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Thursday, 8 December 1960

Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) , - Mr. Temporary Chairman, I sincerely hope that the Treasurer (Mr. Harold Holt) will not accept the amendment that has been proposed by the honorable member for Wentworth (Mr. Bury). I think that the Treasurer has done too much in trying to accede to the requests of various groups all over the place as a consequence of little pressures from this quarter and that quarter. For instance, the exempting of the banks from the provisions of this bill will detract from its efficacy.

Let us analyse the proposition contained in this amendment. Its aim rs the exempting of yet another group from the provisions of this bill. If the bill is a good one - and I believe that it is - nobody who has played any part in the development of the economic position which we now face should be exempted from the application of its provisions. The people that the honorable member for Wentworth would help would be mainly firms like Lend Lease Corporation Limited and L. J. Hooker Limited. They are the worst culprits in the whole of Australia in the development of the situation with which we are now faced economically. Each of them has done more to cause this situation about which we are worrying than has been done by any other one firm or organization. Why should we exempt from the provisions of this measure the people who are chiefly responsible for the situation that it is designed to rectify?

The honorable member for Wentworth said that rf this bill were to operate for only one year, the situation might not be quite so bad as it is. I hope that this is not just a temporary measure and that the Government will continue it for as long as is necessary in order to straighten out the country's economy. The Government may find at the end of next year that the good that has flowed from this bill is so great that it cannot afford not to extend the measure for a further period. One of the tragedies of the situation seems to me to be the fact that the Government is showing some signs of weakening and of making this only a temporary measure, although in certain circumstances it ought to be a permanent one. I think that the Government ought to give no assurances at all that this will be only a temporary measure. It ought to state that, as I have sard, it will continue this measure as long as is necessary.

Mr Harold Holt - I have made it clear that we are working towards a continuing measure.

Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) - I am pleased to hear that.

I think that the Government is perfectly correct in bringing in legislation like this and attacking the situation in the way in which it is being attacked. The Treasurer spoke a truth when he said in a television interview not long ago that the trouble is that the hire-purchase companies have borrowed short and lent long. They have lent more than they were entitled to lend and now they are forced to square their accounts, and they are squealing out and seeking exemption from the provisions of this bill.

Mr Harold Holt - I did not say that that was true of all of them. I said that that is perhaps what has happened in some cases.

Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) - I agree that that is the position. All of the hire-puchase companies have not borrowed short and lent long, but that is true of those that now seek exemption from the operation of this bill. They are the very ones that ought to be caught. They are the ones that have lent more money than they had available for the purpose.

Mr Harold Holt - I do not think that is a fair interpretation of what the honorable member for Wentworth said.

Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) - I do, with great respect. I think that it is a perfectly correct interpretation of what he said. He spoke about people who have made commitments beyond their capacity and who now want to be exempted from the provisions of this measure.

Mr Bury - I did not say that they had made commitments beyond their capacity. 1 said that the commitments that they had made had put them in a position in which they ought to be exempted.

Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) - If they have not made commitments beyond their capacity, they should bear the brunt of this proposal the same as anybody else has to bear the brunt when a new law comes into operation. It is impossible to bring in a law affecting the economy of the country without affecting somebody. Some people are hit. What is wrong with the real culprits being hit hardest? Of course they ought to be hit. I see no reason why they ought to be exempted.

The honorable member for Wentworth said last evening that the hire-purchase companies did a job that can be financed only at relatively high rates of interest. I do not agree with that. He said that there are great losses in the hire-purchase field. That is not true. We have in South Australia a hire-purchase company called the Trades Union Hire Purchase Cooperative Society Limited. Its experience has been that the conduct of hire-purchase transactions does not cost the tremendous amount that the big hire-purchase companies would lead us to believe.

Mr Anderson - How do the interest rates charged by the South Australian co-operative company compare with those charged by the other companies?

Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) - I am pleased that the honorable member asked that question. The rate started at 4 per cent, flat for the first two years of the company's operations. It has now been reduced to 3 per cent. flat.

Mr Bandidt - Does that company lend to the public?

Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) - Certainly.

Mr Haylen - But not interstate. It would not have the honorable member for Hume on its books.

Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) - I do not say that it would not have the honorable member for Hume (Mr. Anderson) on its books, but as a matter of course we do not lend interstate. This South Australian hirepurchase co-operative charges no interest at all, in effect - it refunds the whole of the interest - if the loan is repaid within twelve months, because, like all other hire-purchase companies, it buys at discount. It can buy some electrical equipment for cash at discounts as high as 20 per cent, and it says to its clients, " If you can repay the loan within one year, we shall settle for the 20 per cent, discount for cash that we received ". The ordinary hire-purchase companies obtain this advantage, also. But they receive a further benefit which the South Australian trade union co-operative does not get. This is in the form of insurance. An ordinary company requires the purchaser to insure with a firm nominated by it, and this is usually a firm owned by it. If the insurance firm is not owned by the hire-purchase company, it is certainly a firm in which that company has a substantial controlling interest. Premiums have to be paid by the purchaser in advance for the full term of the loan. If the term is three years, the premiums have to be paid for three years in advance. Interest is paid by the purchaser on that part of the loan which is applicable to the premiums which are paid in advance, although the hire-purchase company itself does not pay the premiums until they actually fall due in each year.

If the Trades Union Hire Purchase Cooperative Society, in South Australia, can run its business at an interest rate of 3 per cent, flat, and provide finance without charging any interest at all when the loan is repaid within one year, how is it that other hire-purchase companies have to charge rates as high as 10 per cent.? A rate of 8 per cent, is very common.

Mr Bandidt - Does the South Australian co-operative lend on motor cars?

Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) - Of course it will lend on motor cars.

Mr Bandidt - There would be no 20 per cent, discount in that case.

Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) - I know that. A discount of as much as 20 per cent, is received on electrical appliances such as refrigerators, radiograms and television sets.

Mr Reynolds - And washing machines.

Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) - And washing machines. Those are the things for which hire-purchase accommodation is most sought after. On such goods, the South Australian co-operative hire-purchase company lends for up to a year without charging any interest.

Mr Bury - What does it pay for its money?

Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) - We pay 5 per cent, simple interest for our money. We have proved that we can re-lend it at 3 per cent, flat, and, on goods such as I have mentioned, for a period of up to one year without charging any interest at all.

I should like the Treasurer to examine this matter more fully. The secretary of the South Australian co-operative hirepurchase company is Mr. L. P. Noller, who, until his retirement, was manager for South Australia of what used to be known as the Industrial Finance Department of the Commonwealth Bank of Australia. He is a reputable man who has had wide banking experience. He will show the Treasurer what can be done. Since the Minister has now evinced so much interest in hirepurchase transactions - I commend him for it - I hope that he will carry his interest one step further.

Mr Harold Holt - The honorable member's leader attacked me when I referred to this scheme.

Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) - I do not think my leader quite understood what you were saying.

Mr Harold Holt - He did not understand that you had a scheme.

Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) - My leader hae said that he is very pleased with what is happening in South Australia, and he has congratulated the trade union movement for what it has done.

Mr- Pearce.- Can you extend this scheme to other States?

Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) - We are hoping it will be extended to other States.

One difficulty is finance, and this is a field in which I believe the Commonwealth Bank could play a major role in cutting down the interest rates now charged by hire-purchase companies. If the Commonwealth Bank will make finance available to properly approved trade union hirepurchase co-operatives, organized on proper lines, as is the trade union hire-purchase co-operative in South Australia, the scheme could be extended to other States and could strike a very telling blow against the kind of robbery that goes on now under the guise of hire-purchase transactions.

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