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Thursday, 8 April 1965

Senator COHEN (Victoria) .- As previous speakers have indicated, the legislation which is now before the Senate does introduce some very useful amendments to correct some anomalies which had arisen and which had been foreshadowed in the operation of this legislation. I do not want to canvass the general issues which have been raised in the debate both by the second reading speech of the Minister for Defence (Senator Paltridge) and by the very comprehensive analysis of some of the problems that was made by my colleague, Senator Cavanagh, in opening for the Opposition. I enter the debate to deal with what I regard as two substantial matters that arise in the consideration of the amending legislation and in the review which must inevitably take place on an occasion like this of the working of the Homes Savings Grant Act during the short period of its operation.

The first of the two questions to which I want to address myself is the matter raised by Senator Cavanagh as to the assurance given to him in this Senate on 21st May last by the then Minister for National Development, Senator Sir William Spooner, who was in charge of the Bill. I note that the honorable senator is not present at this moment. I regret that because I wanted to suggest that, in dealing with Senator Cavanagh's criticism yesterday, Senator Sir William Spooner did not deal with the substance of the criticism that was raised. Indeed, he rather evaded the question by saying that his own memory did not take him back into the detail of the debate last year, that it could not really be refreshed by reference to " Hansard ", and that it was more appropriate for the Minister for Defence to make a reply to Senator Cavanagh than it was for him to make one.

The substance of the matter is, I think, pretty plain. On 21st May 1964, this Senate was debating clause IS of the Homes Savings Grant Bill 1964. At page 1432 of " Hansard ", Senator Cavanagh raised some questions as to what would be regarded as acceptable savings for persons who entered into contracts between the date of the operation of the legislation - that is, 2nd December 1963 - and the date on which the debate was taking place, 21st May 1964. I desire to refer specifically to the passages in the report in " Hansard " which indicate what the controversy was about and how the matter was dealt with by Senator Sir William Spooner, who was then in charge of the Bill. Senator Cavanagh said -

I want to know what happens to those persons who have entered into contracts between the date of operation of this legislation - 2nd December 1.963 - and the present date. Those who have entered into contracts as at the prescribed date are obviously entitled to the grant if they fulfil the other requirements, but those who had their money invested at the prescribed date in something other than one of the institutions mentioned in the legislation are nol eligible for a grant. Will the Minister for National Development (Senator Sir William Spooner) say whether this distinction is fair and whether there is any way of overcoming the anomaly?

Taking that passage as far as it goes, I submit that Senator Cavanagh obviously was suggesting that those persons whom he had in mind were not eligible for the grant. He was asking whether something could be done to overcome the anomaly. Replying immediately, Sir William Spooner, then the Minister, said -

Taking the last point first while it is fresh in my mind, I point out that the period between now and the end of December 1964 is in the nature of a transitional period. In that transitional period savings, no matter in what form they are evidenced, become eligible for the grant. So if the couple marry and build a home they become eligible for the grant by virtue of the department accepting their savings in any form, investment or otherwise. That, I think, is the foundation for the answer to Senator Cavanagh's query.

As I understand it, that was the clearest assurance that if other persons with prescribed dates before the end of December 1964 had savings, in whatever form, accumulated up to 31st December 1964, they were eligible for the grant even though they were not in any of the three categories mentioned in sub-clause (3.) of clause IS of the Bill.

Senator Paltridge - It had to be prior to the prescribed date.

Senator COHEN - That is not what the Minister said. He said: "In that trans.sitional period", and that is up to 31st December 1964. I think it is fair to place this in the context of the debate, so that what was happening can be understood. Senator Cavanagh was viewing, with some caution, the gift being offered. He apparently felt that his own reading of the Bill was more correct than that of the Minister and he was somewhat careful about accepting what the Minister said. Senator Cavanagh said -

But their savings must be in a particular bank at the prescribed date.

I ask the Senate to appreciate the significance of this, because the Minister was being faced squarely with the gnawing doubt that was in Senator. Cavanagh's mind. I repeat that Senator Cavanagh said -

But their savings must be in a particular bank at the prescribed date.

And Senator Sir William Spooner replied -

Not until 31st December, 1964. When you get to 31st December, 1964, by and large, with certain exceptions, your savings must be in a narrow group of savings banks, permanent building societies or trading banks. That proviso becomes operative from 1st January, 1965, with an exception in the case of credit unions and friendly societies, which may continue the even tenor of their ways until 1967.

