9th Parliament · 2nd Session
The President (Senator the Hon. T. Givens) took the chair at 3 p.m., and read prayers.
– (By leave).-I desire to make a personal explanation. When speaking last evening in the debate on the Northern Territory Crown Lands Bill, I stated that the representative of the Northern Territory in another place, Mr. Nelson, was a member of the Australian Labour party. I ‘ now find that my statement was incorrect. “When the Northern Territory election was decided, it was reported in the press that the position had been filled by a Labour representative, and when I knew the elected member was Mr. Nelson, I came to the conclusion - being influenced in this matter by my knowledge that he had been prominently associated with union and industrial matters in the Northern Territory - that he had stood as the representative of the Labour party. I have since learned that Mr. Nelson conducted his election, not as a Labour candidate, but as a Northern Territory advocate. He made his position in this respect quite clear during the campaign, and I desire now, in justice to him and in fairness to his supporters; as well as in the interests of the Territory which he represents in another place, to set the matter Tight.
The following, papers were presented: -
Northern Territory Charts (four) to accompany Report by Engineer Vice-Admiral Sir WilliamClarkson on the possibility of developing a Harbor at the mouth of the McArthur River, tabled in the Senate on the 18th July, 1923.
Ordered to be printed.
Audit Act- Transfers of Amounts approved by the Governor-General in Council - Financial Year 1922-23- Dated 11th July, 1923.
– I ask the Leader of the Senate (Senator Pearce) if his attention has been directed to a paragraph in this morning’s press to the effect that the Commonwealth Govern- merit have consulted the Governments of New South. Wales and Victoria in connexion with a proposal to make a grant to the widow of the late Mr. David Lindsay, the Australian explorer. If the statement is true, will the Government give the . Government of South Australia an opportunity to contribute to the fund?
– We approached the Governments ofNew South “Wales and South Australia; not New South Wales and Victoria.
Penalty for Sorcery
asked the Minister for Home and Territories, upon notice -
– The replies are as follow : -
asked the Minister representing the Prime Minister, upon notice -
In view of the depreciated value of money, will the Government during the present session introduce a Bill to amend the schedule to the Seamen’s Compensation Act to provide that the maximum amount of compensation may be increased from £500 to £1,000, and that the payment of £2 per week may be increased to £4?
– The matter will receive consideration.
asked the Minister representing the Treasurer, upon notice -
– The Treasurersupplies the “following answer: - 1 A blind . woman marrying a sighted man would not lose her pension merely by reason of the marriage. Moreover, she could receive pension provided the income and property of herself and her husband are within thestatutory limits.
asked the Minister representing the Treasurer, upon notice -
– The Treasurer supplies the following answer: -
Automatic Postage Stamp Machines
asked the Minis ter representing the Postmaster-General, upon notice -
Will the Postmaster-General make arrangements forthe installation of automatic postage stamp machines throughout the Commonwealth for use when post-offices are closed?
– The answer is as follows: -
In view of the facilities available for the purchase of postage stamps after office hours from stamp vendors who are granted licences for the sale of stamps throughout the Commonwealth, where necessary, . the PostmasterGeneral does not propose to make the arrangements asked for by the honorable senator at present.
Distribution of Literature
asked the Minis ter representing ‘the Minister for Works andRailways, upon notice -
Will the Minister for Works and Railways make arrangements for the distribution of tourist literature from the Western Australian Tourist Bureau on the transcontinental railway?
– The Commonwealth Railways Commissioner is willing to arrange for the distribution of literature approved by him.
asked the Minister representing the Treasurer, upon notice -
– The Treasurer supplies the following answer: -
The honorable senator’s question concerns a matter of Government policy, and it is not usual to give replies in such cases.
Motion (by Senator John D. Millen) agreed to -
That two months’ leave of absence be granted to Senator Bakhap on account of illhealth.
Debate resumed from 13th July (vide page 1105), on motion by . Senator Wilson -
That the Bill be now read a second time.
– I rise to speak on this measure in a somewhat doubtful frame of mind, but I wish to express my pleasure that the Minister (Senator Pearce) did not insist yesterday that honorable senators should sit continuously until the Northern Territory Crown Lands Bill had been passed through all its stages. Had he done so, I should not have been able ‘ to do anything like justice to this measure to-day. In view of the generous treatment that I received when a lone representative of the Labour party in this Chamber,I appeal to the new senators to insist that all Bills shall be treated in a way worthy of this Senate. I am not one of those who are able at a monent’s notice to readily discuss any question, and we should act fairly to the people who sent us here by insisting on a deliberate discussion of every measure. At present I have to speak on five Bills, and there is a possibility of the introduction of seven others on which I shall be called upon to speak. In view of the limited time which is said to be at our disposal, the list of Bills seems to be somewhat large. Senator Wilson must be congratulated upon the way in which, as Minister, he introduced his first Bill in: this Senate. He is in the very happy position of having introduced a Bill, portions of which will certainly meet with the approval of all parties. His own party - that is himself - was evidently “in hearty agreement with him; the Country party, which he represents in the Ministry, I have no doubt, will approve of the Bill; the Nationalist party, -with which he is associated, will concur; and speaking for the Labour party, I say that we shall heartily welcome the continuation of the Commonwealth Shipping Line. Senator Wilson is, indeed, in a very happy position, since the four parties I have mentioned approve of the Bill to be piloted by him through this Senate. I wish briefly to refer to some of the Minister’s remarks, because there are certain matters relating to the Bill which will require a definite statement from him. Some of his statements might easily be misconstrued. At one stage Senator Wilson stated: “We shall have to follow the road of prosperity and turn aside from the road followed in the past.” He was there referring to the Commonwealth Shipping Line.
– That was a general statement.
– I hope he will not turn aside too far from the track followed in the past. The Commonwealth Shipping Line has been a most profitable investment. On another occasion he stated -
A statement, showing the position of the Commonwealth Government shipping and shipbuilding activities from the end of 1014 until June last, has been tabled. This shows a total debit of £2,645,761 on all transactions after allowing for the proposed writing down, interest on all moneys advanced, and the total cost of all steel ships built or in course of construction in Australia. In fact, it shows all expenditure except the loss on wooden tonnage, which, it is freely admitted on all sides, could not, by any stretch of the imagination, be considered a reasonable charge against the Line.
As a matter of fact, notwithstanding heavy losses incurred during the last two years, the Commonwealth (Shipping Line has made a gross profit of £2,493,449 since its inception, but the net loss has been £493,278, the difference comprising interest and depreciation already written off.
I shall now quote statements made by Mr. Bruce, a gentleman who holds a very high office in another place, which are very pertinent to the question of profit and loss, and the opera-, tions of the Commonwealth Shipping Line. It is one of the lasting pleasures of my public life that I was a member of the Government which established the Commonwealth Shipping Line. I do not know whether I shall he justified in quoting from memory a sentence dropped by Senator Pearce in private conversation some years ago, but I shall venture to do so. Discussing our intended purchase of a number of ships to inaugurate the Shipping Line, the purchase to be subject to parliamentary indorsement, Senator Pearce said that it was comparable with Disraeli’s action in purchasing Suez Canal shares for the British Government:
– No wonder Senator Pearce dropped that sentence.
-I am inclined to think that ha was absolutely correct. Although in recent years, or recent months perhaps, there may have been occasions when the fleet was of little use, this attempt on the part of the Government of that day to do something to benefit Australia is comparable with what Disraeli did for Britain in the purchase of the Suez Canal shares. The Commonwealth Shipping Line should not be thrown aside on a catch cry. If the Line is continued I have no doubt that some of us will live to see the consequent benefit to Australia. I shall now quote the remarks made by the present Prime Minister (Mr. Bruce) in November, 1921, concerning the profits of the Commonwealth Shipping Line, as follows: -
I now wish to deal with the actual position of the ships we own, and the value at which they stand to the Commonwealth. In my figures I shall quote those used by the Prime Minister (Mr. Hughes), which deal with the cost of the vessels, the profits made, and their present capital cost to the Common wealth. The actual position as shown bythe statement of the Prime Minister is as follows: -
If the value of that profit is employed in writing down the present value of the ships held by the Commonwealth, they stand in to the Commonwealth at £3,265,157. But to that amount interest on the money employed - the amount, again taking . the Prime Minister’s figures, of £382,000- -has to be added. That means that the fleet stands in the books of the Commonwealth at £3,647457. The Prime Minister’s figures give the amount as £3,527,157, which shows a slight difference, which is accounted for probably in the additions, because the figures appear quite plain in the statement.
If we have £10,000,000 worth of shipping, standing against the then Commonwealth book value of £3,647,157, it shows a. very handsome profit for the brief period that the ships were in commission. That- statement is taken from Hansard of the 29th November, 1921. The success of the Commonwealth Shipping Line is not to be estimated on the basis of the money actually earned, but on the benefits, indirect and otherwise, it has conferred on the community. I know the Honorary Minister (Senator Wilson) does not expect me to deal fully with the various points mentioned in his speech, which was not of undue length, but included a considerable amount of information that we had no difficulty in following. In the course of his speech he said that the Government intended to’ eliminate unnecessary expenditure by placing the Commonwealth Shipping Line on a proper working basis and disposing of the surplus tonnage. I can quite understand the Government wishing to dispose of unprofitable vessels. It would be presumption on my part to address the members of the Government on this question from the business point of view, because I am not a.’ business man. The Government, however, is supposed to comprise men experienced in all the ramifications of big business, and”! am surprised to learn that it is_ their intention to dispose of surplus ships when such a number are lying idle. If the ships were in my possession, and I wished to dispose of. them, I should utilize them in such a way that they would be entering into competition with private shipping companies and developing trade wherever possible. If the Government wish to sell them it would be a much more business-like proceeding to utilize them instead of allowing them to remain idle, particularly when there are thousands of capable men available to man them. If these vessels were put to their best use it would cost very little more than is involved in maintaining them in their present idle state, and if private shipping companies found that these vessels were competing for the trade offering, they might be prepared to acquire them at a higher price than they would otherwise offer. I do not think a single primary producer has not benefited in some way in consequence of Commonwealth Government steamers entering into the overseas trade. I do not know, Mr. President, to what extent I am allowed to quote from newspaper articles, but there are_ one or two press comments in relation to the shipping business which, although not altogether relevant to this Bill, will be of interest to honorable senators. Senator Newland, Senator Kingsmill, and the Minister can speak as the representatives of important wheatgrowing States; whilst . Senator Duncan, Senator Cox, and I are representatives of a State which not only produces wheat but wool in very large quantities. Queensland, on the other hand, has her cattle and sugar industries.
– Queensland also produces a large quantity of wool
– Yes, and 50 per cent, of the beef produced in Australia. Sen ator Lynch, of “course, is a prominent representative of the wheat producers, who can not only give us the facts concerning wheat production, but is himself a wheat producer. According to the Industrial Australian and Mining Standard, from which I shall quote, the private shipping companies in 1918 were carrying wheat at 235s. per ton, whilst the freight charged by the Commonwealth Government Line was 120s. per ton. It is only fair to assume that the difference between these two amounts went into the pockets of the primary producers. Wool is grown in every State to a . greater or less degree - even Tasmania produces wool of an excellent quality. According to the information before me, the freights fixed for wool on account of the Imperial Government was - for greasy wool,.15/8 d. per lb.; and for scoured, l5/8d. per lb., with a surcharge of¼d. per lb. for any scoured in excess of 15 per cent, of total shipments. The’ Commonwealth Government Line was asked to join in the increase on scoured wool for private shipment from l5/8d. to 21/8d. per lb., but did not agree to such a large increase. When we consider the enormous quantity of wool shipped across the seas we can easily estimate the benefit thus derived by the wool producers. The freight, however, was raised by others to 21/8d. per lb., and although the management- of the Commonwealth Shipping Line agreed that scoured wool should be carried at a higher rate, it considered ½d. per lb. unjustifiable. In order to bring . the scoured rate to a reasonable basis, it decided to fix it at l7/8d. per lb. It is needless to “go into calculations to show the enormous saving thus secured by those engaged in the wool industry, which enabled us to conduct business with the rest of the world on an even balance. Dealing with other products, the article says -
From1918 to 30th May, 1921, the rate on sheepskins was15/8d. per lb. In the early part of 1921 shippers were unable to effect sales on this rate, and business was practically at a standstill. The Commonwealth Lino, in order to assist the exporters of sheepskins, reduced the rate on 30th May to l¼d. per lb.
There, honorable senators will see, an immediate benefit was conferred upon the primary producers. The same thing has occurred in respect of everything the Line has touched. This article preceeds to say - .
In 1921, when the freight on frozen rabbits was being quoted at 168s. per ton, the Commonwealth Line was quoting 140s.
That again was an immense advantage to the Commonwealth, the cheaper freights enabling our people to export rabbits ad- vantageously. A further statement made in this article is as follows: -
On 22nd January, 1923, it reduced freights on frozen cargo all round, beef, mutton, &c., being reduced by Jd. per lb., rabbits by 10s. per ton of 40 feet, fruit by ls. per case, butter by 6d. per box, and general cargo by 10s. per ton.
In considering the advantages conferred on the people by this Line, we must not pay heed to a temporary slump in trade or a slight dearth of freight during a particular month or a particular year. The whole question for us to consider is whether the people are deriving a sufficient benefit from this Line to justify us in keeping it going. Believing that they are, I think that I am justified . in saying that all parties - including the separate Independent party, known as “ the Wilson party,” which always looks after its own interests so ably .in this Senate and outside - welcome the introduction of this Bill. ‘ I do not feel called upon to criticise the Bill closely. The opinions of the organized section of Labour regarding the shipping business are contained in an article from which the following is an extract : -
The retention of these ships by the Commonwealth, and their management in the interests of the Australian people, cuts right across the policy of the richest, the ablest, and the most rapacious capitalist organization in the world - ‘the Inchcape Shipping Combine - with its press and its financial ramifications in every industry and in every country in the world.
I venture the opinion that the continuance of this Line does cut across the policy of the organized shipping ring of the world. Honorable senators who on other occasions have heard it will pardon my repeating the statement made by the late Pierpont Morgan, when he had completed the organization of the shipping ring. At a banquet which was tendered to him by business magnates he said -
We are the advanced Socialists. We have discovered that combination means success ‘in trade, not competition, as our forefathers thought, and we are going to take the profits of combination until the people are sufficiently intelligent to take the profits for themselves.
Senator Wilson is associating ‘himself with the establishment of a Shipping Line which will demonstrate that the Australian people are sufficiently intelligent to take to themselves some of the profits that accrue from the shipping business. I quite agree with the statement that it depends upon the intelligence of the people whether they permit the profits from shipping or any other kind of business to go into the pockets of private companies, trusts, syndicates, or firms, rather than into the common purse. Therefore I welcome the introduction of this Bill. This is a step in the right direction. When this legislation is passed we shall hear no more about the scrapping of this Line. It matters not how powerful the great Inchcape’ organization may be, or how adept it may be in inspiring articles in newspapers, this Line will go on. These interests sometimes try to inspire parties to take certain action by assisting them financially. We know that the financial interests of the world help each other. A quotation which I made yesterday showed that the Financial News in London expected help from a new Queensland Administration if it succeeded in displacing , the existing Labour Government. Remembering the time when ample money was available in Queensland for the purpose of buying up Labour’s majority there - a bid of £3,200 having been made fruitlessly for one vote - I realize that these corrupt practices emanate from the- organized captains of industry, the organized wealthy rings which want to dominate not only the trade, but the Parliaments of a country.
– That offer of £3,200” was said to have been made by theCountry party - the primary producers.
– I shall not say where it originated. I do not think there are many members of the Country party who would agree to provide out of their own funds money with which to attempt to. buy up a Parliament.. My reading has led me to the conclusion that the practice of the big Combine has always been not to spare money if it can gain a corresponding advantage from its expenditure. I am in general agreement with the Bill, but there are some clauses which I am not at present prepared to accept. I am a careful man, without a great deal of business experience, and I. therefore do not accept, without question, everything the Minister (Senator Wilson) says in regard to this measure. Clause 7 provides -
The Board shall be a body corporate, under the name of the -Australian Commonwealth Shipping Board, ‘with perpetual succession and i a common seal, with power to hold property, and capable of suing and being sued in its corporate name.
When I read clause 13, it appears to me that the Minister has -gone too far with this Board. It reads -
All the right, title, and interest of the Commonwealth in and to -
I have no doubt the Minister will say that that is quite usual, and that it is all right. It may be quite usual, and it may be all right. But I can see no reason why the Australian Parliament should pass a clause denuding itself of all right in its own property. . I hope that the Minister (Senator Wilson) will tell honorable senators the reason for this proposal Senator Duncan. - Parliament will control the Board, and the Board will control the industry.
– Could not Parliament control the Board without actually vesting the property in it? Under clause, 14, all the right, title, and interest “of the Commonwealth in and to -
– That is the object of the clause.
– It, is one of the features of the Bill to which I take ob jection. The property of the Commonwealth should be kept under Commonwealth control, although it would, no doubt, be very convenient for State Parliaments and municipalities to be able to derive rates from that property. My objection is to the principle involved in this proposal.
– The Commonwealth will receive debentures in return for the property.
– I shall be glad to hear what benefit the Commonwealth is to derive; but I wish to know whether, as a matter of law, we shall not be going too far actually in vesting this property in the Board. I hope that the Minister will be able to furnish good reason why the Board should have so much wealth vested in it.
– Is not the Commonwealth ‘Bank vested in the Governor of the Bank?
– Not in such language as. that employed in the clause to which I am now referring. I agree that the Board should be constituted a body corporate with power to sue and be sued; but I think that that is sufficient.
– If we had the Board merely to manage the property, the Commonwealth would be responsible for any losses-; but, under the proposed arrangement, the Board is to be liable, and it will have its assets to work upon.
– There may be some advantage in that. In any case, the competition of the Shipping Ring will have to be faced, and, no matter what legislation is passed, the Government will eventually have to bear any losses, as was the case in connexion with the War Service Homes Commission. If this Board got into difficulties, the Commonwealth Parliament would, no doubt, come to its rescue, provided that the fault did not lie with the members of the Board personally. Seeing that the Bill says that “ All the right, title and interest of the Commonwealth “ is transferred to and vested in the Board, it amounts to handing over the property entirely to that body.
