23rd Parliament · 1st Session
The Senate met at 3 p.m.
The Acting Clerk. - I have received advice that the President (Senator the Hon. Sir Alister McMullin) is unable to attend the sittings of the Senate to-day. In accordance with Standing Order No.. 29, the Chairman of Committees will take the chair as Deputy President.
The DEPUTY PRESIDENT (Senator the Hon. A. D. Reid) thereupon took the chair, and read prayers.
– I direct a question to the Minister representing the Minister for Labour and National Service. Has the Waterside Workers Federation asked the Government to legislate to alter the Stevedoring Industry Act to’ provide, in- effect, for compulsory unionism on the waterfront by requiring that only unionists or members of the federation may be so employed? If the union’s request is granted, will the right to work thereby be denied to any waterside worker who does not pay the compulsory political levies, the proceeds of which the federal council of the Waterside Workers Federationhas devoted not merely to the Australian Labour Party, but also, in part, to the funds of the Communist Party?’ Will’ the Government in any action, either legislative or administrative, which it proposes to take on this issue, consider the legislation passed in 1946 by the Attlee Labour Government in Great Britain, which provided that a unionist might, by written notice to his union secretary, contract out of any political payment?’
– Since the question involves matters both of fact and of policy, I ask the honorable senator to place it on the notice-paper. I shall ask the responsible Minister to provide a reply to the question and I shall bring to the attention of the Minister his remarks as to the practice in the United Kingdom.
– Will the Leader of the Government in the Senate urge the Government to amend the regulations relatingto the provision of offices, facilities, equipment and the services of secretarytypists for senators, sothat in future none of these facilities shall be available, to a senator outside the State that lie has been elected to represent?:
– Certain facilities are provided to enable senators and members of the House of Representatives to carry out their responsibilities. I note the honorable senator’s question. I shall convey it to the Prime Minister andto the other members of the Government, with the suggestion that the position might be in some way reviewed to ensure that the facilities that are provided for senators and! members: of the House of Representatives are available to them only in the State that they represent, and for parliamentary duties only.
– I have received a reply to a question thatI recently asked the Minister representing the PostmasterGeneral. The material provided by the Australian Broadcasting Commission was misleading; it was an insult to the PostmasterGeneral and also to the Minister’ who hadto give the reply. I now ask the Minister to check on whether Mr. Finlay is not No. 3 acting general manager. I also ask the Minister to inquire whether Mr. Bearup, who is in London and has been, there for some years, is not paid as assistant general manager. I have the transcript of evidence given by Mr. Moses before the arbitrator.. Will the Minister meet me in his room at 5 o’clock this day and have a look at the transcript of that evidence?.
-If the honorable senator likes to come to my room at5 o’clock this afternoon, I shall be quite willing to see him, and I shall bring the other matter he has raised to the notice of my colleague the PostmasterGeneral.
-I ask the Leader of the Government in the Senate whether he has read a statement made by General. Carl Spaatz, who was an American air. officer in the Second World War and who is reported in the Melbourne “ Age “ of 1 6th September as saying: -
The next war, whether limited or general, won’t be rought by the army, the navy or tb: air force. It will be fought by combat teams embracing elements of all three services. It is perfectly obvious then that all three must be ‘n the hands of one man heading a single organization.
Will the Minister say whether he agrees with the reported utterance of General Spaatz and, if so will he inform the Senate what steps .are being taken to coordinate the activities of the three fighting services’?
– I have some knowledge of the statement attributed to the general and mentioned by Senator McCallum, but I have some reservations about attempting to deal without notice with a matter of such ramifications and wide importance. I therefore ask for the question to be put on notice, and I shall ask Mr. Townley to reply to it, because I think a reply to such a question as that should come forward with the imprimatur of the responsible Minister.
– I direct three questions to the Minister for the Navy. How many aircraft carriers are in commission? How does the cost of an aircraft carrier compare with that of an atomic submarine? ls it true, as held by some naval experts, that an atomic submarine could destroy an aircraft carrier with the greatest of ease?
– On the assumption that the honorable senator’s question means, “ How many aircraft carriers are in commission in the Royal Australian Navy? “, the answer is one. The cost of an atomic submarine, without a weapon system, would be in the vicinity of £30,000,000, while that of an aircraft carrier, with sufficient planes, would be in the vicinity of £45,000,000. An atomic submarine could destroy an aircraft carrier if it hit the carrier with a torpedo, and an aircraft carrier could destroy an atomic submarine if it found the submarine and sank it. It is a matter of which hits first.
– I direct a question to the Minister representing the Minister for the Interior. It arises from a state ment made by the national president of the returned servicemen’s league, Sir George Holland, who is reported to have said that Australia does not have a civil defence policy nor a civil defence control. Are there a national civil defence control and a civil defence policy?
– 1 am quite certain that the Commonwealth Government has a civil defence policy, because for some time past it has had a civil defence training institution at Mount Macedon, in Victoria. I shall bring the honorable senator’s question to the notice of the Minister for the Interior and ask him to furnish a reply, which I shall let the honorable senator have.
– I preface a question to the Minister representing the Minister for Primary Industry by stating that for some time the Australian Primary Producers Union has been seeking representation on the Australian Wool Bureau. As this body claims to have representation in five States, and to represent one-third of the growers in Australia, what is the reason for its exclusion from the Australian Wool Bureau?
– I shall ask the Minister for Primary Industry to supply the reason, not for the exclusion of the Australian Primary Producers Union, but why it is not among those organizations which are and have been for some time associated with the Australian Wool Bureau.
– Does the Minister for Shipping and Transport know whether it is correct that, to revert to the stacking of Tasmanian potatoes on the Sydney wharfs in what is known as growers’ lines, the shipping companies are demanding a substantial premium on the already high freight rates between Tasmania and Sydney? Will he ascertain whether it is possible to revert to the stacking of potatoes in growers’ lines at a minimum cost to the producer and so dispense with block stacking which is one of the great factors destroying the Tasmanian potato industry?
– I am aware that because of the greater time and effort involved, stacking in growers’ lines would be more expensive than block stacking. 1 am not aware of what the position is at Sydney. I shall certainly be pleased to make inquiries as to what is going on there, and the proposed fee, and ascertain whether it is a reasonable charge for stacking in growers’ lines.
– Has the attention of the Minister representing the Minister for Trade been directed to a report of a statement by Mr. Charles Bignon, chairman of the French Cotton Export Board, that Australian advertising in Europe is not worth a penny? In view of the statement, can the Minister inform the Senate of the extent to which the Government considers sales promotion of Australian goods is achieving satisfactory results in Europe?
– I did not see the statement to which the honorable senator referred. Of course, there are statements made from time to time criticizing the efficiency of Australian advertising abroad. I think it is one of those cases in which beauty is in the eye of the beholder; some people like the standard of Australian advertising and some dislike it.
I think that a fair answer to the question is that there is increasing satisfaction on the part of Australian exporters not only with the standard of advertising of Australian goods on overseas markets but also with the general sales promotion campaigns that have been carried out. There is a special organization both in London and Australia which is entrusted with that responsibility. I should not like to attempt to speak for public opinion as a whole, but I think that, by and large, that organization and the efforts of the Department of Trade are attracting increasing public confidence.
– My question is directed to the Minister representing the Minister for Primary Industry. Can he inform the Senate when the second advance will be paid on the 1958-59 wheat harvest? In view of the drought conditions prevailing throughout the wheat-growing areas of
Australia, will the Minister for Primary Industry expedite the payment of this advance to enable the growers to finance their normal operations?
– A second advance on a wheat pool is normally paid when the Australian Wheat Board has liquidated its overdraft, and has accumulated a credit sufficient to enable the advance to be paid. At that stage, the board recommends what the advance will be. That position has not yet been reached with No. 22 pool - the pool for the 1958-59 crop. The board’s overdraft at the beginning of September was £48,500,000. The board is pursuing a vigorous selling policy and is doing all it can to accumulate the funds necessary to enable it to pay a second advance, but it will probably be some time before the advance is paid. The board is fully aware of the conditions mentioned by the honorable senator and will continue to do its best to accumulate the necessary funds.
– Can the Minister for Shipping and Transport state whether his department is ready to use its good offices in the matter of attaining a uniform traffic code for Australia? If so, who should take the next step? When will such a step be taken, and how will it be taken? Will legislation be introduced into this Parliament? Can the Minister give some indication when a uniform traffic code is likely to be achieved?
