Senate
9 November 1927
10th Parliament · 1st Session
- QUESTION
- QUESTION
- PUBLIC ACCOUNTS COMMITTEE
- PRINTING COMMITTEE
- PROCEEDINGS OF PARLIAMENT
- PAPERS
- QUESTION
- QUESTION
- QUESTION
- QUESTION
- ORDER OF BUSINESS
- COMMONWEALTH GOVERNMENT SHIPPING ACTIVITIES
- QUESTION
The President (Senator the Hon. Sir John Newlands) took the chair at 3 p.m., and read prayers.
page 1053
QUESTION
WANT OF CONFIDENCE DEBATE
No Adjournment of Senate
Senator NEEDHAM:
WESTERN AUSTRALIA
– In view of the fact that a motion of want of confidence is being debated in another place, and the fate of the Government is hanging in the balance, I should like to ask the Leader of the Government in the Senate, why he has not moved the adjournment of the Senate following the practice that has been observed from the inception of the Commonwealth Parliament ?
Senator Sir GEORGE PEARCE:
– The Government does not regard the motion submitted by the Leader of the Opposition in another place as an ordinary motion of want of confidence. Such motions are usually based on some announcement of the Government’s policy, whereas it is well’ known that the motion, of which notice was given in another place, was based on only a rumour as to Government policy. That it is not regarded as a motion of want of confidence in the ordinary sense, is shown by the fact that action had to be taken under the Standing Orders in another place, to prevent the debate from lapsing after the expiration of two hours. In the circumstances, the Government does not feel justified in interrupting the business of the Senate.
page 1053
QUESTION
ANNIVERSARY OF RUSSIAN REVOLUTION
CirculationofCommunistic Literature.
Senator CHAPMAN:
SOUTH AUSTRALIA
– I should like to ask if the Leader of the Government in the Senate is aware that during the last week-end two men were distributing pamphlets in George-street, Sydney, issued by the Communist party of Australia, organizing a demonstration to commemorate the 10th anniversary of the Russian revolution, extolling the success of that revolution and suggesting that Australians should adopt the same revolutionary measures? In view of the fact that the pamphlet says “Do not fail to attend the great demonstration which will be world-wide”; is the Minister aware that a central authority must be organizing’ these demonstrations and will he state whether it is the intention of the Government to take some action in regard to literature which thus advocates revolutionary methods ?
Senator Sir GEORGE PEARCE:
– The honorable senator was good enough to show me the leaflet on which he has based his question. I cannot say whether it transgresses any Federal law, but if the honorable senator will let me have the pamphlet, I shall have it brought under the notice of the Attorney-General.
page 1053
PUBLIC ACCOUNTS COMMITTEE
Communications Between Tasmania and the Mainland.
Senator KINGSMILL, as Chairman, presented the report of the Joint Committee of Public Accounts concerning communications between Tasmania and the Mainland.
Ordered to be printed.
page 1053
PRINTING COMMITTEE
Senator FINDLEY presented the report of the Printing Committee.
page 1053
PROCEEDINGS OF PARLIAMENT
Distribution of “ Hansard “ Proofs
The PRESIDENT (Senator the Hon. Sir John Newlands). - Some weeks ago, Senator Sir Henry Barwell asked me if it was possible for honorable ‘senators to be supplied daily with rough proofs of the Hansard reports of honorable members’ speeches in both Houses. I asked the Principal Parliamentary Reporter whether that could be done, and he has furnished me with the following reply : -
In reply to your request for a report upon the suggestion of Sir Henry Barwell, that senators might be supplied with rough proofs of theHansard reports of each day’s proceedings in both Houses in advance of publication -
I am of opinion, having consulted the Government Printer, that it would be practically impossible for the printing office, under present conditions, to do what is required. Apart from this mechanical difficulty, consideration must be given to the fact that, at present, the unrevised proof of a member’s speech is treated as confidential, and except with his permission, may not be seen by any one outside this office, but himself. This is necessary because of possible mistakes by the reporter’ or the printer, to which it would be harmful to give publication, and because, in addition to the correction of errors, many verbal alterations are made by myself or the Second Reporter. Before effect could be given to Sir Henry’s suggestion, honorable senators and members would have to consent to an alteration of this practice. Now that the House of Representatives has resumed its Tuesday sittings, Hansard will be published twice a week - the debates of the preceding Friday and Tuesday will appear on Thursday, and those of Wednesday and Thursday on the following Saturday; consequently the delay in obtaining the reports will be less than it has been.
It is, moreover, the practice of Ministers who are in charge of bills and other important business, to allow a copy of their second reading, or explanatory speeches, to be supplied to a member who desires to read them in advance; or. in compliance with a general request, to supply advance copies to all. Further, a pull of any member’s speech may be obtained at any time with his permission.
H. P. Robinson,
Principal Parliamentary Reporter. 9th November, 1927
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PAPERS
The following papers were presented : -
Arbitration (Public Service) Act - Determination by the Arbitrator, &c. - No. 58 of 1927 - Postal Overseers’ Union of Australia.
Australian Commonwealth Shipping Board - Profit and Loss Account of Australian Commonwealth Line of Steamers for the year 1st April, 1926, to 31st March, 1927; Balance-sheet of Australian Commonwealth Line of Steamers as at 31st March, 1927: Profit and Loss Account of Cockatoo Island for the year 1st April, 1920, to 3lst March, 1927; Balancesheet of Cockatoo Island as at 31st March, 1927: Result of Working of Fleet for the year 1st April, 1926, to 31st March, 1927; and realisation of Assets (Surplus Tonnage) Account, 1st September, 1923, to 31st March, 1927.
Public Service Act - Appointments - Department of Parliamentary Reporting Staff - H. C. Behan and L. D. McDonnell. Works and Railways - G. H. Hallandal.
Commonwealth Shipping Act - Profit and Loss Account - Australian Commonwealth Shipping Board - for the year 1st April, 1920, to 31st March, 1927, and balancesheet as at 31st March, 1927; together with Auditor-General’s report thereon.
Defence Act - Regulations - Statutory Rules 1927, No. 120.
Seat of Government (Administration) Act - Notiee of intention to vary the plan of lay-out of the City of Canberra and its environs, dated 29th October, 1927.
Lands Acquisition Act - Land acquired at - Parafield, South Australia - for Defence purposes. Queanbeyan, Federal Territory - for Federal Capital purposes. Tuggeranong, Federal Territory - for Federal Capital purposes. Urayarra, New South Wales - for Federal Capital purposes.
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QUESTION
FEDERAL CAPITAL TERRITORY
ForestTrees.
Senator J B HAYES:
TASMANIA
asked the Minister representing the Minister for Home and Territories, upon notice -
- What is the total area planted with forest trees in the Federal Capital Territory?
- What is the approximate area planted with each individual species of such trees?
Senator Sir GEORGE PEARCE.The replies are as follow: -
- Approximately 1,485 acres.
- Pinus insignis, 1,370 acres; Cedrus deodara, 45 acres; Pinus canariensis, 5 acres; Pinus halepensis, 5 acres; Pinus pinea, 5 acres; Pinus ponderosa, 5 acres; Cedrus Atlantica, 5 acres; Pseudo-stuga Douglasie, 5 acres; Salix sacramenta, 5 acres; Salix coerulea, 5 acres; Populus deltoides, 5 acres; Populus fastigata, 5 acres; Populus pyramidalis, 6 acres; Populus aurea, 5 acres; Eucalyptus globules, 5 acres; Eucalyptus Maideni, . 5 acres.
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QUESTION
SUGAR CONSUMPTION AND PRICES
Senator THOMAS:
NEW SOUTH WALES · NAT
asked the Minister representing the Minister for Trade and Customs, upon notice -
- What is the annual consumption of sugar in Australia?
- What is the price per ton in Australia, and what is the price outside Australia?
- Are exporters of jams allowed a rebate on the sugar used?
- How many tons of jams are exported?
- How much is the rebate allowed?
Senator CRAWFORD:
Honorary Minister · QUEENSLAND · NAT
– The answers are as follow:-
- Approximately 330,000 tons.
- Australian wholesale prices - £306s. 8d, per ton net for . refined sugar for fruit processing; £3611s. 9d. per ton net for refined sugar for all other purposes; £32 10s. 6d. per ton for mill-white sugar for all purposes. Foreign wholesale prices. - Foreign prices vary according to rates of duty in the various countries. The following wholesale prices for refined sugar existed at the end of September, 1927: - United Kingdom, £30 5s. per ton; Canada, £30 per ton; United States of America, £28 per ton.
- Yes.
- 1,081 tons for year ended 30th June, 1927.
- £1215s. rebate as from 1st November, 1927, makingthe net price of sugar to the manufacturer of jam for export £1711s. 8d. per ton.
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QUESTION
PERTH TO KALGOORLIE RAILWAY
Senator THOMAS:
NEW SOUTH WALES · NAT
asked the Minister representing the Minister for Works and Railways,upon notice -
Are negotiations proceeding between the Federal Government and the Western Austra
Han Government regarding the conversion of the railway gauge between Kalgoorlie and Perth from 3 ft. 0 in. to 4 ft. Si in.? If so, what is the nature of such negotiations?
Senator CRAWFORD:
NAT
– Negotiations are not taking place at present, but the Government’s policy is unification of gauge, and, when practicable, steps will be taken to secure a line of standard gauge from Kalgoorlie to Perth.
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QUESTION
NATIONAL INSURANCE
Dependent Widows and Children
Senator OGDEN:
TASMANIA
asked the Minister representing the Prime Minister upon notice -
- Is it a fact that there arc in the Commonwealth 20,000 widows with. 30,000 children dependent upon them, definitely in need of assistance ?
- If so, is it intended to make provision in the National Insurance Bill for pensions to widows?
Senator Sir GEORGE PEARCE.The answers are as follow : -
- Definite information as to the number of widows with dependent children in need pf assistance is not available. In New South Wales the number of widows receiving pensions is 5,827 with 1.2.487 dependent children. On a population basis, the corresponding numbers for the Commonwealth would be approximately 15,000 widows with 32,500 dependent children.
- The policy of the Government will be announced when the National Insurance Bill is introduced.
page 1055
ORDER OF BUSINESS
Senator Sir GEORGE PEARCE:
Vice-President of the Executive Council · Western Australia · NAT
[3.15]. - I move - ‘
That all other business be postponed until after the motion on the notice paper in the name of Senator Kingsmill “ That the report of the’ Joint Committee of Public Accounts on the Commonwealth Government shipping activities, including Cockatoo Island dockyard, presented to the Senate on 28th September, 1927 be printed” has been disposed of.
As honorable senators are aware a discussion on this important question is at present proceeding in another place, and it is desirable that the debate in both chambers should take place concurrently so that members of both Houses shall ha ve an opportunity to express their opinions on this important matter of policy at the same time.
Senator NEEDHAM:
Western Australia
– I cannot allow this motion to pass without voicing a strong protest. In reply to a question I submitted a few moments ago as to why this chamber had not followed the constitutional practice and adjourned when a certain motion had been moved in another place the Minister (Senator Pearce) stated that it was not really a motion of want of confidence as the mover had to secure the suspension of the Standing Orders before he could submit it. As the right honorable gentleman has been a member of the Senate since its inception, and has also had lengthy ministerial experience, he must know that his answer to my question was weak, and one which he would not have given had he been free to make his own reply. The fact that the motion of the Leader of the Opposition (Mr. Charlton) in another chamber was treated as urgent by being given precedence over all other business, places it in the category of a motion of want of confidence. Both May and Todd emphasize that such motions are always regarded by Governments as votes of censure. The motion in another place has been so regarded and therefore the Senate should follow the invariable practice and adjourn pending its decision.
Senator Ogden:
– Nonsense! Let us get on with our work.
Senator NEEDHAM:
– It is twenty years since I first became associated with the Senate, and on every occasion during that period on which a motion- of censure has been moved in another place the Senate has adjourned immediately. I distinctly remember the late Senator E. D. Millen moving that the Senate should adjourn because a vote of censure had been moved in another place. There cannot be much wrong with a practice which has been followed for 27 years. Why should we depart from it in this instance? The Leader of the Senate said that a matter of such importance as the disposal of the Australian Commonwealth Line of Steamers should ‘ be discussed simultaneously in both Houses. That the disposal of the Line is a question of importance cannot be gainsaid; but I point out to the right honorable gentleman that since Parliament met on the 28th September last there .have been numerous opportunities for both branches of the legislature to discuss- the report of the Public Accounts Committee in relation to the Line. Rather than that this motion should be agreed to; I should prefer that we follow the business paper. Senator Kingsmill’s motion may well stand over until private members’ business comes before us in the ordinary way.
Senator FINDLEY:
Victoria
.- I cannot allow this motion to pass without entering my vigorous protest against the proposed departure from the established practice of the Senate. During my many years’ experience as a senator I cannot recollect an instance in which the Senate has not adjourned when a motion of censure has been launched in another place.
Senator McLachlan:
– Why should we adjourn ?
Senator FINDLEY:
– The fate of the Government is at stake. That, surely, is a matter of importance to Ministers in this chamber. No one can predict the result of the division on the motion now before another place, and, in the circumstance, it would be foolish for the Government to proceed with the discussion of its business in this Chamber. Should the Government be defeated, as I hope it will be, the action of the Senate in continuing as usual would rightly be regarded as foolish. The motion in the name of Senator Kingsmill has been on the notice-paper of the Senate for some time, under the heading “Private Business.” Now the Government wants’ to make it more important than its own business.
Senator THOMAS:
NEW SOUTH WALES · NAT
– Does the honorable senator wish to prevent discussionon Senator Kingsmill’s motion?
Senator FINDLEY:
– The orders of the day, Government business, include the Commonwealth Bank (Savings Bank) Bill. Commonwealth Housing Bill, Crimes Bill, , Forestry Bureau Bill, and the discussion on the Estimates and Budget. So far as the Senate is concerned, those orders of the day are of more importance than is the motion standing in the name of Senator Kingsmill. In another place they would be of minor importance, because of the censure motion now being discussed there. Should the Senate negative the motion before it, the discussion on Senator Kingsmill’s motion could take place at a later date. So far as my knowledge goes, the action of the Leader of the Senate is unprecedented. For the Senate to discuss a subject merely because a censure motion has been moved in another place, is to make a farce of parliamentary procedure.
Senator McLachlan:
– Does the honorable senator want the Senate to stop work altogether ?
Senator FINDLEY:
– No ; I came here prepared in the event of the Senate not adjourning because of a censure motion in another place, to discuss the items appearing on the business paper. I ask Senator Kingsmill who has had a long experience as a parliamentarian, and is an authority on constitutional practice, whether, during his parliamentary career he has even heard of such a motion as that now before us having been submitted. If the discussion on the motion of Senator Kingsmill is a matter of urgency, why did not the Government give the Senate an opportunity to proceed with it weeks ago? We should not have been in this position to-day but for certain disclosures as to what had transpired at a meeting, in camera, of Government supporters. It would appear that a member of one party or the other immediately informed a pressman of what had happened, with the result that the debate on Senator Kingsmill’s motion which, a week or two ago was not regarded as urgent, is now considered of the first importance. It is understood that members of another place will discuss until the early hours of the morning, a motion of want of confidence, based on the intention of the Government to dispose of the Line, and honorable senators are invited to proceed now with the motion in the name of Senator Kingsmill. The procedure is unprecedented. Members from the different States came here to-day expecting that, if the Senate did not follow the usual practice and adjourn, they would continue the debate on the Commonwealth Bank Savings Bank Bill and deal with other Government business on the notice-paper. I am aware, of course, that the Senate does not make or unmake Ministries; but I submit that if it is not to adjourn until the motion of want of confidence in another place is disposed of, it should not allow private members’ business to take precedence over the Government business.
Question put. The Senate divided.
AYES: 22
NOES: 5
Majority . . . . 17
AYES
NOES
Question resolved in the affirmative.
page 1057
COMMONWEALTH GOVERNMENT SHIPPING ACTIVITIES
Report of Public Accounts Committee
Debate resumed from 13th October (vide page 493) on motion by Senator Kingsmill -
That the report of the Joint Committee of Public Accounts on the Commonwealth Government shipping activities, including Cockatoo Island Dockyard, presented to the Senate on 28th September, 1927, be printed.
