2 August 1945

17th Parliament · 3rd Session

The President (Senator the Hon. Gordon Brown) took the chair at 10 a.m., and read prayers.

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Senator COOPER:

– I present the eighth interim report of the Social Security Committee.

Ordered to he printed.

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Motion (by Senator Keane) agreed to -

That leave be given to bring in a bill for an act to amend the Pharmaceutical Benefits Act 1944.

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DISCHARGE of motions.

Motion (by Senator Keane) agreed to -

That the following orders of the day - Government Business- !be discharged: -

No. 3.- The War- South-West Pacific- Report by Acting Minister for the Army - Resumption of debate on motion to print paper.

No. 4. - Full employment in Australia - Government Policy - Resumption of debate on motion to print paper.

No. 5. - Commonwealth Disposals Commission - Review of activities - Ministerial statement - Resumption of debate on motion to print paper.

No, 8. - Man-power - Ministerial statement - Resumption of debate on motion to print paper.

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Second Reading

Debate resumed from the 1st August (vide page 4823), on motion by Senator Cameron -

That the bill be now read a second time.

Senator FOLL:
Acting Leader of the Opposition · Queensland

We listened to a most remarkable speech by the Postmaster-General (Senator Cameron) when he moved the secondreading of this hill last night. The greater portion of his speech had little reference to the bill itself, and consisted mainly of an outburst of spleen against private companies engaged in civil aviation in Australia. This measure has been introduced for the purpose of carrying one step farther the socialization policy of the Government. In August, 1943, the late Prime Minister, Mr. Curtin, during an election campaign, made a broadcast in Perth in which he made the following pledge to the people of Australia : -

They talk about socialization. I have this to say: That the Commonwealth Parliament has no power to socialize any industry. I say that my Government has not socialized any industry. I say, further, that my Government will not, during the war, socialize any industry.

The reason for the pledge was obvious. There were many people in Australia prepared to support the Curtin Government as a war-time administration who were deterred from granting that support because they knew that the general policy of the Labour party was that of socialization.. This the then Prime Minister well knew, hence the pledge given by him. As a political leader, the late Prime Minister was respected for his sincerity and honesty and the people accepted the pledge. In those circumstances thousands of Australians who would never otherwise have voted for the Labour party were prepared to vote in its favour. To the credit of the late Prime Minister, it should be said that, during his term of office, the pledge was respected, Now, upon his decease, one of the first acts of the Ministry is this bill to nationalize interstate airlines and thus dishonour the pledge upon which the party was elected to office.

Senator LARGE:

– The bill was mentioned months ago.

Senator FOLL:

– Its introduction was first mentioned when the late Prime Minister was not taking an, active part in the administrative affairs of this country. That alone is sufficient condemnation of the bill. When a party is elected to office it takes upon trust the destinies of the people. Pledges given to the people for the securing of that trust must be sacrosanct; otherwise, government of the people by the people as we know it and as we have always known it becomes a myth, indeed a mockery. If the Government is desirous to enact this legislation, it should secure a mandate from the people ; its conduct in seeking to enact this legislation without a mandate and, indeed, in dishonouring a pledge given to the people is nothing more or less than acting fraudulently towards the electors.

The second reason why the bill stands condemned is that it is being enacted in defiance of the wishes of the people as expressed in two referenda, the last one held ae recently as twelve months ago. It is nonsense for the Government to attempt to draw such fine distinctions as to say that the bill relates only to interstate airlines and to claim that the Government has always had power to do that. No such fine distinctions were contained in the referenda proposals relating to air transport. What the people understood was that they were being asked to grant the Government a power to do the very thing which the Government is now doing -nationalize airlines. They rejected the proposals. When this bill or the possibility, of its being enacted was first announced to the people, their reaction was not to consider fine distinctions ai to the powers of the Parliament. Their opinion was expressed quite clearly. The people voted “ No .”. How can the Government do this? No government prepared to pay the slightest respect to the wishes of the people of Australia would contemplate the enactment of this legislation. The Postmaster-General, in his secondreading speech, amply demonstrated that the Government in introducing this bill has had no regard, not only for the wishes but also for the interests of the people of Australia. One of the Labour party’s planks is socialization of industry, and the existence of that plank is .obviously the only reason for the introduction of the bill. Some person or persons in the Labour party appear to have reached the conclusion that the time is ripe for the introduction of a socialist programme in defiance of the people and at whatever the cost to the people.

In the Postmaster-General’s secondreading speech Australian National Airways was singled out for a most bitter attack. Indeed, the bitterness of the attack is equalled only by its injustice and disregard for the truth. What did the Postmaster-General say? In relating historically the origin of this company, he made the following insulting and completely untrue statement: -

When it became apparent that public expenditure had made the field of civil aviation profitable for the investment of private capital, the shipping interests - one of the most powerful monopoly groups in the countrydecided to kill two birds with one stone. They decided to extend their profit-making holding! and at the same time prevent the new form of transport from endangering their vested interests by competition.”

What is the truth? In 1935, Holyman Airways Proprietary Limited was operating between Tasmania, Victoria, and New South Wales. Adelaide Airways Limited owned the east-west run. The then Postmaster-General was anxious to arrange an inter-capital service for the carriage of mails. He expounded the potentialities to these companies and as the result of discussions with him. and to implement the objectives of the Commonwealth Government, the two companies combined to form Australian National Airways, and to establish an inter-capital mail service which the Commonwealth, in the interests of trade and commerce generally, so badly needed. It fell to the lot of the company thus formed to set to work to build up an air fleet new to Australian conditions, and capable of effecting the services required, and in the face .of formidable difficulties, to establish a ground organization capable of servicing the air fleet and providing all requisite facilities having regard to the conditions operating in Australia. Tremendous expenditure was incurred and heavy losses were sustained, but these were necessary in the pioneering of a new form of transport. Indeed, the fact that the company itself bore the very heavy losses incidental to its- establishment is probably without precedent in any other country. It is far from the truth, to say that when Australian National Airways commenced operations public expenditure had made the field of civil aviation profitable as the Minister has claimed, that I challenge the Minister to table a statement of the public expenditure which had been undertaken by the year 1936 when Australian National Airways commenced operations. Those figures are readily available to the Minister, and will reveal that the amount of expenditure was ludicrous. I challenge the Minister to go further and table the figures of public expenditure upon civil aviation up to the date of the outbreak of war in 1939. Those figures will also reveal that expenditure was ludicrous, and that civil aviation was, in fact, starved. Indeed, until the outbreak of war the estimates show that no meteorological services were rendered to the company. Such services were instituted only for the Royal Australian Air Force and having been established they were, of course made available to civil aviation. The one consolation which civil aviation has is that the Government charges it with the whole of the cost. As an indication of the assistance rendered to civil airlines by the Government and of the “huge” public expenditure, I point out that even the radio beacon service - the service most essential to civil aviation - had to be pioneered by private enterprise. The cost of pioneering was a responsibility undertaken by Australian National Airways and Amalgamated Wireless (Australasia) Limited.

In a further attack the Minister referred to a number of companies which had been “ absorbed “ by Australian National Airways. That statement is not true. Australian National Airways has, in fact, amalgamated with only one other company - Airlines of Australia Limited. The reason for the absorption was simple: In Airlines of Australia Limited the majority of the shares, namely, 70 per cent., was owned by a foreign company. Australian National Airways bought out this foreign interest to provide a purely Australian ownership, and subsequently, with the obvious purpose of providing facility of operation, amalgamated with the company. The statement that numerous companies had been absorbed is nonsense. For example, two of the companies said to have been absorbed are Tasmanian Aerial Services Proprietary Limited and Holyman Airways Proprietary Limited. The truth is that after a few years of operation, Tasmanian Aerial Services Proprietary Limited changed its name to Holyman Airways Proprietary Limited, and Holyman Airways Proprietary Limited at the request of the Commonwealth Government, as I have already said, amalgamated with Adelaide Airways Limited in forming Australian National Airways. In the Minister’s estimation, therefore, Holyman Airways Proprietary Limited appears to have twice performed the remarkable feat of swallowing itself. I hope that the Minister does not really expect us or the people of Australia to believe that. The story is the same in respect of the other companies referred to by the Minister.

His speech had other strange features. He emphasized that for a considerable period of the Pacific war Australia waa a major operational base, and he argued that, therefore, the Government was compelled to provide, at great cost, facilities of all kinds in the form of airfields, landing strips, &c, throughout the Commonwealth. It is true that, with the aplomb of a “ Mandrake “, in another part of his speech, he debited all that expenditure to 2iivil aviation, and claimed, that it had been expended on behalf of the airlines, thereby constituting a reason for the acquisition of those lines. Are we expected to believe that, because an airstrip had been made at some remote point in the “ never never “ for defence purposes, the Commonwealth now proposes to operate an airline service to that strip ? Yet that isi implied by the Minister’s speech. Air services will be fashioned to fit the facilities which came into being for the exigencies of the war. It sounds more like a joke than a sober exposition of governmental policy, but it is not the cream of the joke for under this: bill the Government is seeking power to operate only interstate airlines, so that by no stretch of the imagination could the Government utilize these defence facilities. It will operate where the civil airlines at present operate. In the light of this consideration, the whole of the argument of the Minister in regard to defence expenditure falls to the ground.

The next peg upon which the Minister attempted to hang the bill was, of all things, the British White Paper. I was astonished to- hear the authorities quoted by the Minister. He quoted the remarks of noble lords of England, and included in his authorities a prominent marquis. But his final authority waa an extract from the Sydney Morning Herald. It is extraordinary how the Minister quotes from that journal when it suits his purpose, although on other occasions he does not fail to criticize it. That White Paper postulates that the shipowners should, play a major part in the development of commercial aviation - the ship-owners who, in another part of his speech, were castigated by the Minister for daring to give to Australia an air service which the Government admits is the equal of any in the world. That he entirely misapplies the quotation which he makes is perhaps only to be expected. The extract from the Sydney Morning Herald expounds the desirability of regulated competition as against free competition. Regulated competition has been the policy of Australia and of the United States of America for very many years.

Earlier in my speech Senator Large interjected that the Government was tuning in to Great Britain. I remind the honorable senator that the present Prime Minister of Great Britain, Mr. Atlee, and other members of his Government subscribed to the White Paper, which postulates a scheme of civil aviation in which shipping companies will play a major part. Finally, the Minister quoted as his authority a gentleman by the name of Lissitzyn. This gentleman who knows nothing whatsoever about mail contracts made between Australian airline operators and the Commonwealth Government is quoted as an authority to establish that the mail payment made to Australian airline operators has no relation to the value of the services rendered, and that those payments really represent a subsidy. That is most extraordinary. One would think that if the Commonwealth Government really believed that this was so, it would produce records from its own Civil Aviation’ Department which, after all, negotiated the contract rather than rely upon a foreign economist, if he is one, who knows nothing of the facts and who would no doubt be astonished to hear the Government’s use of his words. Of course, the reason is clear. What Lissitzyn said was that mail payments can represent a subsidy. What the records reveal - I refer to a letter from the Civil Aviation Department - is that the position in this country was that the three parties concerned, the civil airlines, the Postmaster-General’s Department and the Department of Civil Aviation agreed, that the basis of payment for mail should be value for services rendered. Surely, it is a shabby thing for the Government to seek to utilize without permission, the statements of a foreign economist, who does not know the true position, to deny its own records.

The next direction in which the Minister looks for support is the ‘ TransCanadian Airways. In this he can find only cold comfort because the ‘Canadian Government never attempted to confiscate lines established by private enterprise. The truth about Trans-Canadian Airways is this: The private airlines operated only feeder services from the north to the south where contact was made with the Canadian Pacific Railway Company. They never attempted to develop a transcontinental route. As a result a strange thing developed. The Canadian Pacific Railway Company follows a line across Canada close to the border of the United States of America and with the development of the railways large cities have developed at certain points. For example, Vancouver, Calgary, Regina, Winnipeg, Port Arthur, Ottawa, Montreal and Quebec. The development of these cities inside the Canadian border has been to some extent duplicated by the development of corresponding cities on the United States of America side of the border. For example, Seattle, Helena, Bismarck, Duluth, Saint Paul, Chicago, Pittsburgh, Buffalo, Boston, Portland. American airlines in exchange for the right of Canadian airlines to enter the United States of America obtained permission to enter Canada and very shortly, a most undesirable situation developed. Canadian transcontinental passengers, for example, from Quebec to Calgary preferred to go by air but there were no Canadian airlines to take them and the Americans quickly developed substantial traffic carrying such people, for example, from Quebec to Chicago and thence to Calgary. The Canadian Government found there was a mass of purely trans-Canadian traffic being thus carried through the United States, and decided that something must be done about such an undesirable situation. But it did not set up a national line. It invited the private operators to form a company to operate the route. When the companies had made arrangements the Canadian Government stipulated that it required the nomination of three members on the board. The private companies objected or, at least, the Canadian Pacific Railway Company, the largest company objected, upon the grounds that the Government had no financial interest in the corporation. The Canadian Government then said it would form a statutory corporation in co-operation with private enterprise and the Canadian Pacific Railway Company was offered 49 per cent, of the stock and wa3 to have been the operator. The Canadian Pacific Railway Company objected to this on the ground of governmental control, and. it was only then, when it was apparent that there was no basis on which the route could be operated by private enterprise, or a mixture of private and governmental enterprise, that the Government formed its own airline. When the Minister refers to Trans-Canadian Airways, I would say to him, first, that the Canadian Government was never prepared to confiscate a private enterprise which has successfully pioneered its route; and, secondly, that the Canadian Government was not prepared to nationalize its transcontinental route until the prospects of a governmental and private enterprise service had failed. This Government has never shown itself prepared to follow the example of the Canadian Government and, therefore, cannot with propriety use the Canadian Government’s action as an example.

