Senate
7 June 1956

22^nd Parliament · 1^st Session

QUESTION
- AUSTRALIAN NATIONAL DAY
QUESTION
- LAUNCESTON ABT GALLERY
QUESTION
- TELEPHONE DIRECTORIES
QUESTION
- NORTHERN TERRITORY SHIPPING
QUESTION
- ROAD SAFETY
QUESTION
- BANKING
HOUSING AGREEMENT BILL 1956
AUSTRALIAN COASTAL SHIPPING COMMISSION BILL 1956
- Second Reading
AUSTRALIAN COASTAL SHIPPING COMMISSION BILL 1956
- Third Reading
AUSTRALIAN COASTAL SHIPPING AGREEMENT BILL 1956
- Second Reading
- Third Reading
CONTINUOUS FILAMENT ACETATE RAYON YARN
- Tariff Board Report
QUESTION
- CANBERRA
HOUR OF MEETING

– It is true that the vessel referred to by Senator Ashley has, on two occasions this year, been held up at Darwin for very lengthy periods. The honorable senator mentioned 57 days; I am not sure of that time, hut I agree that on one occasion the delay was of that order, and on another occasion it was a very lengthy period. There are aspects of this matter which contribute very much to these unfortunate delays. One is the lack of berthing facilities at Darwin to which the honorable senator has referred, and which will be very largely relieved when the new Darwin wharf comes into operation, I understand some time this year. It has also been a practice, and the honorable senator may recall it, for Commonwealth ships at berth to come off berth to make way for ships of the State shipping service of Western Australia which provides Darwin and the Northern Territory with essential supplies of perishable goods and other goods.

Senator Ashley:

– And also beer.

Senator PALTRIDGE:

– Yes, and also beer. The North Australian Workers Union is quite strong on the point that its members must have their beer, and [ agree with it. Other factors which bring about these unfortunate delays are frequent wharf hold-ups which the honorable senator might help to mitigate by trying to induce a more realistic attitude on the part of the North Australian Workers Union.

page 1302

QUESTION

ROAD SAFETY

Senator CRITCHLEY:
SOUTH AUSTRALIA

– My question is directed to the Minister for Shipping and Transport. I remind the Minister that yesterday he replied to a question asked by Senator Laught about the uniformity of road traffic laws. Can he inform the Senate whether the amendments of the laws or the suggestions from safety conferences have been uniformly accepted by each State, or has each State chosen some different suggestions and amendments with the result that we are not much closer to uniformity than when the conferences began?

Senator PALTRIDGE:
LP

– It would be quite fair to say that a considerable amount of real progress has been made in getting uniformity. At the same time this is a vast field, and as I said yesterday in reply to Senator Laught, it is a job which will continue for some years. I cannot recollect the percentages of the recommendations which have been accepted by the various States. Thi percentages vary.

Senator Critchley:

– Has any one suggestion been uniformly accepted?

Senator PALTRIDGE:

– Yes, a number of them are uniform. It can be said that progress has been made in that respect, but I want to be completely honest with the honorable senator. I am certainly not trying to convey the impression that substantial progress has been made. It is going to be a lengthy job.

page 1302

QUESTION

BANKING

Senator KENNELLY:
through Senator Critchley

asked the Minister representing the Treasurer, upon notice -

Is it a fact that, in its 1954 report, the Commonwealth Bank stressed that it was desirable that the private banks should hold at least 25 per cent, of their deposits in the form of liquid assets and Government securities?
Has the Commonwealth Bank’s opinion du this matter changed since that time?
What percentage of the deposits of each of the private banks was held in the form of liquid assets and Government securities, as at Hu- loth May, 195G?

Senator SPOONER:
Minister for National Development · NEW SOUTH WALES · LP

– The Treasurer lias supplied the following answer to the honorable senator’s question: -

The following statement appeared in the Commonwealth Bank’s report for the year ended 30th June, 1954: - “The most suitable distribution between the various kinds of liquid assets will vary to some extent from bank to bank and from one time of the year to another, but it is the view of the Central Bank that a ratio of liquid assets (comprising cash, deposits with the Central Bank and Treasury Bills) and Government securities to total deposits of about one quarter, allowing for seasonal and other short term variations, would generally be appropriate”.
The Central Bank considers it important that the trading hanks maintain liquid assets and Government securities at a reasonable level. Many factors have to be taken into account in determining what is a reasonable level from time to time and from hank to bank.
Figures as at 15th May, 1.950, are not available. The latest available published figures are averages for April, 1956, when the percentages for each of the major private trading banks were as follows: -

These ratios are at a stage of the year w hen banking liquidity is not at its seasonal peak.

page 1303

HOUSING AGREEMENT BILL 1956

Motion (by Senator Spooner) agreed to -

That leave be given to bring in a bill for an act relating to financial assistance tothe States for the purpose of housing.

Bill presented, and read a first time.

Standing Orders suspended.

Second Keating.

Senator SPOONER:
Minister for National Development · New South Wales · LP

.- I move-

That the bill be now read a second time.

The bill authorizes the Commonwealth to complete a housing agreement with the States. The agreement itself is presented as a schedule to the bill. Up to this point of time, the Government has observed the conditions of an agreement on housing which ran for ten years from 1945. under which State governments built houses principally to rent. The policy of the Government, however, has always been to encourage home ownership rather than rental housing. Furthermore, the Government prefers to help home seekers build their own homes rather than have them built by Government authorities.

In furtherance of this policy, the 1945 housing agreement was amended in 1955 so that tenants could purchase their houses upon favorable terms. The expiry of the 1945 agreement now presents the Government with the opportunity to carry forward its policy of encouraging home ownership a further stage.

It needs to be realized, however, that the constitutional powers of the Commonwealth in relation to housing are limited.For instance, it is doubtful whether the Commonwealth can provide funds for housing except by way of grants to the States under section 96 of the Constitution unless the housing is for defence or some other Commonwealth purpose, or within Commonwealth Territories, as distinct from States.

Accordingly, the Commonwealth has approached the problem by seeking to make arrangements with the States whereunder they agree to use the funds which the Commonwealth provides in a manner which conforms, at least in part, to the policy desired by the Commonwealth.

To prepare an agreement which gives effect to Commonwealth policy and, at the same time, is acceptable to the States, has not proved an easy task. The States’ housing programmes and policies differ from State to State. The State governments did not relish the attitude of the Commonwealth Government in standing firm upon the issue that, as it was undertaking to find the funds, it proposed to ensure that, at least, a reasonable proportion of those funds was used in a way which the Commonwealth believed to be best in the national interest.

The conflict of views between the Commonwealth and the States has resulted in the position that the agreement is not yet signed by the States. However, as it is essential that the Government be authorized to continue payments under the 1945 agreement until the 30th June. 1956, and to execute a new agreement with the States to operate from that date. it is necessary that the approval of the Comm on wealth Parliament be now obtained. I think it likely that the States will sign the agreement during June.

Before discussing the provisions of the bill, I wish to say something about the housing situation, because I am sure that the progress that is being made in dealing with it is not adequately appreciated. In each of the past four years, almost 80,000 dwellings have been completed. As the current annual need is estimated at approximately 57,000 dwellings,the housing shortage is being overtakenby more than 20,000 dwellings per annum. If we can continue to reduce the backlog at this rate we will be methodically and constantly overcoming the shortage. As I shall indicate later, this remarkable progress has been due very largely to private, not government, house building.

I turu now to a brief description of the terms of the agreement which the bill authorizes the Commonwealth to complete. The period of the agreement will be five years from the 1st July, 1956. The agreement contemplates that housing moneys will be provided each year in two categories. The major proportion of the moneys will be made available in a way which, with a few reservations, will enable the States to implement the kind of housing policy that they prefer. The remainder of the funds are to be paid to the credit of a home builders’ account in each State and used for the purpose of encouraging home ownership. During the first two years, 20 per cent, of the moneys received by each State is to be deposited in the home builders’ account, and in the remaining three years, 80 per cent.

Under the original legislation, the 1945 agreement expired on a different date in each State. The agreement attached to this bill provides that all housing moneys advanced to the 30th June, 1956, shall be made available in terms of the 1945 agreement, and moneys advanced after that date in terms of the new agreement. lt is estimated that approximately 95,000 dwellings will have been built under the old agreement, when it expires on the 30th June, -1956. The money for their construction has been advanced year by year since 1945, repayable over 53 years from the year of each advance. The Commonwealth will continue to accept responsibility for three-fifths of any losses, including losses due to rental rebates, incurred on those dwellings during the 53-year period in which the advances are to be repaid.

The new agreement, like the old one, rnakes no mention of the amount of finance that will be provided each year. It does not specify whether more money or less money shall be provided for housing. That is a matter for agreement from year to year between the Commonwealth and each State, and, failing such agreement, allocation by the Commonwealth from the loan funds made available to the Commonwealth by the Loan Council in the approved borrowing programme in respect of each financial year. Under the new agreement, the moneys made available by the Commonwealth will be repayable by the States by annual instalments over a period of 53 years, at an interest rate which will be 1 percent, below the long-term bond rate when that rate exceeds 4£ per cent.; and % per cent, below the long-term bond rate when that rate is 4£ per cent, or less. The Commonwealth may review interest rates two years hence, but in doing so, it may not reduce the interest concession below % per cent.

To this stage, the Commonwealth has provided the States with housing moneys at an interest rate of 3 per cent., even though, under the old agreement, the rate of interest was identified with the long-term bond rate. As from the 1st July, 1956, that is, under the new agreement, the effective rate of interest will be 4 per cent., the long-term bond rate less the concession of 1 per cent. The State Governments have criticized the effective increase of 1 per cent, which thus results on advances for housing. A short answer to this criticism is that during the past five years the houses built by governments under the Housing Agreement have amounted to only 14.3 per cent’, of the total houses built in Australia. Moreover, the State governments, through their housing authorities have endeavoured to spread their activities from the building of small homes foi’ necessitous people to larger dwellings and, in some States, to large blocks of multi-story flats. So that it cannot be maintained that all the houses built under the old agreement have been for the benefit of those in poor financial circumstances. The result is, that under this system most of our people, except those who qualify under the “War Service Homes Act, arc called upon to finance their own housing arrangements without the assistance of a government and, in addition, to pay taxation to finance the building of homes for others at a subsidized interest rate; and they are called upon to do this knowing that the financial position of some of those whom they subsidize is as good or better than their own.

This Government believes in encouraging home ownership and thinks it undesirable that the rate of interest charged for rental housing should be kept too much below the rate of interest charged to home builders. At the same time, it has desired to avoid too steep an increase in rents.

Also, I remind honorable senators, that at the 30th June, 1956, there will be available approximately 95,000 houses, a substantial proportion of which were built when costs were much lower than they are now. They were all built with money provided at the 3 per cent, interest rate, and arc subject to the rental rebate provisions of the 1945 agreement. The houses therefore, provide a stock from which the State governments can make available cheap rental houses to those whom the community as a whole would like to see helped because of their economic circumstances.

Under the old agreement, there were various stipulations as to the standard of dwellings and as to the basis of rental and their allocation by the State governments, hi the new agreement, these have been largely removed. In the future the Commonwealth’s role will be mainly to provide funds at a favorable interest rate. The States will be able to use the funds made available for their section of the housing programine largely as they desire. They may build houses to let or houses to sell. If they build to let, the States alone determine the rents they will charge. If they build to sell, the States alone determine the amount of deposit and the terms of repayment. The stipulations which the Commonwealth has made relate principally to -

setting aside a percentage of houses built, in suitable localities, for serving members of the defence forces:
1. requiring that dwellings are “of reasonable size and standard, primarily for families of low and moderate means “ ;
large blocks of multi-story flats, which may be built only by agreement with the Commonwealth;
ensuring that advances are used only for housing and site development, not for other ancillary public works, or shops.

The provision in the old agreement setting aside for ex-servicemen and their dependants up to 50 per cent, of the dwellings constructed, is carried forward into the provisions of the new argument relating to State housing programmes. Serving members of the forces are now to be included in this group and, in addition, provision is made for the Commonwealth to require a State to set aside for the erection of dwellings for serving members of the defence forces not more than 5 per cent, of the advance which it receives fox its housing programmes. The Commonwealth will provide a supplementary advance equal to the amount each State is thus required to reserve for this purpose. The houses built under these arrangements will be owned and maintained by the State and the State will not be required to build them in other than “ a usual residential locality “. The net result is, of course, that additional houses will be built in those States where the Commonwealth elects to make use of this provision.

I turn now to that section of the agreement which deals with the Commonwealth policy of encouraging home ownership. As I have already said the agreement provides that 20 per cent, of the total housing moneys in the first two years and 30 per cent, in the remaining three years shall be deposited by each State in a home builders’ account. The home builders’ account is to operate as a revolving fund. From this fund advances will be made to building societies and other approved institutions. The advances made by the Commonwealth Government plus the instalment repayments received from building societies and other approved institutions will be credited to the fund. The advances made to building societies and other approved institutions plus reasonable expenses and plus the instalments necessary to repay the Commonwealth its advances over tin 53 year period will be debited to the fund. This procedure will permit housing moneys to be employed advantageously because as repayments of loan instal ments are received they can be advanced again. The actuarial computation is that assuming repayment of advances by building societies to the State in 31 years, and having regard to the relative rates of interest involved, approximately twine as many houses will be financed in this way over the 53-year period of the CommonwealthState loan than if the money were used to build houses to rent.

In addition the larger deposits commonly paid by building society members mean that more houses will be financed with a given sum than if that sum were made available through. State housing authorities. Advances for the home builders’ account will be made to the States on the same terms and conditions as apply to the advances they receive for their own housing programmes, including interest concession and time of repayment. The’ Commonwealth hopes thai, the provision of funds in this way will simulate the development of building societies in Australia. It hopes that it will give a lead to others with available funds to also lend to building societies. 1 1 hopes that it will encourage an increasing number of people to be more thrifty by participating in the savings schemes associated with some building societies. The building society movement in Australia has made a noteworthy contribution to providing the people of Australia with homes of their own choice erected in localities of their own choosing.

There are various forms of building societies. For example, a co-operative terminating society operates by seeking members to take up shares to an amount equal to the cost of the home they conem plate they will build. The members pay off the values of these shares by modest weekly instalments. When the funds of the society permit, they borrow an amount from the society upon which they pay interest. Their weekly instalment correspondingly increases by this interest payment. The building societies in general obtain the moneys they lend o their members from the sale of their shares, plus moneys placed on deposit with them, plus moneys which they borrowed. Different types of building societies arrange their finances in different ways.

One of the undesirable effects of the present competition to obtain finance is that building societies have been left behind in the race. As a result, they are unable to meet the demands which are being made upon them. In New South Wales and Victoria alone there are some 40,000 would-be members of building societies hoping that a society will be able to obtain finance to lend to them.

For all the good work that building societies do in Australia, they are not as strong here’ as in overseas countries. Building societies are playing an important part in the total homebuilding effort of many countries. A good illus tration is the United Kingdom, where during 1954-55 a total of £373,000,000 was advanced on mortgage by building societies. Total assets of the building society movement at the end of June, 1955. readied the huge sum of £1,867,000,000. The number of individual accounts on building society books at the end of 1954-55 was 5,271,414, of which 1,878,890 were those of borrowers. Two-thirds of all new homes completed in the United Kingdom by private builders during 1954-55 were financed by building societies.

The building society movement is also particularly active in the United States. South Africa, New Zealand and the countries of Western Europe. The movement has grown remarkably in recent years. In the United States the amount advanced on first mortgage loans during 1954 totalled £A.13,000,000,000, an increase of just over 100 per cent, on the figure for 1949. These examples encourage us to hope that building societies in Australia will respond to the stimulus afforded bv the provisions of the bill.

The Housing Agreement, it will be noted, deals with the position in general terms. It does little more than recite thai the required proportion of the funds is to be deposited to the home builders’ account and from that source is to bc advanced to building societies and other institution? approved by the Commonwealth upon terms agreed between the Commonwealth and the State governments concerned. It is contemplated that the arrangement? will differ from state to state. This is due to the fact that the building societies differ in their constitutions and their methods of operation in the various states and also because they are more strongly established in some states than in others. It has. therefore, proved impracticable to evolve a detailed formula which could be written into the agreement and which would operate satisfactorily in all States.

I illustrate some of the difficulties iti the following statements: In New South Wales and Victoria the waiting list of applicants for building society finance is so formidable that there is no doubt the societies in those states could use all the funds likely to be available to them for some lime to come. On the other hand, in Queensland there are at present so few building societies that until they are formed, the finance will need to be made available in other ways.

In Tasmania the permanent building societies have been established for 80 or 90 years. Last year they made advances totalling £960,000 by contrast with the amount of £2,100,000 spent on housing by the Tasmanian Government. They expressed appreciation of the Commonwealth’s interest in their well-being, but indicated that they had successfully managed their own affairs for so long without government finance that they did not now desire to accept government finance. Arrangements are being made for the Tasmanian Government to make guarantee arrangements which will enable building societies to increase their borrowings from private sources. It is hoped that eventually new societies will be formed to take up some of the moneys in the home builders’ account.

Although there will be variations in the arrangements, these will be the following common principles : The objective will be to channel the funds in the home builders’ account to building societies. If the societies are not sufficiently strong to absorb the moneys in particular States in the early years, arrangements will be made for the moneys to be used in the meantime by State banks, housing authorities and other approved institutions. The terms and conditions under which the State authorities lend the money will be similar to those under which the building societies operate. Elates of interest, terms of repayment, amounts of deposit and so on will be calculated by the State banks on a pattern similar to that followed by the building societies. The building societies will need to be incorporated in accordance with State laws and subject in the terms of that legislation to State supervision. The State is to lend to building societies at a rate not exceeding f per cent, more than it pays to the Commonwealth.

Preliminary discussions have been held with the States but arrangements have not yet been finalized. There will need to be further discussions not only with the States but also with the building societies. It is contemplated that the arrangements will be reviewed from year to year so that they can be kept sufficiently flexible to encourage the growth of the building society movement.

I conclude with some general comments. For this Government, at any rate, the 1945 agreement, which now happily has almost run its course, had its deficiencies. That agreement bound the Commonwealth to provide funds - at substantial cost to itself - which were used in a manner not to its liking. At the same time the legislation placed many restrictions upon the use of the funds by the States, some of which were irritating and not worth much in practice.

The agreement contained in this bill contains some important and interesting features. In brief, it may be said thai the Commonwealth provides the States with funds at a favorable interest rate which the States may use for their own housing programmes, be they building houses for rent, or for sale, or both. At the same time, funds are provided through the States for the encouragement of home building primarily through building societies. I doubt whether il would be possible for the Commonwealth to approach the matter in a more reasonable way, and if the States and my friends opposite would put politics aside for a moment I feel they must agree.

Debate (on motion by Senator Ashley) adjourned.

page 1307

AUSTRALIAN COASTAL SHIPPING COMMISSION BILL 1956

Second Reading

Debate resumed from the 6th June (vide page 1297), on motion by Senator Paltridge -

That the hill b« now read a second time.

Senator McKENNA:
Leader of the Opposition · Tasmania

– The Senate is debating this bill in conjunction with another one which relates to an agreement between the Commonwealth and a number of shipping companies. We think that it is right that the Commonwealth shipping line should no longer be operated under the National Security Regulations, and that it should be based on some statutory provision.

The fact that it has been operating for so long under the National Security Regulations really emphasizes a .matter which I am surprised that the Minister for Shipping and Transport (Senator Paltridge) did not advert to in the course of his second-reading speech. It was mentioned by Senator Wright when he enlarged upon the importance to defence of a strong mercantile marine in Australian waters, lt is an integral element in the defence of this country. The mercantile marine played a vital part in World War II., and National Security Regulations were used to requisition every kind of Australian ship, large and small, for the transport of troops munitions and supplies, and for all kinds of auxiliary purposes. The only reference to defence is in the preamble to the schedule of the Australian Coastal Shipping Agreement Bill which contains an agreement between the Commonwealth and the shipping companies. That reference reads -

. Whereas to facilitate trade and commerce among the States and assist the defence of the Commonwealth it is expedient

Senator Wright:

– There is also a reference in clause 18 of the agreement.

Senator McKENNA:

– That is the clause which exempts the Commonwealth from complying with the agreement in the event of war. However, no mention of defence was made by the Minister in his second-reading speech of this bill or the associated measure. Australia is an island continent, and may (reasonably he expected to produce a powerful mercantile marine. That aspect of the matter was discussed very well by Senator Ashley on the 9th December, 1948, in the course of a second-reading speech in which he introduced the then government’s shipping bill. He said -

The mercantile marine is in fact an arm of the fighting services, and the existence of an adequate mercantile marine cannot he left to the accident of commercial chance.

That is very true, and I applaud the sentiment. Therefore it is depressing to hear the Minister say that our coastal shipping services are not all that could be desired. Tasmania knows that only too well, because we suffer from recurrent crises in the export of our main products such as apples, potatoes and timber, and there is difficulty in importing our essential requirements.

It was depressing to hear the Minister assign the reasons for the fact that the coastal shipping services are not as good as they might be. He attributed it to four things - the higher capital cost of building ships, the higher cost of maintaining and operating them, industrial disputes in maritime industries, and competition of road and rail services with sea transport. Not only has the Government done nothing about the first two matters, but it is primarily responsible for higher capital costs and higher maintenance costs. It is because the Government dropped the reins when it took over the country in 1949, and allowed inflation to run riot, that shipping is in trouble to-day, with higher capital and maintenance costs.

Also, on the industrial front, this Government must accept a large measure of responsibility. In the first place, Government supporters rejected, and persuaded the people to reject, a referendum to confer on this Parliament power over industrial conditions. Such a power is vital, and it should reside in the National Parliament if Parliament is to discharge its responsibility in regard to the economy of the country - as it must. In the light of the Government’s performance, it was idle for the Minister to state in his second-reading speech thatthe aim of the Government is to provide an adequate Australian-owned fleet of modern merchant vessels of suitable types.

The bill accepts and perpetuates the very stupid distinction between overseas and interstate trade on the one hand, and intra-state trade on the other. I believe that the Government would have been much better advised to use its energies, not in endeavouring to sell the Commonwealth line of ships, but in endeavouring to get the States to refer powers over navigation to the Commonwealth so that the whole of our shipping activities might be under one head.

Sir John Latham has pointed out most effectively that there is an arbitrary distinction between interstate and intrastate ships. Even though the ships are using the same waters, harbours, and wharfs, and providing exactly the same services they are under control of two entirely different authorities, according to whether they function interstate or intra-state. I ask the Minister to state in his reply to the debate. whether the Government has approached the States to seek a resolution of that division of authority. If not, does he contemplate any action that would tend to clear up the present anomalous position?

We do not quarrel with the broad purposes of this bill, which are to abolish the Australian Shipping Board, repeal the National Security Regulations and replace the board with a commission. The other main purpose is to transfer the assets and liabilities of the board, together with its staff, to the commission. We do not quarrel with that, because nearly all of those provisions are exactly the same as the Labour party put into its 1949 shipping bill. If anybody makes a comparison between that bill and this he will find that clause after clause in this measure has been taken without the alteration of a single word from the Labour measure. So, to that extent we find ourselves very much in favour of the general purposes of the first bill.

However, when comparing the two bills, it is interesting to note the changes effected by the Government. Something has gone wrong, and we of the Opposition object very strongly to what is being done. The Labour legislation of 1949 left it entirely to the Australian Shipping Board to determine what rates and charges it would fix for fares and freights. The bill before the chamber provides that in future the fixation of charges, &c, is to be dependent upon, or subject to, the approval of the Minister. As the Minister said in his second-reading speech, lie can approve or disapprove but he has no power to fix. The interesting thing to which I direct his attention is the fact that there could be a deadlock between himself and the commission under that provision. The commission may consider that certain freights are desirable, and the Minister may say that he disapproves. When one considers the tenderness with which the Government has provided a whole system of arbitrators to resolve differences between the commission on the one side and the private shipping companies on the other, I ask the Minister why he does not refer to one of those arbitrators the question of differences between himself and the commission in relation to fares and freights.

The Minister justifies this new power taken unto himself by the argument that the commission’s ships might undercut the private companies, that it might suffer very severe losses in doing that and that the taxpayer would have to bear those losses. I point out to him that we see the other side in operation. We see the position where the Minister might insist upon the fixation of fares at an uneconomic level, at too high a level, which would destroy the business of the commission, bring criticism upon its activities and make it vulnerable to the suggestion again that it should be sold, and at a bargain price. What we suggest to the Minister is that the provision that fares and freights should be under his control and ultimate dictation should either come out of this legislation or, if it is to remain, the Tariff Board should be appointed as the arbitrator between himself and the commission. The Tariff Board is appointed to resolve questions about ship-building orders. Why should not that board determine any dispute between the commission and the Minister ? We say that this particular provision is the first of the leg irons that the Government has forged upon the Commonwealth shipping line under the new regime.

Now, I come to the second change that is being effected. The commission is being required, under clause 18 of the first bill, to pay its way and to pay to the Commonwealth a reasonable dividend on the capital invested; but, subject to that, it has to strike the lowest possible rates and charges. Honorable senators will remember that in his second-reading speech, the Minister said that the Government expects the commission to operate on a proper commercial basis. He also advocated the policy of placing the commission in the position of a competitive business undertaking. In the course of that, he has obliged the commission to pay sales tax, income tax, and “whatever other taxes are applicable, and to pay a reasonable dividend, but not in addition to paying interest on the capital invested. We have no objection to all that, but we now come to the second leg-iron that the Government puts on this, its unwanted child. I refer the Senate to that part of the Minister’s second-reading speech where he deals with the question of developmental trades. This is what he said -

The Minister has one direct power, to which I should like to refer. Where he considers it is necessary to meet the needs of a particular area and is in the public interest, the Minister may direct the Commission to establish a shipping service to meet those particular needs. Where a service is established at the direction of the Minister and results in a loss and the Commission’s operations for the year also result in a loss, then the Commission is entitled to be reimbursed for the loss on the service or the loss on the years’ operations, whichever is the lesser. This power will enable the Minister to ensure that where they are necessary, developmental trades will be undertaken by the Commission to areas where the Commission would not normally provide services,

Listen to these words - because they would not be payable from a commercial point of view.

I repeat those words to the Minister. They are his own - . . because they would not be payable from a commercial point of view. If the commission is operating on a profitable basis overall, it will be expected to absorb any losses on such trades, but if its operations should not be profitable, then it may be reimbursed and the maintenance of developmental services will thus not be an unduly onerous burden on the finances of thu Commission.

If the Minister meant what he said, if he meant that this new line is to function upon a properly competitive basis, if it is to operate upon a commercial basis, then, in all fairness, why should he be free to direct it into a developmental route which nobody’ else will undertake because, as he says, it would not be payable from a commercial point of view? Where is the fairness in saying to the Commonwealth line, “ Go in and lose, but we do not re-imburse you the full amount if you make a profit elsewhere; we will only make up your overall loss? “ That is completely unfair.

Senator Wright:

– But under the agreement, it is protected in that in the first place the excess goes into Consolidated Revenue; and in the second place, its overall losses are recouped from Consolidated Revenue.

Senator McKENNA:

– That is not th« whole story because there is no specific provision to enable the commission to place moneys to reserve. As the Minister has taken so much out of the 1949 Labour legislation, I ask him why he dropped section 25, which says -

The Board may, with the approval of the Treasurer, set aside, out of its revenue, such sums as it thinks proper for reserves for depreciation of assets, insurance and other purposes.

At this point, and before proceeding with my other argument, I should say that reserves are the first and most fundamental need of the Commonwealth shipping line. The commission has a wasting asset in the ships, an asset which loses its value with considerable rapidity over a period of 25 years, and the only way in which it can stay in the field is to build up reserves out of profits, year by year. The one provision that the Minister will find in this hill relating to reserves is a new clause dealing with the report of the Auditor-General. There is no other provision. The Auditor-General is merely required to report upon the adequacy of the reserves. That is the one reference, and it is most indirect and oblique, to the commission’s power to create reserves.

– It does not do that. It puts the commission in an improper light. While we object to the

Minister having power to fix freights and fares in other cases, we would not object to his doing that in a case where he directs developmental trade and states that the Government is prepared to bear whatever loss is incurred. That is one point that we concede to the Government - power to fix fares and freights. If it calls upon the line to go into a developmental trade, and it loses, or is expected to lose on it, we concede that the Government has the right to have a say in fares and freights, because it has to have an opportunity to limit any subsidy that it has to pay.

The third leg-iron upon the commission is the provision in the bills that the commission may not engage in stevedoring operations without the approval of the Minister. That is specified and particularized. When we come to the second bill dealing with the agreement with the companies, we find a complete prohibition for twenty years on the commission against engaging in stevedoring operations except in rare, exceptional and difficult circumstances. One omission from the 1949 legislation is that referred to by Senator Wright in Part 3 of the act. That is the most important part of the legislation because it set up a system of licensing.

The first provision was to ensure that modern vessels were put into commission on the coast, and the second was to ensure that there were enough vessels to cope with the trade. That system of licensing did not allow registration or licensing of a vessel more than 24 years old, except that an older vessel might be registered if it had been used previously on the coastal trade. I ask the Minister to point to anything in either of these bills which seeks to prevent vessels of too antique a vintage operating on the coast. It is true that it can indicate to the companies that they should replace thentonnage and if, in the very ultimate, they do not do so, the commission may step in and do it, but where is there a particular provision that ships of ancient vintage shall not be kept in operation?

Senator Kendall:

– The Navigation Act looks after that aspect.

Senator McKENNA:

– I am asking the Minister to tell me.

Senator Paltridge:

– The Leader of the Opposition objects to the close ministerial control. That is what hurts.

