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Thursday, 31 March 1966

Mr CREAN (Melbourne Ports) .- I have been waiting quite a long time this afternoon to say a few words upon this measure which, in essence, is a fairly technical amending Bill. It deals with two matters in the Post Office - the question ot money orders and the question of what were formerly called postal notes but which after this legislation is passed will be known as postal orders. In a sense the Bill might be regarded as the demise of the postal note. There are one or two observations I should like to make about these two forms of Post Office service.

The amendments will, of course, convert the denominations in which both money orders and postal orders are expressed to decimals in future instead of pounds. In addition the Postmaster-General (Mr. Hulme) has thought it wise to increase the maximum amount that can be taken out in a money order or a postal order. In each case it has been doubled. Where formerly there was a limit of £20 on a money order the new limit is to be S80 or £40. Where the maximum amount of a postal note was £1 or $2 it is now to be doubled to £2 or $4. In future, the document that has been known as a postal note will be known as a postal order. The new name is probably in consonance with the definition adopted in other parts of the world. I would have liked the Minister to produce a facsimile of the new postal order with the counterfoil to which he referred. I cannot follow what its merits are from the cold words of his speech, but it seems that, to facilitate checking and handling, a counterfoil similar to the butt of a cheque is to be attached to the new postal orders. Should a postal order become lost, I take it that the person who lost it will have an easier means of claiming for his loss than is available to him under the present system.

Apparently the cost of recording the old postal note considerably outweighed any advantage gained and since recording was abandoned some years ago, it has been rather difficult to claim for loss of a postal note. The Post Office records did not disclose whether the note had been presented. I take it that the new arrangement will make it easier to claim for loss in the future.

I have taken the occasion to examine some of the statistics contained in a very useful publication issued by the PostmasterGeneral's Department. It is called "Financial and Statistical Bulletin - 1964 ". I understand that the issue for 1965 has been printed but as it was not to be available until 4 o'clock this afternoon, I am able to quote only figures which relate to the year ended June 1964. No doubt the Minister is in possession of the later figures, but I doubt very much whether they greatly alter the perspective of the sort of thing to which I wish to refer.

I draw the attention of the House to table 14 appearing on page 23 of the " Financial and Statistical Bulletin" for 1964 which gives details of the number of money orders and the number of postal notes issued by the Post Office. In 1939, 3 million money orders df a total face value of approximately £18 million were issued. By 1964, the number issued had increased almost four-fold to 11.4 million and the total face value was £168 million, a nine-fold increase. Of course, the increase in face value would have some relation to the change in the value of money between 1939 and 1964. I suppose by 1964 approximately £2 or more would be required to buy what could be purchased for £1 in 1939. However, this four-fold increase in the number of money orders issued and the nine-fold increase in their face value indicate that the money order is still a much availed of device. The average value per issue of the 1 1 .4 million money orders issued was approximately £15, or $30 in the new currency.

The statistics disclose also that there has been a decline in the use of postal notes over the same period. Whereas in 1939 there were 22 million postal notes issued with a total face value of £8 million, by 1964, only 16 million notes with a face value of £8.6 million were issued. Even though their real purchasing power would have been much less than it was in 1939. the face value of the postal notes issued in 1964 was very little different from that of the notes issued in 1939. In both years the average was about 10s. I do not know whether statistics of the purposes of postal notes are kept, but I suppose that their greatest use would be the purchase of lottery tickets. However, it would seem that many people who formerly used postal notes now have recourse to some other method of payment.

Recently I read an article in the British journal " The Banker " for September 1965. It contained statistics which probably related to 1964. Those statistics disclosed that the British Post Office handled something like 666 million individual postal orders. I am not sure whether the British postal order is the same type of transaction as the Aus tralian money order or postal note hut the fact is that there is certainly much greater resort to this form of payment in Great Britain than is the case in Australia. Even allowing for the fact that the population of Great Britain is four times greater than that of Australia, when we aggregate the number of postal notes, money orders and postal orders issued in each country, it would seem that the use of these documents is 20 times greater in Great Britain than it is in Australia.

This brings me to the point that perhaps there is occasion now to reassess some of the functions of the money order and the postal note, both of which are forms of cash, or near cash. Postal notes seem to have gone out of vogue slowly whereas the money order is still availed of to the extent that I have mentioned - 11.4 million separate orders in the one year. Most of those 11.4 million money orders circulated within Australia. I think only about 500,000 of them were sent outside of Australia. So, at least the money order is stilt used to a great extent by some people to pay debts that other people would probably pay by cheque.

I have great admiration for the Post Office as an institution. I think it is a highly efficient public utility. It shows that public enterprise can be just as efficient and just as useful to the community as can private enterprise. I repeat that I have a very high regard for the Post Office as an undertaking.