– The same language is used in every vesting order for the management of public property, such as parks, &c.
– A Board could not very well “ get away “ with a park; but it might, go off with a fleet of ships. Although it could not sell them, what would there be to prevent the Board from taking them ? Even if it has been the custom to vest property in Boards in this manner, I question the wisdom of it. Let us establish a Board to manage the Commonwealth Shipping Line just as the railways are conducted. The railways are not transferred to the Commissioners as completely as it is proposed to transfer this property to the Board. The Minister stated in his speech -
Another item is the balance-sheet of the dockyard, which showed a profit of £40,000 up to 1922, and £51,000 up to 1923. As these figures would cover 5 per cent, depreciation and 5 per cent, interest . on a capital of £400,000, some honorable senators may rush to the conclusion that it would be good business to continue in the shipbuilding business. As a matter of fact, I am referring only to bookkeeping entries.
It is interesting to know that the dockyard has shown a profit all along. I have a recollection of hearing Senator Reid, prior to his participation in the investigation made by the Royal Commission a couple of years ago, making slighting references to the “ go-slow “ policy which he said had, been adopted there. But since that inquiry he has not pursued that line of criticism. I think his eyes have been opened to the fact that the men are as good as the management.
– The honorable senator is not far out there.
– To say that is not to throw bouquets at anybody.
– I think Senator Wilson will agree that the gibes about the men adopting a “go-slow” policy cannot be entirely substantiated, and that if, during his investigation of the dockyard, he found 25 per cent, of slackness among the. men, there was quite 50 per cent, of slackness in the management. It is interesting and encouraging to know that under Commonwealth control these industrial concerns have been able to show a profit. I come now to the question of writing down. From the point of view of an enthusiast who wants to justify public ownership - and I am one of them, because I say in all seriousness that if public ownership is not going to take the place of private ownership, the world’s outlook is very serious and dark - it would, be quite proper to write down these properties, because this course would enable theBoard to show higher profits. But as a matter of justice is it fair to the present management to write these assets down by millions of pounds before handing them over to the Board? The writing down has been altogether too great. The assets should be handed over at a valuation that would enable the Board to show a profit or a loss in proportion to their capacity to manage the business well or ill. I extend my congratulations to the Minister for the manner in which he introduced the Bill, and I assure him that, whilst we will take the fullest advantage allowed by the Standing Orders to debate the measure, there will be no attempt, as far as Iam concerned, to delay its passage unless of course the Minister, by his attitude, suggests that there is no change in this Chamber as the result of the last election, and that measures must go through without adequate discussion. I want this Chamber to deal with the measures that come before it in a reasonable way. I want no rushing tactics, and no “ stone-walling.” I want this Chamber, as a deliberative assembly, to bring reason to bear upon its deliberations. If the Government will act reasonably they will find me always willing to help them in disposing of the business, but I want to make it quite clear that the day has long since gone by when the Senate must pass measures within a certain time merely because some one, elsewhere, has decided that Parliament, must deal with a certain amount of legislation by each week end. If a legislative schedule has been prepared, it would be better to extend the sitting time of Parliament, instead of rushing measures through without reasonable opportunity for debate. As one who took some part in the inauguration of the Shipping Line, I welcome the Bill as an attempt to place the business on a satisfactory basis. The Line has conferred an enormous benefit upon the people of the Commonwealth, and the measure of its success cannot be shown in any balance-sheet.
– I, too, congratulate the Government upon their decision to retain the Commonwealth Shipping Line. Especially do I congratulate Senator Wilson upon his fine speech in submitting the measure, particularly in view of the fact that, in the Cabinet, he represents a party which during the last election went from platform to platform maligning the little man who was responsible for the inauguration and continuance of the Line. That party was at great pains then to assure the electors that the Commonwealth Shipping Line was of no value to Australia; that it should not be tolerated in any circumstances, and that, if they were returned to power, they would see to it that this and other Government enterprises were got rid of at the earliest opportunity. But with the responsibility of office upon them, by reason of the fact that some of their members are now Ministers of the Crown, they have changed their opinions, and as a result of their determination or conversion we now have an opportunity of considering the present measure. I listened with a very great deal of interest to Senator Gardiner’s criticism and eulogium. He urged that certain figures which have been presented by Senator Wilson should be read in conjunction with other figures quoted’ by Mr. Bruce in 1921, two years ago. The honorable senator found it hard to reconcile the two sets of figures; but I point out that a great deal of water has run under the bridge since Mr. Bruce made his speech in another place in November, 1921. At that time the Line was showing a profit. The financial statement then available related to the best years of its business life. The opportunities presented to the management of the Shipping Line were certainly unique in the history of any Government enterprise. They were given practically a monopoly of all Government business as well as certain other business, and were able to show a handsome profit. Since then, however, the position has been entirely reversed, and for the last two years the operations of the Line have shown a loss of £2,797,719. I am sure Senator Wilson does not wish the people of Australia to judge the advisability or otherwise of the Government’s proposal upon figures that to a certain extent are misleading. When Mr. Bruce delivered his speech on this subject two years ago, his opinions were based upon figures that were quite applicable to the situation at that time, but as, since then, the Line has shown a considerable loss in working, the figures then quoted by Mr. Bruce must now be considerably revised. It is true, as Senator Gardiner has said, that a profit is shown, on the Commonwealth shipbuilding activities that are to be handed over to the Board, but the total debit of the Line and Government shipbuilding activities for the whole period from the inception of the enterprise in 1914 amounts to £2,645,761, after allowing for the proposed writing down and interest on all moneys advanced. When Senator Wilson was referring to this position, I inter : jected that the charges in connexion with writing down and interest were very properly working charges against any business concern. If the Government aserted that an industry was showing a profit, and did not take into consideration depreciation charges and interest upon capital invested in it, they would be putting an entirely false position before the people of the Commonwealth. These are proper charges to take into account in connexion with the combined activities of the Government. It is true that the total profits earned1 by the Line amount to £2,493,000, but the net losses, after interest and depreciation charges have been taken into account, are £493,278. It is, of course, a very serious matter to continue any industry that is showing such a substantial loss, but it is also true, as Senator Gardiner has stated, that we cannot estimate in any balance-sheet the value to Australia of the Commonwealth Shipping Line. It has been of immense service to the Commonwealth, but it would be a bold Government that would, in these days, attempt to carry on any concern that shows a net. loss of nearly £500,000 when there is a public demand for drastic economy.
– The railways are not profitable.
– No, and they are doing a work which, in some respects, is analogous to the functions of the Commonwealth Shipping Line. Moreover, railways exert an important influence in the development of a new country, and in establishing the foundations for future prosperity.
– Our railways pay.
– I was referring to the Commonwealth railway line.
– The Commonwealth railway line is not in “the same category as the State railway systems. It was built not so much for the purpose of showing a profit on working as in fulfilment of a compact with the State of Western Australia.
– And the Western Australian Government did not keep their compact.
– Two wrongs do not make one right. Whatever the Western. Australian Government did, I am proud to know that the Commonwealth Government kept their compact. The establishment of the Commonwealth Shipping Line was not for such a purpose at all, but was due to the very serious situation which confronted Australia owing to war conditions and the impossibility of getting its produce to the other side of the world. If our produce had not been marketed, the farm - era in Australia would have found themselves in a very parlous condition, and, in turn, the rest of the people would have faced ruination. That was the main reason which actuated the Government in establishing the Commonwealth Shipping Line. Those abnormal conditions have now passed away. The Line has ceased to make a profit. It has to compete directly with private enterprise. There are many people in Australia who do not believe that the Government should interfere in any way with private enterprise, but I am glad that the Government intend to continuethe Line, not only for the actual good that will result to Australia, but because i t will act as a check and deterrent upon the rapacity of shipping companies, who, if the Commonwealth Line were not iu existence, might increase their freights and other charges, and thus make an undue levy upon the people of Australia. This has happened in the past. As Senator Gardiner pointed out, it is the tendency for combines and trusts to make large aggregations of capital, not only in the shipping industry, but also in other industries. It is more than likely that if the Commonwealth Shipping Line were abolished, the people of Australia would be severely bled by the Shipping Combine. Like Senator Gardiner, and I believe the majority of honorable senators, I cannot see eye to eye with the Government concerning the extent of the writing down of the value of the Commonwealth Shipping Line. From the figures quoted by the Minister in moving the second reading of this Bill, it appears that the Government, in fixing upon the amount by which the Line should be written down, was not actuated by any consideration of present-day values. The Minister admitted that the valuation now proposed is a farce.
– I did not admit that. The valuation was made by independent, competent valuers.
– This is what the Minister said -
It has been argued that the fleet has been undervalued and too drastically written down. If the Commonwealth Government intended’ to sell the Commonwealth vessels holus bolus to an independent company for £4,713,000, then this criticism would be largely justified.
That statement bears out what I have said. If it is true, as the Minister has said, that the Government would not permit the sale of this undertaking to any private company for the amount tq which it has ‘been written down, it is obvious that the present capital value of the Line as now fixed is more or less absurd. The honorable senator practically admits that it is not a bona fide valuation.
– Would any private company give more than that valuation?
– It is impossible for me to say, because the Commonwealth Shipping Line has not been offered for sale, but I have no hesitation in saying that if private companies were assured that by purchasing the fleet they would enjoy privileges, Government assistance,and preference over other companies, it would not be very hard to find a purchaser to take over the fleet at the valuation of £4,718,000. The Minister said, “ We are capitalizing the fleet on- the present basis to give the Board the opportunity of making the Line a reasonable success.” That is the real reason why the capital value has been written down to such an extent. It is not because it is a proper valuation, not because, in the opinion of the Government, the presentday value of the fleet is only such as is suggested in this Bill, but in order to give the Board of Control a reasonable chance of making the Line a success. Perhaps, if the Board has reasonable opportunities it may be able to make a profit.
– The valuation was made by the most competent authority; the times are abnormal.
– I quite realize that the times are abnormal, but there is such a thing in business as good-will and the good-will of a concern of the magnitude of the Commonwealth Shipping Line is worth a good deal.
– It is worth the good-will of the Commonwealth.
– That is so.
– We are not selling the good-will.
– The Government are’ handing over the whole concern, lock, stock, and barrel, to the Board. They expect the Board to run the Line in the interests of the Commonwealth, and I hope it will do so.
– What is the good-will of a losing concern worth?
– It might.be worth a great deal when capitalized and handed over .to somebody at an absurdly low capital value. Even a set of children could make a profit under those conditions. Although I support the Bill I, as one who has had some business experience, cannot understand the action of the Government in writing down the value of the Shipping Line to such an enormous extent, unless it is to insure that the Board of Control will, at the commencement, be able to make a profit upon a false valuation. If that is the purpose of the Government, and the facts seem to justify this conclusion, honorable senators should be informed of it. The amount written off should not he altogether lost sight of. I prefer a proper valuation of the undertaking to meet the changed conditions. If it is necessary to hand over the Commonwealth Shipping Line to a Board of Control for a sum under £5,000,000, then the difference between the nominal value and the actual value of the fleet as a business concern should be carried to a reserve suspense account, and whatever profits are made by the Line in the future should be placed to the credit of that account.
Under the Bill it is proposed to establish a trust account, and eventually, it is quite clear, that the profits, if any, will be handed over to the Consolidated Revenue Account, and the Shipping Line will not reap any advantage from those profits. The Government propose to deal with th» Cockatoo Island Dockyard as they did with the Commonwealth Shipping Line. The capital cost of the works at Cockatoo Island, amounting to £2,275,000, is to be written down to the absurd .amount of £400,000.
– I explained that matter to the Senate.
– The Minister said: “lt is ridiculous to value the works at £400,000.”
– The honorable senator should read the -whole of my speech before he quotes any portion of it. After an exhaustive inquiry, it was decided that £400,000, the value two years ago, should be fixed as the present-day value. In addition, there is machinery at the island which belongs to the Navy. That is included in the £2,000,000, but not in the £400,000.
– We differ not as to the facts, but in respect of the fixation of values. The difference between a fair valuation of Cockatoo Island Dockyard, the book value as it exists to-day, and the valuation now proposed, is entirely overlooked. The Minister stated -
It is ridiculous to value the works at £400,000, and if the Government were selling the concern to a private company, they would not be prepared to accept anything like £400,000.
No Government would ever dare to sell the Cockatoo Island Dockyard for £400,000, or even three .times that amount. The balance-sheets of the dockyards showed a profit of £40,000 up to 1922, and £51,000 up to 1923. This venture shows a very handsome profit.
– The honorable senator should quote the qualification contained in my speech.
– The Minister stated -
Taking the valuation of £400,000, and keeping in view the fact that the balance-sheet of the dock now shows a profit of £40,000 to 1922, and £51,000 to 1923, it will be possible, on the basis of valuation, to allow five per cent, depreciation, and five per cent, on the capital value.
– I shall have an opportunity of replying to the honorable senator’s statement.
– I am using the Minister’s words.
– The honorable senator is quoting only a portion of my statement.
– The Minister stated -
The balance-sheet of the dockyard showed a profit of £40,000 up to 1922, and £51,000 up to 1.923. As these figures would cover 5 per cent, depreciation and 5 per cent, interest on a capital of £400,000, some honorable senators may rush to the conclusion that it would be good policy to continue in the shipbuilding business.
That has nothing whatever to do with the point I am now making. The Minister has stated that the profits of the dockyard to date would cover 5 per cent, for depreciation and 5 per cent.” interest on a capital of £400,000. The Government have, therefore,’ fixed the capital value at the amount stated to show 5 per cent, interest and 5 per cent, for depreciation. The only sum upon which that would be possible was £400,000, and, . consequently, the Government fixed the capital value at that figure.
– That valuation was arrived at bv a Royal Commission which went fully into the question two years ago.
– That is a mere coincidence. Although the Royal Commission decided that the value of the dockyards, two years ago. should be written down to £400,000, it is now found possible to allow for depreciation at 5 per cent., and pay interest at a similar rate on that figure. As a representative of New South Wales, I am keenly interested in the Cockatoo Island Dockyard, and I am anxious to see it become the prosperous undertaking that it should be under the new management. I quite appreciate the point made by the Minister, that a good deal of the plant employed at Cockatoo Island could not be used by a private business concern working for a profit, as it is maintained by the Government solely for effecting repairs to naval vessels. As the Minister stated, a great deal of the capital value of the plant at Cockatoo could not reasonably be charged against the concern unless the Naval Department were charged sufficient sums to reimburse the dockyard, not only for the work done for that Department, but to meet interest and depreciation on the plant maintained exclusively for the Navy.
– It is only a bookkeeping entry.
– Precisely. It is, perhaps, better to disregard that section of the plant, in view of the fact that it involves only certain crossentries. The Minister said that, although the Commonwealth Government Line had suffered considerably from industrial disputes, it was hoped that, under the new arrangement, employees in all branches would realize the necessity for not interrupting the continuity of the business. I would like to join with the Minister in that pious aspiration, for that is all it is, but I believe that even now an industrial, dispute exists on a Commonwealth vessel. Almost daily it is recorded in the press that there has been an industrial disturbance or strike of some kind on almost every vessel of the Line.
– How many have there been?
– II is impossible to say. 1 am now informed by the Minister for Home and Territories (Senator Pearce’) that the most recent dispute has been settled. It is, however, an unusual occurrence for a Commonwealth vessel to reach an Australian port and depart again without some trouble occurring.
– How long is it since there was a dispute on a Commonwealth vessel ?
– There is trouble almost every week. Many of the disputes are, of course, minor in character and are adjusted within a few hours; but it is the duty, not only of the management, but also of the men, to. strive to see that the Line is conducted in such a way that the reasons for industrial disturbances will be entirely removed. We have often been assured by honorable senators opposite that if all undertakings such as this w,ere under Governmental control instead of in the hands of private enterprise, industrial disturbances would cease to exist.
– The honorable senator once favoured State control.
– Not to the extent that some honorable senators opposite advocate. The Commonwealth Shipping Line is a Government concern, owned by the people and conducted by the Government in the interests of the whole community, and I am prepared to say with-, out fear of contradiction that there have been more disputes on vessels of the Commonwealth Line than have occurred on those of all the other shipping lines trading to Australia. It may be the fault of the management or of the men, but in future negotiations I trust a spirit of sweet reasonableness will be displayed by both parties, and that it will not be possible for any one to point the finger of scorn at this undertaking. Governments should set an example to private enterprise. It should be the aim of the management to pay the highest wages and provide the best conditions, provided, of course, that the workmen reciprocate by giving in return the very. best service for the remuneration they receive. Although I have some doubt fis to the results which will accrue when the proposed Board takes control of this great industry, I trust, with the Minister, that a proper spirit of co-operation; will be displayed between the management and the men which, will enable every one to do his best, not only in the interests of the Line, but also on behalf of the people whose property it is. In such happy circumstances the Line will have a future of usefulness to the Commonwealth. It will assist the primary producers and develop Australian trade and commerce in every direction. There are one or two minor matters which, in my opinion, require slight adjustment in Committee, but I shall support the second reading of the Bill. I welcome the decision of the Government to continue the Line. I believe they are doing right in placing it under the control of a Board, and I have no doubt that their policy -in this connexion will receive the indorsement of a great majority of the electors of the Commonwealth.
