10th Parliament · 1st Session
The President (Senator the Hon. Sir John Newlands) took the chair at 3 p.m. and read prayers.
page 1148
Order of the Day for the resumption of the debate on the motion by SenatorKingsmill, for the printing of the report of the Joint Committee of Public Accounts on the Commonwealth Government shipping activities, including Cockatoo Island Dockyard, having been road,
– The Senate yesterday, on the motion of the Leader of the Government in the Senate, carried a resolution which provided that until the motion standing in the name of Senator Kingsmill had been disposed of, all other business should be postponed.
– It is true that the Senate yesterday agreed to a motion to postpone the business on the noticepaper for the day until the motion in the name of SenatorKingsmill had been disposed of, but honorable senators did not understand that they would be precluded to-day, not only from asking questions without notice, but also from receiving answers to questions already on the notice-paper. I do not think that the Senate intended its decision yesterday to be so far-reaching as you, sir, have decided.
– Having considered this matter very carefully, I find that I am bound by the decision of the Senate yesterday. The Vice-President of the Executive Council then moved -
That all other business be postponed until after the motion on the notice-paper in the name of Senator Kingsmill, viz., “ 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.
That motion having been agreed to, all other business must, in accordance with the Standing Orders, be postponed. Standing Order 65 reads -
Any motion connected with the conduct of the business of the Senate may be moved by a Minister of the Crown at any time without notice.
The Standing Order is definite. The Minister submitted his motion in accordance with that provision, and I therefore rule that until the motion standing in the name of SenatorKingsmill has been disposed of, all other business should be postponed.
– I do not rise to dispute your ruling, Mr. President, but I should like to be clear as to the course we must follow if the ruling is to govern our proceedings in this chamber. I understood the motion agreed to yesterday to mean-
– The honorable senator will not be in order in discussing that motion now. If he desires to dispute my ruling, he may do so.
– May I be permitted to ask you a question, Mr. President? I understood that the motion agreed to yesterday applied only to yesterday’s business, and that it would have no application to to-day’s proceedings. I take it that your ruling is that, no matter how long the discussion on SenatorKingsmill’s motion may last, no other business can be dealt with until that motion has been disposed of. I point out that some of the questions on to-day’s notice-paper were not on the notice-paper for yesterday. One question in my name on the notice-paper for to-day was not postponed from yesterday, and therefore the motion to which we agreed yesterday cannot apply to it.
– No good purpose will be served by prolonging this discussion. The motion to which the Senate agreed yesterday was clear and definite. The’ Senate decided that until the motion standing in the name of SenatorKingsmill had been disposed of, all otherbusiness should be postponed.
– That motion applied only to that day’s proceedings. I point out that my question on the noticepaper for to-day was not on yesterday’s notice-paper.
– The motion agreed to yesterday affects all business on the notice-paper. I rule that no other business can be deal with until the motion submitted by Senator Kingsmill has been disposed of.
– You, Mr. President, having given your ruling, I reluctantly and respectfully move -
That the ruling bc disagreed to.
I do so for the purpose of giving honorable senators an opportunity to say whether or not they intended that the motion which they supported yesterday should cover all proceedings in the Senate until the motion in the name of Senator Kingsmill had been disposed of. I am surprised at the attitude you, sir, have adopted, and at the interpretation you have placed on the motion agreed to yesterday, particularly in view of your statement that your ruling was based on Standing Order 65. The Minister in moving his motion, did not say that, if agreed to, it would control the conduct of the Senate beyond yesterday, and I do not think lie intended that it should. If he did, he should have so informed the Senate. lt has been pointed out by Senator Findley that there are on the notice-paper for to-day questions notice of which was given yesterday. There might have been also motions of which notice was given yesterday. I think the Senate should not. agree to this procedure without carefully considering the position. I objected to the proposal of the Minister yesterday on the grounds which I then set forth. I said that the Senate should not he sitting, in view of what was going on in another place. The Senate ‘decided otherwise and proceeded to discuss the shipping, position, hut honorable senators should not agree to the suggestion that this fact prevents us from asking questions to-day. In conversation with the Leader of the Senate yesterday I said that I proposed to move the Senate adjournment that afternoon in order to discuss a definite matter of urgent public importance. In deference to his wish that the debate should be continued on the shipping question I agreed to postpone my motion until to-day and he told me that it could be moved to-day. That being so, it must have been in his mind that the motion he moved yesterday would apply only to matters on the notice-paper for that day. If we allow ourselves to be tied up in the manner now suggested we shall place ourselves in a very awkward position. For that reason I ask honorable senators to support, the motion I have moved in order to protect their privileges, and to ensure that business is carried on in a proper way.
Motion (by Senator Sir George
PEARCE) agreed to -
That the question of dissent requires immediate determination.
– There should be no doubt on this question. Senator Needham read Standing Order 65 which undoubtedly establishes the right of a Minister at any time to. move a. motion in connexion with the business of the Senate; but any doubt which might remain is cleared by Standing Order 66, which sa.ys -
The Senate shall, unless otherwise ordered, proceed each day with its ordinary business in the following routine. . .
When the Senate carried the motion which I submitted at the outset of yesterday’s proceedings, it “ otherwise ordered.” It varied the routine of business; it ordered that no other business should be taken until the motion by Senator Kingsmill was disposed of. That was certainly what I thought the resolution meant. Anything else would have been ridiculous. It would be absurd to suggest that because a number of senators on both sides of the chamber have spoken on Senator Kingsmill’s motion, the debate on it has been concluded. Other honorable senators have just as much right to speak as we have, and the debate will not be concluded until the motion is put from the Chair. I regret that the Leader of the Opposition (Senator Needham) misunderstood the position yesterday. I know that Senator Herbert Hays was of opinion that he would be at liberty to move the adjournment of the Senate to-day, but I did not intend to convey to him the impression that he would be able to do so to-day as soon as we met. What I did intend him to understand was that after this debate was concluded there would be nothing to prevent him from moving the formal adjournment of the Senate before any other business came on. He is not prejudiced by this ruling. He will still have the right to move the adjournment of the Senate as soon as Senator Kingsmill’s motion has been dealt with. Senator Needham was good enough, at my request, not to go on with his motion yesterday, and I am grateful to him for it.
– It was my intention yesterday to move the adjournment of the Senate on a matter of urgency; but when I mentioned the matter to the Minister, he asked me not to go on with it, as he intended to move a motion in regard to procedure. I distinctly understood, however, that the resolution which was carried was that the business referred to should take precedence over all other business then on the notice-paper, and over all other business except a motion for the adjournment of the Senate. The business mentioned in the motion moved by the Minister did take precedence, but I did not understand that the result of that motion would be to preclude me from moving the adjournment of the Senate in order to discuss a matter of urgent public importance. I understood that I should have an opportunity to move the adjournment of the Senate today.
– It is open to the honorable senator to move the adjournment of the Senate now.
– I have had the ruling of the Chair that I cannot proceed with my motion to-day.
– The honorable senator can do so after the debate on the shipping line is concluded.
– Yes, but not now. I fully understood that Senator Kingsmill’s motion would take precedence over all other business in view of the decision yesterday-
– Over all other business on the notice-paper.
– But I understood that an adjournment motion would take precedence, under any circumstances whatever, over other business whether Government business or otherwise, so long as it was supported by the requisite number of. honorable senators.
SenatorFindley. - I desire to know what is the position of honorable senators who wish to . move in a certain direction. It has been suggested to Senator Herbert Hays that he should now move the adjournment of the Senate for a specific purpose. One honorable senator, whose opinion is entitled to respect says that this can be done. If Senator Herbert Hays can proceed with his motion, I contend that questions without notice may also be asked. Every honorable senator was under the impression yesterday that the motion submitted by the Leader of the Senate referred only to the business of the Senate for that day, and that we should be at liberty to-day to bring forward on a formal motion for. the adjournment of the Senate any matter of urgent public importance. If, as the result of your ruling, Mr. President, we are precluded from doing this, I can only say that by upholding your ruling we shall be establishing a dangerous precedent.
– Standing Order 64 governs the position that has arisen.
– Other honorable senators who are just as conversant with the Standing Orders as is the Leader of the Senate, hold a contrary view. They are of the opinion that it is competent for Senator Herbert Hays to move the adjournment of the Senate now.
– He may do so at the right time.
– The usual practice is to move . the adjournment of the Senate at the commencement of the day’s proceedings. In nine cases out of ten an honorable senator who wishes in this way to discuss a matter of urgent public importance informs the President, and at the same time hands him a written notice framed in accordance with the Standing Orders.
– But the motion is not moved until after notices of motion and questions are dealt with .
– It cannot be done after the business of the day has been proceeded with.
– The majority of honorable senators were under the impression that the motion agreed to yesterday related only to the proceedings of yesterday; otherwise it would not have been acquiesced in so readily, even by Government supporters.
– I can scarcely be expected to read what is in the minds of honorable senators. In calling on business I must be guided by the Standing Orders and what is on the notice-paper for the day. As I had in my possession when we met to-day two notices of motion for the adjournment of the Senate, honorable senators will recognize that I did not give my decision without careful thought. The motion yesterday was for the postponement of “ all other business “ until after the motion in the name of Senator Kingsmill had been disposed of. I was guided in my decision this afternoon by the terms of that motion. I regret that certain honorable senators are disappointed. It is clear, however, that the Senate alone is to blame for the position that has arisen. I am merely following the instructions which the Senate itself, by its decision yesterday, gave me. Standing Order 66 sets out the routine in which the Senate, “unless otherwise ordered,” shall proceed with its ordinary business. Yesterday, the Senate, by carrying the motion submitted by the Vice-President of the Executive Council, decided that the ordinary routine of business should be departed from.
– Am I to understand from your ruling, Mr. President, that as a result of the resolution carried yesterday, no business, not even a motion for the adjournment of the Senate, can take precedence over the motion in the name of Senator Kings- mill.
– I suggest that the Senate should confine its attention to one point of order at a time.
– I am not yet convinced, Mr. President, that your ruling is right. The Leader of the Senate is responsible for this muddle.
– If there is any muddle at all it is in the honorable senator’s mind.
– The trouble has been caused by the Minister’s want of definiteness in the resolution carried yesterday. He has informed us that the debate on Senator Kingsmill’s motion cannot be concluded until the mover has replied. We all know that. There was no intention on the part of honorable senators on this side to prevent others from speaking to it. I believe there is some doubt even in your mind, Mr. President, about the position that has arisen, and I submit that, despite the resolution carried yesterday, it is competent for an honorable senator to move the adjournment of the Senate now; also I contend that questions on the notice-paper for to-day can be answered and the ordinary business of the Senate proceeded with.
Question resolved in the negative.
– As the motion moved by the Leader of the Opposition (Senator Needham) has now been disposed of, shall I be in order, Mr. President, in moving the adjournment of the Senate to discuss a definite matter of urgent public importance?
– Order! The Senate has just carried a motion upholding my ruling that no other business can be taken until the motion in the name of Senator Kingsmill has been disposed of.
– The Minister (Senator Pearce) suggested that the point which I raised should not be confused with the motion moved by the Leader of the Opposition (Senator Needham), that your ruling be disagreed with.
– The first Order of the Day has already been called on; it must now be proceeded with.
page 1151
Report of Pu blic Accounts Committee.
Debate resumed from 9th November (vide page 1093) 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.
– The most important portion of the report of the Public Accounts Committee presented to the Senate by SenatorKingsmill, is that contained on page 19, which reads: -
The proposition which the committee recommends for the future of the Commonwealth Line is for the establishment in Australia, by Australians, of a companywhich wouldbe free from the influence of outside shipping combines or associations, to take over from the present holders the ships comprising the existing fleet, and to run the Line under the control of such company, shareholders and directors, on business lines, with the utmost possible guaranteed support of the Government in such directions as the granting of mail contracts, the sea carriage of Government goodsand material, the transport of immigrants coming to Australia under the control, or withthe assistance of the Government, and in such other ways as may, from time to time suggest themselves.
It isquite obvious that at the time the committee presented its interim report to the Senate on 10th August, 1920, it had not fully completed its investigations. Therefore, any decisions then reached were liable to review or complete alteration when the final report of the committee, based upon all the evidence, was prepared. Whilst the interim report may serve a useful purpose in one way, it should, to a large extent, be disregarded. There is no doubt that the Government intends to dispose of the Australian Commonwealth Line of Steamers, as its intention has always been to refrain from entering into any trading operations. The Government has from time to time disposed of the undertakings, established by a previous Labour administration, which subsequently came under its control. Whilst we may object to its actions in this direction,it has to be recognized that it favours the destruction of the whole of the business undertakings which came under its control when it assumed office. The Commonwealth Bank was established by a Labour administration, but it is now clear that the Government intends to destroy the trading section of that great institution.
The PRESIDENT (Senator the Hon. Sir John Newlands). - Order! The honorable senator will not be in order in discussing at lengththe Commonwealth Bank.
– Do you rule, sir, that I cannot refer to the question at all?
– The honorable senator was proceeding to discuss the Commonwealth Bank at some length. He is not entitled to do that on this motion.
– I was merely showing that the Government has decided to destroy the trading section of the bank. That is part of its policy.
– Order! The honorable senator is not to defy my ruling. I have already ruled that he is not entitled to discuss the Commonwealth Bank on this motion and if he persists I shall be compelled to follow the course usually adopted in such circumstances.
– It is not my intention to transgress your ruling. Perhaps I shall be in order in saying that the Government has determined to destroy, or shall I say, dispose of the Commonwealth Government Line. I do not blame it, because it is part of its policy. The Government was also responsible for the closing down of the Commonwealth Saddle and Harness Factory; but it has not yet closed the Small Arms Factory at Lithgow. Honorable senators will also remember that the Senate sat all one night discussing a proposed arsenal at Tuggeranong, which never materialized. The Labour party established the Commonwealth Woollen Mills at Geelong, which were eventually sold to private interests.
– The honorable senator surely does not expect this Government to carry out the policy of the Labour party?
– No; but I expect it to stand up to its determination, and dispose of the Australian Commonwealth Government Line of Steamers. It will not, however, do sowithout a very strong protest from honorable senators on this side of the chamber. Apparently, it is its intention to pass over to private enterprise the whole of the Government business activities, with the exception of the Small Arms Factory at Lithgow, including the Shipping Line, and also the remnant of the
Commonwealth Bank. I would not expect from the Public Accounts Com mittee, as now constituted, a recommendation in favour of the retention of the AustralianCommonwealth Line, but I would expect the representatives of the Labour party on that committee to place on record their view of a proposal to dispose of a Line of steamers for the establishment of which Labour was responsible. I find that they have done so in a manner that should arrest attention and compel the would-be destroyers of the Line to furnish an adequate reply. In a minority report signed by E. C. Riley, P. J. Moloney, and C. E. McHugh, we have contradictions of the statements of. honorable senators who support the Government that the Line has had little or no effect in the direction of reducing or preventing an increase of fares and freights. On page 22 of the committee’s report, I find the following - The Line has been,and still is, a controlling factor in regulating freight rates on exports from Australia to the United Kingdom, and imports to Australia from the United Kingdom.
That is a clear statement which demands a rebuttal from those who are out to destroy the Australian Commonwealth Line -
In support of the above claim, we would point out that during November,1925, it was proposed that some outward rates from the United Kingdom should he increased by approximately 10 per cent. The directors in Sydney replied that they could not agree to any increase as they considered present rates were sufficiently remunerative to British owners. This suggested increase did not materialize.
Is that statement not emphatic enough to indicate to the most stubborn-minded opponents of the Line that it did prevent a proposed increase of 10 per cent. in freights? The minority report continues -
Further, in August,1926, the Australian Commonwealth Shipping Board was instrumental in bringing about a general reduction of approximately 10 per cent. on freight rates on commodities exported from Australia to the United Kingdom and the Continent.
I invite the attention of those who are anxious to assist Viscount Inchcape, and who want to see the Australian Commonwealth Line swept into oblivion, to these words -
Confidential documents placed before the committee prove that this all-round reduction was not a spontaneous action by the other ship-owners, but was forced by the determined action of the members of the Shipping Board in Sydney.
The fact that in November, 1925, the Shipping Board prevented an increase of 10 per cent. in freight, and in August, 1926, brought about a reduction of approximately 10 per cent., should carry considerable weight -
The annual saving to Australian primary producers and exporters by reason of this reduction alone amounts to far more than the greatest annual loss made by the Line, even including all interest and depreciation charges, and it must be remembered that the greater portion of voyage losses was incurred owing to the unsuitable tonnage transferred to the board.
