheme, on -which £20,000,000 was to be expended. Many persons could hardly believe that an anti-Labour Government would introduce such a scheme. It has been said that the Government intends to assist in the erection and purchasing of homes on better terms than are being offered under any other scheme. The Government does not propose to do anything of the kind. It merely proposes to appoint three commissioners - yet another board - to do certain work. There is always one course - boards - on the Government's menu, which is served at any hour of the day. This Government is reducing parliamentary government to a farce.


Senator Payne - Does the honorable senator think that a savings bank can be effectively controlled without the assistance of a board of directors ?


Senator FINDLEY - The Commonwealth Bank was efficiently controlled for some years by one man and his staff. The Government now proposes to separate the activities of the Commonwealth Bank and to appoint three commissioners to control the savings bank branch ostensibly to enable it to give effect to its so-called housing scheme. The capital upon which the commission will operate for this purpose will consist of one-half of all increases in deposits over -the total amount of deposits existing at the commencement of the Housing Act, as well as one-fourth of all repayments of loans, together with other moneys which will subsequently be borrowed. These will be handed over to the commission, and in turn, I presume, passed on to other authorities. Those authorities, which are not specifically named, will have the power under this bill to grant financial assistance to State authorities if all the States agree to amend their existing legislation. It would not be in order for me, in the debate on this bill, to discuss the Government's housing scheme, although one proposal is Jinked up with the other. I shall therefore endeavour to confine my remarks to the- measure under discussion. Some -time ago we had a visit from Sir Ernest Harvey, the comptroller of the Bank of England. I do not know whether he came to Australia at the invitation of the Commonwealth Government, but ii iis reported that his expenses were paid by the bank of England. During his stay in Australia he made a number of speeches, in one of which he stated that the Bank of England viewed a proposition not from the position of whether it would earn a profit, or benefit shareholders, and he was glad to know that the directors of the Commonwealth Bank were taking a view of their duties very similar to that taken by the directors of the Bank of England. On the other hand, the private banks, as we know, are out to secure the biggest return for their shareholders. Who are the shareholders of the Commonwealth Bank? The people of Australia. And are not the people of Australia directly interested in its success and progress? We hoped when the bank was established that it would be essentially a trading institution, competing with existing banks, and making profits for its shareholders - the people of Australia. Certain honorable senators and members of another place, however, do not wish the Commonwealth Bank to compete with existing financial institutions. It is well known that during the last few years private trading banks in Australia have made immense profits, though in some instances an endeavour has been made to cover up the real position by watering the stock. Notwithstanding the financial stringency, the trading banks in Australia have never been more prosperous than they are today. What they are doing for their shareholders, the Commonwealth . Bank should be doing for its shareholders, the people of Australia. The bill now before us is a sham and a delusion.


Senator Reid - Why?


Senator FINDLEY - Because the Government does not intend to build houses. The passage of the measure will probably create a fictitious land boom. Recently there appeared in one of the Melbourne newspapers a half-page advertisement of a land sale. In the corner of that welldisplayed advertisement was a note to the effect that the Commonwealth Government's £20,000,000 housing scheme had passed through all its stages in the House of Representatives. Here was a definite instance of a firm of land and estate agents making capital out of the Government's proposal. Undoubtedly the intention was to induce people to attend the sale and to buy land, in the belief that the Commonwealth Government would, by means of financial assistance help them to erect houses on the land.


Senator THOMAS (NEW SOUTH WALES) - Is that the fault of the Government?


Senator FINDLEY - It is, because the Government led the people to believe that it intended to embark on amammoth housing scheme, different from any carried out by the State authorities. Actually what it proposes to do is to appoint three commissioners to arrange for advances to existing State authorities. The total deposits in the Commonwealth Savings Bank are, roughly, £47,000,000. The State Savings Bank of Victoria has deposits amounting to £60,000,000. yet that institution has not deemed it necesary to appoint commissioners to carry out its housing schemes.