Senator McKENNA:

Senator McKENNA:

– It is prohibited under clause 4. When one surveys this whole agreement in order to see what will happen under it, he finds that the commission will be restricted, during a period of twenty years, to an aggregate gross tonnage on the coast of 325,000 tons, except under conditions that are not real and will never arise; that it will give a complete monopoly in relation to expansion during the whole of that period of twenty years to the private companies; that it forces the commission into the unpayable developmental trade without full reimbursement for the losses that are suffered; that the commission will be tied down in relation to the freights and fares that it may charge, and denied the, right to handle and book its own cargo and conduct its own stevedoring operations. There is evidently no desire on the part of the Government to tackle the overseas shipping combine and, in that way, to serve Australia. There is no obligation on any company to keep any particular ship on the coast line of this country. There is no assurance that ships will be modern, apart from the power given to the Minister to ask a company to replace tonnage. That is too indirect. We of the Opposition are utterly disappointed in the agreement, which is outrageous. I say, with the most complete deliberation, that we of the Opposition will never consider ourselves hound by this agreement. If and when we become the government, one of our first actions, notwithstanding the existence of any contract, will be to repeal this legislation and cancel this agreement.

Senator SEWARD:
WESTERN AUSTRALIA · CP

– I rise to support the hill, and I should like to offer my congratulations to the Minister for Shipping and Transport (Senator Paltridge) on his very comprehensive second-reading speech, in which he gave to honorable senators all of the information they expected. This will be of considerable assistance to them in considering the measure. I am astounded at the attitude that is being adopted by the Opposition in relation to the measure. I expected them to support it, in view of their continual interest in whether the Government intended to sell the Commonwealth shipping line. By means of a number of questions, they have sought that information. Now, having been informed that the Commonwealth shall not sell the line, but intends to retain it for the service of the country, they still complain. I do not know what they want. Do they want the ships to be tied up and allowed to deteriorate? Do they not think that those vessels should continue to engage in trade around the Australian coast?

I desire to comment on one or two things the Leader of the Opposition (Senator McKenna) said during his speech. He made reference to the defence value of the maritime marine. Everybody, of course, is perfectly aware that the maritime marine is of very great value from a defence point of view. After all, it is essential to have a maritime marine. Anybody who considers the shipping position in this country, over the last few years particularly, must be seriously concerned with its deterioration; the ships have been almost driven off the seas. That has not been due in the main to the Government, except in one particular case, to which I shall refer later, but it has been greatly influenced by the inaction of our friends on the other side of the chamber. I certainly agree that the maritime marine has a very great defence value and I hope that the operations of the Commonwealth chipping line, as envisaged by this bill, will restore our shipping to some degree nf. efficiency.

The Leader of the Opposition referred to two very important matters that were affecting our Commonwealth ships, namely higher capital and higher maintenance costs during the last few years. If he were to look into those matters lie would find that those costs are in no way comparable to other costs. For instance, depreciation and maintenance costs on a 3,000-ton vessel amounts to 13 per cent, of the total cost, the crew wages to 15 per cent., other overhead costs to 11 per cent., and stevedoring costs to 60 per cent. In the case of a 6,000-ton vessel depreciation and maintenance amounts to 11.6 per cent, and - leaving out the other costs - the stevedoring costs amount to 67 per cent. I say without any hesitation at all that the shocking state of our coastal shipping to-day - and this applies also to our overseas shipping - has been brought about because of the shocking conditions maintained on our waterfront by the Communist-controlled stevedoring industry. Until some action is taken to relieve that position and reduce those costs we shall have the shipping trade of Australia reduced to the calamitous state in which it is at the present time.

The Leader of the Opposition also said that this bill would give the private companies a monopoly of any expansion in the shipping industry and that the Commonwealth shipping line would’ be crippled in that respect. One would imagine that the Government was going to allow the private shipping companies to engage in a very profitable trade, whereas exactly the opposite is the case. lt will take the private companies and the Commonwealth shipping line jointly ail their time to try to recover some of the trade that has been lost to other forms of transport. Competition from the other forms of transport is having the greatest adverse effect on shipping on the Australian coast. During the debate yesterday on the Commonwealth Aid Roads Bill it was mentioned that road find rail transport is depriving the shipping companies of cargo which the> would normally carry. Surely to goodness, in a country like Australia where practically the whole of our population is settled round the coastline, shipping should be one of our main avenues of transport. Instead of that we find goods being carried by road at fabulous prices, when compared with shipping freights. So, the shipping companies are not operating in a trade which has great profit in it. Exactly the reverse is the ease. During my remarks I hope to give some figures to show that it is a wonder the shipping companies have been able to carry on, let alone make provision for losses and depreciation on their vessels. I am particularly surprised at the action of the Opposition in opposing this measure. I would have thought it would have joined with the Government in supporting the bill in order to maintain what the Opposition regards as its particular baby. Instead of that, it is allowing our shipping to be gradually diminished by the conditions that are permitted on our seafront.

Then, the Leader of the Opposition referred to the fact that we should engage in overseas shipping. That makes me laugh. Heavens above, I do not know what capitalization he thinks would be necessary if we were to compete with the shipping companies of the world. At the present time, the Orient company is building a ship which is to cost about £30,000,000 or £40,000,000. Where would the Opposition get the money to compete in a service such as that?

Senator Benn:

– That is not a cargo vessel.

Senator SEWARD:

– No ; but the cost of cargo vessels is relatively just as high. It is utterly impossible to compete in such a service. If we can use our Commonwealth ships and gradually increase them and so successfully operate our coastal trade, making it profitable for people to use, the Government will have done a jolly fine job for this country without bothering its head about going into competition with the huge overseas vessels. If the position on the waterfront is cleaned up we will find that more overseas ships will call at our ports.

As we have heard a great deal about the fabulous profits of the shipping companies, T should like to give the Senate a few figures to show the actual position.

Last year, 193 ships, with a tonnage of 568,559 tons, handled little more cargo than did 101 ships, with a gross tonnage of 332,292, in 1935-39. That deterioration has been brought about by the slow turn-round of ships and the way in which ships are held up in port and prevented from fulfilling their functions. Another fact is that in recent years there has been a decline in tonnages of general cargo and an increase in bulk cargo. At the present time bulk cargo represents 75 per cent, of the cargo that is being bandied by ships. One shipping company has experienced a falling-off in general cargo between Melbourne and Sydney to the extent of over 40 per cent, during the last twelve months due to road and rail competition. That is the reason why the shipping companies are in their present state.

For a long time it had been an open secret that the Government has been desirous of selling the Commonwealth shipping line. The Leader of the Opposition asked why it has not done so. Obviously, it could not do so; and I shall give some very good reasons. I have already stated that it takes 193 ships to-day to do the work which 101 ships did a few years ago. Let us consider crew wages. This is only a small item in comparison with stevedoring, charges, but in 1937 on a 2,300-ton vessel the pay for the crew amounted to £33 a day. To-day, it amounts to £189 a day. On a 6,600-ton vessel it was £43 a day in 1939, whereas to-day it is £253 a day. It is very interesting to read a statement by Judge Foster in 1955 in which he pointed out that seamen were paid for 64 hours a .week although they worked only from 28 to 35 hours a week. The judge commented that that was a staggering fact. That is something which affects shipping and which should be taken in hand. A further illustration of why private companies have been unwilling to purchase the Commonwealth shipping line can be gauged from the following figures relating to two efficient motor vessels. A vessel of 2,500 tons carrying 85 per cent, cargo, which is above the usual amount of cargo carried by a vessel like that, cost 131s. a ton to run while the net revenue received amounted to 131s. 6d. a ton. That meant a net profit of 6d. a ton. And those- figures did not include provision for industrial hold-ups, replacement of the vessel, taxation or a return to shareholders. On another vessel of 5,000 tons, carrying 80 per Cent, of its tonnage in cargo - which was relatively higher than usual - the costs were- 123s. a ton, and the joint net result was 131s. 6d. a ton. Can honorable senators wonder that there is no enthusiasm among private companies to buy the ships of the Commonwealth line on the terms suggested by the Minister, which1 he described as being just and fair in all circumstances?

Senator BROWN:
QUEENSLAND

– If the honorable senator’s story is true the private companies should be glad to turn their ship? over to the .Government.

Senator SEWARD:

– Would the honorable senator like a repetition of what happened with the State butchers’ shops and the State sheep station in Queensland? One need not go as far as that for an illustration of government enterprise. Government railways are losing millions of pounds a year. It is far better to appoint a commission to takeover this shipping line, and to run it on a business-like basis, in fair competition with the private shipping companies. A further factor which has influenced the shipping companies not to purchase thu line is that 80 out of the 140 vessels engaged in coastal trade will he more than 25 years old in 1960. To replace them progressively would cost over £60,000,000 - -more than the entire capital cost of the present fleet. Is it any wonder that there is no possibility of selling the ships to the highest bidder - or to any bidder - bearing in mind that they have to be sold at a fair price?

Let us examine the competition to which they are being subjected. Yesterday, it was pointed out that people in Western Australia had been bringing galvanized iron piping by road from the eastern States at a cost of £60 a ton. In another case, bulky agricultural machinery was sent from Sydney to Darwin, via Alice Springs, involving a journey of 700 miles by road. The cost was £50 a ton. That was necessary because no ship was available to transport it. Industrial hold-ups on the waterfront have an important bearing on this situation. 5To businessman will send goods by ship unless he knows definitely the date of its departure, and the date of its arrival at the port of destination. “When that information is not available, and frequent hold-ups on the waterfront are dislocating shipping schedules, he will prefer to send goods to Darwin by road and rail, even at a cost of £50 a ton, although the shipping freight might be less than a quarter of that figure.

I agree with the Leader of the Opposition that the waterfront conditions and facilities at Darwin are not good; consequently, few ships call there. Only Western Australian State coastal ships provide anything like a regular service to Darwin. Not long ago, I was at Darwin when the State ship Kabballi called with a cargo of 170 tons to unload, and three and a half days were taken to do the job. The Blue Funnel line from Singapore to Perth by-passes Darwin because those ships cannot afford to be delayed in the port if they call.

Senator Tangney:

– What are the port facilities like at Darwin?

Senator SEWARD:

– They are greatly in need of improvement, and a certain amount of blame is attachable to this Government for the fact that the wharf has not been built. There is reason for complaint when one observes the attitude of the waterside workers at Darwin. They are brought from the workers’ club to the wharf by bus - a distance which any ablebodied man could walk in five minutes. Instead of their arriving at 8 a.m., it is 8.10 a.m. before they get to the wharf. They take their time to stroll about the wharf, and on the occasion I was there it was 8.40 a.m. before they went on board and began to remove the hatches. A State member of Parliament was with me, and we were standing near the man operating the winch. The man on the hatch gave him a signal to haul up, but he seemed to take no notice. My friend said to him, “I think the man on the hatch wants you to haul up “. The winch man replied, “ Well, he can soandso wait until I roll this so-and-so cigarette “. He rolled his cigarette and lit it, and then proceeded to operate the winch. Is it any wonder that three and a half days were taken to unload 170 tons of cargo? During the recent shipping strike in Queensland as much as 500 tons and 600 tons were unloaded in a day - but not by wharf labourers. It is impossible for business people to use shipping services of that kind. The captain of this ship at Darwin said to me, “ The beer is the last lot of cargo that will come out. If that were to come out first we would never get the ship unloaded “.

I hope that stevedoring operations will come under review within the next few days. Last year, no fewer than 6.6 per cent, of the total man-hours were lost through industrial disputes on the waterfront, representing a total of almost 3,000,000 man-hours. Unless better service than that is given by the waterside workers it would be better for the Government to abandon all idea of going into shipping. But, as has been pointed out, shipping is valuable for defence, and also as a means of transport, in a country which has a long coastline, and where the population is concentrated mostly in coastal areas.

I have been amazed at the attitude of honorable senators opposite. If they think that shipping is a lucrative business, I advise them to buy a few share? in some of the private shipping companies, and they will know from th, dividends they receive what is the real position. I have already given figures of the freight costs involved on various ships. For one ship the return was 6d. a ton on a voyage, and for a larger ship it was 7s. a ton. No allowance was made for dividends or depreciation. There is noi much room for profit-making.

The position of the shipping industry is calamitous, and I wish the Minister and the Government every success in their efforts to promote the shipping industry through this legislation. I am not the slightest bit keen on the Government going into shipping, and I should have preferred some arrangement through which the Government would exercise only such control as was really necessary. However, I appreciate the fact that the Minister is retaining the right to direct shipping to certain ports. That is vital.

The objection to this proposal might be answered by suggesting that a government has the right to build a railway line into a new area for the purpose of developing it. In Western Australia, the ports of Esperance, Albany, Busselton and Bunbury are in great need of development so that ships will call there. Private enterprise will not seek to establish industries or businesses at these centres if there are no port facilities. Would honorable senators opposite invest their money in a concern at a place where it was impossible to gain any return ? If the Government can improve these ports it will provide some inducement for overseas ships to call, and cargoes of apples and wool can be taken on. That is not possible at the present time.

I congratulate the Minister on taking the power to direct ships to these ports so that both they, and the neglected areas in their hinterland, may be developed. I have pleasure in supporting the bill.

Senator BENN:
Queensland

– The agreement contained in one of the bills before the Senate is the crux of these proposals, and I intend to address my remarks to its contents. The secondreading speech of the Minister for Shipping and Transport (Senator Paltridge), was one of the worst ever made in this Senate. One would think that the Minister would have fully explained the agreement for the benefit, not only of honorable senators, but also of the Australian public. Let us examine it, and what do we find ? We find the statement that one of the objectives of the Government is to protect the position of the private shipping companies and to place them in a position whereby they will be able to continue to play their due part in the provision of efficient shipping services in the Australian coastal trade. Their “ due part” in the shipping services! What affinity have the shipping companies engaged in the coastal trade with the people of Australia ? There is nothing in common between the shipping companies engaged in the coastal trade and the people of Australia. The “ due part “ of the shipping companies is to keep profits as high as possible, and neither the Minister nor the Government will escape being informed by me to-day what profits the companies have made over the years. Let no one think for a moment that these shipping companies are struggling and that the shareholders are poor people, because in a few moments I shall disclose the profits of these companies. At present I shall proceed to quote from the Minister’s second-reading speech on the agreement bill. He said - lt is determined however to avoid the position arising under which Commonwealthowned vessels will expand unnecessarily into trades which are being efficiently served by the private shipping interests.

Why does the Minister not tell us the trades that are being efficiently served by the shipping companies? He leaves all that to our imagination. While he tells us that the shipping interests are at present efficiently serving the needs of the Australian public, he does not tell us how they are doing so. I have not the slightest doubt that he and the Government will do their utmost to prevent the commission from expanding into other trades, notwithstanding the fact that those trades may form necessary adjuncts to the main business of shipping. The Minister further said, referring to the Government -

It is not .prepared to confer any undue advantages on the private shipping companies.

Oh no, the Government would not be guilty of such an action ! But I shall deal with the agreement in due course. Here is an agreement before us under which the Government intends to form a partnership with several shipping companies, and we have not been told anything about those private shipping companies. We all remain in absolute ignorance of the affairs of those companies. We know them by name, but a full description of them and their business ramifications has not been given by the Minister, and I hold that against him to his discredit. It has been left to me to disclose something about the signatories to the agreement - those people who will be partners of the Commonwealth, although the partnership will do no more than stultify the activities of the commission.

The agreement will not allow the commission to carry out a full shipping service in the interests of the Commonwealth - it is a matter of strangulation and stultification. It puts the commission in a pillory, and will hold it there for twenty years. The shipping companies are now entering a partnership with a government that was great before it was brought to its knees by these companies, which are the masters of the Liberal party.

– On a very small capital. I appeal to the honorable senator not to ask questions. He will get all the information he requires without asking for it, because I have come here prepared to give it. If I have not answered all the questions he would like to ask by the time I have finished, then, if he will kindly give me notice of what he desires, I shall get the answers for him.

I have mentioned the number of ships in the Australian Shipping Board’s fleet. I. shall now name the ships, now being operated by the Adelaide Steamship Company Limited, and I shall give their tonnages. If my figures are a year or two out, that is not my fault; I am quoting the latest information available to me on the matter. The ships operated by this company are -

L have not the dates on which those ships were launched, but I propose to get that information later if it is available. I have those particulars in connexion with another company whose affairs I shall be examining in a moment, and I shall endeavour to obtain the same information in respect of ships of the Adelaide Steamship Company Limited so that we shall then understand when they will have to be replaced. It had in commission also seven tugs, tenders and launches, and seven hulks and lighters in various Commonwealth ports.

Honorable senators were informed last night that shipping operations on the Australian coast did not attract reinvestment. I direct the attention of honorable senators to the Adelaide Steamship Company Limited. Not only does it engage in shipping, but it also controls the Waratah Tug and Salvage

– I will tell you, and f will tell you also how many preference and ordinary shares are held.

The DEPUTY PRESIDENT (Senator the Hon. A. D. Reid) .-Order ! The honorable senator will address his remarks to the Chair.

Senator BENN:

– I shall do so. but there are so many Presidents ;ind Deputy Presidents around-

The DEPUTY PRESIDENT.Order ! There is only one Deputy President, and he is in the chair.

Senator BENN:

– I shall observe your direction, Mr. Deputy President, but as you will have noticed, I am being badgered for information. However, the interjectors will not interfere with my line of reasoning. I return to the profits disclosed by Huddart Parker Limited. They were -

This company has other business interests apart from its extensive shipping trade. It has large subsidiary colliery, steamship and other interests, which include Hepburn Colliery Limited (57 per cent, interest), Metropolitan. Coal Company Limited (controlling interest), J. and A. Brown and Abermain Seaham Colliery Limited, Tasmanian Steamers Proprietary Limited (half interest), Bay Steamers Limited (controlling interest) and. Amalgamated Wireless (Australasia) Limited. If anybody wants to know who bought the shares of Amalgamated Wireless (Australasia) Limited when they were sold by the Government, they know now. That is where the bulk of the shares went. Huddart Parker Limited also holds one-fifth interest in Australian National Airways Proprietary Limited, with a nominal capital of £500,000. I direct that statement to Senator Henty, because he is always solicitous about Australian National Airways Proprietary Limited.

Senator Henty:

– I like the pioneers of Australia, and always did.

Senator BENN:

– I have been asked about dividends. Huddart Parker Limited had to pay only 6 per cent, on preference shares, but on ordinary shares, it paid a dividend of 14 per cent. Honorable senators need not take my word for these figures; they can check them. I was challenged about the capital investment of shipping interests. This company has 500,000 6 per cent, cumulative preference shares of £1 each, all fully paid, and 750,000 ordinary shares of £1, so that the total capital is £1,250,000. The dividend for ordinary shareholders was 14 per cent.

Senator Wright:

– What was the profi t on the shipping account?

Senator BENN:

– The honorable senator has asked me for details. I gave three or four hours of my private time to this study. The figures are fairly conclusive. I have not finished with Huddart Parker Limited, because that company has a consolidated balancesheet. If honorable senators know anything about bookkeeping and accountancy, they will know that it is possible for a holding company to make transfers of reserves, and it is very difficult for even an expert, who has devoted all his time to accountancy, to trace the movement of cash and other assets. The consolidated balance-sheet of Huddart Parker Limited and its subsidiaries shows the following profits : -

Therefore, the company has been doing all ‘right with its shipping interests and subsidiary companies. I shall now give details of its fleet. Adelong, gross tonnage 5,000, was built in 3936 and is a cargo ship. Barwon, gross tonnage 5,600, was built in 1939. The company also owns Wanganella, of 9,576 tons, which was built in 1932, or 24 years ago, :Ind Westralia, of 8,320 tons, which was built in 1928, or 28 years ago.

Senator WRIGHT:
TASMANIA · LP; IND from June 1978

– What point is the honorable senator making?

Senator BENN:
QUEENSLAND · ALP

– I shall come to the point later, and I shall not require the assistance of Senator Wright. Indeed, I propose to deal with some of the matters referred to by him last night when he made some of the most idiotic statements ever heard in this chamber. The company also owns Zealandia, of 6,660 tons, built in 1910, or 46 years ago ; Goulburn, of 3,263 tons> built in 1915, or 43 years ago; Colac, of 3,339 tons, built in 1920, or 36 years ago; and Corio, of 3,346 tons, built in 1919, or 37 years ago. Some of these ships are older than many honorable senators. There is also Yarra, of 2,257 tons, built in 1907, or 49 years ago, as well as three smaller ships, Eagle, Foremost, and Falcon, which are used ns tugs in various ports. Senator Wright wants to know what point I am making. I” suggest that he is not concerned with whether or not I am making a point. Perhaps he thinks I am referring to these figures merely for the purpose of getting them into Hansard. From the figures I have given it is possible to arrive at the average age of the ships controlled by Huddart Parker Limited, and also to 3ee the expenditure that the company has faced.

There can be no doubt that the agreement will affect adversely the operations of the commission’s fleet. It will circumscribe the activities of the fleet to such n degree that the operations will show a loss within the next year or two. T suggest that, after losses have been shown by the fleet, there will be public clamour for the sale of the ships on the ground of co3t. Then we shall have the spectacle of the bosom friends of the Menzies Government coming along and being prepared to make offers for the ships. That i? the time that they will enter the picture.

There are other companies, of course, that are associated with the Government in this enterprise. For instance, there is the Melbourne Steamship Company Limited. It has not been losing money, either. On the contrary, it has been doing quite well. It does J1Ot require assistance from the Australian Government, nor does it require this unholy alliance that is being brought about by the two measures before the Senate. In 1951, the Melbourne Steamship Company Limited made a net profit of £32,651; in 1952, £37,568; in 1953, £47,928; in 1954, £61,591; and in 1955, £58,186. The average annual profit for the years I have cited was £47,584. Let us consider its activities. In March, 1952, the company bought the freehold premises and plant, with goodwill, of Hodge and Zlotkowski of Sussex-street, Sydney, who had done engineering work on the company’s vessels for many years. A proprietary company was formed, to be known as Hodge Engineering Company Proprietary Limited, with an authorized capital of £100,000 in £1 shares, of which 35,000 are issued, and all of which are owned by the Melbourne Steamship Company Limited. In 1954, the company formed another subsidiary, Cockburn Engineering Proprietary Limited, to engage in marine and general engineering work at Fremantle. I suggest, therefore, that the Melbourne Steamship Company Limited has no intention of getting off the water. It is obvious that the company’s intention is to remain on the water as long as possible, because the shipping business in Australia is such a profitable one.

Mcllwraith McEacharn Limited, another public company, has not been showing a loss on its operations either. In 1951, the net profit of the company was £87,211; in 1952, £150,625; in 1953, £135,366; in 1954, £190,896; and in 1955, £220,542. The total profit for those years was £784,640, and the average profit, £156,928.

Senator GEORGE RANKIN:
VICTORIA · CP

– What is the capital invested in these companies?

Senator BENN:

– A relatively infinitesimal amount. I shall obtain the information for the honorable senator, if he wishes me to do so. I think that it would be very interesting to find out the extent of the capital investment in these companies that are making such high profits.

In sub-paragraph (£>) of the fourth part of the preamble to the schedule of the Australian Coastal Shipping Agreement Bill a provision is made for the maintenance of competition between the respective companies, and also between the companies and the commission. What is the nature of the competition between the shipping companies in the Australian trade to-day? Is any honorable senator sufficiently innocent to believe that the shipping companies are in competition with each other? We should not believe that for a moment. Alice, of Alice in Wonderland, would not believe such a contention, and I suggest that the Minister does not believe it either, because he knows what has been going on. He knows the arrangements. Uniform prices for freights and fares are fixed, and woe betide the shipping company that charges less than those prices. All those matters have been brought within the cartel, as have stevedoring charges.

Senator Kendall:

– James Patrick and Company Proprietary Limited and John Burke Limited have been under-selling for years.

Senator BENN:
QUEENSLAND · ALP

– The honorable senator refers to one or two companies, but I suggest that he cannot mention others. Surely it would be general knowledge if one company was under-cutting another. Evidently, the companies mentioned by the honorable senator are not in the cartel. Generally speaking, shipping freights and charges of all kinds are fixed by the cartel, and all shipping companies observe them. That is why the Commonwealth ships are to be subjected to this agreement. In future, they will have to observe the cartelized charges of the private shipping -companies.

We know that stevedoring companies handle cargoes and that many of them have sheds and storage facilities adjacent to wharfs. We also know of the charges that are made for their services. Those companies will be able to overcharge the commission because the commission will not know anything about the method of fixing the charges. It will find it very difficult to ascertain what is being done.

Sub-paragraph (c) of the fourth part of the preamble is one of the humorous aspects of the agreement. It is a poor law that does not provide a laugh of some kind. I think that this provision is one of the most humorous that I have seen in any legal document. It provides for the efficient and economical operation of shipping services in the Australian coastal trade. Perhaps it will not be very long before the Government introduces a bill for the purpose of preventing people from going bankrupt. The Government is legislating to approve an agreement and to provide an efficient service. I point out that, in the shipping industry, efficiency is promoted by those who conduct the shipping services ; it cannot be assured merely by a legislative stipulation that the service shall bp efficient. Therefore, it is just so much moonshine for the Minister to say that the bill will guarantee that the shipping services on the coast will be efficiently conducted. What sanction can be applied by the Government in relation to an inefficient shipping service? How will it discover inefficiency? I should like the Minister to answer these questions.

I am greatly concerned about the future of the Australian shipbuilding industry. I am concerned at all times about the employment of those who are engaged in that industry because, during the latter part of the war, two shipbuilding yards were established in Queensland by the Labour government. I feel sure that, had not Labour been in charge of the affairs of this country at that time, those yards would not have been established. One of them is located virtually in the heart of Brisbane. What is to be the future of this industry? I point out that the commission will very soon exhaust its limit of gross tonnage.

Senator Paltridge:

– What about replacements?

Senator BENN:

– I should like to receive from the Minister a definite assurance that the two shipbuilding yards I have mentioned will be kept working.

Senator Ashley:

– Replacements for private shipping companies will come from Japan and the United States of America, because this measure does not compel them to buy in Australia.

Senator Brown:

– The companies will buy on the cheapest, market.

Senator BENN:

– A statement was made in this chamber yesterday afternoon to the effect that the coastal shipping industry is a potent factor in the Australian economy. Nobody denies for a moment that it is. Although we acknowledge the valuable services that are being provided by road transport and long trains drawn by diesel-electric locomotives, we still have to rely to a considerable extent on sea transport to maintain and expand our economy. Therefore, it is necessary for us to consider every possible means of improving the shipping services. I do not think for a moment that this bill will improve those services one iota. The Commonwealth ships should have been allowed to continue to operate freely in competition with the shipping services conducted by the private companies. In effect, the Government is applying to the shipping services of this country a form of rationalization, which will cripple the Commonwealth shipping line.

Under this bill, the shipping companies will be immune from competition. After the commission has been in existence for only a short period, it will find that it has to charge the same freights and fares as the private shipping companies. What a helpless position the commission will be in as a result of the provision that all of its booking arrangements shall be carried out by the private shipping companies ! What a glorious opportunity the companies will have to learn of the class of trade and cargo being handled by the commission’s vessels ! This aspect of the matter calls for special investigation.

Let us consider what may possibly be a typical sequence of events. If a trader wishes to consign a cargo from Brisbane to Sydney, it will be necessary for him to ask one of the private shipping companies to make the booking. Let us assume that there are two ships in port, one of which is owned by the shipping company handling the booking, and the other by the commission. To whom will the shipping company give the business? It is reasonable to assume that, if the cargo is of an objectionable character, it will be diverted to the commission’s ship. If, on the other hand, it comprises mineral concentrates or cargo in respect of which high freight is charged, the business will be given to the company’s ship.

There is another aspect of the matter. Under this agreement, the shipping companies will be able to obtain information which could be used to the disadvantage of the commission. For instance, they will learn which traders are using the commission’s services, and will then be able to conduct a form of propaganda amongst the commission’s clients. They could go around amongst those clients, saying, “ We can offer you this and that, which would be to your monetary advantage “, and thereby attract business away from the commission.

The stevedoring companies have been drawn into this agreement because, as I mentioned a few minutes ago, they have storage sheds adjacent to the wharfs. We all know how the stevedoring companies work. They need not notify consignees promptly that cargoes have arrived, and if the notification is not given for a day or so a storage fee becomes payable. This kind of thing goes on. That is how many of these concerns make large profits.

Senator KENDALL:

– Is that why they pay carriers to remove the cargo from their sheds?

Senator BENN:

– I know what goes on in the stevedoring industry. If Senator Kendall would like to hear of instances of demurrage being charged when it should not have been incurred, I shall supply him with the details. This is the sort of thing which could place the commission in an almost helpless position.

In my opinion, this bill is one of the worst pieces of legislation that has ever been brought before the Senate. As the Leader of the Opposition (Senator McKenna) indicated this morning, as soon as Labour is returned to office itwill repudiate the whole of this agreement. I earnestly hope that I shall be present in this chamber on that day so that I may lend my support to that repudiation.

Sitting suspended from 12.4.8 to 2.15 p.m.

Senator KENDALL (Queensland) [2.15J. - As this debate has proceeded I have, unfortunately, become more and more confused. When this bill was originally mooted some weeks ago and I had some knowledge of its contents, 1 thought ait that time I would enjoy speaking in this debate. I also thought that, possibly, I would have to attempt to convince some of my own colleagues on this side of the chamber as to the merits of this bill. 1 certainly did not think that I should have to try to convince the Opposition, or to argue with honorable senators opposite, because after all this bill contains provisions for which the Opposition has been striving for so long.

Having known Senator Arnold for so long and recognizing him as a friend, 1 was amazed at the attitude he adopted when opening the debate for the Opposition. I cannot say exactly what I feel about his speech. In any event it was disgraceful in the sense that he completely misrepresented, almost to the point of falsehood, many of the things that are contained in the bill. The only explanation I can offer is that the Opposition objects to having its catch-cry taken away. Previously, it was always able to ask, “ What is the Government going to do with the Commonwealth shipping line ? “ Unfortunately, Senator Arnold left the chamber before the Minister for National Development (Senator Spooner) replied to the points he had made. It might have done him some good if he had listened to the answers to the propositions he had put forward. It was interesting to note that only four members of the Opposition were present at the time the Minister was speaking. So, it looks to me as if honorable senators opposite are not particularly interested in the bill or in what the Minister had to say.

