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Thursday, 8 December 1960

The TEMPORARY CHAIRMAN (Mr Chaney (PERTH, WESTERN AUSTRALIA) - Order! Honorable members of the Opposition will cease to interject. I have been asked to rule on this matter. The honorable member for Reid is in order. However, if imputations are made against another honorable member he will be out of order.

Mr UREN - I want to make it quite clear that I am asking the honorable member for Wentworth whether he has any association with the financial interests that will be affected by his proposed amendment.

Mr Bury - I have none whatever.

Mr UREN - The object of the amendment proposed by the honorable member for Wentworth is to extend the tax concession to additional moneys borrowed by companies in certain circumstances. Just before this legislation was introduced, the Lend Lease organization wanted to raise £1,000,000. It obtained £1,900,000- nearly 100 per cent, more than it had sought. Loans floated by the L. J. Hooker Investment Corporation Limited have also been over-subscribed. These big city combines are not in the best interests of the community. The Opposition has great faith in the future of Australia, but we say that money should be diverted into the correct channels. At last the Government is accepting the responsibility of trying to direct money into correct channels. But what has it done? It has taken as the basis for this legislation the position existing at 15th November.

I have warned the Government, time and time again, concerning the position. Debenture raisings of listed companies in June, 1955, amounted only to £27,000,000; by the end of June this year they amounted to £193,000,000. When I discussed this with a gentleman representing hire-purchase interests in King's Hall this morning, he said that there has been an increase in costs and wages. But have they increased seven-fold? The borrowings of these companies have increased seven-fold, which is out of all proportion to the increases in costs and wages. The people concerned in these companies will not suffer great hardship under this legislation. At least this legislation is a step in the right direction.

I support the Government on its action, but the Opposition holds that these speculative companies in the building industry are not diverting available finance into the correct channels. What do they do? They build luxury home units which can be bought for between £14,000 and £20,000. The Opposition contends that money should be used to build homes for the people - for the workers - instead of for luxury building. Luxury hotels are being constructed. Instead of money being put to that purpose, it should be used for the construction of hospitals and schools.

The honorable member for Mitchell spoke about housing. The New South Wales Government has done a great job in his electorate by building homes. But would it not be wonderful if the Government could so control investment that money would be available for the provision of sewerage in those homes? At least there is a little hope under this legislation that the Government will tackle the activities of building speculators. This measure represents a contribution to the solution of the problem.

I want to reply to the remarks of the Treasurer (Mr. Harold Holt) on an issue on which I have challenged him time and time again. The clause with which we are dealing relates to banks. Interest on bank overdrafts is most important. I have asked the Treasurer questions on this matter. Last night in my second-reading speech I asked him whether interest on bank overdrafts would be treated in the same manner as it was treated before the introduction of this legislation.

Mr Harold Holt - It is exempt.

Mr UREN - What action does the Government propose to take to stop the banks from diverting some of their funds, by means of overdraft, to their subsidiary hirepurchase companies? Will the Government put a limit on bank overdrafts to firms such as Lend-Lease and Hookers? If it does not, those firms will find ways and means of evading the intention of this legislation. Under normal circumstances, there was no need for legislation of this kind because more money was raised as share capital than by loans. But companies have been raising increasing amounts by borrowing as a manoeuvre within the taxation laws to save the payment of tax. If they can evade the taxation laws in that way they can engage in other manipulations such as the use of bank overdrafts to avoid the effect of this legislation. There is co-operation between the banks and the hire-purchase companies. T have asked the Treasurer to give some indication of what action the

Government will take in this regard. Last night, the Treasurer referred to Mr. Chifley's attitude to hire-purchase rates.

Mr Harold Holt - I referred not only to Mr. Chifley, but to the Labour Party.

Mr UREN - Mr. Chifley, when he was Treasurer, permitted 'the Commonwealth Bank to enter into the hire-purchase field. When Mr. Chifley relinquished office as Treasurer and Prime Minister in 1949 the Commonwealth Bank had lent £16,000,000 by means of hire-purchase. At that time hire-purchase companies had lent a total of about £70,000,000. To-day, the Commonwealth Development Bank - the hirepurchase section of the Commonwealth Banking Corporation - still has total loans outstanding of only £16,000,000. Yet the hire-purchase companies have lent nearly £450,000,000! When the Commonwealth Development Bank was established great promises were given to the Australian Country Party concerning assistance to primary industry. Although those promises have not been fulfilled, not one member of the party has expressed his point of view on this legislation. There was some criticism by the honorable member for Calare (Mr. England). He put a pertinent question to the Treasurer.


Order! The honorable member's time has expired.

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