Senator NEEDHAM:
Western Australia
– Although so far we have had no declaration of the Government’s intentions with regard to the Australian Commonwealth Shipping Line, it is safe to assume that it intends to dispose of the ships as soon as possible. In October of last year I noticed in the public press a statement that the Ministry had decided to sell the Line. I feel sure that in this action it was prompted by certain financial interests that support the Government. At that time the accounts of the Line were being investigated by the Public Accounts Committee. The committee has carried out an exhaustive inquiry, and we now have its report before us. In February, 1925, the Prime Minister (Mr. Bruce) announced that the Government, after due consideration, had decided to call tenders for the purchase of the whole fleet. The words “ due consideration “ are very useful; like charity, they cover a multitude of sins. The due consideration in this case was the pressure brought to bear on members of the Cabinet by the financial men who supply the money for the party machine. We have been told time and time again that this party, of which I have the honour to be a member, must bow to the will of the Trades Hall, that we are governed by outside influences, and that we are subject to castigation if we do not do as we are told. Our history, however, proves just the opposite. When in office we carry out our policy as submitted to the people at election time. I am not wrong in stating that continuous and insistent pressure has been brought to bear upon the Cabinet to sell the vessels. When discussing the sale of the ships in 1925, Mr. Bruce said that certain aspects were considered by the Government, and the only practical alternatives were : First, to retain the fleet, but transfer it to the British Register, and have it manned under British conditions. Mr. Bruce, on that occasion, stated definitely that the Government wasnot prepared to transfer the fleet to the British Register. I will quote his exact words -
The Government is not prepared to recommend to Parliament the transfer to the British Register, and the manning of the Line under British conditions.
That statement was made two years ago, and I commend Mr. Bruce for the attitude he took up on that occasion. We all know only too well the conditions under which British seamen work and live, and have their being. We know the miserable pay they receive, and the extraordinarily bad conditions of their employment. The British seaman is in receipt of £8 a month, while the Australian seaman receives just double that amount, £16 a month. The conditions under which Australian seamen work are vastly better than those prevailing on British ships. I notice now, however, as recorded in The Age of 21st of October of this year, that the Government has changed its mind. It is said that the Government will agree to the steamers being placed on the British Register: If the Government has changed front on the attitude taken up by the Prime Minister in 1925, and is now prepared to allow the ships to go on the British Register, it stands condemned in the eyes of the Australian people. I fully realize that the report may have no foundation in fact, and I sincerely hope it has not. I am satisfied that the Government would be entirely wrong to dispose of the ships, and hand the seamen over to the tender mercies of the British Register. The second alternative mentioned by Mr. Bruce in 1925 was the sale of the Line unconditionally. Mr. Bruce said that he was not prepared to recommend to Parliament the sale of the Line outright without any conditions. I am emphasizing the position regarding the sale of the Line so that honorable senators will be familiar with every move leading up to the present situation. The third alternative was the sale of the Line under conditions which would ensure its retention in the Australian trade, with a guaranteed regular and efficient service, and at the same time, safeguard Australian shippers against all risks of exploitation by any shipping ring or combine. It is interesting to note what Mr. Bruce said regarding this proposal. His words were -
The Government proposes, however, to invite tenders from prospective purchasers for the Line as a going concern, but subject to conditions that the purchaser will maintain regular and efficient service between Australia, Great Britain and the continent; will not increase freights or passage rates, save subject to Stipulated conditions which will be laid down, and will not enter into any shipping ring or combine. … If such arrangements can be made, the primary function for which the Commonwealth Line was created, that of protecting the Australian shipper, will be effected.
I emphasize the statement of the Prime Minister that if such an arrangement could be made the primary function for which, the Line, was created, that of protecting the Australian shipper, would he effected. That statement is worthy of analysis, and it contains two points to which I particularly desire to draw attention. The first point is in the concluding paragraph, where he states that the primary function for which the Line was created was to protect the Australian shipper.. I condemn the present proposal of the Government, because I believe that the interests of Australian producers and shippers will suffer if the Line is disposed of. That is one of the main reasons why the Labour party is strenuously objecting in the Senate, in the Parliament as a whole, and outside Parliament, to the sale of the Commonwealth ships. I ask the Leader of the Senate, is it not just as important to protect the Australian shipper and the Australian producer to-day as it was when these ships were purchased. The need to protect those interests is as insistent now as it was when the Line was established. The second point is in reference to freights and passages. The Prime Minister’s statement clearly indicates that the Government realized the danger of an increase in freights and fares if the Australian Commonwealth Line went out of business, and to-day every member of the Cabinet knows well that as soon as these vessels are sold the door will be open to such an increase. That danger not only exists; it is imminent. Viscount Inchcape, the gentleman at the head of the great Shipping Combine that has spread its tentacles over the seven seas, when addressing the annual meeting of the Peninsular and Oriental Steamship Company on the 8th December, 1926, said -
Unless prices come down rates of passage money …. will have to go up.
That is the declaration of the man who is at the head of the shipping combine and who, a few months after the Commonwealth ships are sold, will add them to the huge concern which he has been controlling for so many years. What applies to passage money applies equally to freights. It is all very well to say that in any sale that takes place the Australian shippers of wool, wheat, and meat will be- protected. We have yet to learn how that protection will be afforded. The Government may stimulate certain conditions in the contract of sale, but those conditions will not last. Means will be found to set them aside as soon as the vessels pass out of the control of the Commonwealth Government, and then the Australian shipper of produce will be at the mercy of the Inchcape Shipping Combine. If the Government does sell the vessels under certain conditions in regard to freight charges, the number of vessels to be employed and so on, and even if they are placed on the British register, what will happen? All Australians at present employed by the Line will be replaced. No one would expect them to work for £8 per month. There is nothing to prevent the Shipping Combine acquiring control of our steamers through a dummy. We know perfectly well that anyone who attempted to buy the Line and run it against the Shipping Combine would have a particularly bad time. The Combine will stop at nothing. At this juncture it might be interesting to refer to some of the methods adopted by it. In this connexion I shall refer to the shipping freight war now being waged on the South African route. Competition has been caused by the formation of the British Continental and South African Line trading between Britain, South Africa, and the Continent. The London Daily. Mail, commenting on the matter recently, said that what might prove one of the bitterest and most intensive struggles entered into by competitive British companies commenced in June. The new company offered substantially reduced rates for certain classes of cargo; but its formation not meeting with the wishes of the Combine, the other lines reduced their freights on the average by 50 per cent., with even larger reductions for some cargoes. For instance, the freight on iron standards, in which there is a big trade in South Africa, was reduced from 27s. 6d. to 5s. a ton. Not content with this, the Conference Line decided to grant a discount of 15 per cent, to wool shippers. This discount, or rebate, of course, was only to remain in existence until the new line had closed down ; but the Union Government, realizing the situation, at once told the Union Castle Line, which is the chief of the Conference steamers, and has the Government mail contract, that unless it immediately withdrew the rebate system it would be given twelve months’ notice of the cancellation of the mail contract. The same rebate system was worked against the Australian Commonwealth Line some time ago; but our vessels came through, despite all opposition. In view of the attitude of the South African Government, the Union Castle Steamship Company has now agreed to withdraw its agreement with the wool shippers, under which special discounts were offered conditional upon shippers binding themselves not to ship with the new1 company. . This reference serves to illustrate the length to which the Shipping Combine is prepared to go in order to destroy competition. It wants the field to itself so that it may charge whatever rates it chooses to impose. Since it has been in existence the Australian Commonwealth Shipping Line has been a source of irritation to the Shipping Combine. The latter has never ceased its efforts to prevail upon the Commonwealth Government to sell its vessels and thus give the Combine a free hand. If our steamers are taken over by a dummy, even if the purchaser is restricted in regard to the freights he may impose, there will be nothing to prevent the Combine from raising freights on its other vessels to whatever figures it chooses in order to counterbalance any loss sustained on the ships purchased from the Commonwealth Government. The Minister may try to counter that argument by asking why the Combine does not adopt that course now. My reply is that it clare not do so, because of the presence of the Commonwealth Steamers. The members of the Public Accounts Committee have had evidence of a confidential nature proving that past attempts on the part of the Conference to increase freights were frustrated by the Australian Commonwealth Line. The position is the same to-day. The longer we keep our own vessels in the service, the longer we shall keep the Shipping Combine at bay. As a member of the Public Accounts Committee in the earlier stages of the inquiry into the Commonwealth Government’s shipping activities, I was present when those confidential communications were made, and. I know exactly the fight that the Australian Commonwealth- Line had to put up against ‘ increases in freight. But once we let the Shipping Combine know that there is no danger of any extension of our Line or that there is a prospect of the vessels being sold, we shall be at its tender mercies. One phase of this question that is worthy of consideration is the benefit that the Australian Commonwealth Line has conferred upon the primary and secondary industries of Australia. Ours is essentially a primary producing country. Every assistance must be given to the man on the land, and every effort made to increase production, because1 more production means more wealth. But production is handicapped unless the producer gets his implements as cheaply as possible and markets his goods as cheaply as possible. One of Australia’s greatest problems is cheap transport. Over and over again the Government has said that quick and cheap transport is one of our greatest needs and is essential to our rapid development. Yet it is prepared to hand over to private enterprise a line of steamers that has proved to be of vast assistance to us by providing quick and cheap transport for our produce to the markets of the world. As I have said before, whoever buys our steamers cannot compete with the Shipping Combine. Of our exportable products, 95 per cent, are primary products, but our secondary industries will likewise be severely handicapped if the Australian Commonwealth Line is sold. They are dependent upon the success of our primary industries. This Parliament has not hesitated to place a protective tariff on imported goods in order to safeguard the secondary industries of the country. I have no fault to find with that policy. The whole community pays to establish and keep them in existence by means of tariff duties and bounties. I have no desire to enter into a fiscal debate, but I am merely indicating that this is the accepted policy of Australia. All these bounties are paid to private individuals. It will thus be seen that here we have a Government which says that because a government enterprise is not showing a profit - although it is indirectly saving the people of Australia millions of pounds, it must be sold to private enterprise, while at the same time it is assisting with the taxpayers’ money private enterprise to carry on its business. In other words the Government will not help something that benefits the people as a whole, but it will uphold the policy of granting an advantage to the few. Up to the 30th June, 1927, the Government paid away over £6,500,000 in bounties. Some of . the amounts paid away were: - On wire netting, £375,000; on fencing wire, £342,000; on galvanized sheet, or plate iron, £215,000; and on pig iron, £186,000. These amounts have been paid by the taxpayers because it is in the interests of Australia that these industries should he established and maintained. Certain primary industries have also received assistance by means of other bounties. Secondary industries have benefited as well as by way of bounties. Owing to the present Customs duties, farmers have to pay higher prices for their agricultural implements. Primary production has in many instances been made profitable owing to the payment of bounties, but our wheat and wool industries have not had such assistance. Huge sums have also been spent in developing the sugar industry, in which the honorary minister (Senator Crawford) is interested. This industry has been spoon-fed for years in the interests of the shareholders of the Colonial Sugar Refining Company. They have obtained most of the benefit from this governmental assistance, as we export very little sugar, and pay high prices for the quantity consumed in Australia. If private enterprise is subsidized through the tariff and by way of bounties, why should not the Australian Commonwealth Line of Steamers, which is conducting its operations in the interest of the whole of the Australian people, receive similar consideration? It has been said that the Government intend to sell the Line because the ships have not been paying interest on the capital cost. Does the Government intend to dispose of the railways under its control because. with the exception of the east- west line, they are not paying interest on the capital cost? Will the State governments dispose of their railways, many of which are not paying? The honorable member for Wentworth (Mr. Marks), speaking in another place on the 6th July, 1923, said -
Notwithstanding the losses that have been made, I think that in a great democratic country like Australia the Government should have within its control the means of transport, especially shipping.
That statement, made by a prominent supporter of the Government in 1923, is as true to-day as it was then. We control our railways, and in most instances our tramways and other means of communication, such as telegraphs and telephones, and partly control aerial services, and it is imperative in the national interest that we should have a direct interest in and control over overseas transport services. It is true that the Federal Capital Commission recently announced its intention of disposing of the. bus transport service within the Territory, which, as I said at the time, was a retrograde step, and contrary to the sentiments of the Australian people. We have not been officially informed, as the Minister (Senator Pearce) said, that the Government intend to sell the ships of the Australian Commonwealth Line; but I have no doubt that that is its intention, as it has previously shown that it is anxious to hand over everything to private enterprise. This Government was instrumental in disposing of the Commonwealth woollen mills when they were showing a handsome profit; it has sabotaged the Commonwealth Bank, with the intention of eventually closing its doors. In perusing the records to obtain the opinions of honorable senators concerning the activities of the Line, I find that you, Mr. President, speaking on the 19th July, 1923, said-
It has been suggested that the Government are appointing a board to control the Commonwealth Line with the intention of eventually disposing of the fleet. I am sure that the Government has no such intention. The members of the Ministry are fully alive to the wishes of the people in this regard. The people of Australia are standing solidly behind this enterprise.
I do not know, sir, what opinion you hold, to-day, or what action you will take, if you should record your vote on this question. If all the facts and figures are fairly placed before the people of Australia the Government will be faced with a difficult situation if it gives effect to its intention, as the Line has been a godsend to the people, especially to the primary producers. It has been the means of benefiting the man on the land by keeping down the freights between Australia and Great Britain, and also between Great Britain and Australia. Speaking in Sydney on the 22nd October, 1924, Mr. Larkin, chairman of the Commonwealth Shipping Board, said -
The Commonwealth Line supplies a vital national need; a fact which is appreciated by all good Australians.
It is true that the Line has supplied a national need, and it is only those who are not true Australians who will not admit that it has been a benefit to the Commonwealth. According to an interim report presented to Parliament in May of this year, I find that the members of the Public Accounts Committee were then unanimously in favour of the retention of the Line. This report states that the committee commenced its inquiries in May, 1926, and examined the members of the board then in Australia, as well as the principle officers of the Australian Commonwealth Line of . Steamers, and several witnesses able to give evidence concerning its operations. The report goes on to say -
In view, however, of emphatic evidence placed before the committee that, owing to the uncertainty which exists concerning- the continuance of the Australian Commonwealth Line of Steamers, its business has been adversely affected, the committee has deemed it desirable to submit to Parliament, prior to the approaching recess, this interim report. To arrive at a decision apart from the question of Government policy as to whether the Commonwealth Government Line should be. continued there must be considered what benefits have accrued to the country by the establishment of the Line, and whether such benefits have outweighed any financial loss incurred as a result of its trading operations. The evidence so far placed before the committee indicates that not only has the Commonwealth Line been directly responsible for actual reductions in freights, but that the presence of the Line has exerted a ma.teiia.1 restraining influence against proposed increases. Whilst it is difficult, in fact, almost impossible, owing to the many factors to be considered, to indicate in- figures thi; actual gain to Australia by such action, it appears to the committee, from the evidence already heard, that the shippers mid primary producers of Australia have derived much benefit from the establishment of the Commonwealth Line of Steamers. The committee, therefore, recommends that, in the interests of Australia, the Line be continued.
I should like to know what further evidence, if any, was submitted to the committee, the personnel of which was only slightly changed, to induce it to submit a majority report such as we have now before us. Considering the assistance the Line has been to the primary producers, it would be interesting to know the attitude to be adopted by the members of the Country party in regard to the sale of the ships. I understand it is the policy of that party not only that the Line should be retained, but that its operations should be extended. On the 10th July, 1923, the honorable member for Echuca (Mr. Hill), who .is now Minister for “Works and Railways, said -
The’ platform of the Country party declares in favour of the extension of the Commonwealth Line by the inclusion of large and fast steamers with plentiful insulated space for the purpose of carrying perishable products to the markets of the world at reasonable rates. The main reason why we have supported this Line is because we believe that in days gone by we have been exploited, and probably will be exploited again, by the Shipping Combine. lt is the desire of the primary producers to foster the Line a£ they believe it operates in their interests by keeping rates at a reasonable level.
Mr. Hill is now a member of a government which proposes to sell the ships which, he admits, have been of great assistance to primary producers. How can he reconcile his statement in 1923 with the action which we know he will take on this important question, and also with the policy of the party of which he is a member ? He stated definitely that it was the desire of the primary producers to foster the line. I should like to know if the retention of the Australian Commonwealth Line of Steamers is still a plank of the Country party’s platform. If it is, why do not the members of that party oppose the sale? They are inert and voiceless, and have now been swallowed by the Nationalist party. In 1923 Mr. Hill said that he, and incidentally the members of his party, were afraid of being exploited by the Combine. I should like to> ask the Minister for Works and Railways, and the members of his party, what has. happened to allay the fear which he expressed in 1923.
Senator Ogden:
– He is now a member of the caucus.