– I think I have explained before that the adoption of a uniform traffic code is a matter for the various State governments. However, the Commonwealth, through the Australian Transport Advisory Council, or more particularly, through the Australian Road Traffic Code Committee, has taken a keen interest in the establishment of a uniform traffic code. Quite recently - I think within the last week or ten days - such a code was the subject of discussion at a meeting of that committee. I have not yet received a report from the committee, but I know that there is agreement in principle by all the States as to the desirability of a uniform traffic code. It is not contemplated that any legislation will be required to be introduced in this Parliament, except insofar as the Australian Capital Territory may be -concerned. .1 .-shall ‘find ;out the dates position and let -the (honorable -senator know.
– My question is .directed to the ‘Minister representing “the Minister for Trade. Has Western Australia in .the past, because of its geographical position, shipped at least 2’5 per cent, of the flour imported by “Indonesia from Australia? Has this .trade virtually ceased because of certain arrangements made between Indonesia .and millers “in eastern Australia? Is it possible that, apart from the loss of traditional Hour .mar.kets for Western Australia, some .ships now -plying between Western Australia :and the islands -to the north of Australia .could be removed -from’ :this -run and used ^elsewhere? In view of the seriousness -of this -state of affairs to Western Australia, will ;the Minister give consideration to inducing Indonesia to import a part of its flour requirements from Western -Australian -mill-owners? Will the Minister also consider a revision of the Stale’s flour export quotas, with the object of allotting to Western Australia a greater percentage of the export trade?
– I am sorry that I am not as well informed on this matter as T should be. I know little more than that difficulty has “been experienced in maintaining our flour trade with Indonesia .for reasons different, in my recollection, from those which Senator Drake-Brockman has (mentioned. In those circumstances, -I ask to -be excused from answering Ihe question at greater length now.. S£ : the question is placed on >the notice-paper, I will ask my colleague, Mr. McEwen, to -furnish ;a reply direct to the honorable senator.
– I .desire to (direct a question to the Leader of the Government in the Senate, without notice. (Does he .contemplate ‘Calling the Senate together next Monday? If “he does, will he .explain to the Senate what great urgency has developed to cause this break-away from tradition? -Senator SPOONER. - Mr. Deputy President, it is .true that I contemplate asking the
Senate to meet next Monday, foi these reasons: A substantial number of members of the Senate desire to be excused from their duties on Thursday m order to attend a series .of functions. I think .that .the number of senators who -would Eke the .Senate not to meet on Thursday is .unparalleled. If legislation to -increase .both repatriation and social service .benefits, and to impose new postal charges, is to become operative as from 1st October, as contemplated, it is necessary .to get .the respective measures through both Houses of the Parliament before 30th September. The bill relating to .postal rates has not yet been introduced in this chamber, and the Social Services Bill 1959 is not yet through the House of Representatives. We have .a responsibility to deal with this legislation by 30th September, and I am sure that Senator Armstrong, no Jess than .any one else, would want us to do that. So we were faced with .an awkward situation. We .had to decide -whether we would meet on Thursday and ask a number of honorable senators to break engagements which they very much wanted to keep, or whether we would for once - and this occasion is not ‘by any means to be regarded as a precedent - meet on Monday in order to deal, :in the leisurely way that is warranted, with -the important legislation that will then be before us.
– I desire to direct to the Minister representing the Minister for the Army a question which is further to the -question that was asked by Senator McKellar in relation to civil defence. Has the Minister seen a further statement attributed to -the federal president -of the returned servicemen’s league, Sir George -Holland, that young men .eligible for national service .training ;b.ut not called up for national service .duty should be -trained in the art of civil defence? If he has seen this statement, will he obtain a report from the Minister for the Army on the practicability of adopting this suggestion?
– J read the further statement by .Sir George Holland with -great interest. If .the honorable senator will be good .enough .to <p.ut .his -question on notice, J .shall refer it to the Minister f.01- the Array and .obtain .an .answer.
– I preface my question of ‘the Minister for the Navy ‘by -reminding honorable senators ‘that -over the last two or three years foreign ‘fishing -vessels are reported to have been operating - and making large hauls - Off the north-west coast of ‘Western Australia. Have any such cases been brought -to the Minister’s notice in the last few weeks, or -months?
– Yes. The vessels of the Navy seek, in their travels around the Australian coast, not only to provide fisheries protection - as they do “in the case of the pearling fleets - but also to keep an eye on fishing vessels generally. I have had on my desk, three times in the last week, reports concerning fishing vessels of various nationalities. Two of them were operating outside the three mile limit, where they have a perfect right to operate. Their presence was reported by “ Diamantina *’, which operates from Fremantle up and down the Western Australian coast. A smaller vessel was anchored near an island off the coast which may, or may not, be in Australian waters. In short, the vessels of the Navy ,are keeping a check on foreign vessels fishing off the Australian coast. The Navy has no right to prevent them from so fishing if they are outside the three mile limit; but it will prevent them from doing so if they are inside the three mile limit. With such a vast coastline there are bound to be some occasions, I suppose, when vessels will be fishing inside yet remain undiscovered.
asked the Minister representing the Minister for Immigration, upon notice -
In view of the recent disturbing statements, including one by the Treasurer, that for the past three years Australia has failed to reach the net migration target, will the Minister make a statement to Parliament on future prospects-, particularly in the light of his investigation into sources of migration during his recent European visit?
– My . colleague, the Minister for Immigration, has supplied the following answer: -
The Minister for Immigration will be making shortly a full statement to Parliament on this subject. However, .the honorable senator would wish to know that the Treasurer, in the statement to which he refers, was speaking of the long-term policy objective that net immigration annually should be equivalent to an increase of 1 per cent, in the population. As well as working to this long-term policy objective, the Government establishes each year an annual immigration programme which, in the last three .years, has on two occasions actually been .exceeded. On the third occasion, in the financial year 1957-58, there was a shortfall of some 8,000, but ‘despite this the overall intake during the three years in question exceeded the sum total of the -programmes established for the three years.
asked the Minister representing the Postmaster-General, upon notice -
Postmaster-General has furnished the following information: -
asked the Minister representing the Minister for Social Services, upon notice -
Is it a fact, as stated in published reports, that, subject to the passage of the necessary legislation, the Government proposes to pay the increased pension rates as from 8th October?
– The Minister for Social Services has supplied the following answer: -
Payment of pensions at the increased rates provided for in the bill now before the House will be made on the first pension pay-day after the day on which the bill receives the Royal Assent.
asked the Minister representing the Minister for Social Services, upon notice -
– The question should have been addressed to the Minister representing the Minister for Labour and National Service. The Department of Labour and National Service has supplied the following information: -
asked the Minister for Customs and Excise, upon notice -
– L now furnish th, following answers to the honorable senator’questions: -
3 and 4. The displaced officers are experienced on work of a particular grade. Most of the work of the class they are now performing will be abolished and the remainder will be performed more economically by adopting methods of investigation somewhat similar to the method? employed in other areas of customs control. Some of the displaced officers will be employed in the new sections, and the rest in other positions in the department where their particular experience and training can be utilized.
– I lay on the table the statement made in the House of Representatives by the acting Minister for External Affairs (Sir Garfield Barwick) on 17th September, 1959, as follows: -
Developments in Laos - Statement by the acting Minister for External Affairs, dated 17th’ September, 1959 - and move -
That the paper be printed.
Debate (on motion by Senator McKenna) adjourned.
– 1 present the fifteenth report of the Standing Committee on Regulations and Ordinances, and move -
That the report be printed.
I point out that it is proposed that a motion will be submitted later in regard to this report, and that the Senate will then have a full opportunity to debate it.
Question resolved in the affirmative.
Motion (by Senator McKenna) - by leave - agreed to -
That Senator Tangney be granted leave of absence for two weeks on account of duties connected with the forthcoming Commonwealth Parliamentary Association Conference.
– by leave - On 25th August, Senator Hendrickson, in a question without notice,, asked whether I would make a statement to the Senate on negotiations for the formation of a. European Free Trade Association. For the information of Senator Hendrickson and other honorable senators I have had prepared the following statement.
Some months ago the Swedish Government suggested that discussions be held’ about the possibility of forming a free trade area between seven countries not members of the European Economic Community - the Common Market. These countries are
Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the United Kingdom. Agreement has been reached very rapidly. Discussions were held among officials and the officials agreed on a draft plan for such a free, trade area. This draft plan was considered at a meeting of Ministers of the seven countries held near Stockholm in late July. The Ministers decided to recommend to their governments that a free trade area, to be called the European Free Trade Association, should be established among the seven countries. They also approved the draft plan prepared by the officials and instructed the officials to draft a convention, based on the draft plan, for submission to governments by 31st October, 1959. i The Ministers decided that the draft plan for the European Free Trade Association should be published, and this has been done. The text has appeared in the newspapers. The United Kingdom published the text in a White Paper in late July. If the honorable senator were interested, arrangements could be made tor him to receive a copy of the White Paper issued by the United Kingdom Government, which is Command Paper No. 823.
