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Thursday, 8 December 1960

Mr SEXTON (Adelaide) .- Mr. Temporary Chairman,I oppose the amendment proposed by the honorable member for Wentworth (Mr. Bury). I feel that it is designed to protect an already overprotected empire - the secondary banking structure of Australia, which is now described somewhat innocently by the phrase " fringe institutions ". The fact remains that these fringe institutions are at liberty to exploit the public and embarrass governments at their own sweet will. Furthermore, they have made a major contribution to the process of inflation which has been going on in Australia and which still continues.

The activities of these institutions which have had this effect have been made possible, of course, only because we have a government which will not face up to the responsiblity of overcoming the constitutional difficulties which have permitted these things to happen. That magic section 92 of the Australian Constitution allows exploitation to go on, provided that it is undertaken in an organized fashion and on an interstate basis. At times, we have seen the Treasurer using this constitutional limitation as an excuse for not taking the action necessary to overcome these disabilities. It is obvious that the large financial institutions wish to retain their present privileged position in our financial structure. That would seem to be the reason why the honorable member for Wentworth (Mr. Bury) and the honorable member for Mitchell (Mr. Wheeler) are pleading their cause in this place. This bill does not cure the malady, but it does attack some infectious parts of it. It will tend to check the easy technique of our uncontrolled banking structure, and I hope that it will curb exploitation of the public, who are now being charged exorbitant rates of interest. It should also help to prevent any increase in the monopoly control of this type of business by the large companies, many of which are owned by the private banks.

Let me refer now to the matter outlined by the honorable member for Hindmarsh (Mr. Clyde Cameron) this morning. I refer to the scheme under which the Trade Union Hire Purchase Co-Operative is working in South Australia. That co-operative is a striking example of what can be done when an organization is dedicated to giving service. It started from a humble beginning, but it has shown already that it is possible to pay interest on borrowed money, to offer financial accommodation at reasonable rates and still carry on. Not only has this organization been able to carry on, but it has been able progressively to reduce the rate of interest charged for financial accom modation made available by it. In three consecutive years the interest was reduced, first to 5 per cent., then to 4 per cent, and finally to 3 per cent, and the shareholders in the co-operative have still received a profit on their investment. It is limited only by the finance available to it. If adequate finance were available, it could extend its service to a tremendous number of potential customers.

I submit that this co-operative is an example of what could be achieved by the hire-purchase section of the Commonwealth Bank structure. Some weeks ago, the Treasurer (Mr. Harold Holt) praised the South Australian venture in this chamber. After he had spoken, 1 asked whether he would support a move to make funds available through the Commonwealth Bank for the establishment of a hire-purchase co-operative. 1- asked him to re-consider the re-opening of the hire-purchase section of the Commonwealth Bank with a view to offering to the people of Australia a service similar to that provided in South Australia by the trade union co-operative there. He promised to consider the matter, but finally answered in the negative. Again to-day the Treasurer spoke in commendation of the South Australian co-operative, but that was just another instance of the lip-service to which we have become accustomed.

The hire-purchase business of Australia has now reached the staggering sum of over £400,000,000. I should say that most of that money has been lent out at a flat rate of interest of from 8 per cent, to 10 per cent. It would be even more if certain other charges were taken into consideration. If the Commonwealth Bank were operating in the hire-purchase field there is no doubt that it would handle the vast bulk of the business, possibly at half the rate of interest charged by the private companies. But we cannot expect it to do that until we have in office a government which is sympathetic towards the people, and favorable towards such a proposal. This Government has no appreciation of the desirability, indeed the necessity, of such a step. Hire purchase has become a major factor in our economy, and it has been allowed to develop in its own way under predetermined conditions without any control at all. Tt is not even subject to the slight control being exercised over our orthodox banking structure.

The Government's refusal to make hirepurchase facilities available to the people through the Commonwealth Bank is understandable, especially when we remember that, in March, 1959, we were given a demonstration of the Government's attitude towards granting banking benefits to the people. We all remember the banking legislation of that year, and I register my protest against not making hire-purchase facilities available through the Commonwealth Bank now. The present bill is some step forward, but it is not adequate to achieve the purpose that we would all desire. I appeal to the Government to reconsider the re-opening of the hire-purchase section of the Commonwealth Bank, for I am confident that it would play a tremendous part in offering hire-purchase facilities to the people at reasonable rates of interest. I support the bill so far as it goes, and express the sincere hope that in the not too distant future the Government will do something more in the interests of the people.

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