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Thursday, 8 December 1960

Mr HAROLD HOLT (HigginsTreasurer) . - I should like to comment, briefly, on some of the points that have been raised. I shall not take up too much time defending the pastoral companies because honorable gentlemen are familiar with their activities. It is rather surprising that the honorable member for Lalor (Mr. Pollard) is so critical of institutions which I believe most people on the land feel give good service on reasonable terms.

Mr Pollard - Always at the maximum that they can extract.

Mr HAROLD HOLT - It is a competitive field.

Mr Pollard - Six and three-quarters per cent, this week; 7 per cent, or 7i per cent, next week.

Mr HAROLD HOLT - Apparently the honorable gentleman now thinks that that is a very excessive rate of interest. I reminded him last night of rates that the Government, of which he was a member in 1941, thought were reasonable for some of these financing operations. Those rates ranged from 15 per cent, to 20 per cent.

Mr Calwell - Did the liberal Government not appoint a committee?

Mr HAROLD HOLT - I shall stick to the present. I want to nail down something that the honorable member for Lalor tried to raise a few days ago. He brought into this House a notification from one of these companies and presented it at question time as though the notification had followed as a direct consequence of the statement that I had made in the House relating to the Government's financial policy. Honorable gentlemen will recall the way in which the question was addressed. Certainly, it was my clear understanding at the time, because notice had not been given to me previously, that the honorable member for Lalor was saying that as a result of the Government's announcement of its financial policy these pastoral finance companies had jacked up their charges to their clients. It was not until a little later that one of these standard notices, which was attached to a statement rendered to a client of the company, came to my attention. I realized then that the notice had gone out well in advance of the Government's announcement. I shall give the honorable member for Lalor the benefit of the doubt. I shall accept that he did not intend to mislead the House, but that certainly was the effect of what he did at the time.

The honorable member for Reid (Mr. Uren) spoke, as he has spoken before, about the possibility - he thought it a likelihood - that the banks will take advantage of the present situation by increasing their advances to hire-purchase organizations in which they have some direct interest. I remind him that for some time now there has been in operation a directive from the Reserve Bank to the trading banks prohibiting increased advances for the extension of hire-purchase and instalment selling. The latest directive, which was broadcast and telecast on 25th November, and published in the press on 26th November, contained this passage -

The prohibition of new or increased advances for the extension of hire purchase and instalment selling is being continued and banks have been asked to review existing arrangements with a view to reduction.

That statement answers the question which he raised. Reference has been made to the organizations that will be exempted by this measure. As I said in my secondreading speech, these organization were exempted because in one way or another there is some direct control over their interest rates. Those which have not been exempted are organizations in respect of whose interest rates we have no direct control.

The honorable member for Mitchell (Mr. Wheeler) saw some significance - not a very happy significance - in the fact that this measure was receiving the support of the Opposition. I think it could be fairly inferred from what the honorable member said that this Government had adopted, in some degree at any rate, the ideology of honorable gentlemen opposite. I should have hoped that any or.e who heard the second-reading debate and the speeches of the honorable members for Melbourne Ports (Mr. Crean), Yarra (Mr. Cairns) and Reid would have realized that there is a very wide gulf between the attitude and policies of this Government and its supporters and those of honorable gentlemen on the other side of the chamber. They are doctrinaire socialists. We ceased a long time ago to be doctrinaire supporters of laisser faire or of even a free market. We have seen some of the excesses and evils of an unrestricted free market and of the unrestricted laisser faire policies of the past. As an illustration, that is why we have carefully regulated the central banking system to give it strong powers in relation to the trading banks; that is why we have required the savings banks to invest a certain percentage of their deposits in ways that we specify; that is why we have required insurance companies conducting general insurance business to deposit with the Government a proportion of the premiums that they receive as a protection for their policy-holders.

We have not been bound by some theoretical doctrine. We are facing up realistically to the practical problems with which we, as a government in a highly diversified and rapidly growing economy, are confronted. In a situation where you have a balanced immigration programme you cannot just conduct yourself as though everything can be left to chance. You have to maintain some special arrangements about the placement of labour and the checking of the health and character of the migrants. You do not leave these things to a sort of free market in immigration. I merely make those points because I think it is possible to over-simplify these problems and see things in the beautifully simple and direct way in which some of our newspapers can afford to see them, where everything is in black and white and there are no complexities in between.

