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Wednesday, 1 August 1906

Senator PEARCE (Western Australia) . - I hope that the Minister will not accept the amendment. There is a good reason why a distinction should be made between an individual and a State. If the individual were to sell his land, it is not probable that he would get an immediate investment. He would probably put his money in the bank. If he deposited it on current account he would get no interest. If he put it in the Savings Bank, he would get only 3 per cent.

Senator Millen - In the Savings Bank in New South Wales interest up to 4 per cent., is paid on amounts up to£200.

Senator PEARCE - In Victoria, where the largest Savings Bank business is done, the interest allowed is not more than 3 per cent. The Government is not likely to hold the money of an individual when it has to pay 3 per cent, interest on it. The Commonwealth Government is not in the same position as a State Government, which runs payable enterprises like railways. The Commonwealth Government runs unpayable enterprises, and, until such time as we have a Commonwealth Bank, it would be unprofitable for the Government to retain a man's money and pay 3 per cent. interest on it. If there were a high rate of interest, it would be an inducement to the individual to leave his money with the Government until he could find a better investment.

Senator Millen - That is not so, because, under, clause 45, as soon as the money is taken to the Treasury, interest on it ceases.

Senator PEARCE - Even if that be so, it does not justify a higher percentage than 3 per cent., which is sufficient to induce the Government to pay the money into the Treasury as soon as possible. As to the payment of31/2per cent. interest to the States, it has to be remembered that the States are, on an average, paying more than 31/2 per cent, on the properties transferred.

Senator TRENWITH (VICTORIA) - On an average, they pay over 4 per cent.

Senator Millen - We in New South' Wales pay on our railways approximately 31/2 per cent.

Senator PEARCE - Even in Western Australia the average rate is 3.57.

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