The " Hansard " report shows quite plainly that Senator Cavanagh was raising the question of persons with prescribed dates between 2nd December 1963 and 21st May 1964, which was the date of the debate. Senator Sir William Spooner's reply literally referred to the period between 21st May 1964 and the end of December 1964. He said specifically that in that transitional period savings, no matter in what form, would become eligible for the grant. I do not know whether or not the Minister was confused, but he certainly failed to make plain the distinction between persons with prescribed dates before and after 31st December 1964 and, indeed, he pressed on with his statement about the matter even after he had virtually been warned by Senator Cavanagh that he might be wrong. After all. it is plain from reading the report of the debate that Senator Cavanagh has specifically raised the question of persons with prescribed dates before 31st December 1964 and the anomalous distinction .which he saw between those with savings invested in the institutions referred to in the Bill and those with savings invested elsewhere.

The importance of the matter is this: Senator Cavanagh has told the Senate that he raised this question with the Minister and failed to get from the Minister an undertaking to honour the assurances given by Senator Sir William Spooner in the Senate on 21st May. Senator Cavanagh has said that as a result of that statement by the former Minister, he had four cases of persons who had come to him for advice and guidance in relation to their applications. He had acted on (he assurance of the Minister in at least one case and had advised the person coming to him for guidance that the Minister had said it was not necessary for the savings to be in a particular form prior to 31st December.

I suggested to the Leader of the Government in the Senate, who is in charge of this Bill, that that is a serious matter. We are all human and there are frailties in all of us; but at the very least some amendment should be made to this legislation to ensure that the case of persons who did not have their savings in the prescribed form prior to 31st December 1964 is dealt with and the anomaly rectified. Otherwise, the Government is in the position of leaving people out on a limb because they have acted bona fide upon an assurance given by a Minister. I am pleased to see that Senator Sir William Spooner has entered the chamber.

Senator Sir William Spooner - The honorable senator had no right to attack me when I was half way through a hair cut.

Senator COHEN - I assure Senator Sir William Spooner that but for circumstances beyond my control, I would not have started to speak for 20 minutes or so. I would have wanted him to be present when I began to speak on this matter. This is in no sense a personal attack on him but the statement to which I have referred was made at 5 o'clock in the afternoon and not 5 o'clock in the morning when we usually deal with the final business of a session. The statement was not corrected and has never since been corrected. Whether it represents a correct view of the law is immaterial at the moment. The point is that Senator Cavanagh acted in the belief that he had been given the green light in a very complicated and difficult piece of legislation. On the Minister's assurance he went ahead and gave certain advice to his constituents.

I ask the Minister in charge of the Bill to give earnest consideration to this matter and discuss it with the Minister for Housing (Mr. Bury) again to ascertain whether something should not be done while the legislation is before the Senate at least to set right the position of those who acted on that assurance. There may be only a few people involved and there may be many, but certainly the matter should not be allowed to proceed on the basis that people are not able to rely upon the Minister's assurance.

That is the first matter I wanted to raise. The other is of more general concern in the administration of this legislation arising, I think, from some comments made by the Leader of the Opposition (Senator McKenna) which have turned out to be somewhat prophetic. These statements were made by the Leader of the Opposition in the Senate when the principal Act was being debated. The Leader of the Opposition then drew attention to the very large number of discretions in the measure. He spelt out, I think, some 12 or 13 particular matters in which a very wide discretion had been entrusted to the Secretary of the Department of Housing under the Act.

I do not intend to re-state those discretions in detail. I want the Senate to note that -the amending Bill which is now before us virtually doubles the number of discretions that appear in the original legislation. An extraordinarily large number of the amending clauses commence with the words " The Secretary may upon being satisfied ". The Bill extends the number of discretions and the area over which the administrative discretion will operate.

I want to mention two particular discretions, if that is the right expression to use. As I said earlier, I do not intend to cover the whole field. These two were dealt with by the Leader of the Opposition (Senator McKenna) on 20th May 1964. On that occasion Senator McKenna said -

In clause 20 there is the extraordinary provision that the making of any grant at all is subject to the Secretary's discretion. There is no right that an individual can assert in a court. No right is conferred. He is given the right to apply to the Secretary of the Department and the Secretary in his discretion decides whether an applicant gets a grant or does not get a grant.

Although the Secretary obviously has no power to make a grant in exces of £250, which is the largest grant that is permitted by the Act, he is given a very wide area of discretion within which he may make up his mind to grant less than £250 upon being satisfied or otherwise in regard to certain -facts.

The second discretion to which I draw attention was described by Senator McKenna in these terms -

He has another extraordinary power under clause 23 which allows him to determine the time of payment. He can make it whenever he wishes and at whatever stage he wishes.

Since the passage of the original legislation in May 1964, the Secretary of the Department has developed what may be described as a species of sub-legislation under the Act. He has introduced general administrative rules to govern the exercise of discretion. I am in no sense making a personal attack on the Secretary. 1 am merely dealing with the extent of the administrative discretion and what is being done under it. I do not assert that anything unlawful is being done in the exercise of the discretion, which is very wide. What I do assert is that in a number of instances - I shall mention two to illustrate my point - further restrictions have virtually been imposed upon the right of the applicant to get a grant because of an administrative decision that has become of general application.