Very briefly, the Stockholm plan, as it has been called, provides for the elimination of tariffs and quota restrictions on trade in industrial goods between members by 1st January, 1970. If the free trade association were to come into being as planned, the first tariff reduction of 20 per cent, would be made on 1st July, 1960, and the first increase in quotas would be made on 1st January, 1960. Trade in agricultural products would be dealt with by a special agreement and by means of bilateral arrangements between members on items of particular interest. One such arrangement has already been agreed upon between Denmark and the United Kingdom and made public on 9th July, 1959. Under this arrangement the United Kingdom has agreed that if the European Free Trade Association should be formed the present United Kingdom tariffs on four items’ of importance in trade between the United1 Kingdom and! Denmark will be abolished for all the members of the association. The four items concerned are bacon, canned pork, luncheon meat, canned cream and blue-veined cheese. As I said in answer to the honorable senator on 25th August, the Government is paying very close attention to the negotiations among the Stockholm group and has been constantly in touch with ‘the United Kingdom authorities on this matter.
Hill received from the House of Representatives.
Standing Orders suspended.
Sill (on ^motion by Senator Sir Walter Cooper) read a first time.
[3.45]. - 1 move -
That the bill be now read a second time.
The purpose of this bill is to amend the Post and Telegraph Rates Act 1902-1956, to adjust certain postal charges. Some other charges for postal services and for telephone .and telegraph services are also to be varied. As is customary, these will be effected by amendment of the appropriate regulations or by executive action but I propose outlining, for the information of the Senate, the major adjustments proposed. Statements setting out the changes in some detail have been circulated to honorable senators.
Before proceeding to cover the main features of the bill now before the Senate, I shall give honorable senators some of the reasons leading up to the proposed changes in rates. In an organization with more than 86,000 employees and with operating and maintenance expenditure exceeding £100,000,000 yearly, changes in cost levels can seriously affect finances. Nevertheless, higher costs do not in themselves justify or make inevitable an increase in charges. An efficient undertaking, such as the Post Office, could reasonably be expected to absorb at least some of these higher costs by improved methods of dealing with traffic, greater output and higher technical efficiency.
That it has done so, Mr. Deputy President, is evident in the figures. During the past three years, there has been -an overall rise of 20 per cent, in all classes of traffic, but staff has grown by only 8 per cent.
Very few organizations, public or private, have done more to improve efficiency an an endeavour to offset the effects of rising costs. This improvement, Mr. Deputy President, will continue. The paper on “The Australian Post Office - Progress - Policy - Plans “, recently issued by -the Postmaster.-General, is a record of real achievement in developing services and planning for the future, and -is conclusive evidence of a -live and realistic approach to problems of management in the broadest sense.
The postal side of the department’s .operations resulted .in a commercial loss of £1,950,000 in 1957-58. As a result of successful efforts to achieve greater efficiency, the loss will be lower in 1958-59, but higher costs resulting from the recent rise in the basic wage and certain increased costs for materials and services .generally would, without action to adjust charges, result in an operating deficit of more than £2,000,000 in 1959-60. on the basis of present tariffs and costs.
In addition, Mr. Deputy President, the adoption of the proposal to convey by air, without surcharge, letter-form articles of small and medium size, posted in Australia for delivery within Australia, where delivery will be expedited by air carriage, will involve additional expenditure and loss of revenue, amounting to about £1.450,000 in a full year.
This development in the air carriage of mails is of great significance and is in accordance with the policy of the Post Office of providing the speediest possible means of conveying mail, consistent with reasonable economy. The improved airmail service will be introduced on 1st November. It is not possible for it to operate earlier because of the problems and details involved in its organization. However, from 1st October, the existing airmail surcharge of 3d. per i oz. will be reduced to 3d. per oz. During October, therefore, all mail to be carried by air within Australia will need to bear the airmail label and additional stamps to cover the reduced airmail fee of 3d. per oz. This fee of 3d. per oz. will be retained from 1st November only to provide a surcharged airmail service for articles not eligible for air carriage without surcharge.
From 1st November, air carriage will be given free of surcharge to letter-form postal articles, in both sealed and unsealed envelopes, which can be conveniently handled in departmental postmarking and sorting machines, and where air conveyance would result in earlier delivery. The service will be available between capital cities, and between capital cities and provincial centres on commercial air routes for mail addressed to those centres, or normally distributed through them. Maximum dimensions of an enveloped article carried without surcharge are being fixed at 10 in. by 5 in. by3/16 in.
Airlines will carry a greater volume of mail under the new scheme and, since this should give some economies in their operating, it has been decided to reduce the general rate per lb.mile payable by the Post Office to the airlines from . 05 pence to . 04 pence.
The bill before the Senate, Mr. Deputy President, provides for the following revision of postal rates: -
Letters and lettercards - The existing rate of 4d. for the first oz. will be increased to 5d. The charge for each additional oz. will be raised from21/2d. to 3d. As already mentioned, these articles, within specified size limits, will be entitled to air carriage anywhere within Australia and the extra air rate of 3d. for the first1/2 oz. will be abolished.
Postcards - Postcards will be eliminated as a specific category of mail and the letter rate will apply.
Publications Registered at the General Post Office - The existing general rate of 21/2d. for the first 6 oz. and 2d. for each additional 6 oz. for registered Australian books, newspapers and periodicals posted as single copies will become 5d. for each 8 oz. The rate for these publications (except books), when posted in bulk, will be 5d. for each 12 oz., but on the total weight of the consignment, irrespective of the number of individually addressed postal articles contained in it.
Other articles - The existing charge for commercial papers, patterns, samples and merchandise of 31/2d. for the first 2 oz. and 2d. for each additional 2 oz. will become 5d. for the first 4 oz. and 3d. for each additional 4 oz. The same rates will also apply to printed matter, which is at present charged at 31/2d. for the first 4 oz. and 2d. for each additional 4 oz.
The proposed rates have been designed to give a rationalized scale of postal charges, in keeping with modern conditions, and simplified to the maximum extent practicable. The important principles to be established are that -
The existing higher charge for first-class mail had its origin in the days when the carriage of the King’s letters was the prime consideration of the postal service. The community now uses the post extensively for the conveyance of papers relating to commercial and industrial affairs, which often are at least as important as personal letters, and which demand equally prompt treatment. In fact, all such mail receives identical postal service and therefore warrants a similar basic charge.
Although larger articles, sent in packet or similar form, are now carried at a lower basic charge than letters, they are more expensive to handle. A packet, on the average, costs more than 6d. for processing, carriage and delivery; the minimum charge has been 31/2d. and the average revenue yield at current rates would approximate 4d.
The new rates provide for a substantial concession to be retained for registered Australian publications. Eligibility for the special concession rates for books, newspapers and periodicals - including the most favorable bulk rate - is confined to publications wholly set up and printed in Australia.
At the present time, the cost of handling the average newspaper or periodical posted in bulk is also more than 6d., and the average revenue derived is only about11/4d. Thus each individually addressed newspaper or periodical is subsidized to the extent of 5d. Under the proposed rates, this subsidy will be reduced by 10 per cent, to approximately 41/2d. per item.
It is important to note, Mr. Deputy President, that the proposed unit of weight for publications posted in bulk is 12 oz. compared with 1 oz. for a letter, even though the basic fee will be 5d. in each case.
About 150,000,000 separately addressed newspapers and periodicals are at present posted annually in bulk; the total subsidy each year is therefore of the order of £3,000,000. With an increase in rates, some decline in postings may occur and about 130,000,000 articles may be posted in the next twelve months. At a subsidy of 4id. each, this would still involve a total concession of about £2,500,000 to this class of mail.
Losses on the handling of publications have seriously affected postal financial results since federation. During this period, the trading accounts of the Postal Branch have shown an aggregate surplus of about £26,000,000, but losses on bulk postage alone have been £57,000,000. The Government feels that, in the circumstances, the proposed bulk rates are a move in the right direction. In fact, Mr. Deputy President, the proposal is by no means out of line with similar rate adjustments since the war. In 1949, the bulk postage rate was increased by 108 per cent, to 24d. for each 16 oz. and in 1951, when the last adjustment was made, it was again doubled to 2id. for each 8 oz.
