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Thursday, 21 May 1970

Mr CONNOR (Cunningham) - I fully support the comments of the honourable member for Banks (Mr Martin), who has just resumed his seat, ft is worth noting the very real reasons that the Government has for doing everything that it can to frustrate while pretending to patronise the credit union movement. The greatest mistake that was ever made by the general banking system of Australia was to fail to give accommodation to the ordinary, honest man who may not have had a lot of assets but who was of good character, honest and in a steady job. The greatest bank in the United States of America today was built precisely on that principle of granting personal loans. This is precisely what the credit union movement does. The bank to which I referred was the Bank of America. It was founded and developed by a man named A. P. Giannini. It was built on that principle, and he walked into a niche in the banking movement which enabled him to ride to success and to develop the greatest general bank in the United States today.

Similarly this Government in the early 1950's sought to curb hire purchase companies which at that stage had been discounting their promissory notes with the orthodox banking system. They chose to go outside the banking system and to raise money on what is commonly called the grey market. In turn it was found that they were able to thrive and to offer serious competition in general banking to the general banks. Then, of course, using the good old maxim: 'If you can't beat them, join them', we find the situation where every major trading bank in Australia today has its subsidiary hire purchase company. These companies are making fantastic profits which range between 18% and 28%, according to the last balance sheets. Because of this, the Government fears the credit unions and is determined to do everything that it can firstly to frustrate them and ultimately to crush them. I remind honourable members that when the Homes Savings Grant Act was introduced savings in credit unions were recognised for 12 months in the hope that they could be enticed away into the more orthodox institutions. Credit unions are in fact workers' banks. The workers who are controlling the credit unions are learning the principles of credit assessment and of general banking. They are getting to the point where in due course they will be applying for their own charter.

Let me deal now with the amendment that is suggested by the Senate. It is speaking with tongue in cheek when it suggests a limit of $5,000 for a housing loan. In fact, as is well known and as was thoroughly ventilated in the original discussion here, the limit of advances in New South Wales is $4,000. It is in New South Wales that 80% of the credit union movement operates at the present time, and this is where the funds are. There is a credit squeeze at the present time. It is certainly equal to the notorious 1960-61 affair, and it will get worse. If this Government wants to tap further sources of finance for home building, let it reduce the limits. The credit union movement can come in and help most effectively by the granting of loans for home improvements and for additions to homes. There is every incentive for the average home owner to use the credit unions rather than the orthodox banks. At the, present time the banks will not give him money anyhow, because bank accommodation is limited to old clients who have long standing accounts and who have had substantial deposits for a number of years. That being so, the credit union movement is the only field to which the average worker can have recourse.

The Government is determined to pursue its policy of continuing immigration. A couple of weeks ago the Minister for Immigration (Mr Lynch) claimed great credit and announced with a very great flourish that the Government would be bringing in about 180,000 immigrants a year. How are they to be accommodated when there is a credit squeeze? How will this Government cope with the housing needs of Australia with its stop-go economics? How will it provide the necessary expansion of accommodation? Australia has been short of housing accommodation ever since the first fleet arrived in Sydney Cove. That shortage is continuing and is being intensified by this Government. It is getting to the stage where people will have to fend for themselves, because this Government is determined at all costs to curb the inflation that it has created. To construct a house is not inflationary. To finance a home for a worker and his family is not inflationary. The best of all migrants to Australia is the Australian child born of Australian parents and reared in an Australian home. We want the other migrants as well. They are welcome because we need to fill this country. But this Government is determined to do its best to ensure that people will have to fend for themselves under the worst possible housing conditions. The proposed amendment is a disgrace.

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