We know that in the stress of war, large numbers of vessels were bought, some of which were out of date; but those outofdate boats have since been disposed of, andour Line now consists of a small number of up-to-date vessels which, if properly managed, should return a handsome profit instead of being run at a loss. Dealing with the statement of honorable senators opposite the minority report proceeds -
The opinion was expressed that the Line is not now in a position to control freight rates between Australia and the United Kingdom and the. Continent owing to the increasing competition by foreign ship-owners, but this is entirely refuted by the fact that, as recently as the end of October last, the Australian Commonwealth Shipping Board received advice from its Loudon office that both the British and foreign owners proposed to immediately increase freight rates by approximately 15 per cent. on all cargo carried from the United Kingdom and Continent to Australia.
I invite the attention of Senator Pearce, who was a member of the Government which created the Line, to that statement. The board, when asked to agree to increased freights, declined to fall in with the proposals, with the result that the suggested increases did not take place. In the face of those facts how can any honorable senator say that the Line has not controlled freights to and from Australia? Seeing that the committee’s report is based on sworn evidence, any honorable senator who says that the Line has not controlled fares and freights is either deceiving himself, or is endeavouring to deceive others. Honorable senators on this side will not be deceived in that way. The minority report continues -
Had the board agreed to this proposal the earnings of tlie Line would have increased materially, but as the Commonwealth ships carry only about 7 per cent, of the imports, its earnings would benefit only to that extent, whilst British and foreign owners would receive additional earnings under “tlie higher rates of freight in respect of 93 per cent, of the trade. The annual saving to Australia in tl is instance again more than covers tlie annual loss by the Line after including all charges such as interest and depreciation.
No honorable senator opposite has dared to challenge the accuracy of that statement, which therefore stands. In that case what justification is there for abandoning the Line? The only reason for the Government’s decision is that its policy is to destroy all such governmental undertakings and to place them in the hands of private enterprise. The Canadian Government has shown wisdom in deciding to retain its shipping Line, notwithstanding the heavy losses involved. Last year the losses on that Line amounted to £1,S21,981, compared with a loss of £593,879 on the Australian Commonwealth Line of Steamers. In view of the decision of the Canadian Government to continue in the shipping business, Australia should hesitate before abandoning its steamers. If the policy of discontinuing .every undertaking that does not pay is to be followed, how long will the East- West line be retained? That line does not pay. Nor will the railway from Oodnadatta to Alice Springs, or that from Darwin to Newcastle Waters pay for many years. I believe that the railway from Canberra to Queanbeyan does pay; but the Commonwealth railways as a whole do not pay. In the circumstances, we may reasonably expect to see tabled a motion that the Commonwealth railways be handed over to private enterprise and heavily subsidized by the Commonwealth. It is not proposed to sell the Line, but to hand it over to a company which shall be assisted by the Government in every possible way. Instead of granting substantial assistance of that nature to a new company, it would be better to render the same assistance to the existing Line, while retaining control of it. Some years ago a number of astute financiers in Canada decided that it would be a good thing .to build a railway across Canada to connect the Atlantic and Pacific Oceans. They induced the Canadian Government to advance them £5,000,000, and to grant them land aggregating 250,000,000 acres along the route of the proposed railway. The railway was completed in due course, and its owner, the Canadian Pacific Railway, is now in a sound financial position. The £5,000,000 advanced to the company by the Canadian Government has been lost for ever, notwithstanding that the 250,000,000 acres of land which it granted to the company is now worth probably £1,000,000,000. That railway pays the Canadian Pacific Railway handsomely, but the profits do not go to the people of Canada. Although the. losses in connexion with the Australian Commonwealth Line of Steamers amount to over £500,000 per annum, when we take into consideration the valuable services rendered to Australia by the Line in the direction of controlling freights and fares to and from Great Britain, that loss is worth while. Were it not for the Line, it would not be possible to travel to Great Britain from Australia for £38. The Government is not prepared to incur further losses in connexion with its steamers, but in other directions it is profligate in the expenditure of public money. Last year £442,410 ls. 2d. was advanced to the exporters of wine by way of bounties, and no doubt further payments of a similar nature will be made this year. Why should the exporters of wine receive this preferential treatment from a Government which is prepared to sacrifice the Australian Commonwealth Line of Steamers? It cannot be said that the wine industry is of more importance .to Australia than is the provision of adequate transport facilities at reasonable rates.
– What would the honorable senator do if he owned the Line?
– It is a pity that Senator Ogden cannot approach a question of such importance from the point of view of the common good. He should not concern himself with what I, as a private citizen, would do “if I were an exporter of wine or the owner of a shipping line, but with what is best for this country. If it is a good thing to abolish the Line because it loses a certain sum of money every year, why should we continue to support, by means of a bounty, the wine export industry in this country? There is no more justification for the one than for the other, only that the people, perhaps, do not know that this Government hands out nearly half a million pounds a year to the wine industry. I am not opposing the paying of bounties, because it is part of the policy of this country. But if it is justifiable to pay bounties for the support of primary industries, it is equally justifiable to incur expense foi’ the purpose of preserving a national shipping industry. We must remember that the days of competition have gone by forever. Some of us can remember the time when it was possible to travel by boat from Sydney to Melbourne for 10s. That time has gone, however, and now the shipping: lines, instead of fighting one another combine their intelligence and fight the public. The bounty ro the cotton yarn industry- amounts to £30,000 a year. Why should we continue to spend that sum on one of the industries of the State represented by Senator Thompson? On shale oil a bounty of £705 3s. was paid last year, and on sulphur the bounty amounted to £34,338 16s. Can any one tell me why the people of this country should come to the aid “f the sulphur manufacturers, any more than they should help the shipping Line ? The operation of handing over the Commonwealth cheque to the sulphur producers, and the incurring of a loss on the Government Shipping Line, are exactly the same from the point of view of the Treasury. The loss on the Shipping Line is, in effect, the payment of a bonus. That, at any rate, is how I look upon it. On wire netting a bonus was paid a mounting to £90,299 ls. 2d. Is there any particular reason why we should pay bonuses on the manufacture of wire netting? Why cannot the manufacturers stand on their own resources? On galvanised iron sheets the bonus amounted to £67,915 ls. lid., and on traction engines to £250. The total amount of the bonuses paid to industry last year was £771,346 7s. Id.
– What single bonus was equal to the loss on the Shipping Line for the year 1 Not one of them.
– The total bonuses paid last year amounted to nearly £250,000 more than the losses made on the Shipping Line. Senator Thompson cannot deny that. I ask the honorable senator, who is so anxious to destroy the Shipping Line, why should the Commonwealth continue to pay bonuses to one section of the community while refusing to pay them to another? If the Shipping Line is to be sacrificed because it is a load on the Treasury, will the people bc prepared to keep on paying bonuses to other industries? I am reminded that at one time, when the Kaiser was considering ways and means of reducing expenditure, ho appointed a committee to investigate the possibility of deposing many of the pettykings and rulers in Germany. The committee reported that, in its opinion, all these offices could be abolished; but the Kaiser overlooked the fact that once the German people set out on the job of abolishing rulers they would abolish him as well, and that is exactly what they did. Therefore, if Senator Ogden and other honorable gentlemen are determined to abolish the Shipping Line, they can take it from me that the bonuses now handed out so freely by the Com-monwealth will come up for review, and I would not be at all surprised if they, too, were abolished. There is another item which I do not think I should allow to pass without reference. There are honorable senators on the Government side who represent Queensland, and who are supporting the Government in its detrimination to get rid of the shipping Line. Those members have not said a word about the enormous sum of money that has been paid year after year to foster, to maintain, to prop, to keep on its legs, the sugar industry of Queensland. They are making a mistake if they think they can destroy the Commonwealth Shipping Line, and still have their sugar industry continuously drawing doles from the rest of the Commonwealth.
– Does the honorable senator want to throw out of employment all the men working in the sugar industry?
– The honorable senator cares a great deal about the men ! Does he want to see the men employed on the ships thrown out of employment, or thrown to the tender mercies of the Inchcape interests? But he wants the sugar industry to put its greedyhands into the pockets of every one in the Commonwealth, and make them pay tribute day by day. I have here a statement dealing with the years from 1901 to 1922, showing what it has cost the Commonwealth to pay the £6 per ton protective duty on sugar. It is shown here that the sugar industry has, on an average, cost the people ofthis country a good deal more than £1,000,000 every year in the way of duty alone. In the 21 . years of the period under review, the total amount of duty at the rate of £6 per ton, paid to protect the locally-grown produce, amounted to £24,608,323. Does Senator Thompson think the people of Australia are going to stand idly by and pay this enormous amount of taxation if the principle of Government support to industry is challenged by the disposal of the Commonwealth Line? The people will have to consider whether it is wise to single out certain industries for this preferential treatment. I desire to invite the attention of honorable senators to an exceptionally well written article in the Sydney Sun of the 9th instant, in which the proposal of the Federal Government to dispose of the Shipping Line is dealt with. Every one of the series, of which this article is part, gives concise reasons why the Line should not be disposed of, and these reasons are set out with remarkable force and clearness. They should carry conviction to everyone whose mind is not obsessed or stultified by association with the members on the Government side of the Chamber. The article frankly admits that the Line does lose half a millions pounds a year. No one denies that. The sugar industry cost the country approximately £25,000,000 during 21 years, but there is not a word about that from the honorable gentlemen on the other side. The article, while admitting the loss of £500,000 a year, asks what is the reason, and then supplies the answer to the quesin these words -
Because the controlling authorities are at loggerheads between themselves. - The Government, in fact, with a Prime Minister, who is obviously hostile to the idea of a Government Line of Steamers, has entirely neglected this business.”
If that statement is true, and I believe it is, and if the Prime Minister has not endeavoured to straighten out these difficulties, it is he who is responsible for the loss of £500,000 a year. No shipping company could run these ships more successfully than they could be run by an efficient board, or an efficient manager, appointed by the Government. Another statement that should carry conviction is the following: -
This Line is the only defence the Australian producer, who wishes to export, has against the Conference Lines. It is the only defence which the importer has against the same great sea-controlling monopoly….. For many years all the power and influence of this Combine has been bent upon the destruction of the Commonwealth Line.
We may presume that the writer of that article thoroughly understood his subject. It is regrettable that honorable senators supporting the Government consistently ignore the menace. The Sydney Sun would not have made that statement if it had not been sure of its ground. On a previous occasion the same newspaper declared, on the authority of the minority report of the Public Accounts Committee, that the Line had been responsible for substantial reductions in freight, and for defeating attempts by the Combine to increase freights. It further stated that the Combine was not unaware of the influence of the Line, and would leave nothing undone to destroy it. Unfortunately for Australia, we now have in office a pliant Prime Minister, who, according to the Sun, has entirely neglected the interests of the Line. We may rest assured that the Conference Line will show very little consideration for the primary producers of Australia when the Australian Commonwealth fleet is disposed of. All that the Combine is concerned with is the making of more profits; and more profits will only be possible by the destruction of the Line. The same article states further -
For the £500,000 loss each year which the general taxpayer must bear, the Line probably saves several millions in freights by keeping the charges of the Conference Lines down upon the level of reason.
It then asks -
Is that no justification for its existence?
Of course there can he only one answer to that question. The fact that the Line has kept down freights is the strongest possible reason for its continuance. The payment of this £500,000 a year may be regarded as an insurance against the levying of higher freights and fares by the shipping Combine. This consideration should weigh with supporters of the Government. The article further states -
It is all very well for Mr. Bruce to talk about safeguards. There is only one safeguard against a monopoly, and that is an active competitor.
Unquestionably the Line has been an active competitor, and it has influenced freights and fares in the interests of the people of Australia. Finally the article states -
If a private company burdened with the conditions which Mr. Bruce indicates that the Government will impose on the purchaser of the Line, can make the Line pay dividends, then there is no excuse for the loss of £500,000 a year made by the Government, and it behoves the Government, before it destroys what is undoubtedly a safeguard, to discover if, by any means, and how, that yearly deficit may be avoided.
That is what any sensible person would do. It is the business of the Government to discover who has been responsible for the loss in operating the Line, and to obviate such losses in future. There is another aspect from which the activities of the Australian Commonwealth Shipping Line should be considered. Every year a considerable sum of money is paid to the Orient, the P. & O., and other companies for the carriage of mails from Australia. Why should not a greater portion of that subsidy be paid to the Line ? Under the new arrangement more will be made available to the Government fleet for such services. The following statement prepared by the PostmasterGeneral’s Department, shows what is being done: -
Suez, and by which mails to Great Britain are despatched, are under contract to the British post office. The amount that will be paid in respect of the year 1928 for the mails despatched to Great Britain is approximately £25,000.
I understand that last year £56,000 was paid to Burns, Philp, and Company for the carriage of mails to the mandated territories and other islands in the Pacific. Altogether the substantial sum of £249,000 waspaid by the Government as subsidy to various mail steamship companies for the carriage of Australian mails. Of that amount only £1,500 was received by the Australian Commonwealth Shipping Line. If a Labour Government had been in office it would have utilized the resources of the Line to the fullest extent in the carriage of mails to and from Great Britain, and consequently it would have been in a better position to-day. In this respect the present Government has not given the fleet a fair deal. During the debate some reference has been made to the losses incurred in the running, of the railways in the several States. An attempt was made to compare such services with the operations of the Australian Commonwealth Line. That argument was entirely fallacious. The railways of Australia are an excellent investment because whilst they do not pay directly, they increase enormously the value of land served by them. [Extension of time granted.] Recently Mr. Eraser, the Chief Railway Commissioner in New South Wales, stated that the railways in that State had increased land values by £250,000,000, not one penny of which had passed into the coffers of the Railway Department. Is it any wonder that, under present conditions, State railways are not paying propositions? It is the policy of the Government to pay bounties for the encouragement of Australian industries. Why should not a bounty or subsidy be paid to the Australian Commonwealth Shipping Line? Since the inception of Federation up to June last the sum of £5,747,236 was paid in bounties.
The PRESIDENT (Senator the Hon. Sir John Newlands). - Order! The honorable gentleman has already dealt extensively with the subject of bounties. I ask him now to confine his remarks to the operations of the Line.
– Very well, Mr. President. I now direct attention to an article on the Line which appeared in the Pastoralists’ Review on 15th of October, 1927, and in which the following passage occurs: -
Considering the extortionate port dues that are charged in this country, the atrocity of fixing Customs duties on ships’ stores used by ships while on the Australian coast ….
The article goes on to comment upon other subjects; but I have quoted one aspect of the question which affects all other shipping companies. The State Governments ought to abandon their extortionate port dues. The article continues -
The enterprise inthe very first was doomed to failure, like every other State enterprise, from the railways down, and can only he continued by heavy additions to our public debt.
The article concludes by suggesting that we should scrap the lot, which correctly expresses the views of honorable senators opposite. I take strong exception to the statement that every State enterprise has been a.failure. That is not the case. I should not be surprised to learn that the Federal Capital Commission intends to dispose of the brickworks in this Territory. It intimated a few days ago that it proposed to hand over its transport services here to private enterprise, which is to-be assisted to the extent of a subsidy of £9,000 for the first year. This is being done merely because the commission has not the capacity to’ successfully conduct the service. The amount I have just mentioned is not regarded by the Government as a loss, but a subsidy. If the Federal Capital Commission suggests; that the brickworks here be sold, the Government should ask its members to make room for men who are capable of undertaking the work they were appointed to perform. If they cannot con trol two or three buses, it is unreasonable to expect them to be able to efficiently control brickworks. The New South Wales Government also established brickworks -
The DEPUTY PRESIDENT (Senator Plain). - Order! The honorable senator must confine his remarks to the question before the Chair.
– I merely mentioned the brickworks in operation in New South Wales because honorable senators opposite have frequently stated that every governmental activity has been a failure. What is the matter with the Commonwealth Shipping Board if, as Senator Foll stated, the ships frequently leave Australia only partially loaded ?
– That is not so. The ships have been fully loaded, which makes the position hopeless.
– I am sure it was not the intention of Senator Foll to mislead the Senate; but if the ships are leaving Australian ports only partially loaded the Commonwealth Shipping Board is not doing its duty. As the taxpayers have to provide millions of pounds in the way of bounties and Customs and excise duties, there should be no complaints if the comparatively small loss incurred by this Line has to be paid by the people, particularly when we consider the great benefit it has been to the Commonwealth. I challenge honorable senators opposite to deny the fact that if the Line is disposed of, Australian trade and the convenience of overseas passengers will be seriously affected. I should like to hear Senator Thompson, who doubtless is interested in the sugar and other industries fostered by the Government, endeavour to prove that the Commonwealth Line has not been responsible for defeating two proposed increases in fares and freights, and for preventing a further increase of 15 per cent. Information to this effect is to be found on page 22 of the report from which I have already quoted. I am not conversant with the powers of the Public Accounts Committee, but I think it should investigate the question of placing the Line and Cockatoo Island under separate control. If the Australian Commonwealth
Shipping Line were placed under the control of a manager, and the Cockatoo Island Dockyard under another authority, differences of opinion would cease to exist, and it would then he an easy matter to discover who was responsible for the losses that have been incurred. Cockatoo Island, which is being maintained largely for defence purposes, cannot be expected to show a profit; but the Shipping Line should at least pay interest on the capital invested. I enter an emphatic protest against the intention of the Ministry to sell these ships to a company which is to receive substantial support from the Government. If the Government can assist a company, it should control the Line; it is wrong to use public money to assist private enterprises. The Government should either keep the Line under its sole control, or dispose of it. I move -
That all the words after “That” be left out, with a view to insert in lieu thereof the following words: - “the decision ofthe Government to sell the Commonwealth Line of Steamers is inimical to the best interests of the primary producers and the people of Australia, and in the opinion of the Senate the Line should be retained and reorganized.”