Senator NEEDHAM:
– Yes , and he has no>w to vote against his principles, since- the Shipping Combine is just as relentless to-day as it was then. The members of the Country party in this Parliament may overlook their obligation, but the electors who are responsible for their political existence will not forget the fact that they are opposing an important plank of their party platform. During the war period the then Prime Minister (Mr. Hughes) found it expedient to purchase several vessels. Had he not done so, it is impossible to visualize the position in which Australia would have been placed. The primary producers would have been at the mercy of the Inchcape Combine, and would have received no quarter.
Senator Andrew:
– Why is the honorable senator so solicitous for the primary producer ?
Senator NEEDHAM:
– Australia is essentially a primary producing country. The Line which has served our primary producers so well should be retained.
Senator Andrew:
– The ships belonging to the Line do not carry wheat.
Senator NEEDHAM:
– Had it not been for the Line, the freight on wheat would have been higher. You, Mr. President, said in 1923 that but for the Australian Commonwealth Line of Steamers much of our produce would have been left to rot. That cannot be gainsaid. I shall now deal with the profits of the shipping companies in order to show how they have exploited the people, especially during the war period. Speaking in the House of Commons, in 1917, Mr. Bonar Law said that he had invested £8,110 in fifteen different shipping companies under the management of seven directorates, and that in 1915 he received £3,624 in dividends, and £3,847 in 1916. A 10 per cent, dividend would have returned him £811. The dividends paid to him were at the rate of 45 per cent, on the capital invested by him, and that after paying excess profits tax. He said that he had invested £200 in one steamer which was lost, and that as his share of its value he received a cheque for £1,000. If given the opportunity, the Combine will do in Australia what it has done in other parts of the world. The Shipping Combine headed by Lord Inchcape, believes, not in competition, but in combination. One of the greatest curses of civilization is the exploitation of the many for the benefit of the few. In that respect there is no greater offender than the Shipping Combine. The members of the Public Accounts Committee know that the Conference Lines control 90 per cent, of the freight between England and Australia. Yet the majority of its members recommend the disposal of the Line. They are willing to allow Australia to get into the grip of the Combine. Ex-Senator DrakeBrockman, who was an enthusiastic supporter of the Government’s policy in connexion with oil supplies, said that the American oil companies should be told that if they intended to exploit the people of Australia, the whole of the’ resources of Australia would, be used to thwart them. Why should not the resources of Australia he used to thwart the Shipping Combine, which, if given the chance, would exploit the people of Australia? Ex-Senator Drake-Brockman also said -
The Nationalist party stands for private enterprise, but always with the qualification that no private enterprise shall be allowed to establish a monopoly for the purpose of exploiting the people of Australia.
With the latter part of that statement I agree. The Government now has the opportunity to protect the people of Australia. While, from a strictly commercial point of view, the Australian Commonwealth Line of Steamers has not been .a success, it has been the means of saving millions of pounds to the people of Australia. The Government and its supporters make a great deal of the losses sustained by the Line, but they carefully refrain from mentioning the profits made by it in the early years of its history. Nor do they take into consideration the benefits, direct and indirect, that, it has conferred on the community. In 1923 the Prime Minister said that it was impossible accurately to estimate the value of the Line to Australia. He emphasized the losses it had incurred, but refrained from mentioning that they were more than counterbalanced by the saving in freight for which the Line had been responsible.. Much could be said about the way in which the Line has been managed. It is well known that the board of directors has not been a happy family. Evidence submitted to the Public Accounts Committee showed clearly that the overhead expenses of the Line were excessive. Not only is there in Sydney a board of three directors, whose salaries amount to £9,500 per annum, but there is also a Sydney manager whose salary is £2,000 a year. In London, also, there is a manager drawing a similar salary, as well as branch managers at other ports. The evidence submitted to the committee showed that there had been extravagance in administration both in London and in Sydney. To manage seven vessels the the board has a staff capable of running a huge fleet. Since the Line was established powerful influences have been at work to bring about its downfall. It has been subjected to adverse criticism in the press, while, during the last three or four years, the uncertainty as to its future has militated against its success. The Government’s indefiniteness has reacted on the people. In the absence of definite statements as to the continuance or otherwise of the Line, shippers have been afraid to forward cargoes by its vessels for fear of retaliation later by the Combine. The pernicious rebate system also acted detrimentally on the Line. In the majority report of the Public Accounts Committee it is recommended that the Line should be transferred to a company which should be guaranteed Government support in the direction of mail contracts, carriage of goods for Government requirements, conveyance of immigrants, and so on. Why cannot that assistance be given to the Line now, without handing it over to a private company? When taken over by the Line, many of the vessels were already old. During and immediately after the war they were run backwards and forwards and only allowed time to load. The ex-enemy vessels were in splendid order when taken over by the Line; but the necessities of the time required that they should be run almost continuously, with the result that necessary repairs were not effected at a time when they could have been made at a reasonable cost. Some of the vessels built during the war period were unsuitable for overseas trade. In view of the way in which the Line has been handicapped from its establishment, it is surprising that its losses have not been greater than they are. According to the then Prime Minister (Mr. Hughes), the accumulated profits on theLine to 30th June, 1921, including the ex-enemy vessels, amounted to £7,784,582. It would be interesting to know what amount of the profits earned by the Line has been paid into revenue. Much has been said about the capital value of the vessels belonging to the Line having been written down from £14,000,000 to £4,750,000; but no publicity is given to the fact that the profits made in the early years of the Line almost compensated for that loss. During the time that the Line has been in existence several reductions in freight, which would not have been made but for the competition of the Line, have been made. Since 1918 the following reductions in freight between England and Australia have taken place: -
[Extension of time granted.]
Senator Chapman:
– The honorable senator is quoting war time freights against present-day charges.
Senator NEEDHAM:
– I am making a comparison with the rates ruling in 1918.
Senator Payne:
– In 1918 freight charges were at their peak.
Senator NEEDHAM:
– The honorable senator will have his opportunity to disprove my figures if he can. The outstanding fact is that but for the existence of tha Line, freights would not have been reduced. On the contrary; there would have been a substantial increase. In nearly every instance freight has been reduced by 50 per cent. The freights on general cargo have dropped from 130s. a ton in 1918, to 63s. a ton, a reduction of 67s. a ton. Will any honorable senator say that if the Australian shipping trade had been in the hands of the Inchcape Combine, those reductions would have taken place. I turn now to a statement made by Mr. Brennan, the manager of the Melbourne branch of the Line, as reported in the Melbourne Herald on the 30th October, 1927. Itis as follows-
In March, 1920, it was proposed to increase United Kingdom rates owing to the high price of bunker coal in England, but as our Line would not agree, the proposal was abandoned. Next month,in April, 1920, the North Atlantic lines increased their rates by 25 per cent. on rough cargo, and 50 per cent. on fine goods. South African lines increased rates by 10s. per ton.
That clearly substantiates my contention that the existence of the Line has been responsible for a reduction in, and stabilization of, freight charges. It is interesting also to refresh one’s memory as to certain statements made by honorable gentlemen supporting the Government. In 1923 Senator Duncan said -
I am glad that the Government intends to continue the Line, not only because of the actual good that will result “to Australia, but because it will act as a deterrent upon the rapacity of shipping companies.
Senator Newlands, now President of the Senate, said on 19th July, 1923 -
The primary producer …. knows that if the . Commonwealth Line had not been in existence he would have been compelled to pay fabulous rates for the carriage of his produce to the markets of the world.
I have no doubt that those honorable gentlemen would express themselves in the same terms to-day if only they had the courage to do so. To show in more detailed form the reductions that have taken place, I shall quote rates and give dates on which reductions have been made since 1921. I take first the position with regard to wool, our staple product - ‘
These figures show a reduction of -£d. lb. on both greasy and scoured wool since 1921, or approximately 30 per cent, on greasy wool and 27 per cent, on scoured wool.
Senator Sir George Pearce:
– Does the honorable senator credit the Australian Commonwealth Line with being responsible for those reductions?
Senator NEEDHAM:
– Certainly. If the right honorable the Minister will read the evidence given before the Public Accounts Committee, he will find that the officials of the Line claim credit for those reductions.
Senator Sir George Pearce:
– The Line carries only 3 per cent, of Australian cargo.
Senator NEEDHAM:
– The figures which I am quoting demonstrate conclusively that the primary producers, and particularly our pastoralists, have benefited from the operations of the Line since 1921. I turn now to the reductions on freight in sheepskins -
These figures show a reduction of fd. per lb., or 54 per cent, since 1921. During the year 1925-26 we exported £3,570,000 worth of furred skins, including fox, kangaroo, oppossum, rabbit, and hare skins - which alone accounted for £2,880,000 of the total export- wallaby and other furred skins. The following shows how freights have come down : -
On these lines there has been a reduction of 1?d. per lb., or approximately 50 per cent. I come now to the freights on fellmonger’s products: -
These figures show a reduction of £5 9s. 3d. a ton, or approximately 60 per cent. : -
On this line there has been a reduction of Id. a lb., or 66 per cent. -
The reduction in this case has been £6 12s. 3d. a ton, or approximately 50 per cent. I now come to a matter that is of great importance to the meat-growers of Australia, namely, refrigerated cargo. Australia has a great oversea competitor in the Argentine. In 1924-25 we exported £6,150,000 worth of beef, lamb, mutton, rabbits, and pork preserved by cold process. In 1925-26 we exported £6,296,000 worth. The figures with , regard to freight on beef are : -
The reduction has been 1 3-16d. or approximately 60 per cent. As our exports of beef in 1924-25 preserved by cold process totalled in value £4,140,000, and in 1925-26 they amounted to £3,265,000, it will readily be seen that our meat growers have benefited greatly from freight reduction. There has been a similar reduction in freight on mutton, the figures being -
The reduction has been11/8d. a lb. or over 50 per cent. -
We have thus a reduction of1.1-16d. per lb., or approximately 46 per cent. We now come to an animal, very much in evidence in Australia, namely, the rabbit. To many people it is a great curse; nevertheless it is a source of considerable revenue to others. In 1925-26 our exports of rabbits and hares, preserved by cold process, amounted to £400,000, and for the same year our exports of rabbit and hare skins amounted to £2,880,000. The reductions in freights on rabbits have been as follows -
According to the first schedule of figures I quoted the rate is now 80s. I now come to another very important primary product, butter, on which the freight reductions have been as follows -
There has thus been a reduction of 2s. a box or 33 per cent. I would ask honorable members of the Country party to note the figures I have quoted, and to note also how the Australian Commonwealth Shipping Line has assisted the primary producers. We know that Australia exports a considerable quantity of butter each year. In 1924-25 our exports amounted in value to £10,000,000, and in 1925-26 they totalled £7,000,000. Therefore, the freight reductions amounting to 33 per cent. meant a very great saving to the producers. I should like to know how our friends opposite will be able to explain their attitude to their constituents if they agree to the disposal of the Line. The same thing applies to the fruit industry in connexion with which the following freight reductions have taken place -
This is a reduction of 4s. 6d., or over 55 per cent. Representatives of Tasmania are especially interested in this proposal. I wonder what they will say to their constituents in Tasmania if they agree to the selling of these ships which have done so much for their State. When Sir Victor Wilson was a member of the Senate in 1923, he said : -
An honorable senator from Tasmania said that the Commonwealth had not done anything for that State. I draw his attention to the fact that the intervention of the Commonwealth Shipping Line was responsible for a reduction in freight to Tasmania of 30s. a. ton.
And Senator Ogden interjected: -
It saved the fruit growers this year 6d. a case in freight on their fruit.
It is desirable to arrive at an estimate of what the Commonwealth Line has saved Australia in freight. In order to do that it is necessary to ascertain the tonnage trade between Australia and Great Britain. This can only be done by taking the whole of the value of the trade overseas, both export and import, and the value of the trade between Australia and Great Britain, and by getting the percentage of the trade with Great Britain, both imports and exports, as compared with the whole value of the overseas trade. Taking the years 1918-19 to 1925-26, this works out at an average of 45 per cent. That is to say, of the whole of our trade overseas, both exports and imports, 45 per cent. is with Great Britain. For the same period the entire cargoshipped and discharged was 84,338,000 tons, or an average of 10,542,000 tons per annum. If we take 45 per cent. of the average tonnage shipped and discharged we will arrive at an approximate figure regarding our trade with Britain, and that works out at 4,743,000 tons a year. Allowing an average of three-quarters of a million tons per year on account of this being a very rough estimate, it would leave our trade with Great Britain at an average of 4,000,000 tons a year, which, I think, is a fair basis on which to make our calculation. My calculations cover the period 1921-26 because in respect of that period I have the figures showing the date on which the reductions took place, and the amount of each reduction. I also take the general cargo as my basis for calculation purposes. The reductions on general cargo since 1921 have been as follow -
We have thus a reduction of 57s. a ton, or approximately 50 per cent. From the 13th April, 1921, the freight on general cargo was reduced by 15s. per ton, and that reduction remained in force until the 6th December, 1921, approximately three-quarters of a year. If we take three-quarters of the 4,000,000 tons, which represent the average trade per annum with Great Britain, and multiply it by 15s.,we will find that during those eight months the reduction in freight effected an approximate saving of £2,000,000. Working out the whole tonnage on the same basis, it will be found that since 1921 the reductions in freight that have taken place have been the means of saving £55,000,000. An honorable senator opposite laughs, but I challenge him to disprove these figures and calculations. The figures, I admit, are only approximate, but they convey a fair indication of the position.
Senator Payne:
– Does the honorable senator suggest that those reductions would not have taken place if the Australian Commonwealth Shipping Line had not been operating?
Senator NEEDHAM:
– There have been big reductions in freight while the Line has been operating, and I say that we would not have had those reductions if the Line had not been working. The money saved would have gone to swell the profits of the shipping companies in Great Britain. As it is, that money has remained in Australia, and the Australian people, especially the men on the land, are much better off.
Senator McLachlan:
– How does the honorable member suggest that it affects the man on the land very much?
Senator NEEDHAM:
– Because the man on the land is one of the biggest customers of the Line, and any material reduction in freight benefits him immediately. It is generally agreed that the Australian Commonwealth Line saved the man on the land from exploitation during the war and after. He has been exploited in the past, and the shipping companies would do the same again if they had the chance. If the honorable senator will look at the export trade figures he will find that the major portion of that trade is made up of primary produce. That is why shipping freights affect the man on the landso directly. The Government has made up its mind to sell the Line. The committee that inquired into the operations of the Line has presenteda majority report recommending that it be sold. I cannot understand why the committee should have changed its mind within a few months, because they previously arrived at a unanimous agreement that the Line should be retained. Two years ago the Government agreed to sell it under certain specific conditions. I believe it to be true that the Government is now nrepared to sell the Line under any conditions. Acting under pressure from outside, it has finally resolved to dispose of it. I do not think there is unanimity in the Cabinet regarding the proposed sale. I believe that one member of the Cabinet is opposed to selling the ships, and that honorable gentleman is not a thousand miles away from the building now.
Senator Findley:
– He was a few days ago.
SenatorNEEDHAM.- If he remains firm in his opposition to the sale of the ships he will find himself outside the Cabinet, and that is a thing which be would not like. I believe that the Government is wrong in its determination to sell these ships. It would be possible by efficient management to make the Line a paying concern. The Cockatoo Island dockyard should not be associated in any way with the Shipping Line. The Line should be separate altogether from the ship-building enterprise. If expenses were cut down, and a moderately sized staff employed, it would not be long before the Line would be a payingproposition.
Senator Sir GEORGE PEARCE:
Vice-President of the Executive Council · Western Australia · NAT
[5.0]. - It is rather gratifying to find the Opposition in this Chamber, by their tactics to-day, condemning the tactics of the Opposition in another Chamber. In another place they took action before the Government had announced its policy in regard to the Australian Commonwealth Snipping Line; but in this Chamber this afternoon, when the Government sought an opportunity to make a declaration of its policy, the Opposition tried to deprive it of that opportunity. The facts we have to present to the Senate are fairly clear. It is true that under the exceptional circumstances prevailing during the war, and immediately afterwards, the Australian Commonwealth Shipping Line was able to reap considerable profit. It is also true that as soon as those conditions passed away the Line commenced to lose money. It was not singular in that regard. When one turns to the Canada Year-Book for 1926, it would almost seem that in reading there the history of the Canadian Mercantile Shipping Line one was reading the history of the Australian Commonwealth Line. The Canada Year-Book states -
Additions were made to the fleet until the total fleet, as at 31st December, 1924, numbered 57 vessels, of a total dead weight tonnage of 353,450. Through sale or loss of vessels the fleet was reduced to 49 vessels, with a dead weight tonnage of 324,986 at December 31st, 1925. With regard to ownership and operation, a separate company was organized for each vessel, and the capital stock of each is owned by the Canadian Government Merchant Marine Limited. Under an operating agreement with each of these companies, the Canadian Government Merchant Marine Limited operates all the steamers, and keeps a separate account for each company. Promissory notes have been given to the Minister of
Finance and Receiver-General for the total capital stock of each vessel, with interest payable at5½ per cent. per annum. Early operations proved profitable, and a surplus of 1,004,233 dollars (without provision for interest charges) was shown for the year ended December 31st, 1920. Subsequent years, however, have shown the effects of the depression in the shipping industry, and annual deficits of 8,047,635 dollars, 9,649,479 dollars, 9,368,670 dollars. 8,836,609 dollars, and 7,667,512 dollars are shown for 1921, 1922, 1923, 1924, and 1925 respectively.
