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Thursday, 3 November 1927

Senator THOMPSON (Queensland) . - I am deeply gratified that the Government has brought down this bill in association with a housing bill. It will enable us to tell our constituents that we have fulfilled the promise we made on the hustings that the Commonwealth would give the people facilities to

Guild their homes. I told the electors that nothing would save the community from bolshevik or communistic tendencies more than would the fact that they owned their own homes. I said that a man who owned his own house would not he inclined to turn it over to the Supreme Economic Council for the good of the whole community, which, as we know, is the objective of our friends opposite. It is not a new idea to build homes for the people. Many Labour Governments in Australia have their housing schemes, and it makes me wonder why there should be opposition by Labour members to the Commonwealth Government's housing proposals. I hope that the federal scheme will not interfere with the existing State schemes. In Queensland, for instance, the system in operation has proved to be of the greatest advantage to the people. I am under the impression that it is now suspended owing to lack of funds. I should imagine that the State Governments would welome any opportunity that would enable them to provide homes for their people. The proposal to make the money available through the Commonwealth Bank ought to be acceptable to all, and I regard the proposal to. increase the maximum amount of the individual advance as a step in the right direction. It will extend the benefits of this class of legislation to a section of people who are usually overlooked. The man who has an income of from £400 to £700 a year has often to live in a more expensive way than many a man with higher remuneration.

SenatorVerran. - Could not the Commonwealth Bank do all this work without separating the savings bank branch from it?

Senator THOMPSON - Yes, but when we consider that the Government's proposals in this respect are developmental - one might also call them philanthropic - we must realize that it is not a class of work that the Commonwealth Bank can very well undertake. I do not think any trading bank would make an advance on a housing proposition with a margin of only 10 per cent. A proposal of that kind requires a special government arrangement. The Commonwealth's scheme proposes to give particularly long terms of repayment, with low rates of interest.

SenatorVerran. - South Australia built its thousand homes scheme through the State bank.

Senator THOMPSON - Any State bank with government backing could take up a proposition like that, and it is perfectly laudable for a government to advance up to 10 per cent of the value of a house; but an ordinary trading bank will not do so. I appreciate the Government's housing proposals, and although I think the margin of 10 per cent. is rather small, I have to bear in mind the fact that repayments begin in the first week, and that as every week goes by, the position in this respect becomes sounder. I should like to know who will beresponsible for the losses that might be incurred.

Senator SirWilliam Glasgow - The authority that borrows the money.

Senator THOMPSON - The Commonwealth, I understand, is to make money available to the States, and under certain conditions which are to be laiddown, the States will make advances to home builders. The States, therefore, will carry out all the details of the Commonwealth housing scheme, and bear the remote possibility of incurring losses. It is a reasonable proposition that since the States will derive from this scheme the advantage of having their own people properly housed, any little disability that may arise from it should also be borne by them. It is quite right, I think, to separate the savings bank business from the general trading business of the Commonwealth Bank for this particular purpose, but I see no reason why the present board of directors of the Commonwealth Bank should not function over the whole of the transactions of the bank. A general manager could be appointed to manage the savings bank branch. There is too great a tendency nowadays to overload activities with controllers. I notice that when the board of directors of the Commonwealth Bank was asked if it would undertake the duties attaching to a housing scheme, it complained of being overloaded with work. Much larger concerns than the Common wealth Bank are managed by boards of directors who have under them many managers controlling different departments. It is idle, therefore, for the directors of the Commonwealth Bank to say that a housing scheme would overload them, especially when Ave know that all the details of the scheme are to be attended to by the States. I understand that the agreements with Queensland and Tasmania in respect to their savings banks are to be continued. It seems to me that there may be a grave risk of the amount available in the savings banks of Queensland, which I believe is larger than that in the Commonwealth savings banks in other States, being drawn upon to provide housing accommodation in other States. I should like an assurance from the Minister that such will not be the case, and that one State will not gain at the expense of another. I do not think there is anything in the contention of honorable senators opposite, that the separation of the savings bank from the general banking business of the Commonwealth is likely to be injurious to the institution; the same aggregate of assets will be available, and the financial strength of the bank will remain the same. There has been a good deal of criticism from honorable senators opposite concerning the general business of the Commonwealth Bank, which they say is deteriorating. Our experience in Queensland is that the Commonwealth Bank is now as well represented as some banks which have been functioning for 50 years and that its business is rapidly increasing. It is also said that the bank is not functioning as well under a board of directors as it did under the control of a Government. According to published figures, however, the net profits - which after all are the only test by which a bank's progress can be gauged - in the first year of the board's existence were £84,000; in the second year they were £210,000, and in the third year £330,000. These figures give the lie direct to honorable senators opposite who say that the bank is becoming decadent. It has also been said that the bank is not functioning as a reserve bank in the way it should. In this connexion, I should like to draw the attention of honorable senators to the position which arose two years ago in the wool business when the exchange rates on London ranged from between £4 and £5 per centum, and were tremendously against the wool-growers of Australia. With die powers which the Commonwealth Bank have been given of late, it was able to make available on the other side, the bank's credits, which eased the position so tremendously that in a very short period the exchange rate was 5s. per centum. At that time 40,000 bales of wool in Queensland were catalogued for sale, but the sale had to be postponed because satisfactory finance could not be arranged. Certain proposals were considered, by the Commonwealth and trading banks, and as the result of reciprocity and harmonious working, the 40,000 bales of wool were sold at prices which I think have not since bee a equalled. That shows the benefit of a reserve bank when its powers are properly exercised. As suggested by Senator Greene, I should like to see the operations of the Commonwealth Bank still further extended. I believe that in time the private banks will realize the advantages of co-operating with the Commonwealth Bank, the reserve powers of which should be availed of to an even greater extent than they are to-day. At the same time, we should foster the splendid business which the bank possesses to-day. Advances should not be made made on such a conservative basis as at present. As I stated on a former occasion, I know of quite a number of instances in which good propositions have been rejected by the Commonwealth Bank. It is useless for it to endeavour to function as a trading bank, unless it handles this branch of its business on a reasonable basis. If the bank is not prepared to foster its present business and extend its operations, I would sooner it went out of ordinary banking and concentrated on reserve banking business; but I. sincerely trust that it will retain the magnificent business it now controls, and further increase its activities. Indeed, I hope that another amending Commonwealth Bank Bill will be introduced in which provision will be made for granting financial assistance to primary producers on the same liberal basis that is now proposed in the matter of housing. By so doing we should be assisting those upon whom the prosperity of the country largely depends. I trust that it will not be long before such a measure is introduced, and when it is it will have the same hearty .support that I now accord to this bill.

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