Question - That the words proposed to be left out be left out - put. The Senate divided.
AYES: 7
NOES: 21
Majority . . . . 14
AYES
NOES
Question so resolved in the negative.
Amendment negatived.
– The document we are discussing is slightly overdue, but is, nevertheless, a most interesting one. If I had any doubt as to the wisdom of the disposal of the vessels of the Australian Commonwealth Shipping Line it would be dispelled by two paragraphs in the minority report of the committee. Theseparagraphs are as follows: -
Australia is situated far away from the markets in which it must compete for ‘its existence, and to do this successfully we must ensure that our ports are served with a sufficiency of modern, fast tonnage to enable our products to be marketed, not only as quickly as possible, but also as economically as possible.
The present steamers, five “ Bays “ and two “ Dales.” cannot be expected to maintain the existing service without serious risk of breakdown and consequent dislocation. To permit of the laying-up and overhaul of ships, and, perhaps, the extension of services, new tonnage will be necessary. Owing, however, to recent development in methods of propulsion and the doubts that at present exist as to the most economical method to be employed, it is considered inadvisable that new tonnage should be ordered until such time as the superiority of the Diesel or other engines has been demonstrated.
These paragraphs clearly indicate that if we are to keep the Line going we must go ahead vigorously with a building programme. The history of the Line is well known, and the great display of indignation we have had from honorable senators opposite for the edification of their supporters will not deceive any one who pauses to think. Senator Grant, during the course of his speech, referred frequently to the people who, he said, were out to destroy the Australian Commonwealth Line. These destroyers, to use the honorable senator’s own word, are not the people whom he had in mind. They are really the maritime unions. It has been said, again and again, that the Australian producer must not be left at the mercy of the overseas Shipping Combine. But that cry has long since ceased to terrify any Tasmanian whose comings and goings are on the sea. Bitter experience has taught the producers of Australia what combine it is that has done them the greatest possible harm. . What they have most to fear is the combine of the waterside and maritime unions. Australia’s industrial and navigation laws have given them an absolute monopoly which they have exploited with a vindictiveness and ruthlessness almost beyond imagination. A most interesting document was road by Senator Grant entitled, “ Unlocking the door to Inchcape.” It was’ anonymous; no one knows who wrote it nor whose opinion it expresses; but, apparently, V.’iscount Inchcape is the great bogy of honorable senators opposite. Australia owns five “ Bay “ steamers and two “Dale” steamers, with a total tonnage of less than 100,000 tons; and we are told that if we sell these vessels we shall be absolutely at the mercy of the Conference Lines. If those seven steamers are the only weapon we have with which to fight the Shipping Combine, we have about as much chance as a puny mouse has against a hungry tiger cat. If these seven vessels are all we have to keep down freights and make “this extraordinarily rapacious Combine” behave, we are depending on a paltry and weak weapon. Job control killed the Line. I speak as one who in his comings and goings to this Parliament must necessarily travel by water. Sea communication and transport is vital to Tasmania, unless travellers are conveyed by air, which I hope will be possible before long. Seven or eight years ago I believed that tlie only hope for Tasmania was that the Government, either Commonwealth or State, should enter into the shipping business. Since then a Nationalist Government in Tasmania has tried the experiment of running a line of steamers. It bought ships, and to control them, obtained the services of a man who had had a long experience in the Tasmanian shipping trade. With that equipment, it em- barked on the new enterprise.. The venture, however, proved a dismal failure. Many reasons have been advanced for its lack, of success, but the outstanding reason was that the Line was a target for the darts of the unions. I do no’t know whether that was because it was a Government concern, but the fact remains that in every possible way the unions harassed the Line, with the result that eventually a Labour Government was glad to get rid of it. The two vessels, which have been retained by the Tasmanian Government in order to fulfil promises made to the inhabitants of King and .Flinders Islands, are run at a loss. Having carefully studied the committee’s report I concluded that only one reason remained which could justify the retention of the remaining seven vessels belonging to the fleet. They are fairly modern ships, which were specially constructed to be of service in the event of wai1. The “ Bay “ steamers in particular were designed to carry fairly heavy armament. They have specially constructed bulwarks and decks, and are capable of mounting eight 6-inch guns. Those vessels would be able to protect themselves against aru enemy, or they could act as commerce destroyers. The Ferndale and the Fordsdale were constructed with the same object. The seven vessels remaining could be used as auxiliary cruisers or as transports. They would be capable of carrying a couple of brigades. It might be argued that, although from, a purely commercial point of view they represent a loss, their value in wartime would justify their retention. But even from that point of view the Government would not be justified in retaining the Line. We do not know the nature of future naval warfare, or whether those vessels would be of any great service to us iri an emergency. Moreover, we all devoutly pray that before the next international upheaval takes place, they will long have been out of commission. During this debate much has been said both as to the losses incurred by the Line and the benefits Australia has derived from its operations. We know something definite about the former. The losses which have been sustained amount to over £11,000,000, which amount is being increased annually by about .£500,000. Balance-sheets show the losses clearly, but there is no such tangible evidence as to the benefits we have gained from the Line. All such estimates are mere assumptions. It is probable that, instead of saving millions of pounds to the people of Australia, the Line has had the opposite effect. During a large proportion of the time it has existed the Line has been the breeding ground of industrial strife. Job control has flourished in connexion with the Line, which in every possible way has been hindered and harassed by those who should have rendered it all the assistance in their power. Now those who killed “ the goose that laid the golden egg” are wailing because of the Government’s decision. The shipping business is perhaps the mostintricate business in the world. For many centuries Great Britain has led the way in shipping matters. It is true that during recent years she has lost a little of that lead, but she is coming into her own again. It is futile to think that a governmental undertaking in Australia can compete successfully with ships run by people who for generations have been engaged in shipping. Honorable members opposite have said that the Line should be retained in order that we mar built up an Australian mercantile marine. Why is that necessary? The establishment of the Line presented the opportunity, while the Navigation Act, which provided conditions superior to those enjoyed by the seamen of other countries, gave every encouragement to its development. But those who had most to gain by the establishment of the Line, and in whose interests the Navigation Act was passed, have not played the game. That that has been so those of us who come from “ the little two-bob island” of which Senator Grant speaks so contemptuously are fully aware. I shall recall but one instance which should be sufficient to prove that statement. Last February the Nairana was held up at Launceston for three days because one of the members of its crew wished to remain there. He advanced the plea that he was sick; but the port medical authorities at Launceston who examined him said that he was fit to go to sea. Nevertheless, the vessel was held up for three days, and Australian citizens, many of whom could, not afford to do so, were obliged to incur additional expense through having to remain in Launceston for that period. One man caused all that trouble. In the face of instances of that nature, which have been all too frequent, it is idle to talk of building up an Australian mercantile marine. Honorable senators opposite, while professing great love for Government enterprise, have been most emphatic in their bitter hostility to privateenterprise of any kind. That private enterprise will render far better service than can any Government-controlled organization is true of the shipping business particularly. I congratulate the committee on its report, and the members who signed the minority report for having emphasized the point contained in its last paragraph. That report should be sufficient to convince honorable senators that the wisest course to adopt is to cut our losses forthwith, and to get out of the shipping business. We are a part of the British Empire, whose tonnage is greater than that of any other nation. There need be no fear that the disposal of the Line will leave us without ships to carry goods to and from Australia. The competition between the various shipping companies is so keen that wherever there are goods to be carried vessels will call for them. While I hope that the British Empire will continue to lead in the shipping industry, I cannot see that the retention of our small fleet of seven vessels will do much in that direction. In any case, it is not reasonable to think that a Line which carries only about 7 per cent, of the cargo shipped to and from Australia can be that wonderfully efficient means of keeping down freights and protecting the Australian producer that honorable senators opposite would have us believe. He knows all about the protection he gets from this. wonderful shipping industry of ours, the chief output of which is strikes, industrial unrest, and turmoil. That being so, I am not prepared to see this country pay over half a million pounds a year to maintain the Line. I support the motion that the report be printed.
– What impresses me most in listening to this debate is the keen solicitation professed by members of the Opposition for the primary producers. They maintain that if the Line is disposed of the primary producer will be charged extra freight, and that this small fleet of seven steamers lias been the means of keeping down freight charges, or has actually caused freights to be reduced. As a matter of fact, freights all over the world have been reduced within recent years, and the figures submitted by Senator Chapman yesterday speak volumes in this direction. He gave definite figures and statements to the effect” that freights have been reduced not only between Australia and the United Kingdom, but also on totally unconnected lines operating in other parts of the world. Consequently, the argument that these seven ships have held up the monster Shipping Combine, and brought it to its knees, is, to my mind, absolute piffle. In further support of the figures quoted by Senator Chapman, I now present some figures taken from the Shipping World Year-Booh, 1926, page 344-
The freight on coal from Wales to Lisbon in 1.020 was 17s. (icl. a ton; in 1925 it was reduced to 8s. 4d. For grain from New York and Philadelphia to the United Kingdom the freight was - 1920, 8s.; 1925, 3s. 3d. For general cargo from the River Plate (San Lorenzo) to the United Kingdom the freight was - 1920, 40s.; 1925. 21s. 3d. For rice from Rangoon to the United Kingdom - 1920, 120s.; 1925, 30s.
Enormous reductions have taken place in those instances. Anyone reading the report of the Public Accounts Committee with an unbiased mind must necessarily arrive at the conclusion, both from the majority and the minority reports, that the Line should be disposed of. The majority report makes it clear that the Shipping Line has outlived its usefulness from the point of view of being a profitable concern to Australia. The first clause of the report reads as follows: -
Whilst fully recognizing and appreciating the invaluable service rendered to Australia by the Commonwealth Line of Steamers during tlie war years and the immediate post-war period, anil the influence which it has throughout exercised in reducing and restraining freight rates, the committee considers that the benefits now accruing to the country by its existence as a Governmental concern are more than outweighed by the heavy losses already sustained, and which, it must be reluctantly admitted, ure likely to continue.
Moreover, if any shipping line is to remain in business, it must progress, and new and up-to-date tonnage must be acquired. At present, the seven ships comprising the Commonwealth fleet arc being run little short of their utmost capacity.
It had been said that the vessels were losing money because they were running half empty; but the committee, after hearing expert evidence, arrived at the conclusion that the ships were loaded nearly to their full capacity. The report continues -
And yet. no provision has been, or can be, made for their replacement, or for additions to the fleet, unless by a special vote. The expectations of Parliament, when it passed the Shipping -Act in .1923, have been far from realized, and the results of the trading of the Line serve to prove how unreliable forecasts and estimates are in the shipping business.
Now I come to the crux of the .report, which is contained in the next clause -
Having regard to all tlie circumstances, the committee is of tlie opinion that the Australian Commonwealth Line of Steamers should not be retained as a direct governmental activity.
That conclusion was arrived at by the majority of the committee after 42 Wit.neses had been examined. The minority report speaks for itself. The concluding paragraph states : -
The present steamers (five “Bays” and two “Dales”) cannot be expected to maintain the existing service without serious risk of breakdown and consequent dislocation. To permit of the laying up and overhaul of ships, and, perhaps, tlie extension of services, new tonnage will be necessary. Owing, however, to recent development in methods of propulsion and the doubts that at present exist as to the most economical method to be employed, it is considered inadvisable that new tonnage should be ordered until such time as the superiority of the Diesel or other engines has been demonstrated.
Even the minority was of the opinion that unless the Line was augmented it could not carry on upon a profitable basis. It would require 140 ships to carry 50 per cent, of the cargo offering from Australia, and, in order that the Line might handle that quantity, it would be necessary to subsidize it to the extent of £12,000,000 a year. No business man would think of agreeing to such a proposition.
– How does the honorable senator arrive at the conclusion that it would be necesary to pay a subsidy of £12,000,000 a year?
– Seven vessels now carry2½ per cent. of the cargo. If yon multiply the loss on their trading by the number of times2½ per cent. will go into 50 per cent., you will get nearly £12,000,000. Senator Lynch made a great deal of the proposal of the American Government to extend its shipping line, yet in the Argus of the 26th October there appears a cablegram, dated Washington, 24th October, headed “ Government ships a failure in the United States. Thirty such ships may be sold.” The cablegram reads -
The Shipping Boardhas appointed a special committee to draw up new specifications for the sale of three lines of ships, namely, the America, Australia and Orient, the American, Oriental and Oregon, and the Oriental, comprising altogether 30 vessels. The committee has been instructed to report promptly to the board.
It is understood that a majority of members of the board favour the disposal of the lines. The board asked the committee to consider the proposal of Pacific Coast operators for an operation guarantee for five years. This was opposed by some members, who favoured a guarantee of ten years.
When the committee has submitted its report, the board will also consider the proposed sale of two Atlantic Coast Lines, namely, the American and West African and the America and France.
There is evidence that governments which have been experimenting with shipping have come to the conclusion that it is not a profitable occupation, and are making up their minds to dispose of their ships. Other nations than Australia have learned that running ships is not a profitable business. What does the Government propose to do in this matter?
– To destroy the Shipping Line.
– The Prime Minister says that, after full consideration, the Ministry has decided that the proper course is to dispose of the Line subject to the conditions that it is to remain on the Empire register, and that an agreement he entered into for a period of ten years to provide a service at least equivalent to that provided under government management. In considering tenders, the Ministry will give preference to the tenderers offering the best conditions regarding refrigerating space, and all matters in which Australian producers are vitally concerned. My honorable friends opposite need not be concerned about the primary producers. Their interests are going to be considered.
– In what way.
– By ensuring that adequate refrigerating space is provided.
– Does the honorable senator think the Government will be able to sell on those conditions?
– I do.
– The honorable senator is an optimist ; he is as optimistic, in fact, as the Jew who thought he was going to get a living in Aberdeen.
– Even if the Government does not secure these conditions the competition amongst other Lines will be sufficient to ensure a good service. New Zealand, which has not a State shipping line, is paying cheaper freight rates than Australia. Therefore, it is a mistake to say that our seven steamers have been the mean’s of keeping down freights to and from this country.
– Mr. Hill does not think so, anyway, and he is a member of the honorable senator’s party.
- Mr. Hill is entitled to his own opinion. The Public Accounts Committee had before it some very eminent producers to give evidence. Included in the list was Mr. W. C. Angliss, M.L.C., one of the biggest exporters in Australia - a gentleman who knows his business from A to Z. He is a primary producer in a large way. No one in Australia is better acquainted with the problems of the producer than he is.
– What opinions did Mr. Angliss express concerning the continuance of the Line?
– That is not disclosed in the report.
– Would the honorable senator be surprised to know that Mr. Angliss favours its retention?
– I do not know what is his opinion. Other witnesses were Mr. Robert Crowe, Exports Superintendent of the Department of Agriculture, Victoria ; Mr. Robert Coates Tilt, solicitor to the Victorian Wheat Corporation, Melbourne; and Mr. Charles Frederick Taylor, director and secretary, Holdenson and Neilson, Fresh Fruit Pty. Ltd., Melbourne.
– Was evidence taken from a practical farmer?
– Three of the men I have mentioned are practical farmers. Whilst we do not know what are their views concerning the Line, we may be sure that the evidence of witnesses examined by the committee was overwhelmingly in favour of the disposal of the ships, otherwise the committee would not have recommended that course. To help the board the capital cost of the Line was written down by over £8,000,000. That sum has been entirely lost, and the interest upon it has to be provided by the people of Australia. Would any business man retain indefinitely an unprofitable section of his business? Since the Line is losing money at the rate of over £500,000 a year, it should not be continued. Even when sold, the ships will not be lost to the Australian trade. The Combine will not have complete control, because reductions in freights have taken place all over the world. If any attempt is made to increase unduly freights to or from Australia, outside competition will at once be attracted, and the position righted. Honorable senators opposite have urged the continuance of the Line at all costs. Labour in office does not always follow the advice which it is now giving to this Government. Labour governments in Queensland and Western Australia have disposed of unprofitable cattle stations, and other State activities that have been losing money. Not long ago the Tasmanian Government sold its ships.