A few extracts from the report of the Public. Accounts Committee will show the position of the Commonwealth Line. On page 14 the total loss each year carried to balance-sheet is set out as follows -
Senator Kingsmill:
– To the last amount a sum £20,000 has tobe added.
Senator Sir GEORGE PEARCE.I understand that such is the case, but what is another £20,000 in a loss of over half a million ? On page 16 of the report of the committee we have the following
Total loss since inception of Board in operating steamers (including balances on pending and closed voyages, &c.), £1,882,960.
No government, no parliament, can afford to disregard the change in the outlook of this Line as represented By these figures. Of what use is it to quote what was said or thought in 1923 ? We had not these figures then, but we have them before us now, and this Parliament, which represents the taxpayers, cannot be blind to them. There is a table at the bottom of page18 of the report of the committee, relating to the domicile of the sea-going personnel, that came as a rude shock to those who thought that the Line of steamers we were subsidizing to the extent of over £500,000 a year was an Australian Line.
Senator THOMAS:
NEW SOUTH WALES · NAT
– That is only a matter of administration. The Government can alter that.
Senator Sir GEORGE PEARCE.I do not know that we can. This table shows that more than half the personnel of the fleet is domiciled in Great Britain, so that, so far as half the personnel is concerned, we are actually paying Australian rates of wages to seamen living in Britain. I approach now the main ground upon which the Leader of the Opposition has based his opposition to the proposal of the Government and the recommendation of the Public Accounts Committee that the Line he sold. tt is that the Line protects the producers of Australia. In this connexion we have to remember that there are only seven steamers in the Line. Honorable senators have only to look at the shipping in our ports to see what an insignificant factor the Australian Commonwealth Line of Steamers is in the export and import trade of Australia. We have also to ask ourselves, what are the products upon which we mostly depend? It is said that Australia is carried on the sheep’s back. That is very largely true. Australia’s prosperity depends mostly upon its production of wool and wheat, but the part that the Australian Commonwealth Line plays in the carriage of our wool and wheat to the other side of the world is almost negligible. The Line carries practically no wheat. Every one. knows that vessels with refrigerated cargo cannot afford the necessary time to load wheat, and I understand that this Line carries not more than 3 per cent, of the total wool clip of Australia. It is ridiculous to think that a line of steamers carrying even 5 per cent, of our wool would have any appreciable effect on the freight on wool. Consequently, whatever benefits our seven steamers may confer on the people of Australia in regard to the carriage of cargo must be confined to refrigerated cargo. The Leader of the Opposition says that the attitude of his party on this question is due to its anxiety to protect the primary producers of Australia. I am quite sure that the primary producers will welcome this belated announcement of the policy of Labour. If their opposition is due to such a desire, I have only to say that this is the first occasion on which they have displayed any anxiety to assist the producers to market their produce. A little while ago there was a strike in North Queensland, when the railway men of Queensland had occasion to settle some differences of opinion with the Railway Commissioners of the State. One would think that a party which professes to be so anxious to protect the pri mary producers would have seen that some regard was paid to their interests. One would not have expected them to choose for that dispute a time of the year when the sugar cane was ready to be cut and $ conveyed to the mills. That, however, was the time chosen for the dispute, and the strikers even denied the sugar farmers the right to cut their own crop and convey their cane to the mills. Did Senator Needham raise any protest? Did he address any protest to the unions who were carrying out this deliberate policy to ruin the sugar crop of Queensland? Did the Federal Labour party at any time express any disapproval of that policy ? No. They remained silent when that outrage - and that attempt to ruin the sugar producers of Queensland was nothing short of an outrage - was being perpetrated. Then, again, we had the British seamen’s strike. When did that happen? It took place just as our wheat was ready to go overseas, and the very ships which came here to take away our . wheat had to remain idle because of that strike. That, too, was a blackleg strike : it was not sanctioned by the union to which the men on strike belonged. On that occasion did Senator Needham and his party enter any protest against the strikers? No. On the contrary, they protested against the Government doing anything to stop the dispute. But for that they were absolutely silent, while the export trade upon which this country depends was jeopardized by the laying up of the ships that were to carry our produce away. In the face of all this, we hear the honorable senator saying that in the interests of the producers of Australia he and his friends are opposing the sale of the Australian Commonwealth Line. The Labour party think that the producers have very short memories. I can assure it that the producers have much longer memories than it appears to think they have. Senator Needham todav spoke as if all the shipping coming to Australia were under the control of Viscount Inchcape of the Conference Lines. He is either ignorant of the facts, or will not make them known. We have only to look at the shipping coming to Australia to find that it is not all British. Large numbers of Norwegian, Swedish, Dutch, German, and Italian vessels come here. and none of them are in the Combine. Furthermore, there are British steamers coming to Australia that are not in the Combine. Before the honorable senator speaks again I advise him to read his notes a second time, because to-day he actually quoted from them an extract from the London Daily Mail which proves that there is competition among British ship owners. In so doing he contradicted himself. He made reference to a freight war in the South African shipping trade, which, if it does not prove that all British shipping is not in the Combine, is absolutely meaningless. The honorable gentleman also quoted certain speeches made in 1923. He reminds us of the Bourbons, whose boast it was that they learnt nothing and forgot, nothing. In 1923 the Line had begun to be a serious financial burden. It was thought that this was probably due to the fact that it was under political management, and was not on a business basis. The Prime Minister (Mr. Bruce) was suspect because he had never disguised his opinion that the Commonwealth Government was not the proner authority to control a shipping line. Being suspect, he was, therefore, all the more circumspect in the way in which he dealt with these vessels. He determined that they should be given every chance. A bill was brought down which authorized the writing down of the value of the ships tremendously and placed them under the control of an independent board. Ships, each of which had just cost considerably over a million pounds to build, were handed over to the Shipping Board at a valuation of £600,000 each. Was that the attitude of a man who was trying to “sprag the wheel”? Was it not rather the attitude of a man who was prepared to give the Line a fair chance to succeed? The provisions of the bill itself show that the action taken to put the Australian Commonwealth Line of Steamers on a business basis was on the most generous lines.
Senator Kingsmill:
– It was put on a basis much better than a business basis.
Senator Sir GEORGE PEARCE.That is so; but even that did not serve to stop the losses or end the tale of dis aster. As a matter of fact that tale is worse to-day than it was in the period preceding 1923.
Senator THOMAS:
NEW SOUTH WALES · NAT
– Has the Line been managed on business lines?
Senator Sir GEORGE PEARCE.An independent board was established free from political influence.
Senator THOMAS:
NEW SOUTH WALES · NAT
– But was it a business arrangement for directors to be quarrelling among themselves?
Senator Sir GEORGE PEARCE.I take it that every board of directors is not a company of angels. 1 have heard of other boards of directors quarrelling amongst themselves. The Government, when it appointed the Shipping Board, was not to know that the members of it would quarrel among themselves.
Senator Kingsmill:
– What do shareholders usually do insuch circumstances ?
Senator THOMAS:
NEW SOUTH WALES · NAT
– Sack them.
Senator Sir GEORGE PEARCE.I have known shareholders to back the wrong horse after directors have quarrelled, but in this case the shareholders are now having a meeting and deciding what they are to do in the light of the experience they have gained.
Senator THOMAS:
NEW SOUTH WALES · NAT
– Instead of dismissing the directors, the Government proposes to smash the whole concern.
Senator Sir GEORGE PEARCE.As I read the report of the Public Accounts Committee there is no direct evidence of bad management on the part of the Shipping Board.
Senator Thompson:
– It had full ships all the time.
Senator Sir GEORGE PEARCE.That is so. I have seen no particular reference to bad management.
Senator THOMAS:
NEW SOUTH WALES · NAT
– The committee suggested that three men should be dismissed without notice.
Senator Sir GEORGE PEARCE.The committee suggested a new system of management. But there is nothing in the report to prove that at any time during this period, even if the board had been dismissed and the control of the Line had been entrusted to one manager, there would have been any appreciable diminution in the losses sustained. With the sad experience of four years of continuous and heavy losses we are entitled to review the position and to see whether it is wise in the interests of the taxpayers and producers of Australia to carry on as we have ‘been doing. I am not going to follow Senator Needham in his comments -on the Public Accounts Committee. The members of the committee are well qualified to defend themselves; but I want to call attention to Senator Needham’s. quotation of Mr. Bonar Law’s statement about the profits made by shipping companies. If I were a champion of our shipping Line, I should suggest that it would be better in this connexion to let sleeping dogs lie. As Senator Needham has already shown during the war years the Australian Commonwealth Line of Steamers made a profit of £7,000,000. How was that profit made? From whom did we make it?
Senator Needham:
– We made it for the people of the Commonwealth.
Senator Sir GEORGE PEARCE.The Line made this profit of £7,000,000 out of the exporters of Australian goods and out of the importers when the profiteers in Great Britain, mentioned by the honorable senator, were also making ‘ profits. The Leader of the Opposition quotes that as a feather in the cap of the Australian Commonwealth Shipping Line; but regards it as a black mark against British shipping companies. In these circumstances I suggest ‘ that the less he says about the profits of other shipping companies during the war period, the better. The honorable senator also assumes that if. the Australian Commonwealth Line of Steamers had not been in existence there would not have been a reduction in freights since 1918. That is mere assumption. What is there to justify such an assertion? It is not sufficient for the honorable senator to merely quote reductions in freights. That does not prove anything. Had I the time I could refer in detail to the freights between Great Britain and China; Great Britain and India; Great Britain and South Africa, and also between other places, and show that similar reductions had been made. Following the honorable senator’s line of reasoning I might argue that the reductions in freight between Great Britain and China were due to the Chinese rebellion, or something of that nature ; but my mere assertion would not prove anything. The fact is that there have been reductions in freight the world over. Is the Leader of the Opposition ignorant of the fact that since the termination of the war there has been a most tremendous depression in the shipping business that has resulted in keen competition, with a consequent cutting of freights? The honorable senator referred to the freight war in the South African trade. A similar position exists in relation to South erica and elsewhere. As I have said, there has been a reduction in freights the world over and it is pure assumption to say that the reduction in the rates between Great Britain and Australia has been due to the existence of the Australian Commonwealth Shipping Line. This is shown by the fact that in the matter of wheat and wool which ships of the Line do not handle to any appreciable extent; there has also been a reduction in freights. Why should the Conference Line have reduced its freights on wheat and wool in the absence of competition? These reductions have been made not because of the competition of ships under the control of the Commonwealth Government, but owing to world wide competition. . Senator Needham has not produced one shred of evidence that the Australian Commonwealth Line has been responsible for the reductions. The honorable senator should ask his industrious factotum to prepare a return showing what quantities of these particular commodities have been carried by the Line.
Senator Needham:
– I quoted the tonnages.
Senator Sir GEORGE PEARCE:
– The honorable senator did not give the quantities of rabbit skins, hides, sheep skins, tallow, and so on, carried by the ships of this Line.
Senator Needham:
– The figures I quoted are authoritative.
Senator Sir GEORGE PEARCE:
– Yes; but incomplete. The figures quoted showed that there had been a reduction in freights ; but in order to prove his case the honorable senator should also have produced other figures to show that the vessels of this Line were actually carrying these goods. He has not submitted these important figures and therefore his assertion is of little value. His figures do not prove anything, I do not intend to labour this question, but propose now to set out the Government’s policy in regard to the future of the Line. The Government accepts the recommendations of the Public Accounts Committee, and proposes to take steps to dispose of the Line subject to a reasonable price being obtained for it. We do not propose to sacrifice it or to give it away. The Line must be kept on an Empire register and the purchaser must undertake to maintain for at least ten years an equivalent service in the matter of passenger, cargo, and refrigerated space. The Government will give preference to any proposals to safeguard Australian exporters and importers in respect of freight and passenger rates. We shall invite those who submit offers to intimate what they have to offer in this regard. The Government will also give preference to any proposal on the lines set out in the committee’s report as to Australian capital being invested in any company taking over the Line.
Senator Ogden:
– Perhaps the Seamen’s Union will take it over.
Senator Sir GEORGE PEARCE.The honorable senator is certainly an optimist; the members of that union have done their hest to send it over to private enterprise. The Leader of the Opposition seems to think that the Government is committing a political crime in proposing to dispose of the Line. If that is so, it does not lie in the mouth of the members of the Labour party to accuse us. I remind the honorable senator that a State Labour Government tried an experiment with a State-owned Line of steamers. They sought by this means to provide an essential service between the mainland and Tasmania, which honorable senators representing Tasmania have always contended should be established. How long did they run that service? What did they do with that Line? They sold it after having made heavy losses. The Labour Government in Queensland invested large sums of money in the purchase of cattle stations and recently endeavoured to sell them.
Senator Thompson:
– But there were no buyers.
Senator Sir GEORGE PEARCE.No. What has become of the State fish shops, and State butchers’ shops, ‘ opened by Labour Governments in Queensland and Western Australia? The Governments in those States have found, as the result of experience, that although these schemes appear satisfactory in theory, they do not work out in practice. They have incurred tremendous losses and they realize that they have to reckon with the taxpayers of the country in endeavouring to justify those losses. The Commonwealth Government feels that it cannot’ justify the loss on the Australian Commonwealth Line. If it cuts this loss, however, it will have a certain amount of revenue which can be utilized for the benefit of shipping between the Commonwealth and the mother country - revenue which otherwise would have to be used in making up these losses. What could not the Government do with the £5”00,000 and more lost last year by the Line, towards fostering a better, cheaper,’ and more efficient service? Even with our mail subsidy, which is only £130,000 a year, we can make certain stipulations as to the regularity of the service and other matters. If we added to that amount another £200,000, we could secure far more benefits than we are obtaining from the Australian Commonwealth Line of Steamers, and still be £250,000 to the good. I therefore contend that the Government should dispose of the Line and cut its losses. Reverting to the position in South Africa, I remind honorable senators opposite that the Government of that dominion was able to bring the Union Castle Company to heel because it was in a position to say that unless the company did what it desired it would withdraw the mail contract. We also have that power .which, if necessary, we shall exercise. As the result of the avoidance of the losses on this Line we shall be in a position to see that the interests of the exporters and importers of Australia in the carrying trade are adequately safeguarded.
Senator FINDLEY:
Victoria
– In his effort to reply to the splendid case submitted by the Leader of the Opposition (Senator Needham), against the
Government’s proposal to sell the Australian Commonwealth Line of Steamers, the Leader of the Government in the Senate (Senator Pearce), said much which, like “ the flowers that bloom in the spring,” had” nothing to do with the case.” He commenced by saying that it would be informative to the primary producers of Australia to learn that the members of the Labour party were anxious to help them in every possible way. The members of the Labour party know that the progress and prosperityof the Commonwealth depends to a very large extent upon primary production.When Senator Pearce was associated with the Labour party a few years ago he pledged himself to the platform of that party, one of the planks of which was the establishment of a Commonwealth owned and controlled line of steamships.
Senator Ogden:
– But the Government has found this undertaking is a failure.
Senator FINDLEY:
– If that is the only argument that can be adduced to support the proposal of the Government to dispose of the Line, I shall endeavour later to show the inconsistency of such a policy, and ask why similar action has not been taken in connexion with other governmental activities which are not showing a profit. The Minister smiled when the Leader of the Opposition quoted certain figures which were somewhat staggering, but nevertheless correct.
Senator Payne:
– They are misleading.
Senator FINDLEY:
– They are not. They are irrefutable.
Senator Payne:
– I shall show later that some of them are grossly misleading.
Senator FINDLEY:
VICTORIA · ALP
– Early in the Great War a bountiful harvest had been garnered and was awaiting shipment at the principal ports throughout Australia. A Labour Government was then in power, and the right honorable member for North Sydney (Mr. Hughes), who was then the Leader of that Government, of which, by the way, Senator Pearce was also a member, pleaded with the British Government to make available ships to lift our surplus of wheat which was being destroyed by mice and rats.
Senator Payne:
– Ships were not then available.