– My understanding of the valuation is not in accord with the views expressed by Senator Duncan. According to the information given by the Prime Minister (Mr. Bruce), the valuations were made by outside experts, and indicate, as far as possible, the present-day value of the fleet. The valuation adopted by the Government, I understand, is somewhat higher than that recommended by . their advisers. Even, if the contention that the. Line has been under-valued is borne out by experience, we have a secret reserve, as we are not disposing of the ships to private individuals, but merely handing over their control to a Board. ‘ If Senator Duncan’s contentious were correct, the Com monwealth would still be in a satisfactory position. It is necessary to arrive at a present-day valuation to enable the Board to compete with its powerful rivals, and thus make a success of the Commonwealth Line. The Line has to enter into competition with strong shipping combines, and, consequently, the Board must not be handicapped in the matter of valuation in an endeavour to make it a success. The members of the Board will be opposed fo the best shipping men in the world, and it will be difficult for the Government to secure the services of suitable men to successfully conduct the Line against their strong opponents. The Board will certainly have the advantage of being able to handle the trade which the Government will have to offer; but, on the other hand, the ramifications of the Shipping Combine extend in many directions, and it has powers which even a strong Government do not possess. I do not envy the work of the Board, and I think it should be given every opportunity to fight its serious competitors. Senator Gardiner advocated the use of the ships that are lying idle. I support that proposal, with the object’ of effecting a satisfactory sale at the earliest opportunity. A going concern can be sold far more advantageously than something which is lying idle and rusting. The argument has been advanced that the railways compare with the Shipping Line. That, in my opinion, is not correct. There are no competitors with the railways. The railways were built for the purpose of opening up country, and naturally their construction was undertaken by, the different Governments. Our shipping business in the past has been done particularly well by private companies. The establishment of the Commonwealth Line was never justified, except as a war measure. I hope that a particularly careful eye will be kept on the balance-sheets. I should like to see a balance-sheet made out every six months. If it is found that the Line is a serious charge on the country, the Government should sell the ships to the best advantage as quickly as possible. Following the war, the Government found itself with a number of ships on its hands that it did not require, and naturally sought the best way of getting out of the difficulty in which it was placed. It decided to con- tinue to carry on the principal part of the shipping business with the “ Bay “ liners. If they are successful, well and good. If they are not, let us get back to sound principles, and sell them as opportunity offers. I do not agree with the remarks of Senator Gardiner in regard to taxation. This Line, will compete with private companies, and must pay its quota of taxation as its competitors are compelled to do. In Queensland none of the State activities pay taxation. That is absolutely unfair to station-owners and others who are compelled to pay the taxation which is so liberally imposed in that State. I hope that the Bill will pass.
– I congratulate the Government on having brought forward this measure. I know that the continuance of this Line is opposed to the desire of. many of their supporters, and is not in accordance with the platform on which they were elected. The Labour party hails with glee the action of the Government. One of our dreams, years ago, was that at some future time a fleet of steamers would be owned by Australia, manned by Australians, and would carry Australian mails to London. That objective has been achieved, and the Line has been a pronounced success. I congratulate the Minister (Senator Wilson) on the manner in which he delivered his second-reading speech, and on the Australian sentiments which he expressed. We do not desire to have all our requirements supplied by people of other countries. We respect Britain, and the flag of the Empire, but we realize that it is necessary to do everything possible to make Australia self -productive. Senator Duncan spoke about the Utopian dreams of some honorable senators who sit on this side. There never was a more ardent advocate of those things than the honorable senator.
– That is not true.
-The honorable senator was President of the. Sydney Labour Council, and of the Clerks Union. Both of those organizations advocatedstrongly these principles.
– That is not correct.
– The honorable senator may say so; but the fact that he held those positions in those militant organizations remains. This is not the first attempt madeby a Tory Government to establish a shipping line in Australia.
Queensland, with its succession of brilliant statesmen and its progressive, enterprising activities, had the first Government which attempted to break down the shipping ring in Australia. The late Sir Charles Lilley, when a monopolistic compauy refused to carry mails to Queensland, because Queensland could not, or would not, pay it a heavy subsidy, made a contract with Mort’s Dock, to build three vessels, each of 498 tons, to carry the mails to that State. They were small vessels compared with those which we have to-day. One was to cost £16,500 and the other two £16,000 each. . The Governor Blackall, unlike vessels which are built to-day purely for profit, was a beautiful little ship. She was quite a little yacht, and continued to carry the mails to Queensland until the colleagues of Sir Charles Lilley politically “ butchered “ him. They would not have anything to do with State enterprise and he was . compelled to sell the Governor Blackall. It was bought by the Australia United Steam Navigation Company and for thirty years carried mails to Brisbane weekly. It then did duty as a collier on the South coast, and I believe it is now doing duty as a hulk, although it is fifty years old. History has repeated itself. Sir Charles Lilley was “ thrown to the wolves “ by the men who should have supported him. In the same manner, the right honorable gentleman who inaugurated this Line and made it a success has been “ thrown to the wolves “ by the colleagues for whom he did so much. I refer to Mr. W. M. Hughes. The Government dare not sell the Line because the people of Australia are so strongly’ in favour of its retention. I happened to be in London when Mr. Hughes bought the “ Austral “ ships in 1916. He was criticised very severely for buying such old vessels. They were nob much good then, and they are not any better now, although they have paid for themselves over and over again. Figures have been quoted by the Minister (Senator Wilson)., Senator Gardiner, and Senator Duncan. Figures can be made to prove anything. I shall quote figures which show that the Line has not made a loss but has proved to be a paying concern. These figures have been taken out for me by a competent man and they demonstrate clearly that on actual working the Line has shown a profit. According to a statement of accounts which was tabled by the Prime Minister (Mr. Bruce), the total debit on all Government shipping transactions - including depreciation to be written off under the reorganization scheme, and interest on all expenditure, capital or otherwise - amounts to £2,545,761. Only the wooden ships have been excluded. The standardized ships also should have been debited to the cost of the war. Those ships are not of a class which is capable of competing with the mercantile marine of the world. An Australian draftsman prepared plans for the construction of a splendid cargo vessel of about the same tonnage at an estimated cost which was less than that incurred on these vessels. The construction of the vessels was altered to the Isherwood type, which was a mistake in the opinion of the best shipping experts of the world. That type of vessel is suitable only for certain classes of trade. We have none of that trade in Australia, and if we wish to dispose of these vessels we shall have to sell them to a firm which is trading on the Isherwood principle of quick handling of cargo and the storage of bulk cargo. There is no trade in the waters of Australia to which these ships can be applied, and that accounts for the difficulty which is being experienced in disposing of them. They are well built vessels, but when they start to wear the cost of repairs is great’er than is encountered- with other classes of vessels. It is not known, 1 perhaps, to many, that those’ plans which were prepared for the construction of an Australian type of vessel and which cost £5,000 were afterwards destroyed. If the standardized ships were charged to tho war debt the Line would be shown to have been a good paying proposition. Before writing off £3,000.000, there is a profit of £5,400,000 available to set off against the difference between the book value and the market value of the fleet. No doubt the Government’s total loss of £2,645,761 would have been a profit if the Line had not been saddled with the extremely expensive “D” and “E” class of vessels. From its inception, notwithstanding the heavy losses during the last two years, the Line had made a gross profit, to 30th Tune last, of £2,493,449, but a net loss of £493,278. The difference between gross profit and net loss must comprise the interest and depreciation already written off; and, as the statement shows the interest as £557,364, the depreciation must amount to £2,429,363. In addition to this, an insurance reserve has accumulated to the extent of £901,920. Therefore, taking everything into consideration, more particularly the fact that during the last few years the Line has been fighting for its life against the shipping rings, the position cannot be termed unsatisfactory. The Commonwealth Government Line has had the effect of compelling the other shipping companies to reduce freights and fares, and it has saved the producers and tourists of Australia from being mulcted in the sum of at least £5.000,000 per annum. If that amount could be credited to the Line, it would enable it to show a very creditable balance-sheet. But, apart from the financial aspect, the Line is a necessity from a national point of view. We should all be proud to belong to this young nation. The United States of America is prepared to lose huge sums in conducting its own shipping line, and it will not allow any produce to be carried around its coasts except in American bottoms. Heal’ progress can never be made by a young nation unless the people are prepared to meet any losses that may have to be sustained in the initial stages of development. It has been necessary for the Commonwealth Shipping Line to spend considerable sums of money, whereas private companies would refrain from spending it, in the provision of better conditions for the seamen. Repairs- are to be carried out in Australia, and that will mean keeping money in our own country. Taking all these aspects into consideration, it is obvious that the advantages of retaining the Line are- great, and I congratulate the Government upon refusing to sell the vessels in compliance with the cry for economy. Instead of bringing about economy, the effect of selling the vessels would, in the long run, be just the reverse. It is proposed to appoint a Board of three to control the Line. I have always taken strong objection to the appointment of Boards, because I believe that, where brains are required to direct an undertaking, one manager is best. There are certain features in connexion with this
Bill, however, that may induce me to waive my opposition to the proposed Board. The Minister (Senator Wilson) told us that there would be a shipping expert, and also a financial expert, on the Board, in addition to the chairman. I hope that there will not be a naval expert, because naval and mercantile men are trained in entirely different ways, and they can never work in accord. I have seen many mistakes made because of this peculiarity. Some time ago a vessel was designed by a naval man. for the Customs Department, but it proved an absolute failure. It was supposed to travel at a speed of 20 knots, and it has never maintained a speed of 7 knots. It now lies in the river at Brisbane a monument to the crass ignorance of the man who designed it, and I should like to know if he is still in the Service. Every effort should be made to prevent overlapping between the Navy and the mercantile men in the designing of vessels. I am glad to know that the Navy is now to do its own work in that respect. This alteration should bring about a reduction in the number of ship designers, some of whom have titles such as “ captain “ .and “commander,” but have never been to sea. I was impressed by the Minister’s Australian aspirations. This aspect of the Commonwealth Shipping Line was entirely overlooked by the gentleman who formerly had control of it. He did not care for Australia. His only thought was in the direction of cutting down expenses. He sent some of the vessels to Germany to be repaired, and others were overhauled in India by black labour. The quality of the work done at Cockatoo Island by Government employees, and in other parts of New South Wales by private firms, shows conclusively that Australian workmen can effect ship repairs more cheaply, and in every’ way more satisfactorily, than they can be done in other parts of the world. Mr. Farquhar, who has had experience in the management of ship-building yards on the Clyde and elsewhere, confessed surprise when he noted the excellence of the work done at the Cockatoo Island dockyard. A press report of his1 statement contains the following : -
He was a Clyde man, and intimately knew the shipbuilding of that famous yard and yards elsewhere. Better workmen or more in telligent industrialists were not to be found anywhere. The Cockatoo men could turn out work under efficient direction that would surprise the world. The worst enemies to shipbuilding in Australia were unfortunately to be found within .the Commonwealth itself.
He was referring to that section of the press in Sydney and Melbourne that never tires of. trying to defame the workmen of Australia, although those workmen have helped to make those journals great. Mr. Farquhar went on to refer to a test made of the ballast tank of the Fordsdale. The space between the hull and the false bottom was filled with water, and, of course, the pressure was enormous, but there was no sign of a leakage. Mr. Farquhar admitted that he had never seen such a test responded to so well in any. part of the world. It was certainly a great compliment to the Australian workmen. In building the Fordsdale only about half the number of men that would, be employed on the construction of a similar vessel in the Old Country were engaged. That is another feather in the cap of the Australian. In British shipbuilding yards the workmen are confined to the particular branches pf the work in which they are experts; but the Australian is familiar with all sections of it, and thus fewer men are required. The subject of the tonnage of the Fordsdale was mentioned last week. The tonnage of 12,800, mentioned by the Minister (Senator Wilson), is simply what the ship can carry; but the Board of Trade does not calculate tonnage in that way. It is estimated according to certain conditions, which I have not time to describe here. The Board of Trade calculates, as the gross tonnage, what the ship is measured to carry, and in arriving at the net tonnage the space occupied by the engines, boilers, cabins, &c, is deducted. Thus a vessel of 9,000 tons gross register is guaranteed to carry 12,800 tons of cargo. A word or two now about the Cockatoo Island Dockyard. Even if the Government had felt inclined to dispose of the dockyard, they would hardly have been allowed to do so, because the Imperial Government have laid it down that there must be an effective dockyard in this part of the British Empire. It is highly probable, therefore, that if the Commonwealth Government had wished to dispose of the dockyard it would have been taken over by the British Government. Many years ago, when I was secretary of the Boilermakers Union of New South Wales, I was in close touch with the Imperial authorities, who were then controlling Garden Island, and I know that they had a complete list of the whole of the mechanics of Australia, so that in the event of anything happening to the British Fleet in this portion of the globe, they could have called upon the services of those men at short notice. They know exactly what class of work can be done in Australia, and also at Singapore. Cockatoo Island Dockyard is an absolute necessity for naval purposes. In Sydney there is another dock which can deal with vessels of the Navy, and I believe it may be lengthened by about 200 feet if necessary. No private firm could afford to install and maintain the machinery that is available at Cockatoo Island for naval repairs, but there is, in the Sydney dock that I have just mentioned, all the necessary machinery for mercantile repair work. The Minister made reference to the number of vessels that have been sent from Australia to other ports for repairs. Many reasons actuate owners in this course. Generally, they expect to have the work’ done more cheaply in certain other ports where skilled labour is not so highly paid as in Australia, and so only temporary repairs are. made to vessels that should be repaired here, and they are sent elsewhere. If our navigation officers were vigilant they would never allow some of these vessels to leave Australia in that condition, merely for the sake of getting repair work done elsewhere at a cheaper rate, although I doubt whether, in the end, if quality is taken into consideration, this course is really economical. The owners of private dockyards must provide work for their staff in order to keep them together. The Government, having decided to retain Cockatoo Island Dockyard, must now see to it that there is continuity of work. Even if the work does cost a little more - I do not think it will amount to very much - it would be better in the end to have it done here, and so keep an efficient staff together ‘. If the Commonwealth Line repairs are carried out at Cockatoo Dock, and if naval work is done there also, there should never be a shortage of work for the present staff. This would .be in the interests of all concerned. The Commonwealth would get their work done w.ell’, and the workmen would know that they were not likely to be “ thrown to the wolves “ through ‘ a stoppage of work, and, perhaps, have to walk the streets. I am glad to know that the Government intend to build two more vessels at Cockatoo Island. Our destroyers and a number of light cruisers were built by the dockyard, and although they -cost a little more than we expected, the work was done very well indeed. There are pessimists who declare that the Australian workman is no good. I do not subscribe to that view at all. Many years’ ago I took part in a demonstration in Sydney to persuade the Government to build all railway locomotives in Australia. At the time it was contended that the engines could not be built here, but wehave since proved that they can. In to-day’s press there is a report that the Victorian Government intend to spend a large sum of money in extending the Newport workshops in order to keep pace with the needs of the Railway Department. It is also stated that they can now build locomotives at a price £600 below the cost of those built by private enterprise. As with the locomotive, so with shipbuilding. One naturally expects the first ships to cost a little more than is estimated, but if we continue in the business we shall eventually be able to compete with any shipbuilding yards in the world. I congratulate the Minister upon his sincerity and his evident desire to place the affairs of the dockyard on a satisfactory basis. I shall do my best to improve the Bill where I think- improvement is necessary, and I am sure the Minister will be only too pleased to accept any assistance that we may be able to render him.
– It is pleasing to note the welcome which this Bill has received, but when we remember the position of this country we need not wonder at it. Australia is perhaps the most lonely outpost in civilization. We have the longest distance to travel in order to dispose of our produce, and we are at the mercy of those who are able to extract the last farthing from our producers. Among our competitors, the Argentine is the most formidable rival. The primary products of that country may be transported to the markets of the world for a fraction of the cost to the Australian producer, who, being, as I have shown, entirely at the mercy of shipping people, have to submit to a system of uniform freights. It is necessary, therefore, that we should set about finding the best means of overcoming these almost insuperable difficulties. The Bill is a means to that end. It has been subjected to criticism. ‘ That is only natural. Fault has been found with the excessive amount by which the value of . the Line has been written down. As we all know, the first ships of the Lino were bought at a high price during the war. At that time Australia, in common with other of the allied nations, was in trouble. There was urgent need to provide adequate means to transport our men, goods, and material to the other side of the world. Therefore, in the purchase of these ships, we had to ignore altogether the question of cost. At that time prices of ships were mounting to a very high figure indeed. Now, owing to the great activity in the production of vessels, nearly every country in the world has a large amount of tonnage lying idle. This condition of affairs necessarily means a huge drop in value. I believe the Government of the United States of America have on their hands not dozens, but hundreds of idle ships. It may be a negative form of consolation, but, nevertheless, it is some consolation to know that our losses in connexion with shipping are not to be compared with the colossal losses sustained by the keen business men of the United States of America as the result of their Venturing on a shipbuilding policy. I extract this information from a leading authority of America, published in the April number of the Review of Reviews -
Money by the hundreds of millions was spent in extending old shipyards and creating scores of new ones, with the result of turning out something like 1,500 ocean-going vessels, nearly all of them slow freighters of medium size. . . . Our Government operation of ships in use, and our maintenance of hundreds of vessels not in use, have resulted, during the past two years, in an annual loss to the United States Treasury of about 50,000,000 dollars. . . . Buteven without subsidies the Government is ready to sell off its worst ships at prices amounting to hardly more than one year’s interest on the original cost.