– Tasmania still has two ships in commission.
– It had to retain those vessels to honour its contract to provide a service for certain islands. Honorable senators opposite have attempted to show “that the Line should be continued in the interests of primary producers. The view is not shared by a considerable section of the producers themselves. The Pastor alists’ Review advocates the sale of the fleet. Since primary production represents 95 per cent. of our export trade, the views of primary producers is entitled to respect.
– They will be penalized if the Line is sold.
– We on this side do not agree with the honorable senator. We realize, however, that he is fighting for the nationalization of industry, which is a prominent plank in the platform of the Labour party. We do not favour the nationalization of utilities that are likely to be a burden on the community. This Government was returned with a definite mandate to relieve taxpayers of unnecessary burdens; and unfortunately the Line has proved to be an incubus. Government-owned enterprises are not by any means free from irritating tactics on the part of unions, and shipping holdups have been all too frequent in recent years. Only yesterday owing to a shipping dispute, a special train had to be provided to bring passengers and goods from Freemantle to the eastern States. There is trouble also in Queensland. Yesterday primary producers had to take drastic action and load their own sugar on a ship at a Queensland port. So much then for the solicitude of the people represented by honorable senators opposite for the interests of primary producers. I favour the Government’s proposal to dispose of the line, and I am sure it will be indorsed by the majority of the people of Australia.
– After the long and informative speeches of other honorable senators, there is little need for me to speak at length. I know, as a representative of Labour, that members of the Labour party still pursue the old delusive shadow of State enterprises. Many years ago I was disillusioned concerning attempts by the State to conduct socialistic enterprises on anything like a business footing, though I admit that a Government may be able to carry on a protected industry. When speaking yesterday, Senator Lynch endeavoured to make a comparison between the running of State railways and State shipping activities. I could not help thinking that the honorable senator was very illogical. Surely he realizes that if a private railway had been constructed between Melbourne and Perth, it would be an unsound proposition to build a State railway between the same capital cities in order to bring down freight charges. Yet that was the trend of the honorable senator’s argument yesterday, when he was advocating the continuance of Government-owned steamers in competition with existing shipping companies. He must acknowledge that a duplication of services means an added burden on the shoulders of the people which each individual and section, must share.
– Where will the honorable senator’s argument lead him if he applies it to all non-paying State enterprises?
– I was particularly careful to observe that it might be possible for a Government to carry on successfully certain public utilities of a noncompetitive character. Senator Lynch also complained yesterday, and again today, that no witness from the ranks of primary producers was called to give evidence before the committee. The primary producers cannot speak with greater authority than anyone else concerning the financial position of the Commonwealth Line. The evidence of primary producers would not be of any more assistance to the committee than that of the motor car salesman referred to by Senator Lynch. The report of the Public Accounts Committee at least provides us with an opportunity to analyse the financial position of this governmental undertaking, and discloses a complete answer to the suggestion of the Leader of the Opposition (Senator Needham) that the Commonwealth Shipping Board has not been given a fair chance. According1 to that report the book value of the ships was written down from £12,000.000 to £4,700,000 when transferred to the board. Is that not a fair 3tart? Notwithstanding such assistance it has not been able to’ make ends meet.
– That depends upon the correctness of the valuations.
– I do not dispute the valuations. The original capital cost of the ships was £14,090,000. In 1923 the value was written down to £12,700,000; but the ships were transferred to the board at a capital cost of only £4,700,000. Even with this assistance the Line showed a loss in 1926 of £575,000, including depreciation and interest charges, which Senator Lynch refused to consider. There has been a total loss of £2,000,000 since the board assumed control. If we wish to benefit the primary producers and shippers generally, we could, with’ greater benefit to the producers, spend a sum, equivalent to that which is nowbeing lost, in paying increased subsidies to the existing shipping companies, on the condition that they charge reasonable freights. The State shipping enterprises in the United States of America, Canada, and Australia were established in consequence of the transport difficulties arising out of the war. The United States Shipping Board still has control of a number of ships, and the Canadian Government has not yet disposed of those under its control. Both countries, according to Senator Lynch, are losing large stuns on their fleets, and it is not likely that they -will continue in the business much longer. 1 do not think that this Line can be regarded as an enterprise - which is conferring any direct or indirect benefits upon the people. It has been said that it has been the means of keepingdown freights and fares.
– That statement was made by the Melbourne manager of the Line.
– It is one that is difficult to prove. We have nothing to show that freights and fares would not have been reduced even if these ships had not been in operation. According to the report of the Public Accounts Committee on the Pacific Island shipping service, Burns, Philp, and Company, which have an absolute monopoly in that trade, did not increase freights between 1905 and 1917, which includes a portion of the war period. We have also to remember that the seven steamers now under the control of the Commonwealth Shipping Board will soon commence to depreciate somewhat rapidly and that -the cost of repairs and renewals will then be heavier than it has been in the past. In these circumstances the board would have to recommend either that the number of ships be increased, or that the Line should go out of business. If the Leader of the Opposition were in the position of the Prime Minister he would not ask Parliament to authorize the expenditure of another £2~000,000 or £3,000,000 to increase the size of the fleet in order to make it a success.
– Even then it would not pay.
– I do not think it would. It seems to me that the time is overdue when we should consider whether we are justified in asking the taxpayers to contribute towards the losses which are incurred annually. I am to some extent assisted in my decision to support the sale of the Line by the fact that it has repeatedly refused to enter into competition with the shipping companies operating on the Australian coast. The board has deliberately refused to allow its ships to engage in the coastal trade.
– It is merely carrying out the dictates of the Government, which does not wish to interfere with private enterprise.
– If the Line will not compete Avith the companies on the coastal service, I am inclined to think that it is working under an arrangement with them. When Mr. Kneen was managing the Line, he was asked to arrange for a vessel to lift a cargo in Tasmania for Western Australia, and absolutely refused because it was not the policy of the board to compete with the local shipping companies. That is on record in Hansard. When that request was refused, I said that I would support the sale of the Commonwealth ships at the first opportunity. It is unreasonable to suggest that the overseas shipping companies registered in Great Britain will have a monopoly of the world’s carrying trade; ships on continental registers will compete with British ships and thus assist in keeping freights at a reasonable figure. I hope, however, that ships on the Empire register will be able to retain the trade. Japanese ships are already carrying the product from the Electrolytic Zinc Company’s works in Tasmania to Japan. Senator Lynch cannot justify his statement that the primary producers will suffer, because even if these ships are sold the competition between the various companies will result in reasonable freights being charged.
– The Conference Lines comprise 27 distinct companies.
– That may be so; but they are British companies which will have to compete with foreign companies.
– The honorable senator is more concerned with foreign companies.
– I am not. I am merely showing that if foreigners are competing with the British companies minimum freights will always be quoted. The Labour Premier of Tasmania (Mr. Lyons) knows from bitter experience that the shipping business cannot be profitably controlled as a governmental activity. He authorized the purchase of several ships to maintain a service between Tasmania and the mainland, but they were not in operation very long before he decided that the business was unprofitable, and sold them to the first buyer. Apart from the competition of other companies, he found that he had to contend with difficulties caused by certain industrial organizations. If Mr. Lyons were Prime Minister to-day, he would adopt the same attitude as the present Prime Minister. For the reasons I have outlined briefly, I intend to support the Government on this occasion.
– I had just been elected to the Senate when the bill providing for the placing of the Australian Commonwealth Line under an independent board of control was submitted. I remember at the time venturing the opinion, in my timid way, as Senator Lynch would express it, that the Line should be given a trial, that strict accounts should be kept halfyearly, and that if eventually, as I suspected would happen, it was found to be losing money, the Government should not hesitate about getting out of it as a going concern. What has happened? There have been continuous losses. Quite a number of ships have been sold, and the price realized has been absorbed, but still there is an annual deficit on operations. Other honorable senators have stated fully the advantageous terms upon which the Shipping Board was supplied with its ships. In shipping circles it was thought that those terms were so favorable that the Line had been loaded with the deliberate intention of enabling it to make undue profit. But what has been our experience? It has gone from bad to worse until it has shown a loss of within a fraction of £600,000 for the year 1927. The only argument that can be advanced for the retention of the Line is the apprehension of an increase of freights upon its abolition. When the Line was formed, I expressed the opinion that its effect upon freights would be absolutely negligible. I spoke with a fairly considerable knowledge of shipping. Although for the last two years I have practically been out of the commercial world, in my time I have had quite a lot to do with shipping. My prediction that the effect of these steamers upon freights would be practically negligible has been borne out . by experience. The figures quoted in detail by Senator Chapman show that the reductions in freight, which are claimed by some honorable senators to have been the result of the efforts of the Australian Shipping Board, were also made in parts of the world where the Australian Commonwealth Line has not had the slightest influence. The greatest preventiveo f a freights increase is competition. There is considerable competition among British ship-owners outside the Combine. We have also Scandanavian, French, Italian and German vessels competing for trade with Australia. In Rabaul the other day a Swedish vessel was loading for foreign ports. We have had Swedish vessels loading in Australian ports. Competition is the soul of trade, and if the Britisher cannot stand up to it, he deserves to lose his trade. On the Australian coast we have had the spectacle of the Patrick Steamship Company bringing down freights with a run, because it is out to compete with existing lines. Even if there were differences of freight to be adjusted in the interests of the producers of Australia, experience shows that it would pay the Australian Government handsomely to give a bonus to make up for the differences in freights rather than lose the money it has been losing on running its own steamers, and which it is still bound to lose if it continues to run them. It has been suggested that our Line should capture the subsidies paid to mail steamers, such as those of the Orient
Company and the Peninsular and Oriental Company. At present we are paying £130,000 a year to the Orient Company, and I understand that a good deal of it is ear-marked for refrigerated space. These lines give us a magnificent service. I suppose there are no finer vessels coming to Australia than the Orient liners. If we paid the £130,000 subsidy to a Line that is losing close on £600,000 a year our position would be infinitely worse than now.
– It would be merely “ waiting for the end.”
– Absolutely. The Orient Company provides a better service in every way and we would still have to bear a big margin of loss on the Australian Commonwealth Line. It has been suggested that in order to make our Line efficient and enable it to pay, we must buy more ships. As a matter of fact it will be absolutely necessary for us to do this if we continue the Line. The very best test of profit earning is the loading capacity of a line of steamers. The Public Accounts Committee has indicated in its report that it was elicited in evidence that the ships of the Australian Commonwealth Line were invariably full both ways. If ships cannot pay when they are fully loaded, their position is positively hopeless, and the sooner we get rid of ships that cannot pay in those favorable circumstances the better. It has been said that the unions have done nothing to help to retain the Line. That is true. Time and again the vessels of the Line have been held up by all sorts of excuses, and every time a ship isheld up its profit earning capacity must be interfered with.
– Our ships were often held up when the Conference vessels were allowed to go free.
– That is so. There were opportunities to use the Australian Commonwealth vessels on the Queensland coast when sugar was held up and could not be got away. When the produce of the people of Queensland was actually rotting on the wharfs there was no sign of the Commonwealth ships coming to the rescue.
– Whose fault was that?
– They were held up by the Seamen’s Union, I venture to think that the conditions which the Government proposes to impose on the sale of these vessels will not be found acceptable to any tenderer. I think in the end we shall have to offer them for unconditional sale, and the sooner we make up our minds to that course the better. I agree that it is highly desirable to lay off the vessels in the way proposed and if the Government can get tenderers on the conditions mentioned, well and good, but I have very grave doubts about that, because if people with capital want to buy these ships they will want to be free to use them in any part of the world they choose. In view of the competition in the trade to Australia, I do not think the Government will succeed in getting tenders on the lines mentioned. If they do not - and I utter this note of warning - the ships should be resubmitted for unconditional sale.
-Would the honorable senator allow Germany to buy them ?
– I do not know that I should like to sell to Germany, but the war is over, and after all we are trading with Germany, and Germany is trading with us and buying our wool. I suppose that wo are all friends to-day, but I should like to see the ships on an Empire or British register. I think it has been demonstrated beyond all doubt that they cannot remain on the Australian register. An undesirable position has been created because of the fact that half the seamen engaged on our steamers are domiciled in Great Britain. I do not object to them living in Great Britain, but the fact remains that it is a condition of affairs that throws an apple of discord into the Seamen’s Union in the Mother Country.
Sitting suspended from6.15 to8 p.m.
– One can easily understand that to have Australian and British sailors living in the one district and doing the same class of work, but receiving different rates of pay is not calculated to ensure industrial harmony. In the Australian Coal, Shipping, Steel and the Harbour of Tuesday, 1st November, 1927, the following article appears -
The outlook for the shipping industry is once more decidedly unpromising. So far from the industry being able to bear the increased running costs claimed by the seamen’s new log, with its complicated demands for overtime rates of pay for work performed at sea outside the limited hours, and for special rates for seamen handling cargo at ports where there are no wharf-labourers available, the shipping business finds the passenger trade so unremunerative already that in some quarters it has had to be discarded altogether. On account of the numerous stoppages precipitated by cooks and stewards the passenger trade is specially liable to interruption which further increases the losses.
Honorable senators opposite appear to be very solicitous for the primary producer. Probably their new-born solicitude for them is traceable to the recent New South Wales election. I understand that it is now deemed desirable in Labour party circles to pay special attention to the men on the land in order to secure a larger share of their votes in the future. The vessels belonging to the Australian Commonwealth Line of Steamers have not been of great assistance to our primary producers. Only 1.2 per cent. of the wheat and about 3 per cent. of the wool which has been exported has been carried by them. In the Pastoral Review for 15th October, 1927, the following article appeared : -
The committee appointed to inquire into the position of the Commonwealth Shipping Line have issued their report, and naturally it is a condemnation of the undertaking. However, one or two findings have crept in which show that the committee were not thoroughly imbued with the facts.
The statement that these ships were useful to Australia in war time is one. The fact is that the old ships bought by Mr. Hughes’ Government were of little or no use to Australia, as very few of them were ever in Australian waters whilst the war lasted, and very few of them ever went into submarine or mine-infested waters.
The committee’s report states that five passenger steamers and two cargo boats have little or no effect in preserving reasonable freights whenthe percentage of cargo they lift from Australia is considered. We hold no brief for the shipping companies, but we can remember no time in the history of Australia when the freights, under the existing circumstances, have been anything but reasonable, and the shipping provided by oversea owners has contributed more than anything else to the development of Australia. Considering the extortionate port dues that are charged in. this country, the constant delays by strikes, the atrocity of fixing Customs duties on all ships’ stores used by the ships when on the Australian coast, and the assistance rendered foreign shipping during strike time, it is remarkable how low the freights have been kept.
Thu committee use the phrase “ to guard against victimization by shipping combines.” The answer to that is that there has never been any attempt in the past at victimization by oversea lines, and it would be manifestly very much against their interests to attempt this even if” it were possible. Also as fur iis “shipping combines” arc concerned there never has been, nor is there likely to lie, anything of this sort in connexion with the Australian trade. For one thing, there ure several competing British interests in the Australian trade, and for another the foreign owned ships have to be fought for the business that is offering. “ Combines “ are one of the foolish fetishes of Australian politicians.
The committee further recommend thu establishment in Australia by Australians of a company free from the influence of the outside “shipping combine” to take over the existing fleet and to run the line on “business “ methods, with the utmost possible guaranteed support of the Government in such directions as the granting of mail contracts, the carriage of Government goods, the transport of migrants. &c. In effect, the recommendation means that the whole support of the Australian Government, backed by the people,’ is to be devoted to support a line which, at the very outside, could not deal with more than 10 per cent, of the total Australian trade. Apparently they are to do all in their power to damage the overseas shipping which Australia would be using for carrying 00 per cent, of her trade.
The committee admit that the country has lost heavily up to the present b)T the Commonwealth Line of Steamers, and yet they suggest that a private company should take them over and run them on the same lines, but presumably charging lower freights. Surely the committee do not seriously think that this can bo done without incurring heavier losses to the community than have already occurred, and also, a thing that is highly probable, putting up the interest on any fresh loans we may require to float. Is it not a much more common-sense proposal to risk a period of higher freights, which could only occur in consonance with the world’s freight market, than to incur a certain heavy loss, which the community would have to pay?
The committee state that “ the capital required by the proposed company would be needed principally for interest and depreciation and working capital, and consequently only a reasonable amount would have to be subscribed.” In regard to this it need only be said that any shipping company run on business lines that paid depreciation out of its capital would very soon cease to exist, but no doubt the committee arc aware that an overseas line run under Australian conditions at present rates of freight would have no profits out of which to pay, depreciation.
The saving in overhead expenses suggested by the committee is, of course, a wise recommendation, birt it would have very little effect in transforming the line from a heavy losing proposition into a paying concern.