Senator FINDLEY:
– The Prime Minister of the day took a very bold step, and acted with striking rapidity. He commissioned a shipping agent to purchase 30 ships. At first the companies connected with the Combine believed that the buyer was an agent for another company; when they discovered that the vessels were being bought for the Australian Government they refused to sell any more, with the result that, instead of 30 ships, Australia obtained only about half that number. From time to time additions were made to the fleet, which has been of great benefit, not only to our primary producers, but also to those who, because of the reasonable fares charged and the short time occupied by the vessels in the journey to England, have been able to visit the Old Country. If the Government is to be governed solely by considerations of finance, we should know wbere that policy is to begin and where it will end. Was the Leader of the Senate actuated by a desire for profits when he advocated the construction of the east-west railway? I was a member of the Cabinet which brought forward the proposal to construct that line. In Victoria public feeling against the building of that railway was so strong that members of Parliament who voted for it were threatened with political extinction. We knew then that the line would not pay for many years. It is true that it now covers working expenses; but it does not pay the whole of the. interest on its capital cost.
Senator Herbert Hays:
– The position in connexion with that railway is improving every year.
Senator FINDLEY:
– That is so ; but it still does not pay. The line was built to serve Australia, as was also the railway from Pine Creek to the Katherine River, which later was extended further south. Does any honorable senator believe that that railway will pay?
Senator Grant:
– When it does pay this Government, if in power, will sell it.
Senator FINDLEY:
– Does any honorable senator believe that the railway from Red Hill to Port Augusta will pay from the beginning, or that every post office erected in Australia represents a profit, regarded from a strictly commercial point of view? Honorable senators do not hesitate to recommend the erection of stately post offices and the provision of increased postal, telegraphic, and telephonic facilities in the districts represented by them irrespective of whether or not they will pay. When the Australian Commonwealth Line of Steamers was inaugurated it was hoped, also, to establish the ship-building industry in Australia. Men were sent abroad to be trained in ship-building, and, later, two excellent vessels were built in this country.
Senator Kingsmill:
– Evidently the honorable senator is easily satisfied.
Senator FINDLEY:
– The vessels built inAustralia were of excellent design and workmanship. But even if they were not equal to those built in ship-building yards which have been in existence for many years - which we do not admit - it should be remembered that very few industries from their commencement manufacture articles equal to those made in establishments which have existed for many years.
Senator Needham:
– The vessels referred to by the honorable senator were equal to anything built on the Clyde.
Senator FINDLEY:
– I am not versed in ship-building, although I take an interest in the ship-building industry as I do in all industries already established, or which could be established, in Australia. Senator Needham, however, is an authority on the subject - he was, as it were, reared in the ship-building atmosphere - and he expresses the opinion that the two ships built at Cockatoo Island were equal to any vessel built on the river Clyde. I am prepared to accept his opinion in preference to that of other honorable senators who have never seen a vessel in course of construction. Tasmanian senators, who know the disabilities under which their State suffers because of lack of communication with the rest of the world, should be ininterested in the subject under discussion. I remind them that in July last a conference to discuss the provision of adequate shipping facilities for Tasmania was held in Hobart at which the following representative gentlemen were present:
Captain Allan and Captain Wood, representing the Merchant Service Guild; Messrs. Thomas Walsh and Thomas Fleming, representing the seamen; Messrs. G. E. and A. Moate, representing the Federated Marine Stewards;. Mr. G. Page, representing the Federated. Marine Cooks; Messrs. A. E. Turley, and F. V. Bates, representing the Waterside Workers . The local organizations connected with the conference were, the Hobart Marine Board, represented by Messrs. L. F. Piesse and J. R. Johnston ; the Tasmanian Shipping Committee, represented by Mr. C. B. Black and Sir Alfred Ashbolt; the Hobart City Council, represented by Mr. F. D. Valentine; the Chamber of Commerce, represented by Mr. W. H. Cummins; the Hobart Development League, represented by Messrs. H. H. Cummins and H. Walch; and the “ Come to Tasmania “ movement, represented by Mr. J. B. Reid. Notwithstanding the many and varied interests represented at that conference the most friendly feeling prevailed. The provision of adequate shipping facilities for Tasmania was discussed from many points of view, and finally the conference agreed to the following resolution: -
That the Commonwealth Government be advised that the only permanent remedy for the distress caused to Tasmania by the lack of suitable communication with the mainland is for the Government to step in and inaugurate a suitable passenger and cargo service, and, in order that the overhead charges may be kept to a minimum and the servicerun as economically as possible, the present organization of the Australian Commonwealth Line of Steamers be used, and the vessels operated under the management of the Australian Commonwealth Shipping Board.
Tasmanian senators would do well to study that resolution. That conference recognized that it would be inimical to the interests of the people to dispose of the Line; that not only Tasmania, but Australia as a whole would be best served by its continuance, and that the fleet should be added to f rom time to time. I remind honorable senators that little or no development would have taken place in Australia but for the construction of State-owned railways, many of which did not pay for several years.
Senator Grant:
– Many of them pay well.
Senator FINDLEY:
– That is true, but others were for years a drain on the finances of the country. The development and progress of Australia depend as much upon community-owned steamships as upon community-owned railways.
Senator Ogden:
– The railways are a protected industry; there is no competition with them.
Senator FINDLEY:
– That is not so. In Victoria, because of the competition from motor vehicles, the railway authorities have inaugurated their own motor transport services, and railway buses now run regularly between Melbourne, Geelong, and other important centres close to the metropolis.
Senator Elliott:
– Have those services been profitable to the railways?
The PRESIDENT:
– The success or otherwise of railway buses is not now under discussion.
Senator FINDLEY:
– If the Government intends to view every proposition solely from the financial stand-point, it should cease talking about the progress and development of Australia. Had that policy been maintained in the past Australia would now, to a large extent, be without schools, roads, railways, post offices, telephone exchanges and other public utilities. I hate the sordidness in our midst. We are, indeed, living in _ a materialistic age, in which everything is -viewed from the point of view,of pounds, shillings and pence. I hope we shall rise above this “ Get-rich-quick- Wallingford “ attitude, which seems to characterize so many men in their everyday life and dealings. Does the purchase of pictures pay? If that is to be the test, why not strip the King’s Hall in this building of all its paintings by the most famous artists of Australia. Is it always to be a question of “Pay, pay, pay!” Are all educational, or musical, or artistic projects to be considered solely from the point of view of “ Will they pay ! “ Are the minds of the people never to be elevated ? Are they to be governed for all time by sordid considerations of profit? I repeat that the Commonwealth Government Shipping Line has paid, if not directly, then indirectly. During the war it saved our primary producers from ruin and disaster, and, with the assistance of the Commonwealth Bank, saved Australia. It kept down freights and fares for some years notwithstanding what the Leader of the Senate (Senator Pearce) said to the contrary in reply to the speech by my leader this afternoon. For proof I invite honorable senators to read what Mr. Brennan, the manager of the Melbourne branch of the Line, said, as reported in the Melbourne Herald on 3rd October, 1927-
In September, 1920, the Conference Linesproposed to raise the freight on scoured wool by id. a lb. Our Line would not agree to this, and the rates were not raised.
Is that proof enough for the right honorable the Minister? If not, I direct his attention to a further statement by Mr. Brennan, published on the same day -
In 1923 owing to the economic conditions, Australian exporters and importers were seriously embarrassed by the ruling freight charges,” and to afford them the much-needed relief, on 22nd January of that year, the Line announced that its rates to the United Kingdom would be reduced by 12i per cent., refrigerated cargo by id. per lb., fruit by ls. per case, and butter by Od. per box. Freights from the United Kingdom to Australia were simultaneously reduced by 10s. per ton.
Again on 12th July. 1926, the Line announced a further reduction in freights of 10s. a ton on general cargo, id. per lb, on all classes of skins, on wool, and on all classes of frozen cargo; a reduction of 6d. per box on butter, and a similar amount on each case of apples and other fruit.
This was a statement by a responsible officer of the Line. Mr. Brennan went on to say -
We estimate the average yearly tonnage of exports and imports to and from Australia and the United Kingdom at over 4,000,000 tons, and 1.0s. per ton represents a saving of £2,000,000 per annum : but this figure is very conservative as the Line has reduced freights by considerably more than 10s. per ton since 1923, besides having prevented increases in rates before that year.
Senator Thompson:
– It would have been more convincing if he could have shown that the Line was making profits.
Senator FINDLEY:
– What did this Government do for a certain company which materialized as soon as a contract was to be entered into for a transportservice in the Federal Capital Territory? The representatives of that concern intimated that, in order to carry on the service on a profitable basis it would be necessary to raise the fares to be charged to the citizens of the Territory. This
Government, notwithstanding its slogan of economy and efficiency undertook to subsidize the company to the extent of 4d. a mile for the first year; 3d. a mile for the second year; 2d. a mile for the third year; and Id. a mile for the fourth year, in order to prevent private enterprise from exacting higher fares from the residents of Canberra. The Australian Commonwealth Shipping Line has been responsible for the reduction of freights and fares. It has benefited the primary producers of the Commonwealth and those who travelled overseas by vessels of- the Line. Many people, I remind the Senate, would not have been able to travel but for its existence. Despite all that it has meant to Australia, the Government refuses to do for it what it has undertaken to do for the company that has entered into a contract to carry on the transport services in Canberra. The Ministry should be prepared to subsidize the Line. The Leader of the Senate, quoting from the Canadian Year-Book, showed that, during the war,Canada had embarked on a similar enterprise, and that the Government-owned ships of the Dominion, like the Commonwealth Line, earned profits during the earlier years of their operations, but later made heavy losses. But the Canadian Government does not propose to sell the Line. ‘‘On the contrary, its intention is to augment its fleet in the interests of the primary producers of Canada. The Australian Commonwealth Line has never had a fair and square deal, because for some years now we have had in power a Government which does not believe in the maintenance of communityowned enterprises.
Senator Payne:
– In what way has the fleet not been given a fair deal?
Senator FINDLEY:
– If the Government had been in earnest it would have augmented the fleet, and made the Line worthy of its name. The Line has established a reputation for quick passages, reasonable freights and fares, and for the manner in which it has catered for its passengers. The Government has, however, shown its antagonism to the Line in every possible direction. It cannot be said that it has supported the management in its efforts to beat down the opposition of the Conference Line. Actu ally, it has offered the Combine every inducement to compete with the Governmentowned ships.
Senator Elliott:
– “Was the writing down of the Line to less than half its cost of no assistance to the management?
Senator FINDLEY:
– The writing down of capital cost did not amount to a row of beans. If the Line had continued to receive the encouragement given to it by the Labour administration, it would have been in such a strong position to-day that not even honorable senators supporting the Government would dare to advocate its sale. The Government having the numbers, can do what it likes in this chamber, and I have no doubt that the Line will be disposed of. I presume that, at a later stage, we shall have before us a measure to give effect to the Government’s policy. In the meantime, I enter my protest against the proposal to sell the Line. There is no justification whatever for that course, if honorable senators supporting the Government have changed their opinions as to the value of the Line, they should state their reasons in this chamber. I’ can understand a member who was at one time associated with the Labour party and believed in its platform and policy saying, “I no longer believe in your programme. I am an individualist, I believe in private enterprise. I have no time for collectivism or community owned enterprises.” But he should be prepared so to declare himself on the floor of this chamber. I cannot understand, and I object to, this backing and filling on the part of some honorable senators. If it. is the policy of the Government not to continue any communityowned enterprise that does not pay, we are entitled to know it. An interim report presented little more than twelve months ago by the Public Accounts Committee disclosed that its members were then opposed to the sale of the Line. The present High Commissioner (Sir Granville Eyrie) was chairman of the committee at that time. I believe I am right in saying that ‘ recently he publicly expressed his approval of the course now recommended by the committee. What right had he, as High Commissioner, to publicly express such an opinion on a question of policy?
Who authorized him to say whether it was wise or unwise to sell the ships?
Senator Needham:
– He admitted that he did make the statement, hut said that he would not offend again.
Senator FINDLEY:
– If he did say it, he spoke out of his turn, and the Government should tell him not to do it again. He is not holding office as High Commissioner to tell the people what he thinks about the selling of the Australian Commonwealth Line, or about any other matter of public policy. He should be so informed, and kept in his place. He should recognize that he is the servant of the people of Australia, although he is living in a mansion. I do not object to his having a mansion to live in, but’ when his expenses are being paid by the people of Australia, and when he occupies a high and responsible official position, he should remain silent on questions such as this. I have entered my protest against the proposal of the Government to sell the Line, and I expect later to have another opportunity of speaking on the same subject.
Senator Sir George Pearce:
– Is that a threat or a promise?
Senator FINDLEY:
– The want of confidence motion in another place is still going on, and” the longer it goes on, the weaker will hecome the Government’s position. The Government is not strengthening itself by allowing this question to be discussed in this way. I have consistently opposed the selling of the. ships, and I shall continue to do so.
Sitting suspended from 6.15 to 8 p.m.
Senator LYNCH:
Western Australia
– Unlike previous speakers, I have no objection to this discussion taking place, because I think the Senate, constitutionally speaking, is as much entitled to discuss any question affecting the public interest as is another place. The fact that there may be some local disturbance in the other chamber is no reason why we should not pursue the even tenor of our way and do the work which the people have sent us here to do. Iii my opinion tho objection to the present discussion is not well grounded. We are as much entitled to say what should be done with the Australian Com monwealth Shipping Line as is the other chamber. If we are to maintain Parliamentary control, Parliament should rule. It is within the recollection of honorable senators that not long ago the present Government usurped a function for which it had no warrant. It sold the Commonwealth woollen mills at Geelong. A previous government had to ask the consent of Parliament for the wherewithal to bring those mills into existence. It could not have established them without the authority of Parliament. But when it came to selling them another government said in effect, “ It doesn’t matter what Parliament may think, we shall act in the . name of the Commonwealth and sell them.” On that occasion I expressed my objection timidly though ineffectively. Of course, if I had not found fault witht the Government I might have fared better than I did on that issue, but I am pleased to note that, as a consequence perhaps of raising a lone voice from the Government side of the chamber against the action of the Ministry in disposing of the Commonwealth woollen mills without Parliamentary authority, the Government has now departed from that dictatorial policy of not consulting Parliament. It has made up its mind to do its duty and consult Parliament with regard to the sale of the Australian Commonwealth Line of Steamers. It is quite in keeping with’ the order of things and in keeping with the dignity and status of the Senate, as portion of the legislative machine of this country, that we should discuss this problem and settle it according to our lights, notwithstanding that a want of confidence motion relating to it has been moved in another chamber. It is proper that a chamber like this, springing from the people as it has in a way that no other second chamber in the world has done, should assert its dignity and responsibility, and see that no government, no matter what its political complexion may be, dares to get behind Parliament and do what was done in the case of the Geelong woollen mills.