The present proposal is to increase the rate to 5d. for each 12 oz. This increase of 33J per cent, is therefore a smaller proportionate increase than each of the two previous adjustments in luly, 1949, and July, 1951. Many small publications, such as church papers, weigh less than 1 oz., 30 or 40 papers to the pound being by no means unusual. At the proposed new rates, the Post Office will, in many cases, be processing and delivering as many as five individually addressed items for a return of only Id. The proposed letter rate is 5d. for 1 oz.; the proposed bulk rate is less than one half-penny an oz. All registered books, newspapers and periodicals posted by members of the public, as distinct from publishers and newsagents, will be charged at the general rate of 5d. for each 8 oz. on each postal article. The minimum charge will again be 5d., as for each other postal article. It is also proposed that “ Hansard “ should no longer be eligible for special concessional rates, but that it be charged at the printed matter rate. Braille articles intended for the use of the blind will continue to be carried by post without charge. With one exception, the new postage rates covered by the bill will apply from 1st October, 1959. However, as announced by the Prime Minister (Mr. Menzies) the new bulk rates will not operate until 1st March, 1960.
As I have said, Mr. Deputy President, there are some adjustments to postal charges not covered by the bill. It is proposed to effect these by amendment of regulations or executive action and to apply them from 1st October, 1959. Adjustments covered include charges for parcels and registered articles and commission on money orders. Parcels rates have not been increased for eight years and revenue is now well below operating costs. Overall increases of about 20 per cent, are proposed.
The fee for registered articles was increased from 9d. to ls. 3d. in 1956 and at the same time a scheme for certified mail was introduced. This scheme has catered for the needs of the public in cases where use of the full registration system has not been essential. In view of this and also of the high costs of handling articles under the registration system, the base registration fee is to be raised from ls. 3d. to 2s. No change will be made in the certified mail fee of 6d. Commission on money orders has not changed since 1951. The fee will be raised from ls. to ls. 3d. for the first £5, with corresponding adjustments for money orders of higher values.
Adjustments proposed for mail addressed to overseas countries will be effected by executive action. Details are shown in a. statement which I have circulated for theinformation of honorable senators. Thesenew international charges have been determined having regard to the proposed’ changes in domestic rates. Generally, the existing categories of international mail are being retained, because of the provisions of the Convention of the Universal Postal Union to which Australia is a signatory. Where appropriate, Australian inland rates of postage will be applied to mail addressed to countries in the British Commonwealth. Parcel-post rates to overseas countries have also been reviewed.. Five simple and logical zonal rates, will replace existing separate rates of postage: for parcels to nearly 200 places’ overseas.
Since 1949, Mr. Deputy President, postal trading losses have totalled nearly. £17,000,000. Postage rates for first-class letters have been, sufficient to give revenue, in excess, of handling costs, but surpluses derived; have been more than offset by losses on handling other types of mail, and on. money orders and postal notes. The new postal rates are designed to bring in overall increased” revenue of £3,400,000 in 1959-60 and £4,600,000 in a full year.
With the operation of the proposed rates, receipts from all letter-form mail will exceed costs, even after allowing for additional expenditure’ and loss of revenue associated with the conveyance of small and mediumsized letter-form articles’ by air, without surcharge. For most packet-form mail, including commercial papers, printed matter, patterns, samples and merchandise, costs wilt be slightly in excess of revenue. For publications, Post Office revenue will still be well below costs, especially for those posted at bulk rates. Losses will continue on registered mail, parcels, money orders and1 postal’ notes, even though the charges for these; with the exception of postal note poundage, are to be raised from 1st October, 1959.
Generally,. Mr., Deputy President, when account is taken of wage rates, overall costs,, and. other special reasons which, allow some overseas postal administrations to charge low postage rates for certain categories of mail, the proposed Australian rates, are reasonable by world standards. In particular, the special low bulk rate for registered newspapers and periodicals is most favorable, by comparison with most overseas rates for locally-produced publications. For instance,, in the United Kingdom, under the domestic internal rate, no singly addressed publication is conveyed: for less than 2d. sterling. A United. Kingdom publisher distributing 1,000 separately addressed- papers, each, weighing 1 oz., would pay postage equivalent to £10 8s. 4d. Australian. At the. new bulk rates in: this country, an. Aus, tralian, publisher would pay £1 14s. 9d. for. the. same service.
I have seen some- references! to- the possibility of Australian? mail’ being; posted in overseas countries because of> the provisions of this bill. Honorable senators may be interested to know that, the provisions of the Universal Postal Union Convention-,, which regulate the exchange of mail between the countries of the world, give a country the right not to deliver mail posted in another in order to gain an advantage from lower rates of postage. This right is extended also to include articles posted abroad in large quantities on behalf of residents of the country of destination, whether- or not such postings are made with a view to benefiting from the lower charges. Therefore, means are available to- control any unfavorable tendency to post mail’ originating in this country, in another country, for delivery to Australia.
On the telegraph side, Mr. Deputy President, honorable senators will be glad to know that, in. spite of higher wages and materials costs* the operating deficit of the Telegraph Branch has been reduced from. £1,200,000 in 1955-56 to £638,000 in 1956-57 and £330,000 in- 1957-58. The handling of telegraph traffic by the new automatic teleprinter switching, system. (Tress), which is being progressively introduced, will ultimately result in savings of about £450,000 a year in operating costs. No change is proposed in the basic rates- for telegrams but some adjustments will be made in rentals for leased telegraph services and in certain fees for miscellaneous items. These are expected to bring in £290,000 in 1959- 60 and £390,000 in a full year.
In the Telephone Branch, there- have been operating profits in recent’ years. On the- other hand, the buoyancy of the economy has- led to a need, for expanded and additional facilities to met the growing demands’ of industry and: the community generally. This has. inevitably involved the provision of large sums from Consolidated Revenue for capital expenditure on telephone exchanges, trunk lines, cable, telephone subscribers’ services,, and associated facilities. As a. result, Post Office capital votes have totalled’ close on £200-000,000 during the’ past five years. The Government has decided! that it would not be inequitable to expect the charges paid by users of the telephone service to meet not only the operating and maintenance’ costs incurred’ in running* that, service, but also to ensure a- reasonable’ annual return on the new capital’ used” in its development. As mentioned’ by the Prime- Minister and’ by the Treasurer (Mr. Harold Holt), the need: for1 such capital; already great, must continue to grow as Australia develops.
The Government is satisfied that the Post Office is. competently managed and efficiently operated. Its practices and procedures are. being continuously reviewed, modernized and improved,, and real and substantial economies in the costs of installing and. running its facilities are. being achieved. The White Paper issued by the Postmaster-General, contains clear proof ot this. The proposed adjustments in telephone; charges, to. apply from 1st October, 1959,, are expected to bring in- additional revenue of £7,030,000 in 1959-60 and £12,400,000 in a full year. Details of the adjustments have been supplied to honorable senators.
These- proposals must be- viewed in their proper perspective- and in the light of the new national telephone policy which will give telephone subscribers extended’ local service areas - known as ELSA - from 1st May,. I960 and,, ultimately, the advantages of full automatic: working. This policy carries) with it the: need for additional capital; but the: Post Office has established conclusively that it isi more-, prudent to use capital in this way than to. spend it on expanding manual handling facilities, with consequent increased annual: charges. Avoidable, operating costs of between £35,0001,000. and! £40;000;000 will almost certainly be incurred over the next ten years in> meeting normal developmental demands, unless Post Office plans for automatizing the telephone service are progressively implemented.
As has been indicated, this new policy will’ permit of local calls on an untimed basis over longer distances and to a greater number of subscribers than is now practicable. Exchanges are to be grouped in zones, based on community of interest, calls within a zone and to adjoining zones being treated as untimed local calls. The distance covered by a local call fee will be increased to cover most calls of up to 25 miles and many up to 35 miles, providing the exchanges concerned are in adjacent zones’. For calls’ between nonadjacentzones, trunk rates wilt continue to be charged1.
Subscribers grouped in those zones adjoining metropolitan areas will have access, at the local call fee, to metropolitan subscribers and the latter will be able to make calls to these nearby zones at the local’ call fee. These real and substantial benefits will be available to subscribers when the new plan operates as from 1st May, 1960.
A new and simplified trunk call charging basis will also be introduced. There are at present 22 separate mileage divisions and it is intended that these should be reduced to eight from 1st May, 1960. As an interim measure, the number of divisions will be reduced to eleven from 1st October. 1959.
Associated, with the new policy, adjustments wilL be necessary in some of the annual rentals for telephone exchange services which, broadly, are based on the number of subscribers available to each subscriber within, local call distance. The adoption of the proposed zoning arrangements and the accompanying extension of local service areas will result in substantial increases in the number of subscribers available for the local call fee.