The illustration accompanying the article - a photograph taken within the last few months - shows a’ veritable forest of masts of idle ships in the River Hudson. I do not know that any credit need be claimed by one political party or the other for the initiation of the Shipping Line. There were few public- spirited men who had not come to the conclusion, in view of Australia’s position, that something had to be done. The necessity had arisen for action. I recall the declaration made by the then president of the Melbourne Chamber of Commerce, Sir Malcolm McEacharn, that it was absolutely necessary to do something in the way of establishing a shipping line to give our producers a chance of meeting the fierce competition with which they were faced in the markets of the world. That declaration by a representative of the commercial interests was made long before any political party appropriated to itself the credit of establishing the Line. The establishment of the Commonwealth Shipping Line is a matter for congratulation.. It is quite true that it was hastened by the war and its influences, but, sooner or later, its creation, was inevitable. No particular party need claim any credit for the Commonwealth Shipping Line, because it was simply a child of necessity. The Australian producers cannot hope to hold their own with other countries if a great deal of the results of their energies is monopolized by excessive freights. Plenty of good men have gone into the interior of this country raising cattle and growing wheat and fruit, and applying themselves energetically, night, noon, and morning, to the production of those commodities. When they have garnered the fruits of their labour, what is the use of sending the surplus to oversea markets if the bulk of the earnings is monopolized by excessive freights ? They have no chance in life. I know a little of wheat production, and I believe Australia is sending two-thirds of her wheat crop to the world’s markets. We have immense areas of wheatgrowing country, and, in competition, we are holding our own with other countries. Our wheat lands are encroaching on’ the poorer and dryer soils. In Victoria the settlers have been pushed out to the Mallee lands; in New South Wales, although good rains have fallen, semi-arid areas are being occupied ; in South Australia the Pinnaroo district and other neglected portions of that State are now receiving attention; and in Western Australia they are leaving what was once- considered a safe wheat-growing zone for semi-arid areas, and up to date the settlers there have met with success. There is a very narrow margin of profit in growing wheat in those areas, so narrow that many of the men there are doubtful whether they will be able to continue on the land if their expenses are further increased. These have been increased in various ways. The cost of labour, which nobody begrudges so long as it provides a reasonable margin of profit, is increasing. The cost of machinery to work the dry and semi-arid areas has increased from 50 to 100 per cent. As pointed out by Senator Gardiner, when the crops are eventually gathered, and the surplus is sent overseas, we shall find the Shipping Combine,’ which is never satisfied, seeking to get double the freight charged by the Commonwealth Shipping Line. It is a question not of political virtue or wisdom, but of absolute necessity, as to whether the Line should be continued in order to save the Australian producers, especially those who have settled in dry areas, from prohibitive expense, and to give them a chance to- make a living. “We are holding our own against the black-grown wheat from the’ Himalayas, and the wheat of China and Bulgaria. That is a standing testimony to the industry that characterizes our primary producers, those who have turned their backs to the cities and have settled in the interior. The Commonwealth Shipping Line is vastly different from other shipping enterprises. The men engaged in this Line will be placed on their mettle, as have the settlers on the land. The value of the Commonwealth Shipping Line has been written down, and the Treasury has met the loss. It is not proposed to hand over this undertaking to the Board of -Control at a prohibitive value. It has been written down from the actual cost to what is considered a fair market value. This is only fair to the Board of Control; in fact, conditions will need to be made a little easier if, it is to be a success. Its burden should be lightened, as it will have a very heavy task in managing the Commonwealth Shipping Line. Keen competition will be met, and the Board will receive no mercy from the powerful interests arrayed against it ; nor will it receive any consideration from the people to be benefited. . The producers will insistently demand cheap freights from the Common- wealth Shipping Line. They will require freight to be fixed at bedrock, in order to give them a margin of profit from their holdings. The Commonwealth Line will be exposed to a fierce blast of competition from private enterprise. No other Government enterprise will be in such au unsheltered position. The running of a railway system is child’s play compared with the administration of the Commonwealth Shipping Line. No railway system in the Commonwealth has to face competition, except in some cases from motor services. The railways are not up against the economic difficulty of competition. The Commonwealth Ship* ping Line will be in an unenviable position. It will be out in the open, and will need all the consideration and sympathy , that the people and the Government are able to give it. The Government have driven a remarkably hard and fast bargain with the Board of Control. Honorable senators have stated that the Commonwealth Line has been . excessively written down, but do they wish it to show a worse return than is the case to-day t Do they wish to increase the work of the Board, and make its responsibility heavier?- The best way to accomplish that, and to raise freights, is to fix the value of the fleet at a higher figure than is now proposed.
– To load the Commonwealth Shipping Line.
– Tes. If the Line is not written, down to the present-day value, the Board of Control will have no chance of making it a success. The American Government were in such a parlous ‘ state that they were prepared . to accept for their vessels one year’s interest on the capital cost, The Commonwealth Line will have no protection. It is a carrying industry, and an agency for the development of this country on a more gigantic scale than the whole of the railway systems of Australia. It is no use bringing the produce of Australia to the sea-board under economic conditions if the matter of carrying it 11,000 or 12,000 miles by sea is not approached economically. We have economic conditions, not only for our manufacturing industries, but also for some of the rural industries. We say to them - “ Well, you are unable, unaided, to compete in the world’s markets, and we shall give you assistance.” That i9 known as the protec- tive policy, arrived at after matured consideration. We voluntarily load ourselves with, imposts to protect our -primary and manufacturing industries, so that they may be successfully carried on, but this we cannot do with the Commonwealth Shipping Line, unless on certain specific lines which I shall refer to later. The Shipping Line will be between two millstones, the topmost being the keen competition of powerful interests, which will reduce .freights occasionally to harass the Line, and the nether millstone being the constant demand of the producers of this country to obtain freights at bedrock level. In . addition, it is proposed to saddle the Line with the payment of taxes and shipping dues. ‘ lt will be marvellous if the’ Commonwealth Line succeeds under such conditions. It is quite clear that the undertaking will be working according to Australian conditions. We pay the highest wages in the world, and observe the most humane conditions of employment. I stand for those conditions, but I also insist that the men should act fairly, and should not make such demands as would make the working of the Line impossible. That practice has been adopted in the past. I have a schedule of rates and conditions in England and Australia, and the Commonwealth Shipping Line, competing with private shipping lines, will pay in the neighbourhood of sixty or seventy per cent, more in wages alone to A.B’s., firemen, cooks, stewards, &c. Here is a definite impost which will be borne by the Line. The men working these vessels are getting the highest wages paid to any body of workmen in the world. I once belonged to the great body of seamen, and I advise them to cast aside their evil advisers, and work to make the Commonwealth Shipping Line a success. Upon their behaviour will depend the existence of the venture. They should make it an integral part of Australia’s enterprises, and enable it at the same time to help in the development of its natural resources. Without the Commonwealth Shipping Line, wo cannot succeed in the interior, and a lot will depend on the attitude of the seamen. The management of the Commonwealth Shipping Line is no child’s play. I should not wish to be a member of the Board, in view of the keen competition they will experience, and ‘ the insistent demands that will be made upon them by the producers. From the point of view of the seamen, the Commonwealth Line will not be continued in vain, because it will open to them a wider avenue of employment, and will demonstrate to the world that such ventures can, by hearty co-operation, be carried on successfully and profitably. I regret that1 such a hard bargain has been driven with the Board of Control, and I hope that, as time goes on, should the necessity arise, the Government will lend their assistance to enable the Board to balance its accounts, just as they do in respect of railway schemes. I do not suppose that there is a railway system in Australia paying interest on capital. In many instances when State railways are in an unsatisfactory financial position funds are withdrawn from the Treasury to pay interest on the capital expenditure. Therefore, if this Line should at any time encounter financial difficulty, I trust there will be no disinclination on the part of the Parliament to authorize the withdrawal from the Commonwealth Treasury of a sufficient sum to keep the vessels of the fleet in active work in the interests of the whole community. I look with confidence to the future of the Line, and trust that its operations will be extended in such a way that it will always be a bulwark and safeguard of not only the primary producers of the Commonwealth, but every other section. After all, if evil days fall upon the primary producers, many hundreds of thousands whom they directly and indirectly support will also suffer. The Commonwealth Shipping Line is the indissoluble link between this outpost nf the Empire and the Old World, and it should be our endeavour to strengthen it in the interests of our primary producers and that vast army of men and women who are directly or indirectly dependent upon them. If the Line is not properly conducted and the profits are distributed in such a way that it does not receive the benefits to which it is entitled, it will be made the subject of constant criticism and ridicule, which will tend to ripen public opinion in the direction of abolishing it altogether. As I have said, co-operation between the Board and the men is essential. I want the Board to’ be given every opportunity to carry on its important part, and If it comprises good men and its operations are not in any way hampered, the Line will, I am sure, be the success which its most ardent supporters desire.
– We read that, there is more joy in Heaven over one sinner who does penance than over ninety and nine just who. need not penance, and I join in the chorus of congratulation upon the sinner - the Government - who has repented. Throughout the length and breadth of the Commonwealth the Labour party has been portrayed as a Socialistic party and condemned lock, stock and barrel for its Socialistic enterprises; but we see to-day that those who have condemned us in the past are now, with the assistance of Parliament, prepared to support the continuance of a Socialistic enterprise. There has been a chorus of approval of the action of. the Government in continuing the Shipping Line, but a doubtful opinion was expressed by Senator Thompson.
– It was not in any way doubtful.
– The honorable senator suggested that the Line should not be a tax. upon the Treasury, and said that it should not enter into competition with private enterprise.
– I did not say anything at all about competition..
– The honorable senator referred to competition with private enterprise, and also said that the Line was established only as a war measure. Doubtless, in the opinion of the honorable senator, the vessels were necessary at that time; but it is a remarkable fact that, although private enterprise may serve the interests of the people in time of peace, it cannot be relied upon in time of stress. Great Britain, the home of private enterprise, realized shortly after the tocsin of war sounded that it had too long depended upon private enterprise, and that in the matter of the supply of war material, the Government should be responsible. Private firms in Great Britain were profiteering and demanding a price for munitions of war which were so exorbitant that Great Britain was converted into one huge Government arsenal.
– War operations are carried on regardless -of cost.
– That may be so; but those gentlemen who were held* up as paragons of virtue in trade and commerce could not be relied upon to assist the nation in- its hour of need. When the test was applied to the apostles of private enterprise, they failed lamentably, and the nation had to shoulder the responsibility of providing its requirements in order to defend its territories. At the time of the establishment of the Commonwealth fleet of steamers, the Labour party realized that private enterprise could . not be trusted, and the exPrime Minister (Mr. Hughes) purchased vessels which formed the nucleus of the present Line.
– But war is conducted in the nation’s interest regardless of expense. ‘.
– If the business men were honest, they should have applied their honesty and ability in the nation’s interests. The ex-Prime Minister purchased certain vessels.
– We made -a great noise then.
– Yes, and the party with which the Minister is now associated condemned the ex-Prime Minister for his action. According to the balance-sheet, the Line, after allowing £1,732,920 for interest and depreciation, shows a loss of £2,797,719 for the last two years, but, as honorable senators on this side have pointed out, the loss- is more than compensated for by the advantages which have accrued to the primary producers, who were able, by means of the Line, to transport their produce overseas during a time of crisis.
– That advantage can never be accurately estimated.
– I do not think any competent valuator, however high his standard of efficiency may be, could calculate the benefits accruing to the people of the Commonwealth in consequence of our possession of such a line of ships. The Labour party could clearly see the benefit to be derived by the primary producers of the Commonwealth by the acquisition of a fleet for use not only during the currency of the war, but after its termination. Shortly after the Line was established, the Government were faced with strong competition by the shipping combine controlled by Lord Inchcape. But, notwithstanding all the difficulties with which Governments have been confronted, our vessels have done well, and have been a great benefit not only to the people of the Commonwealth, but, incidentally to the people of Great Britain, as we have been able to export our produce overseas at a cheaper rate than would have been possible had we been left to the tender mercies of private enterprise. Let us endeavour to imagine the position Australia would have occupied in 1916, 1917, and 1918 if we had been depending upon private enterprise, and particularly upon the vessels controlled by the Inchcape combine, for the transport of our produce.
– Those ships were commandeered for public purposes during the war.
– That may be so, but the honorable senator must admit that there was Government control of shipping in Australia as well as in Great Britain. If it had been otherwise, Australia would have been in a sorry plight. The Government propose to appoint a Board to control the Commonwealth fleet, and I agree with Senator McDougall, who contends that it would be better to have one man than a number controlling the destinies of this important undertaking. There are various branches of shipping interests, and if three men are to be appointed to the Board, as proposed, Parliament should agree to a representative of the Seamen’s Union having a seat on the Board. I have held this impression for some time, but my belief has been strengthened by the concluding remarks of Senator Lynch, who referred to the danger of Australian seamen refusing to do their duty to the Australian people. It is true that Australian seamen, in common with other human beings, have been dissatisfied with the conditions under ‘ which they have been working, and that they have taken action in an endeavour to improve their position.
– In defiance of the Arbitration Court.
– Not always.
– Although I am a strong supporter of arbitration, I believe there are times when it is necessary for the men to take, action, even against a decision of the Court.
– That is a new doctrine.
– Not at “ all. There are many occasions when it is quite legitimate for men to strike against a decision of the Arbitration Court, but I should not be in order in referring to instances where such action was justified.
– The honorable senator surely cannot justify the “Bay” steamers being held up as they have been.
– I do not think vessels should be held up indiscriminately, but when an award of the Arbitration Court is disregarded the members of the Australian Seamen’s Union cannot always be blamed. 1 can place at the bar of public opinion members of employers’ organizations who have been guilty of defying the Arbitration Court, and of evading and contravening its awards.
– That does not apply to the Commonwealth Shipping Line.
- Senator DrakeBrockman has raised the general question, and I am replying to him.
– I had in my mind only the Commonwealth Shipping Line.
– If the honorable senator will let his mind travel along the vacant halls of memory he will realize the reasonableness of my contention that shipping employers are not immaculate, that they cannot cast the first stone in regard to the non-observance of awards of the Arbitration Court in Australia.
– Is the honorable senator referring to the Commonwealth Shipping Line?
– I am speaking of Australian seamen in general, and not only of Australian seamen who are employed in the Commonwealth Shipping Line.
– I am interested to learn some instances of defiance of Arbitration Court awards by the Commonwealth Shipping Line. I understand that the honorable senator can produce those instances.
– Any amount of evidence can be produced to prove that employers have been guilty of breaches of awards of the Arbitration Court. I think it would be wise to have on the Board a representative of the workers in the maritime industry. It would help to preserve industrial peace, and I hope that the Government will consider that phase of the question. Many of the natural ports of Australia might in future be better served by the Commonwealth Shipping Line than they have been. In Western Australia there is a very important natural port that has not been served as it should have been, despite the many representations that have been made, not only to this Government, but also to that which immediately preceded it. I refer to the port of Geraldton.
– Where is the trade I
– My colleagues from Western Australia, t feel sure, will say that Geraldton is the natural port for one of the most important centres in the western State. Wool and other primary products are taken there from different portions of our north-west country; it is the natural port for the exportation of those products. Knowing Geraldton as I do, I hope that in future it will receive better attention than has been given to it in the past. The same applied to Albany, on the southern coast. Albany and Geraldton are two of the principal ports on our sea-board. I trust that in the future those who control the Commonwealth Shipping Line will pay heed to the representations which have been made, not only by representatives of Western Australia in both branches of the Legislature, but’ also by the Government of Western Australia. I hope that the Commonwealth Shipping Line will attend to the requirements of every port on the coast of Australia. Although I am a representative of Western Australia in this Senate, I also claim to be a representative of Australia, and I shall not plead for consideration to be given only to the State from which I come. Senator Lynch has mentioned the work which the seamen should do, and has compared the rate paid to Australian seamen with that paid to British seamen. I do not think that that comparison is fair. In any line of employment the wages paid to Australians are higher than those paid to the workmen in England, and the conditions are better. I have worked in both countries at different kinds of manual labour, and I have found that the conditions and wages in Australia are far in advance of those obtaining in the land of my nativity. That does not mean that the worker in Australia has yet reached the standard of wages and conditions of labour that I desire to see him attain. We should try to make that standard higher. I quite agree with Senator Lynch that every man who gets a fair day’s wage in any calling should give in return a fair day’s work. I have always advocated that principle. The Australian , workman, I contend, does give a good day’s work in ‘return for the wages he receives. Senator McDougall and< Senator Duncan referred to the question of shipbuilding at Cockatoo Island. I hope that Cockatoo Island will not be taken out of the control of the Government. I should like to see -one or two additional “ Cockatoo Islands “ in Australia. We have in Australia the material wherewith to build our own vessels. We have the workmen who are capable of building them. What is more, the Australian workman can turn out a ship as good as any which has been turned out on the River Clyde. On this particular subject I can claim to have some knowledge. I had fourteen years’ experience on the River Clyde, working in every shipyard from Glasgow to Greenock, on both sides of the river, in the construction of vessels ranging from 10 to 15,000 tons.
– What would the workmen be without the direction of the master-mind - the ship architect ?
– What would the master-mind be without the workmen ? The idealist may be able to conceive a ship or anything else, but that conception is useless unless he has the assistance of men who can translate that particular conception into practical operation.
– One is the complement of the other.
– Admittedly. Having seen the men at work - having seen the product of their hands - I say that the Australian workman at Cockatoo Island or anywhere else is the equal of any worker that I have seen on the River Clyde. He possesses the added advantage which was mentioned by Senator McDougall, who himself is a tradesman - I am not - that he does not specialize in any particular section of ship construction. When I was working in shipbuilding yards on the Clyde, there was the plater who was engaged to construct the hull, lay the deck, or put on the beams; then there was the man who riveted the hull, the man who caulked the deck, and so on. Go into the Cockatoo Dockyard and you will get any member of the Iron Trades Union to do the caulking, the plating, and every other part of the construction of a vessel, and do each part well. Senator Lynch need have no anxiety regarding the Australian seaman. The Australian seaman will co-operate with this, or any other Australian Government, in running the Commonwealth Shipping Line for the benefit of the nation, and at the same time for his own benefit, so long as he is given a fair deal. The Australian workman who is building our ships is giving, and will continue to give, good value for the wages that he is paid.
– The honorable senator ought to give him some fatherly advice; it would, do him a world of good.
– Senator Lynch, as he knows perfectly well, has advanced beyond the age for receiving advice. If I attempted to advise the honorable senator on many things, I have a good idea of the kind of reply that I should get. Senator Lynch knows that he has been the arbiter of his own destiny, that he has been and that he is the master of his soul. I ask Senator Lynch to apply that particular doctrine and to allow other people to do the same. This constant lecturing - if I may use that term - of Australian workmen by Senator Lynch is not in consonance with the honorable senator’s practice and experience in life. If he reviews his own life and his own experiences he will realize that he would not stand from anybody the lectures he occasionally gives to senators and to other persons outside the Senate. I hope the Government will heed the suggestion I have made regarding the representation of the maritime workers on the Board, and the necessity for giving better treatment to Geraldton and Albany.
– I support this Bill for two reasons. One is that I believe that shipping is a monopoly, and that it ought to be controlled by the State. It has been laid down by political economists that all industries that are in the nature of a monopoly cannot be controlled efficiently and in the best interests of the community by private enterprise; that those industries ought to be owned and con-‘ trolled by the municipality, the State, or the Commonwealth. There are very few men who to-day would advocate the handing over of our railways to private enterprise. There are very few who would be prepared to hand over to private enterprise our telephones, our Post Office, or the other public utilities which at present are controlled by the Commonwealth . In other countries they are sometimes controlled by private enterprise; but, with all their faults, they are conducted more satisfactorily by Governments than by private people. It has frequently been said that railways are not paying propositions. Those who make that statement overlook some important facts, because, as a rule, railways are exceedingly profitable. It is almost impossible to say what profits they’ really make, because the benefit is not always, reaped by the community. I have heard of railways being constructed merely for the purpose of increasing the value of the land in the districts through which they run.