The Minister answered most of the points that have been raised by Opposition speakers, but, before dealing with the bill itself, I desire to refer to one or two of those points. Senator Ashley and one other Senator whom I cannot recall, complained bitterly of the condition of Australian coastal vessels prior to World War II. Let me say at once that before the war Australia had one of the finest coastal fleets of any country in the world. At the beginning of the war we were able to hand over at least fourteen ships of 10,000 tons for defence work. Among them were Duntroon, Wanganella, Kanimbla, Awatea, Bulolo, MacDhui, and many others which I will not bother mentioning at the moment. I should like to contradict the statement made by Senator Ashley that our shipping in Australian waters was falling to pieces in 1949 because, as I have said, we then had one of the finest coastal fleets in the world. Honorable senators do not have to take only my word for that. Any one who travelled in those days could compare the ships we had at that time with those of other nations. In regard to dockyards, we had ample yards in which to carry out the work necessary on our coastal fleet at that time and also on vessels which called here from other countries.

The Leader of the Opposition (Senator McKenna) complained particularly about the lack of expansion of the Australian fleet. The truth is that since the war thu coastal fleet has been almost’ doubled. I think the figures are 101 ships pre-war and 194 or 195 at the present time. In the same connexion he also said that during the next twenty years the Commonwealth shipping line will be able to increase its tonnage by only 78,000 tons. T point out to him that at the present time we are using ,193 ships to do almost, exactly the same work as 101 ships were doing before the war. The answer to the problem is not an increase in tonnage but a. shortening of the turn-round period. In other words, it is not the mercantile marine which is at fault but the waterside workers or stevedores. Even if we had more ships we would still not be able to handle the tonnages. I suggest that the argument put forward by the Leader of the Opposition is completely fallacious and that there is greater need to concentrate on getting the waterside workers of this country to get back to reasonable conditions as far as tonnages are concerned. The Leader of the Opposition also suggested that the Government has been influenced by chambers of commerce chambers of manufactures and the shipowners. I suggest the Government would be better advised to listen to people like that rather than to listen to people like

Healy, Roach, and Elliott, and a few more who are causing disruption in this country at the present time.

In regard to Senator Benn’s contribution, I have never heard such a conglomeration of completely unrelated facts, lie cited the actual profits made in pounds, shillings, and pence for each year, rant he did not relate those profits to the capital of the companies. He read our a long list of tonnages hut it does not matter whether a ship is 50 tons or 500 tons. That has nothing to do with the argument at all. Senator Benn finished up by telling us that he had spent three hours of his own time in getting his figures together. I have spent 30 years aud. more of my life in association with shipping and I have spent the last few week-ends try to arrange the facts that were in my mind. I have to sort these things out well beforehand, because I am no* a good speaker.

The bill provides for the setting up of an Australian Coastal Shipping Commission which will replace the present, Australian Shipping Board. I am not, quite sure what the difference will be. but I understand the Minister will explain that point fully. It also repeals the 1 049 act, but as that act was never proclaimed I do not see that it can make much difference to the Opposition. I think the Minister for Shipping and Transport (Senator Paltridge) has done n remarkably good job. I wish to refer to only one or two clauses in the bill, the first being clause 17 which has been the subject of some argument by honorable senators opposite. It provides - (.1) Where, in the opinion of the Minister, a shipping service of the Commission is necessary to meet the requirements of a particular area and it is desirable in the public interest that the shipping service should be provided, the Minister may, by writing under his hand, direct the Commission to establish, maintain and operate, or to continue to maintain and operate, a shipping service for the purpose of meeting those requirements.

Immediately there springs to my mind the pleas of my Tasmanian colleagues in their perpetual request for more and more tonnage. I have no doubt that something like that was in the mind of the Minister when he inserted that clause. I imagine that if the Opposition were in office and was dealing with this matter, that is exactly what they would have done with the Commonwealth ships. That was one of the reasons why the Commonwealth shipping line ever came into being - to do work which was not being done by private companies or which private companies were unable to do. My own viewpoint is that this bill does not strengthen the hands of private shipping owners, but rather weakens their hands inasmuch as we have an instrumentality that can put ships on to a run irrespective of whether the private owners like it or not. If we could not send ships to do work which the private shipping owners refused to do, the only way in which they could be induced to do the work would be by an increase in freights. The Commonwealth is able to do the work without raising freights or making any alteration in the normal shipping services. The suggestions that have Been made by members of the Opposition are completely opposite to mine, but I suggest that they might think over the suggestions I have made. Clause 19 deals with the rates chargeable by the commission for the carriage of persons or goods or for any other service, and these are to be subject to approval by the Minister. I cannot see why honorable senators opposite got so hot, under the collar over that clause, because it will have the effect of keeping down freight charges on the coast through the competition of the Australian Commonwealth ships with those of private shipowners. An example of that kind of thing occurred in Australia before the war, when the private shipping companies of James Patrick and Company Proprietary Limited, Burke and Company Proprietary Limited and R. W. Miller and Company Proprietary Limited ran ships and carried freight at a lower rate than that of the larger private shipping companies.

Senator Ashley:

– They are all in disagreement with this bill.

Senator KENDALL:

– They may be now, but I am using their actions as an illustration. In those days, those three companies operated at reduced freights on the coast, and ran what was called a cut-freight service. The bigger companies reduced their freight rates below those of James Patrick and Company

Proprietary Limited, Burke and Company Proprietary Limited and R. W. Miller and Company Proprietary Limited, but the shippers in their wisdom stuck to the smaller companies and this enabled them to maintain their reduced freights. Surely that policy could operate in exactly the same way if applied to the Commonwealth ships. If shippers found that they could ship with the Commonwealth line at a rate cheaper than that charged by the Australasian United Steam Navigation Company Limited or any other Australian shipping company, with whom would they do business ? Obviously, they would ship with the Commonwealth line, and the consequence would be that the level of freights could be maintained at a figure commensurate with what was thought proper in relation to the profits of these particular shipowners. Surely that is logical. If those two factors are taken together I can see no difference. The story is exactly the same in these circumstances, and the Commonwealth line can be used for this purpose, but not for the purpose which Senator McKenna suggests.

Clause 44 of the bill provides that ships belonging to the commission shall not be deemed to be ships belonging to Her Majesty. Reference is made to section 741 of the Merchant Shipping Act of 1894, and to section SO of the Merchant Shipping Act of 1906. I have examined both those acts, and section 80 of the 1906 act provides -

Nothing in this Act shall affect the powers of any legislature of any British possession to regulate any Government ships under the control of the Government of that possession. “ Government ship “ means a vessel not forming part of Her Majesty’s Navy.

My only reason for querying this provision is that it seems to be so unnecessary in view of what I have just read, but no doubt the Minister will explain that.

There are two points in the schedule which call for comment. A great deal of play has been made on the provision that for the next twenty years the Commonwealth line shall be limited to a total of 7S,000 tons of new tonnage. If the average vessel has a tonnage of 5,000 tons, sixteen ships could be built to total 78,000 tons. “Within the next few years, perhaps peace will be restored to the waterfront and there would then be ample ships to carry the tonnage offering. Over a period of twenty years it is contemplated that no fewer than sixteen ships will be built, but as I said before, if the industry operates normally there will be more ships than are required. The majority of the ships now owned by the Commonwealth line are in the condition described as “ A.l at Lloyds “, and they will maintain that condition for manyyears. Many of them have been built within the past six years, and still have a long life.

Senator Henty:

– What is the average life of a ship?

Senator KENDALL:

– That depends upon the trade in which it is engaged, but usually it is between 20 and 30 years. After that the cost of repairs may make the vessel uneconomical to run. Some ships, of course, have been running for 90 years. The old Edina, which was in service in the Melbourne ports, was 90 years old when she was scrapped. By the time that Senator Ashley and his colleagues of the Opposition regain the treasury-benches it will be time for them to deal with this twenty-years provision.

I have become- rather confused as this debate has gone on because at the beginning I thought I should be almost at one with the Opposition, since I have my own views on the destination of the Commonwealth ships. However, I have been surprised to find how much the Opposition dislikes the idea of the Government running these ships, and how much senators on the Government side like it. I have a very strong personal bias in this matter - not that a strong personal bias is unknown in this House - but after 35 years at sea I have a strong dislike for some shipowners whom I have known in the past. I emphasize the phrase “ in the past “ because circumstances have now changed considerably. I make the point, however, that because of my bias, it has been particularly difficult for me to speak on this measure, in view of what has gone before.

For some time I have been reminded, on various occasions, that my views do not coincide with those of the party to which I have the honour to belong, and I have taken the trouble to bring with me what I may call Senator McKenna’s reference book. It is the joint Opposition policy speech of 1949. The then Leader of the Opposition (Mr. Menzies) declared that, if elected, the new government would - require thu new government shipping line, to justify its existence nationally or competitively.

From my point of view, the Commonwealth shipping line has done those things. It has more than justified itself nationally, and over the past few years, particularly during the time that our late colleague, Senator George McLeay, was Minister for Shipping, it justified itself economically. Consequently, I consider that I am within the limits of party policy when I say that I favour the Government’s retaining this shipping line and expanding it.

The second point on which I have been accused of not being consistent is that three years ago, after spending nearly twelve months trying to persuade some private shipowners to send their ships to New Guinea, where the shipping service was in a shocking mess, I had to take other action. At that time, there were 23 Commonwealth ships in New Guinea doing less work than was done with seven ships before the war. I have many friends there who were losing heavily, financially, because of the wretchedly run little government ships that were available. I did my best to persuade private enterprise to take their ships up there - which is just the opposite to what I am now doing. However, the difference is that, whereas Commonwealth ships are doing a good job on the coast of Australia, those ships were not. They were either idle or being run by other people or were being mismanaged from Canberra. After a long period of trial and error, during which I attempted to persuade seven or eight Australian companies to send their ships to New Guinea, I found a small shipping company in England which was interested. It sent its managing director out here and I told him the story and he said. “We will send a ship to Sydney if you will take it to New Guinea, repatriate the crew, get a native crow and get this business going”. T received the ship and took it up to New Guinea and the venture was a great success. The ship is still running, paying good dividends and clearing the plantations of their copra. From that transaction came the eventual sale of all the wretched little ships that were sailing round up there, and in that I believe that I have done something towards the rehabilitation of New Guinea. If honorable senators think that I appear to be inconsistent when I want to keep the Commonwealth ships but not the New Guinea ships, I point out that one fleet is efficient and the other was not. I desire now to say a few words which will lead up to one of my main reasons foi1 supporting the retention of the Commonwealth line of ships. When 1 went to sea as a hoy on sailing ships, the conditions were pretty terrible. I mention these particular matters to draw an eventual comparison between conditions in those days and conditions at present. In those days, on the rotten old tramps that used to run up and down the Mediterranean and through to the Black Sea., the AB’s used to get about £2 5s. a month. I cannot go further back than about 1914. but I believe that conditions then were much the same as those at the turn of the century, when Kipling wrote in Seven Seas to the effect that there was “ grub that would bind you crazy and crews that would turn you grey”.

That was quite true of those days, and during World War I. when we lost about 4,000 merchant ships and fishing ships there was a most extraordinary practice with respect to the ship’s articles. All those on board a sunken ship, officers, engineers and everybody else had their pay stopped when the ship was blown up because the articles of the ship were closed. I was blown up several time? during World War I., and although I was getting only 3s. a day, my pay was stopped until I got back to London. I remember that with a great deal of antagonism, and it is one of the reasons why I am rather biased on these subjects. After World War I. we got some sort of conditions. I shall give an example of what happened with regard to leave. Officers in the British mercantile marine were era n ted two weeks’ leave. If we took that leave we would spend it at home with our dear ones, and then go down to the shipping office for further employment. The office would say to us, “ Oh, yes. Mr. Kendall, we have not anything at the moment, come back in three or four weeks’ time”. Because of that practice, nobody would put in for leave, as he could not afford to be off duty for six to eight weeks. One or two shipowners, like Alfred Holt and the Orient line, paid more than others and gave good conditions to their employees, but despite that, conditions in the British merchant service up to World War II. were not too good.

When I was serving in the merchant service on the Australian coast from 1926 to about 1934, there was a surplus of officers and crew. We were passing through the depression and many ships were laid up. We did not have a very good time of it then; but conditions to-day, although they indicate a swing of the pendulum in the right direction. I believe in some respects have gone too far. No doubt the pendulum will swing back eventually. At the present time, the conditions for seamen have gone to the extreme where so many of the things that are now being done are not at all fair. I believe that one of the problems on the waterfront is caused by the extraordinary attitude of seamen towards the handling of beams and hatches. I do not wish to anticipate later legislation that will deal with the stevedoring industry, but seamen will not now remove beams and hatches as they used to in the old days.

In my time, when we came through Sydney Heads we would know that we would have time to get the beams and hatches off before the ship berthed, and we would take them off. However, if we were going into Newcastle we would know that we would have only a few minutes from the time of entering the breakwater till we got to the town wharf. That being so, we did not attempt to remove beams and hatches and that became a job for the waterside workers. But to-day, even if a ship is going up the Brisbane River, which takes five to six hours, the seamen do not remove beams and hatches.

Senator Wright:

– Is that because it is considered to be part of the work of waterside workers?

Senator KENDALL:

– I think it is part of the work of seamen, but they do not do it. However, we can discuss that matter when the stevedoring industry legislation is before us. Running parallel with the Royal Navy and the Royal Australian Navy, which I include with the Royal Navy, the mercantile marines of Great Britain, Australia, Canada and all Commonwealth countries have built up a great tradition quite the equal of that of the Royal Navy although along somewhat different lines. Many of the men in the mercantile marine, like myself, remain for most of their time in the Royal Naval Reserve or the Royal Australian Naval Reserve, and in wartime they serve with the Navy and in peace with the mercantile marine.

I can remember many instances of bravery among officers of the mercantile marine. In World War I. there was Drewry, of Triumph, who received the Victoria Cross. Another Victoria Cross winner was Steel, who ran stores through the Kut. In World War II. Saunders got the Victoria Cross. They and many others have built up a tradition which is part of the mercantile marine. In peace-time we have the old tradition of a master leaving his ship last, although it is not essential that he should go down with his vessel. I remember Captain Smith, of Titanic, who swam up to one of the lifeboats and put a child in it. Then he swam away and was drowned, rather than put his extra weight on the overladen boat. Therefore, during the centuries we have built up a tradition equal to that of any naval service in the world, and I am very proud to have belonged to that service.

I have mentioned these things because I am leading up to some remarks about the Commonwealth line of ships. In the short .time this line has existed it also has built up a tradition. We have now arrived at the stage where the first master to he promoted from the cadets who started with the line when the line started, has just been so promoted. The only thing that has been stopping the Commonwealth shipping line from retaining its people in the past has been the uncertainty brought about by the silly catchcry that the Government was going to sell the ships. Every time an item of that sort was published in thenewspapers I received letters asking me whether there was any truth in it. I would write back and sayI felt almost certain that there was no truth in it.

A point that the ordinary person ashore does not appreciate is the position in which the officers would be placed if this line was sold piecemeal, if two or three ships were sold to this company and two or three to that. No one seems to think about the people aboard the ship.If the line were sold piecemeal, men like Captain Knight, Captain Ramsay, Captain Fysh and many others who have been with it from its inception would have to start at the bottom again because, when a ship is sold to another company one has to fit in with the employees of that other company and start again at the bottom. Many of the men now engaged by the Australian Shipping Board are far too old for that.I am too old to do it. If I were to lose my seat in this Senate I shouldbe far too old to get a job at sea again, and the same applies to these men. This has been worrying them, and it has also been worrying the juniors who have just achieved their mate’s ticket and second mate’s ticket. They feel that if the ships are sold to another company they will have to make a fresh start. This bill, which should be welcomed by honorable senators opposite, safeguards them against that. It will give them a feeling of security with the result that we shall not have the big turn-over of juniors that we have had in the past. By being able to retain a permanent staff far better work will be done. There will be far better supervision and there will be a great deal more contentment amongst employees. What I have said applies not only to the deck officers but also to ships’ engineers and, to a large extent, to petty officers who remain with ships for year after year. If they are with ships that run regularly to their own home ports they will stay with them for years. On one of the ships on which I was in theolden days, there were men who had come out from England with it when it was originally built, and they were happy to stay on with it.

I realize, of course, that I have no hope of engendering in the ordinary person the feeling that sailors have about ships. For instance, I suppose that to Senator Kennelly a ship is just a collection of pieces of steel riveted together, with a couple of masts and a funnel stuck on top, whereas to a sailor a ship is a living, pulsating being, especially if it happens to be his first command. It does not matter if she is some dirty old scow around the waterfront of Woolloomooloo or other ports - if she happens to be one’s first command, then as the days, months and years go by she becomes more and more beautiful. Perhaps, Senator Kennelly’s viewpoint may best be described by the following passage from Wordsworth’s Peter Bell -

A primrose by the river’s brim

A yellow primrose was to him,

And it was nothing more.

My feeling would be that of the officer in charge of his first command. I am quite certain that to all the masters in the Commonwealth fleet, the ships are something more than just a heterogeneous collection, and it is because of the feeling that I have as a seafaring man thatI should strongly oppose any disruption of this line. Properly treated, this fleet can be one of the finest things we have had.

Another thing that we sought to establish when I first started in England was a national merchant service. By that I do not mean a nationalized shipping line but a national merchant service which one could join as a boy, in which one could study and sit for the various examinations after serving an apprenticeship and eventually be promoted to the various positions until attaining top rank. Under such a scheme, it would be possible to have a pool from which shipping companies could draw personnel as required. For instance, a shipowner could ring saying that he wanted so many masters, officers, engineers and crew members. They could be sent out from the pool, and all would be permanent members of a merchant service just as we have permanent members of the Army, Navy and Air Force. It would not matter whether we had a completely nationalized line of ships, a complete line of private enterprise ships or half and half; the system could still be put into operation. Of course, it would be easier with a completely nationalized shipping service ; but I do not advocate that at this stage because I do not think we are ready for it. I have no doubt that at some time in the future, after I have passed to the happy hunting ground, it may come about; but I cannot see the need for it now. Neither do I advocate it, for a number of reasons that are irrelevant at the moment. For 40 years to my knowledge, we have been striving for the establishment of a proper merchant service just as we have permanent armed forces.

I congratulate the Minister upon bringing down this bill which I am convinced will be advantageous to’ the industry despite what honorable senators opposite have said. It is quite possible that some of the fears expressed by them are genuine, although I doubt that very much from the remarks that they have passed. I feel that eventually they will be convinced that this is just as good a bill as the Minister says it is; and I intend to support it.

Senator SHEEHAN:
Victoria

– I listened with a great deal of interest to Senator Kendall’s remarks. I can appreciate how his soul has been torn during the months that have elapsed since the present Government attained office. Especially do I appreciate his position when I remember that the Prime Minister (Mr. Menzies) intimated in his policy speech that if an arrangement could be made for the satisfactory disposal of the ships under the control of the Australian Shipping Board it would be favorably considered by the Government. I feel that Senator Kendall has given a great deal of thought to this matter, and I am sure that if the Government had taken its courage in its hands and openly and honestly decided to sell those ships, he would have been voting with the Opposition. I can see that he loves ships, and I can understand how interested he must have been in the negotiations that have led up to this bill. From him we have heard a speech from a man who sincerely and honestly loves the sea and the ships in which he has sailed.

I was very interested in his story about the conditions inflicted by good old private enterprise upon him and others who served faithfully and did so much to help make the profits which the shipowners, directors and others who stayed at home enjoyed while the employees slaved on stormtossed ships. The Opposition opposes this proposal because it feels that honorable senators on the Government side are speaking with their tongues in their cheeks. The second-reading speech delivered by the Minister for Shipping and Transport (Senator Paltridge) shows us clearly where they stand on this matter. Possibly we would agree with the first paragraph of the Minister’s secondreading speech, in which he said that the purpose of the bill was to set up a commission to take over the operation of the Commonwealth ships. Until now, they have been operated under the authority of the National Security (Shipping Coordination) Regulations. The Opposition would like to see the ships under the control of a commission with real power, but when we peruse the bill, and the agreement which the Government is asking us to endorse, we find that the real work of the commission will be thwarted at almost every step.

The Minister indicated that, since the end of World War II., the coastal shipping services have not been all that could be desired. Of course, that i3 true, but last night we had the advantage of hearing the war-time Minister for Shipping. Senator Ashley, who told honorable senators of the conditions that existed when the war began. They were not satisfactory then. Senator Ashley told us why it was necessary for the Labour government of that day to establish a shipping line under the national security regulations. Private enterprise had served Australia so well since the sale of the original Commonwealth shipping line that, when the nation faced grave peril for the second time in its history, no ships were available to help the nation defend itself. What n damning indictment of private enterprise which this Government is so fond of eulogizing !

History is repeating itself to-day. The Government proposes by subtle means, through this legislation, to destroy a great instrumentality that was set up during the time of Australia’s peril. I have said that history repeats itself. It might bc as well if we were to consider the conditions which existed when the first Commonwealth shipping line was established in Australia. My thoughts go back to the period about which Senator Ashley spoke last night. In 1914, Australia depended upon the services of private shipping companies for trade between. Australia and the markets of the world. Shipping was controlled by one or two great companies. There was the Inchcape line of Great Britain and the Morgan’s of the United States of America. It is a matter of history that, during this nation’s time of peril, and at a time when the great British Empire of those days was in danger, those companies put their heads together and, by establishing a monopoly, they bled white the British Empire. They were guaranteed the insurance of their ships while they operated along the sea lanes of the world, but they were not satisfied. They began to increase freights and fares. Exorbitant charges were place on Australian products which were exported from Australian to Great Britain. The people who wanted the foodstuffs that were produced in Australia were forced to pay exorbitant prices because of the machinations of the private shipowners. That is recorded in history, and it is a pity that some of those honorable senators who have only recently entered public life do not review the circumstances of those days. I believe if honorable senators could get the full picture of the events that followed the introduction of the Commonwealth shipping line by the late W. M. Hughes, they would have a better understanding of the effects of the measure that is now under discussion.

We established a shipping line because of the failure of private enterprise to provide an efficient shipping service. The Commonwealth shipping line rendered great service to the Australian community. Lt is true, as honorable senators on the Government side have suggested that, in its early days, the Commonwealth shipping line was not conducted on a profitable basis. There was ;i reason. It came into the field dur ing bad times. We know that some persons have always been opposed to public ownership. Because the Commonwealth shipping line did not get a fair deal, or because it was impossible to secure efficient administrators, it suffered losses. That is no reason why it should be condemned because, as the years passed, it became a profitable organization.

In its early days, ships had to be chartered at exorbitant rates, and thai was one of the reasons why the Australian Shipping Board was not able to do all that it desired, but did we expect every Commonwealth instrumentality to pay profits and dividends during the war years and the days of rehabilitation? Is it not a fact that we, in Australia to-day. are a free nation? Is it noi a fact, also, that because of the operations of those ships we were able to remain free? What is the loss that was incurred in the early days of the Commonwealth shipping line compared with the fact that to-day we are the owners of a great continent, and. have a great opportunity to build in the future?

Surely the loss of a few pounds in the early days cannot compare in importance with the great asset that has been placed on the other side of the ledger ! Like the 1914 line, the present Commonwealth line has been the envy of private shipping companies. Quite a number of companies which are independent, at least on paper, have linked together and have been eager to drive the Commonwealth line out of business, so that the field might be left to them once again. For that purpose, we now have a repetition of the tactics that were adopted years ago and which led to the Bruce-Page Government disposing of the original line. Propaganda was used against that line, and certain other methods were adopted.

I suppose that there are scores of people in Australia who share the views of Senator Kendall in this matter. No doubt there are many supporters of the Government who have been exploited by the private shipowners and who have brought pressure to hear on the Government to deter it from selling the ships. The supporters of the Australian Country party, to which the Minister for Repatriation (Senator Cooper) and Senator Maher belong, have had the sad experience of being exploited in the matter of shipping freights and fares, just as Senator Kendall may have been exploited when he served as a very faithful servant of those companies. I have no doubt that, it was because of such pressure that the Government thought twice about the matter and decided that, whilst not openly departing from its belief in private enterprise - a matter that has been stated very forcibly in this Parliament in recent weeks - it would get round the problem by seeing how it could destroy the line. That is to be done, although a Commonwealth line of ships, nominally, will still be in existence.

What effectiveness will the Commonwealth line have in regard to the Australian trade? We have been told that, when the agreement becomes effective, the maximum tonnage that the commission will be allowed to operate will he 325,000 tons. Some honorable senators and many other well-meaning Australians who have been addressing the people of this country, particularly the workers, have said that we must increase production, expand our industries, develop our agriculture, and so on. If our production is increased, what are we to do with the increased quantity of goods that will be available? Do we expect the people of Victoria, New South Wales, South Australia, Queensland, Western Australia, and Tasmania to keep the commodities that they produce within th« borders of those States ? Surely the goods that they produce will have to be transported to the markets. Only yesterday in this chamber we heard honorable senators speaking of the exorbitant costs of road and rail transport, and of the need to increase the use of sea transport because of its efficiency and cheapness. Are these ships of the Commonwealth line, about which Senator Kendall is so pleased, because they are to remain tho property of the nation, to be allowed to transport overseas the commodities produced by the States? According to this legislation, they certainly will not he allowed to do so, except in special circumstances. They will be forbidden, by act of Parliament, except in exceptional circumstances, to help the Australian pro ducer to place his products on the markets of the world. He must continue to remain at the mercy of the overseas shipping combine which has exploited him over the years. He still will be at the mercy of the people who have only recently increased shipping freights and who have been mainly responsible for making it almost impossible for the Australian canned fruits industry to go out and capture markets that otherwise would be open to it.

Honorable senators who support the Australian Country party should remember that the overseas shipping combine is not worried about the whims of tho Australian Seamen’s Union and its endeavours to secure better conditions for seamen, because the labour employed by the combine is not Australian labour but labour recruited from other lands. The Minister has suggested that waterfront stoppages in Australia have affected adversely Australian shipping lines, but no such claim can be made in respect of the overseas shipping companies.

The Commonwealth line is to be crippled and its progress retarded. Thi: gross tonnage of the line, at the moment, is said to be 247.000 tons, and since the maximum tonnage that is to he permitted is 325,000 tons, it means that, during the next twenty years, the capacity of the line to meet, the needs of Australian shippers will increase by only 78,000 tons, or less than 4,000 tons a year. We are going to have some very big ocean liners plying on the Australian coast as a result of the preservation of the line as an Australianowned undertaking ! In my opinion, this agreement amounts to piracy on the high seas.

The effect of the agreement will be that expansion of shipping services along the Australian coast will he left to private enterprise, the darling of this Government. It is to have the lot, as it has captured already the other public utilities that, were referred to last night by Senator Arnold. The present Government parties profess to believe in private enterprises, but they do not really believe in it. The real purpose of the Government is to establish industries and then allow private enterprise to come in and plunder them.

– -What I should have said was, that we do not object to the commission being required to pay income tax. But let us consider the difficulties that the commission will have to surmount in order to be able to pay dividends after meeting its taxation commitments. As I have mentioned before, the commission can be forced, by direction of the Minister, to engage in unprofitable, developmental trade. Any losses incurred from so doing will be offset against profit earned elsewhere, and the commission will not be subsidized in respect of the unprofitable trade.

Senator Mattner:

– What is wrong with that?

Senator SHEEHAN:

– Everything is wrong with it. Why should not the private companies - the co-partners in the scheme - also be required to undertake developmental services? I contend that all parties to an agreement should share equally the good and the bad. But in this instance, the bill provides that only the commission’s ships shall develop unprofitable, developmental lines. While they are so engaged, the private shipping companies can operate on established lines and earn good profits. Yet, the honorable senator asks, “What is wrong with that?”. This is another device for the purpose of denying this commission the opportunity to show its true worth to the Australian community. One again we have propaganda for its destruction, and the whole scheme is working up to the position where, ultimately, the sale of this commission will take place. This bill is purely a subterfuge. The Government has not been game to sell the

– Of course, it would.

Senator HENTY:

– Of course, it would. The Opposition want to nationalize the industry but the people do not want that. They do not want communism in Australia, and nationalization and communism run side by side. When the issue in 1949 was private enterprise versuscommunism, the people discarded the Labour party and the Government has been in office ever since. The Government was quite frank in announcing that itf intention was to sell the Commonwealth shipping line at a proper price provided it could guarantee protection to the outposts of Australia, and provided it could ensure the retention of ships along our coast. As it was unable to secure those conditions, it did not sell the ships.

What has been the- position in the shipping industry ever since? To my mind there has been a stalemate. I illustrate it by comparing the position to an honorable member in this Parliament who represents a certain constituency. He has a motor car which needs to be replaced, but he suddenly finds that his endorsement committee has changed its attitude and is not favorably inclined towards him, but is showing a preference for some outsider. The committee might make the suggestion to him that he needs a new motor car, but his reply would be, “I should have a new car, and if I knew what, the endorsement committee was going to do at the next election I would buy one; but not knowing that I shall keep the one I have “. That is exactly the position in the shipping industry today. It has had the 1949 act poised like a dagger at its throat. As one honorable senator opposite admitted, it could have been put out of business at any time. Being in that position, the industry could not plan ahead. It would not invest further capital because it did not have the slightest knowledge of what was going to happen in the future. That was the position of private enterprise in the industry. What was the position of the Commonwealth shipping line? I suggest that it was even worse.

Senator COURTICE:
QUEENSLAND

– Why did not the

– Thai is so. I repeat that the price of the shares does not reflect a political judgment, but the judgment of hard-headed investors who stand to lose their money if anything goes wrong.