The enterprise from the very first was doomed to failure, and, like every other State enterprise, from the railways down, can only be continued by heavy additions to our big debt. Some readers may say: “But the railways pay interest.” Some are made to show that they do, but what of the huge sum paid in the past to cover deficiencies never added to capital account, and on which no interest is paid by the railways? As Admiral Jack Fisher would have said : “ Scrap the lot.”
I agree with those contentions, especially those dealing with the committee’s recommendations, which are not commercially sound. Probably the committee made them apologetically.
– The article says nothing about the beef bounty.
– It sets forth the views of sheep-owners, rather than those engaged in cattle raising. By quoting from an old report, Senator .Lynch endeavoured to convince the Senate that the Government of the United States of America did not intend to sell its fleets. While I cannot lay my hands on the publication, I distinctly, remember having read in a recent issue of the Empire Parliamentary Journal that it was the intention of the Government of that country to sell three of its shipping lines. Senator Andrew read an extract from a Melbourne newspaper to the same effect. It is general knowledge that the Queensland Government is trying to dispose of some of its socialistic enterprises. From the Labour party’s standpoint, not even the provision of cheap freights for our primary producers would be a more laudable objective than the supply of cheap meat to the people. Yet, a Labour Government in Queensland is now trying to sell its stations.
– The honorable senator appears to have forgotten that when the Mount Morgan mine stopped work he asked for Government assistance.
– The honorable senator has misrepresented the position. I urged that the Development and Migration Commission should go into the matter with a view to seeing what could be done to keep the mine working.
– The honorable senator asked for Government assistance.
– That is not so. I wanted to see whether Mount Morgan could be kept working.”
– Private enterprise was not sufficient.
– The cost of production was too great to allow the mine to carry on.
– In the case of one enterprise the honorable senator wanted the Government to assist’; in the other it was a case of “off with their heads.”
– The two things are not analogous. In four years the Mount Morgan Gold Mining Company Limited sustained losses amounting to £300,000, which the company itself bore; whereas in the case of the Australian Commonwealth Line df Steamers much greater losses have had to be borne by the taxpayers of the Commonwealth. It has been urged as a reason for retaining the Line that in times of war, with the British navy 12,000 miles away, the “ Bays “ and the “ Dales “ could be converted into auxiliary cruisers to protect Australia. Honorable senators supporting that view appear to have forgotten that the Singapore naval base, which is now in course of construction, will be a great safeguard to our trade. The argument that the Line should be retained as a means of defence, therefore, falls to the ground. A recent issue of Fairplay, which is probably the highest authority in the shipping world, contained a wellreasoned leading article dealing with the Australian Commonwealth Line of Steamers, in which it- was pointed out that the Australian Shipping Board had a splendid opportunity to make the Line pay because of under capitalization of its vessels. It went on to say that inasmuch as it had failed to make a success of the venture under those favourable conditions the taxpayers of Australia should no longer be called upon to meet the losses incurred. It concluded by urging the Government to dispose of the Line as soon as possible. “With those views I agree, and I intend to vote accordingly.
Senator THOMAS (New South Wales) the members of the Public Accounts Committee for the report which they have been good enough to supply to us. While saying that, I feel that if they had entered into their work with the same thoroughness that the Films Commission has done, we should now have before us all the information that we require. Some information which would be useful to members of the Senate is not contained in the committee’s report. When Senator Kingsmill was presenting the report to the Senate,, he said that if any information was required which was not in the report, or in the remarks he made at the time, he would be pleased to supply it upon request. I may later take advantage of his kindness in this respect, in order to obtain further details which I think we should have. Perhaps the Senate will pardon me if I state my position in connexion with the Shipping Line. For many years I was associated with the Labour movement, and many of the views I held then I still retain. I used to argue then, as I argue now, that State enterprise was not, to me, something in the nature of a religion. If something could be done more advantageously by the Government than by private enterprise, I was prepared to let the Government do it. If private enterprise could do it better, then I maintained that it should be left to private enterprise. It had to be demonstrated to me that it was useful and advantageous for the Government to enter into an activity before I would support such a proposal. It is the duty of those who support this Line to show that it is of service to the community; otherwise it ought to go. I believe I was the first member of the Federal Parliament - and that was when I was in the House of Representatives - to advocate a State mail line between Australia and England; but even when a younger and perhaps more enthusiastic man than I am now, I never advocated that the State should go into the general cargo business. As a result of certain remarks, which I made from time to time in the House of Representatives, a committee,. which later became a royal commission,. was appointed, with the idea of determining whether it was advisable to inaugurate a State mail service. The commission reported that in its opinion such a service should be established. Some of the members did not sign the report, having it in their minds to bring in a minority report - a course, however, which they did not pursue. I discovered only to-day that the evidence given before the Public Accounts Committee hasnot been published, and will not be made available. In ordinary matters it may be advisable not to publish such evidence; but on an important question of this kind I think it would be to the general advantage if honorable senators were able to read the evidence. I presume that every member of that committee started out to investigate the question with an open mind. They were neither State socialists nor individualists, neither in favour of the Line nor opposed to it. After listening to the evidence, the majority of them came to the conclusion that the Line ought to be sold. The minority came to the conclusion, on exactly the same evidence, that it ought to be retained. In such a case as that, I do think we should have an opportunity of reading the evidence in order to judge for ourselves whether the majority or theminority was right.
– Did not the minority begin the inquiry with preconceived ideas?
– I might say that the majority had preconceived ideas also ; but I take it that both sides went into the inquiry with open minds. They werelike judges who hear the evidence and made their finding accordingly. Even when a judge determines a case, the people have an opportunity to hear the evidence.
– The jury always hears the evidence, and we are the jury in this case, but have not had an opportunity of reading the evidence.
– What was the committee for, but to hear the evidence and report its findings.
– Where the subject of the inquiry is of such a debatable character as that which was considered by the Public Accounts Committee, in this case I think we ought to have presented to us the evidence upon which their opinions were based. I have read the report of the committee with interest, and I observe that the majority suggested to the Government that, subject to certain conditions, the Line should be sold. If the Line can be sold under certain conditions, they recommend that it be disposed of; but I do not think that I am unfair in saying that they would be prepared to go a good deal further, and to recommend that, even if the conditions were not complied with, the Line should still be sold. I do not hesitate to say that the conditions which the majority report lays down are impossible - that the Line cannot be sold on those conditions.
– What about the conditions laid down by the Prime Minister?
– If the conditions announced by the right honorable the Prime Minister are insisted upon to the very letter, there is no need for me to worry about the Line; it will not be sold It is said that for these steamers successfully to carry out the kind of work on which they are engaged they must be Conference ships. When dealing with these Conference ships, it is necessary that all your cargo should go by their steamers. If you send a single ton of cargo by any other Line, you lose 10 per cent. rebate on the freight.
– I understand that that has been done away with.
– I ask the chairman of the Public Accounts Committee if that practice has been done away with.
– I believe it has, but I cannot say because the Conference is a nebulous body, and the Australian Commonwealth Shipping Line has itself been in and out of it several times.
– My friend says he believes it has been done away with. When this commission of which I spoke was held many years ago, we took a great deal of evidence on this question of the 10 per cent. rebate. When I was in Sydney two weeks ago I made some investigations into the same matter. A friend of mine who handles the shipping for one of the largest firms in Sydney, told me that the 10 per cent. rebate was still in operation. He said that he would not like to see the Commonwealth Shipping Line disposed of, because they could deal with that Line without losing the 10 per cent., but they could not do that by any other Line outside the Conference. If the committee had taken evidence on the subject of this 10 per cent, rebate, it would not be necessary for the chairman to say simply that he “believes” the rebate system has been abolished. Dealing with this subject the commission of which I was a member reported as follows : -
As regards the alternative of depriving any shipper who despatched goods by the Commonwealth boat of his deferred rebates we do not think the Shipping Conference would consider such a course of action politic, to say the least of it, because there is a material difference between attempting to fight a rival private company and entering upon a commercial conflict with the Commonwealth of Australia.
The shipping representative of one of the biggest firms in Sydney - the firm of Anthony Hordern - has, as I said, informed me thatthe rebate system is still in operation.
– The honorable senator is referring to imports. What about exports?
– I agree that the man on the land should have consideration ; but consumers also are entitled to have their interests safeguarded. In the last analysis the man who makes a shovel, or a plow, or harrows is doing his part in the production of wheat, fruit, and other primary commodities. Similarly, the man in the city who assembles or makes motor cars, as well as the electrician who improves the lighting systems in our homes, is performing a useful service in making life better and more comfortable for the man on the land. I stand here to-night tospeak, if necessary, on behalf of the importers. I am not an importer myself, but I realize that in the course of trading we must have imports.
– It is more essential that we should have exports.
– Perhaps the honorable senator is right, but we must expect imports in return for our exports. Does the honorable senator suggest that we should give away our sugar for nothing?
– Of course not; but the honorable senator knows that our trade balance is most unsatisfactory.
– That may be so. I am merely putting it that if we export we also must import.
– We should like to have a good surplus of exports over imports.
– I do not wish at this juncture to discuss the subject of trade balances, adverse or otherwise. I content myself with saying that when we export a bale of wool we expect to get in return full value for it.
– Will the honorable senator explain how the 10 per cent. rebate is operated?
– I am glad the honorable senator has put that question to me. Suppose that Harris, Scarfe and Company, the big merchants of Adelaide, import a certain number of commodities from England. If only one ton of it is despatched by a vessel outside the Conference Line the rebate of 10 per cent., which is allowed to shippers by Conference vessels, is withheld for the whole of the consignment. It follows, therefore, that if Harris, Scarfe and Company do not get the advantage of the rebate, their freight charges are 10 per cent. higher.
– That principle does not apply to exports.
– Perhaps it does not, but it affects the general cost of commodities in Australia. In the evidence taken some years ago by the shipping commission to which I have referred, it was disclosed that an Australian house, which had a South African branch of its business, was penalised in this way. The firm mentioned received its Australian imports by vessels belonging to the Combine, but portion of a consignment for its South African branch was carried in a vessel outside the ring, with the result that the firm mentioned lost the advantage of the rebate freight.
– Did not the South African Government discipline that Line?
– I shall be glad if the honorable senator will allow me to tell my story in my own way.
The PRESIDENT (Senator the Hon. Sir John Newlands). - Order! Senator Thomas has asked to be permitted to continue his remarks without so many interjections. I ask honorable senators not to interrupt him further.
– Senator Needham mentioned the incident I have referred to, and I believe he said that the South African Government brought pressure to bear on the Shipping Combine. This Government has taken no such action. It may come as a surprise to some honorable senators to know that shipping companies outside the ring sometimes find it difficult to join it. It does not necessarily follow that because a shipping company has commenced business it will be allowed to -join the Conference. I appeal to the Chairman of the Public Accounts Committee to say if that is not the position.
– They slip in and out of the Conference practically every week.
– As a rule a company outside the Combine has to fight its way into the Conference. In other words, it has to demonstrate that it is powerful enough to fight the Combine. Then it is allowed to join it. The objection on the ‘ part of the Conference is due to the fact that, in its opinion there are already sufficient vessels to handle the trade offering. Consequently, other lines are not welcomed. This information came out some years ago in evidence given by the Chairman of the Peninsula and Oriental Company before a British royal commission.
– Can the honorable senator tell us if the Chambers of Commerce in Australia are in favour of the sale of the Line?
– The honorable senator’s question gives me the opportunity to say in reply that a considerable number of people in Australia strongly object to State enterprises. Their reasons are purely personal. They say, in effect, “ If the Government makes a success of one enterprise it might be induced later to interfere with my business.” I remember what happened when the right honorable the Leader of the Senate was chairman of a commission appointed many years ago to inquire into and report upon the nationalization of the tobacco industry in Australia. During the inquiry there was an important gathering of Chambers of Commerce from the different States in Perth. Mr. Butler, representing the firm of Sargood, Butler, and Nicholl, Melbourne, voiced the opinion of merchants generally when he said that they were opposed to the proposal, because if the government successfully nationalized the tobacco industry, it might very soon nationalize the warehouses. That is my’ answer to Senator Barwell. The committee suggests that an Australian company might be formed to take over the vessels of the Line and carry on. This afternoon Senator Andrew described as “ piffle “ an argument used by one honorable senator opposite. Perhaps I may be permitted to apply the same term to that particular recommendation of the committee. If such a company were formed, and. if it had any influence at all on the trade between Australia and England, the big rival companies would, by way of reprisal cut into the coastal trade. Surely members of the Public Accounts Committee know there are such things as spheres of influence in commercial circles. I repeat that either the operations of the Australian fleet must be continued as a government Line, or the vessels will be absorbed by the Conference. This is not the first time in the history of Australia that we have attempted to conduct big government enterprises. This problem has been dealt with again and again in the House of Representatives. Many years ago the late Mr. Deakin, then Prime Minister, endeavoured to alter the arrangements for the carriage of mails between Australia and England because of the high charges then being made by the Orient Company. He did not suggest the establishment of a government mail steamship line. His object was to encourage the formation of a private shipping company to take the place of the Orient Steamship Company. Being then a young man I was foolish enough to laugh the proposal to scorn in the House of Representatives. The Government came down with a cut-and-dried scheme, and actually gave the name of the firm that was going to carry out the mail contract; but so great was the influence of the Orient and the Peninsula and Oriental Companies in London, that the firm was unable to raise the necessary capital. Consequently the Government bad to pay the Orient Company every penny that it demanded. It was suggested that the Line should be under the control of a private company.
– I understood the honorable senator to say that it was to be operated by the Government.
– No; Mr. Deakin would not favour such a scheme. The proposal was that the firm of John Lang and Company should build certain vessels and run a line of steamships, but nothing eventuated. I have not been able to obtain a copy of the last annual report of the P. and O. Company, but some years ago this company, which was receiving a subsidy of £300,000 a year from the British Government for the carriage of mails, showed a profit on the year’s operations of only £250,000. In the absence of the subsidy the company would have lost money.
– The profits of the Conference Lines have been small during recent years.
– That may be so, but during that one year the P. and O. Company could not have made a profit but for the subsidy it received from the British Government.
– Is it not a question of whether it would not be better to pay a subsidy than endeavour to run a line of steamers on our own account ?
– That phase of the question was mentioned by the Minister (Senator Pearce). At present we are paying the Orient Company, which provides a four-weekly service, a subsidy of £130,000 a year, which covers the carriage and delivery of mails within a specified time, and the provision of a certain area of refrigerated space. The refrigerated space on the “Bay” steamers is equal to that on the Orient Line, and the former could deliver the mails within 24 hours of the time in which they are landed atFremantle by the vessels of that company.
– The “Bay” steamers are not cargo boats.
– They are passenger boats, but are not classed as mail boats, which travel somewhat faster in order to ensure the expeditious delivery of mails. The “Bay” steamers save a day by avoiding Marseilles, and I believe that five of the seven vessels now under the control of the Commonwealth Shipping Board could deliver Australian mails with the same regularity as they are now delivered by the Orient Company. I endeavoured to obtain some information from the Postmaster-General’s Department concerning the amount paid in poundage by the different States, but the only information I could obtain at the moment was the total amount paid by the Commonwealth. Although the people of Australia strongly support a protectionist policy, those who arc advocating the sale of these ships are running the risk of placing a dangerous weapon in the hands of the free traders. Last year we lost approximately £4,000,000 on sugar.
– That is nonsense.
– I shall quote figures later in support of my statement.. Recently I submitted certain questions to the Government concerning the sugar industry, and the answers I received were such as would be given by a school child. I am not opposed to assistance being given to the sugar industry, because, if we are protecting, say, the manufacturers of pianos in New South Wales, we should also protect the sugar-producers in Queensland. If those engaged in different branches of manufacture are given the benefit of protection, why should not the seamen employed on the ships also be protected ? I was surprised to hear the Leader of the Government in this chamber state yesterday that a large number of the seamen employed on the ships under the control of the Commonwealth Shipping Board, are domiciled in Great Britain. As these men are receiving Australian wages and enjoying the conditions provided under our Navigation Act, we have a right to insist upon them living in Australia. A paragraph in the majority report of the Public Accounts Committee reads -
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 tlie successful marketing of Australian soft and citrus” fruits overseas.
Surely that justifies some of the loss incurred. The Prime Minister (Mr. Bruce), speaking in another place, said that improvements in the service would he made in time; but perhaps we shall “wait as long for these improvements as- we are likely to wait for a uniform railway gauge throughout Australia. If, as some honorable senators have suggested, the vessels under the control of the board have been instrumental in keeping freights within a reasonable limit, the Line should receive “the credit. It is surprising to realize that, except by air, England cannot be reached any quicker to-day than was possible 25 years ago. The speed of the vessels operating under contract with the Commonwealth Government is regulated by that of the slowest boat, because if the faster vessels arrived 24 hours ahead of schedule time, the other vessels would be expected to do the trip in the same time. The contract entered into between the Commonwealth Government and the Orient Company is usually for a period of seven years, and consequently there can be no variation of its terms during that period.