– Order! There is no reference in the Bill to railways and railway profits, and the honorable senator is not entitled to debate that subject.
– A shipping line may not, on the surface, appear to be a monopoly; but it is almost as much a monopoly as a railway, or any other public Utility which is acknowledged to be best conducted by the State. For that reason, if for no other, I support the principle of the Commonwealth continuing to control the Shipping Line. It is proposed to establish a Board. Generally speaking, I am not in favour of management by Boards. There is a danger of creating a number of highly-paid positions, and the number is likely to be substantially increased, if not in the interest of the industry concerned, for the benefit of the officials personally. The control of the Commonwealth Bank was vested in one man, and I think that he made a pronounced success of the institution. Therefore I see no reason why we should not adopt that plan in the present case. If, however, the Board is to comprise five members, as has been suggested, at least three of the positions should go to representatives of the working-class section. It would not be fair to allow all the positions to be held by men who have had no practical experience as workmen. I hope that the Government will realize that the working class is entitled to direct representation on the Board, and I have no doubt that if the suggestion were adopted, the innovation would prove to be fully justified. It is quite impossible to secure the best results from workmen who feel that their services may be dispensed with almost at any time. They have to pay their way just the same as the more wealthy section, and they are entitled to the privilege, enjoyed by tens of thousands of people, of a regular income. That can only be secured by steady employment. I am glad to know that the Board, in addition to managing the ships, is to undertake the work of keeping the vessels in order. A regular supply of repair work would go a long way towards making the employees contented and efficient. If highly-skilled mechanics were dispersed, owing to a slackening off in the volume of available work, they would find positions elsewhere, and when the Government required the services of experienced men, they would be unable to obtain them.For some time the Cockatoo Island Dockyard will ‘be the centre of operations, so far as Commonwealth shipping is concerned. It is proposed to hand over to the Board the whole of the island and the plant, at a valuation of £400,000. There are two large graving docks, and a good deal of machinery of a most costly character. As the Island itself is very valuable, I think that too low a valuation was placed upon the establishment; but it was better to do that than to overcapitalize it. It is also proposed to take over Schnapper Island. Although I have a very fair knowledge of the islands atPort J ackson, I do not know of one by that name. I am under the impression that the proper designation is Spectacle Island. It lies some short distance west of Cockatoo Island. I am entirely opposed to the Cockatoo Island property being made subject to State taxation. This Parliament should never permit any State to levy taxation upon a Commonwealth utility. Many people, especially the members of municipal bodies, complain that Commonwealth properties are not rateable as private properties are. I maintain that it would be entirely wrong to give a State Government power to tax such an undertaking as the Cockatoo Island Dockyard. I am in favour of the Commonwealth controlling big industries such as a shipping line, and even increasing its activities in such directions. Although the Board will be acting for the Commonwealth, the undertaking, will still be Commonwealth property. I therefore support the Bill.
Debate (on motion by Senator McHugh) adjourned.
Sitting suspended from 6.20 to 8 p.m.
– I move-
That the Bill be now read a second time.
I am glad of the opportunity of submitting to the Senate this proposed amendment of the Income Tax Assessment Act of 1922. The Bill, in clause 2, seeks to amend the Act by omitting from paragraphc of section 16 the words -
Five per centum of the capital value of land and improvements thereon, owned and used or used rent free by the taxpayer for the purpose of residence or enjoyment, and not for the purpose of profit or gain.
I invite the attention of honorable senators to what I consider is one of the most important questions engaging the attention of the people of the Commonwealthat the present time. I ‘refer to the scarcity of houses. Paragraph e of section 16 of the Act is largely responsible for this . condition of affairs. There are other causes, it is true, but this is one of the most important. I may be told that the scarcity of housing accommodation is not peculiar to the Commonwealth; that it is a world-wide trouble, and that in some other countries it is more acute than in Australia. That may be true, but, nevertheless, this Parliament should do all it possibly can to overcome the difficulty in the Commonwealth. Unless the people are properly housed, the health of the community must be adversely affected. This trouble with regard to housing has become more acute since 1914. One factor, as we all know, was the withdrawal of a large number of men usually engaged in the building trade - and other peaceful avocations to engage in war. I do not suggest that the passage of the Bill will bring about the millennium, but I think it will contribute very materially to an increase in housing accommodation throughout the Commonwealth. The section of the Act which I desire to have deleted was introduced ‘ by a Labour Government in 1915. The provision was strongly opposed by many members of the party, but it got through our Caucus meeting by two votes, and therefore its passage through Parliament was simple. It has remained upon the statute-book ever since. So far as I know, the principle is not incorporated in any State Income Tax .Act, or, indeed, in the income tax legislation of any other country, but that, of itself, would not be an argument against it. The idea of taxing incomes is a very ancient one. It has been in operation in Great Britain almost from time immemorial, and, perhaps, for that reason it was adopted quite easily in our Commonwealth legislation. The existence of the principle prevents the investment of capital in houses. Some illinformed persons declare that the Labour party are opposed to Capital. I disagree with that view entirely. The Labour party is opposed to the investment of capital in such a way as to enable the investors for a long term of years legally to rob their fellow citizens of the fruits of their labour, but that is quite a different matter from being opposed to the investment of capital in legitimate enterprises. So far as I know, not a single member on this side of the Chamber, and not one of our supporters, would for a moment offer opposition to capitalists who wanted to invest money in the .erection of housing accommodation. In fact, they would all welcome, more especially in the large centres of population, a substantial addition to the existing number of houses, particularly houses to let. The erection of houses to let is unheard of in suburban Melbourne. Nearly all of the dwellings that have been built are for sale on terms involving the largest possible deposit, and the payment of heavy instalments for an almost indefinite number of years. Thousands of our fellow citizens have . -this millstone about their necks. I am afraid that very many of them will never be able to get rid of it. I can speak with more authority of the situation in New South Wales, because there I come in direct touch with those who are directly concerned in the problem, and know what I am speaking about. Overcrowding today in suburban Sydney and in many parts of the country is more acute than at any previous period in our history, and I feel certain that, despite the existence of the Fair Bents Court and a number of other panaceas, rents are higher than ever.
– Is that not because the operation of the Fair Bents Court discourages the building of houses to let!
– In my opinion the Fair Rents Court has had very little effect upon the situation one way or the other. In a limited number of cases it has prevented increases in rents, but as a set-off it has prevented builders and speculators from investing money in housing propositions. To that extent it has limited the supply, and the position of the prospective tenant is as bad as ever it was.
– Was speculation in house-building in Sydney ever more profitable than at the present moment ?
– I doubt if speculation was ever more profitable, but that does not touch the point that houses to let are very nearly unknown in Sydney and the larger centres of population in New South Wales.
– And in the other States also.
– I know that in Sydney it is most difficult to get a house to rent at almost any figure. The person . who invests money in house property expects to get at least as good a return as from any other investment, and it is a fact that, as an investment, house property is not attractive. For this I blame, to some extent the provisions of the Income Tax Assessment Act. On previous occasions I have referred to the exactions of the State income tax in New South Wales, upon which is superimposed solicitors’ fees and a number of rates and taxes upon house property, with the result that no one cares now to build houses except for sale. The builders do not come to this Parliament asking for assistance. They only want to be left alone to work out their own salvation, instead of being handicapped in many ways, including the imposition of high Customs duties on materials used in the construction of homes. I am aware that, in this measure, I cannot deal with the duty up to £5 lis. 8d. on roofing slates, or with the State income tax, but this Parliament can give some relief by adopting the amendment which I am .now submitting for the favorable ‘consideration of honorable senators. This amending Bill affects every taxpayer who has a home in the Commonwealth. The man who has no home is not directly affected, but every .taxpayer - and there is a good number of them - with a taxable income and a ‘home of his own, or a home in his wife’s name, is obliged, under the Act as it stands, to add to his taxable income the value of his home and the land upon which it is erected. This Bill would do .away with that requirement. There is no £5,000 exemption. Even the Labour party violated their platform in their anxiety to increase the tax upon housing accommodation.
– Why attack the Labour party?
– The Labour party, in this connexion, violated the £5,000 exemption.
– We never had an exemption of £5,000 on income tax.
– I am putting the case of the man who has his own home, and does not get the benefit of the £5,000 exemption. Every income taxpayer is taxed on the value of his home and the land upon which it is erected. I prefer to call it a fine. A man is taxed regularly every year, and the tax is heavier in proportion to the improve- - ments made to his own or his wife’s property. There is no escape from this taxation. The Income Tax Commissioners have an army of skilled mcn, who are experts in every branch of the business. They allow large companies, like the Midland Railway Company, in Western Australia, to escape portion of their land values tax for a number of years, but they do not permit the small man, or any home owner with a taxable income, to escape payment. The tax is a continuous penalty upon industry, and drives capital into other channels. I defy any honorable senator to indicate any feasible way by which rents can be kept down when housing accommodation is scarce. There >are a thousand and one devices to successfully evade the lowering of rents.
If housing accommodation is to be plentiful, we should remove from the industry the hindrances to the investment of capital in the erection of houses.
– In the last two years, more money has been spent in Sydney and suburbs in the building of houses than in any previous two years.
– I quite agree with that statement.
– How, then, does this provision in the Act prevent tie investment of capital?
– It prevents investment in houses to let. Sydney has made very great strides in the building industry during the last few years, but I noticed the other day a report in one of the Sydney papers that there was a shortage of 20,000 houses.
– Does not the Honorable senator think that it is the high price of money that causes the high rents?
– It has some effect. Surely honorable senators will admit that the taxing of homes restricts the building industry. Dogs are taxed because they are nuisances, and the tax is imposed to minimize the number. Is that the reason why houses are taxed today ? Is it to increase the scarcity, and thus enable the owners of existing houses to extract higher rents?
– The honorable senator was just now told by Senator Gardiner that more houses were built in Sydney in the last two years than in any two previous years.
– I admit that. But to-day, in Sydney, the housing accommodation is scarce; the rents are higher, and overcrowding is more prevalent than ever before in its history. I challenge the honorable senator to deny it. In view of these conditions, I ask him to support my proposal to remove those forms of taxation which hamper the building industry.
– Is the increase in rents greater in proportion than the increase in the cost of buildings?
– To-day rents are higher, houses scarcer, and overcrowding more prevalent than ever before, and the existing Act, which fines a man because he has a home, is one of the contributing causes. I do not suggest for a moment that, if this proposed amendment is carried, it will bring about the millennium. I am taking advantage of my position in. the Senate to indicate the reform required to provide better housing facilities, and to place rents on a reasonable level.
– In Sydney, labour cannot be obtained to build houses.
– I admit that there is a temporary scarcity of labour.
– There has been a scarcity for years.
– There is a temporary scarcity in two lines of the building trade.
– The honorable senator knows as well as I do that it is permanent.
– I know that a number of senators do not agree to proposals of such a practical character as is the one now before them. They prefer rather to indulge in inane and superfluous utterances. The proposed amendment is of a distinct, definite, and concrete character, and, if agreed to, I honestly believe will relieve, in some measure, the existing overcrowding, and assist to reduce the extortionate rents. As far as I know, no other senator has brought forward any scheme to deal with theseproblems.
– Does the proposal exempt all homes from taxation?
– I propose to exempt all homes within the Commonwealth from taxation. Under the Act, as it stands to-day, every man who has a taxable income has to add -to it the value of his home. The practice of taxing a man’s home year after year reminds me of what the Egyptians used to do in the bygone centuries. Every man who owned a fig tree had to pay a tax on it, with the result that fig trees were few and far between. In England, many years ago, if one dared to have a window in a home, an annual tax was imposed in respect of that window. We do not require legislation of that kind in the Commonwealth. I have not the remotest idea of the person responsible for the incorporation of this provision in the original Act. Apparently, it was dug up by one of the astute civil servants and placed in the hands of the Treasurer, who, in turn, foisted it upon the people. I do not care where it came from, or who was responsible for it, but its operation, to a very large extent, is responsible for the existing housing shortage. It is an extortionate fine, and a distinct menace to the industry. It drives capital out of the country. It certainly drives capital into other industries. To-day every effort is being made to evade the payment of this tax. People are being’ jammed into flats. In Great Britain thousands of our fellow workmen are herded in tenements, consisting of two or three rooms, one tenement above the other.
– I rise to a point of order. I submit that this Bill is not properly before the Senate. Section 53 of the Constitution provides -
Proposed laws appropriating revenue or moneys, or imposing taxation, shall not originate in the Senate.
I direct your attention, Mr. President, to the fact that this Bill proposes to amend section 16 of the Income Tax Assessment Act 1922, and that section (2) of the Income Tax Act provides-
The Income Tax Assessment Act 1922 shall be incorporated and read as one with this Act.
It may be contended that the Income Tax Assessment Act, which this Bill proposes to amend, does not impose taxation, but since, under the section I have just read, it is to be incorporated and read as one with the Income Tax Act of 1922, it is clear that taxation is imposed by either one or both of them. They are laws imposing taxation. If that is so, then this is a Bill to amend an Act that imposes taxation and, as such, cannot be originated in the Senate.
– This amendment is not to impose, but to relieve, taxation.
– That does not affect the question. In the Act itself there are various sections which relieve the taxpayer from taxation. There are exemptions of all kinds; but the Constitution is clear. It says that proposed laws appropriating revenue or moneys, or imposing taxation, shall not originate in the , Senate. It is clear, therefore, that if such a measure as this cannot originate in the Senate, we are merely wasting time in discussing it now. I do not wish to limit the powers of the Senate in any way ; but if we should pass a Bill imposing taxation, another place, in the exercise of its constitutional, powers, could not receive it. In our own interests, we. do not want to exceed our constitutional rights, and that is why I have raised the point of order at this juncture.
– I know that it is beyond the jurisdiction of the Senate to originate a measure for imposing taxation. That is provided in the Constitution, but I do not know why. The members of this Chamber are elected on aswide a franchise as those of another place, and presently we will assert our right to initiate . money Bills in the Senate. I submit that this measure does not impose taxation, and therefore is properly before the Senate. The Bill is framed to relieve, instead of to impose, taxation. I submit that it is’ in accordance with the provisions of the’ Constitution, and is one which should meet with the approval of the Senate. I trust, Mr. President, you will not uphold the point of order raised by the Minister (Senator Pearce).
– Is it not a money Bill?
– This is not a money Bill. The proposal is to remove taxation.
– It is a Bill to amend a money Bill.
– Not at all. It prevents the imposition of a certain form of taxation, and I submit that, in the circumstances, I am in order in bringing it before the Senate.
The PRESIDENT (Senator the Hon. ‘
– In concluding, I wish to emphasize the ‘ point that if this Bill becomes law, it will benefit every owner of a home in Australia who has a taxable income. It is a measure of far-reaching ‘ importance, and will have a perpetual and generally beneficial effect on the whole community. I have never claimed that if adopted it will be the means of bringing about the millennium; but it is a step in the right direction, and I am not at all concerned if it upsets one of the pet theories of a previous Labour Adminis-‘ tration.
– Does it exempt the man who does notown a home?
– No. He is already exempted. In this connexion I am not concerned about such persons. The measure is primarily framed to benefit those who own a home and have a taxable income, and to remove taxation from industry. It is a serious question, and one on which we should openly and fearlessly express our opinions. I trust that in view of the very favorable consideration honorable senators on this side have given the business of the Government, the Minister (Senator Pearce) will not move the adjournment of the debate, but will express his views and also induce his colleagues to support the second reading, which I now move.
Debate (on motion by Senator Pearce) adjourned.
– I move -
I realize that I am approaching this question at a very inopportune time, seeing that the Senate has before it a measure which may curtail our shipping services in another direction. I shall not deal, however, with the question from the view-point of those who favour the nationalization of the shipping industry, because I must confess that I have been somewhat disillusioned in my faith in State enterprise as an adequate means of competing with the shipping monopoly. I approach the question more from the stand-point of the urgent needs of Tasmania, which is a component part of the Federation. The Constitution expressly provides that assistance may be granted, to necessitous States; but it does not say in what direction. It may be by paying a subsidy, by assisting a (State to develop its rivers, “ harbours, or ports, or by providing adequate means of transport to enable the people of a particular State to get into closer communication with the sister States of the Commonwealth, so that its producers may market their commodities as cheaply as possible. I am asking the Senate to support a motion which, if adopted, will create in Tasmania a better feeling towards the Federation. Tasmania is divided by water from the sister States, but it is in the Federation, and is entitled to claim from the Commonwealth some of the advantages which are enjoyed by other States. The people, however, have a feeling of isolation. First of all, let us see whether there is any necessity for this action. I shall be told, I suppose, that already an adequate service between Tasmania and the mainland is being provided by private companies. An adequate service, however, is not being provided by private companies. Members travelling from Tasmania know the difficulties and disabilities of travel under existing conditions. Intending passengers have to leave the capital city oh Sunday in order to catch. Monday’s boat. They join the boat in the River Tamar some time during the night, and she leaves at 3 o’clock in the morning. The accommodation provided on these steamers is not by any means complete or satisfactory. A far better, service is desirable in the interests of the State and in order to meet the requirements of its people. The number of passengers, inward and outward, between Launceston, Devonport, Burnie, and Melbourne last year was 73,000.
– That represents a good income at 2s. a head in the way of poll tax.