Senator Benn:

– The shares are quoted above par in to-day’s quotations. They are £1 Os. 6d.

Senator HENTY:

– So they are £1 Os. 6d. ! That is an increase of 9d. They were 22s. five weeks ago. And this is the company that honorable senators opposite hold up as an example of the great shipping companies making enormous profits. They know that if itwere not for the subsidiary activities of these companies they would not attract any capital at all.

Senator Sheehan said something about the enormous profits of the overseas shipping combines, and how they are bleeding this country white. Governments of all political complexions have dealt with the Conference shipping lines, but no Labour government has ever taken steps to alter the method of dealing with them. There has never been any attempt to alter the agreement between those lines and the exporters. Although the freight charges of overseas ships have increased by only 50 per cent, the Australian coastal ships have increased theirs by 143 per cent, or more.

There has been quite an amount of unfair and unjust criticism of this measure. I speak as a Tasmanian. and all Tasmanians have a vital interest in shipping. It i” all very well for those who live on the mainland to speak in a detached way about shipping, because they have alternative forms of transport; but shipping is the life-blood of Tasmania.

Senator BYRNE:
QUEENSLAND · ALP; QLP from 1957; DLP from 1968

– The honorable senator knows what a rotten spin private enterprise has given Tasmania.

– I shall deal with that in a moment. It is laid down in the bill that the Minister shall notify private enterprise that there is the demand for another ship at that port. If the shipowners tell him to “ jump in the lake “, as Senator O’Byrne suggests, the commission will have authority to build another ship and serve that port. The bill clearly provides for the expansion of the Com monwealth fleet, as honorable senators opposite would realize if they would only read the bill with unbiased minds.

Another criticism offered by the Opposition is that all the unprofitable cargo will go to the Commonwealth ships while private enterprise will take all the profitable business. I remind them that the bill proposes to set up a commission. I believe that competent shipping men will be appointed to that commission. It will have complete knowledge of what is happening. It will have all the essential figures as to costs and so on, and if it. finds that one ship is not profitable it will inquire into the matter. In any instance of unfair treatment an appeal can be made to a tribunal which will decide on the facts that a certain step is justified. The commission can set up its own agency and do all things necessary to combat the very obstacles which honorable senators opposite suggest will confront the Commonwealth line of ships.

If honorable senators opposite examine the position carefully, they will realize that this proposal is a compromise between what we have hoped to do and what we have said ever since 1949 that we would do; that is, a compromise between selling the Commonwealth ships at a price fair to the Australian people and driving private enterprise out of the coastal shipping lanes of Australia, which was really one of the main purposes of the Labour Government’s act of 1949. The Minister for Shipping and Transport (Senator Paltridge) has achieved a sound compromise which will lift this state of stagnation from the coastal shipping trade of Australia and will open up a future for both the Commonwealth line of ships and private enterprise. I commend him for the immense amount of work he has done in the very short time he has occupied his present position. He has done a magnificent job in. introducing this bill, and I think I speak for my fellow Tasmanians on this side when I say that he has our full support because he, like his late colleague, has always kept the needs of Tasmania to the forefront of his thoughts. He has done that again in this bill, and we feel that Tasmania is fully protected under it.

Senator CAMERON (Victoria) [4.3J. - I was particularly interested in that part of the debate in which it was emphasized that we must depend upon private enterprise for our salvation. It reminded me of the fact that all wars have had their origin in international competition by private enterprise for trade and profits. Tragically enough, those wars have acted as accelerators in organizing the economy of nations, especially the economy of Australia. For example, before the 1914-18 war there was the same political stagnation in Australia as we see on the opposite side of the chamber at the moment. With the advent of war, the members of the then government were stirred to dynamic action, where previously they indulged in repetitive action, displaying no capacity to plan for the future. The 1914-18 war led to the introduction of the first line of Commonwealth ships. Those ships were necessary to cope with the demands being made upon shipping at that time. Then came a further period of political stagnation and ships were laid up for years in Sydney Harbour and other harbours. After that, came World War II. Again we were desperately in need of ships, and the second line of Commonwealth ships came into being. So, in our time, we have had definite proof that wars have acted as accelerators in organizing the economy of nations when their governments lacked initiative and the members of such governments were merely the mental counterparts of those whom they represented.

What does it prove? If the lessons of the war have proved anything, they have proved that nationalization of shipping and other essential services is absolutely necessary. Nationalization has been forced upon us whether we want it or not. During World War II., the Bank of England was nationalized, although the old school of bankers and the government itself said that it was impossible. Eventually, they made a virtue of necessity because, without nationalization of the Bank of England, they could not continue. They also nationalized the coal mines, because under that system management was better. It has not been as effective as I would like to see, but that is the background. Changes pf major im portance are forced upon us by war for want of imagination and a capacity for dynamic action on the part of governments.

This Government is attempting to do exactly what was done during World War I. It is thinking in terms of the restoration of the status quo. The Government wants to get back to the old days of private enterprise. It does not realize that uncontrolled private enterprise has been the cause of practically all international and internal troubles. During this debate, honorable senators on the Government side have said that nationalization is a form of socialization. That is not true. Actually, nationalization is the very antithesis of socialism. The only difference between nationalization and private control is this: Under private control, profits are received directly; under national control, they are received indirectly. As an example I cite the railways.

In the case of the Victorian railways, the capital cost has been recovered, possibly more than one and a half times. The people do not receive the profits from the railways. It goes mostly to private bond-holders, the majority of whom are absentees. It is not a socialist proposition. Rather is it a form of state capitalism in which control is exercised indirectly through a government instead of directly through a board of directors. The profits are practically the same, and there is a guarantee against losses. I am reminded of a statement by the late John Burns, which he made during World War I. It is both good alliteration and good sense. He said -

Moat people are either prisoners of phrases or slaves of shibboleths.

We hear from the Government side repetitious statements about Communists, Communist control of the stevedores, and Communist control here, there and everywhere. The Government has what I might call an acute form of “ commophobia “. It has all the signs of mental atrophy and physical stagnation. Everything in this world depends upon management, including private enterprise or nationalization. If there are incompetent and indifferent persons in control, and they are not subject to pressure from below, the results are quite the reverse of what they should be. That is to be seen in the railways to-day. It appears everywhere. Political management was responsible for inflation and high prices, and the impoverishment of thousands of helpless people who could not help themselves. Bad management is the result of ignorance.

What we desire when we advocate nationalization of shipping is more effective control of shipping. Senator Kendall has admitted that the control of the Commonwealth shipping line has not been all that was desired or expected. Possibly, it would have been a lot better had there been a different government in charge of the national economy but, as Senator Kendall has said, talk about selling the Commonwealth shipping line has a demoralizing effect upon the personnel of the line. The two things that men fear most are death and poverty. They will take a risk with death any day in the week, but they fear poverty much more than death. When the Government talks about selling the Commonwealth shipping line, the men who have given the best years of their lives to its service are demoralized. Instead of being encouraged and inspired, they are discouraged and become apathetic.

This Government would have us return to private control. Private control as visualized by the Government will never be in the future what it has been in the past simply because of circumstances over which the Government has no control. If we want to move forward, we must have some form of dynamic action, but the Government has brought along this half-baked proposition in which it suggests partnership with the private shipping companies. The Government has claimed directly that this will be an improvement on the previous arrangement. It will be nothing of the sort, because the dominating motive of private control of shipping is profit; not the welfare of the people, or of those who work for the Commonwealth shipping line. If there were no profits, the shipowners would not be interested in shipping. When supporters of the Government postulate and a.ssume that the shipowners are altruistic men who are prepared to sacrifice themselves to do their best for the country, they are completely wrong. Any one who has had experience similar to that of the Labour Government between 1941 and 1949, will know that that is not true. The very men that we had to control in those days were nien engaged in private enterprise. They were more concerned about the profits that they could make than about anything else. As I have stated in this chamber previously, the position was so bad that we were forced to appoint an aircraft production committee. For all practical purposes, the aircraft industry was in a state of chaos. When that committee came into being - and its members included men who were prominent in the aircraft production industry as well as (wo representatives from the trade union movement - the position improved almost overnight. Had it not been for war-time exigencies, however, that committee would never have existed. Previously, private enterprise had control of the industry, as it now controls shipping and other activities, but private enterprise was found to be in a state of unpreparedness.

The Menzies Government of the day had to bring in national security legislation for the purpose of preventing private enterprise from robbing the people, as it had attempted to rob them during the war years. As I have pointed out to the Senate on other occasions, the previous Labour Government found, in a number of instances, that so-called reputable companies had debited the Government with thousands of pounds in respect of costs which, properly, they should have borne themselves. With the able assistance of Treasury officials, particularly the late Mr. Harris. we recovered nearly £1,500,000 from them. These people will do the same kind of thing again if they have the chance to do so. The leopard never changes its spots, and those who engage in private enterprise never depart from their policy. We should learn from the lessons of the past. Practical experience is a hard and costly school, but a great number of people, both inside and outside this Parliament, do not learn in any other school.

It does not seem to be understood, to judge from the way in which honorable senators opposite speak, that the state as we know it to-day kas its origin in the ownership, maintenance arid protection of private property. That is the fundamental basis of the state in this and every other country. It would be impossible for wealth to be accumulated in the hands of a few people, particularly in this highly mechanized and monopolistic age, if it were not for the protection afforded by the state. People should not believe that the state is a socialistic body. It is nothing of the kind. The state comes into being for the purpose of protecting private owners of property.

The great problem that faces us to-day is that of distribution. Never, at any time in the history of mankind, have we been able to produce so abundantly and so expeditiously all of the commodities that we need. The problem of production has been solved, and the problem that has to be faced from now on is the problem of distribution. The great obstacles in the way of solving it are the private owners, those who possess more, wealth of all kinds than they can use. They are the obstacles in the way of a more efficient and humanitarian form of distribution. They are the people who oppose the nationalization of shipping. They do not want interference with what they consider their prerogative, and this Government, which represents vested interests, acquiesces.

It can be said without exaggeration that, for all practical purposes, the Government is becoming more and more a political committee of the private owners, particularly the monopolistic owners of capital in this country. For that reason, it is important to try to understand the natural and inevitable repercussion that will flow from that trend. Honorable senators opposite should not console themselves with the thought that the status quo will be maintained indefinitely, instead, they should appreciate the psychological effects of this holding-up of distribution. Because of the Government’s attitude in this respect, it is now receiving a good deal more adverse criticism than it has received in the past, and such criticism will continue. As that adverse criticism generates hostility in the minds of the people, the Government will have to do one of two things.

It will either have to go forward, or stand aside and allow somebody else to do the job. In 1941, when the Menzies Government failed to do its job in this Parliament, it degenerated into a rabble and had to stand aside while the Labour party came to office and did the job that it had failed to do. At that time, I remind honorable senators opposite, Labour was in the minority in both Houses of the Parliament. We had not been voted into office by the people. I do not suggest for a moment that the Menzies Government could not have done the job as well as we did it ; I am saying that it did not try to do so. It believed that it could rely on the old methods of doing things. It did not appreciate that the war had brought about a changed set of conditions, and that it was necessary to adjust methods to those conditions or stand aside. The Menzies Government stood aside. A similar position is developing to-day.

What has happened since this Government came to power? Profits to-day are colossal, and I suggest that that is the thing that is going to cause all the trouble. Profits now are on a higher scale than ever they were before. On the other hand, costs of production, despite what may be said by those who do not understand the position, have never been lower. As the Leader of the Opposition (.Senator McKenna) has stated, the Government parties have failed to understand the origin and the effects of inflation. Although the Government said in 1949, “We are going to put value back into the fi “, what is the position now, as a result of its lack of knowledge and inaction? The position has gone from bad to worse. Production has increased tremendously, but the labour force required in industry has diminished due to the greater use of machines. Considerable mechanization has taken place in both primary and secondary industry. The cost of production has been reduced all along the line, but the real value of wages has decreased alarmingly. Evidence of this is found in the acute shortage of housing and the distressed circumstances of the unfortunate age and invalid pensioners. In my recollection - and I was horn and bred in this country - the housing situation has never been worse than it is to-day. I have heard of instances of four and five immigrant families being herded into cottages that were meant to accommodate only one family. There is much evidence of overcrowding in the industrial areas of the cities, particularly Melbourne and Sydney.

The PRESIDENT:
Senator the Hon. A. M. McMullin

– -Order! The honorable senator should get back to the bill.

Senator CAMERON:
Minister for Health · VICTORIA · LP

– As I have said, although the cost of production in this country has been reduced considerably, the purchasing power of wages has never been lower than it is to-day. The last sea voyage that I made was in Damascus in 1902-

Senator O’SULLIVAN:
LP

– The ho senator is still at sea.

Senator CAMERON:

– I do not know by what mental process the Minister for the Navy (Senator O’sullivan) has arrived at that conclusion. However, I was about to refer to the conditions of employment of seamen. But for the navigation legislation that was introduced by Labour, the conditions would be much worse than, they are to-day. The Minister for National Development (Senator Spooner) has referred to the Navy. I remind honorable senators that the Royal Australian Navy was established by a Labour government. Surely this Government would not dream of selling the Navy-

Senator O’SULLIVAN:
QUEENSLAND · LP

– God forbid !

Senator CAMERON:

– Apparently, the Minister is more solicitous about the Navy than about the Commonwealth shipping line. When both Senator Spooner and Senator Wright were addressing the chamber, I wondered what might be the state of their minds if they had had. to perform duties on a coalburning ship in the tropics for three or four months. I have no doubt that they would lose a good deal of their avoirdupois. Unlike Senator Kendall those honorable senators cannot claim to have had practical experience of shipboard life. Therefore, the Opposition was not misled by the theories that, they advanced.

Recently, several Italian ships were held up at Fremantle, where the navigation authorities decided that they were unseaworthy. This is proof of my contention that private enterprise is not so concerned as it should be about the welfare of the people. But the private shipping companies are greatly concerned about building up their bank balances in order to pay dividends to their shareholders.

I quite agree with Senator McKenna’s opinion that this bill will facilitate the establishment of a monopoly by the private shipping companies. We of the Opposition have not been misled by either the astute wording of the bill or the sentimental utterances of the Minister for National Development. In suitable circumstances, an economic dictatorship might become a political dictatorship. Senator McKenna has pointed out that the bill makes no mention of the freight charges that can be levied by overseas shipowners; they will continue, apparently, to write their own ticket. But if a worker wants to write his own ticket he is called a Communist. On the one hand, the wages of the workers are fixed, but on the other hand, the Government makes no attempt to prevent the overseas shipowners from increasing freight charges and fares in order to increase their profits. If the Commonwealth ships were permitted to compete with the overseas shipping lines, the position could be kept in control. It would be a lot better than what the Government proposes to make it. I was very interested in what Senator Seward said. In effect, he repeated what has been said over and over again by people who write editorials in newspapers, banking journals and financial reviews. He said that the behaviour of waterside workers and seamen is responsible for the difficulties with which we are faced. Nothing is wrong with human nature as human nature, but there is a good deal to object to in human behaviour; and human behaviour is determined by the conditions under which these people work. If the Government, thinks it can bring in all sorts of drastic regulations for the purpose of suppressing these people because of their behaviour, it will find it will live to be disillusioned, possibly in a more painful way than it can visualize at the moment.

Senator Kendall, by implication, said that if men like Healy and Road were out of the way everything would be all right. Supposing those men did oblige by going out of the country, the position would be precisely the same. It i3 the conditions under which men work that bring into being their representatives. If those representatives are not giving effect to what the people who elect them want, they are passed out and others are put in their places. Healy, Roach, and a number of others, at whom the honorable senator pointed the finger of scorn, are products of their conditions just as are honorable senators opposite, as is displayed by the arrogance of some of them when they are referring to workers and their representatives. As I have stated, honorable senators opposite are the product of their conditions, and the easier their conditions the more disposed they are to become arrogant and aggressive. Really intelligent people would try to understand the state of affairs and would take up an entirely different attitude. Government senators are only wasting their breath when they try to convince senators on this side that the position on the waterfront, and the behaviour of seamen and stevedores, is due to men like Healy and Roach. I could say that the behaviour of Government senators in this chamber is due to a gentleman by the name of Robert Gordon Menzies, but I say nothing of the sort. Their behaviour is determined by the conditions in which they were born and reared and in which they find themselves at present. The tendency of the average person who is placed in a position of power is to abuse that power. That has gone on since the world began. To-day, the position is very different from what it was in years gone by. Honorable senators opposite are dealing with men who are highly organized. Again, their organization is the result of their conditions. The Government is not able to suppress them as effectively in their collective capacity as it could years ago in their individual capacity. If honorable senators opposite try to understand the position as it should be understood, it will be all the better for themselves and, possibly, for everybody else concerned.

In conclusion, I repeat what Senator McKenna said, that some things will appeal to intelligent men or women who desire to see justice done to their fellowmen. This bill is designed, to use Senator McKenna’s phraseology, to legiron the Commonwealth shipping line in the interests of private shipowners. I have no doubt that this bill is the result of secret conferences between the Government and the shipowners to find out what the owners would be prepared to accept and what they would be prepared to do. For all practical purposes, this bill is an instruction from the private shipowners not only in Australia hut also overseas. Power on paper is one thing, but power in reality is another; and to the extent that the Government tries as it will if it gets the opportunity to enforce the power it seeks to obtain by this bill, it will be disillusioned. But I hope the disillusionment will not be as painful as it could be in certain circumstances.

Senator GORTON:
Victoria

.- This bill is probably the best bill to come into either House of the Parliament since I have been elected to the Parliament. I do not refer only to the careful way in which it has been thought out or to the impression it gives me that it will carry out. the purposes for which it has been drafted; I also believe that it pinpoints exactly the principles for which people on this side of the clumber stand, ami, by contrast, brings out the real reason for the opposition to it by the people on the other side of the chamber. A good deal of nonsense has been uttered from time to time on the subject of socialization. It is generally put forward by some people who, in general, are opposed to the Labour party. Wc on this side of the chamber have never been, and are not, averse to social action for certain purposes. We, obviously, have no objection whatever to the public acting through a government carrying out such works as building large dams for irrigation purposes, building roads and footpaths, generating and reticulating electricity, and carrying out other projects such as those which private enterprise either cannot or will not undertake but which are necessary to be done for the good of the country.

Although such enterprises may technically be described as socialization they are things to which we on this side are not opposed. I believe we can go further and say that we are not opposed to public instruments entering, in certain circumstances, ordinary fields of commerce. It is clear that those engaged in private enterprise find themselves subject to great disciplines of competition if they are to survive and provide the people with the best goods at the cheapest prices, which is what they do if they are under genuine competition. It is also clear that these disciplines are difficult and that private enterprise always tries to escape from them by means of combinations of one kind or another, perhaps by agreements to keep prices up or to keep production down. In those circumstances, we on this side of the chamber believe that it is right and proper to provide the people with the benefit of the competition which they would not otherwise have. Where the real cleavage arises between the Government and the Opposition is that the Government will not agree to restrictive measures and will not say to people, “ You are, by law, prohibited from engaging in a. certain, field. We will, with all the force of Parliament behind us, prevent you from competing with a government instrumentality “. That is what honorable senators opposite seek, and it is the real principle to which Government senators are unalterably opposed.

This bill provides that there shall be competition in the shipping business. On the one hand there will be the Australian Shipping Commission - which I think an honorable senator opposite jocularly suggested might form part of a “ ring “ - and on the other hand the private shipping companies. Even if the worst suspicions of my friends opposite proved to be true, and the private shipping companies did become a combine or a ring, there would still be competition provided from the Commonwealth line in the terms of this bill, with its proper application of liberal principles. That i3 why I said, at the beginning, that it is one of the best bills that has been brought into Parliament since I have been a member.

It has other great features which commend it to me. Those employed by the Australian Shipping Commission will not be subject to public service procedure or to the seniority clauses which could be, and probably are, a great hindrance to the proper functioning of an authority of this kind. The commission is given all the benefits, as regards promotion and personal selection of managers, which private enterprise has, and which, by and large, a public service department does not have. It is an excellent principle, and I trust that when other such corporations are established - as they will be from time to time - this principle will be embodied in the relevant legislation where possible. The commission is subject also to taxation and other imposts to which private enterprise is subject, and thereby its operations will be tested by the same touchstone with which private enterprise companies are tested. For those two provisions governing the internal running of the commission I commend the Minister very highly.

I now turn to some of the objections to the bill which have been voiced by honorable senators opposite, and I shall keep till last what I believe to be the real objection which is animating their minds. We have been told that this bill will prevent the commission from engaging in overseas trade. I do not believe a more complete and utter mis-statement could be made in direct contradiction of the clear terms of this measure. Indeed, in clause 15, it is specifically laid down that one of the things which the commission can do is to engage in overseas trade. As regards interstate trade, the commission is to operate under the terms of an agreement with the private shipping companies, as set out in the schedule. That agreement was attacked by Senator McKenna as something which shackled the Australian Shipping Commission, and prevented it from carrying out its duties properly. However, under the bill, it may engage in overseas trade without being subject to the agreement which, Senator McKenna says, is such a shackling influence. If there is any shackling under the agreement, the commission is freed from it when it is told to engage in overseas trade, but by some strange alchemy these facts are turned into a base metal, and it is suggested that in some way the commission is prevented from engaging in overseas trade. The facts are quite clear, and completely contradictory to that statement of the Leader of the Opposition.

Honorable senators opposite have suggested also that under the bill and the agreement it contains the commission is prevented from expanding, That, again, is completely untrue. The commission now operates 155,000 tons of shipping, and has 94,000 tons building. Under the agreement, subject to certain circumstances, it is limited to 325,000 tons, but that represents an expansion. When its tonnage reaches that figure it will have by far the biggest fleet of ships engaged in the Australian coastal trade, and it will be one of the biggest, if not the biggest, fleet of coastal shipping in the world. But even then it is not in an iron-clad limitation, because if private companies will not build, for certain purposes, ships which an independent arbitrator thinks they should build, then the commission will have authority to build more vessels, and increase its tonnage beyond the limit of 325,000, and to operate them for the benefit of Australia. This bill does not prevent expansion.

The Government has been criticized because the bill provides that the Minister can direct the commission to open llew or unprofitable shipping services around the coast of Australia. It has been said that the agreement does not give the Minister power to direct private companies to do this. Quite clearly, one of the functions of this commission - as it was of the Australian Shipping Board - is to provide isolated communities with services which would be unprofitable for private enterprise to operate. Therefore, quite properly, the Minister should have the right to direct the commission to carry out these duties. But side by side with that direction, goes the obligation to reimburse the Australian Shipping Commission for any money which it loses in the operation which it is so directed to carry out. Honorable senators opposite complain that the Minister has not the power to direct private shipping lines to open unprofitable avenues of trade. They suggest that he should have that power, and that the bill should include an obligation to repay to private shipping lines what it might lose in operating a service of that kind. However, when no such obligation is included, they cannot object to the Minister’s not having the right to direct private shipping lines to enter sUCh trade.

The bill has been criticized on these grounds and on many others, but none of the arguments will, for a moment, abide a simple reading of the measure itself and the schedule which contains the agreement. An added benefit is the security which it gives to the Australian shipbuilding industry, security which has not been present in the past, and which it is necessary should be given in the future. The measure provides all the things which the shipping services of Australia need - security for the ship-building industry, security for isolated communities which need services, even if they are unprofitable, security for the people as a whole in that there will be competition at all times, including competition in the unloading of ships, without huge overhead costs. As I said before, for all these reasons, and the principles on which the measure is obviously founded, it is the best bill that has been brought down in either House of Parliament since I have been a member.

The real Opposition objection to it is that, unless the agreement is shattered, this measure will prevent the Labour party, if it ever regains office, from prohibiting private shipping companies from operating round the coast of Australia. It will prevent also the complete nationalization of shipping - which, as in the case of the banks, is one of the Labour party’s objectives - and it will ensure thai type of competition which the Australian people need and ought to have.

Senator COOKE (Western Australia) [4.55 J. - This bill is a most unusual one to be presented by a Liberal government. According to the way in which it was presented and. the arguments advanced in support of it, this Government has suddenly come to believe in socialized or quasi socialized system of shipping for this country. The Government has stated that it desires to improve our shipping services, and I believe that it does. However, I also believe that our services badly need improving.

This debate has shown that the Opposition is apprehensive that there is some intent in this legislation not to establish an overall plan for the building up of Australia’s shipping services. If it turns out that Australia becomes denuded of shipping, then there will be an economic disaster in this country because we rely on ships for the well-being of our overseas trade. I suggest that the Opposition has good reason to be apprehensive about the Government’s intention in this matter, and to prove that, I shall direct the minds of honorable senators back to the last occasion when a government tried to provide shipping services for Australia.

It should be remembered that if anything is to be done to improve our economic position, we should start by improving our shipping service which is so important in our overseas trade, and we should also see that we have some form of coordination over other forms of transport. Let us now consider the history of Australian shipping.

In 1916 a state of affairs existed which I believe was similar to our present state of affairs. At that time the then Prime Minister, William Morris Hughes, acting on his own responsibility, bought fifteen cargo vessels from the Austral line in England. That action was endorsed by the Parliament, and it received the approbation of the nation. Air. Hughes said that he had purchased the ships in order to prevent flagrant exploitation of Australia by existing shipping companies. I suggest that the situation then is similar to our present situation, because honorable senators from both sides of the chamber have presented cases to the Senate showing exploitation of Australian producers and merchants by shipping interests.

Freight rates have become so high that we are unable to meet our obligations in overseas markets. According to volume 8S of Hansard at page 11098, before World War I. general cargo was carried from Australia to England for 47s. 6d. a ton, but after the war started the rate rose to 105s. a ton. The freight on wheat rose from 25s. or 30s. a ton to £15 a ton.

In one case the value of a cargo of maize was £18,826 and the freight £50,443, or 260 per cent, higher than the value of the cargo.

Therefore, honorable senators will see plainly that the position that had developed at that time has again developed - surely there can be no argument about that. The Government admits that freight is an ever-pressing burden on our development and our trade, and it realizes the great necessity for having a line of Commonwealth-owned ships which will ultimately carry the burden of inflation, and reduce the excess profits derived from exorbitant freights charged by private companies.

On the last occasion that a Labour government established a national shipping service for Australia, 44 ships were involved. We now have 40 ships, so we are getting to a dangerous stage in respect of competition with private companies at present. On the 31st July, 1923, the Commonwealth fleet consisted of eleven Austral line cargo vessels of 4,000 tons each, seventeen vessels belonging to enemy powers of from 1,000 tons to 6,000 tons, six “D” vessels of 3,300 tons, thirteen “ E “ vessels of 3,300 tons, two “ Dale “ vessels of 9,700 tons and five “ Bay “ vessels of 13,800 tons. And it should be remembered that the Commonwealth shipbuilding yards were capable of producing ships equal to and as cheap as the ships produced in any country of the world. The cost of shipbuilding in Australia was £30 a ton c.f., and the overseas cost £36 a ton.

Those ships competed with the ships belonging to private shipping companies, and thus a magnificent service was established for Australia. The service was so good that Lord Inchcape offered to buy the Australian fleet or to sell to Australia his ships which were engaged in the Australian trade. He offered to take that action because he thought the Commonwealth ships might eventually ruin his Conference line of ships.

In 1923 the Bruce-Page Administration took steps to sell those ships. Inquiries were instituted, and claims were made that because of greatly increased costs the Commonwealth line should bc disposed of piecemeal, and that led to the deliberate sabotage of the line. Nothing eventuated at that time, hut ultimately the position was investigated by the Public Accounts Committee which made a report in May, 1927, on the advisability of disposing of the fleet. The Public Accounts Committee reported -

Not only has the Commonwealth line been directly responsible for the actual reductions in freights, but the presence of the line has exerted a material restraining influence. The Committee recommends that in the interests of Australia the line be continued.

But that recommendation was not accepted. Mr. Bruce, the then Prime Minister, required the Public Accounts Committee to hear new evidence in camera, and consequently the committee reversed its recommendation. In 1927, Mr. Bruce sold the Commonwealth line of ships. The cost of construction of the ships of that line was £7,527,504, and if it had been depreciated at 33-J- per cent., which is reasonable, its value would have, been £5,01S,336; but the actual selling price was £1,900,000. However, the total amount to be paid for the line has never been received by the nation.

Therefore, if the Opposition is apprehensive that the Government is bringing in this legislation to stabilize our desperate shipping position for the moment with the ultimate object of disposing of the ships, then it is quite possible that the. Opposition is right. If the Government wishes to dispose of it at some future date - and it is quite possible that it will do so - nothing in this legislation will stop it so long as the Minister’s policy inclines towards such disposal. For that reason I suggest that the bill has not been introduced to protect the Commonwealth’s ships or Australia’s economy, but to foster the interests of private enterprise. The actual position is that the shipping question has become embarassing to Australia’s economic position and to the Government, with the result that the Government is now faced with one of two alternatives. It must either expand the Commonwealth shipping line, with its efficient service and profitable working, to the point where it will be able to meet all competition from the obsolete, wornout, slow-moving ships of private enterprise, or it must compromise with the private shipping companies by allowing the Commonwealth’s ships to carry the less profitable cargo and do the developmental work while leaving the profitable business to unrestrained exploitation by private companies. In effect, if it accepts the compromise alternative, the Government will be saying to private enterprise, “ You can pick what you want out of the business available and so long as you are satisfied and can carry on profitably, we will not interfere with you. Do not worry about anything that you cannot do or anything that is not commercially profitable; the Commonwealth-controlled ships will render the service there, even if it means operating at a loss”.

have said that the operations of the Australian Shipping Board have been profitable. Although, for the first four years, the board showed a. loss, the following profits were earned in later years: -

I emphasize that those profits were made despite the fact that the board was required to give service at places where the private companies did not find it profitable to do so. If private enterprise wants competition, the Government’s clear answer is to let private enterprise continue as it has been doing and to allow its own ships to operate in unrestrained competition with it.