– Does the honorable senator suggest that the vessels of the Australian Commonwealth Line should undertake the work now being <lone by the Orient steamers?
– Yes.
– That is a retrograde step.
– Can we not build boats equal to the Orient boats?
– “We have not got them now.
– Have we not wealth enough in Australia to build boats equal to those that private companies can build? Our subsidy of £130,000 to the Orient Company is simply a subsidy to first class passengers. Are we in favour of cheaper freights? As a matter of fact I am not too sure that the Government wants cheaper freights. “When some time ago the Conference Lines reduced the freight on cement, our Government immediately increased the Customs duty on cement. There are some people who do not want cheaper freights, because they look upon high freights as being equivalent to protective duties. Ian one of those who like to see everything made in Australia that can be made here ; but still we must import some things, and the cheaper we can get them the better for all concerned. When the Leader of the Opposition (Senator Needham) was speaking, he referred to the big profits that were made by British shipping during the war. Subsequently the Leader of the Government in the Senate (Senator Pearce) taunted Senator Needham with having found fault with private companies for making these profits, while in the same breath he admitted that the Commonwealth Shipping Line had made a profit of £7,000,000 during the war. The history of our steamers is exceedingly interesting. When Mr. Hughes was in England he* endeavoured to buy ships, because it was necessary for us to have them to convey our produce to the Motherland. When he met the shipping magnates in conference they told him that he could obtain freight if he paid the current rates. Mr. Hughes replied that that did not suit him. They thereupon told him that he could not buy the vessels. Fortunately Mr. Asquith, be it said to his credit, was at that conference, and he came to the rescue of Mr. Hughes. The result was that Mr. Hughes was able to buy the ships. But he had only got as far as Capetown on his return journey to Australia, when he learned that the ships he had bought were not to be allowed to leave England. He cabled at once that he would return to England if that was the case. But they had had enough of him in London, and so they sent the ships away. I say, “All honour to Mr. Hughes.” When I think of the magnificent work he did for Australia and the Empire, and of his treatment to-day, I am a sad man. It is true that he -made a profit of £7,000,000 on these vessels he bought, and it all went into the Consolidated Revenue, but if he had not bought them and made those profits, other vessels would have done the work and the profits would have gone to ship-owners who thought more of their ships and of the profits they could earn than of the Empire. Then came the armistice, find Senator Pearce went to England. I should like to speak of all that he did there - it was all to his credit and honour - but I cannot; my lips to an extent are sealed. I can, however, mention this: A large number of our gallant sons who were in England after the armistice wanted to return at once to their parents, their wives and their children or their sweethearts who were also just as anxious to see them again; but they were told that ships could not be provided for them. Ships could be provided to send them to the front but not to send them back to their own country, because, at that time they were required to send manufactured goods to the Argentine. If a Commonwealth Minister had not been inEngland at that moment our lads would have had’ to remain away from their homes for two years longer. As it was, Senator Pearce saw to it that vessels were quickly made available for their return. We should not forget that these shipping companies are not very keen about patriotism when vested interests are at stake. I want to know why the Government is hesitating about selling these steamers. Senator Pearce has told us that they are of no use to any one, that they have not reduced freights, and that they are losing money. The minority report of the Public Accounts Commitee tells us, however, that the vessels have kept freights down. I ask the chairman of the committee whether it had evidence to that effect or whether the minority who signed the minority report made that statement because they imagined it.
– A good deal of it was due to imagination.
– It is unfortunate that we have not before us the evidence taken by the Public Accounts Committee, so that we might determine this point for ourselves. Senator Pearce has told us that because the Australian Commonwealth Line is carrying only a fraction of the trade of Australia it is not likely to bring about a reduction of Freights. Will the Government seek to wipe out the Commonwealth Bank because it is handling only a comparatively small portion of the banking business of Australia? Senator Pearce says, “We cannot afford to crush private enterprise.” There was a time when I was supposed to be a good socialist, but as a socialist I did not compare -with the right honorable gentleman. In those matters I sat at his feet. He was my teacher. How times have changed ! How the Senate has changed ! In those days the Senate used to nationalize something every Thursday. It nationalized tobacco, iron, and every thing except the land. “ There is no particular advantage in having this Line,” the Minister says; “we can trust these ship-owners in the future.” There was a time when he and I were not prepared to put ourselves absolutely in the hands of private enterprise. If the Minister is right in saying that we need have no fear for the future, why is there objection on the part of the Government to the immediate disposal of the Line unconditionally? Why impose any conditions? Why keep it for a day longer than necessary? I cannot help thinking that there is, after all, a lurking suspicion in their minds that if the ships were soldthe future might not be quite as secure as it would otherwise be. The question of shipping facilities is a problem in every country. England has had the same problem as our own to solve. Before a select committee of the House of Commons, Sir Robert Giffen, the celebrated statistician of Great Britain, a man with a European reputation and a prominent freetrader, said, in effect: - “The competition is so unfair and unjust that the Government in the last resort ought to be prepared to run the ships and charge nothing for freight.” We do not go so far as that in Australia.
– He may have been a great statistician; but evidently he was not a practical man.
– I know, of course, that he was not the equal of the honorable senator. He was not a business man ; but he had a European reputation, whereas the honorable senator’sreputation is confined to Canberra. In Canada and South Africa the difficulties we are experiencing have also beenexperienced. In China the merchants felt the competition so keenly that they tried to form a company to fight against the Shipping Conference in Chinese waters. ‘The Chairman of the Peninsular and Orient Company, giving evidence before the select committee of the House of Commons, said that the Chinese company had to go into the Conference. One of the members of the select committee innocently asked, “ Were they compelled to go in ?” The reply was “No; they could have stopped out and lost money.” I agree with the majority and minority report of the Public Accounts Committee that the three directors of the Australian Commonwealth Line should be dismissed. I am not here to back up the seamen and their actions. I do not think they gave the Line fair play. Some time ago ‘1 said here that, if the seamen were not giving the Line fair play, I would be in favour of selling the steamers. The Minister replied, “ They will eat out of our hands to-day.” I hope that the position is better to-day so far as the seamen are concerned; but here we have three directors drawing £9,500 per year - they never had such large salaries before - and, instead of looking after the big task entrusted to them, they spend their time in petty jealousies, not talking to one another. If a steward does not do his duty we find fault with him; but here we have men drawing thousands of pounds a year and neglecting their duty. I would dismiss them and appoint one man to take charge of the Line. I would tell him, “If you do not run the ships properly, you will take the blame; but if you run them properly, we shall give you the credit.” I should like the Government to retain the Line, determined to make a success of it. The trouble is that. Ministers have been hesitating what to do with it. The Government should determine to make the Line a success. [Extension of time granted]. We should, take into consideration not only the direct benefits conferred by the Line, but also the indirect benefits.
– What are they?
– Senator Reid, who, apparently, is unable to see that any benefits have been conferred on Australia by the Line, frequently refers to the indirect benefits of the sugar industry. In the absence of certainty as to the continuance or otherwise of the Line, shippers have, been afraid to forward cargoes by its vessels.
– The ships have always been full.
– A good deal has been said as to the difference between the wages paid to Australian and British seamen; but I point out that the subsidy paid to the Orient Company in respect of the mail contract would practically make up the difference. The right honorable W. M. Hughes, speaking in another place, said that the vessels should be transferred to the British register. With that I disagree. They should be retained on the Australian register. We should protect our seamen, so long as they are prepared to live in Australia. While the primary duty of a private shipping company is to provide dividends for its shareholders, our duty is to conserve the interests of the people as a whole.
Senator Sir HENRY BARWELL (South Australia) [9.17]. - Senator Thomas has told us that some years ago he imbibed socialistic ideas at the feet of the present Leader of the Senate (Senator Pearce). He said that they both were socialists. If that statement is correct, I can only say that Sir George Pearce has given evidence of a considerable advance since then ; whereas Senator Thomas, if he has not actually retrogressed, has remained dormant. The honorable senator is as much a socialist to-day as he was in the days gone by. He is clearly in favour of State enterprise in shipping matters. I am opposed to the retention of the Australian Commonwealth Line of Steamers, because I am convinced that a governmentowned concern, running under the conditions which apply to that line, can never be anything but a failure, imposing heavy and increasing losses on the taxpayers of the country. Largely as the result of the operations of the Arbitration Court, we have set up in Australia an artificial and uneconomic standard of wages, which makes competition with the rest of the world, in all but a few industries, impossible. Government ownership, when in competition with private enterprise, is foredoomed to failure, when both operate under similar conditions. How much greater must be that failure when, as is the case with the Government’s fleet of steamers, the Line has to carry burdens and operate under restrictions which are greater than those imposed upon its competitors! Under existing conditions in Australia, even vessels privately owned cannot be run profitably. Those privately - owned steamship lines now operating in Australia can only do so because there is no outside competition. That is the reason for the coastal provisions of the Navigation Act, which necessarily will have to remain in force if Australian shipping companies are to continue their operations. Every honorable senator will agree that the establishment of the Australian Commonwealth Line of Steamers was justified as an emergency war measure. Up to 30th June, 1921, the Line was conducted at a profit. The amount then standing “to its credit, was approximately £3,000,000. In 1921 the operations of the Line were reviewed by Parliament. The special conditions which brought the Line into existence then no longer existed. In my opinion, the ships should have been sold then. That, indeed, was the opinion of the present Prime Minister. In 1921 Mr. Bruce advocated the sale of the Line, but the numbers were against him, and the ships were not sold. Reference to the debates in another place at that time will show that Mr. Bruce then said that if the Line were retained, the profits then standing to its credit would soon be converted into a loss. Experience has shown that he was right. Not only has that profit of approximately £3,000,000, as well as the proceeds of the sale of 47 vessels been absorbed, but there is, in addition, a debit balance of over £11,000,000 against the Line. The annual loss for several years has been between £500,000 and £600,000. I point out that those losses were incurred when conditions were comparatively favorable to the Line. There is every indication that if the vessels are retained the losses will be even greater in the future. In support of that contention,’ I point out that wages and the cost of running the steamers generally are continually on the increase, and that the competition among the shipping companies is becoming keener every year.
– And the ships of the Line are getting older.
Senator Sir HENRY BARWELL.Yes. If the Government is to continue in the shipping business, new ships will have to be acquired. Even so, I doubt whether it is possible for Australia to build up a fleet of vessels capable of exercising any effective control over the other companies which, despite all that has been said, have not acted inimically to the interests of Australia. It has been contended that if the vessels are retained, freights will be reduced still further. I fail to see how the existence of so small a fleet will be able to exercise such a powerful influence as to cause the other companies to reduce freights. For the Line to exercise that influence it would necessarily have first to reduce its own freights, thus imposing additional burdens on the taxpayers, because all losses in connexion with the activities of the Line have to be met by taxation. What right has the Australian Shipping Board to reduce freights at the expense of the taxpayers of the country? The extent to which the taxpayers shall be called upon to contribute to the public revenue is a matter, not for the Shipping Board, but for Parliament to decide. It is the business of the board to run the Line without loss. To reduce freights would be to increase the existing losses, and thus to place an additional burden on the people. I desire now to refer to the profits made by the British shipping companies which, I point out, are operating under conditions more favorable than those which apply to the Australian Commonwealth Line of Steamers. I have here Brasseys Naval and Shipping Annual for 1927, edited by Alex. Richardson and Archibald Hurd, on page 157 of which, under the heading, “ Some Aspects of British Shipping, 1926,” the following appears: -
Losses are,’ unfortunately, more often tlie rule than, profits in shipping concerns to-day. There is no. exaggeration in the statement that there are not ten important British cargo shipping Meets which have earned their working expenses and depreciation and 5 per cent, on their capital from their current freights during the past four years. Had it not been for resources accumulating during and immediately after the war, they could not have continued to ply in either near or distant waters.
That is the condition as regards British shipping at the present time. The Annual then goes on to say -
Would State enterprises have succeeded? It could only have turned these losses into profits by cutting down expenditure, which is mainly under the heads of new construction, repairs, fuel, and wages. As to these items, I may remark that to give to the shipyards less than they receive at the present level of prices, would mean throwing the losses on to the shipyard man - an impracticable policy for any State department or Government. To spend less on repairs would lead to the more rapid deterioration of existing ships. To spend less on fuel would mean slower speed or less money for tlie mining man. To reduce wages by a State department decree is beyond their courage. There remains only the cost of management, which is a very small percentage of working costs and, as far as can be learnt from State experience, is not likely to be cheaper or better if management is the function of civil servants rather than of privately controlled and selected organizations. The experience of the war taught us a great deal about the courtesy and sense of duty of permanent and temporary civil servants, and their readiness to act under the guidance of skilful ship managers, who really made the Ministry of Shipping; but it did not teach us how to make working expenses, and depreciation, and maintain wages at their present level out of a freight of 15s. a ton to Buenos Ayres, and home again at 12s. 9d ! That plain problem, and a hundred more rather like it, have to be solved to enable the shipping companies to keep themselves alive.
In general, State ship-owning has in it inherently some latent or patent evils. As it exists at present it tends to be less influenced by the healthy element of competition, and it is a disturbing element, subject more to political than to economic movements. For instance, while we recognize the efforts of many of those who control and direct State merchant fleets to act fairly to private shipowners, every observant person can see how difficult it is for State-owned enterprise, exposed to the claims of conflicting interest, to adhere to one policy, and there is an almost inevitable tendency towards flag discrimination where State shipping is concerned. lt would be better for trade, as a whole, for those Governments which ave engaged in com. mercial undertakings to dispose of their tonnage as rapidly as possible, and leave the field of commerce open to the wholesome competition of free, equal, and unaided enterprise.
There is no menace whatever in the Shipping Combine that has been referred to by the Leader of the Opposition. Everything goes to show that there is free competition. It is not a combine, but a conference, a conference of shipping companies.
– What is the diffference ?
– If it was a. combine the lines within it would be bound down to some unanimity of action with regard to the fixing of freight rates, and so on.
– That is just what is happening.
Senator Sir HENRY BARWELL.There is free competition between companies within the Conference.
– It is a pity the Public Accounts Committee did not get that information.
– It has got it.
Senator Sir HENRY BARWELL.I have no doubt the committee did get the information, and I have no doubt that the chairman, in the course of the debate, will be able to inform us that the shipping companies which come within the Conference are free and unhampered. Here is another statement which appears in this work that has been published for years and years, and is a recognized authority on shipping. In the latest number it has this to say in regard to British shipping -
British shipping serves nearly every industry in the country, certainly every manufacturing industry and every export trade. It provides tlie cheapest carriage in the world, and for its services it secures a toll on goods so small as to be scarcely perceptible in retail prices. It brings, in effect, our foreign markets and our customers to our very gates. As to our food and raw materials, it may be said that Our diet, which is the most varied in the world, is the direct outcome of cheap sea carriage, and of the ingenuity and practical scientific skill of our naval architects, engineers and chemists. No matter what arrangements are made to regulate supplies or to ensure to merchants and ship-owners alike, equable rates of freight, the latter are always subject to the influence of world competition - a healthy influence which is the very life blood of efficiency, conferring benefits alike on producers and consumers.
The effect of British shipping on the life of the British people does not end with low freights and safe and frequent voyages. It plays a part in the payment of foreign merchants and growers, without which we should be unable to buy from abroad the essential foods by which life and comfort are maintained.
With regard to government ownership, and the influence, if any, which the governmentowned steamers might exercise upon the shipping conference, I desire to refer to the experience of the United States of America. The United States of America during the war period acquired a large fleet of ships. But it has now decided to dispose of the whole of that fleet for reasons which are made perfectly clear in the debates which have taken place in Congress. Governmentownership has proved uneconomical and inefficient, and the steamers controlled by the United States Shipping Board have exercised no control over the Combine which operates in the Atlantic.
– Then the honorable senator admits that there is a Combine there ?
– There is a Combine, but I do not say that it operates detrimentally. I do say, however, that the United States’ ships exercise no control over it. If the United States Shipping Board, which controlled 300 ships, and had 900 more in reserve, could exercise no control over that Combine, what sort of influence would the Commonwealth Line of Steamers - seven in number - exercise over that so-called Combine, the Inchcape Conference. It is clear that they would exercise no influence at all. On the United States Shipping Board, this book has some comment to make -
As far back as 1912 the American Congress declared it to be necessary, both for national defence and for the sake of foreign and domestic commerce, that the United States of America should possess an efficient merchant fleet capable of carrying the greater portion of its own commerce. But for the war it is probable that this statement would have continued to be merely a political tenet which had no practical bearing upon the world’s commerce -
The effect of the war was to provide opportunity for a political ideal to be translated into the sphere of practical affairs.