– Yes; the Marine Board collects that impost. The quantity of cargo carried to and from those ports last year was 45,000 tons. The cost of construction of a fast, up-to-date passenger steamer, which would deal also with a certain quantity of goods, would be approximately £250,000. I understand that the Commonwealth Government pay a subsidy of £30,000 for the carriage of mails to Tasmania. Taking only 75 per cent, of that amount as a probable income, the service which I propose would earn from that source £22,500. Fifty per- cent, of the inward and outward cargo would give an income of £16,000. Apart from the 2s. poll, tax, an income of £96,000 a year would be received from 75 per cent, of the number of passengers, inward and outward. Thus from mails, cargo, and passengers we can estimate that there would be a revenue of £135,000 a year. Let us look at the cost of running a steamer of the type required for this service. The cost of coal for a steamer similar to the Nairana would be about £46,000 a year. Wages would total £11,500, food £14,000,- docking approximately £2,500, stores £5,000, repairs £3,000, port dues £3,000, labour in connexion with the shifting of cargoes £4,000, insurance £5,000, incidentals £3,500, administration £4,000, and depreciation £15,000. That gives a total cost of £117,000, which would leave a profit of £18,000. I have based my calculations on the advice of one who knows a good deal more about these matters than I do. The figures show conclusively that a ship of this kind could be run not only without incurring any liability, but at a handsome profit to the Commonwealth .
– If a ship can be run profitably, why is it necessary to pay a subsidy?
– The subsidy ‘is being paid to private companies. That would be saved to the Commonwealth if it had its own service. Let us consider Tasmania’s justification for asking for such consideration. I do not appeal to honorable senators entirely on sentimental grounds. Tasmania is a partner in the Federation. It pays its proportion of Federal expenditure. It is separated by a stretch of water from the mainland, and its producers are placed at a disadvantage in that every ton of produce is subject to a penalty by way of freight which is not borne by the other States of the Commonwealth. The Commonwealth Government have expended considerable sums in the construction of railways in the various States in order to provide Inter-State communication; 1,733 miles of railways have been built at a cost of over £11,000,000. The transcontinental railway cost £7,213,000, and last year it made a loss of £135,000.
– The Commonwealth Government have not built any railways in Victoria or New South Wales.
– They built the transcontinental railway, which has given Western Australia direct communication with the other States of the Commonwealth. The Oodnadatta railway /cost £2,250,000, and made a loss last year of £156,000. The Darwin and Katherine River railway cost ,£1;725, 000, and lost last year £63,000. The Commonwealth has spent in all £11,250,000 on railways which last year showed a lossof £354,000. Tasmania has to pay a proportion of those losses. It does not growl at having to do so; it pays up willingly and loyally. Having to make large contributions in order to assist in providing communication between the States on the mainland, surely Tasmania has the right to demand that similar treatment shall be meted out to her. We ought, by means of such a service as I suggest, to link up this little State, which regards itself as the Cinderella of the Union, with the mainland. Yesterday the Senate discussed the Northern Territory, on which has been incurred a liability of something like £6,000,000 to £7,000,000, and on which an annual loss of nearly £300,000 is being made. Tasmania has to pay its proportion of that loss. Notwithstanding its contributions, Tasmania cannot properly share in the advantages of Federation on account of its insular position. It is not yet a large manufacturing community, although I hope that it will be before very long. It has a wonderful power scheme, and is able to supply power more cheaply than any other place in Australia, if not in the , world. It is a small community, with limited revenues and limited opportunities. It has a difficult country to work, with a very heavy rainfall. The railways are difficult and costly to construct and to maintain. On account of the climate, the roads have ‘cost £4,000,000 to £5,000,000 of borrowed money. That expenditure has had to be made. The State has endeavoured to finance itself; consequently it has not, so far, been able to devote proper attention to the development of industrial enterprises. People prepared to establish manufacturing industries in Tasmania find themselves under a disadvantage owing to the isolated position of my State. Cadbury’s recently inaugurated a valuable industry on the banks of the River Derwent, and I was informed that an extra cost of £10,000 per annum was involved because of the freight between Tasmania and the main-, land States. The fruit-growers of my State are under a similar disadvantage because of the cost of carrying their produce by sea to the Australian markets.
– Queensland has to have its fruit conveyed by rail to Victoria.
– I have been informed’ that fruit can be carried by rail from Brisbane to Melbourne for less than by water.
– That is not so.
– There is a special fruit train from Brisbane to Melbourne, and there are special rates.
– Tasmanians have N been paying a duty of £6 per ton, and have now to pay, £9 6s. 8d. per ton to help keep the Queensland sugar industry going. That will cost Tasmania from £150,000 to £200,000 per annum on the sugar it uses.
– Tasmania will have to start the beet sugar industry.
– The day will certainly come when cane sugar will have to give place to sugar produced from beet. The people of Tasmania have, to obtain such goods as clothing, machinery, and fertilizers from the mainland; but my State has not neglected its own financial obligations. In fact, its direct taxation is higher than that of any other part of the Commonwealth, with the exception of
Queensland. In Tasmania the direct taxation amounts to £2 4s. l0d. per head of the population. In Queensland the amount! is £2 6s. 3d; in New South Wales, £1 18s. 6d. ; in South Australia, £1 12s.11d.; in Victoria, £111s. 10d.; and in Western Australia, £1 6s. 3d. Our revenues are considerably lower than those of the other States, and our expenditure, unfortunately, of late years, has often exceeded the revenue. We have been told from time to time that we should straighten upour own financial affairs; but I maintain that the Federal Government is under an obligation to see that assistance, such as I am advocating tonight, is granted to Tasmania. I do not intend to delay the Senate by a lengthy speech, because I shall have an opportunity of replying to those honorable senators who address themselves to this motion. I ask the Senate not to look upon thin proposal as one for the socializationHi: shipping, but merely to consider it as a service that is badly needed by Tasmania. The Launceston Corporation and the Marine Boards of Hobart and Launceston are unanimous in their desire for a better shipping service for both the northern and southern portions of the island. Those bodies have made requests similar to that contained in the motion.
– Why not have a vessel running, directly from Hobart to Melbourne?
– From, the standpoint of a passenger service, it would be a better paying proposition to have an up-to-date steamer running between the mainland and the island on the shortest route. It would be more attractive to passengers, and they would not mind the train journey to Hobart.
– How would an air service do?
– That may be within the bounds of possibility in the next fifty years.
– In another couple of years it will be an accomplished fact.
– The honorable senator is very optimistic. Tasmanians will be glad to avail themselves of the. best service obtainable. I believe that the present passenger traffic would be almost doubled if we had an improved service. People do not travel between Melbourne and Tasmania at present for pleasure. I do not care very much whether the service is established between. Melbourne and Burnie or between Mel bourne and Launceston although I should prefer Launceston if it were improved as a deep sea port. I hope that the matter will be decided to-night, and that the verdict will be that, as a partner with the other States of the Commonwealth, Tasmania should be given the opportunity to develop its trade and commerce on equal terms with the other States.
– I have pleasure in seconding the motion. The Commonwealth has a duty to Tasmania in relation to its transport facilities. In considering a subject of this nature, it may be assumed that railways and waterways fall very much within the same category. The Commonwealth Government, after an excellent case was made out by Western Australia and South Australia, built the transcontinental railway at very considerable cost, and, furthermore, it is proposed to incur another very large expenditure in providing for a uniform railway gauge from Brisbane to Perth. I wish, first of all, to compliment Senator Ogden on the way in which he has handled the subject. I do not intend to traverse the ground that he has covered; but there are one or two matters upon which he has not touched. In 1902 a Committee was appointed by the Senate to consider the advisability of the Commonwealth adopting measures to improve the steam-ship communication between. Tasmania and the mainland. The Committee recommended, in the first place, that the importance to the Commonwealth of this communication was such as to demand an improved steam service, that it was desirable that there should be a daily mail service each way throughout the year, between Tasmania and Melbourne, and that, so far as practicable, the hours for the arrival and despatch of mails should be approximately the same every day. The Committee also recommended the Government, in the meantime, to” invite tenders for the establishment of a six days a week steam-ship service each way, three alternate days in the week, by way ‘ of Launceston, and the remaining three days by way of Devonport and Burnie, due consideration being given to improved passenger accommodation and increased speed. That recommendation was made twenty odd years ago. To-day we are still waiting for effect to be ‘ given to it.
– And the service is not a great deal better.
– The service at the present time is not an improvement on that which has been in existence between the mainland and Tasmania for the last thirty years. In the report to which I refer, there is, in an appendix from Admiral W. B. Creswell, this statement - *
There is no reason on earth why a Government should not carry passengers and conduct a passenger traffic by sea just as well as by land. A fast’ steamer is an addition to the defence of any coast. The faster the better, and if in addition she is capable, on occasion, of carrying n large number nf troops she. is a valuable acquisition in this particular instance. » -
That report was issued in 1902, and we are getting considerably less than was suggested then as; being the necessary amount of accommodation for the transport of cargo and passengers. I want to credit the Tasmanian Steam-ship company with having put on the Loongana and the Nairana. These are excellent vessels, but, unfortunately, the Nairana has been taken off for. repairs, and the Loongana has been transferred to the Melbourne-Burnie run, a smaller vessel, one that is totally inadequate for the purpose, having been substituted on the Melbourne-Launceston route. The extraordinary hours at which this vessel leaves Launceston make it almost impossible for intending passengers, other than those who are absolutely compelled to travel, to make the trip. On two mornings this month she has left at 3 a.m.
– Passengers can get on board in the evening, surely.
– Yes, but wo all have not the honorable senator’s proclivities for sleeping. In the consideration of this problem we have to decide what would be an adequate service for Tasmania. There are two routes - (1) to the northern ports; and (2) to Hobart. I do not think the Commonwealth has any. vessels that would satisfactorily meet the situation on the run from Melbourne to Launceston. Therefore, Senator Ogden’s proposition that the Government should ‘either’ build or procure suitable vessels is an excellent one. It should pay the Government handsomely. Mr. Hughes, when
Prime Minister, bought certain vessels for the Commonwealth for a specific purpose during the war. His action was a stroke of genius. But when the war was over the functions of these vessels were at an end, and the opinion held in some quarters was that they should be sold. I shall try to. set out the reason for the difficulty of selling these steamers at the present time. “We have to remember that the British Government, during the war, were compelled to seek American financial assistance. They ‘ had to find security against which to borrow money to carry on the war, so they forwarded shipping stocks to the United States of America, and .these were taken up by the International Mercantile Marine Corporation which was formed for that purpose. When the war was over British investors desired to repurchase their stock, and made an offer which was acceptable to the Corporation. The Corporation decided, however, that before concluding the bargain it would be proper to submit the proposal to the Washington authorities, who were then ^deeply interested in the question of international shipping. The Washington authorities refused to sanction the repurchase. The British investors then said that the Corporation could take over the ships represented by the stock, and they would rebuild. This resulted in feverish building to increase the British and Allies Mercantile Marine, and at the same time Germany decided to very materially increase her building programme. Thus, practically, every Treasury was compelled to face serious losses in connexion with shipping proposals. The position of Tasmania in regard to shipping facilities is most unsatisfactory. I therefore suggest that it would be of mutual advantage to the Commonwealth and Tasmania if, instead of forcing the sale of this fleet at ruinous prices, some of these vessels, after being suitably fitted, were transferred to the Hobart route, where any loss in running would be small compared with that occasioned by such a sale. The position as regards the northern end is that none of the present Commonwealth fleet is of the right draft to suit the river at Launceston, consequently it would be necessary to adopt Senator Ogden’s suggestion to build or buy.
Should he be unsuccessful in his desire, I would be glad to put an alternative proposition. It will be remembered that the following clause is part of the agreement between the Postmaster-General and the Shipping Company -
That the Postmaster-General hereby covenants and agrees with the contractors that if they well and faithfully observe and perform all and every the covenants and agreements hereinbefore contained, and on their part to be observed and performed, he, the Fostmaster Gener al will pay or cause to be paid to the contractors by < equal monthly instalments, calculated from the 1st May, 1921, a subsidy at the rate of £30,000 per annum payable in Melbourne, such > instalments to be payable and paid respectively on the expiration of each succeeding calendar month during the continuance of this contract. .
In connexion with the subject of Stateowned steam-ships, it is well, I think, that we should consider the position in some of the other countries of the world. I find this information in a publication issued by the ‘ Department of Commerce, Washington, and entitled, Government Aid to Shipping -
A number of countries own steam-ship lines. Belgium has owned for many years a number of vessels that have been operating between Ostend and Dover in connexion with the Belgian State Railways. Lloyd’s register shows that the Belgian Government owned in 1914, ^eleven steamers, three turbine and eight . paddle-wheel boats. The turbine steamers are of about 1,700 tons gross capacity, and have a speed .of 24 knots. Three of the other steamers have a speed of 22 knots, and three others have 21 knots.
This Government obviously realized the immense advantage of a fast ‘service. I wish to emphasize the fact that the subsidy for the Tasmanian service is the substantial amount of £30,000, and I. therefore say that the Postmaster-General or the Government should have a voice in the control of the company, as is done in many other parts of the world. For instance, in Japan I find that -
Under the . recent mail contracts made with the leading Japanese steam-ship lines, the Japanese Government has practically as much control over the affairs of these companies as would be possible under direct Government ownership. The extent of governmental control is indicated by the fact that all passenger fares and charges are subject to modification by the Minister of Communication, who must be consulted also in regard to arrangement of routes, ports of call, number of voyages to be made, and time of voyage.
Austria has had similar difficulties, but they deal with the situation better than we do, for they have imposed on their steam-ship mail contractor these conditions -
I could quote more extensively on this subject, but I shall content myself with .a reference to the Dutch position. I find that they have included in their mail contract the following provisions : -
Control by the Government. - Appointment of directors and representatives, and adoption of Statutes and by-laws to be subject to the approval of the Dutch Government, which would also have the right to be represented at all -meetings of the company, and the power, to examine all its books and papers.
If the Government do not agree to Senator Ogden’s proposal, and I trust t they will, they should, at all events, see that they have some representation in return for this subsidy of £30,000. We would then have some voice in the control of the vessels and the routes. The Tasmanian Steam-ship Proprietary Company may say that they have diverted the Loongana for the purpose of allowing the Launceston Marine Board to remove a rock from the mouth of the river; but it is not very comforting for passengers on the Oonah, when hung up waiting for slack water, to learn that another vessel, eight times as large, is coming down the river and steaming past the rock with no difficulties at all. It is utterly absurd to say that the river is not navigable, and that it is necessary to wait for slack water. If we had a voice on the Board of Directors, I undertake to say that our. representatives would not stand this sort of 1 treatment being meted out to our people. Such representation and control would be nearly as satisfactory as would be the carrying out of Senator Ogden’s proposal in its entirety. It would be one means of enabling us to overcome some of our present difficulties. We have a right to expect from the Commonwealth the same treatment in respect to the Tasmanian shipping service that the people of other States get in respect of the railway system. Our oceanic position should not militate against us. I have much pleasure in seconding ‘the motion.
Debate (on motion by Senator Wilson) adjourned.
Debate resumed (vide page 1298).
– I greatly appreciated the Minister’s speech when moving the second reading of this Bill. There is very little sentiment in this Chamber concerning the different States, and although I am not by any means an advocate of State rights, I was pleased to see a South Australian Minister so competently introduce his first Bill. He was moderate, extremely careful, and fair. The declared policy of the Government is private enterprise. The Labour party believes in State Socialism, and it is gratifying to learn that the Government has been converted to such a point that it is indulging in State Socialism, at least, for one industry.. I do not know who is responsible for it, or from where the pressure came to change the declared policy of the Government. My belief is that it came from the producers of Australia. Senator Gardiner this afternoon, by his figures, proved conclusively the value of the Commonwealth Shipping Line to the producing community of Australia. Labour has always been prepared to help the producers. We agree that they are, to an extent, the backbone of the country. They are certainly a part, but not the whole of it. The farming community, and the pastoralists, last year derived a substantial benefitby a reduction of the freights. The Commonwealth Shipping Line reduced freights by 10s. per ton, and the private companies immediately followed suit. Had it not been for the Commonwealth Line of Steamers the possibilities are that the private companies would have increased rather than decreased freights. In. one year that reduction meant to the producers a saving of between £400,000 and £500,000. It is no wonder that the primary producers of this country f avour the continuation of the Commonwealth Shipping Line. The Labour party is prepared to help them in this respect. I am only sorry that they did not assist us to retain the Commonwealth Woollen Mills, at Geelong,’ which were a direct benefit to the whole of Australia. Senator Wilson “is leaving shortly for London. I should not suggest that, even if hecame into contact with Lord Inchcape, he would be contaminated by his influence; but whilst in London he will, at times, be associated with big commercial men from all parts of the world, and will have a splendid opportunity to forward the interests of the Commonwealth ShippingLine. The Government should emulate the example of Lord Inchcape in respect of British shipping, and exploit the coastal trade of Australia. Immense profits have been made by various shipping companies here. During the war one . company in Adelaide carried goods for the soldiers, and, incidentally, prided themselves on being a very patriotic concern. Their original capital was about £400,000, but so much profit was made at that time that, in order to present a good face to the public, they watered their stock and issued three shares for each originalone. By that means they kept their dividends down to 10 or. 12 per cent.
– That has not been my experience in ‘Companies with which I have been connected.
– The honorable senator was not connected with this, nor any other shipping company. He is now connected . with the best shipping, enterprise possible, and I hope it will prove a great success while he has charge.
– The honorable senator wishes to see the Minister steer the ship of State.
– I would not say that others could not steer a better course than Senator Wilson. There are on this side of the Senate men better fitted to take the helm of government. I know, however, that he would not deliberately steer a wrong course. There are opportunities in Australia for the exploitation of the coastal trade. In South Australia there is a vast area - Eyre’s Peninsula - which will never be developed until adequate shipping facilities are provided. Certain honorable senators to-night have discussed the position of Tasmania, but Eyre’s Peninsula comprises, I daresay, ten times the area of that State. The Commonwealth Government are taking a step in the right direction by continuing the Commonwealth Shipping Line, and they should extend its operations to Eyre’s Peninsula. They have had the courage to face the big ship-owners on the other side of the world, and they should adopt a similar attitude towards local ship-owners, and so prevent the primary producers frombeing exploited. I did intend to supply the Senate with figures showing the cost of cartage and shipping freight on farming implements from Adelaide to Port Lincoln, but I shall not weary honorable senators with them. Most honorable senators are aware of the circumstances, and they know that it is almost impossible for the . settlers to obtain machinery, much less, send horses and other stock across the water, unless the market prices are exceptionally high. I agree with Senator Gardiner that under the Bill too great a power is to be given to the Board. There is no need for the Government to completely dissociate itself from the shipping service, by handing to the Board the right, title, and interest of the Commonwealth in this property. Very often Boards become autocratic. I remember a Board, that was almost impossible of approach, even by the men responsible for its appointment. I ask the Minister, when he replies, to give the Senate further information as to ‘ the powers of the Board.
