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Wednesday, 3 June 1942

Mr SPOONER (Robertson) .- I ask the Minister to give careful consideration to the submission of the honorable member for Warringah (Mr. Spender) and the honorable member for Lilley (Mr. Jolly), for their case is sound. The subject of loan raisings by government instrumentalities and bodies similar to the Australian Broadcasting Commission has received a great deal of attention in recent years. Probably this bill was drafted without due regard to the present trend in Australian finance, which is that all loan raisings shall be subject to control by the Loan Council. During recent years a great deal of the looseness of earlier days in this matter has been tightened. In days when money was free it was probably quite all right for public instrumentalities to make their own approach to the market, but it would be harmful to permit that practice in wartime and in days of financial stress. It is true that, under the provisions of the bill, the commission would only be able to raise up to £50,000 at one time, but it is also true that it could obtain such money as it needed by means of an approach to the Loan Council through the Commonwealth Treasurer. I can see no justification for including these provisions in the bill.

Mr Jolly - The procedure would not be in keeping with the provisions of the Financial Agreement.

Mr SPOONER - I would not say that, but it certainly would not be in harmony with recent trends in financial administration in this country. It will be recalled that more than ten years ago the members of the Loan Council, which included the Commonwealth Treasurer and the Treasurers of all the States, unanimously entered into what was called a "gentleman's agreement" with regard to borrowings by States in excess of £100.000. That agreement still holds and no indication has been given that any party to it desires that it shall be repealed.

Mr Rosevear - The honorable gentleman has referred to a trend in Australian finance. Would it not be more accurate to say that the authorities concerned were forced along a channel?

Mr SPOONER - I do not think so, because the agreement was made unanimously. It was realized by the members of the council that there was considerable danger in indiscriminate borrowing.

Mr Paterson - Another purpose of the agreement was to prevent competitive borrowing.

Mr SPOONER - That is so. With competitive borrowing by authorities desirous of laying hands on large sums of money, there if a grave danger that interest rates will be forced above the ruling Australian rate. Perhaps clauses 36 to 43 of the bill have been incorporated from the current act.

Mr Blackburn - They are exactly similar provisions.

Mr SPOONER - I cannot see that there is any justification for including them in this bill, seeing that the Australian Broadcasting Commission may take steps to have its financial requirements met by the Loan Council through action by the Commonwealth Treasurer, or by a direct approach through the Government to Parliament.

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