Senator Payne - Is not that bank managed by commissioners?


Senator FINDLEY - It is controlled by part-time commissioners. The chairman is paid a salary of £600 a year, and the other commissioners £500 a year each. The principal work of the bank is undertaken by the general manager and his staff.


Senator Payne - -What is the honorable senator complaining about in regard to this measure ?


Senator FINDLEY - I wish the honorable senator would follow my argument. The commissioners to be appointed under this bill will not erect a single house.


Senator Andrew - They will find the money.


Senator FINDLEY - They will not do even that. The main portion of the money will be raised by loans. The excess deposits in the savings bank will be an infinitesimal sum compared with the amount that will have to be borrowed to give effect to the Government's scheme.


Senator Andrew - That is questionable.


Senator FINDLEY - If the honorable senator will read the speeches delivered in another place on this bill, he will see that I am right. There is no justification whatever for the separation of the savings bank activities from the general banking business of the Commonwealth Bank. There is equally no justification for the appointment of commissioners. Assuming that this bill and its complementary measure go through all stages without vital amendment, and that the necessary money will be available, the amount of work to be done by the commissioners will be so unimportant that it could very well be done by the present management.


Senator Duncan - The present arrangement has not been satisfactory, from the point of view of the savings bank.


Senator FINDLEY - That is because full advantage has not been taken of the opportunities. The Commonwealth Savings Bank is paying a lower rate of interest on deposits than that paid by the State Savings Banks. In both Sydney and Melbourne the State Savings Banks are housed in monumental buildings. I understand that the State Savings Bank in Sydney has been in course of erection for three years, and that it is not completed yet.


Senator Duncan - Why interfere with State Savings Bank business?


Senator FINDLEY - When it is finished it will be a splendid advertisement for New South Wales. The same may be said of the magnificent State Savings Bank building in Elizabethstreet, Melbourne. The volume of work done there is immense. Senator Duncan has just asked why the Commonwealth is competing with the State Savings Banks. My reply is that the Commonwealth Government went into the banking business in the interests of the people of Australia. When it undertook the savings bank business the hope was expressed that suitable premises would be erected in all the important centres throughout Australia. Many of the post office buildings are so unsatisfactory as not to conduce to an increase in business. It should be the policy of the Commonwealth Bank to develop its activities in all branches on up-to-date lines. It has not hesitated to provide modern premises for its general banking business, but it has shown some reluctance to do the same for the savings bank branch.


Senator Duncan - Does the honorable senator say that the States are not already doing all the savings bank business effectively?


Senator FINDLEY - No. The State Savings Bank in Victoria is doing a splendid work. The same kind of work should be done by the Commonwealth Bank. The bill proposes that the Government shall engage in a roundabout way in a housing scheme. Why does not the Government put forward its best efforts to further the interests of that branch of the bank, which in future is to be managed by a commission? From time to time it is made apparent that a very large section of the community has every confidence in the Commonwealth Savings Bank, and is anxious to do business with it notwithstanding that the interest rate which it offers islower than that of the State institutions. Deposits are made by people, who, if they were sordid, selfish, and keenly anxious to obtain the highest possible return, would do their business with the State Savings Banks.


Mr GREENE (NEW SOUTH WALES) - The limitation that is placed upon the amount which may be deposited has a good deal to do with that.


Senator FINDLEY - Perhaps that may have some effect. I regret that the Government has seen fit to introduce legislation, the ultimate effect of which will be to weaken what the Labour party hoped would be one of the strongest financial institutions of its kind in the world. Since the present administration assumed office it has not shown itself fully cognizant of the efforts that have been made by the bank to extend its operations, and the work which it has done. Time and again it has declared its opposition to any form of collective ownership of financial and other institutions. I regard this as a further evidence of its intention to weaken, not to strengthen, the Commonwealth Bank and of its desire to assist the private banks, the shareholders of which are always anxious to secure the highest dividends.







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