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Thursday, 8 December 1960

Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) . - In a debate such as this one feels impelled to say that the Government should do more than it is doing to obtain the constitutional power to deal directly with the problem of interest rates paid and received by hire-purchase companies. The Commonwealth's power has never been tested. We have only assumed that we do not have it. The Government should assume that it has the constitutional power, pass a law and let it be clearly understood by the hire-purchase companies that if they challenge the law the Government will then be forced to adopt the only other means that I know of to deal with the problem, that is, to prevent them from deducting, for income tax purposes, any of the money that they pay in interest. Instead of drawing a line at 15th November and telling these companies that from that date interest payments will not be deductible the Government should make it clear to them that if the law is declared invalid by the High Court the Government will not hesitate to treat all interest payments in the same way as it is now treating interest payments on moneys borrowed after 15th November.

A law, if passed by the Parliament, is a valid law until it is challenged. Only the hire-purchase companies are likely to challenge it. Let it be made plain to them that if they do so the Government will use the full power of Parliament to deal with them, just as it is now half-heartedly using the power of Parliament to deal with moneys borrowed after 15th November. In addition, we should tell the hire-purchase and finance companies generally that if they continue to charge excessive interest rates on money that they lend, and to offer excessive interest rates on money that they borrow, the Commonwealth Banking Corporation not only will enter the hirepurchase field actively in competition with them but also will lend money to approved co-operative hire-purchase companies to enable them to compete with the existing private organizations.

I conclude -I suppose to the relief of the Treasurer - by saying that the Government on this occasion has the full support of the Opposition. We repeat that the Government should have taken this action much earlier than it has; that the action should be much severer than it is and that the Government should not have granted the exemptions that it has granted. The private banks certainly should not have been exempted from the provisions of the bill. I hope that the Government, at the expiration of the time during which this bill will operate, far from considering allowing the measure to lapse, will re-impose it with greater severity.

Amendment negatived.

Bill agreed to.

Bill reported without amendment; report adopted.

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