The first of the two illustrations I propose to quote is perhaps the lesser of the two in importance. It is this: No grant is made until the Secretary is satisfied, in the case of a building contract, that 10 per cent, of the contract price has been paid. As a matter of administrative practice, that may or may not be a sound general rule to adopt. I can conceive of cases in which it would be sound. Some doubt may exist about whether the contract will be proceeded with and the building will be completed.' That would be a" good reason for some caution on the part of the Secretary. But there may be other cases in which the actual grant, when it -is made, will form part of the original payment. In those cases rigid application of the 10 per cent, rule might impose hardship upon a new applicant.

Senator Paltridge - Has the honorable senator related that to figures?

Senator COHEN - I can think of a person who has a rather small deposit.

Senator Paltridge - Try to relate it to figures.

Senator COHEN - I have not a definite case in mind. One was mentioned to me, but the figures escape me at the moment. However, it still does not invalidate the point I am making.

Senator Paltridge - In other words, it remains a good debating point?

Senator COHEN - No. I am concerned with making another point. If the Minister is patient with me for a few minutes, I shall develop the argument and he will see the point 1 am making. What I am saying is that that requirement does not appear anywhere in the Act. And, of course, there are no regulations under the Act. A person who wants to know his rights will not find reference to this requirement other than in a booklet that has been issued by the Department, if he turns to the legislation, he will not ascertain there that there is in existance an administrative practice which will result in his not being able to obtain a grant until 10 per cent, of the contract price has been paid. I would not mind that being a rule which was capable of being departed from in specific cases. It is unfortunate that there should be a hard and fast rule without a discretion remaining in the Secretary. If the Secretary builds up his rigid rule of practice, he is virtually writing into the legislation an additional restriction.

I now move to the second illustration, which is of somewhat greater importance. The Secretary has, as an administrative act, made a certain decision in relation to the maximum amount of savings that will be permitted in any one year. This is of particular application to the period prior to 31st December 1964. At page 13 of the booklet this passage appears -

The amount saved in any year of saving is acceptable up to -£250.. However, if a person saved more than £250 in a year of saving that began before 1st January 1965, these savings may be accepted provided . they are not more than threequarters of that person's total savings and no more than £560. The limit of £560 is approximately three-quarters of the maximum acceptable savings of £750.

That is an administrative rule. If a person turns to the Act to ascertain his rights, he will find in it nothing whatever. that will tell him what are the maximum permissible acceptable savings in any one year. He must read, the booklet. The booklet contains a decision that has been made by the Secretary, with the express approval, I understand, of the Minister. The Minister has indicated in correspondence that the rule was made with his approval.

I am not arguing at the moment that some limit such as £560 is unreasonable. It may or may not be so. I can conceive of cases in which it may impose hardship, but under every law of this type you will always find somebody who falls on the wrong side of the line and who does not qualify for a particular benefit. My concern is to point out that a definite sum is fixed as the maximum amount of savings regarded as acceptable in any one year; that is £560, or three quarters of the applicant's total savings not exceeding £560. In my opinion this is moving on to pretty dangerous ground, because nowhere in the Act is a limit fixed. The Secretary is given power to determine in an individual case what should be the amount of a grant and to determine what are the acceptable savings. But in the result a form of sub-legislation has been created which is not challengeable in this Parliament because it is neither in the Act nor in any regulations made under the Act. The only way in which the matter can be canvassed in the Parliament is by way of criticism of an administrative decision for which the responsible Minister must answer. But there is no way in which, if the practice were disapproved and if the particular rule were disapproved, this Parliament could move by way of disallowance of regulations, since there are no regulations.

I suggest to the Minister that this is an extremely important matter. From time to time in the Senate we have debated the question of Parliamentary scrutiny and the extent to which broad administrative policy should be embodied in subordinate legislation so that it can formally be before this Parliament and properly scrutinised. My suggestion is that if the Secretary of the Department wants to make a hard and fast rule, and if he wants to fix precise upper limits in the way that has been done with the approval of the Minister, then the rule should find its way into regulations so that the Senate may, if it thinks proper, disallow the regulation. So it should appear in the Act as being a statement of the maximum amount that can be regarded as acceptable savings in any one year.

These are not small matters but are of far reaching importance. I am not concerned to canvass whether the amount of £560 fixed by the Secretary as the maximum can be justified. I am concerned to say that he is, by introducing broad administrative rules of his own, which apparently are inflexible - they are given out to the public in a pamphlet on that basis - watering down benefits conferred by this legislation. Those are the comments I wish to make. I do not otherwise enter the genera'l area of the debate as it has been dealt with by Senator Cavanagh, Senator Poke, and the Minister in his second reading speech.

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