The Minister made little reference to actual Australian conditions, probably because he is aware that no such references can support a case for nationalization. However, he made a comparison of the charges for freight, passengers and air mail for the purpose of enunciating a most extraordinary argument. He quoted these figures of charges for air carriage: Freight, .014d. per lb. mile; passengers. 0157d. per lb. mile; air mail, .0425d. per lb. mile. The air-mail figure is, of course, much larger than the other figures and this, he said, points to an irrefutable conclusion that carriage of mails is not based on the value of the service rendered but represents a large measure of subsidy. The underlying assumption which we are expected to follow is that there are no more onerous circumstances attached to the carriage of mail than to the carriage of freight or passengers and, therefore,, the comparatively high rates for mail matter points to a subsidy. In the light of the facts known to the Government, this argument is, to say the least of it, shabby. The Minister knows that, in fact, attached to the mail contract are conditions most onerous which do not apply in respect of freight or passengers. Here are some of the conditions -

Under clauses 2 and 14 the company is bound to make the flights called for under the mail schedule irrespective of the amount of mail offered and irrespective of -whether any loading at all is available to make the trip payable.

Under clauses 9 and 10 the company is bound to observe the time-table agreed upon and under the latter clause it must delay the plane up to 30 minutes for arrival of a connecting mail carrier.

Under clause 14 the Commonwealth grants the company free use of aerodromes.

Clause 15 provides that the company may not employ a pilot, ground engineer, navigator or radio operator unless’, he undertakes to enlist and serve if required as a member of the Royal Australian Air Force.

Under clauses 18 and 21 the company must carry all mails offered to the exclusion of .passengers and freight and under clause 19 the company must bear full responsibility for mails.

In the event of inability to complete a trip, the company must at its own expense pay for the most expeditious conveyance of such mails by air or surface transport to the proper destination. That is stipulated in clause 24.

Under clause 25 the company must at certain places convey the mails to and from the aerodrome to the post office and under clause 26 . the company must instruct its employees in post office procedure.

The company is prohibited under clause 27 from allowing concession fares and under clause 28 (i) is hound to carry free of charge certain members of the Civil Aviation Department.

The company is bound to supply free accommodation to any civil aviation employee travelling on duty up to an amount of 2£ per cent, of the contract payments for carriage of mails made to it by the Commonwealth. For any excess, the company must allow a concession of 15 per cent, on single fares and 10 per cent, on return fares. Provision in that regard is made in clause 28 (iv).)

The company must grant a concession of 10 per cent, to each member of the Commonwealth Parliament and, in the case of a Minister, to one member of his personal staff as provided in clause 28 (v).)

The company is also required to grant priority of booking to Commonwealth Ministers.

It will thus be seen that the payments for the carriage of mails include payments for the observance of extremely onerous . conditions and that comparison with American payments is, on that ground alone, out of the question. The payment includes payment in many cases for carriage of mails from airport to post office, a service not rendered in America. In order to make a fair comparison, the mail payments would require to be reduced by the volume of free travel compulsorily provided for members of the Civil Aviation Department and the concessions obligatorily imposed in relation to other civil aviation employees and members of Parliament, &c. The foregoing clauses, with the obligations they entail, explain why there must be a great disparity between freight rates, passenger rates and mail rates.

The Minister also compared the poundmile rate in America with the poundmile rate in Australia, and suggested that that indicated that the mail charge in America was lower than that in Australia. This is quite untrue. The pound-mile rate is merely a method of calculation. It is one that must contract where mails are carried long distances and expand where mails are carried short distances. The real criterion of cost is the payment per pound for originating mail. Let me give an example. For the carriage of 1 lb. of mail for 20 miles, a payment of Id. per pound-mile might be reasonable. It would represent a payment per .pound of mail of ls. 8d., but to carry that 1 lb. of mail 2,400 miles the payment of £10 per pound would be extortionate, indeed, absurd. In America the pound,mile rate is lower because the average distance over which mail is carried is far greater than the average distance over which mail is carried in Australia. Hence the lower American rate and hence the adjustments to still lower rates that the Minister has spoken of, which correspond to increases in the average distances over which mail is there carried. The vital fact is that aa the result of the application of the poundmile rate in Australia, payment per pound of originating mail is 4s. 4d. That is the cost to the Government- The cost to the Government of the United States of America is nearly 50 per cent, higher, and I challenge the Minister, who has questioned the veracity of the Australian airline operators, to produce to the Senate the figure that he has on record as the payment per pound of originating mail in America. I ask that he do this so that the public may .be aware that the Australian rate is lower, as the operating companies have stated.

The Minister in making a ‘further attack on Australian National Airways, stated that its average payment per pound-mile is over half as much again as that paid to another company operating a poundage contract. I know to which company the Minister referred, but I do not wish to mention it by name. To achieve this, the Minister refers to a company operating with a pound-mile rate but on the basis of a minimum and a maximum payment. For the particular .period that he has chosen, an artificial inflation of the mails for war purposes has taken the payment that would he due under the pound-mile rate beyond the maximum. The payment, therefore, stops at the maximum and this maximum payment is then calculated on a pound-mile basis. It is an untrue and unreal calculation. Lt is sufficient condemnation of the Minister’s approach to this subject to point out that in another period where the carriage of mails had not reached the required minimum payment of the minimum would entail, if the Minister’s calculation could be adopted, payment at a pound-mile rate three or four times that of Australian National Airways Limited. Once the maximum rate has been paid, irrespective of the quantity of mail carried, the company, under its contract, cannot get more than the maximum amount. Consequently, with the present inflation of mails, the poundage rate is very low, but once the abnormal inflation of mails ceases, the company that he has used as an example will show a higher rate on the carriage of mail than is shown by Australian National Airways.

Having thus examined the various reasons adduced by the Government for the bill, I have demonstrated that not one of those reasons will stand up to even the most cursory examination. The truth is that this bill represent® socialization for the sake of socialization, and it shows a complete disregard of the interests, welfare and the wishes of the people. In this regard, let me draw attention to the most remarkable and most appalling feature of these proposals. In the House of Representatives, the Prime Minister (Mr. Chifley), speaking of this bill said -

This is largely a post-war measure because the organization associated with it cannot work for some time. That will give the people an opportunity next year to judge these things.

If that means anything, it means that the commission will not operate until, at the earliest, after the general elections next year. What is to happen in the meantime? The Japanese war is drawing to a close. Aircraft essential for our post-war operations should be secured now. Civil aviation should be ready to implement the plans for expansion that it has developed. It may be expected that aircraft so necessary will shortly become available. The aircraft, though available, will be in short supply. Australian companies, such as Australian National Airways Limited, have a worldwide reputation, and, on that reputation, have secured priority of orders with leading airline organizations throughout the world. If the new planes that become available are not obtained, they will be secured immediately by other countries, and Australia will lose its chance to startoff on an equal footing with other countries. Australian airlines and the development of civil aviation are to stagnate for nearly two years. The civil airlines, which are under thread of confiscation, surely cannot be expected to make huge commitments in the way of expansion. The Government, in the absence of the proposed commission cannot expand its policy; so the position is obvious. Within the next eighteen months, we may expect our greatest degree of rehabilitation. The Government is preparing for it. The Reestablishment and Employment Act is on the statute-book. We have just passed a Commonwealth Public Service Bill relating to employment. The Prime Minister has just announced a substantial release of Army personnel. Air Force personnel is similarly to undergo a reduction. What of the men in the services seeking employment in civil aviation, which, on the Government’s own admission, should provide employment for vast numbers under most acceptable conditions? That avenue is to be closed. The companies, under threat of confiscation, cannot expand and take in the persons that they would be willing to employ. The commission will not be in existence and, therefore, cannot operate. The men released will have to find jobs quickly. They will be deprived of the opportunity that should be afforded to them of seeking their destinies in the commercial aviation field.

Under normal conditions, civil aviation would develop in this country as in other countries, but, with the threat of confiscation before them, airways operators, both interstate and intra-state, will have to throw overboard their plans for expansion. The companies have already submitted to the Government proposals to bring all parts of Australia in touch with each other on the basis of a 24-hour mail delivery service. Plans for a station-to-station service outback will be cast aside. The Government will not be able to operate outback services because, under the Constitution, it has no power to handle intra-state air transport. The inland services are the services that generally are unprofitable. It is the coastal services that are remunerative and the profits thereon offset the losses on the inland services. The Government intends to take the plums - the coastal services - and leave the outback without air-mail services. The outback is the part to which the greatest attention should be paid. No other country has taken such a stupid step in connexion with air services as that which the Government contemplatesin this legislation. Great Britain, Canada and the United States of America have turned their attention to a greater expansion of air-mail services, but for twelve or eighteen months in Australia all expansion will be stifled, because there will be a complete deadlock. The organizations that operate the airlines will not take this legislation lying down. They will fight. Meanwhile, they will not be able to expand. Neither will the Government, because its power to do so will be challenged. This legislation undoubtedly will become the subject of prolonged litigation, and during that period, Australia will lose opportunities for the development of civil aviation. As I said earlier, priorities have been obtained by private airline operators for the purchase of the most modern passenger and freight carrying aircraft in the world. These priorities may bie lost because of this foolish and damnable action by the Government. The Postmaster-General linked up the construction of military aeroplanes in this country with the development of civil aviation. Actually there is no comparison between fighting aircraft and modern passenger and freight carrying aeroplanes. If the Minister makes inquiries in connexion with what is known as the Lancastrian aircraft he will find that the production of this aeroplane is merely a temporary expedient and that there Ls no real relationship between defence and passenger carrying aircraft.

I shall deal now with the position of the employees of private airline organizations which are to be taken over by the Government. Australian National Airways alone employs more than 2,000 people. Qantas Empire Airways Limited also has a large number of employees. These organizations have their own superannuation schemes, and when this measure becomes law and those employees are brought on to the Government payroll, they will lose superannuation benefits which in the case of one major company at least, aTe twice as good as those provided by any Government superannuation scheme operating at present. Many employees of the private airline companies have devoted many years to the building up of this industry in Australia.

The Postmaster-General dealt with the question of monopolies. I ask him where does a monopoly exist in this industry to-day? There is no monopoly. Any person or organization may obtain the permission of the Civil Aviation Department to operate an airline service in competition with existing services. The only monopoly in this industry is that which the Government proposes to set up by this legislation. This bill will deprive any private airline operators of the right to carry on an airline service in opposition to the government service. This Government did. not make any attempt to assist in the pioneering work of this industry. The Postmaster-General knows quite well that there is no monopoly in air services- to-day.

I remind honorable senators again of the experience of this country in regard to State enterprises. Mention has been made of the history of the Australian Commonwealth Line of Steamers. That is a matter, which, I submit, -will not bear investigation. As a member of the Public Accounts Committee I participated in an inquiry into the operations of that line. Evidence showed that there were more strikes and hold-ups among employees of the Australian Commonwealth Line of Steamers than in the rest of the shipping lines put together, lt was common to see vessels of that line tied up owing to strikes> whilst the Inchcape ships plied to and from this country freely, carrying passengers and cargoes which might otherwise have been carried by the Australian Commonwealth Line. The line did not make any profits. In fact, the Public Accounts Committee found that ships of the line were being sold gradually so that the rest of the fleet could be kept going. No modern vessels were added during the period of its control by the Commonwealth Government. The line was merely held together until its operation became such a drain on the taxpayers of this country that they were glad to get rid of it.

Queensland has had bitter experiences with State enterprises. One of the reasons why Queensland is the most heavily taxed State in the Commonwealth is the huge losses incurred in days gone by by State enterprises established by Labour administrations. Millions of pounds were lost on State undertakings. Heavy losses were incurred on State cattle stations; State butcher shops had to be closed because they were a failure; the fishing industry also failed under State control, as did the Government timber mills. Subsequent administrations were only too willing to get rid of these undertakings. More important still is the fact that these enterprises were sold eventually by Labour governments which were sick of the sight of them. Although there is no Upper House in the Queensland Parliament, and full legislative power has rested with Labour governments for many years, not one of the State enterprises has been re-established Only yesterday I brought to the notice of the Prime Minister the fact that another State enterprise was in process of formation. I cite this case to shaw the dangers of Government taking over ventures of which they know nothing. Recently, the following statement was issued by the Department of Post-war Reconstruction concerning the plywood industry: -

At Bowden-street, Alexandria, New South Wales, the Commonwealth has erected a building and installed plant at cost of £68,000.

The PRESIDENT (Senator the Hon Gordon Brown:

– Order! Whilst the honorable senator is entitled to make passing reference to government enterprises, he is not in order in dealing with the plywood industry.

Senator FOLL:

– I bow to your ruling, Mr. President. The statement to which I have referred indicates that it is proposed to install a plywood-manufacturing plant in a building which cost £60,000. The plant itself is to cost £68,000, despite the fact that equipment which would give the same output was sold in Sydney recently for £7,500. This is yet another example of the manner in which the need for a. close scrutiny of public expenditure is being totally disregarded by this Government.

This bill is part of the Government’s socialist programme. It has been introduced in defiance of a pledge given to the people. Its effect will be to throw into chaos al] civil aviation operations in this country. We on this side of the chamber are few in number at present, hut we make our most vigorous protest against the passage of this hill. We shall vote against it at all stages, although we realize that the Government has the required numbers - regimented numbers at that - to ensure its passage. It is a tragedy that the Government should interfere with one of the most progressive industries in this country.

Senator McKENNA (Tasmania) upon the speed and brevity of his utterances, and in respect of the latter I hope to emulate him. A Convention for the Regulations of Air Navigation was signed in Paris on the 13th October, 1919. Australia was a signatory to that Convention. Later, in 1920, the Air Navigation Act was passed in this country, empowering the Governor-General to make regulations giving effect to the provisions of the convention, and also to provide for the control of air navigation in its interstate and overseas aspects, and also within a territory.

Senator Herbert Hays:

– Subject to the Constitution.

Senator McKENNA:

– Yes. Pursuant to that act, which was amended in 1936, regulations known as the Air Navigation Regulations were promulgated. Those regulations provide for the registration of aircraft, tests as to their air-worthiness, control of the competence of pilots, provisions for the safety of machines, and air navigation generally. They, too, are the regulations under which any organization desiring to engage in public air transport must be registered or licensed.