Under the present rental table, there are five groupings for rural exchange services, with two further groupings for metropolitan areas: If the: five rural groupings were retained under the zoning plan, increases in rentals in some: country areas would’ be very severe. Country rental groupings will therefore- be reduced- to three, namely: - 1-2,000: subscribers;, 2,001-7,500 subscribers;, and! 7.50:1 subscribers and upwards.
Subscribers in zones adjoining metropolitan areas will1 pay the same rentals as metropolitan subscribers from 1st May, I960,, as they will then share with them local call! access: over wider areas. At the same- time, trunk charges applicable over the shorter distances will be abolished. The principle of having a higher rental for a- business service, at present operative only in the metropolitan and larger provincial centres;, will! be applied in all areas’.
AH the adjustments associated with the regrouping of districts and zones to provide for larger local call areas and fewer trunk charging categories will not become effective until 1st May, 1960, but certain variations in telephone charges are proposed from 1st October, 1959. In metropolitan areas, there will be a rise of £4 in the existing annual rental for a business service and £2 for a residence service. Increases in rentals in country areas will range from 5s. to £2 12s. 6d. Details of these adjustments are shown in the statement circulated to honorable senators. Total additional revenue from rentals is expected to be £3,150,000 in 1959-60 and £3,740,000 in a full year.
For trunk-line calls, overall charges will be increased by about 10 per cent, but reductions of up to 5s. will apply to calls over distances in excess of 600 miles. Moreover, as I have said, from 1st May, 1960, most calls of distances up to 25 mi les, and many of up to 35 miles, will become untimed local . calls and charged as such.
The adjustment of trunk-line charges, and associated fees for particular person calls and fixed time calls, is expected to bring in extra revenue of £910,000 in 1959-60 and £1,470,000 in a full year. The difference is due chiefly to the fact that some extra revenue actually earned during 1959-60 will not be received by the Post Office until subscribers’ accounts payable after June, 1960, are settled.
The local call fee will be raised from 3d. to 4d., irrespective of whether the cali is made from a subscriber’s service or from a public telephone. Additional revenue expected is £2,300,000 in 1959-60 and £6,310,000 in a full year. The substantial difference in these estimated amounts is due to the fact that payments for much of the local call traffic made in 1959-60 will not be collected until the following year.
Certain miscellaneous telephone tariffs have not been varied since 1951 and, indeed, some of them have remained unchanged since 1939. These are also being adjusted from 1st October to bring in £670,000 in 1959-60 and £880,000 in a full year. The rentals for items of auxiliary telephone apparatus such as extension telephones, alarm equipment, portable services, private branch exchange equipment, &c, and non-recurring charges, including the rates for statements of calls and diversion of calls, will be raised overall by about one-third. Certain other items, such as charges for deaf aid equipment, and for block type and other insertions in the alphabetical directories, will not be varied. The telephone service connexion fee will also remain unchanged.
Extra mileage fees on telephone services now apply where exchange lines in rural areas exceed a radial distance of two miles from the connecting exchange. These fees were introduced originally to recoup the department, to some extent, for the additional maintenance costs incurred on exchange lines in country districts. Presentday economics governing the provision of rural telephone services favour longer subscribers’ lines rather than the establishment of small exchanges, and these extra mileage fees are to be abolished.
Summarized, the adjustments covered by this bill, together with those which have to be effected by regulation and executive action, will bring in £10,700,000 extra revenue in 1959-60 and £17,400,000 in a full year. The difference between these figures and those quoted by the Treasurer (Mr. Harold Holt) in his Budget speech are, of course, due to the decision of the Government not to proceed with the minimum charge of 2d. for each singly addressed newspaper and periodical posted in bulk, to defer the general increase in the bulk rate until 1st March, 1960, and to retain a somewhat greater concession for bulk postings and unregistered books, printed matter, packets and the like, than was originally contemplated.
A loss of revenue of about £700,000 in 1959-60, and over £1,100,000 in a full year, will result from the abolition of the surcharge on letter-form domestic air mail. Thus, the net gain in revenue is expected to be £10,000,000 in 1959-60 and £16,200,000 in a full year.
Post Office revenue is likely to be £119,700,000 in 1959-60, compared with estimated ordinary services expenditure of £109,000,000. The cash surplus of £10,700,000 will, of course, be paid into Consolidated Revenue, from which £39,400,000 is being provided this year for Post Office capital works to extend postal, telegraph and telephone facilities.
Reference is often made to penny postage,- and honorable senators will be interested to learn that the penny post of Sir Rowland Hill’s day was actually a very dear service. Its present-day equivalent would be about ls., compared with the proposed letter rate of 5d. When related to the purchasing power of money, nearly all the proposed rates are relatively lower than similar charges prior to the war.
If Post Office charges had risen in the same ratio as the basic wage since 1939, the letter rate would be 7d. instead of the 5d. proposed, the local telephone call fee would be 4id. as against 4d., and the fee for a trunk-line call between Melbourne and Perth 42s. 3d. in lieu of the 15s. proposed. The rental for a residence service connected to a small rural exchange would be £10 10s. as against the proposed £6, and the Sydney and Melbourne business rental £19 4s. instead of the £17 5s. proposed.
It is important to point out, Mr. Deputy President, that simplification of rate structure and real improvements in service will accompany the introduction of the new charges for postal and telephone facilities. Honorable senators will agree that the proposed rates are not unreasonable, taking into account the cost of installing and operating Post Office facilities as a whole, the substantially liberalized postal and telephone policies to be implemented and the improved grade of service these policies contemplate. I commend the bill to honorable senators.
– The bill before the Senate is one with very few clauses - three in fact.
– And very few virtues.
– In studying the bill I found none. The bill is confined solely to the matter of an increase in postal rates, but the speech of the Minister for Repatriation (Senator Sir Walter Cooper) went far beyond its immediate purposes and dealt with telephonic, telegraphic and many other activities of the Post Office, including future policy, the financing of future development and various forward looking proposals. In those circumstances, I take it that the door is open to the Opposition to cover the same ground.
– They are all relevant matters, surely?
– They are completely relevant to postal matters, but nol to the bill.
– They are surely relevant to the proposal to increase rates?
– Postal rates - not telephone or telegraph rates. Neither does it relate to many charges which are to be dealt with by regulation, or executive act.
– They are all part and parcel of the business of the Post Office.
– The honorable senator can say that in a perfectly general way but, to be precise, they are simply not relevant to the purpose of the bill which, according to clause 3, is related to “ rates of postage “ on three types of mail. One cannot, in any conceivable circumstances, find in that a reference to telegraphs or telephones.
– How could you come to a decision on postal rates without knowing the general financial position?
– I see no practical difficulty at all in dealing with postal rates quite separately from telegraph and telephone rates. In fact, it has been done on many occasions, as when an individual item has been picked out and dealt with. It would be wrong if the debate did not permit a general canvass of the whole situation to be made. I am merely placing on record the limited purpose of the bill and claiming the privilege taken by the Minister to cover other ground also.
The first general comment that I should like to make would be that in truth, and apparently in law, the Post Office is a monopoly in this country. It exists under the federal Constitution and is the one monopoly that can thus be established in this country. It is rather interesting to note, looking at. judicial decisions both in Australia and in the Privy Council - the ultimate court of appeal - that banking, other than State banking, has been deemed to be part of trade and commerce and. in so far as it has interstate activities, to be part of interstate trade and commerce, to which Commonwealth power is confined. That has been taken up and projected into placitum (i) of section 51 to bring about that result but we find, when we come to posts, telegraphs ,and telephones, .that that does not happen. It would be hard, I suggest, to find anything more .relevant or of greater consequence to, or a more integral part of, trade and commerce than mails, telephones and telegraphs. The transmission of money, -memorandums and messages surely -lies at the very base of trade and .commerce, and .is part .pf At. .One would expect, I suggest, in logie and in law, to find .the .courts of the land regarding posts, telegraphs ,and telephones as an essential part of trade and commerce, as they did banking. But they do not do that. Neither do they give any reason for the distinction. They merely make the comment that traditionally the Post Office and the carriage of mails and matters incidental thereto have been matters for governments. I am not quarrelling with the statement of fact, and I am not quarrelling generally with the position. I am satisfied with it, ‘but I draw attention to the fact that section 92, with all its difficulties, has been elbowed out of the way, without a legal -or logical argument, on the plea that traditionally and historically the Post -Office has .been ;a matter ‘for governments.
