SOME FALLACIES

Auckland Star, Volume LXXVI, Issue 146, 22 June 1945, Page 5

SOME FALLACIES

AUSTRALIAN BANKS Menzies Attacks Plan For Nationalisation N.Z. Press Association—Copyright Rec. 2 p.m. CANBERRA, this day. The Commonwealth's new banking legislation at best would restrict the activities and services of the trading banks; at worst it would crush them, said the Leader of the Opposition, Mr. Menzies, speaking on the second reading of the Banking Bill in the House of Representatives.

"The whole plan of the Government," Mr. Menzies proceeded, "is to nationalise the banks, not by a process of buying them up, but by first exhausting them and then absorbing them."

The Government claims that the bill will regulate the banking system, safeguard depositors, control the volume of credit, control exchange and co-ordinate Australia's banking policy under the direction of the Commonwealth Bank. Mr. Menzies said many people believed that if hundreds of millions of pounds could be found for war purposes the same amount of money could be found for peacetime projects. This was an extremely dangerous fallacy. In the past year Australia had spent about £700,000,000, although the 1939 Budget had been the first to reach £100,000,000. The great expansion, he said, had been posssible only because the Government had set in motion expenditure running into hundreds of millions of pounds and had then withdrawn from the public a large proportion of the purchasing power created by the spending power. When people said the Government could spend as many millions on peace as on war they were assuming that the economic and social conditions applying in wartime would be continued in time of peace. The debate is continuing.