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Thursday, 8 December 1960

Mr REYNOLDS (Barton) .- First, in general criticism of the Government's measures, I want to say that 1 believe that they are unfairly discriminatory; they are too late and above all they are too imprecise. That can be said of some of the other measures we have had before us, including the bill to increase sales tax on motor vehicles. In this measure, the Government is discriminating between certain purveyors of public credit. On the one hand, the Government proposes to remove a tax concession that has been given in the past in respect of interest payments that have been met by certain public interests. On the other hand, the Government proposes to exempt from the provisions of the bill co-operative societies, pastoral companies and other public and semi-public organizations which provide public utilities. I am happy about that because the Australian Labour Party has said for some time that what was needed in the Australian community was a recognition of the fact that certain companies operating on behalf of the community must be given priority over other companies. This is a young and developing country and we must put first things first. We are at a stage when we must recognize that we cannot have all the things we would like. The bill is an attempt to recognize rather belatedly that there are priorities.

Under the terms of the bill, certain organizations would be permitted to retain a concession in the payment of taxes. What concerns me - and the honorable member for Mitchell (Mr. Wheeler) referred to it to some extent - is that there is no guarantee that some of those who are to be allowed to retain this concession will pass the benefit on to the people at large. Like the honorable member for Mitchell, I have serious misgivings about the pastoral companies. It is quite true, as he said, that these people do not make money available only to those who are already pretty secure in rural life for farm development; they also provide finance for a large range of consumer goods. I am sure that the Treasurer (Mr. Harold Holt) did not intend that these organizations should retain this concession in respect of such business whilst other institutions which cater for the people's wants in consumer goods will lose it. I am not sure that these people will provide credit, even for farmers, at an appropriate interest rate in conformity with the concession that they are to be allowed to retain. 1 am confident that the Australian Labour Party would have said that if there is to be discrimination there should also be a stipulation that those people who give financial accommodation should bear in mind, when fixing the interest rate, that they have been allowed to retain a tax concession. The Government does not propose to fix an interest rate. The bill does not stipulate that those concerned must pass on the benefit of the concession. There is no doubt about the application of the bill to other institutions. They will have to lift the price of the money they supply to the community by way of hire purchase because they will have lost a tax concession that they previously enjoyed. The way will be left open for other institutions which retain the concession to charge a higher interest rate because their competitors are in a less favorable position than they are. So the community will continue to give a concession to organizations such as pastoral companies but will have no guarantee that the benefit will be passed on to those who obtain credit. There is no guarantee that any more money will be diverted by the pastoral companies to the very needy farming community. As I said recently, there is a lot of evidence that these pastoral companies are not doing the right thing by the farming community and that they are not doing all they could to provide finance for rural development. Instead they are competing with other financial organizations in catering for the more profitable demand for durable and non-durable consumer goods. I have also criticized the Development Bank for not doing as much as it could either.

The Treasurer might claim that he has no power to fix interest rates that may be charged by many of the organizations which are to retain this concession. If that is so, it is about time, as the Labour Party contends, that we took advantage of the Constitutional Review Committee's recommendations, and got down to acquiring the kind of power and authority in this Parliament which will allow the Government to be much more precise in the instruments it uses in order to direct the community's resources, man-power and finances into avenues that are for the fundamental wellbeing of the community.

My main misgiving is that the instrument being used by the Government now is too imprecise, and it does not guarantee that the organizations that will derive the benefit in regard to interest payments will pass that benefit on to the community, first in the form of loans at properly reduced interest rates and, secondly, by feeding money into the channels through which the Treasurer hopes it will go.

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