Senator HENTY:

– Then they will go broke.

Senator COOKE:
WESTERN AUSTRALIA

– That is not happening at the present time. It is not fear of their going broke but fear of their being extremely successful that prompts the Government to introduce this measure. I should say that the Australian Shipping Board has demonstrated that it is capable of earning sufficient profit to enable it to carry out a certain amount of developmental work and still compete with private enterprise.

I come now to the private companies who are to be signatories to the new agreement. Probably more than 50 per cent, of the ships of these companies are obsolete, slow-moving and uneconomic, and those who pay the freights bear the burden. The Adelaide Steamship Company Limited, with a paid-up capital of £2,325,000, now has assets worth £4,0S2,000. During the period when the Australian Shipping Board’s fleet was earning good profits, the following dividends were paid by the Adelaide Steamship Company Limited: - 1950, 6 per cent.; 1951, 6 per cent.; 1952, 11 per cent.; 1953, 11 per cent.; 1954, 11 per cent.; and 1955, 6 per cent. In other words, it has increased its assets by almost 100 per cent, and still paid adeuate dividends. Huddart Parker Limited, with a paid-up capital of £1,250,000, now has total assets worth £3,538,487. During the same period, it paid the following dividends : - 1950, 13 per cent. ; 1951, 17 per cent.; 1952, 15 per cent,; 1953, 24 per cent. ; and 1954, 25 per cent. There are no figures available for 1955, but the figures disclose that this company, like the Adelaide Steamship Company Limited, is earning a sufficient margin of profit to enable it to engage in developmental work.

The next company is Mcllwraith McEacharn Limited. Its paid-up capital is £1,000,000, and it now has total assets worth £2,593,000. The dividends paid by that company were: - 1950, 9 per cent.; 1951, 9 per cent.; 1952, 15 per cent.; 1953, 16 per cent.; 1954, 20 per cent.; 1955, 22 per cent. The paid-up capital of the Melbourne Steamship Company Limited is £366,000 and its total present assets are worth £1,345,663. The dividends paid by it over the same period were - 1950, 8 per cent.; 1951, 9 per cent.; 1952, 10 per cent.; 1953, IS per cent.; 1954, 19 per cent.; and 1955, 16 per cent. Those figures prove conclu- sively that there is no danger under the present system that private shipping companies will be unable to work profitably.

Another factor that honorable senators do not seem to appreciate is that the freight charges of the Commonwealth line and of the private lines have been almost the same, yet the private lines have made very little more profit than have the Commonwealth ships which were obliged to do a certain amount of developmental work as well. While the private companies have been making these huge profits, the Australian producer, exporter and importer have been contributing to the dividends paid. The high freights charged by the private com panies have enabled them to build up their assets by almost 100 per cent, and to declare huge dividends at the expense of the Australian people. In 1951, the freight rate on general cargo rose by 5 per cent, to 117s. 6d, Changes in the freight rates in subsequent years were -

The reduction, in May, 1955, was not brought about by a decrease in the charges payable to the shipping companies for freights, but was the result of a reduction of 45 per cent, in the Government levy on the stevedoring industry to provide long service leave and other conditions that were granted by the Labour government. In May, 1956, that reduction was recovered by the shipping companies when the charge for freight was increased to 134s. a ton.

If the Government were sincere in its claim that it desires to provide a shipping service for the benefit of producers and the Australian nation as a whole, it would enter into open aud genuine competition with the shipping companies. If the Commonwealth shipping line could take our freight overseas and bring goods to Australia at rates 33^- per cent, below the existing charges, it would be doing real service to the Australian economy. This Government is cheating the nation by compromising with private enterprise and enabling it to keep the whole rotten fleet of privately owned ships afloat.

When I was in Japan, a discussion took place between representatives of various countries upon shipping arrangements, not for Australia but to provide a shipping service for Japan. The Japanese mercantile fleet had been extensively damaged, and Japan required shipping services. A service to operate from Japan to the Continent and the United Kingdom by way of India and. Africa was discussed. I was amazed when I listened to the discussions between the shipping magnates who were engaged in competitive services. They were prepared to reduce shipping freights to a rate much below that which we were being charged. They were prepared to place the most modern ships on these services. I had no authority to speak on behalf of the Australian Government, but I asked why such modern vessels were operating in that area at such low freight rates. The operational cost of a modern ship is much lower than that of an obsolete vessel. The shipowners said that they were not dealing on that occasion with sections of the British Commonwealth of Nations. “ We are in open competition with Dutch, Italian, French and United States shipping and we have to meet that competition “ they said. “Until we can do that, Australia will have to accept slow moving bottoms “.

Senator Benn has pointed out that some of the ships on the Australian run are more than thirty years old and that their inefficiency is placing a heavy burden upon Australian production. We should have a modern fleet of ships. There should not be a ship more than 25 years old operating on the Australian coast. Alain tenance of obsolete ships is expensive; they are slow-moving and inefficient. Which side is the most inefficient in the bargain that is implied in these measures ? The inefficient partners are the private shipping interests. They are operating obsolete ships on the Australian run, and there appears to be little hope of replacing them unless the proposed commission sells them ships from our fleet or gives them cheaper ships which otherwise would go to the Commonwealth line.

If we are to give service in the coastal shipping trade, we must have competition in the real sense. If private enterprise wishes to meet that competition, it should do so on its own initiative. The Government claims that the bill imposes no restrictions, but I say definitely that it imposes considerable restrictions upon the Commonwealth shipping line. The Minister for Shipping and Transport (Senator Paltridge) has said that the Government could not find a buyer for the Commonwealth ships. We do not know anything about the details of the proposed sale. We know that it has been a. matter of Government policy to sell the ships, but the Minister has stated that the Government could not get a buyer who would pay the price that was sought and guarantee an efficient service. That is all right, but it is useless for the Government to say that at this stage it will organize a shipping line of great national value. The Opposition rightly is apprehensive about the proposal. If the Commonwealth shipping line becomes a good commercial proposition and, therefore, a good buy for private enterprise, the Government will be prepared to sell it later at a loss, just as it sold the assets of the Australian Whaling Commission and its shareholdings in Amalgamated Wireless (Australasia) Limited and Commonwealth Oil Refineries Limited. There is nothing in the bill to protect national assets; in fact, in a minor sense, there is encouragement to sell them if possible.

The Government has claimed that it will not enter into effective competition with private shipping firms. I do not believe that it will do so. The proposed agreement limits the tonnage of shipping that the Commonwealth can operate to 325,000 tons for twenty years, and that tonnage can be increased only in circumstances under the control of the private shipping companies. They will be able to control it because the Minister has given an assurance that, if the private shipping companies are prepared to enter into a service or provide a service that is satisfactory to the Minister, there will be no encroachment on that trade by the Commonwealth shipping line.

The agreement will also prohibit the commission from undertaking stevedoring work or booking operations except in certain circumstances which will be under the control of the private shipping companies also. That appears to me to be a bad move on the part of the Government. It should never have attempted to set up a shipping line and leave a necessary auxiliary like stevedoring in the hands of private shipping interests.

Senator Kendall:

– A Labour government established the shipping line.

Senator COOKE:

– I do not care what the Labour government did in that connexion. I am analysing the bill and the possible effects of it upon the nation. This proposal is comparable with the establishment of a travel bureau by the Government under an arrangement whereby bookings and direct arrangements with the customers would be left to an agency. Just imagine a government running such a service and leaving those important details to somebody else! The Government should smarten up Australian shipping and take action to keep cargoes moving. Under this arrangement, if there is a dispute between the proposed commission and the private shipping interests, the Minister will decide in favour of private enterprise. He would not uphold the Commonwealth shipping service and submit the argument to a full inquiry. I can see in this arrangement another hurdle to complicate die free movement of our shipping services.

We find, also, that provision is made tor appeals to an independent authority concerning increases of rates. I suggest that that provision is almost useless, since no one could afford to make such appeals from time to time. Should there be a dispute concerning freights, the Government may intervene, in the . public interest, and say to the private shipping companies, “ You shall not charge that rate “. I understand that the matter would then go to an independent authority who would determine what the rate should be. I cannot visualize that happening very often. I think that the conditions regarding freights that apply now also will prevail then. There will be an unholy alliance, or a gentleman’s agreement, as the Government pleases to call it, that the freights will be maintained at a certain figure satisfactory to the private shipping companies, and there will be no competitive freights offering to the shippers of Australia. As I see it, this bill is aimed directly at making that position possible. Without this legislation, it would not be possible for that to be done. The Commonwealth line of ships is showing a profit. It is operating satisfactorily, and is introducing new ships to its services. It has a most uptodate fleet. To judge from the recent balance-sheets of the undertaking, it would be able, provided that the same degree of prosperity continued, to give concessions to Australian industry, both primary and secondary, by way of reduction of freight rates. This bill aims to prevent that from being done.

I have no doubt that, once this commission gets under way, it will honestly endeavour to do a worthwhile joh, within the restricted orbit of its operations. It is essential that we should retain the Commonwealth line of ships. However, should this undertaking be administered in the unsympathetic manner that the Government has adopted towards other Australian industries, the Commonwealth line will be damaged, rather than assisted, by this legislation. It is idle to say, as the Government has said in this instance, that it is its intention to assist the development of Australian industry while it subjects the Government line to unfair restriction and control. Let us consider the whaling industry, for instanced The initial costs of establishing it were tremendous. Private enterprise was not interested in the industry, although the Nor’ West Whaling Company Limited had battled on and tried to make a success of it. When the industry whs taken in hand by the Government, however, a successful enterprise was established which provided most beneficial services for Australia. Not only did the undertaking make profits, but also, it undertook research. Because of the success of the undertaking, other organizations also became interested-

The PRESIDENT (Senator the Hon. A. M. McMullin).- Order! The honorable senator must come back to the bill.

Senator COOKE:

– Because of those things, other whaling ventures which were established became as successful as the Commonwealth line of ships is now. The whaling station was sold by the Government instead of being protected by it. The Commonwealth line of ships also will be cast overboard, should it he commercially advantageous for private enterprise to buy it. Should that happen, it will mean the destruction of the right of the Australian people to have a nationally controlled maritime service.

We hear a great, deal these days of free enterprise, but I suggest that the supporters of the Government should seek substantiation of their belief in free enterprise. They should consider the position of the United States of America. I remind them that that country, at an even earlier stage of its development than Australia has reached at the present time, enacted maritime legislation to provide that goods should not enter or leave

America unless they were in American ships. That legislation almost led to war between Great Britain and America, but it had the effect of making an American nation. This is not a matter for free enterprise only. It is a matter of national importance, and Australia will never be a nation unless it has its own shipping services. This Government must have the right to build ships and to enact maritime legislation, not to control shipping absolutely, but to provide conditions similar to those that exist in America and other countries, where the private shipping interests have been controlled in order to prevent them from using obsolete, worn-out ships to trade with the nations with which we have to trade. Why does not the Government do that, if it has a national spirit?

We know very well that goods can be sent from England to markets on which we compete, in more up-to-date vessels and at cheaper rates, although they have to travel greater distances, than Australian goods can be sent to those markets. We suffer from the fact that private enterprise undertakings are using obsolete and worn-out ships, the maintenance and inefficient operation of which is not borne by the shipping companies - indeed, they are making excellent profits from those ships - but by the nation. The Government has boasted about deleting a section of the 1949 act, introduced by Labour, and which was not proclaimed. That section made provision for the protection for which I ask. If we are to have efficient shipping services, we must ensure that Australian seamen have not to go to sea in coffin ships.

Senator Kendall:

– They are not coffin ships. They have all been passed by the navigation authorities.

Senator COOKE:

– That is all very well. Nevertheless, many of them do not provide the modern appliances and facilities that crews should have. Many of them come within the category of ships about which the honorable senator himself complained. Industrial disputes have arisen because the ships have not had proper accommodation for the crews. Of course, the Government has said that those disputes have been Communistinspired, but that has not been the case.

The disputes have been due to obsolete shipping. That, however, is a human phase of the question which, perhaps, honorable senators opposite do not understand. There is also another phase, that of economics. To have obsolete ships is like driving a horse and buggy, or a T-model Ford, while other nations of the world, because of their insistence on modernity, are driving V8’s. We shall not be able to compete successfully so long as the Government allows the nation to suffer by refusing to interfere with the private shipping companies by making laws to regulate the services which we have a right to expect from private enterprise.

Senator COLE:
Leader of the Anti-Communist Labour party · Tasmania

[5.34 1 . - When we remember that this bill emanated from the Liberal party and the Australian Country party, and we read its provisions, we must agree that it is quite a good bill. I offer my congratulations to the Government for having seen the light. We all know that the policy of the Government, over the years, has been to sell the Commonwealth shipping line, but the people of Australia do not want such a thing to take place. I am sure that the majority of members of this Senate would not have allowed it to take place, despite the Government’s majority, because many honorable senators are sufficiently interested in the welfare of the States that they represent to ensure that this shipping line, which provides valuable services to the States, is retained. Having seen the light, the Government has introduced as good a bill as possible, which is designed to make for an efficient Commonwealth shipping line. That is what Australia needs.

I am not very keen on the proposed title of the new commission. I should like the word “ coastal “ to be deleted, so that the commission would be called the Australian Shipping Commission, because it is essential, itf the future, for the Commonwealth shipping line to extend its operations to include overseas trade. I think that that is very important. Although the agreement will permit the commission to engage in overseas trade in certain circumstances - I am not debating that point - I contend that the inclusion of the word “coastal” in the title implies that the Government is concerned only with the coastal aspect of the shipping line. I think that it would make for a better understanding by the people of the Government’s intention in this connexion if the word “ coastal “ was not high-lighted.

I am certain that the Minister for Shipping and Transport (Senator Paltridge) will evince discretion in the exercise of his powers under the bill. The measure provides that the Minister may direct the commission to engage in developmental trade. I am sure that if all Ministers recognize Tasmania’s problems to the degree that the Minister for Shipping and Transport has done, the Tasmanian representatives in this chamber will have no cause for complaint. The stipulation that losses incurred by the commission in providing services on developmental runs shall be offset against profit made on other runs is quite reasonable. As in the case of profits made by Trans-Australia Airlines, profit made by the Commonwealth shipping line should be paid into Consolidated Revenue. I have no quarrel with the Government’s proposals on that score, although I think that profits made from established services should first be applied towards the provision of efficient shipping services to out-of-the-way parts of Australia. I think that the proposed rationalization of the government shipping service and those provided by the private companies will make for greater efficiency. That rationalization does tend to bring about greater efficiency, is evidenced by the fact that Australian National Airways Proprietary Limited has operated more efficiently since Trans-Australia Airlines was established. I believe that the interests of Australia can best be served by a balanced set-up in relation to shipping as well as air transport. 1 am not very pleased about the proposal in relation to stevedoring which, I think, is probably more profitable to the shipping companies than the carriage of freight. Although supporters of the Government have stated that the stevedoring companies are separate entirely from the shipping companies, if one studies the lists of shareholders of the stevedoring companies, he sees that, in the main, they are subsidiaries of the shipping companies. Prom time to time, much has been said in this chamber about the necessity to turn-round ships quickly. I believe that the Government now has an opportunity to improve the position in this regard. It is common knowledge that a lot of malingering takes place on the wharfs. If the waterside workers were permitted to form their own stevedoring company, I am sure that this would be overcome. If they themselves had control of the stevedoring operations—-

Senator Vincent:

– With “Commos”’ in charge of the work?

Senator COLE:

– If the waterside workers could earn more by putting a greater effort into their work, I am sure that they would do so, and the turn-round of ships would be enlivened greatly. I do not like the provision that all stevedoring work shall be undertaken by the existing stevedoring companies, because 1 believe, as I said before - and I should like the Minister to find out for me whether or not this is so - that the companies make more profit out of their stevedoring activities than from the carriage of freight.

I believe that this bill is a constructive attempt by the Government to improve the efficiency of the shipping industry. Senator Cooke directed his attention at length to a consideration of whether it is likely that the Commonwealth ships will be sold in the future. If ever that comes about, I am sure that there will be an. uproar in this Parliament. Now that the Government has made up its mind on this matter, I do not think that it will attempt to dispose of the Commonwealth ships. I hope that the motion for the second reading of the bill will not be rejected, because if this bill is not passed there will be a continuation of the unsatisfactory state of the shipping industry that exists to-day. At least, by this measure, the Government is attempting to improve the industry and for that reason I support the motion for the second reading. I take this opportunity to inform honorable senators that I shall be prepared to support any amendments designed to benefit the Commonwealth shipping line.

Sitting suspended from 5.45 to 8 p.m.

Senator O’BYRNE:
Tasmania

– It would have given me a great deal of pleasure to be able to congratulate the Minister for Shipping and Transport (Senator Paltridge) on introducing his first major bill into the Senate. While my personal regard for the Minister is very high, from a political and ideological point of view I cannot congratulate him on introducing this particular bill.

We have heard a great deal of hypocrisy from Government senators who have tried to make a comparison between the state of the economy and of the shipping industry to-day compared with conditions eleven years ago when we Were suffering from the effects of war. To use such an argument when, perhaps, memories are becoming a little dim in regard to the difficulties of those days, is rather an unfair way of trying to strengthen a week case. I was reminded to-day of the policy of this Government by seeing a book written by General Macarthur which has just come to the library. In it he discloses what the non-Labour Government intended to do in the event of the defeat of this country at the hands of the Japanese. I am just as entitled to remind the Government of those days as the Government is to remind the Opposition of what it did not do about shipping when it was involved in making good the muddling that went on during the early part of the war before Labour assumed office. We should be concerned about the present and the future.

We are considering one of the mo3t important measures in a long series of measures which, in my opinion, are based one the ideological viewpoints of the Government. To state the position briefly, the policy of the Government is to support vested interests and private enterprise wherever they can make a profit and to palm off on to the taxpayers the responsibilities which private enterprise will not engage in because no plums are to be had. Honorable senators opposite have attempted to justify this measure. I feel certain that the general public does not understand its implications. As Senator McKenna has said, this bill puts a ball and chain on every section of the Commonwealth shipping line, and to ali intents and purposes it strangles the only protection that the Australian people have had against one of the most notorious sections of cartelized business that exist? in the world, outside the oil companies. Shipping is notoriously a monopolistic set-up and this bill is playing into tinhands of a group of people who, through their subsidiaries and international tieups, are getting away from the original intention of an Australian shipping line and are trying to repeat the 1924 debacle when the Commonwealth shipping line was given to them without payment. They are getting around the problem in another way by tieing this line up so thai later, when a fanfare of publicity is given to the fact through the press that the Commonwealth shipping line has los money, as it inevitably will, they will be able to achieve their objective. They will then pick the eyes out of the business by taking the new ships and leaving the “ D “ class ships which were built during the war and are now getting on in years, tied up at wharfs or anchored and forgotten in rivers; Senator Seward mentioned something about State butcher shops in Queensland. It shows how weak is the Government’s case when honorable senators have to go back to an isolated case in Queensland and quote a venture that was undermined at every corner.

I was rather surprised to hear .Senator Gorton endorsing some of the fundamentals of socialism. He admitted that electricity, hydro-electric generation, water conservation, irrigation and other such ventures should be undertaken by governments. However, he did not draw the line where the Government’s responsibility was to cease and where private enterprise was to commence. We know from experience that times have changed very rapidly and that international business is becoming more and more a cartel and a monopoly. For its own protection private enterprise has found that it has had to combine and make trade agreements between various businesses. The worn-out theory which is subscribed to by this Government and is implicit in ii? ideology that there should be free competition exists no longer. Apparently, that is now to be regarded as a horseandbuggy idea in a laisser-faire economy. To-day, a small man cannot enter into this business. The moment he enters into the field of the big monopolies where profits are to be made, he is snuffed out like a candle. Every honorable senator on the Government side knows that that is the case: but they are overlooking those things and deliberately and purposely signing the death warrant of a most efficient organization which has been the saviour of interstate sea transport in this country in the post-war years.

Senator HENTY:
TASMANIA · LP

-day was speaking of the days when he could freight goods to Launceston at 18s. a ton. I remember those days too, but I also remember the difficulty that Senator Henty had in those days in disposing of those goods. The fact is that there were plenty of ships running to Launceston and they were all looking for trade in those days. To-day, the position is different because sea transport of the goods that Senator Henty wants to freight is not profitable from the point of view of the shippingcompanies. They prefer bulk cargoes like sugar, superphosphate and other heavy commodities which fill their ships to the Plimsoll line. Senator Henty wants transport for mixed cargoes and he knows how difficult it is to get private enterprise to go into that type of business. He and I have repeatedly seen the Minister in regard to the transport of goods, such as potatoes, timber and other commodities from. Tasmania. They are not highly profitable cargoes. Inevitably, we have had to go to the Minister and say, “ Can you give us a Commonwealth ship?” If competition existed we are led to believe, on the basis of the outworn theory to which this Government subscribes, that we would have private ships coming to Tasmania and taking their share of these difficult cargoes in which the margin of profit is comparativelylimited.

Senator HENTY:

– How many shipping lines are running to Launceston?

Senator O’BYRNE:

– I shall deal with that matter later. The agreement contained in the schedule to the bill includes a list of companies which have signed it. They have been well canvassed in the Senate to-day, but it is most interesting to notice that several people from Launceston are directly interested in seeing that a company such as William Holyman and Sons Proprietary Limited has a tie-up with the Commonwealth shipping line. That company has been well served by the Commonwealth shipping line. The costs which were largely responsible for the losses that accrued on the shipping services to Tasmania, and which were placed to the debit of the Commonwealth shipping line during the war and afterwards, were incurred through the chartering of ships from William Holyman and Sons Proprietary Limited at a high rate. There is also a tie-up with Huddart Parker Limited and the Adelaide Steamship Company Limited.

The last-mentioned company holds onefifth of the shares in Australian National Airways Proprietary Limited. It is easy to see how Tasmania will be affected by a transport tie-up with the Adelaide Steamship Company, Huddart. Parker Limited nml Australian National Airways Proprietary Limited. TransAustralia Airlines was tied up in a similar manner, but this Government did. not have the political courage to sell Trans-Australia Airlines. It was giving a magnificent service to the public, and passengers were assured of being taken to their destination instead of being offloaded or pushed around if they did not happen to be wearing the right school tie, as happened with Australian National Airways Proprietary Limited before Trans-Australia Airlines was commenced. This legislation provides the opportunity for precisely the same sort of thing to happen. Unless we can get some submarines to provide opposition to William Holyman and Sons Proprietary Limited, the Adelaide Steamship Company and the airlines monopoly, it will bc a poor lookout for Tasmania, if private enterprise treats that State as it has done over the past fifteen or sixteen years.

An interesting contribution was made to this debate this afternoon by Senator Kendall. I always like to hear him speakon this sub 1ect, which is so dear to his heart, but I was surprised that he did not make some reference to the Merchant Service Guild and its attitude to this matter, lt was mentioned, during the debate, that private shipping companies wanted a long-term agreement so that they could invest in Australian shipping, but what guarantee is given under this proposed legislation of continuity of employment to members of the Merchant Service Guild? The scales are loaded in favour of the companies in every clause of the bill. The private companies get the duck and the Commonwealth shipping line gets the crow. 1 direct attention to the Minister’s secondreading speech in which he said that one of the objectives of the Government was to protect the position of the private shipping companies, and to place them in a position which would enable them to continue to play their due part in providing coastal shipping services. The Minister should have said that the objective of the Government was to make them face their responsibilities, because if they continue to play the part they have been playing, shipping throughout the Commonwealth will soon be in a state of chaos. There is no doubt that the private shipping companies have let down the business people of Australia by not supplying up-to-date, modern and efficient ships for the Australian coastal trade.

Government senators may say what they like about the Australian Snipping Board, but if it had not been for its magnificent work, the shipping services would be in a sorry plight. Every one associated with that board deserves the highest praise. The policy of this Government has been a restricting influence, and the efficiency and success of that board reflect great credit on those who have been responsible for its activities. It has been able to satisfy the craze of this Government to make profits, and it has been able to establish such a reputation in the community that if the facts behind the Government’s proposal to establish the Australian Shipping Commission were known to the public, this Government would be thrown out of office, neck and crop. It is a great pity that facilities are not available to make the facts known. Honorable senators will recall the avenues of information that were employed by the Government in the

Petrov sham with its ham actors and Kleig lights, the fanfare of trumpets and all the blarney and boloney that went, on, including press exaggeration and accentuation. This Government has no mandate to strangle the Commonwealth shipping line, but clause after clause in the bill, and paragraph after paragraph in the Minister’s second-reading speech, clearly show that that is the Government’s intention. In his speech the Minister said -

The Government has no intention of unduly restricting the activities of the Aus tralian Coastal Shipping Commission, on the contrary it has given the Commission very wide and general powers . . . still less is it prepared to place any of those companies in any thing approaching a monopolistic position.

But that is exactly what the Government is doing, and as one can see from the list of companies in the schedule, the Adelaide Steamship Company, William Holyman and Sons Proprietary Limited, Huddart Parker Limited, Mcllwraith McEacharn Limited, and Tasmanian Steamers Proprietary Limited are all keenly interested.’ Compared with the rest of the Commonwealth, Tasmania is only a tiny speck geographically and, with a small population, but within the little circle of that State’s interest these five companies are as close as one amalgamated concern. They never compete with one another; they are trade bedfellows. They hover round and pick off the transport plums when it suits them.

I now refer to the 25th report of the Public Accounts Committee which deals with shipping service between Melbourne and Tasmania, a service which, ostensibly, has been carried on by private enterprise. The report illustrates the extent to which private enterprise will exploit a situation if it is given the opportunity. This legislation hands such an opportunity to private enterprise on a platter. The estimate for the shipping service .subsidy for- one vessel, the Taroona, for 1954-55 was £150,000, but the expenditure for that year was £160,000. That means that’ the taxpayers of the Commonwealth paid this private shipping line a subsidy of

CI 60,0 00 to run that service to carry passengers and perishable goods - a most essential service. The report reads -

Since 1950 the Commonwealth has paid a subsidy to Tasmanian Steamers Proprietary Limited in order to maintain S.S. Taroona as the sole remaining surface passenger link between Tasmania and the mainland. From an ii mount of £16,000 in 1950-51, the subsidy has grown steadily. In 1952-53 it was £139,000 mid for 1955-56 is estimated at £360,000.

The Government subsidy is being paid to keep this private company going, and yet the company has practically a monopoly over our coastal shipping trade. The board’s operations and responsibilities are confined to non-paying areas and, moreover, the total tonnage is restricted. The report continues -

Although the subsidy is paid in full by the Department of Shipping and Transport, an amount of £16,000 per annum is recovered from the Postmaster-General’s Department.

I remind honorable senators that the subsidy is paid for carrying only secondclass matter, because all other mail is sent by air. A payment was made to Trans-Australia Airlines for the purpose, but after Trans-Australia Airlines had built up a good business, this Government stepped in and handed over half the business to a private concern, Australian National Airways Proprietary Limited. Now here is the interesting part, of the report - lt is a contribution towards the carriage of mails on Taroona

The subsidy was increased in 1955-56 because Taroona was scheduled for a four-yearly Lloyd’s Survey at the Cockatoo Dock and Engineering Company, Sydney, in 1956. The Survey is expected to reveal the need for extensive repair operations, and the Government has agreed to meet the additional costs of it.

Not only will the Australian Government pay £360,000 this year, but it will also pay the cost of the ship’s survey. There is a grant being paid to a private shipping line out of the taxpayers’ money because that concern is not efficient enough to carry on its own service. The Government accordingly finds it expedient to keep Tasmania quiet by paying this enormous subsidy. The point that I am making is that private enterprise has failed Tasmania in the last six years, and there is no indication that it will give the States a better deal in the future. Many of the D and E class ships which are efficient and useful for the Tasmanian trade, are also useful in other parts of the Commonwealth, and it is likely that the Commonwealth shipping line, having built up this trade to Tasmania, will be forced to move out and leave it to private enterprise. We know that more ships are needed or the Darwin run, and more still will be needed when the new wharf is built at Darwin. The coastal shipping board will do all that pioneering work.

Senator Kendall:

– Pioneering ! Private ships traded in that area .100 years ago !

Senator O’BYRNE:

– This matter of the Commonwealth having to pay for the repair and alteration of Taroona, indicates tha t private shipping companies are prepared to take whatever they can get from the Government, and do nothing at all about increasing their efficiency or competing for business. The legislation at present before the Senate will make the shipping situation worse because it will further encourage private companies to pick the eyes out of the coastal trade and leave the rest of it to the Government vessels. In opening this debate the Minister said -

The Commonwealth, for its part, has undertaken that it will not, except through the agency of the commission, operate merchant vessels in the coastal trades and that the commission will not engage in stevedoring operations, nor undertake itself the booking or handling of cargo carried on its vessels in coastal and territorial shipping trades. These services will continue being performed as they have for many years past by private companies, except in conditions that will be described later.

During the last three years the agencies mentioned by the Minister have made £545,000 out of booking and consignment of cargo fees and in five years will have received £S00,000. That is all very well, but they get the first choice of available cargo, and if a profitable cargo comes in they take it. They leave difficult cargoes for the Commonwealth ships. One does not have to be an Einstein to work that out. The same situation will continue to prevail. _ Much has been said about the coordination of transport. Indeed the honorable member for Mackellar (Mr. Wentworth) was speaking about it only recently in another place. I believe that sea, air and road transport should all be co-ordinated. What is to prevent Trans-Australia Airlines from acting as agents for this Commonwealth enterprise? That organization has sufficient offices and staffs to carry out the work for the board. If that were done the board would also know that its interests were being protected in the allocation of cargoes. I suggest that the chances are weighted against the successful continuation of the Commonwealth shipping line. With regard to the restriction of tonnage the Minister 3aid - . . if the companies do not, within a time specified, take steps to provide the tonnage which the independent authority has determined is necessary, the Minister may authorize the commission to acquire the tonnage, and the tonnage which the commission is empowered to operate is increased by the amount of tonnage so acquired.

