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Thursday, 8 April 1965

Senator PALTRIDGE (Western Australia) (Minister for Defence) . - This amendment, like an earlier one, was submitted in the other place and was rejected. Again, the Government rejects the amendment. This matter has some aspects which are similar to those of a proposition we were considering earlier this afternoon which was submitted as an amendment by the Opposition. The aspects are similar in that the purpose, function and structure of credit unions are not the purpose, function or structure of an association designed to accumulate finance for housing.

No-one would deny, of course, that in their own field credit unions do first class work. They mobilise funds and make them available on loan for a number of purposes, but the types of loan .that they make indicate that they do not qualify for the provision of this type of finance. For instance, in New South Wales the maximum loan that a credit union can make to a member is £1,000. Loans are made for a variety of purposes, the principal ones being for the purchase of consumer durables such as refrigerators, television receivers and washing machines. Some loans are made for the purchase of land and deposits on homes, but generally speaking the proportion of loans made which could be regarded as directly connected with the purchase or acquisition of a home is very low. The average amount of the loan made, as distinct from the maximum loan possible, is also low by comparison with housing loans made by institutions which are directly concerned with the provision of housing finance. For example, the average loans made in recent years by a number of credit unions from which information has been gathered range from £90 to £300. The maximum period for repayment of loans also varies according to the policy of the particular credit union but generally it ranges from three to five years - hardly a period applicable to housing finance. All this indicates that the principal purpose of a credit union is not to make long term loans to enable its members to buy houses but to mobilise funds for lending to members to enable them to acquire household goods and the like.

In view of Senator Cavanagh's remarks about investment, it is of interest to note that a credit union in New South Wales is debarred by the legislation relating to co-operatives from investing funds in building societies. It can deposit surplus funds in an association of credit unions of which it is a member and that association may, in turn, invest moneys in a building society, but this does not alter the fact of the very nature of the activities of a credit union. I understand - I have not been able to confirm this - that in New South Wales a central office has been set up and in quite recent times has made £50,000 available on loan to either a building society or a number of building societies. The investment of £50,000, when compared with the total investment from other sources, indicates that lending for home building purposes definitely is not the function of credit unions.

SenatorMURPHY (New South Wales) [4.I7J. - I support the request which has been made by Senator Cavanagh. New South Wales has a special interest in credit unions, and so closely is the credit union movement connected with the provision of housing in New South Wales that one Minister, the Hon. Abram Landa, has under his charge the portfolios connected with housing and with co-operative societies and credit unions. He has done a great deal, on behalf of the Government of New South Wales, to encourage the ordinary citizen of that State to help himself through cooperation with his fellows in obtaining credit. Credit unions are a means of selfhelp. This is an area in which one would have thought that the Liberal Party, which claims at times to encourage citizens to help themselves, would have shared our views.

The credit union system is, of course, a competitor with the banking system. There seems to be one thread running through this Bill and the earlier Bill relating to the insurance of housing loans. Beneath the laudable aims which may appear in the Bills, there is a strong vein of promotion of banking business. Although the government banks may get some incidental advantage, the main interests to gain by this aspect of the Bills are the close friends of the Government - the private banking corporations in this country. So one sees in these Bills a resistance by the Government to proposals to extend the area of eligibility to include persons who hold savings in institutions which are quite sound, which are reputable and which are subject to government supervision.

One does not even find a suggestion that the Government is prepared to accept an amendment relating to credit unions, which already devote much of their holdings to loans for home building purposes. Instead, the Government takes a completely negative attitude. All that the Government seems interested in doing, besides making this grant to citizens, is promoting the vested interests of its supporters. Faced with this situation, we know that the Government will never retreat from its position. The idea of encouraging private enterprise and self-help among the ordinary citizens just flies out the window when the interests of >the great banking corporations are affected.

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