– The Act can be amended at any time.
– The Commonwealth should not transfer any of its powers. I believe that it should have greater powers. It is a national Government, and I am very jealous of the Commonwealth’s powers, and desire that no danger shall arise from the transfer of the Commonwealth control to the Board.
– The honorable senator will agree that the success of the Commonwealth Bank was, in a large measure, due to the freedom enjoyed by the management.
– I am not objecting to the measure of freedom given, but I doubt whether the powers given to the Governor of the Commonwealth Bank are as great asthose to be given to the Board. No honorable senator knows what may happen in the future. We are all agreed upon the main principles of the Bill, and we desire the Commonwealth Shipping Line to be a great success. I ask the Minister to satisfy me that the powers proposed to be given to the Board are necessary. It is a habit with some people at every opportunity to malign the workers of Australia; they have the idea that the workers do not give a fair return. I was pleased that the Minister, when speaking, attributed the past inefficiency of the Commonwealth Shipping Line, not to the workers, but rather to the heads of Departments. I agree with that sentiment. When the clause relating to- the Board of Control is discussed in Committee, I shall suggest - I doubt whether the Government will accept my proposal - that at least one representative of the workers should be on the Board. I understand there are to be three members, comprising a marine expert, a repair expert, and a financial expert. Provision should also be made for the inclusion of an industrial expert or a person in sympathy with the viewpoint of the workers. Some seem to be under the impression that the workers’ representatives, or even the workers themselves, do not wish any. enterprise to be a success; but if there is one Australian undertaking which the workers wish to succeed it is the Commonwealth Government Shipping Line. One way to secure that objective would be to give the workers a direct voice in the management of the Line. This practice has been tried successfully in ‘Great Britain and in America. In a recent report the Joint Industrial Council of London published certain ‘conclusions concerning the main factors affecting the restriction of output. I do not suggest that every worker in Australia is a superman; in every large body of men, whatever their trade or calling may be, there will always be some few who are inefficient or even dishonest.
– Is not the Darg a deliberate policy with a certain section of the workers?
– It may be with a very small section. The Joint Industrial Council; to which I have referred, reported on the principal points affecting the restriction of output. The first was “the fear of unemployment.” That is always the grim spectre in the distance to every workman who is reaching the retiring age, and who may be virtually thrown on the human’ scrap heap.
– The distance is not great.
– It is not; and many men who have to rear families and who at times encounter ill-luck or illhealth are compelled to carry on with the old-age pension as their only income. The second point was, “ The disinclination of workers to make unrestricted profits for the benefit of private employers.” Whatever profits are made by the employers should be shared by their employees.
– That is the practice in many industries.
– It may be the practice in England and in America, but it is exceptional in Australia.
– The unions oppose the’ practice.
– There are not many employers in Australia i who are operating under a system which allows their employees to share in the profits. The third point was “ The worker’s lack of interest in an industry owing to nonparticipation in control.” That is an important point, and has a direct bearing on the question I am discussing. When men have a direct voice in the control of an industry their interest is naturally greater.
– The Australian sea7 men are shareholders in the Commonwealth Line.
– Yes ; and they are therefore entitled to a voice in its management. The fourth point was, “ Inefficiency, both managerial and operative.” I trust the Government will reconsider their decision to allow the workers in the industry to have representation on theBoard of Control. We do not suggest that a worker should be appointed to the Board to enable him to obtain inside information, but, having a voice in the management, he would be able to express the feelings of the men and also to convey to them the opinions of the other members of the Board on the question of control. Senator Lynch very properly said that industrial warfare is no use to the worker or to the community, If there was a misunderstanding between the Board and its. employees - which is very often the cause of industrial disputes - the workers’ representative on the Board would be able to render considerable assistance, in bring:ng the parties together. It is frequently said that the men- are always at fault, but there are employers in Australia and elsewhere who cannot refrain from the cry that the men are not working hard enough. When a man is doing his best and fails to meet with any’ encouragement, it is only natural that dissatisfaction should arise. Senator Lynch referred to the Commonwealth Government Shipping Line as a child of necessity. It is a form of Socialism which could not be retarded, and it is only a matter of time when other socialistic enterprises will be undertaken by the Government in the’ interests of the whole community. Senator Lynch also said that the Line must receive the -most sympathetic treatment possible, because the great Shipping Combines of the world will, with the enormous wealth at their command, endeavour to destroy the whole enterprise. The controllers of existing shipping corporations do not want to see Australian-owned ships carrying our produce to . the markets of the world, and returning with commodities on a 5 per cent, interest basis while they, by means of their own ships, are looking for enormous profits. Unless the Board is very careful it will have to contend with many difficulties, the greatest of which will be the opposition by existing shipping companies.
– The existing companies have accepted the Line as an ordinary competitor.
– They will endeavour to get it oat of the way.
– They will try to rope it into the Combine.
– I trust the Commonwealth Government will not agree to the Commonwealth Government Line exploiting the people of Australia.
– They have been working together.
– Any shipping company is entitled to receive a fair price for the service it renders, but I would offer the strongest possible’ objection if the producers were being exploited simply because an arrangement had been entered into between the Commonwealth Government Line and the private companies. If that were done there would be no justification fo1* the retention of the Line. The Board will have an opportunity to capture the whole of the Australian trade. and Australia should become a maritime power of no small importance. Honorable’, senators on this side are pleased that the Government do not intend to dispose of the ships, since one of the greatest assets that a nation could possess is a strong mercantile fleet. Now that we have made a start, I trust it will be the policy of the Government to continue with its shipbuilding programme, and so to extend our trade that if the population of the Commonwealth increases to the extent we hope it will do during the next forty or fifty years, we shall be able ‘to cater for the increased requirements without the assistance of private shipowners who conduct their operations in their own interests. I trust the second reading of the Bill will be carried, and that in Committee several minor amendments which I consider necessary will be adopted.
.- The vessels forming the nucleus of the Commonwealth Government Line were purchased by the ex-Prime Minister (Mr. W. M. Hughes), and although considerable opposition ‘ was shown towards his action, subsequent events have proved that what he did was in the best interests of the Australian people. It is very interesting to note the number of honorable senators and 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.
– The converts are on the honorable senator’s side of the Chamber.
– I realize that. Many members of the Country party who opposed this 1 form of Government control now enthusiastically support the enterprise, because it has been of great benefit to the primary producer. I have always been in favour of governmental enterprises conducted in the interests of the people, and during the recent election campaign I strongly advocated the retention of the Commonwealth Government Line. A number of speakers have referred to the losses incurred, but they have been more than compensated for by the benefits derived. I am very glad that the Commission which was ap- pointed to inquire into the working of the
Cockatoo Island Dockyard has been justi’fied in the recommendations which it made. A very strong feeling existed that that’ Dockyard should be disposed of, and that private enterprise should be allowed to manage the business. The people of Australia now realize, however, the benefits which they have obtained from the Commonwealth (Shipping Line, and they recognise that it is necessary to have a place at which to carry out repair work. As the result of the recommendations of the Commission, the management has been placed on a better footing than has existed for a considerable time. Marine engineers and experts who were not connected with the Cockatoo Island Dockyard, in giving their evidence, unanimously expressed the opinion that the work done there was a credit to the workers.
– What about the cost of that work?
– The cost was too high; but, under the new conditions resulting from different management, they have decreased considerably. Thousands of pounds have been expended in the installation of first-class machinery. Shipbuilding will have an important bearing on the future of Australia on account of the isolation of this country, and its distance from other countries. It is necessary, therefore, that every encouragement should be given to the industry. The shipping and allied trades have made England what it is. Without that in- dustry her other manufactures would not have enabled her to reach the high position she occupies in trade and commerce. Australia is similarly situated in the Pacific, consequently I have always been extremely anxious to see shipbuilding go ahead. The work which has been turned out at Cockatoo Island Dockyard has stood the strain of battle, storm, and stress. That highly satisfactory state of affairs will continue only so long as the workmen eve to the Commonwealth adequate service for the money which they receive.
– Does the honorable senator suggest that the workmen have “gone slow”?
– I know that they have. The future development of this country depends upon the worker. If an honestday’s work is given, the shipbuilding industry will become firmly established in Auslralia. At times, and under certain conditions, efficient service . has not been rendered. I have not any class feelings. I am prompted to speak in this manner because I desire to see the interests of the workers advanced, and the future welfare of- Australia assured.
– I think that the honorable senator is libelling the workers.
– If Senator Needham went about with his eyes open, and studied the facts without any party feeling, he would agree with nine-tenths of my statements. I make these statements with a feeling of sorrow. They are’ based, not on: hearsay, but on actual knowledge. I regard the working class in Australia as being second to none in the world. I desire to see industries established. Especially do I desire that shipbuilding shall be carried oh at Cockatoo Island. I shall do everything I possibly can to encourage the workers to turn out a good article able “ to compete with that turned out by any other country. I know that they can do it if they like. I worked amongst them some years ago, and I have, had them working under me. To-day, while the quality is all right, the quantity is lacking.
– Are these men getting an honest day’s wages?
SenatorRE ID. - They are getting the wages fixed by the Arbitration Courts. The awards given in all the trades with which I am acquainted are fairly liberal; in some instances they might be termed generous. I do not care whether a man receives £2, £3, or £5 a day ; the wage is nothing if a corresponding service is rendered.
– Are the men giving value for value?
– Many are not. The man who is dishonest to himself becomes a bad citizen. There is nothing in Australia to equal the plant at Cockatoo Island. I am very pleased that a Board is being appointed to carry on the work on business principles. Honorable senators opposite are opposed to giving the Board the powers set out in the Bill. I cannot see that they are ‘being given any powers that they should not have. They are, as it were, directors working under articles of association that are embodied in this Bill. Parliament represents the shareholders, and to Parliament these directors are responsible.
– There will be no control over the Board.
– There will be the same control that is exercised by other shareholders over their directors. Cockatoo Island has a magnificent plant that has not always been fully employed. Previously, competition with outsiders was not allowed. The Board,, however, is tobe given the right to compete with any one. In the past, because the tenders were too highlargely on account of mismanagement - shipowners were forced to go to other countries to have their work done. In view of the protection that has been given, I trust that the Board -will be able to compete with outsiders, and to cope with the demand, even if it means working double shifts. Senator McDougall said that an efficient staff can be retained only when there is continuity of employment. I agree with that. The Commonwealth has sunk thousands of pounds in the installation of machinery for -affecting repairs to our Navy. If the staff is kept employed on ordinary marine business, those men will always be at call should trouble at any time arise between Australia and any other country. Honorable senators opposite know that a big section of . the community is always opposed to State enterprise. I am not opposed to it so long as it results in efficient working. Because it will be an important factor in defence, because it will make for the future welfare of Australia, I am anxious that Cockatoo Island shall turn out successful work, and return to the people of Australia a good dividend for the money that is invested in it. Australia has not a dock large enough to deal with ships of 16,000 tons capacity, such as are now being used, because of their carrying efficiency ‘ and economy in operation. It is a great handicap to a shipping company, if a vessel in Australian waters happens to Deed docking, to have to take the risk of sending it to the other side of the world, or else to Singapore. Eventually, I have no doubt. Australia will have a floating dock capable of dealing with the largest vessels visiting these shores. Syd- ney will be the principal port of the Commonwealth for a considerable time, and if the employees at Cockatoo Island give efficient service, there is no reason why a floating dock should not be constructed at Sydney’.
– Does the honorable senator think that there need not be another dock like it on any other part of the Australian, coast ?
– A start must be made somewhere. If by reason of our immigration policy the population of this country is increased by millions, docks may eventually be needed at other ports. Port Gladstone, in Queensland, is, in many respects, superior to Sydney, and some day, no doubt, it will come into its own; but I am speaking for the moment of what is within practical reach. If the workmen give value for the money expended on the works at Cockatoo Island, it will be in their own interests, as well as of benefit to the Commonwealth.
– It is difficult to understand the policy of the present Government. Like the weather, it is erratic and unreliable. What they say one day they contradict the next. As soon as the Ministry were selected the announcement was made that they were anti-socialistic, and would not engage in trade of any kind. The Treasurer (Dr. Earle Page), as leader of the Country party, said, to use his own phraseology, that he was against all forms of Socialism, “ naked or fig-leafed.” In accordance with their declared policy, the Government sold, or, rather, gave away, the Commonwealth Woollen Mills, because the establishment was competing against private enterprise; and because, according to the supporters of the Government, the mills had sold cloth to returned soldiers and supplied material to Government Departments at half the prices charged by private firms. The Government are now going to engage in the shipping trade in competition with private enterprise, because it will result in lower freights to the producers of Australia. It may be said, therefore, that the Government are consistent in one thing, and that is in their inconsistency. We were informed that although the Country party had but five members in a Cabinet of eleven, nothing could be done by the six if the five objected. In my day we had majo rity rule, and six was more than five. In this Cabinet, however, five equals six, and if the five do not believe in Socialism or Government trading, why, I ask, do they propose to continue a Socialistic Shipping Line, after disposing of the Socialistic Woollen Mills? The party to which I belong has always believed in the extension of the functions of government. If we had the power, we should nationalize not only shipping, but many other enterprises and institutions. That is ‘ a principle to which we have subscribed since the Labour movement came into existence in these southern seas. In 1906 a Royal Commission on the Ocean Shipping Service conducted an inquiry, and made strong recommendations in favour of a Commonwealth Government Line of Steamers. Its report stated, inter alia -
The time has come when, for the fuller development of the great services of the State, and for the exemption of its industries from unnecessary shackles, it is essential that the functions of the community should be enlarged. The prestige and the welfare of the Commonwealth demand that it should no longer remain dependent upon private individuals for the carriage of its mails. The isolated position of Australia, and the many leagues of ocean which separate us from other countries, render the carriage of mails, and perishable produce to distant markets a question of paramount importance . . . The State-owned boat would be run primarily in the interests of the producer and consumer. While it is not contemplated that the national undertaking would be carried on at a loss, the making of a profit (which to a private company is the main incentive of trading) would be a secondary consideration. So far as its home trade is concerned, Australia has long since recognised the necessity of connecting the rural producer with thecity consumer by an ever-extending railway system. The time has come for an application of the same principle to the larger markets of the world, to which, the home demand having been met, our producers must obtain access if their occupations are to be conducted with the maximum benefit to themselves and the community.
The Commission took evidence on oath in the various States, and many men occupying prominent positions were called as witnesses. The late Mr. George Graham, who was Minister for Agriculture in Victoria, declared that the producers of this State had for a considerable period, been exploited by the shipping combine and the middleman. He went on to show how the producers in the butter industry in Victoria had been paying tribute to the steam-ship owners and the middleman, and he said -
From the inception of our butter export trade, the mail companies have looked after number one, and have extracted from the producers as much as they could. I have taken a very active interest in the export trade from its inception in 1889, when we first offered a bonus for the export of butter. I say, without fear of contradiction, that the mail companies, with the assistance of the middlemen in Melbourne, have been a great bar to the progress of the industry, because they have demanded exorbitant freights, and have all through the piece given us a hard road to hoe.
A Commonwealth Government Line of Steamers, in the interests of the primary producers, and to remove the disabilities referred to by the late Mr. Graham, would have been an accomplished fact long, ago had it not been for certain difficulties with which the Labour party was confronted. At the outbreak of the war, when our . party was in power, we took steps to establish the Line. There was vigorous opposition from certain quarters of the action taken by the Labour Government; but those who were then strongest in their condemnation of the policy initiated by us are now its strongest advocates, and are .prepared to shower blessings upon the Commonwealth Shipping Line. The Prime Minister (Mr. Bruce), in introducing the measure in another place, said-
– The honorable senator is not entitled to allude to a debate of the current session in another place.
– It has been said by a gentleman occupying a very high position in the Commonwealth - a position almost akin to that which you, Sir, hold to-day - that the Commonwealth Line conferred an incalculable benefit upon the community. We know that, had it not been for the existence of the Line during the war, the primary producers ‘of Australia would have been in a very difficult position, because there were then no ships available to carry their produce overseas. . The inauguration of the Line was the beginning of a policy to which the Labour party had committed itself. The party now in power opposed ‘the project, but for some reason or other, which has not been properly explained, they have been converted to the Labour party’s policy in regard to shipping. The book value of the ships, £12,766,588, has been written down by £8,048,438, so the ships will be handed over to the Board to be created at a depreciated value of £4,718,150. I should like to know the names and addresses of the gentlemen who have been responsible for this drastic writing down in the value of the Commonwealth ships. Are they interested in shipping? Are they likely purchasers of vessels that will be disposed of eventually ? Are they directly or indirectly associated with the shipping combine?
– Does the honorable senator- think that the value of the vessels has been written down too much?
– Yes, I do.
– Then the honorable senator is no friend to the Line.
– I believe; the ships should be handed over to the Board at their proper value.
– We believe that will be done.
– I have no doubt that the Minister honestly believes that the vessels have been written down to their true value, but I should like to know something about the valuers.
– They are not likely to make any personal profit out of the ships.
– I do not suggest that they are likely to make money out of them.
– Is it not in the interests of the people that the value of the ships should be written down as low as possible ?
– No. Does any business man do that in respect of his assets ?
– I mean from the point of view of insuring reasonable freights for the primary producers.
– What have freights to do with the writing down of these assets?
– Because the ships have to earn the interest on their capital value. 1
– I am not concerned for the moment about the earning of interest or profits in connexion with the Commonwealth Line. I believe, with members of the Royal Commission that inquired into the .Commonwealth shipping activities, that the profits, so far as the Commonwealth Line is concerned, are of minor importance. With private enterprise profits, of course, are a major consideration. My chief desire is to see the Line properly established and run in the interests of the primary producers, and incidentally for. the benefit of the people of Australia. The proposed Board is to be endowed with immense powers. The Shipping Line will be handed over lock, stock, and barrel, and some of the ships that have been written down in value will be up for sale. Who are the likely buyers ? At present there is little or no competition in shipping, so we are not likely to get a very high price for vessels that have been written down. The Government appear to have an obsession for Boards.