I now refer honorable senators to the report of the Tariff Board on the shipbuilding industry, dated the 16th June, 1955.

Senator PALTRIDGE:
LP

– I draw your attention, Mr. Deputy President, to the noise and laughter which is coming from the press gallery. I am. trying to listen to the points made by Senator O’Byrne, and I find that the noise from the press gallery is such that I cannot hear all the honorable senator is saying.

The DEPUTY PRESIDENT (Senator the Hon. A. D. Reid). - Order ! I ask the persons who are at present occupying the press gallery to maintain silence so that the debate may be followed by all honorable senators.

Senator O’BYRNE:

– The report of the Tariff Board on the shipbuilding industry, to which I have referred, states -

There was no evidence that fears of tile future could justifiably bo based on a falling off in demand of local requirements. Mr. C. H. McFayden, secretary of the Department of Shipping and Transport, furnished u complete list of vessels trading on the Australian coast and their ages, and in a summarizing cable showed that in the next ten years orders would need to be place for 5S0,000 t.d.w. of new ships. This tonnage would replace 107 vessels which will be 25 years of ape and older in the next ten years, and nineteen overseas vessels on charter, And provide additional tonnage for expanding needs.

The importance of providing for expanding needs is illustrated by the increase that has taken place in our population over the last five or six years. During that time, the figure rose from under 7,000,000 to over 9,000,000. Those people who are visiting here from the United States at the present time will be wanting to emigrate to Australia, especially after they see how competition in private enterprise is folding up in such great fields as the motor car industry. When they come here, they will be requiring extra shipping facilities; yet it is proposed under this bill to tie down the Commonwealth’s ships for the next twenty years to a maximum of 350,000 tons. That, being so, the private shipping line will bc free to enjoy and derive great benefit from the extra business that will be available. It is not only impudent, but also immoral to tie future generations and governments in this country to an agreement such as the one proposed here. The report goes on -

It is essential to the establishment and maintenance of an efficient shipbuilding industry in Australia that the industry has ships to build.

The bill contains a provision under which the Minister may order the private shipping people to obtain new ships; but he has no authority to say that they must go to Australian shipbuilding yards for them. They can go anywhere for their ships, and I can visualize where they will go in the very near future. We heard over the radio to-day that Scapa Flow, one of the traditional centres of the Royal Navy, has been closed down. That seems to indicate that those in authority share my view that the probability of war is receding since the advent of the hydrogen bomb, which has given to people the knowledge that there can be no more profit for the big business organizations, cartels or exploiters of the world in pursuing wars. I was afraid of the hydrogen bomb at one time ; but now, because it has created that state of affairs, I am pleased that it is available. The closing down of Scapa Flow should free trained shipwrights and other shipbuilding artisans for the building of ships for peaceful purposes. We know also that a number nf ships have been disposed of in the United States of America and in the

United Kingdom. This means that ships will he much more readily available to other parts of the world, but. at the same time, it is essential that we maintain our own shipbuilding industry. The Tariff Hoard report continues -

The i ministry lias been kept going since the war largely by orders for the Government line and partly by the fact that the B.H.P. lias been building ships for its own use. I’he general complaint by the shipbuilders was that the private owners were not placing orders with the Australian yards but were obtaining their requirements from overseas, flic Board questions whether sufficient purchases are being made from any sources by private owners (excluding B.H.P. and the Western Australian State Government) to maintain the coastal fleet at a reasonable standard of efficiency.

The board then gives an analysis of the trading vessels of 200 tons gross and over operated by those owners on the 1st August, 1954. ‘ That list discloses that there were 66 vessels over 25 years old, and they represented a dead weight tonnage of 139,32S tons out of a total of 316,484 tons. It discloses also that nine vessels, representing 46,158 tons dead weight, were built in Australia since 1945 and that private owners were also operating 40 vessels of from 9 to 25 years old. This means that at the present time from 50 per cent, to 80 per cent, of the ships operated by private companies are over 25 years of age or are of more or less obsolete design. The Tariff Board’s report continues -

As the effective life of a vessel is said to lie 20 years … it will be seen that even 140,000 t.tl.w. if available immediately would not bring the fleet up-to-date.

That is due to the fact that on the 1st August, .1954, there were only twelve replacement vessels on order, representing -24,670 t.d.w. The report continues -

Recent information concerning policy and practices in the U.S.A. is contained in a report “Maritime Subsidy Policy” prepared by the Office of the Under-Secretary for Commerce and Transportation and the Maritime Administration in April. 1054. The following ure quotations: -

The policy of reserving the domestic waterborne commerce of the United States to vessels built in the United States and owned and operated by United States citizens is as old as the United States Government itself. . . . This policy should not be discontinued.

There, the Americans are insisting thai their ships be built in the United States

Senator Henty:

– And we in Australia are doing the same.

Senator O’BYRNE:

– No provision in that direction is made in the bill. The Government may direct the private owners, but if they can find an alternative ship and can prove that fact to the satisfaction of an arbitrator, who may be an accountant or a. lawyer, that arbitrator will question the Government’s authority to tell these people that they must buy ships built in Australia. There is nothing in the bill that will give the Government such authority, although I think we are all agreed that the recent war has proved that owing to our isolation in the Pacific it is essential thai our maritime services and shipbuilding industry be kept at the highest possible level. Apart from that, the maintenance of the shipbuilding industry is essential to the balancing of our industrial economy in that wo must have adequate artisans trained in every field of human endeavour.

Mention was made of Taroona and the proposal of the Government to build a ferry to keep going the service for passengers, motor cars and perishable goods between the mainland and Tasmania. I see no provision in the tonnage limit laid down under the bill in respect of another important development that has taken place in the United States of America. I refer to motor transport barges. In the United States of America, they have three-decker barges which are able to moor at suitable landing places. Trucks are driven on to the barges with their loads, and three or four can be transferred to another landing place. Tho goods are not handled and the services run frequently. No provision is madu in the bill, with its limitation on tonnage, for such a service. We could do with 500,000 tons of that sort of shipping. It is the responsibility of the Commonwealth Government to develop that side of our sea transport services. This matter has been overlooked. The Government has shown itself to be short-sighted: It wm* impudent, too, in seeking to tie future governments and future generations to n frowsy agreement such as that proposed in this legislation. Many restrictions have been placed on the Commonwealth shipping line, and there are no mandatory obligations on the private shipping companies. If a difference arises between the Minister for Shipping and Transport and the private shipping companies, the matter may be referred to an arbitrator. The Government “ may “ refer the matter and the arbitrator “ may “ do something about the private shipping lines, but when the Commonwealth shipping line is involved, the provisions are mandatory. The whole proposal is unfair.

The Minister stated in his secondreading speech that there were obvious advantages in having an arrangement with the private companies for bookings and stevedoring. I believe that the cost of stevedoring and booking services i;i the past five years has practically equalled the amount of profit made by the Australian Shipping Board. I believe that the average profit has been about £300,000 a year and, in the past three years, the line has spent about £500,000 on forwarding and booking fees paid t.” the companies who have had first pick of the cargoes. The agreement provides -

If the Australian Shipbuilding Board advises the Minister that orders held by the Australian merchant shipbuilding yards for the construction of new tonnage for the coastal and territorial shipping services are less than is necessary to enable the industry to continue in operation at a reasonably adequate level of production, the Minister may give notice to the companies specifying the tonnage which in his opinion should be ordered from the Australian shipbuilding yards.

The bill is worthless. The Government claims that it will exercise a. measure of control over the private shipping companies, but the agreement is worthless unless the companies can be compelled to have most of their new ships built in Australian yards. I should like the Minister to indicate where in this legislation there is authority for provision to bc made in favour of the Australian yards.

The Minister stated that one of the oibjeefiv.es of the Government under the agreement was to ensure that no companies were placed in a monopolistic posi tion. He had his tongue in his cheek. The measure precisely provides for a monopoly for twenty years in the best trade on the Australian coast. By that time, the Commonwealth ships will be obsolete. The new commission will have no protection at all. If the private shipping companies want to charter a Commonwealth ship when the time comes, there is nothing in the measure or the agreement to indicate that the Minister will not give his permission. That being so, the public will be presented with balance-sheets showing that the new commission, with its old ships, has a debit balance. The Commonwealth line will then be branded as another nonpaying government enterprise.

This measure follows the platform that has been drawn by the Government since it was elected to office. It has been a government of fits and starts. It starts little, but it throws plenty of fits, and this is one of them. It is a misfit government. If I did not think so much of the Minister for Shipping and Transport, I would call him “ FitzPaltridge “. This measure will hold back the Commonwealth shipping line just when Australia, is on the verge of a tremendous era of development. The population is expanding rapidly through immigration and natural increase, and new areas are being opened. That is the claim of the Government, but it has introduced a long line of restrictive measures. It has acted similarly in the field of electronics, radio and television. Amalgamated Wireless (Australasia) Limited was handed over to private control. Only to-day, one of the richest oil organizations in the British Commonwealth of Nations was sold to a big Texas oil cartel. That process is proceeding all the time.

That is the Government’s policy, and what has private enterprise done; We are just about broke. The country is ruined. The Government has ruined it. The Prime Minister (Mr. Menzies) and the Minister for Trade (Mr. McEwen) are overseas trying to pick up what they can and handing out sops, after presenting a doleful picture of the national economy. This is a negative government; it is not progressive. At one time it is trying to maintain the status quo; at another, it is trying to turn back the clock. Neither can be done, and those who try are swept -away. This Government is doing a grave dis-service to Australia by restricting the progressive Commonwealth shipping line, and depriving the people of the services that have been operated so well by that organization. I am aware that when the Government tries to justify its actions before the people, it will get its just deserts.

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

– in reply - I was particularly interested in that aspect of Senator O’Byrne’s speech which dealt with the payment on account of the vessel Taroona, of a subsidy, by the Commonwealth for the purpose of maintaining the Bass Strait ferry service. It is, of course, perfectly true that for years this Government has paid large and increasing sums by way of subsidy for that purpose. We have regarded that payment as an inescapable responsibility. These sumo of money have been paid pursuant to a promise which was made years ago, and which has been repeated frequently since then. Tasmania always has been regarded, so far as shipping is concerned, as one part of the Commonwealth that should receive special treatment, regardless of cost. The plain fact is that the Taroona subsidy is paid because the payment of it is inescapable. I could not help thinking that Senator O’Byrne, at one stage of his criticism of the Government, was actually advocating the nonpayment of the subsidy.

Now, I want to say something which T. believe to be basic to the bills before the Senate. Of course, only one of the purposes of these measures is to extend to the private shipping companies an assurance that, so long as they make a real and substantial contribution to the development of this country, they will be given a measure qf protection, so far as legislation can protect them, from the operations of a government shipping line which, in some circumstances, could be crippling, and also from the actions of’ some future socialist government, which most certainly would be crippling. The debate to which we have listened to-day has been 90 per cent, on the surface.

This question of shipping services exposes one, of the vital differences between the Government parties and the Australian Labour party. This i3 a matter not of socialization or nationalization generally, but of socialization of shipping. The Opposition cannot plead anything in the nature of the Blackburn interpretation in connexion with shipping. It cannot plead, when it conies to shipping, that it would nationalize only the national good, because specifically written into the platform of the Labour party is the objective “nationalization of shipping”.

Senator Brown:

– What is wrong with that?

Senator PALTRIDGE:

– Nothing. But that being so, I should have expected that this debate would have revolved round that issue and that each and every member of the Opposition who spoke would have debated the matter as one of socialization. That objective was confirmed at the Hobart conference of the party, so that the supporters of the party, or some factions of them, must have felt reinforced by that confirmation. Only a few days ago, the federal president of the party reaffirmed the policy of socialization.

One might have expected, therefore, that that would have been the trend of the debate, but it was not so. We who sit opposite the representatives of the Labour party in this chamber have become so used to their tactics that we now understand what is going on. We know that their policy includes socialization of shipping, and so do they, but why, oh why, do they not stand up and say so on every possible occasion? Why is it that, on some days, they try to give themselves an air of political respectability?

Senator Courtice:

– Why not deal with the agreement?

Senator PALTRIDGE:

Senator PALTRIDGE:

– Senator Ashley, surprisingly enough, made the quite remarkable statement that, in 1949, it was not the policy of the Labour party to nationalize shipping - that it was not Labour’s intention to do so. I cannot understand why the honorable senator made that statement, because, in 1948, the nationalization of shipping was adopted as a plank of Labour’s policy. Despite the honorable senator’s statement, the nationalization of shipping was still a part of Labour’s policy in 1949. I cannot understand now, any more than I could in 1949, why members of the Labour party consistently try to hide this part of Labour’s policy.

The honorable senator then went on to refer to the performance of stevedoring operations and agency duties by private companies. The proposed arrangements are in operation to-day and have been ever since the Australian Shipping Board was constituted. Neither under Labour nor under this Government, has the board ever engaged in any stevedoring activity. This has always been conducted by the private companies. That is an arrangement which Senator Ashley, when Minister for Shipping and Fuel in the Labour Government, found convenient and satisfactory. But now the Opposition says that, under this arrangement, there will he all sorts of trafficking and discrimination in the handling and allotment of cargoes. I inform the Senate that if, in the opinion of the commission, the commission’s ships are discriminated against, or the commission is not satisfied with the charges that are made for stevedoring, it will be open to the commission to have the matter resolved by an independent authority. In the event, of the commission’s contention being upheld, it may get the work done by an organization other than a signatory to the agreement, or to make arrangements to do the work itself.

Senator Vincent:

– Nothing could be fairer than that.

Senator PALTRIDGE:

– I agree with my colleague, Senator Vincent, that nothing could be fairer. Labour, having clone this as a socialist government, now criticizes this Government for proposing to continue the arrangement. Now that the Government has incorporated the principle in the agreement, the Opposition condemns it. Let there be no mistake about the matter. We on this side of the chamber know where we stand in relation to it. I say, without equivocation, that we will not expand governmental activities into spheres which can be conducted by private enterprise, unless and until private enterprise fails to deliver the goods.

Senator Courtice:

– And then the Government will sell out the shipping line to private enterprise.

Senator PALTRIDGE:

– I know that a Labour government might do so, in accordance with its socialist policy. Therein lies the basic difference between the Opposition and Government parties. The arrangements set out in the agreement are considered to be eminently fair and reasonable, and completely workable. I am confident that they will produce the result that the Government, desires.

Last evening, Senator Ashley also referred to shipbuilding activities. I am sorry that he is not present in the chamber to hear my reply to his comments. He seemed quite resentful of the possibility that private shipowners might arrange for ships to be built overseas. He implied that, by so doing, they would gain an advantage over the commission. In my opinion, the honorable senator adopted a completely negative approach to Australian shipbuilding. Recently, this Government proudly announced significant developments in that industry. Only a few weeks ago, I, myself, had the pleasure of announcing the Government’s intention, to call tenders for the building of two 12,500-ton vessels in Australian yards. Only yesterday. I announced the Government’s intention to’ arrange for the new Bass Strait ferry - the like of which has not been built in Australia before - to be constructed here. This indicates the confidence that the Government reposes in the Australian shipbuilding industry. Last week, the Broken Hill

Proprietary Company Limited announced its intention to build two 19,000-tonners at Whyalla. These will be the biggest ships yet built in Australia. I suggest that that is the kind of approach to Australian shipbuilding that is needed in order to give the industry confidence. It indicates that both the Government and the people of Australia acknowledge that this industry is rapidly coming into its own, and that it will, no doubt, continue to make a progressively increasing contribution to Australia’s economy.

Surprisingly, Senator Ashley also asked why the commission was being established. I do not need to myself answer that question, because the Leader of the Opposition (Senator McKenna) supplied the answer this morning when he indicated that the Opposition - including, presumably, Senator Ashley - was not opposed to the broad idea behind the setting up of the commission.

This morning the Leader of the Opposition asked me several specific questions. I shall endeavour to answer those questions to the best of my ability. The first, and the one which caused me some slight palpitations, was what had happened to clause 9 in the schedule to the bill. I now assure him that the omission was a typographical error only. The agreement is as published in the schedule ; there is nothing to be taken out of it, and nothing to be added to it. He also asked me, pointedly, if the Government was taking any steps to have power referred to the Commonwealth so that interstate and intra-state shipping operations, and presumably, port and harbour authorities, should come under the one authority. I tell him now that the Government has not taken any steps to bring about the result which he envisaged ; nor has it that step in immediate contemplation. The Commonwealth considers that that is a State function which can be usefully and properly carried out by the States; and it has no immediate intention of seeking the power to which the Leader of the Opposition referred.

Then, the Leader of the Opposition referred to the power of the Minister to approve freight rates and asked if I would give consideration to referring this matter, when in dispute, to the Tariff

Board. In reply, I would say that the power of the Minister in this connexion should be read, in conjunction with that section of the bill which lays on the commission the obligation, consistent with its duty, to charge the lowest reasonable rates possible. I point out, too, that it is a power of approval and disapproval and that the Minister lias no power to initiate. It means, I consider, that it the Minister refuses to accept the advice of the commission he will do so at the peril of cither producing a had financial result or of imposing rates which are grossly too high. That fact, would bc revealed in the accounts of the commission and would undoubtedly appear in its report; and that in itself would be a safeguard. I point out, also that, when the Government appoints this commission it intends to appoint a panel of responsible businessmen who will not act in any irresponsible or fickle manner in relation to freight rates.

The Leader of the Opposition referred to developmental trades and the possibility of losses being sustained by the commission in those trades. I rather felt that he made far too much of that point. It is perfectly obvious that any assessment of the commercial results of the concern must be viewed in conjunction with the amounts lost in developmental trades, and no assessment would fail to take cognizance of that fact. It has been pointed out that in actual fact if the surplus were held by the commission it might find its way into general revenue and the effect on the cash position would be precisely the same as if it had been made in a developmental trade. However, I emphasize that where losses occur as a. result of participation in developmental trades, those losses would certainly and emphatically be taken into account in any assessment of the business operations of the commission. The Leader of the Opposition then addressed himself to what he referred to as the physical removal of a ship from the coast, and he asked what would prevent an Australian ship being removed from the Australian coast to engage in trade in South America. I point out that under clause 48 of the commission bill, the sale, mortgage, or transfer of registration “without the approval of the Minister is prevented; and, that being so, a ship would have to be transferred to the service mentioned by the Leader of the Opposition on Australian conditions. The ship could not be transferred from ti Le Australian register. The likelihood of an Australian vessel being taken fromthe Australian coastal service and being operated economically in a service such as the Leader of the Opposition envisaged would be extremely remote. Even if a shipping company took that step it would be placed in the position that the vacancy on the Australian coast would have to be filled by it, or failing that, the vacancy would certainly be filled by the commission.

Much was made by the Leader of the Opposition and other speakers of the fact that the Minister may authorize, in. certain circumstances, the building of additional tonnage and the engagement of firms outside the agreement for stevedoring, or for agency purposes. I say to the honorable senator quite frankly that I do not think there is a real ground for such a fear. It might be a valuable debating point. The point is that if the Minister rejected the advice he was given he would place himself in a position where he would be letting the tonnage of shipping on the Australian coast run down, and that is a political impossibility these days.

The DEPUTY PRESIDENT (Senator the Hon. A. D. Reid). - Order! The Minister’s time has expired.

Motion (by Senator McKenna) - by hume - put -

That so much of Standing Order 407a be suspended as would prevent the Minister for Shinning mid Transport (Senator Paltridge) speaking in reply for more than thirty minutes.

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

Senator PALTRIDGE:

– I thank Senator McKenna for his courtesy, and I shall not detain the House much longer. Last night, Senator McKenna drew attention to a political reference in mv second reading speech, and expressed indignation that I should have made it. He pointed out that it was not usual for such a reference to be made in a second reading speech. Frankly, I had not known that, but I say with equal candour that when I have time, one of the exercises of my leisure hours will be to examine closely the second reading speeches of Senator McKenna in his capacity as a minister, and ascertain how frequently he broke what he now lays down as a golden rule. I am encouraged to do that because I can refer appropriately to the second reading speech made by Senator Ashley on the Shipping Bill in 1948, which is literally studded with political references and criticisms, both direct and implied, at the Opposition of that time. He said -

After the war, in the absence of any positive steps by the government of the day, the industry was allowed to die out.

Senator Courtice:

– That was factual.

Senator PALTRIDGE:

– That is so, but it is not contended that what I said in my second reading speech was not factual. Senator Ashley continued -

As a consequence of those years of neglect the only major shipyard in operation in the Commonwealth at the outbreak of the war in 193!) was the Cockatoo Island Dockyard.

Here is another gem -

In 1928 the Government of the day obsessed with the profit motive, ignoring the substantial benefits which had accrued to the Commonwealth through the influence of the line in reducing freights, particularly on primary products and disregarding the importance nf maintaining the mercantile marine, particularly in the overseas trades, sold the remaining ships of the Commonwealth line. The vessels were sold at an absurdly low figure to the White Star Line, a unit of the British shipping combine.

I suggest that if I were mildly at fault in my second reading speech last night, certainly I am in the company of Senator Ashley, and I shall check with interest the second reading speeches of the Leader of the Opposition (Senator McKenna). I know that his comment was offered in a spirit of utmost kindness and helpfulness, but I cannot quite believe him.

Senator Kendall:

asked a question with reference to the operation of the British Mercantile Marine Act. The answer is lengthy, and would probably best be given at the committee stage.

In conclusion, I say that this bill aims to give to private enterprise an assurance that it will be allowed to proceed unhampered throughout the coming years. But that does not mean that private shipping companies will be given an open go. No undue advantage is conferred on them. Indeed, this legislation places them well and truly on their mettle. I has been said that private shipowners welcome this measure, but I assure the Senate that they do not. It places upon them a firm and fixed obligation which, if it is not met, will bring down on them most severe and serious penalties. This bill does nothing more than to say to private enterprise, “ Carry on ; here is the opportunity for you to do a job of providing shipping and shipping services, but, in the event of your failing to do so, the Government will see to it that shipping and shipping services are provided for the Australian people “.

Question put -

That the hill be now read a second time.

The Senate divided. (The President - Senatorthe Hon. A. M. McMullin.)

AYES: 25

NOES: 20

Majority . . . . 5

AYES

NOES

Question so resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 7 agreed to.

Clause 8 (Constitution of commission ).

Senator McKENNA:
Leader of the Opposition · Tasmania

– Clause8 provides, inter alia, that the commisison shall consist of five commissioners who shall be appointed by the Governor-General. The Minister for Shipping and Transport (Senator Paltridge) has already indicated that the commission shall consist of five businessmen. I ask him whether those persons are in mind at the present time. If they are in mind, from what business are the commissioners to be drawn ? Finally, will any of the present members of the Australian Shipping Board be included in the proposed commission?

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

.- What I might describe as preliminary consideration, has been given to the personnel of the commission. It is merely a preliminary consideration, and no persons have been selected. It, is the intention of the Government that the persons appointed to the commission shall be those persons who, in the opinion of the Government, can, by training experience and knowledge, best serve the purposes of the commission.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I have one further question to ask the Minister for Shipping and Transport (Senator Paltridge). The Minister’s statement rather indicates that persons who have been trained in the conduct of shipping, and who have had experience in that field, will be appointed to the commission. Could I have an assurance from the Minister that none of those persons who are’ appointed to the commission will continue to be interested in private shipping companies? If somebody from the staff or the directorate of private shipping companies is contemplated for appointment to the commission, would the Government consider the appointment of such a person without ensuring that he resigns from his private office in shipping?

Senator Paltridge:

– I am not in a position to give the assurance required.

Senator McKENNA:

– I did ask the Minister previously, and he apparently overlooked it in the multiplicity of my questions, whether it was in contemplation that any of the present members of the Australian Shipping Board will be appointed to the commission. Are they to be completely disregarded and a fresh start made, because if that is to be the case I consider that the Government should have regard to the need for some continuity in shipping policy. According to The Federal Guide, which [ have before me, and which, perhaps, may be out of date, the Chairman of the Australian Shipping Board 13 Mr. McFadyen, the Deputy Chairman Mr. Dewey and the members Mr. Edwards, Mr. Radford, Mr. Tudehope and Mr. Mercovich. There are six persons on the board. Is it in the contemplation of the Government that there will be a clean sweep of that personnel and that the new commission will take over, or will the Minister have regard to the need to preserve some continuity between the policy of the new commission and the old board?

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

– I regret that I am unable to give a definite answer to the question asked by Senator McKenna. That is the type of thing to which consideration is now being given.

Clause agreed to.

Clauses 9 to 14 - by leave - considered together.

Senator WRIGHT:
TASMANIA · LP; IND from June 1978

– I direct the attention of honorable senators to clause 13, which relates to the vacation of office, because I detect in its draftsmanship that the task has been of a somewhat novel nature. I only wish to recall to the committee the comments of the Minister with regard to th, fact that the ideas in this clause owe something to suggestions made by the Public Accounts Committee after its investigation of the affairs of the Australian Aluminium Production Commission.

In a recent measure honorable senators had to consider what interest on the part of a member of the Export Guarantee

Corporation should disqualify him from office. Here, instead of an interest in ;i contract disqualifying a person, it is the non-disclosure of that interest which disqualifies. Moreover, it is the nondisclosure of an interest other than an interest of a commissioner in a contract for “ the carriage of a Commissioner or any of his goods “ in sub-clause (4.) of clause 13.

I notice that the disclosure required is one to be made as soon as possible after the relevant facts have come to the knowledge of the commissioner. I am not able to call to mind any comparable legislation that conditions a disqualification upon that contingency. I do not propose to say any more about that, except to suggest that in view of the struggle being made by the draftsman to find an appropriate formula for all these cases, which are of real importance, having regard to the experience of the Australian Aluminium Production Commission it is a. matter which a committee of this Senate might very well consider during the recessor later this year.

There is only one further aspect tha ; I wish to mention, and that arose also out of the experience of the Australian Aluminium Production Commission. I have nothing of a critical nature to say about the activities of some of the members of that commission, but it will be remembered that one member had entered into contracts with companies in which he had substantial interests. I believe that, the Public Accounts Committee wasatisfied that the existence of that conflicting interest in that case did not lead to any damaging transactions on account nf the commission. However, business customs show that it is prudent to protect a public corporation against n director of it having competing business interests. Indeed, there are instances in which the commissioner does not act in the best interests of the commission. There are cases where he is in fact negligent and fails to protect the commission’s, interests. Professor Bailey gave an opinion to the effect that there was no legal right of recourse against the commissioners on the Australian Aluminium Production Commission, and I have the greatest respect for his opinion. But I submit that in the light of the High

Court’s decision in the case of Fouche against the Tasmanian State Superannuation Board there is a considerable amount of doubt on the point. I suggest that the Senate would do well to address its mind to that point because, if the prevailing opinion of the Crown Law officers is to the effect that a commissioner can be negligent to his commission without involving himself in civil right of recourse for loss suffered - for example by the sale of a vessel worth £40,000 for £2,000 - if, would seem to me that proper legislation passing through this Parliament should provide specifically for such an eventuality. I regret to mention that offshoot from the bill, but we are creating all these corporations during this session and this action follows so quickly after the untoward experience of the Australian Aluminium Production Commission that I desire to place it on record for the purpose of subsequent patient consideration by the draftsman and legal officers.

Clauses agreed to.

Clause 15 (Functions of commission).

Senator McKENNA:
Leader of the Opposition · Tasmania

– This clause provides that the functions of the commission are -

To establish, maintain and operate, or to provide for the establishment, maintenance and operation of, shipping services for the carriage of passengers, goods and mails . . . between a place in the Commonwealth and a place in another country.

I put it to the Minister for Shipping and Transport (Senator Paltridge) that at the present- time the Commonwealth shipping line, as it is known, is not operating away from the territorial or coastal waters of Australia. I point out that he is setting that out now as one of the functions of the commission for the future. Is it in contemplation that the Commonwealth shipping line will enter into the overseas trade and that it will become active in that trade? I sincerely hope that is in the mind of the Government. I realize that it would involve fairly heavy expenditure and commitments, but i argue that in no other way can the undue charges imposed on freights between Australia and other parts of the world be conditioned or regulated than by the active competition of an independent line such as the Commonwealth shipping line. Is the Minister able to say whether it is the policy of the Government, or whether it is in the Government’s mind, that the line should, in the near future, engage in trade of that nature, or is this provision mere words to which no effect is intended to be given?

Senator WRIGHT:
Tasmania

– Before the Minister replies on that matter, and to illustrate the absurdity of the submission, I wish to say that, as I pointed out to the Senate a fortnight ago, coastal freights in Australia between Melbourne and Sydney have risen by something of the order of 197 per cent, since 1947, and that during the same period the overseas freight of which the Leader of the Opposition (Senator McKenna) complains have risen by only 50 per cent. When one knows of the arrangement made by the erection of the Overseas Transport Association in 1930 pursuant to the Scullin Government’s legislation, it is completely beyond one’s comprehension as to how any responsible person in this place could entertain the idea of this shipping service actively participating in overseas trade with such a disadvantage as that which the load of present Australian costs would place upon it as compared with the overseas lines.

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

– In the past, it has been found necessary, in order to meet special circumstances, to send an Australian ship overseas. The Senate will recall the ship that had to be sent to Cocos Island to assist in the establishment of an aerodrome there. On other occasions in which special circumstances have obtained, ships have been used for particular purposes. That is the reason for writing this provision into the bill. It is neither the policy of the Government, nor is it in contemplation, that overseas trade should be embarked upon.

Clause agreed to.

Clause 16 (Powers of Commission).

Senator BENN:
Queensland

Senator Wright:

– Does the Minister think that what I have suggested is preferable?

Senator PALTRIDGE:

– There is no objection, but my advice is that the phrase is preferable as it is, because the words “ of a value “ would be rather more vague than those now in the bill.