– It had a pretty fair start against any potential competitors, did it not?
– It did have a pretty good start against any competitors, and it goes one step further, pursuant to the authority of this Parliament, by making sure that none arises, because one finds in the Post and Telegraph Act a complete prohibition upon the transport of mail for reward and upon the establishment of telegraph lines and such-like. So that, in fact and in law in this country, the Post Office not only is, but also claims to be, pursuant to the authority of this Parliament, a monopoly.
I deal with that matter first to show that there are plainly no competitors in the field, and that considerations that might well influence a government when, with limited authority over interstate trade, it may engage in a particular field of interstate trade, but cannot exclude others from that field or prevent them from entering, do not apply to the Post Office, which has no competitors. There is no need, in the circumstances, for the Post Office, which provides a great many public facilities for the people of Australia, to show a profit. It is not required ito be .fair ito :any competitor*- It has merely ‘to provide services- adequate services- fox ‘the people in accordance with its .charter. We of the .Opposition :say .that, in those circumstances., it -should be completely .adequate if the Post Office pays its way,. We do not argue against the proposition .that, by and .large, it should pay its way - =that its revenues -should equal -its expenditure. On that point, I ,am talking about its .annually recurring expenditure. I am talking about its year-by-year trading position, and for the moment only - because I shall return to it - I am by-passing the capital position of the Post Office.
A public utility like this may .well be expected to serve a ,lot of public ends. ;In fact, it does. It services and acts as agent for many other Commonwealth departments - at the cost .of the services which it renders. That, I think, if one regards it in the light in which I have presented it, is completely proper. In that light, the .provision of services at cost, without seeking to make -a profit, is completely proper. I find, when I look at the Post Office, that it is used too, for many social purposes. As the debate, I have no doubt, will show, the Post Office is used to speed up and to subsidize the distribution of news, books and information. It undertakes many activities that one considers should be provided only by a government, and only at cost. We find that the Post Office is used for the purpose of decentralizing, of overcoming the vast distances of our continent, of removing the isolation of the outback, and for many worthy social purposes, and we say that it is properly used for those purposes- Hence, we demand to know why the Post Office should be expected to make a profit.
Although we do not agree with the Government, we at least can understand it when it says that the Australian National Line, which is in competition with private shipping lines, -should in fairness be compelled to bear charges similar to those paid by the private lines. Up to a point, we can even see, or at least understand, the Government’s argument when it says that the same thing applies to Trans-Australia Airlines in the field of civil aviation, and, to a degree, we can understand when the Government applies this principle to the Commonwealth Bank of Australia– its own instrumentality - by imposing on it the burdens of income tax and that sort of thing. This is an understandable .approach, but the point that I wish to make at this stage is that it is utterly beyond understanding why an institution <of the national character of the Post ^Office, which serves only national ends for all the .people, should be called upon, not only to make profits in terms of speeches made in this Parliament before I began my speech to-day, but .also to provide capital moneys for future capital development. We say that the whole approach by the Government to this -matter is completely and fundamentally wrong.
Let me take the Senate, if I may, to the Budget speech made by the Treasurer (Mr. Harold Holt), so that I may indicate the outlook with which the Government approached this matter. As reported at page 43 of “ Hansard “ of the other place, of 1 1th August, the Treasurer adverted to the Post Office and said -
There is room for difference of opinion as to -what the true capitalization of the Post Office should .be in accounting terms, and so that the Government may have the best advice on that and other outstanding questions, we have recently decided to appoint a committee of competent outside people to study and report upon the basis on which the commercial accounts of the Post Office should be prepared.
Very largely, so far as I have read, that would be a matter of form. But the Treasurer went further, and said -
When we have the advice of that committee we shall review the whole question of Post Office finances, and we hope then to be able to determine in precise terms what constitutes the capital of the Post Office, regarded as a business undertaking, and what annual return upon it the Post Office should reasonably be required to seek.
That means a return on capital as if it were an ordinary trading business organization. The Treasurer proceeded -
In the meantime, however, it is clear beyond doubt that, since capital expenditure on the Post Office must continue to increase, the earnings of the Post Office should also be increased, not merely to meet the cost of its day-to-day services but to provide something by way of return on the additional capital.
He did not say what return. The right honorable gentleman soon afterwards gave a television interview which was reported in the press on 24th August. It was reported that he had said this -
If you are to put the accounts of the Post Office on a proper business basis, you must allow for something - say, the equivalent of the bond’s return-
Bonds return 5 per cent, or 4i per cent. - or some interest on the capital invested.
That has amounted to .some £400 million in the post-war years.
It is very intriguing fto find .the Treasurer saying, in his Budget speech, that a committee would be appointed to ascertain the -basis -of capitalization, the ‘kind of .account<ing that should be adopted and what returns should foe .expected, and to hear him, Within ‘days, -determining these matters before the nation and outside the Parliament - even -fixing -the rate of interest .to be charged.
I was alarmed when I heard what the Treasurer had to say on this point in his Budget speech and, I said that whatever further impost was to be placed on the people under the terms of the bill now before us, it was perfectly clear that the Government intended to place on the people an impost of about another £20,000,000 per annum in Post Office charges, because, if, as the Treasurer suggests, about £400,000/000 of capital has been invested in the post-war years alone, and the rate of interest charged is to be something like the bond rate - about 5 per cent. - the right honorable gentleman is forecasting an impost on the users of the Post Office of another £20,000,000 per annum for all time, just so that the Post Office will pay its way. In other discussions, he has indicated that the Post Office should also contribute something to future capital expansion. So I regard the committee that has been mentioned as being in the minds of members of the Government as a mere front for decisions already made and clearly predicated, and I think that we may expect, in addition to the £16,000,000 or £17,000,000 of the impost to be made in this financial year, an excuse that a committee recommends that interest be charged on the capital - a statement which will be made in a budget that will come before us very soon, and perhaps even sooner than the next annual budget.
Let me now say something about the capital of the Post Office, and in particular about the £400,000,000, or thereabouts, which the Treasurer has mentioned. We find that the Post Office buildings were valued at £38,000,000. The PostmasterGeneral, in his report, stated “ All these are shown at cost “ - at original cost.
Imagine a figure of £38,000,000 for all the post offices in Australia, for all the telephone exchanges and for all the innumerable facilities! The enormous amount of plant and equipment that goes into the post offices is another matter, but let us take the buildings and the sites. I have no hesitation in saying that any group of businessmen in this country would pay £38,000,000 - the total cost of the buildings - for two post offices alone. They might even pay that amount for one post office. I refer to the post offices in Martin-place, Sydney, and Bourke-street, Melbourne. The capital figure shown is completely unreal. Where is this Government tending? It says in the Budget, “ We want to see upon what proper basis the Post Office should be capitalized “. Does that mean that the Government proposes to bring up to date the values of these great post offices in every capital city, many of them built before federation, with an enormous accretion? Is the Government going to determine that sum as the capital and charge interest on it? If it is, it will be following a truly commercial principle, because we have examples all over Australia of companies taking the capital accretion and distributing it in bonus shares and additional profits to their shareholders. That has been done time and again. It behoves the Minister to tell the Parliament plainly just what the Government has in mind.
I am prepared to say that if a true assessment were placed on the buildings alone, for the whole of the Postal Department, it would be at least ten times greater than the figure of £38,000,000. It could even be twenty times that figure or more, and I am prepared to say that it might be much more than that. All I say at the moment is that the figure of £38,000,000 is a truly absurd one in relation to present-day values.
– Is the honorable senator suggesting that we are going to do that?
– I am asking: Are you? I find, when I refer to the Treasurer’s statement, that it mentions a committee to determine the proper basis of capitalization for the Post Office, and I am asking the Minister to say what has the Treasurer in mind. If he wants commercial accounts, he will go in for the capital accretion.
– What committee will that be? Who will the members be?
– It is a committee to be appointed by the Treasurer.
– Will there be members of Parliament on it?
– The Treasurer has already decided one of the most important matters for decision, namely, the rate of interest to be charged on the capital. So he has done half the job for the committee.
– Will the appointment of the committee come before the Parliament?
– Senator Brown has asked - and I shall refer him to the Minister for his reply - who will appoint the committee, and who the personnel will be. Like the honorable senator, I am exceedingly interested in that matter. He has further asked whether the appointment of the committee will come before the Parliament for consideration before the committee goes into action. There is a vast and a major question involved in this matter of capital accretion and the charging of interest to the Post Office on capital, and whether the capital should be shown in the accounts or built up in the course of time by bringing the values up to date. Those are matters plainly for the Minister to advert to. If the Government is to display any frankness in regard to this question, the Senate should be given some indication of them.