In this discussion I have noticed a very humorous display of altruism. The Leader of the Opposition (Senator Needham) has giver friendly advice to the Government about what it should do over the sale of the steamers. In his usual courteous manner he has told Ministers that they should not do what they propose to do. From a distinctly party stand-point that is the last thing the honorable senator should have done, because if he is right in .his contention - and I believe he is - that the action of the Government will not find support among the electors of this country, he should not give friendly advice to the Government and bring himself and his party into second place when an appeal is made to the people. He should let the Government go headlong to its doom. Ac the same time, despite his altruism, he has given a tone to the debate which is always refreshing. On the other hand, the Leader of the Government in the Senate (Senator Pearce) has displayed a remarkable want of sympathy for that young fledgling, the. Australian Commonwealth Shipping Line, which according to him is so small, so feeble, so impotent that it cannot perform anything of real worth, and therefore should be put painlessly out of existence by asphyxiation. If the right honorable gentleman cannot find a stronger argument for the position he has taken tip he should throw up the sponge until some one suggests a better one to him. His contention, that because the Line is small and incapable of doing more than it has done in the past, it should be put out of being, reminds one of the unfortunate predicament of the girl who, in seeking forgiveness for an indiscretion committed, pleaded that it was “ only a little thing.” The fact that the Commonwealth ships have not done more because their number is small is a reason not for disposing of them, but for increasing their number and power. It is a reason for nurturing the Line and giving it some parental encouragement. Having fathered the Line, the Government should look after its offspring and give it strength to exercise more power. Keeping the Line weak will, on the authority of Sir George Pearce, render it impotent. But, applying the honorable senator’s arguments as it should be applied, it is the duty of the Government to see that the institution which it has brought into existence gets fair play and is nurtured into a state of lusty efficiency. Before public opinion in this country was sufficiently educated up to the. establishment of a Line of Commonwealth ships to take their place on the oceansof the world, and do a service to the people of Australia, a long, sinuous,, weary, rocky, and thorny path had to be trod. No one knows better than Senator Pearce that 25 years ago a Government that would propose to make it an act of public policy to establish a line of steamers would not get publicsupport. In those early and unenlightened days there was ample warrant’ for this, because the people engaged in the transport of produce and1 passengers overseas behaved themselvesas citizens should behave themselves. They were committed to a policy of “ live and let live.” They had not then learnt the trick of putting their headstogether and saying, “It matters not what becomes of those from whom we are drawing our dividends so long as we get into a position of impregnability’ that will enable those dividends to grow and grow yet larger.” But in a littlewhile they forget the old maxim of “ live and let live “ ; they forgot to behave themselves as they should, and be content with. a fair thing. They began to look upon, the people ‘generally as their victims. By the aggregation of men and capital here and in the old country there sprang into existence that huge aggregation of shipping known according to itsown cognomen as the Conference. What does that name mean ? Does it not mean that the ship-owners confer together. And what do they confer about? Are they acting independently? Not at all. They confer together to bring about a definite line of action in regard to the charges they make, and we know quite well, because of the uniformity that characterizes their schedules of rates, that they are in a combine. In their rates and charges there is no difference^ no matter what point of the compass you go to. As the outcome of their method of perfecting their organization the people of Australia and other countries are for the time being their common prey Faced by this position in the maritime world what was society to do? The only thing that that large collection of individuals which forms public opinion could do when put on its defence was to say, “If you combine to make an unfair profit out of us, we, in turn, will organize, meet you face to face, and fight you.” As Senator Pearce well knows, at the time that I mentioned when public opinion was weak and not enlightened, some of us could see the way out, but” we had not1 sufficient backing in -the electorate to push the necessary measure through Parliament. At length, however, after pulling down harrier after barrier, we made sufficient converts in this and other Parliaments, and public opinion reached the point of saying that we in Parliament, as custodians of the people’s welfare, were no longer justified in folding our arms and permitting these depredations to be perpetrated with impunity upon a defenceless people. Public opinion was such that a Government felt justified in bringing down a bill to authorize the building of a fleet which would stand up against this organization of world-wide strength. I need only refer very briefly to the antecedent steps taken during the war period, when all the belligerent nations were at their wits’ ends to provide an adequate maritime carrying trade. During that period, as has been said by previous speakers, Australia, on account of its isolation, was in a far worse position than any other country. A fleet of steamers was purchased to meet an urgent need. It is true that the best judgment may not have been exercised in purchasing the ships; but it is equally true that the action of the then Prime Minister (Mr. Hughes) proved to be one of the finest ever taken by a leader of any government on behalf of the primary producers. I now pass on from the time when public opinion was brought to the point of recognizing that the Government of the day, springing as it did from the people and solemnly charged with conserving their interests, was right in taking this drastic step, to what was done three and a half years ago, when the Line was handed over to a Shipping Board. What has happened since? Apparently these gentlemen have now changed their minds; this enterprise is to be discontinued. Had I the time, I could quote the. speeches of the Minister (Senator Pearce) during. the long, weary years I/have known him, but more particularly those of three and a half years ago. Were I to collect his utterances, and quote examples of his eloquence, coherence, and driving power in support of the retention of the Line,they would be found to eclipse almost anything that honorable senators have ever heard in this chamber. But what is the attitude of the right honorable gentleman to-day? The only point he attempted to make this afternoon in support of the disposal of these fine ships, which have been built and have been running very effectively in the interests of the Australian people, was that the Line is so small, weak, and incapable of exercising any good, that it had better be swept away. If the Government cannot produce a better argument in support of its proposal to blow up this bridge - it is a bridge over which Australian producers may transport their products to the markets of the world - it had better yield the field until better arguments are found. Such a Government is incapable of performing its duty to the people. I could recall opinions expressed during the period to which I have already referred, in which men not necessarily associated with the Labour party, strongly supported some such enterprise as that which the Government now propose to dispose of. I well remember hearing about the late Hon. Robert Reid, in the early days of his political experience, speaking of the pressure of the overseas Shipping Combine, and urging that the only means of overcoming the difficulties with which importers were then confronted was the provision of a line of ships, such as this Government now proposes to demolish.
What other means have we of freeing the people of this country from the tentacles of this great octopus than by conducting our own Line. Are we now going to reverse the opinions we so forcibly expressed three and a half years ago? Are we going to tell the people who sent us here to protect their interests and provide them with a means of selling in favorable markets the commodities which they work so hard to produce, that we have been recreant to our trust? I trust that honorable senators will preserve an open mind until the last word has been spoken on this important subject, because «the time is coming when they will have to account for their stewardship. We should insist upon valid reasons being given for this drastic and unnecessary step. We should obtain the opinion of those whose heads have been bowed to their work, and have little opportunity of knowing what we are doing here. They will demand an explanation? It is true that we. are entitled to change our views. This Parliament exists, amongst other things, for the expression of opinion on public questions. The essence and significance of an institution such as this is the formation of opinions which may, if necessary, be changed. We should therefore keep an open mind upon this subject until better arguments are brought forward than those which were submitted bv the Minister this afternoon.
What lamp is set unto our feet to guide us on our course ? A committee consisting of members of both branches of this legislature inquired into the operations of the Commonwealth Government shipping activities, but with due respect to that committee and its chairman, I sub.mit that the evidence was not sufficient to justify the recommendations which it has submitted. When Sir Granville Eyrie was chairman of the committee it submitted an interim report to the effect that the line should not be sold. Has that report been overlooked? Are we turning our backs upon the recommendation it contained ? It is true that the report stated that further investigations were to be made: but the fact remains that it placed on record the unanimous decision of the committee at that time, some fourteen months ago, that the ships should not be sold. The chairman of the committee later relinquished his past in order to accept the High Com.missionership in London and Senator Kingsmill, who was appointed chairman in his stead, submitted this document on which we are now asked to take definite action. When a parliament or a government endeavours to ascertain what is in the minds of the people, it should go about the business in a thorough manner. It should consult those who are vitally interested. O’ne section which has been mentioned over and over again, I refer to the primary producers, apparently has been overlooked in this in- quiry. I have perused the list pf witnesses which the committee examined in an endeavour to find the name of a single primary producer - a man of the soil who toils from daylight till dark in the back-blocks of this country - but I cannot find one. There is an array of gentlemen, including administrative officers and engineers, who are summoned to give evidence. A number of managers and sub-managers, as well as a salesman in a motor garage in Melbourne were examined. What has a salesman in a Melbourne garage to do with such a question as this?
Senator Thompson:
– Would not a representative of the Pastoralists’ Review speak with some authority on behalf of the man on the land ?
Senator LYNCH:
– I admit that the Pastoralists’ Review represents one section of the primary producers, but only one ; it is not qualified to speak on behalf of other sections.
Senator Foll:
– A representative of the Wheat-growers’ Association appeared before the committee. Bus name appears at the top of page 5 of the, report.
Senator LYNCH:
– The representative of the Wheat-growers’ Association is a solicitor in Melbourne. That supports my argument that one of these 6s. 8d. gentlemen in Melbourne was summoned to give evidence on behalf of the primary producers.
Senator Foll:
– He was deputed to speak on their behalf.
Senator LYNCH:
– He may have been; and for the information of the Senate, I may mention that his name is Robert Coates Tilt, solicitor for the Victorian Wheatgrowers’ Association. I should like to read that gentleman’s evidence in order to ascertain what he knows about wheat-growing. I have spoken of the wheat-grower; it would! be more correct to speak of the wheatsower, because very often when a farmer has put his seed into the drill he has seen the last of it. Senator Foll should know that it is ridiculous to suggest that a solicitor could adequately express the views of the primary producers. I leave it to the honorable senator to find amongst the witnesses one sturdy farmer. The next name in the list of witnesses is that of Mr. Yuill, a sharebroker. Another sturdy example of a wheatgrower! Then comes the name John Griffith Thompson, Eastern merchant, Melbourne. Among the witnesses there is not one whose address is not on the fringe of the continent - in the capital cities around the rim. Not one practical primary producer gave evidence before the committee. The recommendations of the committee are opposed to the interests of those for whose benefit the ships were built and purchased. Those most concerned were not consulted about the disposal of the vessels.
Notwithstanding its deficiencies, the report serves a useful purpose in that it places before us some matters of which previously we had but a faint idea. Among other things, it enlightens us as to the formation of public opinion regarding the Line. It shows that some of the newspapers of the Commonwealth contained false reports about this Government enterprise, and how the advocates of vested interests endeavoured to bring the Line into popular disfavour. No such systematic attempt has been made to discredit our railways, which, like the steamers, are employed in conveying goods from one place tq another. The report tells us of people who were engaged in the mischievous and disreputable work of discrediting a Line of steamers which has been such a benefit to this country, and could still he of greater service. The Line has not been fairly treated; the wells of public opinion were poisoned in advance. Agents were active in their endeavours to mould public opinion against the Line. The jury was squared. The general public, reading those inspired paragraphs, did not recognize in them the statements of interested persons. The committee gathered evidence mostly from the wrong persons; and on their ill-founded opinions, and on scrappy evidence, made its recommendations. The measure of the benefits conferred on Australia by the Line cannot be calculated. Beading between the lines, as one must do in connexion with this report, I find on page 6 that the people of Australia were saved £2,000,000 because of the influence of .the Line in keeping down freights. That information is set forth in the report in the following language -
It was claimed that the reduction of 10s. per ton in freight rates forced by Mr. Larkin early in 1923 had resulted in a saving of over £2,000,000 a year in Australia’s freight charges.
I do not know why the word “ claimed “ has been used. The point is whether a reduction in freights did, or did not, take place. Inquiry reveals that a reduction did take place, because of the influence of the Australian Commonwealth Line of Steamers. I do not know why the report does not contain the definite statement that freights were reduced. Senator Ogden would do well to remember that the Line was responsible for retaining in the pockets of the people of Australia at least £2,000,000.
Senator Ogden:
– It was taken from one pocket to the other.
Senator LYNCH:
– The other steamship companies wanted to take it from that pocket, but the Commonwealth Line prevented them from doing so. Other benefits conferred upon Australia by the Line are set out on page 11 of the report in the following terms : -
Instances were quoted in evidence of the prominence given in the press to happenings of a detrimental nature on Commonwealth steamers, whilst similar episodes on other vessels were not mentioned.
On page 17 the committee reports -
Apart from the financial results of its actual trading operations, and its war-time necessity, evidence was placed before the committee indicating that benefits, in addition to those already referred to, through its influence on freights, had been derived by Australia through the establishment of the Commonwealth Line and its presence on the United Kingdom to Australia berth. By the building of the modern “Bay” and “Dale” steamers, the Commonwealth Line had impelled other owners to improve their ships and services ; and by the provision of experimental refrigerated chambers in its ships it had encouraged and rendered possible the successful marketing of Australian soft and citrus fruits overseas. Goods carried in these chambers, it might be mentioned, pay no freight unless they arrive at their destination in good condition. Amongst both the exporters and importers, the Commonwealth Line was said to enjoy a good reputation for its efficient handling of cargo, and many communications from merchants confirming these views were placed before the committee in evidence.
Notwithstanding that the existence of the Line has conferred those benefits, a majority of the members of the committee has recommended the disposal of the vessels. The committee further recommends that the capital value of the fleet should be written down still further. It considers that the fleet should be handed over to a new company at a reduced capital value. That is an admission that the old management was handicapped in its control of the Line. The committee, moreover, seriously proposes that the amount of the capital of the new company shall be sufficient to cover working expenses and to pay interest and depreciation. Reference is made to the capital value of the fleet having been written down by about £8,000,000. Beyond a mere statement in this Parliament, that does not appear to have been done. No such sum has been written off in connexion with the steamers so far as I can gather from this authority. I direct attention to page 269 of the Commonwealth YearBook for 1925. Under the heading “Commonwealth Government shipping and ship building activities,” it is there set out that the capital cost of the vessels in commission was £11,818,938 ; the estimated cost of vessels in course of construction £2,238,000; the value of the vessels lost and/or sold, £807,80S. The gross profit on the working of the fleet to the 30th June, 1923, less office expenses, amounted to £2,493,449; insurance reserves less unexpired premiums and estimated claims outstanding, all as good as cash, amounted to £901,920; proceeds from sale of vessels, £299,433; amounts recovered on vessels lost at sea, £791,897 ; profit on the working of ex-enemy ships, £3,673,494; present day market value of the fleet, £4,749,350. The statement that £S,000,000 was written off is a myth as far as those figures go. It is not there.
Senator Ogden:
– We are paying interest on that amount.
Senator LYNCH:
– We are paying interest on something over £4,000,000.
Senator Duncan:
– Can the honorable senator tell us what has become of the money received from the sale of the ships? Did it go into the Consolidated Revenue ?
Senator LYNCH:
– I presume it did; but, for his own satisfaction, the honorable senator should study the figures and ascertain definitely. “ May we take it that the policy of this Government is to place such an important transport service as the Commonwealth Government Shipping Line on a cash basis and to declare that, unless it shows a profit, it must be abandoned? If that is to be the policy of the Commonwealth for the future, then there is a distinct line of cleavage between railway and shipping policies. The accounts for the railways systems of . the several States show that these important public utilities, so far from returning a profit, do not even give an adequate return by way of interest, and certainly do not provide for the amortization of capital,’ which is set down at £251,000,000. Our railways are not on a cash basis, and yet no one is anxious to get rid of” them. There may be an isolated voice in the wilderness calling for the sale of the railways, but certainly there is not a registered or considered public opinion in favour of that course.
Senator Thompson:
– In Queensland, before the advent of the Labour Government, the railways were on a payable basis.
Senator LYNCH:
– One swallow does not make a summer. I arn speaking of the position by and large. For the quinquennial period 1920-24 the loss in interest on a capitalized value of £251,000,000 was £2,000,000 per annum.
Senator Ogden:
– The Governments had to build railways because there were no other means of transport.
Senator LYNCH:
– And I remind the honorable senator that the management of our various railway systems is in an entirely different position from the management of the Government Shipping Line. The latter is faced with an unscrupulous and hungry rival in the shape of a Shipping Combine-. That is the reason why the Line is in its present position. If the Australian Commonwealth Shipping Line should be placed on a cash basis, why not apply the same principle to the railway systems in the several States, because in each case the taxpayers have to find the money to make good any losses incurred. In the circumstances there is no justification whatever for the Government’s policy simply because the ships are not returning profits.
Senator Ogden:
– It is not fair to compare our railway systems with the Australian Commonwealth Shipping Line.
Senator LYNCH:
– Am I to understand, then, that Senator Ogden believes that the Line should be made to pay its way, and that, if it does not, it must be sold? I am merely putting it to the Senate that if the Line must be sold because it is not on a profit-earning basis, then, to be consistent, we should apply the same principle to our railway systems, the capital cost of which is £251,000,000, as against only £4,600,000 for the Commonwealth Government Shipping Line, and sell our railways. I cannot understand a public policy which seeks to place the sea carriage of cargo on a basis different from the land carriage of goods. That, to me, is the embodiment of inconsistency, and cannot be justified.
Senator Thompson:
– We can command the services of dozens of steamship lines, but can have only one railway system in a State.
Senator LYNCH:
– I am afraid that Senator Thompson and I will have to agree to differ. I am merely asking honorable senators who approve of the sale of the Line to explain why its. affairs should be judged by one standard, and the accounts of our railway systems by another and totally different one. To provide interest and depreciation on the capital cost of our railways, the taxpayers of Australia have to find £27,000,000 every year, and yet, although the railways are not paying, there is no public clamour for their sale. How different is the position of the Commonwealth Government Shipping Line. The capital cost is- now stated to be some £4,600,000, and the annual charge for interest and depreciation is only £400,000 - a paltry sum compared with £27,000,000 to be provided by the taxpayers of Australia annually on account of the railway systems of the several States. The Commonwealth railways are in much the same position. They were only started the other day, so to speak, and they are going along very merrily. According to the Commonwealth- Tear-Book for 1924 the average capital value over the same quinquennial period was £11,250,000, and the average yearly loss for that period was £130,000 on the working side. These figures do not include the amount which should have been provided for interest and depreciation or replacements. Interest on capital cost at 4J per cent., which is a fair average figure for that period, represents about £460,000. If we add to that charge 1 per cent, for depreciation - it is not enough, because no engine, no rolling-stock, and no permanent way will last for 30 years - we find that another £114,000 a year should be debited to the Commonwealth railways. If we bring together interest charges, and the amount that should be allowed for depreciation, we find that the taxpayers of Australia have to provide £704,000 a year for the privilege of running the Commonwealth railways. That interest burden must be definitely shouldered some. day.. [Extension of time granted.] On the basis of this calculation the whole of the capital value of the Commonwealth railways will disappear in sixteen years under this annual drain. If we apply the the same reasoning to the shipping fleet, it will take 26 years before the unwritten down capital of the Line is dissipated. Yet some honorable senators are willing to dispose of the ships, while they have no desire to do other than retain the railways. The shipping business shows an infinitely better return than does the railway undertaking.