Senator COOKE:
Western Australia

– The Minister for Shipping and Transport (Senator Paltridge) has said that only honorable men will be appointed to the commission. When procedures are not fixed by legislation even honorable men are allowed a wide scope. We ask for protection, to which no honorable man would object; but if appropriate provision is not made in the legislation, the Government will be showing a callous disregard for the protection of assets under the control of the commission. It is all very well to say that these commissioners will be honorable men, but we have heard some very stringent criticism of the manner in which other honorable men failed, to call tenders, or make it known that tenders would be called, for a valuable national asset. I refer to the assets of the Australian Whaling Commission. I do not make any insinuations about the men who operated that commission, but there was no conformity with business practice when the assets of the Australian Whaling Coin/mission were sold. That transaction was absolutely disgraceful.

At this stage, when the personnel of the proposed new shipping commission is not known, and it is possible to read into the legislation that assets may be sold by tender or valued in some undefined way, we should watch our step. We are not here to consider honorable men, but to write the law, and the law will mean only what it says. If we are not prepared to do that, we are evading our responsibilities. We should be particular to write into the bill precise terms and conditions. Senator Wright has mention abuses in connexion with another big Australian asset, the aluminium works, upon which a report was presented by the Public Accounts Committee. We have had a public scandal about the sale of the assets of the Australian Whaling Commission.

Senator Spooner:

– Nonsense!

Senator COOKE:

– Now we find that there is to be very limited protection for the assets of the new shipping commission. The Minister has asked us to remember that we shall be dealing with honorable men, but the Minister does not know who they will be. I recall the deficiencies shown by the Australian Aluminium Production Commission. There was no misappropriation, we were told, but there was terrible bungling. I have great respect for the opinions of Senator Wright in these matters. The honorable senator stated that there was definite cause to be disturbed about the disposal of the assets of the Australian Aluminium Production Commission. Therefore, I do not feel reasonably satisfied with the provisions of the bill in this respect, and I ask the Minister for Shipping and Transport to consider the matter. I suggest that there is no harm in writing into the bill protection against unreasonable disposal of assets. If honorable men will be concerned with it so much the better; the Government will be protecting them from any pressure that might be brought against them. I shall leave it to my leader to take the matter further, if he thinks it proper to do so. but for my part, I think that further consideration should be given to it.

Senator LAUGHT:
South Australia

– I also refer to sub-clause (3.) of clause 16, to which Senator Wright addressed himself. I am not entirely satisfied with the attitude of the Minister for Shipping and Transport (Senator Paltridge) with regard to Senator Wright’s suggestion. In the case of a disposal or purchase of assets of a value exceeding £50,000, it would accord more with my views if the words “ for a consideration exceeding Fifty thousand pounds “ were not used. I suggest that the Minister defer consideration of this matter so that he may give it a little more thought. The advice that he received perhaps was tendered to him rather quickly, and I should like him to consider the substitution of the words “ of a value “ for the words “ for a consideration “. I believe that the test should be not the actual consideration stated in some document or other, but the value of the assets being acquired or disposed of.

I do not agree with Senator Cooke’s impassioned suggestions regarding the possibility of fraud, but I do think that the value should be the determining factor.

Senator SPOONER:

– I do not understand the difference between the value and the consideration, in a bona fide sale.

Senator WRIGHT:
TASMANIA · LP; IND from June 1978

– A negligent sale might easily produce a consideration much below the value.

Senator LAUGHT:

– If we were to put in the words “ for a value “, there would be an onus on all concerned to see thai, the asset was valued. If the words “ for a consideration “ are left in, there will not be that onus. The agreement might contain only a reference to so many thousand pounds, which might not be the actual value.

Senator O’SULLIVAN:
QueenslandMinister for the Navy · LP

– I think that there is considerable merit in the points that have been raised by Senator Laught, Senator Wright and Senator Cooke, except in regard to the Australian Whaling Commission. However, I do not think that we can carry this matter a great deal further than the bill takes it. The words “ price “, “ value “ and “ marketable value “ are frequently mentioned in acts of Parliament. I think that, in the context in which the words “ for a consideration “ are used in this clause, there is the inherent meaning “ as a fair, equitable and marketable consideration “.

Senator WRIGHT:
TASMANIA · LP; IND from June 1978

– Does not the Minister think that, in the context, the words refer to a price stated in the agreement?

Senator O’SULLIVAN:

– A valuable consideration might be love and affection. The sum of 10s. is sometimes taken as a valuable consideration for the purposes of a transfer. We must bear in mind that the accounts of this committee will be subject to audit by the AuditorGeneral, and if there were any suggestion that an asset worth, say, £100,000 had been sold for a consideration, a price, a value, of £20,000, in the scheme of things that fact would be commented upon in the report of the Auditor-General. By virtue of the fact that he was an auditor, he would know the value or the price - call it what you will - at which that particular asset appeared in the accounts and hooks of the commission. The job of an auditor is to investigate and report upon, as well as to protect against unlawful and doubtful transactions of that nature.

I agree entirely with the advice that has been tendered to the Minister for Shipping and Transport (Senator Paltridge), who is in charge of the bill, and I think that the words “for a marketable value”, “for a value”, “for a price”, and “for a consideration”, in the context, all have the same meaning. T should be sorry to see the words altered.

Senator McKENNA:
TasmaniaLeader of the Opposition

– I wish to make it clear that the Opposition will not move any amendments of this bill for the reason, as I indicated at another stage of the consideration of the measure, that we regard the bill as a part of a scheme which completely lacks our approval. We are certainly not going to amend what we entirely disapprove of. At this committee stage we are seeking information, and we are prepared to make suggestions. On the matter which has just come before the Committee, although we shall move no amendment of this or any other clause, I put forward the thought, in case the Minister for Shipping and Transport (Senator Paltridge) may be disposed to consider it again, that some difficulty in the drafting of this clause may have been caused by the fact that there are two concepts to consider: purchase and disposal. I suggest that the word “ consideration “ might be appropriate in connexion with a purchase, and I shall read the sub-clause substituting that word. It would read -

The Commission shall not, except with the approval of the Minister, purchase assets for a consideration exceeding fifty thousand pounds.

That would be completely proper, and there would be no difficulty about it. The difficulty arises when the word “ consideration” is applied to a disposal.

– No, but you would depend on other considerations for protection against that. We must assume that a fair bargain was being made, and that it was bona fide. I think we must proceed on that assumption, in the first place. I agree with the comment of the Minister that the words “ of a value “ are a little more vague than are the words “ for a consideration “, but I think that a greater element of protection is provided in the words suggested by Senator Wright than in the words proposed in the clause.

I have risen to point out that, if the Minister intends to give the matter further consideration, he may be able to resolve some of the difficulties about which we are arguing by dealing separately with purchases and disposals, and substitute words that may be more appropriate.

Senator WRIGHT:
Tasmania

– I rise only because of the remarks of my leader, the Minister for the Navy (Senator O’sullivan), in answer to Senator Laught’s submissions. May I remind the committee of the narrow limits within which the Auditor-General confined his duty in his reports on the Australian Aluminium Production Commission, where these matters did not come to light until three or four years after the transactions, and when it was hopeless to try to re-organize the accounts in order to account for disposals? I plead for some perspicacity in our consideration of these matters, the lack of which might be excusable if we were without previous experience, but in the light of that experience it would be inexcusable. There should be in the Crown Law Office a most carefully settled series of clauses appropriate to the constitution of these public commissions. One of those essential safeguards is limitation on the power of disposal, such as has been thoughtfully included here, but in phraseology which, I submit, leaves a loophole for unfortunate and unfavorable transactions on the part of a public commission. I shall go no further than to say that my interest in the matter will not cease at the conclusion of the committee stage of this bill.

Senator SPOONER:
.Minister for National Development · New South Wales · LP

– I intrude during the consideration of another Minister’s bill only because of my particular interest in the matter that has been raised. What Senator Wright has suggested is that the danger of which he complains would be removed, or at least minimized, by the substitution of the word “ value “ for the word “ consideration “. This is where .1 take leave to differ from him. After all, a valuation is only an expression of opinion. In a commercial transaction, a person arranges in the light of a certain set of circumstances for a valuation, or a series of valuations to be made. There is the book value of an asset and the depreciated value. When an owner decides to sell, he observes every precaution by obtaining an independent valuation. That independent valuation is an expression of opinion. A person might take his goods to an auctioneer and ask, “What could you get for these at auction?”. Or, in the case of property, he might ask a similar question of a real estate agent. The practical man who has to sell the goods might express the opinion that he thinks he can get for them a certain price, which might be 50 per cent, below the independent valuation, or 20 per cent, higher than it. In the final analysis, the seller has to make up his own mind what his bedrock price shall be. Whatever the commission proposes to do will have to be approved by the Minister, which means, in effect, that the proposal will have to he properly documented when it is placed before the Minister for his “Yea” or “Nay”. If Senator Wright’s suggestion were adopted, I think the last stage would be worse than the first.

Senator WRIGHT:

– The irony of the position is that I have suggested that there should be an obligation cast on the commission to refer certain matters to the Minister for approval, but the Ministers are contesting it.

Senator SPOONER:

– Contesting what?

Senator Wright:

– They are contesting the desirability of imposing on the commission, in doubtful cases of value exceeding £50,000, an obligation to refer the matter to the Minister as a check.

Senator SPOONER:

– The legislation provides for reference to the Minister. What we are arguing about is whether we can best express what we want by the use of the word “ value “ or the word “ consideration “. Having expressed my views which, I hope, find favour with all, I say that the best term to use in these circumstances is the word “ consideration “ which, to my way of thinking, means the actual price that is obtained upon sale.

Senator COOKE:
Western Australia

– Having performed the duties of an auditor over a period of years, I can appreciate the opinion that has been expressed by the Minister for the Navy (Senator O’Sullivan) in relation to the obligation that devolves upon an auditor to direct attention to sales effected at prices below disposal valuations. Senator Wright has expressed a preference for the use of the word “ value “ instead of the word “ consideration “. I think that it will be readily acknowledged that, when an auditor sees a document stating that assets may be disposed of for a consideration, he does not query the price received for them. For instance, in relation to rent, consideration could be merely a peppercorn. On the other hand, the consideration might be ls., or 5s. payable monthly - nothing like the rent properly payable. As occurred in connexion with the aluminium commission, when certain assets were disposed of at prices below their market value, in the absence of a stipulation that they might be disposed of for a consideration, the Auditor-General concluded that a concession had been made in the selling price. If an auditor did direct attention to a sale below market value, where such a stipulation existed, his superior officer would probably adopt the attitude that, although it was quite wrong, the act permitted it. In- these circumstances, nothing more could be done than to close the stable door after the horse had got out.

In some government, departments, many disposals are effected of which the really responsible administrator knows very little until the schedule is placed before him. Unless a particular item is extraordinarily important, he usually adopts the attitude that, the goods having been disposed of, very little more can be done about the matter. It is competent for us, at this stage, to write into the legislation a provision that it shall be the responsibility of the commission to submit special cases to the Minister for approval, and that it shall be the duty of the Auditor-General to report on sales effected otherwise than in accordance with certain conditions. Unless the legislation provides that a certain valuation shall be determined by the Minister in connexion with valuable assets, there will not be adequate protection of public property.

An auditor’s function is to check accounts in the light of documents placed before him. If a disposal had been effected without the approval of the Minister, in cases in which the Minister was required to approve, ‘and the auditor neglected to direct direct attention to that fact in his report, I think he would, be out of court. As matters stand, although an auditor could contend that the commission had acted wrongly, the commission could show that, in accordance with the legislation, the disposal was valid. The clause should he so worded as to provide full protection for the commission, the auditor and the Government.

Senator PALTRIDGE:
Minister for Shipping and Transport · “Western Australia · LP

.- The matter that has been raised by Senator Wright is important from a drafting point of view. I think that the bill itself is evidence of the fact that the Government, has taken notice of the Auditor-General’s report in relation to the Australian Aluminium Production Commission.

Senator Wright:

– I acknowledge that.

Senator PALTRIDGE:

– I take this opportunity to inform the honorable senator that the Crown Law authorities are at present considering the formulation of a series of provisions in relation to this bill and similar bills. I have no doubt that they will pay due regard to the comments that have been made by honorable senators to-night.

Clause agreed to.

Clause 17 (Powers of Minister in relation to shipping services).

Senator McKENNA:
Leader of the Opposition · Tasmania

– This is a clause to which the Opposition has directed much criticism. The Minister for Shipping and Transport (Senator Paltridge) rather indicated that he thought the Opposition had made too much of it. There is no quarrel, of course, with the provision in sub-clause (1.) that the Minister may direct the Commonwealth shipping line to pursue a particular activity in the public interest, and to continue doing that. Our objection arises in connexion with the provision that if the Commonwealth shipping line suffers a loss in doing so, any losses sustained in that way are to be borne by the commission to the extent that the profits on its general activities offset that loss. I should like the Minister to tell me whether I am putting the position accurately when I paraphrase it in this way: Any loss sustained by the commission in complying with any direction is to be borne by the commission to the extent that the profits on its activities offset the loss. In other words, the

Government will pay to the commission, any portion of the loss not so offset. I should like the Minister to tell me if I have accurately represented the position.

Senator Paltridge:

– That is right.

Senator McKENNA:

– I simply repeat in very brief terms the argument I have already addressed to the Senate, namely that it is wrong to provide in this bill that the commission has to pay its way and be expected to proceed on a commercial basis under the circumstances set out in this clause. Surely, the Government which gives a direction that involves a loss ought to be prepared, as a matter of plain fairness, to cover that loss and allow thu commission to disclose the true position in its trading accounts. After all is said and done, a cursory reading of a profit and loss account and balancesheet entails merely looking at the figures at the end of the document. People do not go back to ascertain why a particular circumstance disclosed a loss. After a year or two, the fact is forgotten that a loss occurred because of developmental trade expenditure and that kind of thing.

I slum Id like to hear the Minis ter’s attempt: to justify this position from a commercial point of view. The Opposition agrees that the Commonwealth shipping line ought to do the work it is directed to do - it is there for that purpose - but if a loss is sustained in undertaking something which the Minister himself has said would not be payable trade from a commercial point of view, the Government should be prepared to bear the whole loss. I should like to have the Minister’s answer. If the Government is not prepared to do so it is, in effect, asking the Commonwealth shipping line to subsidize such a trade, either in whole or in part. I simply argue that that is not a fair proposition.

Senator ARNOLD (New South Wales) .10.23].- Before the Minister for Shipping and Transport (Senator Paltridge) a answers the questions asked by the Leader of the Opposition (Senator McKenna) I should like to ask him if he can explain to mp in which way the criticism I made last night is invalid. The clause provides that where a run is necessary in the service of the people, although it may be an unprofitable run, the commission can be directed to pick up that run. One of the runs I have in mind is that from Melbourne to Tasmania which, I understand, has to be heavily subsidized by the Government in order to keep it in operation. Is it not a fact that under this particular clause the company operating on that run could decide to relinquish such an unprofitable run, and then the Commonwealth shipping line would be compelled to pick it up and bear the loss out of any other profits it might make? I understand that a subsidy of some hundreds of thousands of pounds is at. present paid in respect of that run.

If that is true, I refer to the further criticism I made last night that if there was any run that needed to he developed it would have to be developed by the Commonwealth shipping line on the instruction of the Minister and, obviously, there would be a loss on that run. My further reasoning is that if any private company found that the trade in which it was engaged began to show a loss it would decide to go out of that trade - and under this particular clause the Commonwealth shipping line would have to take over that unprofitable run. Therefore, seeing the Minister was so free iti his criticism of my remarks, I feel I should put it to the committee that I based those remarks on the comments I have just made in regard to this clause. I should be grateful to the Minister if he would attempt to disprove what I said last night, namely that the profitable runs will he undertaken by private companies whereas the Commonwealth shipping line can be directed to take over all the unprofitable lines.

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

.- I shall answer Senator Arnold first. The particular comment he made to which I took exception was that the Commonwealth shipping line would, of necessity, take over all the unprofitable trade.

Senator ARNOLD:

– That, is exactly what I meant.

Senator PALTRIDGE:

– That was the particular comment to which I took exception because, as I have pointed out, that is not so. The Commonwealth shipping line would not take over all the unprofitable trade. Private companies do now, and will, in the course of their normal operations, carry some of this unprofitable trade. The other comment to which I took exception was that the Commonwealth ships would be prevented from entering the territory of the private companies and competing with them.

Senator ARNOLD:

– “We will come to that matter when we are discussing a later clause.

Senator PALTRIDGE:

– I took exception to that comment because it is not in accordance with the facts. The Commonwealth shipping line will not take over all the unprofitable trade. It is a fact that the Commonwealth shipping line is voluntarily taking over the Bass Strait service, which is now unprofitable; but it confidently expects that when its new vessel is in operation it will make a profit. The economics of the new vessel will be such that they lead us confidently to expect that will be the case.

I now refer to the question asked by the Leader of the Opposition (Senator McKenna) about the opening up of developmental trade by the Commonwealth shipping line at the direction of the Minister that it do so. When, at the direction of the Minister, the Commonwealth shipping line undertakes a developmental service and shows a loss, the Leader of the Opposition suggests that at the expiration of the particular accounting period there will be nothing to indicate, on the face of the accounts, that the position as disclosed by the final accounts has been affected by the fact that it had undertaken, at the direction of the Minister, a number of unprofitable trades, and for that reason its accounts might he misunderstood. I have already pointed out that in any realistic assessment of the final accounts of the commission by people undertaking an analysis of them it would naturally be taken into account that the position disclosed had been affected to an extent by the fact that the commission had undertaken these unprofitable trades.

Consideration interrupted.

The CHAIRMAN (Senator the Hon. A. D. Reid). - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -

That the Chairman do now leave the chair and report to the Senate.

Question resolved in the negative.

page 1380

AUSTRALIAN COASTAL SHIPPING COMMISSION BILL 1956

Consideration resumed.

Senator PALTRIDGE:
LP

– I am indebted to Senator Wright who has given me notice of an amendment to clause 39, which deals with reports. His suggested amendment is as follows: -

The report shall deal specifically with the operations of the Commission in relation to any service in respect of which a direction of the Minister under section 17 of this Act was in force during the year and the financial statement shall show separately the financial results of any such operation.

I am prepared to accept that amendment which, I think, should remove the objection of the Leader of the Opposition (Senator McKenna).

Senator ARNOLD:
New South Wales

– Having regard to the explanation of the Minister (Senator Paltridge), I wish to ask a further question on this clause. I suggest that what I said last night has already been borne out by what he has said this evening. The first of the unprofitable runs is now to be passed on to the new Commonwealth line. Last night, I suggested that that would happen, and now the Minister has said that the Tasmanian line, which has been losing substantially, is to be turned over to the Commonwealth line. Is that a fact?

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

.- If I said what Senator Arnold suggests I said, I was at fault, but I meant to indicate - and I thought it was generally understood, because the ship Taroona has been the subject, of discussion in this chamber in recent days - that when a ship to replace Taroona is rebuilt and placed in service in three and a half years’ time, it will be owned by the Commonwealth, and operated on what I confidently believe will be a profitable basis. The Commonwealth line will not, therefore, be taking over an unpayable service.

Senator ARNOLD (New South. Wales) 1 10.34]. - The point which the Minister (Senator Paltridge) has tried to elucidate is still open to the same criticism. He points out that here is an. unprofitable service, but the Government proposes to build a ship, and because of more efficient methods and fact that the new vessel might be better suited to the trade, the service might be turned into a profitable one. I sincerely hope that that will be the case. However, it is a perfectly valid criticism that private shipowners can abandon non-profitable runs, and the Commonwealth line can be directed to take them up. The Minister suggested that some services to-day are being run at. a profit, and that that will continue, but can he assure the committee that private shipping companies will not take advantage of this clause and cease to operate unprofitable runs, with the result that the Commonwealth line will have to pick them up?

Senator McKENNA:
Leader of the Opposition · Tasmania

– I thank the Minister (Senator Paltridge) for his explanation, and I can see that he is prepared to move some distance to meet the objections I have raised. However, merely to provide that the commission shall include in its annual report a specific reference to the loss incurred in opening up a developmental line does not fully meet my objection. It does not require that the loss shall be reported independently. It does not even ensure the presentation of a correct balance-sheet or the profit and loss account. My complaint is that the commission itself is asked to subsidize the losses which the Government directs shall be incurred. The more reporting of the fact does not remedy the position. Plainly, the subsidy should be paid by the Government, not by the commission.

Senator COOKE:
Western Australia

– This clause provides that the Minister can direct the commission to provide services which are considered by the Government to be essential, but which may possibly show a loss in the accounts of the commission. Senator Wright has logically argued that if the loss is sustained, and is recouped at the end of the year to the shipping commission, or if a profit is made and is paid into Consolidated Revenue, the difference if each loss suffered by the commission as the result of operating a service under this section was recouped in full currently as the loss becomes known would be only the difference between Tweedledum and Tweedledee. However, I have a different opinion. The commission should at least be allowed to show in its accounts the total losses sustained, and at the end of the year it should claim from the Government reimbursement for operating what might be termed unremunerative services - that is, on services that the Government directs the commission to operate at a loss because no private company would operate such a service. The Government has promised that the commission will operate its services on a business-like basis. If that is so, it should be allowed to record in its accounts the actual cost of operating these non-paying services, and be recouped at the end of the year by a Treasury advance or by a credit placed to its account. If that is done the accounts of the commission at the end of the year will be a true record of its trading. After allowing for taxation reserves and other contingencies any profit can be paid into Consolidated Revenue, or any losses can be recouped. Such a method of accounting would place the commission in a much more favorable position. The Government would hesitate to suggest to Trans-Australia Airlines or to Australia National Airways Proprietary Limited that they should carry mails on routes which are unprofitable. If they did so and incurred a loss, at the end of the year the Government would recoup those airlines for their losses. Why should this commission be placed at a disadvantage? Unless a method such as I have suggested is followed, the commission’s accounts will be so muddled that they cannot be interpreted. If it has operated a service at a loss, that should be recorded in its accounts and the commission recouped currently as the loss is incurred and not at the end of the year from the Treasury. Then, if the commission has made a profit, that can be placed in Consolidated Revenue at the end of the year.

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

– I desire to reply to some matters raised by Senator Arnold. The terms of the agreement are such that the shipowners undertake to provide adequate, efficient and economical services on the coast. If they do not do that, then the agreement breaks down and the commission may move in and take whatever action is necessary to remedy the position. The companies cannot take action in the way indicated by Senator Arnold without putting themselves quickly out of business. That is the basis of the agreement.

Senator ARNOLD:
New South Wales

– I said last night that under this clause it was possible for the Commonwealth shipping line to be compelled to take, up all the unprofitable runs which the shipping companies did not want, and that we had no assurance other than some platitudes in the agreement that the commission would run an efficient service and do its best. All I want to establish now is that I made a valid criticism last night, which is sustained by the answer given to me by the Minister for Shipping and Transport (Senator Paltridge).

Clause agreed to.

Clause 18 agreed to.

Clause 19 (Charges to be approved by Minister).

Senator ARNOLD:
New South Wales

– This clause sets out, inter alia, that the rates of charges for the carriage of persons or goods or for any other service are subject to approval by the Minister. Last night, I suggested that it was possible under this measure for the Commonwealth shipping line to be put into such a position that it would not be able to compete against private Hues. I formed that opinion upon what the Minister said in his second-reading speech. I will read the relevant part of the Minister’s speech, because I would like the Minister to inform me whether this clause is in line with that speech. He said -

It is determined however to avoid a position arising under which Commonwealth-owned vessels will expand unnecessarily into the trades that are being efficiently served by private shipping interests.

I ask the Minister whether this clause provides him with the power to do what he has stated. He has said that the Commonwealth shipping line will not be allowed to enter into private shipping companies’ trades, and 1 cannot find any clause other than clause 19 which will give him power to do that. Under that clause does the Minister intend to do what he said he would do in the second-reading speech, and am I correct in assuming that by his words he intended to convey that he would prevent the Commonwealth shipping line from going into profitable runs ?

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

– This clause deals exclusively with freight rates. The statement in my second-reading speech was one of general policy to the effect that the Government would ensure that the Commonwealth, shipping line did not expand unnecessarily into private shipping services. That is a perfectly sound economic practice, and a continuation of the ordinary rationalization of shipping. We cannot have ships chasing one another from port to port. That is the simple economics of shipping, and the statement in my second-reading speech is an assertion of that fact. Clause 19 deals exclusively with freight rates, and I do not see the connexion between it and the statement in my second-reading speech.

Senator McKenna:

– If the rates were put up much higher than the rates charged by private shipping companies, then the Commonwealth could not compete with the private companies. I think that is what Senator Arnold means.

Senator PALTRIDGE:

– I thank Senator McKenna for his explanation. I did not see that point. There is an obligation on the commission under clause 18 to charge the lowest possible freight rates commensurate with its obligations. It would not be permitted to raise its rate to the level that would have the effect thai: Senator Arnold envisaged, merely a.< an aggressive weapon against the private companies.

Senator Arnold:

– Having read the Mi j lister’s statement, I believe that the explanation that he has given shows that 1 was perfectly justified in raising the matter.

Clause agreed to.

Clauses 20 and 21 agreed to.

Clause 22 (Terms and conditions of employment).

Senator McKENNA:
Leader of the Opposition · Tasmania

– It has been usual, when Commonwealth instrumentalities such as the proposed commission have been set up, or at any rate in recent years, to include a provision that the salaries of officers are to be fixed and determined with the approval of the Public Service Board. That was done in the 1949 legislation from which the Minister has drawn much for the purposes of this measure. However, that principle has been dropped out of this bill. Will the Minister for Shipping and Transport (Senator Paltridge) say why the policy followed by his Government, and that followed by the earlier Labour government, has been departed from in this instance?

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

– That principle has been dropped from this bill because the commission, when established, will operate as a normal shipping company in competition with other shipping companies, and will employ a staff on the same basis as the staffs of other shipping companies are employed.

Senator McKENNA:
Leader of the Opposition · Tasmania

– Does that mean that there is a new principle emerging now and that when government undertakings are in business in competition with private enterprise, the Public Service Board is to have no say in fixing the salaries of. the staff of those undertakings?

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

– I must he honest and tell the Leader of the Opposition (Senator

McKenna) that I do not know the answer to his question. At the moment, my own compass has not gone beyond this bill. 3 have given the reason why the clause is framed in this way and 1 cannot answer his other question.

Silling suspended from 10.52 to 11.30 p.m.

Senator McKENNA:
Leader of the Opposition · Tasmania

.- Before the suspension of the sitting, the committee was discussing clause 22, and I had referred to the Minister for Shipping and Transport (Senator Paltridge) the fact that the bill makes no provision for the salaries paid by the commission to its staff to be subject to the approval of the Public Service Board. That seems to predicate a new policy. It seems to be emerging in relation to business undertakings on a competitive basis. If that, is the case, it is obvious that attention will have to be paid to Trans- Australia Airlines, as the restriction does apply in that case. If the Public Service Board is to have no say in salaries in connexion with the employees of the proposed commission because it is on a competitive basis, surely that would apply also to Trans- Australia Airlines ?

Senator Paltridge:

– The same principle as is contained in the bill applies now to Trans-Australia Airlines.

Senator McKENNA:

– I was going to couple clause 25 with that reference. There may be some significance in that connexion, also. I can well understand that, where a government business concern is competitive, or is supposed to be competitive, there could be a good deal of interchange of staff. There could be pirating of key and competent personnel. A business undertaking would want it two ways. It would want some freedom to pay key men to avoid losing time, or to attract good men from competitors. That is a sort of interminable war that goes on. Do I understand that Trans-Australia Airlines is now in the position in which the new commission will be placed ?

Senator Paltridge:

– That is right.

Senator McKENNA:

– That could not. he quite correct, because I recall that eases have gone on appeal recently in’ which Trans-Australia Airlines was involved with the Public Service Arbitrator

I notice that a later clause in this hill negatives an approach to the Public Service Arbitrator. I am sure that the position as proposed in the bill is not quite comparable with that of TransAustralia Airlines.

Senator PALTRIDGE:
Minister for Shipping and Transport · “Western Australia · LP

– I understand that the two organizations are not in the same position so far as the Public Service Arbitrator is concerned, but they are in the same position with regard to the employment of staff.

Senator McKenna:

– Without’ reference to the Public Service Board?

Senator PALTRIDGE:

– Yes.

Clause agreed to.

Clauses 23 and 24 agreed to.

Clause 25 (Public Service Arbitration Act not to apply).

Senator McKENNA:
Leader of the Opposition · Tasmania

– I understand from the Minister for Shipping and Transport (Senator Paltridge) that the staff of the commission will have no access to the Public Service Arbitrator, and that this provision is not in line with that which applies to TransAustralia Airlines. Will the Minister comment on this matter, and the reason for the change?

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

– This clause provides that, the Public Service Arbitration Act will not apply in relation to employment of officers or employees of the Australian Coastal Shipping Commission. The provision is necessary as, unless the commission were excepted, the terms of the Public Service Arbitration Act would apply to all employees of the commission. If that were the case, the terms and conditions of employment of employees would be subject to two jurisdictions, namely, the Public Service Arbitrator and the normal arbitration and wage-fixing tribunals. Experience has shown, particularly in the recent case of the Trans-Australia Airlines pilots, that much confusion, results from this conflict of jurisdictions. The exclusion of the Public Service Arbitrator from the affairs of the commission will have the effect that employees will be subject to the normal processes as applied to employees of the private shipping companies. The Public Service Board concurs in this provision.

Clause agreed to.

Clauses 26 and 27 agreed to.

Clause 2S (Capital of the Com mission).