It is rather interesting to note the vast change in the mind of the Government regarding this matter. On 4th and 5th March, 1959, the Premiers and the Prime Minister met in Canberra to consider Commonwealth-State relations. The question cropped up as to why the Commonwealth used some of its annual revenues, raised by taxation, to supplement State works programmes and charged the States interest on money which cost the Commonwealth no interest at all - merely the bare administrative costs of collecting it. That became a very live issue at the conference, and the Post Office was brought into the discussion. Any honorable senator who refers to page 48 of the report of the proceedings will find a very diverting and informative discussion. I shall read a portion of it to bring it into proper context with the point to which it leads. Mr. Menzies said -
Really, the idea of us paying ourselves interest on the money that we lay out for public works is a bit humorous, is it not?
If he were directing that question to me, I would say, “ Yes, decidedly humorous for everybody except the person who has to pay the interest “. The report proceeded -
Mr. BOLTE. ; You do it in the case of the Snowy Mountains scheme, because there the States or the consumers will pay for it.
Mr. MENZIES Yes.
Mr. BOLTE. ; But, in relation to nonproductive works, you do not charge yourselves interest. It does not come into your Budget. You do not have in your Budget an item of interest on the capital revenue moneys that you have raised. We have an item of interest.
Mr. MENZIES. I wonder what the effect would be if we had.
Mr. HILEY. ; The Postmaster General’s Department would show a loss if you did that, and so would the Commonwealth Railways. 1 would like the Senate to note the reference to the Postmaster-General’s Department in the light of the present statement of the Postmaster-General. The report continued -
Mr. BOLTE. ; That would be the practical effect. The Commonwealth Railways and the Postmaster-General’s Department would show a substantial loss. Now the States are forced into the position that, if they are using these moneys for some of their services, as Sir Thomas Playford has said, the services start to show a loss, and the States are forced to put up the charges. So it does not work out as well for us as it does for the Commonwealth.
Mr. MENZIES. I understand that argument, but I do not understand the argument about what the Commonwealth ought to do. The proposition is that we charge ourselves interest, we throw into deficit a couple of great undertakings -
I invite the Senate to remember that the Post Office was one of them - that have been referred to, and we then raise the wind in order to meet that deficit - because it all comes back onto us. Therefore, charging ourselves interest is merely a complicated piece of book-keeping that does not produce one pennyworth of financial results.
– That is humorous.
– The Prime Minister said it was humorous.
– What date was that?
– The conference was held on 4th and 5th March, 1959. I have been quoting from page 48 of the report of the conference. That was only four or five months before the whole process was completely reversed in relation to the Post Office, the very matter that was then under consideration. The Treasurer now says that the Post Office should be brought up to a proper capital base, and that it should pay interest upon that capital. The Government says, “We will refer the matter to a committee, but we will tell it in advance what interest it has to charge “. It is a very bitter warning to the people of this country to see what is now in the minds of the Treasurer, and of the Prime Minister who spoke so differently only recently. It is obvious that the capital is to be boosted to somewhere near present-day values, and that the Post Office is to be called upon to pay interest on that figure. It is completely clear that there is another heavy impost coming to the users of all Post Office facilities, accordingly. That is clearly predicated in what the Treasurer said.
The Minister, in his speech, stated that costs had risen by ?30,000,000, due mainly to wages, during the period of this Government’s rule. Of course they have! These charges that are now being made are for no other purpose than to make good the sins of omission of this Government in letting inflation run wild, particularly in the early years after it took office, despite a promise to put value back into the ?1 and into pensions. The Government just dropped the reins and let inflation rn free. In 1950, when we in the Senate begged and urged the Government to take positive steps, when we moved for a referendum on prices, we were told that there was nothing the Government could do about inflation, that it was a matter for the people themselves. That was a most abject surrender on the part of this Government, indicating, I would say, the most arrant incompetence. That landed this country into every conceivable kind of difficulty in its trading position overseas, its balance of payments position, and its exchange position. If the Government had taken competent and proper steps at the right time, we would have held our cost structure and the Government would not have betrayed the solemn promise on which it was elected. The Government talks about the cost of running the Post Office. It is seeking by these increases only to cure the very ills that it let develop. I do not say that the Government caused these ills, but it let them develop to the stage where charges of this nature are now to be imposed upon the people of Australia.
-Would you say that the country has had it now?
Senator- McKENNA. - If you are. speaking about the Government, I would, say, * Yes ‘-.
– I said “ the country “.
– Let me reply to that interjection for a moment. The country had an opportunity to speak ten days ago- at Lismore. The. honorable senator likes to interject, when he sees, a point coming, but let him listen, to this. In Lismore, a State seat held by the Country Party from time immemorial - if we can count the time we have: been in. Australia as time immemorial - was lost to the Country Party. The by-election was held immediately following the Budget and the announcement of these postal’ charges- with> their additional burden on country people. For the first time Labour, which had not run- a candidate in the general election earlier in the year, won this seat from the Country Party.
– Who got the shock?
Senator- McKENNA. - The Country Party got the shock.
– Were- you surprised at your success?
– Surprised, yes. Senator Scott asked who got the shock. The answer to that is easy. The Country Party and this Government got the shock. I would be. prepared to say that this difficulty, in which, the country people are placed under an Australian Country Party PostmasterGeneral, would never have arisen had the old leader of the Australian Country Party been in this Parliament. He had a far greater political sense than his successor. I would say, too, that he had a sense of the human values involved. We see already in relation to this matter the beginning, of the disintegration of this rump party, the Australian Country Party.
– You. are talking about the disintegration of parties!.
– We shall return!’
– Who is making this speech now? Am I in it? Senator Scott introduced: this subject and I have made what- I believe to be a completely fair and wholly true statement. I mean it when r say that the people of Australia are outraged at these increases in postal charges, which will go right into their homes. They see themselves paying then* by the year and day by day. They will pay increased rental’s on their home telephones, increased telephone charges generally, and increased postage charges. While the ordinary individual will not pick up the whole burden immediately, he will carry the lot eventually, and it will be our purpose to make that plain. What will happen? The Treasurer told the world on television -
Most of the cost will be carried by industry and commerce,, and they will be able to deduct additional expense for taxation purposes. That will soften the blow to that extent.
That is quite true.
– They will pass on the cost.
– That is true. The great burden of all the increased postal, telephone and telegraph charges- will fall upon- industry and not immediately upon the little people. But what will commerceand industry do? Will they absorb the charges, or will they do exactly as they did with sales tax and: pay-roll tax? The/ passed them on, and they do not pass them, on simply. They add their margin of profit, whatever that may be. So the extra charge, plus, the margin of profit, will go where? It will go- to the people who buy all the goods and all the services, and who are. they? They are the little people. They will not pay immediately, but- eventually they, will pay every penny of the increased: charges, and more. They wil’ pay the profit- in addition. How much worse off will industry and commerce be? They will be infinitely, better off, as the Treasurer says. They will pay the charges, but they will get them back from the people, with a profit, in addition, and having paid the charges these willi be allowable as a deduction, for income tax purposes. If they are companies, as most of them would be, they will show a- profit of 7s. 6d’. in the £1 on what they pay. They will get it both ways.
– It is a rather odd profit, is it. not?
– Would the honorable: senator spell the word? Is he talking about me as a prophet?
– I shall take your own interpretation.
– It is perfectly clear that the proposition I put is right. The Treasurer affirms that having paid the amount they will get at least one-third of if remitted in tax, but in the meantime they will have passed the lot on. They will have a remission in tax and a refund of the extra cost, plus the profit on it.
– They should be very happy, should they not?
– They will be quite happy about it. The Treasurer has indicated to them that he will soften the blow. There is no escape from the proposition that the extra burden, together with a margin of profit, will be put upon the little people of the country. That is the point. Those- charges that they do not pay in their homes, in stamps, telephone accounts, and in other ways, they will pay in all the’ services and goods that they use. That is completely inescapable. Here again we have that indirect form- of taxation which is so obnoxious to people who think. Under this Budget £25,000;000. is being’ given in remissions of tax to individuals, but we find that 2,600,000 of our people will benefit, on an average, by ls. 2id. a week. The scale rises to the stage- where the 57 fortunate people - perhaps they are not so fortunate - who have incomes of £50,000- a- year or more - will have a remission of tax of £-2,000 a year or £40 a week.
– Tell us the story of what happens when income tax goes up.