I propose to review the broad provisions of this bill from their constitutional base, and I now approach the consideration of the bill- from that angle. This measure proposes to set up an Australian National Airlines Commission for Australia, to consist of five commissioners. It will be mandatory on the Commonwealth to establish airline services for the transport of goods and passengers by air for reward in three different categories, namely, interstate, between a State and a Territory, and within the boundaries of a Territory. That is set out in clause 19. The Commonwealth is also empowered, but not obliged, to set up overseas air services with the approval of the Minister. It is reasonable that the commission should not have absolute discretion in a. matter which might involve international relations. Accordingly, the approval of the Minister is , required in that respect. There cannot be the slightest doubt about the power of this Parliament to set up such a commission and to impose upon it the duties that I have indicated.

Coming now to the constitutional basis for that provision I refer, first, to section 51 (i.) of the Constitution. Pursuant to that provision, the Commonwealth Parliament is given power with respect to “ Trade and commerce with other countries, and among the States “. I submit that aerial navigation and thiprovision of an aerial service are at least incidental to interstate trade and commerce if, in fact, they do not form a pari of such trade and commerce. I refer also to section 98 of the Constitution which reads -

The power of the Parliament to make laws with respect to trade and commerce extend? to navigation and shipping, and to railways the property of any State.

I direct attention particularly to the word “navigation” in that section. It is wide enough to include not only sea navigation, but also navigation by air. I refer also to section 51 (xxxix.), under which the Commonwealth is given power over matters incidental to the execution of any power vested by the Constitution in the Parliament. Pursuant to those three provisions, there can be no question of this Parliament’s power to regulate in any way interstate and overseas air navigation, subject always, of course, to the Constitution, and particularly to section 92 of the Constitution Act. At a more appropriate time T shall advert again, to that matter.

Dealing with the Territories service and the constitutional base for what is to be done pursuant to this bill, I refer to section 122 of the Constitution which reads -

The Parliament my make laws for the government of any territory surrendered by any State to and accepted by the Commonwealth, or of any territory placed by the Queen under the authority of and accepted by the Commonwealth, or otherwise acquired by the Commonwealth, and may allow the representation of such territory in either House of the Parliament to the extent and on the terms which it thinks fit.

It will be seen that the fullest law making power is conferred on this Parliament in relation to anything within the confines of a Territory. Dealing with the third aspect, namely aerial transport between a State and a Territory, I have only to point out that the provision in section 92 - that interstate trade and commerce must be free - is confined solely to what takes place between one State and another. It has no reference whatsoever to aerial transport or to trade or intercourse of any kind between a State and a Territory. Accordingly, in those respects I submit that there is a plenitude of power for this Parliament to embark on the activities which I have mentioned.

Under clauses 21 and 42 of the bill the commission is given wide power to acquire property, including aircraft, for its own purposes. Section 51 (xxxi.) of the Constitution confers on the Parliament power to make laws with respect to-

The acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament nas power to make laws: . . .

The provision for compensation . is contained in Part IV. and I submit that the bill contains a most complete and just charter for compensation. It is comparable with the National Security Regulations which deal with compensation in respect of property acquired in war-time, which have already survived the scrutiny of the High Court. Honorable senators who have studied the bill will know that if the authorities do not agree as to the amount of compensation to be paid they may appeal to a compensation board. If either party is dissatisfied with the decision of that board, the matter may be referred to the High Court of Australia. “Whether or not the provisions of the bill relating to compensation are just, it will be seen that the High Court has ample power to ensure that justice shall be done. I point out that there is no compulsion on the Commonwealth to acquire property, including aircraft, and that in any event that power can be exercised only on the condition that justice in the matter of compensation is done to the people from whom property Ls acquired. The provision in the hill whereby the Treasurer may make available the sum of £3,000,000 has ample constitutional authority in section 81 of the Constitution.

Part IV. of the bill raises a more interesting constitutional position because it deals with the suspension of licences which are already in operation, and it controls in some way the issue of new licences. Clause 46 provides that where the commission has established an interstate or territorial air service any private airline licence that is in operation for public transport for reward will be suspended, but only for so long as the commission in fact provides an adequate service. An adequate airline service is defined in the bill. “What constitutes an adequate service is a question of fact, and those facts can be determined by an appropriate Court. . I put the position in relation to clause 46 that if one of the present private operators of airline services were to consider that the commission was not providing- an adequate service on any line it may enter the field under its suspended’ licence which. would1 then revive; but if that company were wrong in considering, that the commission was not providing an adequate service it would, of course, have to take the consequences of illegally acting. But the point I make is that there is no exclusive right in the commission to operate aerial services. Certain licences, as I have indicated1, will be more or less suspended and- will remain in suspense only while the commission is providing an adequate service. If the commission fails in that particular then the private operator, under the suspended licence, may enter the field.

Clause 47 adverts to the circumstances” in which new licences may be issued. Under the Air Navigation Regulations, the licensing authority is prohibited from issuing new licences, interstate, or between States and territories, while the commission is providing adequate services in those fields. But if the commission fails in the duty imposed upon it under this measure to provide adequate services, the licensing authority may issue new licences. So, my second point is that, again, the power and authority of the commission is not exclusive. I pass to a consideration of a third aspect, showing that there is- an even wider field in this respect. Nowhere in clauses 46 or 47, or anywhere else in the bill, is there anything to prevent a private person from transporting himself, his goods, friends, employees or family by air between States, or between a State and a territory. The only condition is that he may not so transport for reward. That field is not touched in any way whatsoever by this hill; and, with what changes that are necessary, the same thing applies to companies and firms. They, if they wish, may transport the whole of their interstate produce by air without reference to the commission at all, subject to their complying with the requirements of the Air Navigation Regulations and to making no charge of any kind. I am certain that Senator Nicholls would never have forgiven the Government had1 it in this bill prohibited private transport between States, and by so doing prevented him landing in Canberra in the course of years to come from his helicopter. In that case the honorable senator might even have left the government benches. My own belief is that air transport in this country, particularly of goods, is in its veritable infancy, and that in the very near future we shall find that many firms and corporations in this country will provide their own private air services especially for the transport of perishable goods ; and we shall see trade, particularly interstate trade, developed and revolutionized by that activity. Otherwise, we should show a lack of vision and lack of faith in the progress and enterprise of our people.

Let me recapitulate the three points showing that the commission will not have a completely exclusive licence. First, there will be those licences that are in suspense, but only while the commission provides adequate services to the people of Australia; secondly, new licenses may b<* issued to new bodies if the commission is not carrying out the duty imposed upon it by this measure; and, thirdly, there is the complete and wide field of private persons who may enter into the field of interstate trade transporting themselves, their goods, employees or families without restriction so far as this bill is concerned.

Senator J B Hayes:

– Is the honorable senator certain that those fields will not be taken over?

Senator McKENNA:

– The bill docs not in any way touch a private firm, or company, which desires to transport its friends, employees, or goods interstate, or from a State to a Territory.

Senator Sampson:

– Would they not require a licence in order to engage in such services ?

Senator McKENNA:

– I have already said that one may engage in such services subject to the Air Navigation Regulations which make provision in respect of aircraft, safety measures, and the employment of competent personnel to navigate the aircraft. That leads me to a consideration of the difficult section 92 o( the Constitution, because all powers that are conferred upon this Parliament by section 51 of the Constitution are expressed to be subject to the Constitution ; and section 92 has been the subject of a great deal of litigation which has been of great interest to this Parliament. Section 92 says -

  1. . trade, commerce, and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free.

I put it to honorable senators that for an understanding of that particular section one must see clearly that what th” section is doing is concentrating on thing? primarily rather than upon persons. Th* prohibition in that section against any interference, or impediment, with interstate trade, or commerce, is preventing interference with things, that is, trade, commerce and intercourse, and does noi, primarily at all events - it may do so incidentally - confer rights upon any particular individual in the community. T put the view that the correct interpretation is that the right that is protected by the section is the right of an owner, or vendor, of goods to market them without hindrance, or impediment, in another State. The section does not protect the right of a person to carry on or use any transport agency he chooses. It is provided that trade must flow freely. The same is true of trade, commerce and intercourse between the States. So long as there is no impediment on those things, there is no infringement of section 92. I put it that if there is an adequate service provided for interstate traffic by a commission set up by this Parliament, then, although the individual has no choice or selection, which is not conferred upon him, there is no impediment, or obstruction, to interstate commerce. The channel is wide open, and there is no restriction whatsoever, and, accordingly, no infringement of section 92.

I do not propose to weary the Senate with a long, dissertation on legal authorities but I wish to refer to two cases decided by the High Court, and to one decided by the Privy Council, and to quote brief extracts from those judgments. They will tend to show that section 92 which, in the common view, is exceedingly wide in its terms has, however, certain limitations and restrictions. Honorable senators will know that section 92 binds not only the States but also the Commonwealth. That was decided clearly by the Privy Council in the Jamas case in 1936; but there are cases in the High Court having the approval of the Privy Council which show that section, 92 is subject to all kinds of qualifications. For instance, if one were to take literally the phrase that interstate commerce was to be free there would be no power in a State Parliament to require the registration, or licensing, of motor vehicles which engage solely in interstate trade. But cases in the High Court show clearly and definitely that States may regulate interstate trade within their own borders. I refer first to the King v. Vizzard in 1933 which is reported in Volume 50, C.L.B. That was a case in which a man named Hill in Victoria was engaged in running to transport service from Melbourne to Wagga, Hew South Wales. He was concerned solely with interstate trade. He was not concerned with trade within the boundaries of any one State alone. The acts of New .South Wales at the time required the licensing of all vehicles using a road. This man did not take out a licence in New South Wales. He was prosecuted, and convicted according to the law of New South Wales that required him to take out a licence. He appealed to the Full Court of the Supreme Court of New South Wales. The Commonwealth intervened and had the matter removed to the High Court. The decision of Their Honours was that section 92 of the Constitution did not prevent the State of New South Wales from imposing that restriction and requiring a vehicle engaged in interstate trade to be licensed under New South Wales law.

Senator Sampson:

– Then such vehicles have to be licensed under the laws of two States?

Senator McKENNA:

– That is so. The High Court, by a majority of four to two, held that section 92 did not affect the validity of the State law. As honorable senators will see, there is a clear limit to what is commonly referred to as the exceedingly wide scope of section 92, which uses unusually wide terms providing that interstate trade and intercourse shall he absolutely free. “Absolutely” is a word that is rarely, if ever, encountered in legislation apart from the Constitution. There arc two passages in. the judgment of His Honour, Mr. Justice Evatt, in Vizzard’ s case, that I will read to honorable senators. His Honour says at page 78 -

I think that a State does not infringe section 92 if, having no concern, interest or object in restricting or prohibiting trade between. States, or commerce between States, or intercourse between States, it chooses to organize, regulate or co-ordinate those facilities and services which are provided and conducted within the State as instruments essential to all trade, commerce and intercourse, including interstate trade, commerce and intercourse. Any given organization, regulation or co-ordination may infringe section 02 if it is proved that the State is really directing its authority against commerce or intercourse between itself and any other State, or between any two other States. But it is not enough to show that individual traders or travellers are incommoded or “burdened” in the course of their interstate transactions or journeys by having to obey general State regulations which, in their particular application to individuals, may control and determine the manner and method of their trading or travelling. For instance, it cannot be said that section 92 necessarily prevents the State from monopolizing the service of land transport within its borders. Nor does section 92 necessarily prevent a State from ending all road transport within its borders by adopting the simple if drastic expedient of destroying the roads, through the direct result of such action would be to force all’ traders and travellers, including those trading or travelling interstate, to use, or contract to make use of, the State’s own railway services.

On page 94, there is another very brief reference by His Honour to section 92, in which he says -

Section 92 does not guarantee that, in each and every part of a transaction which includes the interstate carriage of commodities, the owner of the commodities, together with his servant and agent, and each and every independent contractor co-operating in the delivery and marketing of the commodities, and each of hie servants and agents, possesses until delivery and marketing are completed, a right to ignore State transport or marketing regulations, and to choose how, when and where each of them will transport and market the commodities.

One of the results of the contrary view, recently rejected by this court in Willard v. Rawson ( 1 ) , would be to exempt the interstate carrier from the payment of motor vehicle taxation in either of two States, although he makes a very extensive use of the roads of both. The argument rejected in that case assumes that section 92 primarily protects persons, but its real object is to secure the free flow and passage and marketing of commodities among the States and to secure the right of passage of persons from State to State.

His Honour concludes with the significant words -

Absolute freedom is ascribed to trade, to commerce and to intercourse, and is not ascribed to traders or to travellers, considered merely as individuals.

That was reviewed with approval by the Lords of the Privy Council in the James case, which is recorded in Volume 55, C.’L.R. I refer to a passage that I think amply justifies the legislation that we are considering. I am quoting from page 54 of Their Lordship’s judgment -

The Post and Telegraph Act 1901-1923, contains a great number of detailed regulations with reference to the posting, stamping, delivery and so forth, of letters, the transmission of telegram’s, &c, including interstate intercourse. But if freedom is understood in a certain sense, all these matters come within the powers given by section 51 (i) and (v) to make laws with respect to trade and commerce and postal and other services. Section 98 . . .

They are referring to section 98 of the Post and Telegraph Act - of the act calls for special notice; it forbids and makes it an offence subject to specified exceptions to send or carry a letter for reward otherwise than by post. As this provision applies to interstate as well as intra-state correspondence, it is in one sense a limitation on freedom of intercourse, assuming that term to include correspondence and it may thus be regarded as an interference with trade. Whether that is so or not, it is however a limitation’ notoriously existing in ordinary usage in all modern civilized communities; it does not impede freedom of correspondence, but merely as it were, canalizes its course just as “ ‘free speech “ is limited by well known rules of law. Very much the same is true of the Wireless Telegraph Act 1905. Nor can it be fairly said that the Secret Commission Act 1905, interferes with freedom of commerce in any sense in which that term is properly used. It forbids irrespective of any State boundary, objectionable trade practices in interstate trade.