Senator McKENNA:
Leader of the Opposition · Tasmania

– 1 have referred previously to the capital of the commission, and I direct attention now to clause 28, paragraph (a), which states in part -

The capital of the Commission at any time is an amount equal to the sum of -

the value, as determined by the

Treasurer

Is the Minister for Shipping and Transport (Senator Paltridge) in a position to say anything regarding the basis of value that will be accepted by the Treasurer? Will it he the cost, the depreciated cost, the market value or the sale value ?

Senator ARNOLD:
New. South Wales

– On the same point, will the Minister for Shipping and Transport (Senator Paltridge) state whether paragraph (d) is retrospective. It states -

Such amounts as have been paid to the Commission by the Treasurer out of moneys appropriated by the Parliament for the purposes of the Commission.

Can the Minister indicate what amounts are likely to be debited to the commission under that paragraph of clause 28?

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

.- The Leader of the Opposition (Senator McKenna) asked me a question on this clause during the debate on the second reading, and I omitted to give him the information he requested. The capital value of the vessels transferred will be the book value, less an allowance for the unexpired period of the survey. The Leader of the Opposition also asked for an assurance that the value would not exceed the price at which the Government would sell the ships. I am able to give that assurance.

Senator McKenna:

– The Minister can give an assurance that the value at which the ships will be debited in the books will not exceed the price at which the Government was prepared to sell?

Senator PALTRIDGE:

– Yes. In reply to Senator Arnold, the provision to which he referred will not be retrospective.

Clause agreed to.

Clauses 29 and 30 agreed to.

Clause 31 (Bank accounts).

Senator O’BYRNE:
Tasmania

.- -This clause states-

The Commission shall open and maintain an account or accounts, with the Commonwealth Bank of Australia, and may open and maintain an account or accounts with such other hank or banks as the Treasurer approves.

This provision is rather confusing because there are three different sections of the Commonwealth Bank. Is the reference in this case to trading account? Does the clause mean that fixed deposits will be maintained in the Commonwealth Bank, or will the accounts be placed in the trading bank?

Senator Wright:

– The honorable senator should read the clause for himself.

Senator O’BYRNE:

– The reference is to the Commonwealth Bank of Australia. ls that the central bank or the trading bank? Will the account be on fixed deposit?

Senator PALTRIDGE:
Western AustraliaMinister for Shipping and Transport · LP

– The bank referred to is the Commonwealth Bank of Australia, known as the central bank. The account which will be opened with the central bank will be used for the lodgment of residual funds and will not be used for day to day operations.

Senator BYRNE:
QUEENSLAND · ALP; QLP from 1957; DLP from 1968

– Does the reference to “ such other bank “ mean that the commission may open accounts with one of the private banks and not with the Commonwealth Trading Bank ? No provision is made in the bill for accounts to be opened with the Commonwealth Trading Bank.

Senator PALTRIDGE:

– It may open accounts with other trading banks. Incidentally, this provision is similar to a provision in the 1949 Shipping Act.

Senator O’Byrne:

– Since that time, the functions of the Commonwealth Bank have been separated.

Senator PALTRIDGE:

– Yes, but the provision means that the commission may open an account with the Commonwealth Trading Bank, the Commonwealth Bank of Australia, or some other bank.

Clause agreed to.

Clause 32 agreed to.

Clause 33 (Profits of the Commission).

Senator McKENNA:
TasmaniaLeader of the Opposition

– I refer the Minister for Shipping and Transport (Senator Paltridge) to paragraph (b) of sub-clause (2.). Sub-clause (2.) refers to items that are to be debited against revenue in ascertaining the profit or the loss for the year. Paragraph (b) provides for inclusion in the expenditure of provision made in that year for obsolescence and depreciation of assets. That, of course, is a very proper provision. Reserves will be created in that way to enable replacement of ships that become obsolescent to take place without seeking fresh funds. Is there any provision in the bill whereby general reserves may be established, apart from those for depreciation and obsolescence? I suggest to the Minister that the establishment of a general reserve is important because the commission will. have power to increase the tonnage of its fleet from 247,000 tons to 325,000 tons and may wish to purchase new ships. I take it that it would be a. wise policy for the commission, as it operates throughout the years, to endeavour to build up, out of profits, a general reserve against the day when it may wish to carry its fleet to the limit of 325,000 tons, which is permitted under another bill.

I invite the attention of the Minister to the fact that, although he has adopted very large sections of the 1949 act, I do not see in this bill anything comparable with section’ 25 of the 1949 act, which provided that the board might, with the approval of the Treasurer, set aside out of its revenue such sums as it. thought proper for reserves for depreciation of assets, insurance or other purposes. In other words, there was quite a general power in the 1949 act that. I do not see repeated in this bill. I think it is desirable that there should be power to create general reserves, for the reasons that I have given, and I suggest to the Minister that paragraph (b) of sub-clause (2.) permits the creation of reserves only to provide for replacement of assets because of obsolescence or depreciation.

Senator Paltridge:

– I refer the Leader of the Opposition (Senator McKenna) to sub-clauses (3.) and (4.) of the clause which, I think, should cover the position to his satisfaction.

Senator HENTY:
Tasmania

. - .1 refer to paragraph (d) of sub-clause (2.), which provides that provision made in a financial year in lieu of insurance may be properly chargeable against the revenue received or receivable in respect of that financial year. Does that mean that the commission may underwrite some of its own insurance?

Senator Paltridge:

– Yes, it may create its own insurance reserve fund.

Senator LAUGHT:
South Australia

– I am wondering whether the question of the payment of municipal rates by the commission comes within the scope of this clause. I understand that it is the practice of the Commonwealth to make ex gratia payments in respect of municipal rates, and I should like to know whether the commission will pay municipal rates in the same manner as I understand the Australian Broadcasting Commission, the Commonwealth Bank, and other Commonwealth instrumentalities pay them.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I thank the Minister for Shipping and Transport (Senator Paltridge) for referring me to sub-clauses (3.) and (4.) of’ clause 33, in relation to- the matter that I raised a short time ago. However, I find no reference at all in those sub-clauses to reserves. Sub-clause (3.) provides that - lyle profits of the Commission for a financial year shall ho applied in the first place in payment of such sums as have been determined bv the Minister under sub-section (1.) of section twenty-nine of this Act, the balance (if any) shall be applied in such manner as the Minister, with the concurrence of the Treasurer, determines.

Whilst there is no specific reference there to the creation of a general reserve, I can see that such a thing is possible under the legislation. I should like a specific assurance that the creation of a reserve to enable new ships to be built, in order to bring the commissioner’s fleet up to a total of 325,000 tons, was in contemplation.

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

.- Yes, I can give the Leader of the Opposition (Senator McKenna) the assurance that he seeks. That is the intention of the legislation. The answer to the matter raised by Senator Laught is that, while the Commonwealth is not obliged to pay municipal rates, commercial undertakings, such as this commission will be, now do so as a matter of grace.

Senator Laught:

– And will this commission follow that course?

Senator PALTRIDGE:

– The commission will be treated as another commercial undertaking of the Commonwealth and will make provision for the payment of rates.

Clause agreed to.

Clauses 34 to 38 - by leave - considered together.

Senator COOKE:
Western Australia

– I refer to clause 36, which deals with the liability of the commission to pay taxes. Sub-clause (4.) provides -

Tor the purposes of the Income Tax and Social Services Contribution Assessment Act 1030-1956, the cost to the Commission of any ship or other asset becoming vested in the Commission under section forty of this Act shall be deemed to be the value of the asset as determined by the Treasurer under section twenty-eight of this Act.

It appears, therefore, that when it comes to the assessment of taxation, the Government is under no difficulty about determining the value of the assets. Since the Government will he interested to ascertain the value of the assets of the commission for taxation purposes, I suggest that the Minister for Shipping and Transport (Senator Paltridge) should give proper consideration to the suggestion made earlier to-night concerning the valuing of assets that are to he disposed of. Reference has been made to the fact thai those concerned with the matter would be honorable men, who could, without a check, assess the value of ships or plant up to £50,000 when disposing of assets, but a valuation is required by the Treasurer independent of the commission when it comes to taxation. If that is to be so, then why not let a check valuation bc made by the Treasurer, independent of the commission, of the value of the assets that are to be disposed of? It is provided that the Treasurer shall determine valuations in respect of the commission’s assets, including ships, for taxation purposes. I should like to know whether there will be a separate valuation of the assets by the Commissioner of Taxation.

Senator O’BYRNE:
Tasmania

– I refer to clause 36 (4.). The estimated value of the 42 vessels which will become vested in the commission is approximately £30,000,000. Their cost of construction was approximately £18,000,000. For the purpose of this subclause, will some writing-down take place, in addition to the ordinary rate of depreciation of 20 per cent, allowed to ordinary businesses, or will the commission take the vessels into account at present-day values ?

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

– As I pointed out to the Leader of the Opposition (Senator McKenna) a few minutes ago, the transfer value will be book value, less a provision for the unexpired portion of the service.

Senator HENTY:
Tasmania

– I presume that clause 36 (3.) means that, as the commission will not be a public transport authority, it will he subject to sales tax.

Senator Paltridge:

– That is right.

Senator LAUGHT:
South Australia

– Will the Minister inform me whether the commission will be liable, under clause 36, to pay-roll tax?

Senator Paltridge:

– The answer is, “ Yes “.

Clauses agreed to.

Clause 39- (1.) The Commission shall, as soon as practicable after each thirtieth day of June, pre pare and furnish to the Minister a report of its operations during the year ended on that date, together with financial statements in respect of that year in such form as the Treasurer approves.

(2.)…..

Senator WRIGHT:
Tasmania

. -I move -

That, after sub-clause (1.), there be inserted the following sub-clause: - (1a.) The report shall deal specifically with the operations of the Commission in relation to any service in respect of which a direction of the Minister under Section seventeen of this Act was in force during the year and the financial statement shall show separately the financial results of any such operations.”.

The clause has been .quite carefully drafted so as to ensure that the accounts of the commission shall be presented at the end of each year in such form as the Treasurer approves. Then it requires the Auditor-General’s scrutiny, and provides that the accounts, together with the AuditorGeneral’s report, shall be laid before both Houses of the Parliament. Having regard to some remarks which were interchanged during the second-reading debate, arising out of the special considerations involved under clause 17 in relation to a service which is directed to be carried on by the Minister in the public interest, I had thought that this clause required special accounts to be kept for that service. When I brought the matter to the notice of the Minister, there seemed to be an acceptance of the idea that a provision requiring that might not be a disadvantage. It will be remembered that the form of the accounts in some other commissions for a long time remained unclarified

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

– As I indicated earlier, when Senator Wright mentioned this matter, his amendment is acceptable to the Government.

Amendment agreed to.

Clause, as amended, agreed, to.

– Compliance with the law of the Commonwealth would be one of those conditions.

Senator McKenna:

– I am asking somebody to point out where that law can be found. .

Friday, S June 1956

Senator WRIGHT:
TASMANIA · LP; IND from June 1978

– The relevant law is to be found in paragraph (c) of sub-clause (1.). My interpretation of that provision, which I make as an innocent suggestion to the Leader of the Opposition (Senator McKenna), is that it will ensure that the Minister^ consent shall be obtained before the owner of a British ship registered in an Australian, port makes application for the transfer of its registration from a port of registry in Australia to a port of registry outside Australia. I suggest that that paragraph meets the argument which the Leader of the Opposition made in his second-reading speech when he drew a distinction between the operation of clause 48 as between a transfer or a mortgage but not between a transfer and the physical taking of a ship from the Australian coast. I submit that Senator Kendall has supplied the answer from a practical point of view; and I have pointed out the provision of the Imperial Merchant Shipping Act which provides that when a ship is taken’ off the Australian coast it shall be registered in another port of British registry. That makes it obligatory upon the owner to apply for the Minister’s consent before making an application pursuant to the Imperial Merchant Shipping Act.

Senator KENDALL (Queensland) 1 12.3 a.m.]. - I should like to add there are two types of ships’ articles, one relating to coastal shipping, and one relating to overseas sailing. I do not think that any member of the Seamen’s Union would sign on a vessel under the wrong articles. If he were signed on under coastal articles he would not go overseas.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I do not in any way accept the suggestion made by Senator Wright. I do not profess to have any particular knowledge of maritime matters ; I have never . been concerned particularly with them, but by reason of the fact that I have recently read that in order to escape taxation in the United Kingdom, British ships are now registering in foreign ports, I do not accept Senator Wright’s suggestion. The ships which register in the way I have mentioned escape taxation in England but freely engage in trade to and from England. Therefore, the port at which a ship is registered has nothing to do with where it may trade. I took an interest in this matter from a taxation point of view. The practice has developed in England for ships to go to some obscure little island in the ocean, register there and then trade all over the world.

Senator Wright:

– I submit that the Leader of the Opposition is putting his case very imperfectly and incompletely.

Senator McKENNA:

– I am simply indicating that the mere registration of a ship, according to British practice, does not prevent the ship from physically going around the world.

Senator Wright:

– Of course, it does not.

Senator McKENNA:

– Then paragraph (c) of sub-clause (1.), to which

Senator Wright has referred, does not provide a condition preventing the movement of a. vessel. It may have an effect upon other things. The Minister for the Navy (Senator O’sullivan) indicated that there are barriers against a ship leaving Australia if it has not complied with certain conditions. I then asked him, assuming no difficulty arose from that angle, whether any law existed to prevent a ship leaving Australia. I say to Senator Kendall, with very great respect, that if an owner contemplated moving a ship from the coast and did offer articles to a crew, he would, of course, offer articles for overseas trade and the crew would know exactly under what conditions they were signing. There would be nothing secret about it. My concern is to make sure that a ship which comes straight off the slips, and upon which this country has provided a subsidy, could not be physically taken off our coastal trade for a period of 25 years. What clear protection is there against such a happening?

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

– I think I made reference to this matter earlier in the debate. I pointed out that the possibility envisaged by the Leader of the Opposition (Senator McKenna) was remote indeed. He asks whether a physical barrier exists to taking a ship off the coast. There is none, and I think I indicated that earlier in the debate: but the actual fact is that the ship would have to sail from the coast under Australian articles with Australian conditions in respect of crew and employment. I am reminded by Senator Anderson that a ship could not do that and trade economically. Assuming, however, there is an exceptional case of the kind to which the Leader of the Opposition refers, such as the sudden opening-up of a market offering lucrative profit, the position would then be that the ship would move off the coast and would earn for Australia a very valuable and desirable export trade. That would not be an undesirable feature as, I am sure, the Leader of the Opposition will agree.

Senator McKenna:

– I quite agree.

Senator PALTRIDGE:

– Of course, as I have said, if a ship operating on the Australian coast leaves Australia the position is that the company has to replace it. If the company does not do so, the commission will then replace it.

Senator Cooke:

– I rose to speak on clause 47 at the same time as the Minister for Shipping and Transport. You, Mr. Chairman, called clauses 42 to 47, but you did not say they were inclusive. Would I be in order in speaking to clause 47 now?

The CHAIRMAN:

– The committee is now considering clause 48.

Senator Cooke:

– Because of the peculiar way in which the bill has been considered I gave way to the Minister when the clause was being discussed.

The CHAIRMAN:

– If the honorable senator desires to deal with clause 47 he may ask at the conclusion of. the debate that the clause be re-committed.

Senator McKenna:

– It would be more convenient to deal with it now.

Clause agreed to.

Motion (by Senator McKenna) agreed to-

That clause 47 be re-committed.

Clause 47 (Purchase of ships by Minister for disposal).

Senator COOKE (Western Australia) ri2.8 a.m.]. - This clause provides that -

The Minister, with the concurrence of the Treasurer, may, on behalf of the Commonwealth and for the purposes of the Commonwealth, purchase ships and dispose of ships so purchased to the Commission or to any other person.

I should like to receive the assurance of the Minister for Shipping and Transport (Senator Paltridge) that it is not the intention of the commission or of the Minister to purchase and dispose of ships which are not new. A private company may relinquish a run which is unprofitable and the commission may be directed by the Minister to take that run over. I desire to receive an assurance that the commission will not purchase from the private company ships that have been in operation for more than ten years but that this clause refers only to new ships.

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

– I give the honorable senator the assurance that he seeks. The provision for payment of a subsidy on shipbuilding has been taken from the old act, and continues the practice which has been in operation for a number of years.

Recommitted clause 47 agreed to.

Clauses 49 and 50 agreed to.

Schedules agreed to.

Title agreed to.

Bill reported from committee with an amendment.

Motion (by Senator Paltridge) put -

That the report be adopted.

The Senate divided. (The President - Senator the Hon. A. M. McMullin.)

AYES: 23

NOES: 19

Majority 4

AYES

NOES

Question so resolved in the affirmative.

Report adopted.

Third Reading

Motion (by Senator Paltridge) put -

That the bill be now read a third time.

The Senate divided. (The President - Senator the Hon. A. M. McMullin.)

AYES: 23

NOES: 19

Majority . . 4

AYES

NOES

Question so resolved in the affirmative.

Bill read a third time.

page 1391

AUSTRALIAN COASTAL SHIPPING AGREEMENT BILL 1956

Second Reading

Debate resumed from the 31st May (vide page 1133), on motion by Senator Paltridge -

That the bill be now read a second time.

Senator ARNOLD:
New South Wales

– The Minister agreed that this bill and the measure that we have just disposed of should be debated together. The Opposition feels that it has had an adequate opportunity to express its views on both bills, and we donot propose to debate the second reading of this bill.

Senator COOKE:
Western Australia

.- This is the first bill that the Minister has presented to the Senate, and I should like to tender him my congratulations, and to thank him for the consideration that he has given to matters submitted by honorable senators on this side of the chamber. He has shown consideration for theOpposition’s submissions, a practice which has become uncommon in recent times, and I express my appreciation of his courtesy.

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

– If I am in order in so doing, Mr. President, I should like to return thanks to my Western Australian colleague, Senator Cooke, for his very generous gesture.

Question put -

That the bill be now read a second time.

The Senate divided. (Tub President - Senator the Hon. A. M. McMullin.)

AYES: 23

NOES: 19

Majority . . 4

AYES

NOES

Question so resolved in the affirmative.

Bill read a second time.

In committee:

The bill.

Senator McKENNA:
Leader of the Opposition · Tasmania

– The Opposition has signified, of course, its complete opposition to this bill, which is an even more obnoxious piece of legislation than the one that the Senate has recently disposed of. I do not propose to repeat the objections of the Opposition, which were expressed during the debate on the previous bill; I merely wish to make certain comments. Whether the Minister answers the points that I shall make is a matter of indifference to me. I merely wish to put the position of the Opposition. Clause 4 imposes an obligation on the Australian Coastal Shipping Commission to do all such things as the agreement provides that the commission shall do, and to refrain from doing anything that would be contrary to the provisions of the agreement. Reference to the agreement shows that the parties are, on the one hand, the Commonwealth, and on the other hand, a large number of companies. The commission is, of course, not a party to the agreement. It could not be sued and nothing could be enf orced against it. It is proper, from the Government’s viewpoint, that a statutory obligation should be cast by the provisions of clause 4 upon that body, if the commission is to be bound at all. While a statutory duty is cast upon the commission by the bill itself, no such statutory duty is cast on the companies. I point out that clause 17 of the agreement provides -

The Commonwealth, the Companies and the Commission shall produce to the independent authority all information, accounts and documents which he or it may consider necessary to enable him or it to consider any matter arising from the agreement.

Bill reported without amendment.

Motion (by Senator Paltridge) put -

That the report be adopted.

The Senate divided. (The President - Senator the Hon. A.M. McMullin.)

AYES: 0

NOES: 0

AYES

NOES

Ave . . . . . . 23

Noes . . . . . 19

Majority . . 4

Question so resolved in the affirmative.

Third Reading

Motion (by Senator Paltridge) put -

That the bill be now read a third time.

The Senate divided. (The President - Senator the Hon. A. M. McMullin.)

AYES: 23

NOES: 19

Majority . . . . 4

AYES

NOES

Question so resolved in the affirmative.

Bill read a third time.

page 1394

CONTINUOUS FILAMENT ACETATE RAYON YARN

Tariff Board Report

Senator O’SULLIVAN:
LP

– I lay on the table the report of the Tariff Board on the following subject: -

Continuous filament acetate rayon yarn.

page 1395

QUESTION

CANBERRA

REPORT of Select Committee.

Debate resumed from t,be 16tb May read page 765), oil motion by Senator M <“C.vi.i..i:.i- -

Thar, tin; Report of the Select Committee on tin- Development of Canberra, presented to tin- Si- Senate <in the 2!Hh September, 1955, be considered

Senator LAUGHT (South Australia) J 2.45 a. in. . - .1 apologize to honorable senators for speaking at this hour, but there is a. very important matter to be discussed by the Senate. That is the report of the committee under the chairmanship of Senator McCallum. I congratulate the committee on the excellence of its work. I desire to refer to the recommendations of the committee which appear on page 104 of its report under the heading of “ Administrative Transfers”. I am very interested in some com ments in these recommendations, particularly those in paragraph (11.), which reads as follows: -

That the Government also take steps to brins to Canberra, and establish in the Federal Capital the following institutions: -

The High Court of Australia.

The Federal Arbitration Court.

The Commonwealth Bank.

The Australian Broadcasting Com mission.

When 1 was addressing the Senate some weeks ago on this matter I think that I made out a clear case showing why it would be unwise to bring the High Court and the Commonwealth Arbitration Court to Canberra. I believe that the committee did not consider this question, other than from the building stand-point. I imagine that no evidence was taken from, say, the Registrar of the High Court, or the equivalent officer of the Commonwealth Arbitration Court. I consider, from my reading of the committee’s report, despite the thoroughness of its work, that in considering this matter it, put emphasis on the building angle and thought it would be a grand thing to have a glorious High Court building in Canberra. I am satisfied that no evidence was taken from such an officer as the registrar of any court. I feel certain that no evidence was taken on this matter from any barristers who would normally practise in the High Court. There will be an opportunity for Senator .McCallum to correct me if I am wrong on this matter.

I did make the point that I though r that, if it were fitting” to have a court building in Canberra, a very small building might be useful for the housing of the Judicial Committee of the Privy Council, should it visit Australia in connexion with its judicial work. I think that the opportunity may easily come for Australia, in its partnership in the British Commonwealth, to he the convenient head-quarters of the Judicial Committee of the Privy Council when it is hearing some important cases. But at this stage I cannot see the wisdom of moving the High Court or the Commonwealth Arbitration Court to Canberra. Also, I cannot see the wisdom of moving the Commonwealth Bank or the Australian Broadcasting Commission to Canberra. I think that the Commonwealth Bank, by its very nature, should be close to where the main commerce of the country is carried on.

Senator LAUGHT:

– Either in the City of Sydney or the City of Melbourne. I feel that to remove the Commonwealth Bank to this place would not be wise. Likewise, I think that the head-quarters of the Australian Broadcasting Commission should be closer to the place from which the concerts and other main programmes would naturally come. I congratulate the committee on its work. I do not propose to deal with any other matters, but I feel that the points I have raised to-night are of sufficient importance to warrant some consideration by Senator McCallum when he replies.

Senator McCALLUM:
New South Wales

– in reply - I had not intended to reply because I do not think any of the criticism offered seriously affects the major recommendations of the committee, but I shall refer briefly to the point raised by Senator Laught. It was not the intention of the committee to recommend that all hearings of the High Court should be held at Canberra; but I point out that courts go on circuit and sit at such towns as are suitable to the litigants. That has been the custom in England since the reign of

Henry i. In America, however, the High Court lias had its head-quarters at Washington ever since there has been a Washington. It went there at the same time as Congress and the President.

As to other institutions, the committee does not propose that the Commonwealth Trading Bank shall have its headquarters here, but we feel that the Commonwealth Bank should. The Commonwealth Bank to-day is simply a central bank and its directors and governors are not, or should not, be concerned with ordinary banking business; they are concerned with general bank policy. It was our sole intention that the head-quarters of every instrumentality should be here.

As to the other criticisms, I simply say that we do not think any of them seriously affect the main recommendations which, in brief, are simply that within a period of ten years the head-quarters of the main public offices should be transferred to Canberra and that the requisite administrative buildings and residences for public servants should be erected here. We say that the Government should not dawdle along as all governments have done hitherto; and we recommend the appointment of a commission in order that the work shall be carried out expeditiously. We recommend also that there should be a standards committee to superintend and advise on the whole of the planning of Canberra and that a quick decision should be made on the lakes scheme. There was some slight difference of opinion with the Public Works Committee which accepted as final and definitive a report about which we were not quite sure, and we simply recommended that it should be considered again.

I should like this motion to be carried unanimously. The Senate then will have clone all that it can in this matter except in one regard. The responsibility for carrying out the recommendations of the committee will be placed squarely on the Minister and on the Cabinet. It will become an executive matter. There is one matter in which the Senate could take separate action. It is the setting-up of the committee that we have recommended. It will be competent for any honorable senator to move that that bo; done. I do not claim any special prerogative in that respect, nor do I think it is the desire of any member of the committee to do so; but I can assure the Senate that it will be done. There is nothing I feel more like at the moment than, sleep, but I assure honorable senators that on this matter I shall neither slumber nor sleep.

Question resolved in the affirmative.

page 1396

HOUR OF MEETING

Motion (by Senator O’sullivan) agreed to -

That the Senate, at its rising, adjourn tu Tuesday next, at 2.30 p.m.

Senate adjourned at 12.55 a.m. (Friday).

Cite as: Australia, Senate, Debates, 7 June 1956, viewed 22 October 2017, <http://historichansard.net/senate/1956/19560607_senate_22_s8/>.

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Senate 7 June 1956

QUESTION

AUSTRALIAN NATIONAL DAY

Senator MARRIOTT:TASMANIA · LP

Senator O’SULLIVAN:Minister for the Navy · QUEENSLAND · LP

QUESTION

LAUNCESTON ABT GALLERY

Senator HENTY:TASMANIA

Senator PALTRIDGE:Minister for Shipping and Transport · WESTERN AUSTRALIA · LP

QUESTION

TELEPHONE DIRECTORIES

Senator SEWARD:WESTERN AUSTRALIA

Senator COOPER:Minister for Repatriation · QUEENSLAND · CP

QUESTION

NORTHERN TERRITORY SHIPPING

Senator ASHLEY:NEW SOUTH WALES

Senator PALTRIDGE:LP

Senator Ashley:

Senator PALTRIDGE:

QUESTION

ROAD SAFETY

Senator CRITCHLEY:SOUTH AUSTRALIA

Senator PALTRIDGE:LP

Senator Critchley:

Senator PALTRIDGE:

QUESTION

BANKING

Senator KENNELLY:through Senator Critchley

Senator SPOONER:Minister for National Development · NEW SOUTH WALES · LP

HOUSING AGREEMENT BILL 1956

Senator SPOONER:Minister for National Development · New South Wales · LP

AUSTRALIAN COASTAL SHIPPING COMMISSION BILL 1956

Second Reading

Senator McKENNA:Leader of the Opposition · Tasmania

Senator Wright:

Senator McKENNA:

Senator Wright:

Senator McKENNA:

Senator Wright:

Senator McKENNA:

Senator WRIGHT:TASMANIA · LP; IND from June 1978

Senator McKENNA:

Senator Wright:

Senator McKENNA:

Senator WRIGHT:TASMANIA · LP; IND from June 1978

Senator McKENNA:

Senator Wright:

Senator McKENNA:

Senator Kendall:

Senator McKENNA:

Senator Paltridge:

Senator McKENNA:

Senator Paltridge:

Senator McKENNA:

Senator Paltridge:

Senator McKENNA:

Senator BENN:QUEENSLAND · ALP

Senator McKENNA:

Senator Wright:

Senator McKENNA:

Senator Wright:

Senator Paltridge:

Senator McKENNA:

Senator Wright:

Senator McKENNA:

Senator WRIGHT:TASMANIA · LP; IND from June 1978

Senator McKENNA:

Senator Hannaford:

Senator McKENNA:

Senator Benn:

Senator McKENNA:

Senator Gorton:

Senator McKENNA:

Senator Gorton:

Senator McKENNA:

Senator Wright:

Senator McKENNA:

Senator Spicer:

Senator McKENNA:

Senator Spicer:

Senate
7 June 1956

Senator MARRIOTT:
TASMANIA · LP

Senator O’SULLIVAN:
Minister for the Navy · QUEENSLAND · LP

Senator HENTY:
TASMANIA

Senator PALTRIDGE:
Minister for Shipping and Transport · WESTERN AUSTRALIA · LP

Senator SEWARD:
WESTERN AUSTRALIA

Senator COOPER:
Minister for Repatriation · QUEENSLAND · CP

Senator ASHLEY:
NEW SOUTH WALES

Senator PALTRIDGE:
LP

Senator CRITCHLEY:
SOUTH AUSTRALIA

Senator PALTRIDGE:
LP

Senator KENNELLY:
through Senator Critchley

Senator SPOONER:
Minister for National Development · NEW SOUTH WALES · LP

Senator SPOONER:
Minister for National Development · New South Wales · LP

Senator McKENNA:
Leader of the Opposition · Tasmania

Senator WRIGHT:
TASMANIA · LP; IND from June 1978

Senator WRIGHT:
TASMANIA · LP; IND from June 1978

Senator BENN:
QUEENSLAND · ALP

Senator WRIGHT:
TASMANIA · LP; IND from June 1978

Senator SEWARD:
WESTERN AUSTRALIA · CP

Senator BROWN:
QUEENSLAND

Senator BENN:
Queensland

Senator WRIGHT:
TASMANIA · LP; IND from June 1978

Senator WRIGHT:
TASMANIA · LP; IND from June 1978

Senator WRIGHT:
TASMANIA · LP; IND from June 1978

Senator WRIGHT:
TASMANIA · LP; IND from June 1978

Senator BENN:
QUEENSLAND · ALP

Senator GEORGE RANKIN:
VICTORIA · CP

Senator BENN:
QUEENSLAND · ALP

Senator SHEEHAN:
Victoria

Senator MARRIOTT:
TASMANIA · LP

Senator MARRIOTT:
TASMANIA · LP