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Tuesday, 4 May 1965

Senator PALTRIDGE (Western Australia) (Minister for Defence) . - I move -

That the Bill be now read a second time.

The purpose of this short Bill is to amend that part of the Coal Industry Act which deals with the Joint Coal Board's banking operations and with the power of the Board to borrow money on overdraft. As the Senate is aware, the Board operates by virtue of almost identical acts of the Parliaments of the Commonwealth and of the State of New South Wales.

As they now stand the Commonwealth and State Coal Industry Acts require the Board to bank with the Reserve Bank of Australia. The Board's principal bank accounts are in Sydney but accounts are also maintained in Wollongong, Newcastle, Cessnock and Lithgow. With the exception of one small account with the Reserve Bank of Australia, which is an imprest account kept for the purpose of paying witnesses their expenses in attending the Coal Industry Tribunal, all these accounts are with the Commonwealth Trading Bank of Australia. The result is that the Joint Coal Board is in breach of both Coal Industry Acts. As I shall now show, this position has arisen following amendments made to the banking legislation of the Commonwealth, subsequent to the enactment of Coal Industry Acts.

Under the terms of the Acts, the Board, when it was established, was required to open and maintain its accounts with the then Commonwealth Bank of Australia. The Board accordingly opened accounts with the Commonwealth Bank at a number of metropolitan and country centres. Apart from the accounts at the country centres, these accounts were all carried by the central banking section of the Commonwealth Bank which then performed both central and trading bank functions.

By the Commonwealth Bank Act 1953 the central and trading bank functions of the Commonwealth Bank were separated. A new corporation, the Commonwealth Trading Bank of Australia, was created which took over the trading bank functions of the Commonwealth Bank. The Commonwealth Bank continued in existence with its central hank functions. Late in 1954 the Board moved from its address in King Street, Sydney, to its present premises in Goulburn Street.

Shortly thereafter it requested the Commonwealth Bank to transfer all its metropolitan accounts except the one required for the purpose of the Coal Industry Tribunal to a conveniently situated branch in Oxford Street. This, in fact, was a branch of the Commonwealth Trading Bank and the Board was advised after the accounts were transferred that they would in future be with the Commonwealth Trading Bank and not with the central bank as hitherto. Similarly, as a result of the 1953 legislation, each of the country accounts was transferred by the Commonwealth Bank to the Commonwealth Trading Bank.

This position was basically unaffected by the Commonwealth banking legislation of 1959 under which, inter alia, the Commonwealth Bank was renamed the Reserve Bank of Australia and the Commonwealth Trading Bank was placed under the control of a new corporation, the Commonwealth Banking Corporation. So far as the Board was concerned, this legislation meant that the Board's accounts should be with the Reserve Bank and not with the Commonwealth Trading Bank where, with the exception of the one account referred to earlier, they were and still are held.

The Board's present banking arrangements are efficient, convenient and satisfactory. It would not be possible for the Reserve Bank to provide the kind of banking service at present provided by the Commonwealth Trading Bank. The effect of the statutory changes which I have outlined above is that the Board cannot lawfully continue its present banking arrangements which it considers essential to its efficient operation. This is an unsatisfactory position which needs to be resolved by legislation.

It is the Government's view that the Board should be authorised to continue its present banking arrangements and, accordingly, the present Bill has been prepared to amend the principal act which is the Coal Industry Act 1946-1958.

A new section 19a is proposed for the principal act. This will authorise the Board to maintain an account or accounts with an approved bank or approved banks. Such approved banks will include the Reserve Bank or any other bank declared by regulations to be an approved bank for the purpose of section 19a. Upon the coming into effect of the legislation now before the Senate, it is intended that regulations will be made declaring the Commonwealth Trading Bank to be an approved bank.

The power of the Joint Coal Board to borrow money is conferred by section 23 of the principal act and the opportunity has been taken to provide that the words " Commonwealth Bank " wherever appearing in this section will be omitted and replaced by the words " Reserve Bank ". Finally, a section of the amending Bill validates the action of the Joint Coal Board in having maintained banking accounts with the Commonwealth Trading Bank in the past.

Under an agreement referred to in the preamble to the Coal Industry Act the Governments of the Commonwealth and of the State of New South Wales have undertaken not to take action without the prior concurrence of the other, to repeal or amend any of the legislation covered by the agreement. The concurrence of the New South Wales Government has been obtained to the amendment proposed in the present Bill. I should add that this Bill has been drafted by the Commonwealth Parliamentary Draftsman after consultation with the State Parliamentary Draftsman, and in agreement with him. I commend the Bill to honorable senators.

Debate (on motion by Senator Ormonde) adjourned.

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