Result. - The years since the war have shown that, no matter how strong is the national ambition for a particular object, that object cannot be obtained if it runs counter to economic law. The history of the American merchant marine is one of epic creation in response to the old world’s frenzied demand: of premature jubilation in the satisfaction of a national ideal; and of reluctant awakening to the disillusionment of a privately-owned fleet crippled by its State competitor, an annual national deficit of between 20 and 30 million dollars on its State shipping venture, and a fleet of well over 4,000,000 gross tons lying rotting atits anchors, without the slightest prospect of finding useful employment.
It is no wonder, therefore, that the United States finds it difficult to find employment for the great fleet now on its hands. That was when a large portion of the fleet was still unsold, but since then the ships havebeen disposed of. The article continues -
Towards the middle of last year the United States Government formulated the somewhat paradoxical policy that the United States shipping vessels should be sold to private owners, but that the Government should retain control over their management up to a certain point.
A much more practical step was takenlast August, when Mr. HenryFord was induced to purchase a certain number of the laid-up vessels of the United States Shipping Board under an agreement to scrap the ships within the continental limits of the United States within eighteen months of the delivery of the vessels; reserving the right to use any of the machinery from the ships in his factories, and also reserving the right to fit certain of the ships with Diesel engines for the use of his own companies. This purchase concerned some 200 ships, and no doubt the coming year will see the disappearance of a large amount of ineffective tonnage from America’s fleet on this account.
As a matter of fact, I understand that the whole of the tonnage has been disposed of since that was written. In the face of evidence of that kind, would it not be folly for the Australian Government to throw millions of good money after bad by continuing the operations of this Line? I am surprised to see that at least two honorable senators on this side of the chamber are prepared to do so. I can understand the attitude of Labour senators, and their willingness to sacrifice millions on this Line. The Leader of the Opposition in this chamber said that it is because of their concern for the primary producers of Australia. I suppose the Leader of the Opposition must be allowed to have his little joke. In any case, I am sure that this new-found fondness and affection for the farmers and primary producers of Australia will be treated as a joke by the farmers themselves. “ To hell with the farmer,” a prominent supporter of the Labour party once declared when his tongue was unbridled. That was the expression of his political faith, and “ To hell with the farmer “ has always been the cry when the interests of the farmer and the interests of the Labour party have been in conflict. If the Leader of the Opposition in this chamber had been perfectly candid, he would have told the Commonwealth the true reason why his party is in favour of retaining the ships. It is not because of interest in the farmers or the primary producers of this country. The real reason is that the main objective of the Labour party is the socialization of industry and of all business, and they know very well that the nationalization of these ships, or of any other branch of industry, is a step towards their goal. Far from protecting the interests of the primary producers, the Labour party would confiscate their property under a system of socialization, and yet that party is supported in this instance by some of the senators on this side of the chamber, namely, Senator Thomas and Senator Lynch. I cannot understand them for a moment. I never heard a more ineffective speech than that delivered by Senator Thomas in support of the retention of the Line. The honorable senator referred to the rebate of 10 per cent. in freight charges on imports. I do not know whether or not that principle is in force now; but the chairman of the Public Accounts Committee, when appealed to, said he believed it was not. In any case it is irrelevant and has nothing to do with the subject under discussion.
– If the Australian Commonwealth Line has the influence which some honorable senators claim for it, it should be able to prevent any such injustices being put upon importers by the Combine.
– The vessels of the Line have always been full so they could not have affected the position. I was surprised to hear Senator Thomas say that he represented the big importers of Australia. By what right does he make that claim, and advocate the retention of the Line? The Associated Chambers of Commerce which undoubtedly represent the importers of Australia, recently passed a resolution unanimously in favour of selling the Line.
– Probably Senator Thomas meant to say that he represented freetrade importers.
Senator Sir HENRY BARWELL.I do not know whatthe honorable senator meant. He declared himself in favour of the retention of the Line, and went on to say that the Government should take the necessary steps to make it pay. It is impossible to make a success of the enterprise under Australian conditions, and in competition with overseas ships. Success could only be possible in the Australian coastal trade which is not subject to outside competition. There is much more that one could say on this subject, but I feel that it has been worn threadbare already and I shall not detain the Senate longer. In closing I should like to state that I agree with everyword uttered by the right honorable the Leader of the Senate (Senator Pearce) in his speech yesterday. He put the case clearly and concisely. When the bill to authorize the sale of the ships comes before the Senate, it will have my wholehearted support.
– The Government might have had some justification for its present attitude if, during the last election campaign, it had declared that, if returned to power, it would take the necessary steps to dispose of the Line. No such proposition was put before the people.
– These heavy losses had not been disclosed then.
– That cannot be offered as an excuse for the Government’s proposal. Senator Chapman should know something about the difficulties of our primary producers when they are at the mercy of private shipping companies. He must know how the farmers on the west coast of South Australia were treated for many years by the Adelaide Shipping Company. Deputation after deputation waited upon the Government of that State, asking for relief of some kind. The only course open was the formation of a company to operate ships in opposition to the existing shipping ring. Would the honorable senator advocate the destruction of the railway line that runs for hundreds of miles from Port Lincoln through the west coast district, because it does not pay in the sense expected of the Australian Commonwealth Steamship Line?
– I have heard the honorable senator and other members of his party declare that if a. private enterprise is unable topay State arbitration awards, it ought to go out of existence.
– Senator Chapman has heard a lot of things and there are many things of which he has not heard. He must know the difficulties of the west coast farmers. He must know, also, how, during the war, when the manhood of every Allied nation was giving its lifeblood, shipping companies everywhere raised freights against primary producers and made profits running into millions of pounds. So much for the patriotism of private enterprise! The position is different with a governmentowned public utility such as the Australian Commonwealth Shipping line. It functions in the interests of the people, and it should be judged by other standards. Senator Andrew, this afternoon, quoted the names of a number of witnesses who gave evidence before the Public Accounts Committee, and endeavoured to persuade honorable senators that they were the representatives of primary producers. He was, however, unable to inform the Senate whether they approved or disapproved of the sale of the fleet, so, from that aspect, his argument was of no avail. Several honorable Senators supporting the Government, and particularly representatives of the Country party, appear to have changed their opinion concerning the utility of the Line. Some time ago they were in favour of its retention. Now they are prepared to sacrifice it, notwithstanding it has benefited the primary producers of Australia to the extent of hundreds of thousands of pounds.
SenatorFoll. - Can the honorable senator show that it has saved Australia hundreds of thousands of pounds?
– I refer the honorable senator to the remarks made yesterday by the right honorable member for North Sydney (Mr. Hughes). He stated that, since its inception, it had, by its influence on freights, saved Australia at least £1,000,000 a year. The rapidity with which some members of the party supporting the Government change their views almost makes onewonder if Parliament is a place for honest men. The Minister for Works andRailways (Mr. Hill), amember of the Country party who, presumably, now favours the Government’s policy for the sale of the Line, held an entirely different opinion a few years ago; but that was before he joined the Ministry. On the 10th July, 1923, he 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 plenty of insulating space for the purpose of carrying perishable products to the markets of the world at reasonable rates. The main reason we have supported this Line is because we believe that, in days gone by, we were exploited, and probably will be exploited again, by the Shipping Combine. It is the desire of the primary producers to foster the Line, as they believe it operates in their interests by keeping rates at a reasonable level.
That was Mr. Hill’s opinion before he joined the Ministry. What does he say now ?
– The rank and file of the Country party have changed their opinion on this question.
– If it was desirable to advocate the retention of the vessels when Mr. Hill made the statement I have just quoted, why is it not to-day?
-The staggering losses incurred by the Line have convinced the primary producers that it is useless to carry on any longer.
– Mr. Hill has changed his opinion because he is compelled to support the Ministry of which he is a member. A paragraph in the interim report of the Public Accounts Committee reads -
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 material 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 the actual gain to Australia by such action, it appears to the committee, from the evidence already heard, that the shippers and 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. In making this interim recommendation the committee desires to emphasize the fact that it has not yet completed its investigations; so far as these have gone, however, they indicate the necessity for a review of the present system of financing the Line, and a drastic curtailment of the overhead expenses, including the London office; but until Mr. Larkin has had an opportunity of expressing his views in -evidence the committee does not consider it desirable to indicate the lines along which such re-organization should be effected.
The supporters of the Government’s proposal are sheltering behind the fact that when the interim report was presented the committee had not concluded its investigations, but the only witness examined after that document was presented was the chairman of the board, Mr. Larkin. I think we are safe in assuming that the committee reversed its decision because pressure was brought to bear upon certain members of it. On page 6 of the majority report the following appears: -
For some years, due largely to the then prevailing conditions, the result of the operations of the Commonwealth Government Line showed substantial profits, and the Line was instrumental in enabling snippers in Australia to get their goods to the overseas markets at reasonable rates, because, it was stated, the presence of the Line not only exerted a considerable influence in restraining increases in freights, but in many instances actual reductions in rates made by the Line were almost simultaneously adopted by the other shipping companies. For example, it was claimed that the reduction of 10s. per ton in freight rates forced by Mir. Larkin early in 1923 had resulted in a saving of over £2,000,000 in Australia’s freight charges.
Notwithstanding that the committee has now reversed its decision and has recommended that the Line should be sold. Senator Thompson endeavoured to prove that the Line should be disposed of because it is not showing a profit.
– Is that not a good reason ?
– The honorable senator did not refer to the service these vessels rendered to the nation during the
Avar.
– The ships were not constructed until after the termination of hostilities.
– A number of these vessels are so constructed as to be able to carry 6-inch and 8-inch guns, so that they could render service in protecting shipping on our trade routes.
Senator Thompson apparently overlooked the fact that the Queensland sugar industry is being assisted to the extent of £6 on every ton of sugar produced, and that the industry could not prosper without such assistance. If the sugar and other industries receive Government aid, why should not the Australian Commonwealth Line of Steamers, which has been of inestimable value to the people of Australia, also receive some consideration? The taxpayers of Australia are paying over £43,000,000 in Customs and excise duties in order to assist local industries, and I do not think the Australian people object to contributing their share towards the losses incurred in conducting this valuable transport service between Australia and Great Britain. There is no difference between the two things; both are supported by the people of Australia in general. What we pay in Customs duties comes from the pockets of the people; what we pay to keep the Commonwealth steamers going also comes from the pockets of the people. If one is right, both are right; if one is wrong, both are wrong.
– Would the honorable senator scrap both customs duties and the Australian Commonwealth Line of Steamers ?
– I do not advocate the scrapping of either. If Australia is to become a great nation we must build up our industries. I think we ought to have a Line of steamers and protect them just as we protect industries whether they are run at a loss or not.
– The sugar embargo is a vicious thing.
– It suits Senator Thompson that the people should pay to keep the sugar industry going. Would it suit him also if a bounty were paid to keep the gold industry going?
– Would the honorable senator oppose a gold bounty?
– I should do a lot of hard thinking before I did oppose such a bounty. I should, however, require more tangible evidence than I have heard so far before supporting it, since I am informed that every ounce of gold won involves an expenditure of £5.
– We are paying what is really a heavy bounty to the Shipping Line.
– I am trying to point out Senator Thompson’s inconsistency. He opposes the payment of a bounty to a Shipping Line, yet he would ask us to pay a heavy subsidy to the sugar industry and a substantial bounty to the gold-mining industry. I could say a good deal more- on this question, but it has been worn threadbare. Honorable senators of the Labour party stand for nationalization We support the continuance of the shipping line because the running of Commonwealth ships is part of our policy, and because we know that these vessels have proved to be of immense benefit to the primary producers of Australia. But when we talk of primary producers, where do we draw the line of demarcation? It is customary to describe the man who makes agricultural implements as an industrialist; but as a matter of fact he is playing his part in primary production. The man. who carries the implements to the farmer, the man who carries the farmers’ produce to the seaboard, and the man who loads that produce on to a steamer all play their part in primary production. We do not know where to begin or where to end when we begin to talk about people engaged in primary production. We are all engaged in it, irrespective of our spheres of labour. Even at this late hour I hope the Government will see the error of its ways. Ministers should first go to the country, place their proposition before the people and get a mandate from them, before deciding to dispose of the vessels of the Australian Commonwealth Line. In the Prime Minister’s policy speech at the opening of the last election campaign, there was no mention of the intention of the Government to dispose of the Line. But if, after having put the matter before the people at the next election, the Government is returned with a majority it will have every right to sell the vessels.
– Senator Hoare has been honest in saying that the Labour party advocates the retention of the Australian Commonwealth Line of Steamers because it is part of the policy of the party to nationalize all means of production, distribution and exchange. I am equally honest in saying that whether this Line is a paying concern or is losing money, X think it is wrong in principle for the Government to enter into competitive trading with the people whom it is governing. It is wrong in principle for a government elected to make laws for the guidance and control of the people as a whole, to enter into competition with members of the community, and still retain the right to tax its business competitors to make good any loss incurred by its business ventures. Therefore, I am opposed to such trading. It is conceivable that at times it is really necessary for a government to trade. Governments by reason of special circumstances have sometimes been forced into enterprises which they would not otherwise touch. The Commonwealth Government went into the shipping business at a time when it was absolutely necessary, in the interests of the country, that something should be done. It was also necessary at that time to pass a War Precautions Act, under which the Government could do most extraordinary things. That act served its purpose. Under its provisions the Government could carry on and do things absolutely essential in a time of 3tress; but no one would suggest that that act should operate to-day, or that we should have inforced to-day the restrictions it imposed. That these ships served a useful purpose at the time to which I have referred is no reason why they must necessarily be retained now that we have returned to normal times. The Government has acted wisely in deciding to dispose of the Line. It is useless for honorable senators to ask why a government cannot carry on a business undertaking as well as private enterprise can. It is sufficient that experience shows that very few government-controlled businesses have been conducted at a profit. Some honorable senators have attempted to compare this shipping service with our railway systems ; but I maintain that the two services are entirely different. With the exception of one or two short lines, there are no privately-owned railways in Australia. Had private railway companies been operating in Australia for a number of years in competition with government lines, a comparison could be made, but under existing conditions that is impossible. Last night Senator Lynch unwittingly did Western Australia an injustice when he said that’ the annual revenue earned by the East- West railway was about £130,000 per annum less than working expenses, and that, therefore, that railway could properly be compared with the Australian Commonwealth Line of Steamers.
– I referred to the whole of the Commonwealth railways.
– The honorable senator did not make that clear last night. If he had quoted the latest figures available he would have shown that last year the East- West railway showed a small credit balance over working expenses. There is, moreover, every possibility that with the passing of time the finances of that line will improve. It has been contendedthat there is a prospect of the financial condition of the Australian Commonwealth Line of Steamers improving, but I fail to see how that can be accomplished. On the journey from England to Australia the vessels belonging to the Line are invariably full, although in the opposite direction that is not always the case. Honorable senators opposite have said that the Line should be retained in the interests of primary producers. The primary producers of Australia are more intimately interested in the future of the Line than some would have us believe, for the reason that only our primary products can be exported. In this connexion I draw attention to a passage appearing on page 24 of the report of the Tariff Board, dated 30th June, 1927-
It is quite obvious that both primary and secondary producers expect to hold their own domestic market against all outsiders. Costs of production are now so heavy in Australia that, in order to effect this object, the tariff on primary and especially secondary commodities has to be kept high, and, if production cost’s are not checked, may have to be raised still higher. The result of this condition is that no market other than the domestic is open to the secondary producer. He cannot compete with the outside world, and is confined withinthe area controlled by the Commonwealth.
That is the crux of the question before us. The extract that I have read is the considered opinion of the Tariff Board, which makes a very careful study of tariff problems. Recently a number of influential newspapers and financial experts have expressed alarm at our adverse trade balance. If we cannot increase our exports the only way to adjust that trade balance is to reduce imports. In that case the vessels belonging to the Line will have less chance of showing a profit than they now have. I do not say that the Line has not benefited Australia in the past, or that in the matter of refrigerated space for perishable goods it is not still of advantage to us. It is human nature In my opinion, however, whether this Line was in existence or not, the shipping companies would, if they were able, exploit the shippers of Australia. It is only human nature to do so.
SenatorFoll. - What about those who preach the brotherhood of man? Would they exploit anybody?