Here is an important passage -

It merely illustrates how the Commonwealth can make laws under section 51 (i.).

That is the one that we are concerned with to-day - with respect to interstate trade and commerce without infringing section 92.

I invite honorable senators to consider the very close analogy between what is done under the Post and Telegraph Act, which forbids the despatch of letters between States except by the Postal Department, and what is proposed to be done under this legislation. The Postal Department prohibits the transport of letters, except through itself, but takes the necessary step to provide an adequate service. Something less than that is contemplated under this bill with relation to the aerial transport of passengers and goods, and I should say that if the Privy Council had this bill under consideration, it would say of it exactly what it said of section 98 of the Post and Telegraph Act in the James case. The only other case that I desire to refer to is the case of the Riverina Transport Proprietary Limited v. the State of Victoria, recorded in Volume 57, C.L.E., at page 337. That is a case in which the company was engaged solely in interstate trade by road. A licence was refused by the transport authority of Victoria. The company appealed against the decision to the High Court, which held that the legislation of the Victorian Parliament was valid, although it amounted to what might generally be regarded as interference with interstate trade. The very interesting position arose that the Chief Justice, Sir John Latham, was one of the majority. I invite the particular attention of honorable senators to what he had to say at page 352. Sir John Latham said -

So also, in the case of transport regulation, the Commonwealth Parliament can legislate with respect to interstate transport.

That is exactly what is being done under this bill. The judgment continues -

Such legislation would be legislation with respect to interstate trade and commerce (James v. The Common-wealth (1 ) ), but wouldnot necessarily t>e restrictive of the freedom of interstate trade and commerce.

Again, what is being done under this bill fits in exactly with what Sir John Latham said there. The Chief Justice further said -

Indeed, the Commonwealth Parliament could pass a statute, limited to interstate transport, on the general lines of the Victorian Transport Regulation Acts.

I remind honorable senators that nobody may operate a vehicle on the roads in Victoria for reward without holding a licence; but there is ample scope for all other people to run vehicles on the roads. There we have an exact analogy with what is being done under this bill. In the course of his remarks in the case of the Riverina Transport Proprietary Limited, Sir John Latham appears to have given his blessing to what is being done under this bill. He further said -

The interstate commission or some other body could be empowered to grant licences in respect of interstate transport. These licences could authorize interstate carrying notwithstanding any State statute or any action of a transport regulation board or other authority under a State statute. Appropriate legislation would be effective by virtue of the Commonwealth Constitution, sections 51 (i), 101 and 109. It is by such means that, when the Commonwealth Parliament is satisfied that the necessity arises, the freedom of interstate trade and commerce can be protected against interference under valid State legislation such as the Transport Regulation Acts.

That concludes my quotations from judgments. There was of course the later case of Gratwick v. J ohnson, dealing with the rail transport of persons between Western Australia and other States. That case was decided against the Commonwealth, but on the ground that the Commonwealth’s action directly prohibited or restricted intercourse between the States. The Commonwealth might easily have obtained a similar result by allowing everybody to travel, but according priorities of say, 1 to 50, or 1 to 100, if necessary. Had the legislation taken that form, unquestionably it would have survived its reference to the High Court.

I say that this measure, in all but a very minor aspect, is thoroughly constitutional, and will survive any attack that may be made upon it. When I say that, I want it to be clearly understood that I am referring to the provisions of the bill now under consideration and not to any other matter.

I pay a tribute to the Minister for Air (Mr. Drakeford), his officers and the draftsman for the very careful course which, in my view, they have steered through the intricacies of the Constitution.

Senator Foll:

– The honorable senator apparently believes that they have been dodging the Constitution.

Senator McKENNA:

–N0. I say that they have been very careful to ensure that they remained within the Constitution. The honorable senator’s interjection does not coincide with my thought on the matter.

I believe that the growth of aviation will be enormous. I am prepared to concede that the airline companies now operating have rendered a very real service to this country. Particularly, I pay a tribute to Holymans Airways Proprietary Limited, a company which has very largely pioneered air services in this country. I give to that organization credit for the efficient manner in which its services have been developed. I also pay a tribute to the Australian people who, in a very brief period, have become airminded. That also is a factor which has contributed largely to the development of air services. However, I believe that we are only at the beginning of the development of air transport, particularly of goods, and certainly of passengers. I believe that air services are a public utility which should be under the control of a body set up by this Parliament and that the time is opportune for the establishment of government control of these services. It is much better that the ‘Commonwealth Parliament should step in now, rather than wait until some time in the future when civil aviation will have assumed vastly greater proportions. This action now, will cause less damage, injury, and heart-burning. I sympathize with organizations such as Australian National Airways Proprietary Limited, which have rendered an excellent service and which may go completely out of existence due to this legislation; but at least they may derive some small satisfaction from the fact that their name will be preserved to posterity, and, I believe, posterity will pay due credit to Australian National

Airways Proprietary Limited as the precursor of Australian National Airlines. If there is a crumb of comfort to be derived from that fact, the private airline companies are entitled to it.

Senator Sampson:

– It is rather a tiny crumb.

Senator McKENNA:

– Yes, but I am generous in handing out anything that I can. There is one point of distinction which I should like to draw between what the commission will have to do under this bill, and what the present airline companies are doing. Clause 24 states -

For the purposes of this Act, the Commission shall be deemed to be a common carrier of passengers and goods and (except as by this Act otherwise provided) shall be subject to the obligations- and entitled to the privileges of common carriers of passengers and goods.

The liabilities and rights of a common carrier cover a very wide field. A common carrier is obliged to carry any goods offered to him for carriage, otherwise, action for damages may be taken against him. A common carrier is responsible entirely for the safe delivery of goods right up to the point of delivery. He is responsible if they are stolen or damaged by negligence, even if there is no negligence on his own part. The only tilings that can absolve a carrier from liability for safe delivery, are an act of God or an act of the King’s enemies. The commission will be required to accept complete responsibility for goods and, under clause 66, it will accept limited liability to passengers. The minimum sum. specified in respect of passengers is £1,000. and the maximum £2,000. I have here an airline passenger ticket issued by Australian* National Airways Proprietary Limited. Clause 1 reads -

The carrier is not a common carrier, and reserves the right to refuse to carry any passenger, luggage or goods without assigning a By reason therefor.

The Commonwealth is accepting full responsibility, and it will have to carry any goods offered, to it, unless it has some just and lawful excuse for not so doing. Clause 6 states -

The passenger, his luggage and goods are carried’ entirely at his own risk, and the carrier accepts no responsibility for damage, including death, injury, delay, or loss of any nature arising out of or incidental to the said carriage or any services ancillary thereto (including transport of the- passenger, his luggage and goods, to and from any aerodrome or taking off or landing places and including also such substituted carriage as is in the next Condition hereafter mentioned), and the passenger for himself and his executors, administrators and dependants expressly renounces all claims against the carrier in- respect thereof whether the same may be due or alleged to he duc to negligence or misconduct on the part of the carrier or not.

What a contrast with the provisions of this bill, under which the Government, which is not concerned with profits, can confer more benefits on its patrons !

Senator Sampson:

– Will the Government accept responsibility for the death of air passengers?

Senator McKENNA:

– The persons affected by the death would be obliged to establish that there had been negligence on the part of the Commonwealth. Under the present system passengers by air have completely forfeited their rights, and those of their executors, to compensation, whether or not there has been negligence on the part of the company. Some years ago, when it was thought that a company known as the Rosny Estates and Ferry Company Limited, which conducted a transport service across the Derwent River at Hobart was about to go into liquidation, the Hobart Mercury, in its issue of the 21st September, 1926, published a leading article which I regard as a complete justification for this bill. I shall read an extract from that article -

Having saluted private enterprise in the persons of the Rosny shareholders, we have frankly to say that the ferry business in which they are engaged is not, in our opinion, properly the business of private enterprise. If their present decision compels recognition of this fact, therefore, it will be a blessing in disguise. Much is heard of the faults of “bureaucracies’-‘ - because the citizens who have the power do not keep them in better control - but if there is one thing which should be in the hands of the Government of a State, or of some public body under that Government, it is the means of public communication. Bonds, bridges, ferries, railways, tramways, which the public must have for the means of intercommunication, and without which no State can exist, are not proper “public utilities.” to be in private hands, therefore liable to become monopolies to the detriment of the public itself, although private enterprise often renders good service until the public can take them over.

I thank the Mercury for an excellent brief. It is true that in its leading article there was no reference to airlines, because at that time there was no airline communication with Tasmania, if, indeed, any such means of transport existed anywhere in Australia. A very different leading article appeared in the Mercury of the 19th July, 1945, on the subject of the nationalization of airlines. The Mercury then said that such a policy was wrong. Surely the principle which the Mercury supported in 1926 is as sound to-day as it was then. The only reason that I can see for the change is that whereas in 1926 a small company was on the point of liquidation, on this occasion a powerful company, with extensive financial interests, is concerned. I regard the bill as one designed in the interests of the people of Australia, and as it has constitutional authority, I support it.


– Honorable senators have listened with interest to the speech of Senator McKenna in which he dealt with the constitutional aspects of this legislation. “Whether or not we agree with all that the honorable senator said, we give credit to him for a thoughtful contribution to the debate. The honorable senator said that, should the commission which this bill proposes shall be set up fail to provide a satisfactory aerial transport system, private enterprise could re-enter the field. Theoretically, that may be so, but what is the position when we examine it from a practical point of view? It must be remembered that under this bill the Government does not contemplate entering into competition with Australian National Airways, but intends to absorb that undertaking. Should the Government fail, is it likely that some other private transport company, knowing what had happened to Australian National Airways, would enter the field, particularly when it would have good reason to believe that if it also made a success of aerial transport, another “ grab “ would take place ? Such arguments are misleading. The honorable senator also inferred that the Government was pioneering air transport, whereas that is not so. For a number of years private enterprise pioneered civil aviation in Australia, and during that period it encountered many difficulties.

Indeed, when help * was needed, it was not forthcoming. I pay tribute to the firm of W. Holyman and Sons Proprietary Limited for the service that it has rendered to Australia in connexion with shipping and aviation. W. Holyman andi Sons . Proprietary Limited started in a small way running small sailing craft from Launceston to the north-west coast of Tasmania. The three sons started as members of crews, and eventually became masters in charge of small craft. By hard work, foresight and enterprise they built up a shipping service, and later went into the steamer trade, eventually establishing a service between Tasmania and the mainland. It is significant that when other ships were held up because of coal strikes at the Christmas period year after year, Holymans ships never failed to provide a service. When they could not obtain coal, they used wood for fuel, and so kept their services going. These enterprising people are typical of many good citizens to be found all over Australia, who have developed this country by hard work, and their own initiative, and faith in this country. Turning their attention to aviation in its pioneering days, Holymans established a ferry service across Bass Strait. At that time aircraft were practically in the experimental stage. The company was confronted with many difficulties. It lost several aircraft, and a member of the family, who as a pilot, lost his life in one of those disasters. But such obstacles did not make these men turn back. They did not say that the enterprise was impossible. Like thousands of other enterprising people in this country they refused to turn back. They established air services throughout Australia. What motive prompts the Government to enter the aviation business at this stage? It has not been argued for one moment that the existing private companies have failed to give efficient service. The PostmasterGeneral (Senator Cameron) in his second-reading speech implied that aviation is under the control of a monopoly. What is the history of aviation in this country? Has private enterprise lagged behind the times? ‘Can it be said that the existing companies have used obsolete aircraft? No. They have led the way, and have succeeded in providing an uptodate service by using the most modern aircraft. The company to which the Minister refers has been more progressive than any other company in this field. Australian National Airways provided the maximum of service for a minimum of business, building all the time on the great possibilities in the field of aviation. It cannot be said, therefore, that the Government’ is entering this field because the existing private companies have not given efficient service. Let us suppose that the Minister’s implication that a monopoly is growing up be true. If companies have merged, they have done so in order to give more efficient service by eliminating uneconomic competition. I do not think that a monopoly is growing up.

Honorable senators opposite have much to say about the merger between Australian National Airways and the company which previously ran a service between Adelaide and “Western Australia. That merger was made as the result of the representations by the then Postmaster-General that those companies should merge in order to facilitate the speedy transport of mails. That was the object of that merger. Would any honorable senator say that that was wrong? Is it not infinitely better that a number of small companies which are giving an indifferent service, and competing to the detriment of each other, should merge in order to provide better and cheaper service to the community? Has it not been to the advantage of unionists to merge a number of small unions, and to federate under the Australasian Council of Trade Unions? Why have the unions merged?

Senator Collett:

– To create a monopoly.


– That is so. Such action may be in the interests of the unions. I am not disputing that. After companies have developed from small beginnings, and by their success have contributed to the prosperity and benefit of the nation generally, no Government is justified in overriding their rights 3s is proposed under this measure. If any Government wants to enter the field of aviation it should do so as a pioneer, and not take over services which have been developed at great risk and cost by private enterprise. Are we to understand that it is the policy of this Government to take over successful companies? Of all enterprises which the Government, may consider it is justified in taking over, airways is the last form of transport which comes within that category. The Government has not justified its intention to enter this field. The PostmasterGeneral implied that a monopoly has been created by the absorption of a number of small companies by a larger company, and that the Government should prevent the development of that monopoly.