– What does the honorable senator suggest - control by one man ?
– We have a Board to control the Note Issue. We did not know much about their operations until recently, when, owing to a minor alteration in the design - the omission of the Government printer’s name on the notes - there was an impression abroad that a considerable number of forged notes were in circulation. In certain quarters there was almost a panic, £1 notes being sold at 16s., 17s., and down to 15s. each. Then we have the Tariff Board, of three members, one of whom has been absent from Australia for a long time, and the Chairman, so we are informed, is to accompany the Prime Minister (Mr. Bruce) and Senator Wilson to the Economic Conference in London this year. There will be only one member of the Board left in Australia, and, as two are necessary to form a quorum, that body will not be very active for some time to come. We have also the Public Service Board, and it is proposed, under the Northern Territory Crown Lands Bill and Ordinance, to create a Board of three to deal with Northern Territory problems. Lastly, we , have this proposed Commonwealth Shipping Board of three, four, or five members. The Bill is indefinite on this point. We do not know how many members will compose the Board, how they are to be appointed, what they are to be paid, and whether their headquarters will be in Australia.
– Yes, certainly in Australia.
– If this Board cannot make a success of the Line at the depreciated value, they will not be fit for their positions. During the last few years we have had a great deal of government by proclamation and government by regulation. Now, apparently, we are to have government byBoards.
– What does the honorable senator suggest in lieu of a Board to control Commonwealth shipping?
– When we reach the Committee stage of the Bill we maybe able to offer some useful suggestion. I am not enamoured of Boards. Nothing so far has been said ‘ to convince me that the Line has not been efficiently managed up to the present time. In my opinion, we have a manager quite as capable of looking after the interests of the Line as the Board will be. We are told that the Board is to.be completely free from political control. Does any one suggest that political control has been exercised over the present manager of the Line? Has anything been said against him in regard to his capacity and fitness for the position ? Not a word.
– But greater powers are to be given to the Board.
– And that is where I see danger.
– The Line is not to be intrusted to the control of one man, who might be an autocrat.
– No honorable senator will suggest that the manager of the Line has exercised autocratic powers. The Government propose to close up certain Federal activities, one being the Williamstown shipyards. As a Victorian representative, I wish to enter my vigorous protest against such action.
– Where did the honorable senator obtain that information?
– The Government intend to hand over to the Melbourne Harbor Trust the Williamstown shipyards. The Commonwealth Shipping Line was established about the year 1916. At that time the Williamstown shipyards were managed by the Victorian Government. In 1918 the Commonwealth Government took control of those yards, and the Prime Minister gave the assurance to the workmen there that, provided they altered their unionistic rules as to piece-work and one or two other matters, permanent employment could be found for them. For some time” quite an army of men were fully engaged on shipbuilding and ship repairing at the yards. Many Commonwealth ships were repaired. The Bill will encourage centralization rather than decentralization. It is now proposed by the Commonwealth Government to hand over the yards to the Melbourne Harbor Trust, which already has a staff capable of carrying out any - necessary work. When the yards were continuously working, 400 or 500 men were employed. To-day, about 240 men are employed, and I am informed that, if the Commonwealth Government hand over to the Harbor Trust the Williamstown shipyards many of those at present engaged will be thrown out of employment, because some of the Commonwealth vessels, instead of being repaired at those yards, will be taken to the Cockatoo Island Dockyard in Sydney. I am neither a parochialist nor a State-righter, but I would not be doing my duty, as a representative of Victoria, if I did not urge the Ministry to carry out a policy of decentralization by allowing the Williamstown yards to remain under the control of the Federal Government. In 1918, the then Prime Minister (Mr. Hughes) gave an assurance that the men would be given permanency of employment, but apparently that guarantee is not to be observed. In order to encourage decentralization the Victorian Government established workshops at some of the principal cities of the State, which policy has been approved of by the people of Victoria. The Commonwealth Government apparently does not believe in such a policy. In the interests of economy they say that it is advisable to relinquish to the Melbourne Harbor Trust the control of these yards. I hope that the Government will stay its hand, for the present at least, respecting the yards to which I have referred. No doubt every honorable senator is in favour of the principle of the Bill, but strong exception will be taken by the Labour party to some of its provisions, and when the Bill is in Committee we shall then have an opportunity to express our approval or otherwise. I am pleased that the Common- wealth Shipping Line is to be retained, as, since its inception, it has justified the belief of the Labour party in Government trading ventures. I trust this will be the beginning of a new era so far as Australian shipping is concerned. I take strong, exception to the control being handed over to an irresponsible body. It is true that the Board will be responsible to the Minister, who represents the Government of the day, but powers to be conferred on it are too wide, and when- in Committee we shall put forward amendments to the Bill which will be acceptable to the Labour party.
– With many of the principles” embodied in the Bill I am in entire agreement, but concerning certain- other principles I, like other honorable senators, have some doubts and fears. The Government are proposing to hand over to “ an outside Board the responsibility for a tremendous Government utility that, in my opinion, should remain closely within the purview of the Government, and be subject to the free criticism of Parliament. I do not anticipate that this criticism will cease owing to the Commonwealth Shipping Line being placed under the control of a Board; but whatever criticism Parliament may wish in the future to offer vill not be as effective as was that offered in the past. I wish to refer briefly to the’ establishment of the Commonwealth Shipping Line, and the benefit it has conferred on Australia. As we were reminded by the’ previous speaker, Senator Findley, the Line was first established in 1916 by the purchase of vessels by the ex-Prime Minister (Mr. Hughes). His action ran the gauntlet of a considerable amount of adverse criticism, although’ the majority of the members of Parliament were in sympathy with and quite approved of the purchase. It was made at a time when the affairs of .Australia were in a critical condition - when the commercial interests of Australia were beginning to feel the want of shipping facilities to carry our produce overseas, and to return with goods from other countries. At that time we had two bountiful harvests, and wheat, wool, and other produce were going to waste owing to a lack of shipping facilities. It is not necessary to remind honorable senators of the criticism that was levelled at the Government of that day, because much of our wheat, from 1916 onwards, was ruined by mice, weevil, and other pests. The vessels purchased by Mr. Hughes were a godsend to the producers of Australia, and also to the troops who were then fighting for England and her Allies overseas. Those vessels were able to carry food, clothing, and other requirements to the troops of Britain and her Allies, and to return with goods urgently . needed in Australia. The inauguration of the Commonwealth Shipping Line was undoubtedly a tremendous blessing, both to the people here and overseas. I ask honorable senators to picture in their minds what would have been the fate of the people of Australia at that time if they had been compelled to pay the freights charged by the various combines which controlled the oversea shipping. I agree with a statement made this afternoon that the value of’ the Commonwealth vessels to Australia cannot be estimated in pounds sterling. Senator Gardiner to-day quoted freights charged in 1916 ‘ by the Commonwealth Shipping Line and other lines trading between Australia and overseas. He might have gone further and have quoted figures showing thebenefit Australia derived from its own shipping service. There is a growing feeling outside this Parliament against the continuation of the Commonwealth Shipping Line. We are told that the Commonwealth Government should not engage in trading. The Commonwealth Line, however, is not engaged in trading in the strict sense of the term. One might as well say that our railways, post-offices, and other public utilities, which the Commonwealth is successfully conducting, are’ trading concerns. It is well to remind the people of Australia that, in the opinion of the members of this Parliament, the retention of the Commonwealth Government Line does not mean the continuation of a Government trading enterprise. It has been said that the primary producers and their representatives are sudden converts to the retention of the Line, but the primary producers themselves have never condemned it. The average primary producer is a keen man, who looks for the highest price for his produce, and for the cheapest freights, and he knows that if the Commonwealth Line had not been in existence he would have been compelled to pay fabulous rates for the carriage of his produce to the markets of the world.
– The primary producers are not too well off now.
-No, but if the Line had not been operating, they would have been in a worse position. Even if the Commonwealth Line has not been charging lower freights, it has been the means of preventing other companies increasing their rates to a figure which at present we can only imagine.
– New Zealand has not a shipping line of its own, and yet the producers in that Dominion are paying lower freights than Australian producers.
– That may be so. Before leaving this phase of the question, I may say that but for the Commonwealth Line much of our produce would have rotted; it would not have been worth sowing grain, and many manufacturers would have been compelled to close down owing to the lack of essential requirements. Considerable criticism has been levelled against Governments during recent years for continuing ship construction, but during the war almost every person in authority was pressing the Government to construct more ships. I was a member of two or three deputations which wafted upon the then Prime Minister (Mr. W. M. Hughes), and urged his Government to build ships in different parts of Australia. Requests were received from Hobart, Maryborough, Sydney, Brisbane, and Western Australia. The advocates of ship construction in Australia didnot care whether the vessels were built of concrete, iron, steel, or timber, and if the Government’ had adopted the foolish proposals advocated by some the losses would have been much greater than they are to-day. Very wisely the Government placed a certain amount of restraint upon ship construction. Members of the Chambers of Commerce and the Chambers of Manufactures who, to-day, are opposing ship construction and the continuance of the Commonwealth Line, were passing resolutions nearly every fortnight in favour of a more active shipbuilding policy. On one occasion, a deputation waited upon the then Prime Minister while he was in Adelaide,’ and suggested that the design of the ships- to be built at the yards of Messrs. Poole and Steel, Port Adelaide, should be altered to provide for insulated space, so that later they might possibly be used for carrying frozen produce around the coast or to the Near East. If that suggestion had been adopted, those vessels, instead of being unsuitable for long voyages, as they are to-day, owing to the inadequate cargo space, could have been used in the Tasmanian service or on other comparatively short voyages to our island possessions. The design, however, was not altered, and these ships will now possibly be disposed of, not because of any defect in construction, but merely be- * cause they were designed as ordinary cargo carriers.
– Was not their size limited to the capacity of the engines which could be built in Australia?
– I do not knowwhy a limitation was imposed. It has been suggested that the Government are appointing a Board to control the Commonwealth Line, with the intention of eventually disposing of the fleet. I am sure that the Government have no such- intention. The members of the Ministry are fully alive to the wishes of the people in this direction. The people of Australia are standing solidly behind this enterprise, notwithstanding the press criticisms which, ever since the inauguration of the Line, have, been most unfair. Doubtless the repre; sentatives of shipping companies or large commercial enterprises interested in the shipping business have been behind the agitation which has been g’iven such prominence in the pi psb. I am confident, however, that the people are standing solidly behind the Commonwealth Line of Steamers, knowing ‘ perfectly well the benefit it has conferred on Australia. Senator McHugh has referred to’ the freights charged by the vessels trading from Port Adelaide to Spencer’s Gulf. Many years ago a company of farmers on the west coast started a small line of steamers. I think they had two > vessels. At that time - it was prior to the war - freights were not as high as they have been since, but the other steam-ship companies then trading cut fares and freights again and again until they managed to push the small company out of business. I believe it was said at the time that they even went so far as to pay bonuses to people who travelled or sent goods by their steamers. At any rate, the farmers in their blindness .and folly patronized the vessels that cut. the fares and freights, and the consequence was that after running for a few months the new company had to close down. Fares immediately went up, and now, as Senator McHugh has pointed out, it scarcely pays a man to send live-stock or goods by water from the west coast. Within the last month or so, the Adelaide Steamship Company has increased the passenger fare from Port Adelaide to Port Lincoln from £1 10s. to £2. The journey from Port Adelaide occupies an afternoon and a night. Passengers leave in the after- * noon, have one meal and a bed on board, and are supposed to be off the steamer at Port Lincoln before breakfast. At one time the fare for this trip was 10s’. This is an instance of the so-called benefit that is derived by handing over to private enterprise the full control of shipping along our coast or overseas. And it furnishes a reply to the question Senator Drake-Brockman put to me a few moments ago. I should like to say a word now about the Commonwealth Line of Steamers and industrial trouble. Like Senator Reid, I do not refer to industrial troubles in any vindictive spirit, but I very much deplore the fact that the Commonwealth’s steamers should be subjected to more labour trouble than is met with by any other shipping line trading in or to Australian waters, whether its crews be black, brown, or brindle. There is very little industrial trouble on the boats engaged in the coastal trade, but nearly every time a Commonwealth owned vessel comes into Australian waters trouble occurs. Why should this be the case? The Commonwealth Line of Steamers pays fairer, wages than are paid even by the private com,panies trading along our’ coast. It’ provides accommodation not to be found on the ships of other lines. Its crews are paid overtime, and receive wages for the voyage to England that are almost unbelievable when compared with those paid by other lines. It pays these wages and competes with vessels run by cheaper labour, and manned by crews whose conditions are not to be compared with those, for the Commonwealth vessels. And yet it it expected to show a profit. I sincerely hope that the crews will take a more reasonable view of their duty to the Commonwealth. After all, this experiment is but an instalment of the public ownership which the Labour party desire to bring about. Why should they seek to tie up Commonwealth vessels every time they come to Australia? I hope that wiser counsels will prevail, and that the responsible leaders of the Seamen’s Union and the Stewards’ Union will not send men down to the ships’ to induce the crews to cease work for no reason whatever. I know that the organizers of these unions harangue the men on the wharfs, and that the men very foolishly leave their ships. For what reason they do so heaven only knows. The conditions under which they work are very much better than those provided by other shipping lines. I trust that wiser counsels will prevail, and that for the sake of the future welfare of the Commonwealth Line of Steamers the Labour party will urge the men to take a more reasonable view. Why subject the Line to treatment which is not experienced by other lines trading to Australia? I have a rooted objection to the appointment of Boards. In my opinion the appointment of Boards is a means devised by members of a Government to relieve themselves of responsibility. As one who is responsible to the electors, I. am willing to take my full share of the responsibility entailed in administering the affairs of Australia, and my full share of whatever blame may - attach to the running of the Commonwealth Line of Steamers. I am ready to bestow blame ‘ or to condone anything whenever I think it necessary. The function of .managing public utilities belongs, first of all, to the Government, and, in the second place, to members of Parliament, and I intensely dislike the idea of relinquishing in the slightest degree the hold that Parliament should have on every public utility. However, tho Board to be appointed in this instance must be one. of experts. They should be men specially trained for many years in the shipping business. A man will not acquire a full knowledge of shipping business unless he spends many years in it, and the more knowledge he possesses the more successful is his management of a shipping line.
I hope there will not be more than three members on the Board to be appointed under this Bill, and that the Government will secure the best men available. Whether they be found in Australia or elsewhere I do not mind, so long as they have the very highest qualifications, and I shall not care whether they are paid £2,000 or £10,000 each.. If they are not, really capable men, and their salary is £2,000 per annum each, they can easily cause the country ‘ to lose that amount in two months. If they are well qualified, they can save the amount of their salaries, whatever it may be, by careful and competent management. Therefore, I hope that the question of the salary to be paid will not stand in the way of securing the very best men who are available. There is in Australia a great notion of paying small salaries. A bigger mistake could not be made. The salaries paid to men occupying positions similar to this in private life are much greater than the Commonwealth Government will be. prepared to pay to the men whom they place in charge of the Commonwealth Shipping Line. The salaries that are being paid to-day to responsible officers of the Shipping Line are an absolute disgrace to the Commonwealth. I hope that that practice will be altered, and that in the future the salaries paid will be commensurate with the responsibilities and the qualifications of the men who are appointed. I regret that such large powers are proposed to be given to the Board, and that such large’ interests are to be handed over practically without any check or control over them. Just as I recognise the necessity for appointing this Board, however, so I recognise that it will be impossible for us to go only half way in - the matter. I can see no way of achieving the result which we are all anxious shall be achieved, other than by vesting in the Board the powers which the Government intend to give them. I am compelled to agree to that provision, as I am unable to see how these men will be able to carry out their duties unless they have absolute control over everything appertaining to the Commonwealth Shipping Line. The Bill provides that after the profits reach a certain amount they shall be paid into the Consolidated Revenue. I hope that the Government will not put a finger on the profits of this Line. It is a very bad practice to allow the Treasurer to take money from public utilities, and place it into the Consolidated Revenue. The same objection can be urged against this proposal that can be urged against the manner in which the earnings of the Postal Department are dealt with. The only way in which profits should be taken from the Commonwealth Line is by an appropriation of Parliament. After an adequate sinking fund has been provided and a sufficient sum has been set aside for the proverbial rainy day, the Treasurer should obtain the consent of Parliament before he appropriates any of the profits.
– The Treasurer will have to obtain the consent of Parliament before he can do so. Parliament will have absolute control.
– I have read very carefully the clauses to which I object, and I have come to the conclusion that when the profits exceed a certain percentage they can be automatically appropriated by the Treasurer. I hope that I am wrong. If the Treasurer adopted the usual practice, these moneys would be too easily taken over by the Treasury. The matter should be dealt with by special legislation in order to afford members of . Parliament the opportunity of properly discussing it. It is said that the Line will be removed from political control. I hope that it will not be. If, at any time, I feel it to be my duty to criticise the Commonwealth Shipping Line in this Parliament T. shall regard myself as having a perfect right to do so. This Line is still to be the property of the’ people of Australia, and I shall never agree to relinquish my right to criticise it publicly, when I believe it necessary to do so. As long as that is the rule I do not think it will be possible to say that the Line is free from political influence, any more than are the railways or other public utilities. Although I do not approve of some of the provisions of the Bill, I support it as a whole, and wish the Board and . their enterprise a very successful career. ‘
. -I am exceedingly grateful for the very fine spirit which has been exhibited in the discussion of this measure and - to honorable senators opposite especially - for the very considerate manner in which I have been treated’ in handling this, my first, Bill in the Senate. At this very late hour of the night I think I shall best meet the convenience of honorable senators by asking leave to continue my remarks tomorrow morning.
Leave granted; debate adjourned.
Senate adjourned at 11.28 p.m.
Cite as: Australia, Senate, Debates, 19 July 1923, viewed 22 October 2017, <http://historichansard.net/senate/1923/19230719_senate_9_104/>.