The Leader of the Senate referred to the Canadian Government Merchant Marine Limited, but he only told half the story. I intend to tell the other half. It is quite true, as the honorable senator said, that a loss of something over $S,000,000 has been sustained annually by the Line in the last five years; but in spite of that, the Canadian Government intends to retain it. According to The Canada Y ‘ear-Book for 1926, about one-ninth of the capital value of the Government-owned ships is lost annually. As a result - of the losses the board of directors has proposed a reduction of the capital cost of the vessels, which is given as $72,000,000, to “what may be considered the present replacement value. about $18,000,000.” That is one method by which the Canadian Government intends to encourage its Line. It is also proposed that the interest due to the Government shall be payable for each year only if it is earned after allowing for depreciation. This provision is to apply for a period of five years. In other words, the Canadian Government is prepared to write clown the capital value of its ships, to 25 per cent, of the present figure-
Senator Kingsmill:
– But interest will still have to be paid on the full amount.
Senator LYNCH:
– I am not concerned with that for the moment. I am comparing the attitude which the Canadian Government is adopting towards its ships with that which this Government proposes to adopt towards our Line; but in reply to the honorable senator’s interjection I submit that if this capital is written off, it will not exist.
It has also been argued that we should dispose of our vessels for the reason that only half the employees engaged on them are resident in Australia. The same situation exists in regard to the Canadian Line. But the Canadians are not proposing on that account to sell out. The Canada Tear-Booh states that the employees engaged on the Government Merchant Marine of that Dominion live in the United Kingdom, Europe, the West Indies and Newfoundland. In spite of this, the Canadians intend to allow their vessels to continue their useful career. That is the difference between the Commonwealth and Canadian policies.
Senator Thompson:
– Is it fair to British seamen that Australian seamen domiciled in Britain should be receiving Australian rates of wages?
Senator LYNCH:
– That is beside the point. I submit that there must be some sound reasons to justify Canada in writing down the value of her ships so liberally and in taking steps to extend their usefulness although they are losing more than three times the money that ours are losing. I submit, further, that the reasons which have justified her in adopting this attitude are sufficiently strong to justify us in acting similarly -with respect to our ships. The very last thing we should be .doing is to abolish this splendid enterprise, which in the past has meant so much to our people, and which would mean just as much to them in the future if we would continue it. The report of the American Shipping Board indicates that the United States of America is also encouraging rather than discouraging her publicly-owned shipping lines.
Senator Thompson:
– The Government of the United States of America has decided to sell three of its lines.
Senator LYNCH:
– They are still in existence, for I have -the report of the American Shipping Board for 1924 before me.
Senator Thompson:
– That report is ancient.
Senator LYNCH:
– It is the latest that is available in the Commonwealth. The American ships have lost money, just as the Australian and Canadian Government vessels have done. But I quote the following from the report to show the attitude which has been adopted by Congress -
The United States Lines have pursued the policy of maintaining stable and reasonable passenger rates, and refuse to join other Lines in increasing rates unless entirely justified by operating and other conditions. “The Government of the United States of America, like the Commonwealth and Canadian Governments, deemed it wise some years ago to buy vessels to carry to the world’s markets the surplus products of its people, and it made up its mind to do so under fair and reasonable conditions.
Senator Andrew:
– And now it is selling its vessels.
Senator LYNCH:
– My information, which is from’ official sources, and is not mere hearsay, is to the opposite effect. In 1924 the board recommended the adoption of a shipbulding programme. If any honorable senator has official information to the contrary, I invite him to say so, giving chapter and verse, as I am doing. The American Government Shipping Line has suffered serious losses. In 1924, 41,196,394 dollars were lost, or about £8,000,000. I regard that loss as a kind of insurance. If it is spread over the population of the United States of America, it is equivalent to a payment of about ls. 7d. a bead. Taking the total annual average loss of £557,000 which was sustained in the operation of the Australian Government Line of Steamers for the last complete three years of board control for which we have figures and spreading it over the population of the Commonwealth, it is equivalent to about ls. lOd. a head, or a few pence more than America. I venture to say that in consideration of the degree of insurance which this Line affords to the people of this country, that payment is abundantly well worth while. We are prepared to follow the example of Canada and the United States of America in constitutional and other matters, and also to adopt public policies which have been found to operate successfully in those countries ; and I can see’ no reason whatever why we cannot as readily follow their example in relation to shipping. These great English-speaking communities have decided, through their Governments, to retain their publiclyowned shipping lines, and I submit that we should be well advised to do likewise. It has been stated by interjection that the Government of the United States of America is proposing to sell certain of its vessels; but I shall require nothing short of a reference to a definite resolution of Congress to that effect to convince me that is so. According to the report of the United States Shipping Board, America is going in for a ship-building programme.
Senator Thompson:
– The honorable senator is quoting figures for 1924-25.
Senator LYNCH:
– All I can say in reply to the honorable senator is that there are none so blind as those who will not see. I ask the honorable senators if they believe in insurance for themselves against those devastations that often rob them of their earthly substance, and even threaten their lives. I submit that our steamers are a form of national insurance against the rapacity of the unfeeling Shipping Combine and the money power that stands behind them. The insurance required is an annual loss on operations amounting in the average to not more than £1S0,000 over the last 3£ years on the working side alone. I ask that that insurance be maintained and that our steamers, which have exercised such a great influence for good, be given a chance to live and make’ good. It is wrong for the Government not to adopt a policy that every wise man adopts - that of insuring against risks. While the Government will not insure the people of Australia against the risks of excessive rates and fares, it proposes to embark on many schemes involving an enormous annual expenditure. It will not leave to private enterprise the establishment of wireless communication between here and the Old Country. It is prepared to spend £500,000 on that project, and it will not entrust the task to private, enterprise. I do not know what action it proposes to take in connexion with the project to establish airship communication between Great Britain and Australia - whether it is content to leave the construction and running of the airships to private enterprise; but I have seen it recorded that the Prime Minister, when he was interviewed on the matter, looked favorably upon the project as outlined to him. It is quite evident that the Government is prepared to step in and maintain, wireless and airship communication with Great Britain; but in a matter of greater importance - . sea communication, something that is the very life blood of our prosperity and affects so many people in the arid interior, who, to make ends meet, must have bedrock rates of freights for the carriage of their produce to markets overseas - the Government is prepared to leave our producers in the lurch and pave the way for others to pounce on them and extract from them their last ounce of flesh and blood. I do not propose to stand for that sort of thing. Are we, for the sake of £180,000 a year, to wipe this Line out of existence? If the question were put to the Conference Line or to Lord Inchcape, “What would you like best in connexion with these Australian steamers?” the answer would be, “ To see them sold.” What they would like least, and what the people of Australia would like most of all, is to see the . Commonwealth Government retain the vessels. We ought to be wise in our day and generation. We should take our stand where we stood 3^ years ago. At that time every one said, “ Let us have ships.” Three and a half years from now, if these vessels are sold, the people will say to those who sold them, ““Why did you dissipate the only means by which this Commonwealth could hold its own against the Shipping Combine?” My voice and my vote will go for the retention of these vessels, in the belief that we are not entitled to look upon a mere £180,000 a year as something we cannot afford as an insurance against the greed of men who will have no pity on us. Are we to be told that the Shipping Conference has grown less grasping or more humane; that its controllers awake in the middle of the night to worry about our interests, and that they have it in mind to be benefactors to the people of Australia ? I do not blame them. It is only natural for men having these opportunities and to use them to their own advantage. It is equally natural for the victim, in turn, to defend himself, and in this case his defence is the retention of these vessels. I have no time for those men who have behaved in the past in a spirit which is not Australian, and who by their actions have forfeited every right to consideration from this Parliament. I refer to the seamen. I know, however, that they have been misled. We should regard their actions as a mere passing phase of our industrial life, and we ought not to base a permanent policy upon such actions. If we are to come to a decision on a sordid cash basis or on the finnicky plea that the men who work our steamers are not living in Australia, we are calling to our aid the weakest support possible, and taking up an attitude of which we shall be ashamed in years to come. Better, therefore, is it for us. to hold steadfast-, to a shipping Line which represents the true embodiment of altered opinion over the past 30 years, and if we adhere to our attitude of three and a half years ago we shall not regret it.
Senator PAYNE (Tasmania) T9.261. - -I should be somewhat diffident in replying to the impassioned appeal of Senator Lynch, but for the fact that in his enthusiasm for the industry in which he plays no small part he has lost all sense of the commercial aspect of the case we are to-day .considering. The whole tenor of the honorable senator’s speech was that, no matter what it costs, the Australian Commonwealth Line- of steamers must be retained. The honorable senator followed to a great extent the remarks of the Leader of the Opposition (Senator Needham), and those so ably -expressed ‘by his lieutenant (Senator Findley). But all three honorable senators have lost sight of a very important fact, in declaring, that ‘ freights have been considerably reduced because of the existence of the Australian Commonwealth Line, and that if it had not been for that Line there would have been no such reductions.
Senator Findley:
– There is no doubt whatever about it.
Senator PAYNE:
-There is a grave doubt about it. The reductions of freights did not apply solely to the maritime trade between Australia and Great Britain. During the same period they applied on trade routes where the Australian Commonweath Shipping Line has no influence. The Leader of the Oposition said that our vessels were directly responsible for the reduction of the rates between Great Britain and Australia, and he quoted the years when those reductions were made. I have endeavoured to get dates approximating those submitted by the honorable senator. For instance, he said that in 1925-26 freights were about 50 per cent, lower than they were in 1920. I find that in 1920 the rate on timber from the United States of America to Australia was as high as 18s. per 100 feet. One ship which arrived here in 1920 carried timber at lis. ner 100 feet. In 1923, however, the rate for the carriage of the same class of cargo from the United States of America to Australia was from 5s. lOd. to 6s. 9d. per 100 feet, and in 1925 it was from 5s. to 5s. lid. per 100 feet. The 5s. rate is less than one-half of that ruling in 1920 on a route on which the Commonwealth ships were not engaged. In 1920 the freights charged on three vessels trading between Baltic ports and Australia were 8s., Ils. Id., and 10s. Id. per 100 feet. In 1923 the rate was 5s., and in 1924 one vessel brought out a cargo of timber at 3s. 7d. per 100 feet. In 1925 several steamers arrived in Melbourne with cargo on which a freight of 5s. 5d. per 100 feet was charged as against lis. Id. per 100 feet in 1920. The freights between New Zealand and Great Britain, a route on which the Commonwealth ships have never been engaged, were reduced to a similar extent during the same period. That is a complete answer to the statement of the Leader of the Opposition that the Australian Commonwealth Line has been the means of reducing freights between Australian and Great Britain.
Senator Needham:
– That, does not affect my contention.
Senator PAYNE:
– If it does not, the honorable senator’s arguments are useless.
Senator Needham:
– The honorable senator cannot disprove my statement.
Senator PAYNE:
– I have already clone so by quoting the reduction in freights on routes on which the vessels of the Australian Commonwealth Line have not been engaged. Senator Findley said that the Government has not encouraged the board in its work, but the honorable senator did not attempt to prove his assertion. Surely the honorable senator is aware of the conditions under which the control of the Line was handed over to the Commonwealth Shipping Board. The capital cost of the vessels was written down to give it an opportunity of conducting its business on a reasonable basis. When the bill under which the control of the ships was handed over to the board” was before another place the Prime Minister said; -
The vessels which the Commonwealth board will retain will be on a, valuation that places them in fair competition with any other wellconducted Lines, and there is no reason, under these circumstances, why they should not earn reasonable interest on the money invested. Two of the principal causes of the loss during the last two years will, therefore, be eliminated under the bill.
When the bill was before the Senate the Leader of the Opposition (Senator Needham) and Senator Findley .expressed views similar to those of the Prime Minister, and predicted that under the new conditions there was a reasonable prospect of the Commonwealth fleet paying its way. The Leader of the Opposition in another place (Mr. Charlton) also supported the proposal.
Senator Needham:
– I opposed the bill. The honorable senator should quote me correctly.
Senator PAYNE:
– In the same speech the Prime Minister said -
In exchange for these assets the board will issue debentures to the Government for the total amount of their valuation. The debentures will carry a fixed interest rate of 5 per cent. One hopes that in the future profits will be earned by the Line. There is no reason why that should not be so when it is established on a proper basis of capitalization and operates only vessels suitable for the trade in which they will be engaged. In the event of there being any profits from their operations, the board will be entitled to retain the whole of them until they have accumulated reserves to an amount equivalent to 25 per cent, of the total capital at the time outstanding. The Government are desirous of ensuring the strength and stability of the Line. I am sure that the House will agree that it is a wise provision that, before any profits are taken from the Line an opportunity should be given to build up the “necessary reserve to put it in a really strong financial position. After the reserve funds have reached an amount of at least 25 per cent, of the capital for the time being outstanding, 50 per cent, of the profits may be retained by the board to further increase reserves, and 50 per cent, must be handed over to the Treasurer of the day.
The optimism of the Prime Minister and of some honorable senators opposite who supported the proposal was not justified. Senator Lynch’s speech may be summed up in these words - “ Write down the Line still further and it can be made a profitable concern.” Let us see if that is possible. According to the report of the Public Accounts Committee the five “ Bay “ steamers, which cost approximately £1,200,000 each, were written down to one-half of their cost before being handed over to the board.
Senator Herbert Hays:
– They were practically new ships at the time.
Senator PAYNE:
– Yes. In common with other honorable senators I regret that the report of the Commonwealth Shipping Board is not more favorable. It discloses that during the period under review the total loss on operating the ships amounted to £628,894. I should like Senator Lynch .to compare that absolute loss with his glib utterance that the loss was only £180,000. The amount I have mentioned is exclusive of depreciation and interest, which ‘ amounted to £534,136. The interest on the writtendown value of these five ships would therefore, be £754,783, or a total loss for three and a half years of £1,719,815. If their value is further written down another 50 per cent., say, to £300,000 each, the loss would be £1,273,354, instead of £1,719,815. Even if the ships were presented to honorable senators opposite, or to the board, they would still show a substantial loss, as they are not meeting working expenses. Whilst I have always admired the prompt action of the Prime Minister of the day in acquiring the ships during a period bf emergency, we have to remember that conditions have now changed and that this commercial venture, like almost every other Government enterprise, has proved a failure. Senator Lynch referred somewhat scathingly to recommendations of the Public Accounts Committee, and quoted extracts from that document favorable to the retention of the Line. Surely the honorable senator does not suggest that even in an adverse report the committee would refrain from publishing anything of a favorable nature. Parliament must be supplied with all the information at the disposal of the committee to enable it to come to a proper decision. I have studied the majority and minority reports, and also a summary of the evidence, and as a representative of the people have decided that it is my duty to support the Government in its endeavour to avoid further unnecessary expenditure. If I felt that it was incumbent upon the Government to retain the Line in the interests of the Australian people I should advocate its retention; but I am convinced that it is useless to attempt to’ further burden the primary producers by increasing losses on the Line which can only be met by increased taxation. How could ships be filled if freights were raised unreasonably? Only by keeping them within reasonable limits can they hope to benefit our rural population on whose prosperity they, to a great extent, depend. At this stage I am prepared te accept the committee’s report; later, any legislation introduced to give effect to it- will receive my earnest consideration.
Senator CHAPMAN:
South Australia
– I wish to deal with a few salient points referred to by the committee. The Australian Commonwealth Line of Steamers was established during the war, and for some time it operated at a profit, partly owing to war conditions. During that period the people of Australia, particularly the primary producers, benefited greatly from its operations. Later, partly because of post-war conditions, heavy losses were incurred. For the period ended 30th June, 1917, the profits of the Line amounted to £426,394 7s. 4d. For the years ended 30th June, 3918, 1919, 1920, and 1921, the profits were respectively £905,879 0s. 6d., £1,2S4,59S lis. 8d., £365,385 14s. 10d., and £530 930 lis. lOd. The next year showed a’ loss of £521,037 lis. 9d., while for the period ended 31st August, 1923, the losses readied the enormous sum of £1,051,997 4s. lOd. Those figures do not take in.0 account depreciation, which from the time of the inauguration of the fleet to its transfer to the board, mounted to £2,155,155 17s. 2d. The loss, therefore, to the 31st August, 1923, amounted to £215,002 7s. 7d. Alarmed at the position into which the Line had fallen, Parliament, in 1923, decided to hand over the vessels to a board to be run as a commercial concern. At that time it was not thought that circumstances justified the disposal of the Line. Honorable senators who have since changed their opinions because of the further heavy losses which have been incurred have been criticised for so doing. The general attitude of members at that time towards the Line was that it should be given another chance. In order that the board should not be unduly handicapped in its operation’s because of excessive capital value of the fleet, the value of the vessels was written down about £8,000,000. The book value at the time of the transfer to the board was £12,716,800 7s. 2d, and the ships were taken over by’ the board at a value of £4,718,150.
