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Thursday, 31 March 1966

Mr POLLARD (Lalor) - by leave- 1 have had only a few minutes to examine this document, but I have listened with interest to the Treasurer's proposals and all I can say about them is that the hard pressed sufferers of the existing drought are offered exactly nothing. Is anybody going to tell me that having abandoned its own proposal to establish a reserve banking sector within the Commonwealth Bank the Government honestly suggests to the Parliament that something will be done about the further usage of the Commonwealth Developmental Bank?

Mr Ian Allan - The honorable member is out of touch.

Mr POLLARD - The honorable member who interjected has never been in touch. Having expressed the wish that the Commonwealth Bank will do something that under its charter it is not legally entitled to do, there is to be no amendment of the Commonwealth Banks Act. Consequently the Commonwealth Development Bank will be required still to operate under its existing charter. If its existing charter has proved inadequate to handle the loan requirements of the primary producers, particularly those affected by the present drought, and has proved incapable of enabling loans to be made to drought stricken farmers to restock their properties and to rehabilitate themselves, I fail to see how, after the mere expression of a wish to the Commonwealth Development Bank, the Bank will do anything to alleviate the distress of those most harshly pressed today.

We have been told, of course, that there has been a meeting with the private trading banks which are prepared to cooperate. This means, of course, that if a person cannot get accommodation through the Commonwealth instrumentality to which this Government has expressed the wish that long term finance at a low rate of interest be made available, he certainly will not get it any cheaper from any private trading bank. I can understand the mechanics of the Government's proposal. The Government's plan is to release from the special account held by the Reserve Bank those moneys that the private banks are required to lodge with the Reserve Bank from time to time in order to prevent inflation. Lo and behold, when the special account moneys are released from time to time to the private banks the banks proceed, with the extra liquidity they have and which is desirable and necessary, to make loans to their clients. They do not charge a lower rate of interest. They charge their clients current interest rates. This is what they will do in this set of circumstances. The only hope offered is that a person might get a minimal rate of interest on a loan from the Development Bank. If that is so, and the Commonwealth Development Bank is the institution to look to, why has the Government had to make arrangements with the private banking institutions at all? The $50 million talked about by the Treasurer will be liberated to the private trading banks which will, as a result of the liberation of this money, show an increase in their profits in their annual statements to their shareholders. This is what the Government is offering the primary producers. There is not one solitary reference in the Treasurer's statement to any particular rate of interest.

Mr Ian Allan - Yes there is.

Mr POLLARD - There is not. The Treasurer did not specify any rate of interest. He refrered to a minimal rate, but what is to be the minimal rate? Any Government offering a gleam of hope to the people bogged down with a massive debt on their shoulders would say: "We have arranged with the Developmental Bank and with the private trading banks for loans to be made available at 1 per cent, or 2 per cent, interest ". What the Opposition would do is what the Labour Government did for the hard pressed primary producers in the drought of 1944 to 1946, when millions of pounds were distributed without any requirement for the primary producers to repay the money. If the Government cannot go that far, surely it can stipulate a minimum rate of interest, thereby putting hope into the hearts of the people concerned. Surely Australia is financially strong enough to shoulder the difference between the market rate of interest and a specified minimum rate of interest if the resources of the private trading banks must be used. Surely the difference could be shouldered by the Commonwealth Bank or by the Government. Recently I read the annual report of the Reserve Bank of Australia and noted that it had made a profit of £23 million for the year. Of that figure, £15 million represented profit from the Commonwealth note issue. I remind honorable members that the Commonwealth note issue was introduced first by the Australian Labour movement and that at the time of its introduction the notes were referred to as Fisher's flimsies. Today, those notes are responsible for returning to this Government a net profit of £15 million, half of which is paid into consolidated revenue and the other half credited to reserves. The balance of the £23 million profit made last year is the result of the operations of the Reserve Bank and other sections of the activities of the Commonwealth Banking Corporation.

Surely this Government should have the decency to say to those who are most severely embarrassed and harassed by the drought, those who cannot buy stock, that it will accept some of the financial respon sibility for lifting them out of their plight. But all the Government has done has been to put its friends who contribute to its party funds in an immensely stronger position than they have enjoyed hitherto. It is underwriting any losses that the private trading banks may incur as a result of the transactions referred to in the Treasurer's statement.

I condemn this Government on its policy with regard to the present tragic drought. It has failed to satisfy anybody right from the time of its first statement about drought relief, and it satisfies nobody today. Even if there were any substance in what the Treasurer has said today, there would still be no immediate hope for the man who is in a desperate position now. What is proposed is some long term arrangement, and emphasis is laid on the fact that the managers of the trading banks are to have a discretion as to whether the security offered is good enough. Everybody should know that there are many cases today in which no security at all can be offered. The Government's present proposal is typical of its lack of realisation of what is actually happening in the badly drought stricken areas of the Commonwealth. I hope that the members of the Country Party, and even the members of the Liberal Party who sit behind the Government will rise in their anger and indict their own Government for the meagre and mean help it proposes to give.

Mr Barnes - The honorable member said that he had not studied the report. That is obvious from his remarks.

Mr POLLARD - $how me where I have not studied it? The Government's arrangement is with the private trading banks. Is that Tight or wrong?

Mr Barnes - The honorable member said it would not help the primary producers. I say it will.

Mr POLLARD - I said that it will not give any immediate help to the drought stricken landholder who has no security - the man who has lost nine-tenths of his cattle or his sheep, the man who is already up to his neck in debt with the banks. The Treasurer has indicated that the banks are expected to make this money available only to people who have adequate security.

Where is there any adequate security in the drought stricken parts of Australia today? It just does not exist.

Mr Barnes - The honorable member said be had not studied the report. That is obvious.

Mr POLLARD - What report? This is not a report; it is an apology. I leave it at that. Those who are suffering today can judge whether I am right or whether the Government is right. I know what their answer will be.

Mr Robinson - I ask for leave to make a statement on the matter which is now before the House.

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