If the Government believes that it should enter this field, it should respect the rights of those who have pioneered aviation, and should enter the field in competition with private enterprise. Let the Government show that it has the initiative to make a success of civil aviation in competition with private enterprise. In such competition, of course, the Government would be at a distinct advantage. Instead of condemning existing companies as monopolies, and implying that they will do something to the detriment of this country, the Government should give full credit to private enterprise for developing aviation in Australia. Let us not forget the services which private enterprise has rendered during the war in the interests of the nation. The aircraft owned by Australian National Airways have been at the call, and, for all practical purposes, under the control of the Government during the war. That company under instruction has taken machines off their ordinary routes, and undertaken special missions to New Guinea, often flying their aeroplanes over uncharted seas. Why has the Government not said so? Why_ has it chosen now, when the air services are under full governmental control, to take over the Australian National Airways? The threat of confiscation has been held over Australian National Airways for months and months. Like other companies, it is looking ahead and wants to plan for the future.

Senator LARGE:

– iSo are we.


– The Holymans are in their fourth generation as transport people. They can look with pride and satisfaction on what they have done in developing the transport services of Australia, and should he able to look to the time when their children and their children’s children, for generation after generation, will similarly be engaged in developing our transport services. Why should the Government at this stage in the history of the Holyman family, merely by the passage of legislation through this Parliament, be able to destroy their inherent right to carry on from generation to generation operations for the betterment of this country? It could’ never be said that they have operated to Australia’s detriment. On the contrary, the Holymans have devoted their lives to our betterment. What sort of a democracy is it that allows a parliament by one fell swoop to cut them off, as it were, in their prime? Not one iota of evidence has been given that their activities have been in restraint of trade. Why, with faith in the future, they have pioneered air transport to unprofitable places in the belief that, although, for the time being, perhaps for years, the routes would not pay, ultimately, with the development of Australia, they would reap the fruits of their labour as pioneers. Throughout his speech the Minister referred to the activities of Australian National Airways in terms of scorn, almost as if it were an undesirable element likely to do something detrimental to the country’s interests, but he adduced not one jot of evidence to support his innuendoes. It is as clear as noonday, that the Government has all the taxing and other powers it needs to ensure that no air transport concern, whether a monopoly or not, shall operate in this country for the benefit of the few and to the detriment of the many. Australian National Airways could never be accused of having done that. Yet its head is on the chopping-block and the headsman’s axe is poised. In that predicament, how can it view the future? Senator McKenna has said that the constitutionality of this measure cannot be doubted, but the Senate is not the last court of appeal. We are grateful that the airline operators have a higher court of appeal than this. They will fight this bill in the High Court, and why should they not? It is abundantly clear that the passage of this bill will not be the end of private enterprise in Australian civil aviation.

Senator Sheehan:

– As an Australian anxious to develop his country, is the honorable senator proud of that?


– Of course. The airline operators have given ample evidence that they are good Australians. They have never crawled to any government for help. Like all pioneers, their attitude has been, “ Leave us alone and let us develop with the least possible restriction, and we shall give an efficient service “. No doubt they desire to supplement their aircraft and expand their operations, but they cannot with this bill hanging over their heads like the sword of Damocles.

The legislation will be contested in the High Court, and if necessary before the Privy Council. It may be years before the issue is settled. What will happen meanwhile? Are we to allow the aviation industry to stagnate because a legal battle is taking place? Surely not! This is the worst step a government could ever take. I forecast that should the validity of this legislation be upheld, the time will come when the Government will be forced to appeal to private enterprise to take over the operation of the air transport industry again because of its inability to handle the complexities that will arise through the governmental operation of interstate airlines on the one hand and the private operation of intrastate airlines on the other. The interstate airlines also carry on intra-state operations. Australian National Airways has developed air services all over Australia. Doubtless, it envisages overseas operations in competition with other companies. The Minister referred boastfully to the result of the British general elections. It is wise not to be unduly elated in victory or unduly depressed in defeat. Governments have been defeated before, and they will be defeated again. I invite the Government to think that over. But does the Minister think that because the people of Great Britain voted the Labour party into office the Labour party will sweep all private enterprise from the field? He says that the British airlines will be nationalized, but are not the

British airlines like those of this country, under national control to-day? Does anybody suggest that the Department of Civil Aviation in this country does not actually control all air transport. Much of the air transport in Great Britain is carried out by the foreign companies.

I am convinced that some day the Government will regret having taken this step. This industry will not succeed under government control. The Govern; ment is doing a disservice to this country, and a great injustice to the people who pioneered air services. This measure will prevent what honorable senators claim to support, namely, the development of private enterprise which in the past has done so much for this country. “Who knows what industry will be the next to be nationalized? The PostmasterGeneral said that the Government had been paying huge subsidies to private airline operators for the carriage of mail, but how much is actually being paid? The fact is that the Government is paying the airline companies for the carriage of mail, just as it pays other individuals and companies. It is paying for a service, just as it pays postal officials for their services. Another argument advanced by honorable senators opposite is that millions of pounds have been expended by the Government on the construction of aerodromes. That expenditure was quite properly incurred. In the course of the war, air fields and aviation facilities in this country were essential and have been of inestimable benefit to the people from a defence” point of view. They have been used not only by our own Royal Australian Air Force aircraft, but also by the aircraft of Allied nations. It is a misrepresentation to say that facilities have been provided by the Government to the airline operators free of charge. What would charges for the carriage of mail, freight and passengers by air in this country be if the airline operators had to construct their own aerodromes and provide their own navigation aids such as direction finding apparatus? The provision of these services is taken into account in fixing the rates for the carriage of mails, passengers and goods. The passage of this legislation will be a deterrent to the expansion of private enterprise in this country. Industrialists will fear that if they make a success of their undertakings, they will be taken over by the Government. They believe that the Government is watching their development, as a rook watches another bird build a nest, ready to take possession at the appropriate time.

I protest against this measure. The Government has not a mandate from the people to pass legislation of this kind. I repeat that it is doing a disservice to Australian citizens, and is not playing the game by those people who have done so much for the betterment of this country and. the advantage of the community generally.

Senator SHEEHAN:

– .Since the first announcement of the Government’s intention to introduce this legislation was made by the Deputy Prime Minister (Mr. Forde), varying statements of the Government’s alleged purpose, have been made by opponents of this proposal. The most remarkable of all the arguments advanced in favour of the abandonment of this legislation are those .to which we have just listened from Senator Herbert Hays. The honorable senator claimed that this legislation was designed for ohe purpose only, namely, to nationalize the company known as Australian National Airways.

Senator Herbert Hays:

– Because it has been successful !

Senator SHEEHAN:

– I suggest that the honorable senator should cast his mind back to what occurred when the announcement of this legislation was first made. He will find that it was stated then, in some quarters, that this was socialization; that the Labour party, having as its objective the socialization of the means of production, distribution and exchange, was out to socialize air services, merely to give effect to its policy. Somebody else said that what the Government desired was nationalization, and one also heard the statement that il was just a matter of the Government being anxious to control aviation. I am wondering what all this argument is about. Recently, a leading article in the Melbourne Herald stated that the real issue was not socialization, nationalization or government control, hut whether li neier monopoly control by the Government, air transport would be more highly developed than would be the case if it remained under the control of private enterprise. That sums up the position. In the interests of Australia, to whom can the development of air transport best be trusted - to the Government with its substantial resources, or to private enterprise with its limited resources. Is it better that transport should be entrusted to a government whose only interest is to serve the people, develop the country, and ma-be Australia fit to play its part in the future progress of the world, than that it should be in the hands of private enterprise which is concerned only that dividends shall be paid to its shareholders? No one will argue that private companies are philanthropic institutions whose chief aim is to serve the nation. Their first concern is to serve their shareholders, and therefore they must strive to make profits. It is unfortunate that the constitutionality of legislation of this nature may be tested in the High Court. Honorable senators listened with attention to the speech of Senator McKenna on the con1stitutionality of this legislation because they know that by reason of his legal training he is well qualified: to deal with that aspect of the subject before US Senator Herbert Hays was jubilant at the thought that this legislation would probably be taken to the High Court and even to the Privy. Council for a decision as to its constitutionality. As one who entered’ this Parliament to assist in the development of Australia I regret that possibility, for it shows that this national Parliament must function, not as unfettered legislative bodies in other countries do, but in accordance with the book o-f rules. T cannot concede that it is a matter for rejoicing that legislation passed by the National Parliament, which is representative of the people and comes under review by the people at least every three years, should have to run the gauntlet of High Court proceedings. It may be that the judges of the High Court,, because of their out-moded reading of the law and not because of any political bias, will decide that this legis lation is ultra vires the Constitution. In stating that possibility I make no reflection on the learned justices of the High Court, but it is well known that the decisions of the High Court as constituted at a particular time may not be the decisions of the High Court when differently constituted. The interpretation of the law may vary according to the constitution of the High Court bench.

In considering whether such an important public utility as air transport should be entrusted to the government of the day or to private enterprise, it is well to recall the development of transport in Australia. In the- early days of this nation, land transport consisted, for the most part, of horse-drawn vehicles. The pioneers of road transport were the McCullochs, Permewan Wright and Company, Cobb and Company, and others. Those pioneers operated for a number of years, but later they had to face competition from other forms of transport, and eventually they went out of business. In this matter I can speak with more knowledge of Victoria than of the other States. It is interesting to note that the railways of Victoria were first conducted by the Hobsons Bay Railway Company. After some time, it was found that that company could not undertake land transport in the interests- of the young colony, because it had to look first to the interests of its shareholders. It could not undertake the construction of purely developmental railway lines. Can honorable senators imagine what the railway systems of Australia would have been had the construction of railway lines been dependent on the initiative of private enterprise? Under those conditions’, would we have in existence the network of railways which serves Australia to-day? I put that question particularly to those honorable senators who claim to represent the wheat-growers, the wool-growers, and other primary producers of this country in the outback portions of the Commonwealth. Had private enterprise been responsible for the construction of rail-ways we should have had railways connecting the more populous centres, but not extending further. But because governments, which were interested primarily in the development of Australia, built non-paying railways from an accountancy point of view, great developments have taken place. The influence of those railways on the development of the country generally, and the indirect benefits which they have conferred on the nation, cannot be assessed in terms of money. Our railway systems have played an important part in the great crisis through which this country is passing. Their performance is a magnificent tribute to the foresight of those who built them, as well as to the efficiency of those who have operated them.

In considering the question before us, we should also bear in mind the development of postal services in Australia under government control. Here again it is interesting to note that the first telephone bureau in Melbourne was established by private enterprise. The late Mr. Byron Moore, who for many years was secretary of the Victorian Racine Club, played an important part in the establishment of the company which had for its purpose the installation of telephones. Do honorable senators imagine that the present postal facilities, particularly in outback areas, would be available had private enterprise controlled the postal system? Honorable senators who from time to time make representations to the Postmaster-General (Senator ‘Cameron), the Minister in charge of this bill, for extensions of postal telegraphic and telephonic facilities to outback districts would do well to keep these facts in mind when registering their vote on this bill. One could go farther, and traverse the history of a large number of great public utilities which to-day are nationally owned and controlled in the interests of the people. Would any one suggest that our Army, Navy or Air Force should be controlled by private enterprise? Certainly not. Senator Herbert Hays made a special plea on behalf of Australian National Airways. He suggested that that company had pioneered aviation in Australia, and that for that reason it should be left religiously alone to go forward and control this new public utility. I have nothing to say against Australian National Airways, or against Holyman and Sons. In fact, I know per- sonally some members of the Holyman family: I have nothing to say against their enterprise, or business acumen, in developing what they believed would be a paying proposition. That is not the issue. The issue now before us is the future of aerial transport. But let us deal with Australian National Airways on whose behalf Senator Herbert Hays has made a plea. I have in my hand a very interesting brochure on Australian aviation, the foreword to which has been written by a man with whom I was associated in the land transport industry, Mr. A. A. Drummond, the secretary of the Australian Railways Union in South Australia. This brochure, which is entitled Australian Aviation, contains a number of articles which were written for and published in the Railway Review. Mr. Drummond, in his foreword to the brochure, writes -

I realize the tremendous contribution which both civil and military aviation have given to the defence of the Commonwealth and the significant part in peace which this industry is destined to play.

Those are his opening words, in the foreword to this brochure which is distributed with the compliments of Australian National Airways. The first statement made in the name of the company is -

To trace historically the early development of aviation in Australia, and to pay due tribute individually to the many Australians who pioneered this great modern industry, is not possible in the limited space available here. It has been found convenient to take the first central flying school in 1912 as our starting point. However, the Civil Airways Companies of Australia appreciate how much they owe to early experimenters, especially those who gave their lives in the belief that aviation would some day make a worthwhile contribution to the progress of civilization.

Thus, Australian National Airways does not claim for itself the kudos which has been given to it by opponents of this measure. The company in its review of aviation in this country takes 1912 as the starting point of development of aviation in Australia and says -

In 1912 the first central flying school for the purpose of training pilots in air .crews was established at Point Cook in Victoria.

Who established that flying school at Point Cook? Was it established by any of the private companies which are operating to-day, or who desire to operate airways in the future? I have an idea that it was established by the government of the day, which happened to be a Labour government. It is worth remarking that the present Government, which is a successor of that government, is now endeavouring to implement the policy which has long been a plank of Labour’s platform. At a later stage, during the depression, when wholesale retrenchments were being made because of the obnoxious thing known as the Premiers plan, and it was suggested in influential quarters that civil aviation and what it stood for should be swept aside, another Labour government, the Scullin Government, stood fast for the maintenance of civil aviation in this country.

Senator Gibson:

– Who suggested that civil aviation should be swept aside?

Senator SHEEHAN:

– The honorable senator was a member of the Parliament at that time, and he should know the history of civil aviation in this country. During the depression the Scullin Government refused to abolish civil ‘aviation in Australia.

Senator Gibson:

– The honorable senator has not said who proposed that civil aviation should be abolished.

Senator SHEEHAN:

– The honorable senator is well aware of the facts. The brochure continues -

In furtherance of the objectives of the Point Cook organization, an Aviation Instruction Branch of the permanent military establishment was instituted in 1913 and applications for volunteers to undertake aviation as a career were called and a great many Australian youths were enlisted for service.

Senator Sampson:

– It was established under the Minister for Defence, who was then Sir George Pearce.