In recent times the Government of Great Britain produced a White Paper dealing with what is called the giro system. It is rather difficult to make direct comparisons between the banking, credit and postal facilities of one country and those of another. For example, I should think that the pattern of savings banking in Australia is very much different from the Post Office savings system in Great Britain. It may well be that the Post Office of Great Britain more readily lends itself to the giro system than does the Australian Post Office. An interesting aspect of the giro system is that it offers a very convenient method of payment for people who apparently still have not enough transactions in a year to make them want to have a cheque bank account. They can establish a credit at an institution like the Post Office and can conveniently pay monthly or periodical transactions such as the electric light bill or the gas bill. They simply write out a chit of some sort which is accepted at the Post Office. A debit is then made in their giro account and a credit is recorded in the giro account of the undertaking concerned, be it the electricity commission, the gas and fuel corporation or the rate department. 1 suggest that consideration be given to establishing a similar facility in Australia. I would not like to be categorical at this stage about whether the Post Office ought to be the institution that should make the facility available, but at least the suggestion is worthy of consideration. This system seems to me to have two possible advantages. As I indicated earlier, it would be of considerable interest to the great majority in the community who still do not want to have recourse to a cheque bank account. Moreover, in aggregate the accounts would always be in credit rather than in debit. If the money was banked at a place such as the Post Office or in the savings bank system, it would provide an investing fund that would be readily available to the Post Office or the public at large.

For the benefit of the House I should like to quote from a statement that is contained in a book entitled " Banking in Western Europe ", which was edited by Professor R. S. Sayers and published in 1962. The statistics I propose to quote deal with the situation in Sweden, the economy of which is not very much different from that of Australia. Sweden has much the same sort of population as we have and has the same standard of living. The relevant passage reads -

The relative importance -

The writer is discussing the giro system, which operates quite freely on the Continent, particularly in France and most of the Scandinavian countries - of the different methods of payment may be judged to some extent by the results of an inquiry undertaken by the Swedish Banks' Association during the week 21-27 January 1945. This showed that of the total amount of ail payments made during the week, 27 per cent, were made in cash, 38 per cent, through commercial bank accounts, 28 per cent, through the accounts of the Post-Giro, and 7 per cent, by other means.

I point out that in Sweden nearly three transactions out of ten in terms of amount were transacted through the Post-Giro. The passage continues -

The apparent importance of payments through the commercial banks is misleading in so far as it can be explained by the large average size of the sums paid in this way. The payments effected through the Post-Giro comprise a larger number of small amounts. If we compare the number of payments

That is, the number as against the amounts - transacted through the different institutions, the results of the inquiry conclusively show that payments through the Post-Giro predominated. During the period-

That is during the sample week - they accounted for 1,248,708 of the payments made compared with 202,368 through the commercial banks' cheque accounts.

Then this conclusion is reached -

It is clear that in the Swedish financial system the Post-Giro and the commercial banks cater for different types of transactions, the former specialising in effecting the payments of private individuals, the latter in those of the business and industrial community.

I make the point that the Post Office is designed to handle in the course of a year hundreds of millions of small individual transactions involving the posting of letters, the buying of stamps, the sending of post cards externally and internally, the sending of parcels, the registering of valuable articles and so on. It seems that there is quite a gap in the community for facilities to enable people on what might be described as average incomes more conveniently to pay some of the sums that they have to pay weekly, monthly, quarterly or even annually. I am not suggesting that the Post Office is the only place that perhaps could provide this facility. However, I draw attention to the fact that in Sweden approximately seven transactions out of eight in terms of number are conducted under the Post-Giro system and that even in terms of value such transactions still account for 30 per cent, of the total.

I note that the honorable member for Mackellar (Mr. Wentworth) is in the chamber. From time to time the honorable member makes observations here about mobilising the savings of the community. I suggest that there is a considerable untapped reservoir of savings for which the existing banking mechanism does not cater. One of the matters to which the Vernon Committee drew attention was that it was perhaps time to have a re-examination of the credit and banking mechanism in Australia. The Government of Great Britain has chosen to use the Post Office to meet this situation and has introduced the giro system.

I conclude by quoting briefly from an article that appeared in the " Banker " of September 1965. I commend the full article to honorable members. The article, which is entitled " Living with the Giro ", was written by Anthony Bambridge, an English writer who apparently looked closely at the system. He wrote -

The simplicity and speed of the giro, working all day on six days of the week, are calculated to appeal to that area of society now well accustomed to buying on credit but still without bank accounts, either because it regards the banks as to stiffly conservative or because it finds their short hours of opening inconvenient.

Equally, while the giro is specifically aimed at these two out of three adults at present struggling with postal orders, money orders, registered letters and having to wait over a week for a postal cheque to be cleared, it may well find favour with many who already have bank accounts.

I commend this matter to the consideration of the Postmaster-General because it seems that money orders are still availed of. They are used, it would seem to me, to pay accounts from one individual to another. The postal note, now to be called a postal order, is a declining sort of commodity. I have suggested that this Bill might have been called "The Demise of the Postal Note Bill ". Over a period of time, a considerable reduction in the use of this form of commercial paper has taken place. It seems that about the only service it performs now relates to people who live in country areas and who use it to buy lottery tickets from lottery institutions which are established in the cities. Not only does the post office gain from the poundage on the postal note but also it gains in the use of two postal stamps as well. A person sending for lottery tickets has to put the postal note in a letter and then has to include in that letter another stamped self-addressed envelope so that the ticket may be returned. Sometimes another stamped self-addressed envelope is required so that the person concerned can receive a result slip. Really, the Post Office does fairly well out of the postal note. Usually the sale of the postal note in connection with a person's transactions has tied to it the sale of at least two postal stamps. Here is the occasion for this matter to be reconsidered. I also ask the Postmaster-General, because I know he is interested in these matters, whether he might give some consideration to exploring whether in fact a gap exists in the credit facilities in Australia and whether the postal giro or something else like it might very well be inserted to channel the credit that could come out of that gap.

Question resolved in the affirmative.

Bill read a second time.

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