– I have observed some of those gentlemen, and I have noticed that they are just as careful about looking after themselves as I am, and they are a good deal more successful. The Prime Minister made it perfectly plain that he would not be a party to the scrapping of these ships. He stipulated certain conditions and guarantees to the effect that the people of Australia should receive a fair deal from whoever bought the ships. Among these guarantees was one that adequate refrigerating space should be provided to meet the requirements of the primary producers. The inference I drew from his words was that if the guarantees were not forthcoming, he would not agree to the disposal of the vessels. He also insisted that the ships should be retained on the Empire register, and that they should be kept running in the Australian trade. A good deal has been said about the effect these steamers have had in reducing freights on the Australian route. Senator Chapman quoted someilluminating figures last night toprove that freights had come down in other parts of the world without any competition from the Commonwealth Line. I propose to quote some figures which apply to the Australian trade, and which really supplement those given by Senator Chapman. In 1920, the freight on greasy wool was l&5/8d. a lb., while to-day, itis l¼d. On beef the freight was l&3/4d. ;it is now fd.j on mutton it was lid: it is now 1-Jd.; on fruit, the freight was 8s. a case in 1920, while in 1925 it had been reduced to 4s. a case, and since then it has been reduced another 6d. a case. On lamb, the freight was 2d. a lb. in 1920, while in 1925 it had come down to lid per lb.
– That is less than a 50 per cent, reduction.
– Yes, that is less than a 50 per cent, reduction, whereas some of tlierductions quoted last night, as having been made where there is absolutely no competition on the part of the Australian Commonwealth Line, were from 43s. 3d. per ton down to 10s. 4d. While the Commonwealth Line may have had some influence in reducing freights between Australia and the Old Country, it can be shown clearly that, no matter who brought them about, they have not been nearly so great as those which have taken place in other parts of the world. In saying that, I am not trying to rob the Commonwealth Line of any of the credit which might legitimately be due to it for effecting a reduction in freights. From one end of Australia to the other the Commonwealth Government is being charged with sanctioning an ever-increasing expenditure, and newspapers endeavour to demonstrate that this is the most extravagant Government that Australia has ever had. Then, when the Government brings down a proposal such as this to decrease expenditure - and after all, it must make a start somewhere - there is a howl that it is going to ruin the country. I remember a short while ago there was a debate in the Senate on the subject of the financial relations between the States and the Commonwealth, and some honorable senators declared then that the Government had determined to ruin, the States - that it had obtained a strangle hold on them, and was using its power to crush them. I do not wish to refer slightingly to the Commonwealth Line as a small, useless and miserable fleet. I believe that these ships did as well as any such fleet in the world could have done under similar circumstances. No fleet could compete with the Conference Line if it were handicapped by the tremendous expenses which the Commonwealth Line has to bear, and from which its competitors are free. Every opponent, except one, of the Government’s proposal, has spoken of it as a proposal to “ destroy “ this fleet. The picture conjured up in my mind, as I listened to them, was that the ships were to be towed out and scuttled beyond Sydney Heads. As a matter of fact, if they are to be disposed of in accordance with the committee’s recommendations, they will still be retained on the ocean trade routes of the world.
– And the money now lost on them will be put to a better use.
– As the honorable senator says the money will probably be put to a better use. It is all very well to say that half a million here, and half a million there does not matter, but a start must be made somewhere if we are to cut down the expenses of government to something like a reasonable level. I agree with Senator Sampson that condemnation of the Line is to be found, not in the majority, but in the minority report of the committee. This states clearly that if it is to be retained and operated successfully the Line must be added to. It is well known also that additions to be effective must be considerable. Anything less than twice the present number of ships in operation would be useless.
– Has the honorable senator never heard of a business being expanded by the purchase of additional plant?
– Of course I have, but I remind the honorable senator that usually a plant is expanded only when returns justify that, course. The Australian Commonwealth Line is showing heavy losses even under the most favorable conditions it can obtain in Australia. Possibly if it is handed over to a private company it may return a handsome profit; but, again, I emphasize that the minority report states definitely that it would be useless to expect any improvement under existing conditions. It adds that the present is not a favorable time for adding to the fleet. Construction costs are high, and shipbuilding is at a transition stage because of recent developments in the means of propulsion. In the circumstances, it is better to get out of the business altogether instead of attempting to carry on indefinitely until we can add to the fleet. We should be honest about the matter. We should admit that we have made a mess of the business, and be prepared to allow some one else to carry on. The primary producers, about whom members of all parties seem to be concerned, are, I believe, as clear thinking a section of the community as any other. If they can see that without the Line they can get as good a service, and have their produce taken to the markets of the world at a reasonable figure, as was the case before the establishment of the fleet, they are entitled to be relieved of their share of the burden which its maintenance will placeupon the community generally.
– They will not enjoy reasonable freights from the Combine.
– Long before the Commonwealth was inaugurated Australian produce was carried to the world’s markets, and I doubt if freights, except during the war period, were ever outrageous. I admit, of course, that primary producers in those days got very little for their products. I can remember growing wheat in the Wimmera district in Victoria, and considered that I was being well paid when I got 2s. 6d. or 2s. 8d. a bushel for it. Even in those days our surplus wheat found its way to the London markets under reasonable conditions, and I believe that, if the Line is disposed of, our produce will still be shifted at satisfactory rates. Owing to the competition in an open market there will be little risk of excessive freight charges. It has been pointed out that the vessels of the Line carry only a small proportion of our wool and wheat, so that its disposal will not seriously affect those lines of produce. Wheat freights are now almost back to the pre-war level.
– No; the freight is about 30s. a ton, as compared with18s. prior to the war.
– At all events, wheat freights are nearer to pre-war rates than are the charges for other classes of goods from Australia. And wheat freights, as I have stated, will not be materially affected by the disposal of the Line.
– Of course they will, because the operation of the Line under its present management releases other ships for the carriage of wheat.
– I doubt if the sale of the Line will affect wheat or wool freights to any extent. Freights on refrigerated cargoes may be affected ; but I am inclined to believe that the interests of primary producers will be amply safeguarded by the precautions which the Prime Minister promised that the Government will take in disposing of the fleet.
– A great deal has been said for and against the retention of the Line. The speech of Senator Sir George Pearce yesterday, in reply to Senator Needham, was far from convincing. Senator Needham pointed out that Mr. Bonar Law, formerly Prime Minister of Great Britain, had drawn fabulous dividends from the operations of shipping companies in England, and the Leader of the Senate suggested that the honorable senator wished the Commonwealth Government to do the same in Australia at the expense of the primary producers. There is no parallel between the two cases. The dividends which Mr. Bonar Law received went into his own pockets, whereas, if the Australian Commonwealth Shipping Line made profits, they would go into the pockets of the people. The right honorable gentleman when a member of a Labour Government, gloried in the fact that a Commonwealth Line of Steamers was establised by that administration, in order to assist, among other things, the marketing of our primary products overseas. What is his attitude to-day? He vainly endeavoured yesterday to defend the sale of the ships, which he once said would be of inestimable value to the Australian people. Senator Sampson referred to the necessity of disposing of the Line because of the enormous losses which have occurred; but he apparently overlooked the fact that these ships were responsible for reducing the freight on consignments of apples from Tasmania to Great Britain during one season by at least 6d. a case. In 1921 the freight on fruit to Great Britain was 8s. a case, and to-day it is 3s. 6d. Is not that a benefit to his constituents ? As mentioned in the report of the Public Accounts Committee, the Conference Line reduced freights in order to compete with the ships under the control of the Commonwealth Shipping Board, and in consequence Australian shippers have benefited to the extent of over £2,000,000 a year. If the Government cannot profitably conduct a motor bus service in the Federal Capital Territory, it is unlikely that it can efficiently control a line of deep-sea ships under the present management. Why does it not appoint a competent man to conduct this branch of its business? These vessels do not carry large consignments of wheat and wool from Australia, but their refrigerated space is greater than that on most vessels trading between Australia and Great Britain. They have also been instrumental in reducing the time taken on the voyage from 33 to 28 days. Although the Line last year lost between £500,000 and £600,000, Ave have to remember that during a certain period it showed a profit of £7,000,000, which should be credited against its losses. As mentioned by other honorable senators, the Australian taxpayers who contribute towards the bounties paid to assist industry, and also pay large sums in the form of Customs and excise duties, will not object to meeting their share of the loss incurred in providing an essential transport service. If these ships are purchased by a British company and placed on the British register, the seamen, instead of being paid £16 a month, will receive only £8 a month, which is quite inadequate to maintain a family. The vessels of the Line, which can be equipped with 6-inch and 8-inch guns, could be used as auxiliary cruisers in time of
Avar, and thus assist in protecting our trade routes. The Prime Minister (Mr. Bruce) is reported as having said on 1st November, 1923-
The Commonwealth Line is here. You can fight it, or wipe it off the seas if you are able to do so. I could speak at length of tlie Line, of its great activities of the past, and its glorious future.
Its glorious future consists of being handed over to the Shipping Combine. On the 19th July, J 923, Senator Reid, speaking on the Commonwealth Shipping Bill, said -
Many members of the Country party who opposed this form of government control now enthusiastically support the enterprise because it has been of great benefit to the primary producers. I have always been in favour of governmental enterprise conducted in the interests of the people, and during the recent elections I strongly advocated the retention of the Commonw.ealth Line Ships.
On the same day he also said -
It is very, interesting to note the number of honorable members of another place who have been converted to government control, and who now realize the benefits to be derived from a Government-owned line of ships. … A number of speakers have referred to the losses incurred, but they have been more than compensated for by the benefits derived.
I am sure the honorable senator is of the same opinion to-day.
– A lot has happened since then to change any sensible person’s opinion.
– Speaking on .the 11th July, 1925, Mr. Bruce said -
The honorable member for Echuca (Mr. Hill) was not quite fair in his criticism of tlie management. He stated the facts with regard to wheat charters during the past two ^ years, but said nothing of the service rendered to the wheat-farmers of Australia by the Line during the war. Therefore it is only fair that I should remind the House of what happened at that time. If they will throw back their minds they will remember that shortly after the Line was established it was carrying Australian wheat to London at £7 10s. per ton at a time when British ship-owners were charging £13 and more and foreign charters were as high as £15 per ton. The Commonwealth Line rates were a considerable benefit to the Australian farmer. . . .
If the country people have shared in the benefits conferred by the Commonwealth steamers in past years it is quite open to them to share in those benefits in the future if the vessels are retained by the Commonwealth Government. I wish to draw the attention of honorable senators to what happened in 1919. When Mr. Hughes Avas Prime Minister he said -
I do not propose to address the committee at length now, but it will be recollected that on the 16th inst., when I had the honour of setting out the position in regard to the Commonwealth Line of Steamers and Commonwealth shipbuilding, I said that an offer had been made, if I remember right, in 1919, to purchase the Commonwealth Line of Steamers, and that I had reason to believe that we could sell our ships now if we desired to do so. I have here a cablegram dated 17th November, which is of so much importance that I propose to read it to the committee. Mr. Larkin, the general manager of the Commonwealth Line of Steamers, has cabled me conveying the following message from Lord Inchcape, which his Lordship wished him to forward to me: - “I realize that prospects of shippingall over the world for several years to some are extremely bad. Americans have overbuilt themselves at high costs, Germany is building at low costs, while tonnage at present laid up is more than can be profitably utilized for some years. The Conference Lines to Australia must keep their ships running, even at serious loss, utilizing their accumulated reserves to make up deficiencies. 1 recognize, and admit quite freely, that Australian Government, with taxpayers behind it, can go on indefinitely, and that Conference Lines may eventually be ruined.I am prepared to recommend Conference to come toan agreement with Australian Government, either to buy its ships on reasonable terms, or to suggest that they should sell their ships to Australian Government and leave latter a free field. If you decide to adopt the first alternative, I feel sure an arrangement satisfactory to. you could be arrived at; and I may say the same if you decided to adopt the latter.”
Evidently an offer was made in 1919 for the vessels of the Australian Commonwealth Line. I do not know if. the price was ever made known. It is also interesting to note that in December, 1926, after paying a visit to Great Britain for the express purpose of getting a buyer for our vessels, Mr. Larkin tendered his resignation as chairman of the Shipping. Board. I should like to know what caused him to do so, and why the offer, which I presume be brought back from Great Britain, was turned down. Was it because the Government of the day did not thinkthe time opportune to sell the steamers or, because the shippers of this country persuaded the Prime Minister not to sell? It is quite apparent that since 1917, there has been a determination on the part of certain people that the vessels belonging to the AustralianCommonwealth Line should be sold. Ever since then shippers by the Line have been disturbed, and during the last five or six months they have been frightened to ship by theLine. Agents for vessels belonging to the Conference Lines have probably been telling them that if they did not return to the Conference vessels they would not get space in them, when the Australian Commonwealth Line was sold. I should say that that accounts very largely for the falling off in the cargo offering from the Old Country to Aus tralia during the last six months. And for that falling off in trade the Government has been responsible. The Sun Pictorial of the 28th April, 1925, said-
One well-known exporter said these vessels had always been run in a business-like manner. Shippers were so well satisfied, that space on “ Bay “ liners had been fully booked long before the day of departure. The Line had been responsible for a freight reduction which enabled producers to place their goods onthe London market at a reduced cost, and so compete with other countries. Although the Linehas lost £400,000 a year, it has saved Australia £3,500,000 in freights. “Under such circumstances,” he said, “ we have been pleased to ship our goods on Australian vessels, manned by Australians, and pay freights into Australian revenue.”
All shippers speak in the highest terms of the vessels belonging to the Line. As an indication of the trend of affairs, not long after the formation of the Line, the following extract from the Times Trade Supplement, December, 1919, is interesting. Under the heading “ Lightening the burden it was stated -
In September, 1920, the Conference Lines proposed to raise the freight on scoured wool by¼d. per lb. Our Line would not agree to this,and rates were not raised.
In1923, owing to 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 rates to the United Kingdom would be decreased by 12½ per cent., refrigerated cargo by ½d. per lb., fruit by1s. per case, and butter by 6d. per box. Freights from the United Kingdom to Australia were simultaneously reduced by 10s. per ton, and in these reductions the Line was followed by the Conference Lines.
These reductions resulted in an enormous saving tothe producers and consumers in Australia, and were of very great benefit to the population of Australia as a whole.
Again, on 12th July, 1926, the Line announced a further reduction in freight rates from Australia of 10 per cent. on all general cargo,1/8. per lb. on all classes of skirts, on wool, and on all classes of frozen cargo; a reduction of6d. per box on butter and a similar amount on each ease of apples and other fruit.
We estimate the average yearly tonnage of exports and imports to and from Australia and the United Kingdom as over 4,000,000 tons and 10s. 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.
One could continue for a long time enumerating the benefits conferred on
Australia by the Line. The Government has granted large sums of money by way of bounties to assist different industries and enterprises; yet this Line, which has been instrumental in reducing freights and has provided excellent accommodation both for passengers and cargo at reasonable rates, is practically to be given away. We are to have a repetition of that which took place in connexion with the Geelong Woollen Mills. The men with the money bags who control the Government are forcing it to get rid of its fleet. The more we consider the Government’s proposal the worse it appears. Honorable senators know that so soon as the Line is removed from the control of the Australian Shipping Board, its influence in controlling freights willcease. No buyer will submit to the conditions which the Government says it will impose on the purchaser of the fleet. Those proposals are mere camouflage. Vessels which not only serve a useful purpose in conveying goods to and from Australia at reasonable rates, but also are capable of being converted into auxiliary cruisers, are to be given away because, from a strictly commercial point of view, they do not pay. If the Government was consistent and was guided solely by financial considerations, the two cruisers now being constructed would be sold for the reason that they will be non-productive. Even our Commonwealth railways may yet be given away by this Government, because, for the most part, they represent a loss.
– The Commonwealth Woollen Mills were making profits; yet this Government disposed of them.
– In that case the Government disposed of a concern which was making profits; now, it proposes to dispose of its fleet because it is operating at a loss. The Government is so anxious to dispose of the Line to private enterprise that it is prepared to subsidize the company which takes it over. I should like to express the hope that the vessels will not be sold, but that would be a vain hope. In my opinion they have already been sold. It is now only a matter of Parliament agreeing to the Government’s proposals and the vessels will be handed over. Mr. Larkin went to England with the object of finding a purchaser for the
Line. That the offer he submitted was not accepted was probably the reason why in December, 1926, he tendered his resignation. I protest against this disposal of vessels which are serving a useful purpose.
Debate (on motion by Senator Reid) adjourned.
page 1190
Motion (by Senator Sir George Pearce), by leave, agreed to -
That daring 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 12.45 p.m. to 2.15 p.m.
page 1190
[11.20]. - In view of the ceremony that is to take place tomorrow morning in celebration of Armistice Day, I move -
That the Senate at its rising adjourn until 11.30 a.m.to-morrow.
Question resolved in the affirmative.
Senate adjourned at 11.22 p.m.
Cite as: Australia, Senate, Debates, 10 November 1927, viewed 22 October 2017, <http://historichansard.net/senate/1927/19271110_senate_10_116/>.