Senator SHEEHAN:

– Yes ; he was then a Labour Minister giving expression to Labour’s policy, before he “ratted”. After the war of 1914L18, the great possibilities of the aircraft industry were recognized. The brochure continues -

By 1921, the progress of aviation in England, America and other countries had clearly indicated the important role that aviation was destined to play in the transport of the future.

In this year the Commonwealth Government found it necessary to set up machinery to control civil aviation a.nd to promote its further development. To this end the Civil Aviation Administration was constituted as a special branch of the Department of Defence, and the late ‘Colonel H. C. Brinsmead, O.B.E., M.C., was appointed first controller.

All of us remember the very fine work that was performed by that department under the control of Colonel Brinsmead, and we regretted very much that he waa unable to carry on that work. Thus, without going so far as one would like into the subject, we find that the development -of aviation in Australia has been based primarily on government initiative and assistance.. It is fitting, therefore, that this Government should propose that the control of aviation shall revert to the Government which has been mainly responsible for its development up to date. I turn to Senator Foil’s remarkable speech. I must compliment him on the energy he displayed this morning after having burnt the midnight oil in preparing it. He must have burnt the oil till dawn to prepare his speech in reply to the second-reading speech delivered last night by the Minister. It must have been a terrific task. In his speech he objected to the use by the Minister of pound-mile rates as a basis for comparing the charges for the carriage of mails in Australia and the United States of America. It is interesting to recall that Captain Holyman, the managing director of the Australian National Airways, in an address to the Constitutional Club, Melbourne, himself used the pound-mile rate as the basis of comparison. The Melbourne Herald of the 5th February, contained the following report: -

page 4893


Vigorously attacking the Federal Government’s allegations against private airline companies in an address to the Constitutional Club to-day the managing director of Australian National Airways Limited (Captain Ivan Holyman) gave the following comparison of charges for mails in the United States of America and by Australian National Airways Limited -

United States of America, 2s. 6.7d. Australian National Airways Limited, 3)d.

The figures seem to be quite wrong, so, in that respect, he may not have been correctly reported. The rate in America stated last night by the Minister was 0225d., which is to be reduced to .012d., but the point is that Captain Holyman used the formula used by the Minister, which Senator Foll, in his apology for the company, claimed was not correct.

I have already said that aviation is in its infancy and that rapid development lies ahead. Some objection was taken to the figures quoted by the Minister of expenditure by the Government on civil aviation. The £11,494,000 is made up as follows: -

Department of Civil Aviation : Capital expenditure £4,157,000.

Department of Air and Department of Aircraft Production: Expenditure on aerodromes and hangars - £7,337,000.

The total expenditure of the Department of Aircraft Production on aerodromes is much greater than £7,837,000. As I have said, that figure represents only what is regarded as expenditure of potential value to civil aviation, but an interesting comparison can be made on the figures. I find that in 1944 the paid-up capital of all airline companies totalled £1,290,055 and that the value of their assets approximated, £1,000,000. Yet much has been made of the terrible calamity that will overcome the companies that are, as it is suggested, to be swamped. Senator Foll took exception to the Minister’s statement referring to the mergers of various airline companies in Australia. He said that it was a cruel statement for the Minister to make and it was not altogether correct.

Senator SHEEHAN:

– Well, we have another interesting publication, Wings of To-morrow, by Olive Turnbull, which gives the history of the Australian National Airways. Amongst other things, it says -

Thus Australian National Airways became one organization, functioning from Horn Island to Perth. From the original Holyman venture, with its one Fox Moth, had sprung the great organization of Australian National Airways Proprietary Limited, merging in its new form the systems of Tasmanian Aerial Services Proprietary Limited, Holymans Airways Proprietary Limited, Adelaide Airways Limited, West Australian Airways Limited, and Airlines of Australia Limited, and, through it, of New England Airways Limited, Rockhampton Aerial Services Limited, and North Queensland Airways Proprietary Limited. It is worth remarking that at no stage of its growth has Australian National Airways entered into active competition with other lines - that is to say, there has been no suggestion of employing large resources to force other operators out of business. Those companies which have been absorbed have been absorbed by amicable agreement and at a fair price.

Whilst that discloses the gradual growth of a monopoly, the author claims as an indication of how fair the company has been that it has bought out the other companies. Senator Herbert Hays suggests that the Commonwealth Government, with all its resources, should not deal with the companies, as is proposed in the legislation. He would go further. He says that the Government should compete against the companies and see if it can put them out of business.

Senator Herbert? Hays:

– Would it not be better to compete with the companies ?

Senator SHEEHAN:

– The fact remains that whether this legislation is passed or not, the Government can freeze the companies out of business but it does not desire to act unfairly. In this legislation, provision is made for dealing fairly with the companies, and negotiations will be carried on with them. They will be asked if they want to come in. What do these mergers mean? Have they just been developed for the purpose of flying aeroplanes round Australia? Of course not! We come back to the real truth of the mergers and there is proof of the tendency of the Australian National Airways to become a monopoly. In four years, from 1940 to 1944, Australian National Airways obtained the following proportions of the total amounts paid by the Government in the form of a direct subsidy and mail payments-

Senator Herbert Hays:

– That is for carrying mails.

Senator SHEEHAN:

– I am showing how this company, slowly, but surely, was becoming a monopoly. In 1940-41, out of a total expenditure of £208,108, £31,852, or 15 per cent., went to Australian National Airways. In 1941-42. £215,937 was expended and Australian National Airways received £69,347, or 32 per cent. In 1942-43. out of a total expenditure of £623,336, Australian National Airways received £467,706. In 1943-44 the total expenditure was £S84,023 and Australian National Airways received £733,725’. Had the projected merger with Guinea Airways not lapsed because of the fear of this legislation, Australian National Airways, out of a total of £884,023, would have derived nearly 96 per cent. That shows exactly what was happening. As I have said, the issue is, can the Government do this joh as effectively as it has been done by private enterprise. Of course it can.

Silting suspended from 12.4$ to 2 p.m.

Senator SHEEHAN:

– The future of air transport in Australia will be in safe hands under the control of the Government of this country. The debate has shown clearly that slowly but surely the great public utility of air transport was getting into the hands of a private monopoly. If this service is to be controlled by a monopoly, it is better that it should be a government monopoly than one controlled by private enterprise. The Postmaster-General referred to the list of shareholders in Australian National Airways and showed clearly that the shipping companies were more intimately connected with air transport than were companies established for purely air transport purposes. Among the companies associated with Australian National Airways are Huddart Parker and Company Limited, the Union Steamship Company Limited, W. Holyman and Sons Proprietary Limited, the Adelaide Steamship Company Limited and the Orient Line of Steamers. Of a total of 398,708 shares in Australian National Airways those shipping interests hold 375,000 shares, whereas companies interested only in air transport hold 23,703 shares. Five persons hold one share each in order to entitle them to a seat on the board. In defence of the share register it has been contended that some of the shipping companies have their head-quarters in Australia, but that does not get over the fact that the creation of a monopoly was intended. It is opportune to point out that shipping companies have developed as the result of subsidies granted by governments. That is true of British shipping companies as well as of American companies, and so the argument that these concerns have served the community unaided is not well founded. The fact is that shipping interests have depended largely .on government assistance. If further evidence were required to show that air transport in Australia was getting into the hands of a monopoly it is to be found in the fact that whereas in 193S there were sixteen companies engaged in air transport, the number had fallen by 1944 to eight. Senator Foll was wrong when he said that the British Labour party advocated the setting up of a British Overseas Airways Corporation in its present form. The fact that the Labour party is now in office in the United Kingdom makes it necessary that the true attitude of that party should be stated.

Senator Foll:

– I said that the British Labour party subscribed to the White Paper.

Senator SHEEHAN:

– The fact is that the British Labour party strongly criticized the measure on the ground thai it did not go far enough. As an official spokesman stated -

It fails to establish a national unified air transport system to be operated solely in the public interest.

The views of the British Labour party are clearly expressed in an official pamphlet entitled Wings for Peace, in which, under the heading “ Labour’s Postwar Policy for Civil Flying” it is stated -

The Labour party considers that, insofar as air transport remains in national hands. Britain’s air service should be wholly nationalized . . . Only the public ownership of all civil air transport will provide the people with a service which is fully efficient and fully dedicated to the interests of the community as a whole.

That crystallizes the purpose of this legislation. All the arguments that have been advanced on behalf of private airline companies, both in this Parliament and in the newspapers of this country, have failed to disprove the contentions put forward by the Government. It would appear that, so long as the Government is prepared to assist these companies to develop their industry, the Government is all right. This debate has shown that civil aviation in Australia has been developed as the result of goverment assistance in providing facilities for air services to be carried on. It would be a tragedy if the public moneys expended in developing the production of aircraft were not to be applied, in the public interests. To what degree would aircraft production in this country have developed had it not been for the assistance given by governments? The early manufacturers of aircraft were assisted financially by the ‘Commonwealth Government. Honorable senators will remember that not many years ago it was seriously contended that Australia could not build motor car engines, but, largely as the result of the developmental work undertaken in Australian aircraft production factories, this country can now manufacture the most up-to-date motor vehicle engines as well as aircraft engines. Those who speak in opposition to this measure would give to private enterprise the benefit of that experience. It would be wrong if in the early history of aviation in this country, the Government did not reserve to itself the right to control this new public utility. The time is not far distant when, in addition to conveying passengers, mails and freight from one point to another within Australia, airlines will connect this country with all parts of the world. It is only right that the Government of the country should control such an important instrumentality. I see nothing revolutionary in extending the control of aviation so as to make the Government really responsible for the development and maintenance of this vital public utility. The Government is to be commended on having introduced this measure so early in the history of aviation. Although some sections of the community may now object to the introduction of this legislation, I am confident that in the years to come, the people of Australia will be grateful that there was in office a government sufficiently far-sighted to place this new public utility under national ownership and control.

Senator SAMPSON:

– I shall deal with the real issue underlying this measure. Honorable senators may say that that issue is socialization, or nationalization, or government control of a public utility, but the real question is whether the establishment of a government monopoly will so develop air transport in Australia as to make it more efficiently and economically operated than if it were left to private commercial enterprise. The Government has given no ground for its contention that the proposals outlined in the bill before us come within the constitutional powers of this Parliament. The strongest conviction that the Commonwealth should be able to establish this monopoly if Parliament approves does not get over the difficulty should the High Court declare this legislation to be unconstitutional. While the right to nationalize interstate air services is assumed by the Government, it is admitted that that right cannot be claimed in respect of intra-state services. But intra-state services are just as important as interstate services to the development of aviation in Australia. The companies have always recognized that fact. Without the right to conduct interstate air services they could not afford to operate feeder services with modern aircraft and ground equipment. If those companies are stripped of the right to conduct interstate services they cannot efficiently, and at a profit, conduct intra-state services; and I suggest that without monopolistic power the Government could not control such services economically. The progress that has been made in civil aviation in Australia and its contribution to the defence of the country give no ground for questioning the ability of private enterprise to carry out its prepared plans for the complete coverage of the whole continent of Australia. Those plans were submitted to the Government some time ago. They set out in detail the projects of the private companies, and there is not the slightest doubt that if the present airlines were not interfered with, those plans would he brought to fruition within, possibly, the next two or three years.

Senator McKenna made an interesting speech with regard to the constitutional aspect of this legislation. I confess that I am not competent to deal in detail with that phase of the matter. But, as he said, the legislative power of the Commonwealth is contained in section 51 (i.) of the Constitution. That section empowers the Commonwealth to legislate with respect to trade and commerce, with other countries and among the States and [ suggest is the test of nationalization, or socialization, or whatever one may call the Government’s present proposals; because if the power in relation to interstate airlines be established, the nationalization of overseas airlines becomes also practicable under the Commonwealth trade and commerce powers, because such traffic is trade and commerce with other countries. If this power be upheld it would make it possible for the Commonwealth to-day to nationalize any industry on those grounds. But the Commonwealth does not possess power to nationalize intra-state airlines or any intra-state industry. Of course, this whole matter is subject to the interpretation by the High Court, whose duty it is to interpret the Constitution.

Is this bill introduced because of inefficiency of existing airways companies? I say “ No “, because the services being conducted in the main by Australian National Airways, are as efficient as those in any other country. The Government exercises absolutely rigid control over all air operations in this country. The civil aviation companies are already subjected to the most rigid control through the Department of Civil Aviation. No airliner owned by a commercial company can leave the ground unless that department is satisfied that all conditions set out in the regulations have been scrupulously fulfilled. The department has absolute control over routes and stopping places, fares and freight rates, time-tables and frequency of services, rates paid for carriage of mails, the safety of aircraft, aircrews and ground engineering staffs, and over methods of flying operations and air navigation. In short, it has absolute control over all air services to-day. All services operated by commercial companies are licensed by the Department of Civil Aviation, and no service may be operated without such a licence.

We have heard quite a lot about the defence issue in this matter. I shall touch .upon that aspect briefly. Early this year one of the speakers in a debate broadcast by the Australian Broadcasting Commission in its session known as “ the Forum of the Air “, said -

The moat important question involved is the defence issue. For national survival we must develop the countryside, the inland, the isolated routes. That will be done only by publicly owned airways. A system operating for private profit concentrates on the already thickly populated routes.