Senator McLachlan:
– The fleet cost over £14,000,000.
Senator CHAPMAN:
– That is so, but its book value at that time was £12,716,800 7s. 2d. In the light of those figures I cannot understand Senator
Lynch’s statement that there was no writing down of the capital value of the fleet. Vessels which cost over £14,000,000, and whose book value at the time of transfer exceeded £12,000,000, were handed to the board for less than £5,000,000. On the difference of nearly £S,000,000 interest has. to be paid. That interest represents a loss to the taxpayers of Australia. Notwithstanding the reduced capital cost, further losses were incurred ; on a capital of £4,71S,150 losses amounting to £1,882,960 were made from the inception of the board in 1923 to 31st March, 1927. Is it any wonder that honorable senators have changed their views as to the advisability of continuing the Line? One of the greatest factors responsible for the heavy losses was that the ships were on the Australian register, and were run under Australian conditions. So long as they remain the property of the Commonwealth Government the ships must remain on tha Australian register; hut if handed over to a company, they could be placed on the British register, which would mean that their running costs would not be so great. The committee’s report shows that a “ Bay “ steamer under Australian conditions of manning and pay in force last year had to carry a complement of 170, at a cost, including overtime and leave, of £3,725 per month, while a vessel of similar class on the British register would have a crew of only 154 at a total monthly cost of £1,654. The expenses of working these vessels on the British register would be about half what they are now.
Senator Needham:
– Would the honorable senator like to see Australian seamen working under conditions which apply to Steamers not on the Australian register?
Senator CHAPMAN:
– I am not discussing that point; I am merely endeavouring to show that the Government would be justified in disposing of the Line. The committee’s report continued -
A comparison of the actual wages, &c, paid for the year ended 31st March, 1926, on the live “Bay” steamers and the estimated wages payable for similar steamers on English articles showed a difference in favour of the latter of £117,758, the figures being - actual wages paid under Australian articles, £204,987; estimated wages paid under English articles, £87,229.
The increased running costs greatly undermine the efficiency of the Line as a factor for forcing reduction of freight. The committee also stated -
Taking Australian wages and conditions as . £100, the committee was informed that in respect of a. vessel of 6,000 tons gross, British wages would be £32.41; American, £42.21; Swedish, £24.51, and Danish, £15.4.4; but since those figures were prepared Australian rates have been increased by 5s. per month per rating.
So great is the advantage that foreign competitors have over the Australian Commonwealth Line of Steamers that it is almost hopeless for us to attempt to compete with them while our vessels remain on the Australian register. The Leader of the Opposition said that the influence of certain .vested interests had caused the Government to decide to dispose of the Line. As a member of the Country party, I wish to make it clear that that party has given no consideration whatever to the views of outside financial interests. Its members have seen for themselves the position which the Line has reached. They would like the Line to continue; hut the losses revealed by the balance-sheet have caused them to change their opinions. Senator Needham said that the continuation of the Line was a plank of the Country party’s platform.
Senator Needham:
– I quoted from a speech by the present Minister for Works and Railways (Mr. Hill).
Senator CHAPMAN:
– The Country party now advocates the encouragement of a regular and direct shipping service, with adequate refrigerating space at competitive rates to potential markets. The rank and file of the Country party have got ahead of their political representatives. They realize that most of the losses in connexion with the Line will fall on the primary producers, and that it would be better to have a lino running on a competitive basis than that further losses should be incurred in connexion with the Line controlled by the Government. The Leader of the Opposition also, expressed concern for the position of the farmers, but it would not be too much to say that he was much more concerned about the position of the 500 Australians who are employed by the Line. Apparently he advocates that it should he continued for their benefit, notwithstanding the huge losses that are being incurred. It would be better for the taxpayers of Australia to pension them off at arbitration rates of wages if they cannot be absorbed into lucrative positions. Senator Needham stated, further, that the existence of the Line had led to freight reductions, and in an ingenious argument he estimated that, on the basis of tonnage shipped, several millions of pounds had been saved to the people of Australia. We have only to look at the position in other countries to appreciate the weakness of his argument. I think that, in round figures, he claimed that the Line had been responsible for an average reduction in freight of 50 per cent. I direct his attention to the 1927 edition of Brassey’s Naval and Shipping Annual. That authoritative work gives particulars of the estimated average steamer freights in the open market from Tyne and North Sea Coast ports of England for the years 1920 to 1925 inclusive. The following are the figures for the first and last years of the period mentioned : -
Senator Sir George Pearce:
– On those figures, it would appear that the Australian Commonwealth Line has been keeping up freights.
Senator CHAPMAN:
– The Inchcape group is not the only shipping concern in the world. Other nations have their own organization, and we shall have the benefit of their competition. The figures I have quoted show that freight reduc tions in respect of other countries have been much greater than the reductions secured in connexion with the Australian trade, even with the influence of the Australian Commonwealth Shipping Line. In the circumstances, we are justified in asking if we can continue to incur these huge losses. When the primary producers of Australia fully appreciate the position of the Line, and when they weigh the advantages which they may have received through its operations against its cost to the people of Australia, they will realize that, in the interests of all concerned, it should be disposed of.
Senator FOLL:
Queensland
.- It was my privilege to be a member of the Public Accounts Committee during portion of the time that it was engaged in investigating the affairs of the Line. I entirely disagree with the statement of Senator Lynch that the Line has not had a fair deal. The honorable senator suggested that it had been somewhat unfortunate; that it had been “ booted “ hither and thither, first by the Government and then by the Public Accounts Committee, and that every possible obstacle had been placed in its way so that its affairs should be presented in the most unfavorable light. Actually the reverse has been the case. In all its dealings, I consider the Line has received the most favorable treatment at the hands of the Government. If it were my privilege to be associated with a commercial enterprise that had received the same generous treatment as that meted out to the Line, I should consider it to be my own fault if I were not successful. The figures of profit and loss have been quoted over and over again, and I have no intention of repeating them. Honorable senators must recognize, however, that the Commonwealth Shipping Board assumed control of this Line under the most favourable conditions. The capital value of the ships had been written down to approximately 331/3 of their actual cost, and to a figure at which they could not possibly have been replaced. Everything was done by the Government to make it possible for the board to operate successfully. All available mail carriage was given to the Line, and nothing was left undone to ensure that a profitable business would be built up. Senator Lynch inferred that only witnesses who were likely to be prejudiced against the Line were invited to give evidence before the Public Accounts Committee. I deny that statement. If the honorable senator will take the trouble to look through the long list of witnesses that the committee examined, he will find in it the names of practically every important executive officer of the Line.
Senator Kingsmill:
– Most of them appeared before the committee on several occasions.
SenatorFOLL. - That is so. From Mr. Larkin and Sir William Clarkson downwards, all the officers had the opportunity to submit to the committee any suggestion that they thought would be likely to lead to more effective work.
Senator Lynch:
– Surely other than those concerned with the management were interested in the subject?
SenatorFOLL. - Even officers who had formerly been employed by the management of the Line but had left it to undertake other work were invited to suggest policies which might lead to profitable results. Senator Lynch also referred to the evidence given by persons who were supposed to represent the views of the primary producers. He had a tilt at Mr. Tilt, the solicitor of the Victorian Wheatgrowers’ Corporation, who was appointed by that body to submit its views to the committee.
Senator Kingsmill:
– As a matter of fact the Line carries practically no wheat.
SenatorFOLL. - Senator Lynch made it appear as though no effort was made to obtain the views of representatives of the primary producers on the subject. I merely point out that Mr. Tilt was specially retained by the Victorian Wheatgrowers’ Corporation to put its views before the committee in the most effective way. Another witness who submitted views on behalf of the primary producers was Mr. Robert Crowe, Export Superintendent of the Victorian Department of Agriculture -
Senator Lynch:
– He is. a civil servant.
SenatorFOLL. - Nevertheless he was able to represent the views of the primary producers. As Senator Kingsmill has pointed out, these vessels carry very little wheat. The management was repeatedly offered wheat cargoes, but it did not accept them.
Senator McLachlan:
– It could not handle that class of business.
Senator FOLL:
– That is so. It informed the wheat-growers that it would be wiser and more economical for them to charter tramp steamers on the British or some foreign register that were fitted to handle wheat cargoes. In these circumstances it must be realized that the Governmentowned vessels had no influence whatever upon the ruling rate of freight for wheat. If Senator Lynch had taken the trouble to study the situation closely he would have discovered that it would be practically impossible for these ships to handle more than the merest fraction of our annual wheat crop.
Senator Thompson:
– They only handle about 1 per cent. of the crop.
Senator FOLL:
– That is so. I have heard Senator Lynch severely castigate the Government on various occasions for continuing to carry on public enterprises at a heavy loss, and it was somewhat surprising to me to hear him plead to-night that this undertaking should be continued in spite of the annual loss which it involves. As Senator Pearce and other honorable senators have pointed out, the running of these ships has had practically no influence upon the freight on wool and wheat, for they are not fitted to handle such cargoes. The primary producers of this country should not be misled into thinking that the Line has affected these freight rates in any way whatever.
Senator Hoare:
– Didthe honorable senator sign the interim report which the Public Accounts Committee submitted on this subject?
Senator FOLL:
– I am not sure whether I signed it or not, but I know that I had something to do with drafting it. I do not see that that has the slightest bearing on the case. The interim report of the Public Accounts Committee was drawn up in the early stages of its investigations.
The vital evidence relating to the Australian Commonwealth Shipping Line was gathered subsequently.
Senator Kingsmill:
– It had not begun to come to light previously.
Senator FOLL:
– I resigned from the Public Accounts Committee on the 30th June, 1926, and the interim report was submitted by the then chairman, Sir Granville Eyrie, on the 10th August, 1926. In any case that report could have no influence on the ultimate decision of the committee, as expressed in its final report, and, as a matter of fact, had no bearing upon it. It was the vital evidence which the committee subsequently obtained, and which it found difficulty in obtaining earlier, that led to the committee almost unanimously deciding on the course of action recommended in its final report. There were only three dissentients from the committee’s recommendation, and they were sure to dissent, as their policy is one of socialization of industry. One reason submitted to the committee for the high freights on the Australian trade was that there was too much shipping running to Australian ports, and that, in consequence, many steamers were leaving our ports half empty. Senator Chapman has already pointed out that it costs over twice as much to run Australian ships as it does to run ships on the British register. The Shipping Board had to have a schedule of rates that would enable them to bring their ships somewhere near a paying proposition.That they have failed to do this by over £500,000 a year we already know, andwe have every reason to believe that, because their ships are so expensive to run, the Shipping Board has, by force of circumstances, been compelled to do just as much to keep freights up as it has done to keep freights down.
Senator Payne:
– Our ships Avere always full.
Senator FOLL:
– Yes. The Leader of the Opposition claims that,with better management, our steamers might possibly be made a better paying proposition; but you cannot have better management than thatwhich succeeds in filling the ships. It is generally admitted that the “Bay” steamers are the most popular on the
Australian run. Witnesses before the Public Accounts Committee admitted that the standard of fare on the “Bay” steamers was equal to, if not better than, thatwhich was provided on any other one-class ship on the Australian trade. But I fail to see why the taxpayers of Australia should be called upon to bear the financial loss involved in providing a standard bill of fare for the people who travel between the United Kingdom and Australia. It is generally admitted that the amount of depreciation allowed for on these ships is probably far less than that which has actually taken place in recent years, and is certainly far less than that which is likely to take place in the next few years if the ships are to be run on the existing time-table. Because there are only five “Bay” steamers maintaining a monthly service and calling at all ports in Australia, it is practically impossible to lay them up for a reasonable length of time to give them a proper overhaul. As a result repairs and replacements are likely to be heavier than they have been. It has been pointed out by the Shipping Board that,if the Line is to maintain the present service, two more ships must be purchased and used on the run between Australia and Great Britain. What a howl there Avbuld be from the taxpayers if, within the next few months, the Government asked for another £1,000,000 or £1,500,000 to increase the size of a fleet which is already losing over £500,000 a year!
Senator Kingsmill:
– Each ship would cost a good deal more than £1,000,000.
Senator FOLL:
– Quite so.
Senator Payne:
– Their cost would need to bewritten down by one-half immediately.
Senator FOLL:
– These are the figures for building the ships in Great Britain. If it was proposed to build them there, our friends opposite would put up the demand which they made in connexion with the building of the new cruisers - that they should be built in Australia.
Senator Kingsmill:
– If they were built in Australia they Avould cost about £2,000,000 each.
Senator FOLL:
– It is not unreasonable to assume that if two additional ships were constructed the losses would be very much greater, because the present monthly servicecould not be extended. The ships, during recent years, have not been of great benefit to the primary producers, as suggested by Senator Lynch and other honorable senators, because the primary producers in common with others, have had to contribute towards the heavy loss which has occurred every year. It is also interesting to note that the wages paid, and the conditions under which the men work on the Line are better than those obtaining on ships in any part of thu world. Even the United States of America, which is regarded as a country of high standards, does not attempt to reach our standard in this respect, which is largely necessitated by the awards of our arbitration court. I cannot see why the Australian taxpayers should be asked to meet this tremendous loss every year in order to find profitable employment for a few hundred persons, more than one half of whom, I understand, are domiciled in Great Britain. As suggested by Senator Chapman, it would be better to dispose of the Line and pay those working the ships a handsome pension. As mentioned by the Minister (Senator Pearce), the Queensland Government has on several occasions undertaken State enterprises with disastrous results. When the late Mr. Ryan was Premier of Queensland he said that the Australian people were being exploited by the beef barons, who were charging high prices for meat. He contended that if the State acquired State cattle stations, and established State butchers’ shops, the people would be supplied with cheap meat. But the Queensland Government, which acquired stations, was eventually compelled to write down the value of its stations, as the Commonwealth Government has been compelled to do with ships under its control. The State stations in Queensland have been written down to the lowest possible extent, and only a few weeks ago the present Premier of Queensland (Mr. McCormack) submitted the whole of the stations to public auction, and in some instances was unable to get a bid. The Queensland Government also established fisheries and purchased trawlers.
The PRESIDENT (Senator the Hon Sir John Newlands). - The honorable senator will not be in order inreferring in detail to the activities of certain State instrumentalities.
Senator FOLL:
– I was merely showing that the Queensland Government has been quite as unfortunate in its state enterprises as the Commonwealth Government has been in the shipping business. The whole history of State trading enterprises in Australia disclose that they have been a dismal failure.
Senator Duncan:
– There have been exceptions.
Senator FOLL:
– The only exception is the Queensland State insurance department, which is a monopoly, and cannot possibly lose. Generally speaking, the experience in Socialistic enterprises has been such that it is now admitted that it is desirable to dispense with them. If the Government gives effect to its proposal, the electors will recognize that it is shouldering its responsibilities in a business-like way, and is endeavouring to conserve the interests of not only the primary producers and the manufacturers ; but the whole of the people.
Debate (on motion by Senator Grant) adjourned.
page 1093
QUESTION
DINNER ADJOURNMENT
Senator Sir GEORGE PEARCE:
Vice-President of the Executive Council · West Australia · NAT
[10.36]. - As it has been represented to me thut the present hour of adjourning for dinner, as fixed by a sessional order, is somewhat inconvenient to certain honorable senators who have some distance to travel to their hotels, I ask leave to move a motion to make the adjournment hour 6.15 p.m.
The PRESIDENT (Senator the Hoa. Sir John Newlands). - Is it the pleasure of the Senate that the honorable senator have leave to move the motion indicated ?
Honorable senators. - Hear, hear.
Leave granted.
Motion (by Senator Pearce) agreed to -
That, during the remainder of the present session, unless otherwise ordered, the sittings of the Senate or of a committee of the whole Senate be suspended from 6.15 p.m. to 8 p.m.
Senate adjourned at 10.41 p.m.
Cite as: Australia, Senate, Debates, 9 November 1927, viewed 22 October 2017, <http://historichansard.net/senate/1927/19271109_senate_10_116/>.