At this point we believe that we are facing up to a very difficult situation as realistically as we can. This brings me to the amendment moved by the honorable member for Wentworth (Mr. Bury). I regret that the Government cannot accept the amendment. I would feel rather more troubled about having to say that, if I did not know that this measure on the Government's quite explicit statement is not only of a temporary character but also very limited in point of time so far as the operation of the set of proposals at. present before the House is concerned. We have put a time limit to it. Most of the financial year has already gone, and I would imagine that the great majority of the concerns which might be affected do not overlook the exemptions already given not only as to classes of undertakings but also as to interest which had been paid in the last financial year, or, if it suits a company better, the annual interest liability as at 15th November. So, how much area is left to cause concern? The honorable member for Wentworth admitted that if this legislation was to be limited in operation to a short period of time there might be in some cases - and they cannot be many, proportionately to the whole - a tax liability which otherwise would not have existed. I suggest that it is not more burdensome a tax liability than would have been the case had the Government decided to cure this situation by some general increases in the rates of company taxation.

Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) - Will you have something to say later about the success of the trade union co-operative hire-purchase system which is operating in South Australia?

Mr HAROLD HOLT - I will, if I have time. As far as any continuing legislation is concerned, I suggest that the clue to that is contained in the words I used in my second-reading speech - that what we would be looking to in any continuing scheme was a curb on excessive borrowing and excessive rates of interest. I do not need to elaborate the reasons why this House would wish to see some curb placed on excessive borrowings or excessive rates of interest. But I do add that while it is simple enough to say that, it rs not simple to work it out in a form of permanent legislation which is to operate reasonably and equitably. That is the reason why we have brought along this holding measure which, quite frankly, does not touch a whole range of undertakings which, in a continuing scheme, we would want to touch. On the other hand, it may have an immediate effect - or an effect during the life of the legislation - on some undertakings which, in a continuing scheme, we would not wish to come within that ambit.

I feel that already we have so widened the exemptions, either as to classification or as to the interest liabilities of the organizations concerned, that we would be depriving the legislation of real effectualness if we were to take the matter any wider. I believe that in almost every case the sort of situation to which the honorable member for Wentworth has alluded will be met by the ingenuity of the entrepreneurs concerned. In any event, the Government accepts it as an obligation to state, as early as is humanly possible, the elements of the continuing scheme that it will be presenting to the Parliament in the next session.

Mr Calwell - Things will be much worse next year. This will be no use. You know that.

Mr HAROLD HOLT - The Leader of the Opposition (Mr. Calwell) has been praying for years that things would get worse. He sees that as the only hope of realizing his long-cherished ambitions. I entertain a friendly regard for the honorable gentleman, and but for an even stronger regard for the welfare of this nation I would like to see his personal ambitions realized. I regret that the policies of this Government are not likely to bring his ambitions any closer to fruition.

The honorable member for Hindmarsh (Mr. Clyde Cameron) spoke of the success of the trade union co-operative hire-purchase scheme operating in South Australia, and I am glad to learn that it is continuing successfully. Competition in this field might well be useful, and when, on an earlier occasion, I said by way of reply to something which came to me from the Opposition, that the trade union movement with substantial funds at its disposal might try to service its members in these directions, the Leader of the Opposition attacked me and accused me of being facetious in what I said. The honorable member for Hindmarsh has shown that it is a practical possibility and that, on his evidence at all events, it is succeeding. I hope that having heard what I have to say, and having received the assurances that I have given as to our intentions in this matter, the committee will now indicate its support for this measure and allow us to proceed to other business which is before us.

Mr Pollard - I wish to make a personal explanation; I claim to have been misrepresented. The Treasurer certainly said that he did not think I did intentionally what he accused me of doing. He said, " I give him this much credit, that he did not do it intentionally ". I refer to the slip sent out by the South Australian Pastoralists Association. The Treasurer said it was sent out in October.

Mr Harold Holt - The one I had was.

Mr Pollard - The one I have was sent out in November, after the Treasurer's statement of the Government's economic policy.

Mr Harold Holt - But would it not relate to transactions occurring in October?

Mr Pollard - I do not know what it related to. The information reached the primary producers after the date of the announcement of the Government's economic policy.

Progress reported.

Sitting suspended from 12.45 to 2.15 p.m.

CUSTOMS BILL (No. 2) 1960. Second Reading.

Debate resumed from 11th October (vide page 1854), on motion by Mr. Osborne -

That the bill be now read a second time.

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