A glance at the existing -air routes gives the lie direct to that statement. For years past commercial companies have operated services in the remote and sparsely populated areas, such as Broken Hill, Alice Springs, Oodnadatta, Daly Waters, Marble Bar, Wiluna, Katherine and Thursday Island. Some routes are very profitable whilst others are conducted at a great loss; but overall, the companies are able to make services, as a whole, pay. The profitable services pay for the unprofitable ones. As I have said, the private companies have already lodged with the Government their post-war plans, which envisage the maximum development of the interior of Australia, and the companies are capable of carrying out these plans without any government subsidy. With regard to the defence aspect, it is generally known that the private companies have given splendid service in this war, because the Commonwealth at the outbreak of hostilities did not have one modern passengercarrying aircraft. The first long-distance reconnaissance squadron, if one could call it a squadron, consisted of four Australian National Airways Douglas aeroplanes ; and when “Japan struck the civil airlines moved vital war supplies and personnel right up to the firing line in the first crucial weeks. Unarmed, they evacuated women and children from Rabaul under the noses of the Japanese. They landed commandos at Wau, and transported medical and food supplies to battle zones. The private . companies have also carried out all maintenance work for the Department of Civil Aviation. They contributed in a very large measure to the defence of Australia. Therefore, when the defence issue is raised, as it was in the debate to which I- have referred, we should take with a grain of salt the statements of men who have had no practical experience in the matter. With respect to the contention that government control of aviation is wrapped up with defence preparations, I refer to the bitter lesson learnt by the United States of America. That country has set its face resolutely against government ownership of airlines. At a press conference last year President Roosevelt declared -

I do not want to put the Government in commercial passenger and freight service after the war. I believe all air routes should be operated by private concerns where profitable and that government operations should be reserved ‘for a few lines operated at a loss purely for communication with new and distant territories.

America and the late President Roosevelt, had bitter experience of government intervention in the operation of airlines. In 1934 President Roosevelt cancelled the air-mail contracts held by the private companies and handed them over to the Army. It proved a tragic move. Within three weeks twelve aeroplanes had crashed, seven pilots had been killed and six seriously injured. The climax came on the 26th February when eight people lost their lives in a mail-aeroplane crash in Utah. The Administration was charged with the responsibility for those deaths. Congress, which had supported President Roosevelt by 24S to 81 votes in his decision to hand the contract over to the Army was by now thoroughly alarmed at the position, and demanded the renewal of the commercial contracts. President Roosevelt said that he had been assured that the Army Air Force could do the joh safely and efficiently. He had, however, bought his experience the hard way, and within five weeks of their cancellation most of the private contracts were renewed.

The essential feature of civil aviation for defence purposes is to have the most efficient and highly developed airways organization. I say, without hesitation, that we have such an organization in existence in Australia to-day. It does not matter where the aeroplanes have been flying to; they will fly anywhere. That private enterprise is necessarily more efficient than government enterprise will surely not be questioned. At the beginning of the war, the strength of our airlines under private enterprise was Australia’s strength in the air. Our only modern aeroplanes were those owned by private companies which they had obtained not merely in spite of government apathy but also, in some cases, in face of actual opposition on the part of the Government. Immediately on the outbreak of war, these aeroplanes transported troops and war material to Darwin and other strategic points which they had never previously visited. At a moment’s notice they were flown to New Guinea where they had never flown before to evacuate civilians. They were flown to the battlefields, transporting commandos and- taking supplies to beleaguered troops. They convoyed the first contingent of the Australian Imperial Force to go overseas during this war.

Had the airlines languished under the control of governments as did the Royal Australian Air Force, a - different story of the war may have been told. Their organization did all the repair work and maintenance for the United States Air Force when the struggle for air supremacy in New Guinea was in progress. Allied forces, won it, and it was the civil airlines organization that kept their planes- in the air. One illustration of government, as opposed to private, enterprise is illuminating. Before the war, Australian National Airways imported Link trainers, a mechanical device for teaching pilots to fly. The Government claimed duty on the machines, classing them, of all things, as a “mechanical toy”, and no arguments would alter its view. When war broke out, they were the only apparatus of their kind in Australia. They were diverted by the Australian National Airways to the Royal Australian Air Force, where they performed invaluable service. This proposition is likely to add more than £3,000,000 per annum to present taxation and will produce’ no result that cannot be better obtained at less cost by individual enterprise under proper government control as already exists. I, for one, deplore this hill, because I foresee that it will retard instead of develop Australian civil aviation, and it will be costly.

Senator COOPER:

– This bill is a continuance of the implementation of the Government’s policy of socialism. Estimates of the cost of taking over the civil airlines vary from £3,000,000 to £9,000,000. It would be far better to expend the large sum of money involved, whatever it may be, on development in essential directions. The people are crying out in anger against the shortage of houses. Land for the settlement of ex-members of the forces is needed. Irrigation! schemes are essential. All sorts of reproductive works are necessary. Will the taking over of the airways confer any immediate or ultimate benefit on the public? Even government supporters will admit that the answer is in the negative. Instead of conferring a benefit on the people the taking over of the interstate airlines will act to the disadvantage of the people outback. The airline companies have prepared plans to give improved services to the people in outlying areas that they so urgently need immediately they are able to do so. I understand that they have been granted priorities to obtain the necessary aircraft to put the plan into operation. For reasons that I will touch upon later, it seems that that plan will have to go by the board and that the people outback will wait in vain for the better and quicker communications they have -hoped for.

Since the inception, of air transport in this country - I do not intend to deal with it from the commencement - great progress has’ been made. Some of the smaller companies have been formed into larger companies. That has resulted in better administration and cheaper handling of the traffic. Generally speaking, the mergers have resulted in better service. The one company whose fate particularly concerns me is Qantas Empire Airways Limited which started operations soon after the war of 1914-18. The company was formed by a small band of enthusiasts in central-west and northwest Queensland who had great faith in the future of the venture and confidence in the men “ engaged to operate the aircraft. The company was formed to provide facilities not then available to people in remote regions. One of its first “jobs was the transport of the sick from the outback to hospitals in the towns where they were able to obtain the medical attention and nursing that hitherto have not been available. For eleven years the shareholders received no return whatever on their capital, but they did not grumble, because, as I have said, they had faith in their enterprise. That faith was justified. Qantas Empire

Airways is providing services not only in this country but also overseas.

Senator Foll:

– It pioneered the new route to India.

Senator COOPER:

– It pioneered not only aviation in this country but also the overseas route to India and on to Great Britain. This bill will mean that the company that braved and overcame, in the pioneering days, all the difficulties, dangers and chances of loss, will be taken over as a going concern by the Government. In his second-reading speech, the Postmaster-General (Senator Cameron) referred to the expenditure by the Department of Civil Aviation, the Department of Air and the Department of Aircraft Production on aerodromes and other facilities for civil aviation. He said -

According to the latest figures, the Department of Civil Aviation’s investment in capital expenditure is £4,157,000. In addition, the Department of Air and the Department of Aircraft Production, during the war, have incurred very substantial expenditure on aerodromes and hangars, some of -which will be of value for civil purposes. The cost of those improvements which are of immediate or potential value for civil use is £7,337,000. Thus, the total Commonwealth investment on ground facilities which will be used for civil aviation has already reached £11,500,000, or more.

The Minister did say that £7,337,000 was of potential value, but most of the work it was expended on was necessary for war purposes. It would he incorrect and unfair to say that it was expended entirely for the benefit of the private airline companies. Admittedly, £4,157,000 has been expended by the Department of ‘Civil Aviation on the equipment of aerodromes, but airline companies cannot be saddled with the £7,337,000 expended, as the Minister said, for more or less war purposes. The companies have also expended hundreds of thousands of pounds in providing hangars and other equipment at aerodromes. They are government aerodromes and the areas on which the hangars and other buildings are erected are leased. Some are held on short-term leases. At the end of the leases the buildings, many of them very costly, will become the property of the Government. If the private companies cease to operate, as they will be compelled to do under this measure, the buildings which they have erected for their own _ purpose will become government property. I ask the PostmasterGeneral. (Senator Cameron) whether it is proposed to compensate the companies for the buildings and equipment which they have installed on various aerodromes throughout the Commonwealth, first, in cases where leases have not expired, and, secondly, in cases where leases have expired- and the buildings are still the property of the companies? I imagine that compensation will be paid to these organizations. In some cases buildings and equipment are practically new. Five years is quite a short time in the life of an aircraft hangar. From the remarks of the Prime Minister (Mr. Chifley) when replying to the second-reading debate on this measure in the House of Representatives, I gather that the Government assumes that this legislation will be the subject of litigation, and that, therefore, it may not become operative for some time. That may mean that civil aviation in this country - a country with a small population and vast distances in which air transport must be a vital factor - may be brought to a standstill for several years. Naturally, it cannot be expected that the airline operators will purchase new planes and equipment, and. open up new routes, when hanging over their heads all of the time is the possibility of nationalization.. They probably will do their best with what they have in hand.

Honorable senators opposite have complained that substantial interests in Australian airline companies are held by shipping organizations. As the shipping companies will be most affected by the development of aviation, it is only natural that they should have been farsighted and secured an interest in air travel. To that end, they naturally have given their support to the most progressive airline operators.

A9 the proposals contained in this measure appear likely to be the subject of litigation, I do not propose to deal with them at length ; but on the evidence available, I believe that the passage of this legislation will not be of benefit to the people of Australia.

Senator CAMERON:
Post was surprised to hear the Acting Leader of the Opposition (Senator Foll · Victoria · ALP

refer to my second-reading speech as an outburst of spleen. I was under the impression that the speech had been temperately, and I trust, convincingly worded. No attempt was made to attribute ulterior motives to anybody. 1 merely set out to show in cleaT English language exactly what was the position as the Government viewed it, and exactly what the Government intended to do in the circumstances. The Government’s case is based upon facts which cannot be disputed, and the Government relies upon the soundness of its arguments in the light of those facts, to justify this legislation. Neither I nor the Government has anything to gain - in fact we have everything to lose - by being splenetic, hysterical, or abusive; but we have everything to gain if we can establish our facts and submit our arguments in simple language. That is the approach that I have endeavoured to make on all matters ever since I became a member of this chamber.

Senator Foll said that the Government did not have a mandate from the people to introduce this legislation. My reply to that is that sufficient mandate is given to the Government by the Constitution. In that connexion Senator McKenna submitted the Government’s case clearly and convincingly. Nothing has been done that would amount to a repudiation of any assurance given by the late Prime Minister, Mr. Curtin. The ease against the hill is based largely upon assumptions and generalities. The words “ socialization “ and “nationalization” have been used, but no attempt has been made to define them. The responsibility to define them lies with those speakers who have used them, and not with me. My view is that these words have been used with the intention of implying ulterior motives. Before the last war, the late John Burns said that in his judgment the average person was either “ a slave of shibboleths or a prisoner of phrases “. I am reminded of that statement when I hear the words “ socialization “ and “ nationalization “ used, without any attempt by the users to define them.

As requested by the Acting Leader of the Opposition, I have sought from the Department of Civil Aviation figures showing the payment per lb. of originating mail in the United States of America and Australia. The figures which I shall quote are, in the case of Australia, for the twelve months ended the 31st March, 1945, and those for the United States of America are for the eleven months ended the 30th November, 1944 - the latest date for which information is immediately available. ‘The figures are -

Australia - An average payment of 3s. 10.3d. per lb. of originating mail for an average carriage of 1,243 miles.

United States of America - An average payment of ls. 4.093d. per lb. for an average carriage of 065 miles.

It is not possible to state definitely that the figures in the case of the United States of America are correct, as1 the only information available in the Department of Civil Aviation is for “pounds of mails carried”. It is not certain whether this figure represents only originating mails or whether it contains a duplication due to originating mails being counted more than once when carried by more than one airline company. If they have been duplicated, then the comparison I have quoted is not a true comparison. The figures given, however, are the best available, and I leave it to the honorable senators opposite to supply any more accurate information in respect of the United States of America. Although I have supplied these figures at the request of the Acting Leader of the Opposition, I do not agree that the payment per lb. of originating mail is in any way an indication of the value of the service rendered. Surely it cannot be contended that the same service is rendered in carrying one pound of mail from Canberra to Sydney as from Canberra to Cairns, and therefore it is imperative to take into account the distance over which the mails are carried. By so doing, we arrive at the pound-mile rates which I have used and which are, [ suggest, the only correct basis of determining the value of the service rendered’.

I have endeavoured to obtain figures relating to the capital assets of the Department of Civil Aviation to the various dates as requested by Senator Foll. The latest figures which I have been able to obtain in the time available are subject to confirmation. They show that at the 30th June, 1936, the assets of the department were valued at £361,000; at the 30th June, 1939, they were valued at £1,369,000, and at the 30th June, 1944, their value was £4,157,000. Figures showing the” value of such assets at the 30th June, 1945 are not yet available because details of expenditure in regard to certain air navigation aids are not yet to hand. Exclusive of that expenditure, which was substantial, the total value of the capital assets of the department at the 30th June,” 1945, was £4,857,000. The above figures do not include a number of licences acquired and developed for Royal Australian Air Force purposes, although some of them are now in use for civil aviation purposes, and others may have a potential value for civil aviation. The figures show that most of the development of ground facilities for civil aviation has occurred since June, 1939, and that relatively little development of such facilities occurred before that date. I do not ascribe that lack of development solely to apathy on the part of the governments then in office, as .obviously, there has been need for greater expenditure in recent years to meet the everincreasing demands for larger and better airports and more highly developed auxiliary services to meet the requirements of modern air transport.

Senator Foil’s statement that Australian National Airways bore all losses and provided all facilities in the early days is capable of a misinterpretation which I am sure the honorable senator would wish me to correct. It is true that the company did sustain losses in ite early days, and operated many of its services without subsidy and with only small government payments for mails carried. It also provided certain facilities for its own use, such as hangars, passenger buildings, &c, but in those days, as at present, it had the free use of the aerodromes, landing grounds and other aids to air navigation which were then available. Those facilities were provided at the cost of the Commonwealth Government then, as now. The Commonwealth Government also bore considerable losses in those days, apart from the cost of the ground organization, because then the payment to the airline companies by way of subsidies and mail payments substantially exceeded the revenue obtained by the Commonwealth from airmail surcharges.

Senator Foll also referred to the high rate charged for the carriage of mails. A logical explanation of this disparity in rates would be that mail is more costly to handle, and requires more expensive equipment and special staff. But that is not borne out by the facts. Mail is simply cargo, and it is more economical cargo to carry than passengers. Unlike passengers, it requires no ticket office and staff, no air hostess to look after their comfort, and no expensive seating accommodation. Unlike boxes, cases, and many other forms of freight, mail bags can be pushed into odd corners of an aircraft, and they need little special stacking. Admittedly, priority in carriage is demanded for mails, but that is more than offset by the fact that, apart from the certainty of its supply in quality - a factor which is highly valued by the contractors - it is the most regular of all cargoes and is obtained without the expensive advertising required for passenger and other* forms of freight. The concession given in the free carriage of Civil Aviation Department personnel in recent years represents less than 1 per cent, of the payments made to Australian National Airways.

Time will not permit of a detailed reply to other points raised during the second-reading debate, but I suggest’ to Senator Herbert Hays that he would do well to keep in mind that the process known as social development has undergone a continuous evolution. Many essential services are at first privately controlled, but later they come under public control. As Senator Sheehan pointed out, that has occurred in connexion with roads and highways. Every person in the community, whether rich or poor, has freedom of access to those roadways and highways, and it would be well if Senator Herbert Hays kept that fact in mind. I am tempted to think that the honorable senator is obsessed by the belief that- nothing can be changed for the better.

Senator Sampson:

– Departmental changes can be made.

Senator CAMERON:

– The changes wrought have not had any harmful effect, although the present Government has done a lot to correct the mistakes of previous governments.

Senator Cooper referred to the existing facilities. These facilities have been improved by the war, but they are all of either immediate or potential value to civil aviation. War always accelerates economic development. In this country we have found it necessary, owing to the exigencies of war, to establish industries of various kinds and to re-organize other industries. Before the war, the Australian engineering industry was 60 years behind the tunes, but to-day we have in this country . engineering establishments equal to the best in the world. That development would probably not have taken place but for the war. That is one of the saving qualities of the great tragedy of war. Senator Cooper also referred to the compensation to be paid to existing airline companies. The bill provides that compensation shall be paid for all assets acquired by the Government. It is not the intention of the Government to acquire the assets of any private individual or company without paying just compensation for them.

Question put -

That the bill be now read a second time.

The Senate divided. (The President - Senator the Hon Gordon Brown.)

AYES: 16


Majority . . . . 1



Question so resolved in the affirmative.

Bill read a second time.

In committee:

Clause 1 (Short Title)

Senator FOLL:
Acting Leader of the Opposition · Queensland

– The Opposition is of opinion that this bill is wholly bad, but in view of the numbers opposing us we cannot amend it. Consequently, we have no intention of moving amendments. We shall agree to the bill being taken as a whole.

Clause agreed to.

Clauses 2 to 65 agreed to.

Clause 66-

In any action brought against the Commission to recover damages or compensation in respect of personal injury, the court or jury shall not find or assess nor shall judgment be given or entered for the plaintiff for any amount of money exceeding the amount following, that is to say: -

Senator CAMERON:
PostmasterGeneral · Victoria · ALP

– I move -

That the word “ In “, first occurring, be left out with a view to insert in lieu thereof the following words: - “Subject to the Carriage by Air Act 1935, in “.

The convention for the unification of certain rules relating to international carriage by air, signed at Warsaw on the 12th October, 1929, to which the Commonwealth has acceded and which is given effect to by the Carriage by Air Act 1935, prescribes certain limitations with regard to the liability of persons engaged in international carriage in respect of personal injury sustained by passengers. The Australian National Airlines Commission may, with the approval of the Minister, undertake the operation of international airlines services. In the event of the commission so doing there might be a conflict between clause 66 as it stands in the bill and the provisions of the convention. The proposed amendment is designed to avoid this conflict and any suggestion that might be made that the Commonwealth is not observing the provisions of the convention.

Amendment agreed to.

Clause, as amended, agreed to.

Clauses 67 to 70 agreed to.

Preamble and Title agreed to.

Bill reported with an amendment; report adopted.


Motion (by Senator Cameron) put-

That the bill be now read a third time.

The Senate divided. (The President - Senator the Hon. Gordon Brown.)

AYES: 15


Majority . . . . 7



Question so resolved in the affirmative.

Bill read a third time.

page 4903


Bill presented by Senator Keane, and read a first time.

Motion (by Senator Keane) put-

That so much of the Standing and Sessional Orders be suspended as would prevent the bill being passed through its remaining stages without delay.

The PRESIDENT (Senator the Hon Gordon Brown:

– There being an absolute majority of the whole number of senators present, and no dissentient voice, I declare the question resolved in the affirmative.

Second Reading

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

.- I move -

That the bill be now read a second time.

Honorable senators will remember that a bill was introduced by the Minister for Health (Senator Eraser) in February, 1944, for the purpose of providing for the supply of pharmaceutical benefits. It has now been found necessary, in the light of the experience gained during the preparation of the administrative machinery and also in order to clarify the Government’s intentions, to amend the act in various ways. Most of the amendments relate merely to administrative details, and I need not deal with them here, but two of them warrant comment. Clause 5, sub-clause 4, provides in effect that the Director-General shall not approve any friendly society dispensary which commences operations after the 1st August, 1945. The Government’s policy with regard to the supply of pharmaceutical benefits by chemists and dispensaries is that all existing agencies shall be eligible to enter into an agreement with the Commonwealth Government for that purpose.

To enable this to bedone, it has been necessary to enlist the co-operation of the State governments in order that State laws controlling dispensaries shall, where necessary, be suitably amended. Unfortunately, this has led to several different interpretations of theCommonwealth requirements. In order, therefore, that there shall be no further misunderstanding in this regard, it has been deemed advisable to define more clearly the Government’s intentions by limiting the number of dispensaries to be approved to those at present operating. I feel sure, in view of the various statements that have been made recently on this subject, that this amendment is eminently fair and will provide a satisfactory basis for agreement between all parties, provided, of course, that the States concerned make it possible for all existing dispen saries to play their part in providing benefits under the Pharmaceutical Benefits Act. The action of the New South “Wales Government in limiting the number of dispensaries to those operating before the 1st March, 1945, is evidence, if any were needed, of the necessity for such a provision.

The other amendment to which I desire to refer is provided for in clause 10, which amends section 22 of the principal act, in order that medical practitioners may prescribe under special circumstances, without the need of a personal examination. This amendment has been necessitated by the expressed fears of the medical profession that, in a case of emergency, a medical practitioner would not be able to prescribe until he first personally examined the patient. This was never intended, and I hope that, as this misunderstanding has now been cleared up, the Government will receive closer co-operation from the medical profession than previously.

Debate (on motion by Senator Foll) adjourned.

page 4904


Motion (by Senator Keane) - by leave - agreed to -

That leave of absence be granted to every member of the Senate from the termination of the sitting this day to the day on which the Senate next meets.

page 4904


Motion (by Senator Keane) agreed to-

That the Senate, at its rising, adjourn to a date and hour to be fixed by the President, which time of meeting shall be notified to each senator by telegram or letter.

Sitting suspended from3.28 to3.52 p.m.

page 4904


Messages Intimating Agreement by House of Representatives.

Messages received from the House of Representatives intimating that it had agreed to the amendments made by the Senate in the following hills: -

Commonwealth Public Service Bill 1945.

Superannuation Bill (No. 2) 1945.

Life Insurance Bill 1945.

Australian National Airlines Bill 1945.

page 4905


Meeting of Senate - Western Australian War Industries: Engineering Facilities - German Scientific Inventions - Australian Army: Malaria; Disposal of Tools of Trade - Footwear

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

.- I move -

That the Senate do now adjourn.

Earlier this afternoon I moved that the Senate, at its rising, adjourn to a date and hour to be fixed by the President. I wish to inform honorable senators that the earliest date upon which the Senate will meet is the 29th August. I wish to avoid calling the ‘Senate together until I am sure that there is business for it to do.

Speaking on the motion for the adjournment last night, Senator Collett referred to the closing of a certain engineering establishment in Western Australia. The plant in question is at Bayswater, and has been employed in the repair and maintenance of aircraft. This work has been reduced considerably owing to the transfer of operational aircraft to the north, and the reduction of the strength of the Royal Australian Air Force. Several maintenance workshops are being closed, and their employees are being released for other essential purposes. The Bayswater factory has been offered to the Department of Munitions, but that department also is reducing operations through lack of orders, and is experiencing difficulty in keeping its own factories in operation. The factory at Hendon, South Australia, is being closed, so that what limited demand there is at present for small arms ammunition may be met at the Welshpool factory in Western Australia. In these circumstances, it cannot be expected that the Department of Munitions can find any use for the Bayswater factory. The Secondary Industries Commission has been consulted, but it is not aware of any government work which can be undertaken at Bayswater. If commercial enterprise has any suggestion to offer for the use of the factory, the commission will be glad to examine it.

To-day, Senator Foll asked me, as Minister representing the Prime Minister, the following questions, upon notice : -

  1. Is it a fact that thousands of experts and scientists from the United Kingdom and Allied countries followed the army of occupation into Germany for the purpose of securing details of formulae and patents which might be useful to them?
  2. What action has the Commonwealth Government taken to obtain from Germany, as reparations, technique, data, drawings, flow charts and processes which, if conveyed to Australia promptly, could be of inestimable value to manufacturers and primary producers ?
  3. If the Government has not already taken action in company with the United Kingdom, United States of America and Canada, will it immediately make inquiries from primary and secondary industries in Australia of their requirements and then despatch experts by air direct to Germany to ensure that Australia obtains a fair share of this valuable form of reparation ?
  4. Will the Government make representations to the United Kingdom and Allied countries that all German’ patents should now be thrown open to the world.
  5. Will the Government seek an assurance from the British Government that all information secured from Germany will be made available to the primary producers and manufacturers of Australia?

The Prime Minister has supplied the following answers : -

  1. Investigations are being carried on in Germany by a number of teams of Allied scientists and experts. They are concentrating primarily on enemy technical establishments and personnel of military importance. Attention will later be given to industrial activities.
  2. A list of goods and other benefits which Australia may usefully seek in settlement of our claim for German reparations is being compiled by the Commonwealth Government and the technical data and processes referred to will be considered in this connexion.
  3. The range of subject-matters of importance to Australia is too wide to permit oi the sending of experts to Germany to investigate all of them. The Commonwealth Government has already compiled a list of the subjectmatters of immediate importance and has taken action to obtain lists of information from Germany. The Government is considering the despatch to Germany of experts to investigate certain types of industrial activity. The Department of Post-war Reconstruction and the Council for Scientific and Industrial Research are in touch with primary and secondary industries with a view to ascertaining their requirments
  4. German patents, &c, are at present available upon licence to Australian industries, under the Patents, Trade Marks, Designs Copyright (War Powers) Act 1939-40.
  5. Arrangements have been made with the United Kingdom Government for the supply to Australia of technical information obtained from Germany.
Senator SAMPSON:

. -There are two matters which I wish to bring to the attention of the Minister representing the Minister for the Army. The first is in relation to malaria. I urge that a complete survey, by means of blood tests, be made of all troops who have served in malarial areas, upon demobilization. There are many hundreds of soldiers who have this disease, but, in many cases, because of the suppressive atebrin treatment given to them whilst they are in the Army, it does not become manifest until after they have been discharged. To my own knowledge, many discharged personnel have become victims of malaria. Nearly all troops who have served in malarial areas have it in a suppressed form. The action necessary to carry out the survey which I suggest is a matter for the Director-General of Army Medical Services, but I believe that some precaution is vitally necessary. There is a grave danger that certain areas of this country in which the anopheles mosquito exists may become malaria-infested because of the transmission of this disease from the blood of servicemen who have malaria in a suppressed form to these mosquitoes. I am not a medical man, but I lived for many years in Africa, where malaria is rife, and I suggest to the Army authorities that blood tests should be carried out as a precaution against the spreading of this disease.

The other matter to which I wish to refer arises from a letter which I have received from Bougainville. The letter states -

Will the Government consider giving first option on the sale of tools of trade to those tradesmen in the Army who have been using them? We have many tradesmen such as carpenters, plumbers, blacksmiths, fitters, &c, and dental mechanics here. All these are issued with fairly good tools of trade by the Army, which arc now of course part worn but with much life left in them. The bulk of these tradesmen intend to take up a similar trade on demobilization. The Government will save itself a lot of trouble and help the men greatly in re-establishing themselves if they can have first option of buying tools of trade.

That is a sound proposal. It is only reasonable that tradesmen in the services should have the first option to obtain these tools of trade when they are being disposed of by the Commonwealth Disposals Commission.


. - I bring to the notice of the Minister for Supply and Shipping (Senator Ashley) a matter of great concern to many people, particularly those with small incomes. I refer to the poor quality of the footwear which is being manufactured for children. Particularly in wet climates, it is important that children’? footwear should be of good quality, but that now obtainable is of very poor quality and, in addition, is much more costly than before the war. One aspect of this matter which is causing difficulty is that boot repairers cannot cope with the volume of repairs. They complain that the materials available to them for repair work are of poor quality. It is not unusual to see notices in shops intimating that no further footwear will be accepted for repairs for periods varying from one week to two or three weeks. The result is that parents are compelled to purchase new footwear, which also is of poor quality. I ask that something be done immediately to remedy this unsatisfactory state of affairs.

Senator Keane:

– I shall bring honorable senators’ remarks to the notice of the appropriate Ministers.

Question resolved in the affirmative.

page 4906


The following papers were presented : -

Air Force Act - Regulations - Statutory Rules 1945, No. 117.

Commonwealth Public Service Act - Regulations - Statutory Rules 1945, No. 115.

National Security Act -

National Security (General) Regulations - Orders -

Taking possession of land, &c. (8).

Use of land.

National Security (Industrial Property) Regulations - Orders - Inventions and designs (61).

Regulations - Statutory Rules 1945, Nos. 112, 113, 116.

Senate adjourned at 4.3 p.m. to a date and hour to be fixed by the President.

Cite as: Australia, Senate, Debates, 2 August 1945, viewed 22 October 2017, <>.