– I do- not tell stories - I leave that to the honorable senator. I state facts. It is an inescapable fact that tax concessions are given in thaiway. Immediately there is an annual increase of £16,000,000 or £17,000,000 in postal charges that go back on all the little people in the- same way as the- most obnoxious of all forms of taxation, the payroll tax.
One ought- to examine how- the post office is faring with- increased charges. Some years ago, when heavy increases were made in telegram charges, we in this place foretold that there would’ be a loss of revenue and a falling off of business. What has the result been?’ Let me refer to the Financial and Statistical Bulletin for 1957- 58, showing the: numbers- of telegrams despatched* within Australia over several years. I am looking at. Table- No… 43, which shows the figures- since 1938-39. When we left office in 1949, the number of ordinary telegrams sent in a year was 28,922,000, or nearly 29,000;000. Under this Government, there- has been- a continual decline. The- number has fallen from 29,000,000- in 1949 to 28,000,000 in 1950, 27,000,000 in 1951, 21,000;000 in 1952, 19,000,000 in 1953- and- 1954. 18,000,000 in 1957 and 17,000,000 in 1958.
– What are the figures for the trunk calls in the corresponding years?
– I shall refer to them, too. Let me stay on this matter for a- minute. £ am. prepared: to concede that with the development of air-mail services, and that kind- of thing, there may be some loss of. revenue in telegrams; air mail might supplant some of them. But there is a perfectly outstanding case of killing the goose that laid the golden egg!
– What about the teleprinter service?
– The teleprinter is another factor, but is brought into account in the charges that are made for that service in the Telegraph Branch. And it has made a continuous, substantial loss under this Government!
– I think you have a very poor argument.
– Let me point to something else: According to table 26 on page 35 of the “ Financial and Statistical Bulletin “’ of the Postmaster-General’s. Department, the number of postal notes issued in 1’94’9 was 28,000,000. In June, 1950, the number was 30,000,000. We were in office for part of that year. But it has fallen steadily year by year under this Government, from 28,000,000- to 18,000,000.
– The cost has gone up.
– Of course it has! To-day, there are fewer telephones calls per person than there were in 1949. One might expect, in this country with the vast prosperity that the Government brays about from time to time, and where, according to the Government, everything is booming and everything in the garden is lovely, that people would be sending more telegrams, using more postal notes and more money orders, and making more telephone calls.
– And they do not; they use fewer! Let me refer now to table 39 to see how we fared with telephone calls in the period. We find that this great monopoly, this great public utility that is supposed to be there to serve the people of the country, is serving relatively fewer and fewer year by year under this Government. It is not a public service at all now. It has been ruined under the management that has operated it and directed its policies.
Table 39 gives particulars of local calls per subscriber’s line. In 1949, they numbered 1,161. To-day they number only 982. Under this Government, the number of local calls has fallen year by year. For the various years, they were -
– But look at the trunklines column.
– I agree that the trunk-line figure has grown.
– How much?
– Give us the figures.
– I do not conceal the figures. I have them before me. The number of trunk-line calls has grown from 64,000,000 to 112,000,000.
– They have nearly doubled.
– Yes, trunk-line calls have nearly doubled.
– What is the revenue?
– The honorable senator can go ahead with it. I do not attempt to conceal that there has been an improvement there.
– How much?
– A corresponding one. You tell us.
– It has increased from £4,000,000 to £19,000,000.
– That may be so. I am making the speech, and I am saying that the review is eloquent. When one looks at item after item as it relates to the ordinary individuals of the country, we find that more and more of the ordinary people each year are using fewer and fewer of the facilities the Post Office provides. That is not a proud record for the monopoly, for this great public utility that should be serving more and more people with more and more facilities.
Our friends on the Government side point to trunk-line calls. I emphasize that they would be mainly press calls or business calls in the highest degree. They are calls made by the press and business undertakings. They are calls made by people engaged in trade and commerce. It is fairly safe to say that all those trunk-line calls that have been made so buoyantly in this period have been made at inflated charges and those higher costs have been added to the burden borne by the little people of this country in the costs of goods and services. Of course, these trunk-line calls have been made but not by the little people, not by the multitude, not by the people who might want to send letters and telegrams or use money orders and postal notes. The use of those services by the multitude has fallen, and I am submitting that the Government has not a very proud record in this respect.
Let us compare the profits of the Post Office under the Labour Government with the position under this Government. One can see the decline almost at a glance. Table 13 shows the trading results. I am looking now at the postal column as against the figures relating to the telegraphic and telephonic activities of the Post Office. That shows a big average yearly profit of approximately £3,000,000 from 1941 to 1948 and in the following year there was a drop to approximately £250,000. The details are -
Now let us look at one of the reasonably lucrative avenues of the Post Office. The present Government took office late in 1949 and since then there has been a long line of losses. There has not been one sign of profit in the postal section in any year since then. For instance, in 1950 the loss was £1,153,559. In 1951 it was £1,813,169. In 1952 it was £544,662. It increased to £2,416,818 in 1953. In 1954, the loss was £1,849,631. The total losses shown by the postal section under this Government up to 30th June, 1958, were £17,000,000.
I invite the Senate to look at the table relating to the telegraph branch, a most difficult branch. The Labour Government showed profits in this branch during its term. Certainly we were in office in an unusual period, a period of war, but the table shows that for every year from 1941 to 1947 this branch showed a profit under the Labour Government. There was one year in which the branch showed a loss. That was a loss of £325,949 in the year 1948. In 1949, that loss increased to over £1,000,000. When we look at the record of this Government, however, we find that there has been no profit at all. Whereas there was a line of profits under the Labour government, the record of the present Government is a completely unbroken line of losses. That is the story of the Post Office under the Menzies Government - losses all the way through and fewer facilities for the people of the country. I think that table gives the picture particularly well.
– What do you attribute those losses to - staff?
– Certainly not to the staff. The staff is smaller now than ever before. I pay great tribute to the officers of the Post Office for their forward planning, for their readiness to adopt modern methods. They have done a great deal to absorb the extra cost in which this Government has involved them. I pay them a marvellous tribute for that. But for the men who operate the Post Office, these losses would be so enormous that they would be shrieking to high heaven. It is only by their efficiency that members of the staff have kept the losses in order at all and saved the face of this Government in any degree.
– You still have not answered my question.
– Will the honorable senator please repeat it?
– To what do you attribute those losses?
– I say to the honorable senator that one of the factors has been the high charges which have forced users away from the Post Office facilities. I remind him that it might be very good business for the Post Office, and a good way of overcoming these losses if, instead of increasing charges, it reduced them and let more people come into the field. That has been done in industry. I have told the story in this place more than once of how Henry Ford, in the old days, from time to time reduced the selling price of the T-model Ford below the cost of production. His executives thought he was mad, but what happened? The company obtained vastly more orders, enabling it to go ahead with quantity production, which, in turn, brought costs down. The company sold at a lower price and made smaller profits, but it sold a greater number of units and, as a result, made a bigger overall profit than ever.
– Can you give me an example of a similar nature in your recent experience of any Ford branch?
– If the honorable senator can give me any reason why I should do so, other than his desire to divert me from my purpose at the moment, I would be very happy to do it. Let me come back to my theme. I am trying to answer Senator Wade, who took me to task for not answering him. One reason for the losses by the Post Office is the high charges that have been made for telegrams and telephone calls. I suggest that the Post Office would have done infinitely more business if it had kept its charges down. One of the great faults of this Government is that all the time it has kept pushing charges up and all the time has been concerned about interest. What stupidity it is to talk of notional interest on money that has been paid to the Post Office! The Treasurer has told .us that £400,000,000 has been paid since the war, but when I look at the financial statements of the Post Office I cannot verify that figure. I can account for about £310,000,000* but I defy anybody here to find £400,000,000. It appears that there are items appearing in the appropriations for other departments that include capital sums for the Post Office, and I understand that the figure of £400,000,000 is correct. As the Treasurer said, all of it has been provided out of revenue and has cost the Commonwealth nothing other than the mere administrative cost of collection. It is -not borrowed money.
The proposal is that interest shall be charged to the Post Office on that money. I never heard anything so fictional or fantastic in my life. It is really absurd. As the Prime Minister said, it is humorous. The Herbert Committee that sat in 1956 to investigate electricity undertakings in the United Kingdom said that it was utterly inequitable to ask the consumers of electricity - in this case we are considering the users of the Post Office in Australia - to provide the capital for future expansion.
This Government is interest-mad. Senator Spooner and I have differed on the question of interest payable by the Snowy Mountains Authority. Let me deal with that. I complained about the interest that was being charged in that case. The Minister answered my complaint and gave the startling information - it was accurate, I have no doubt - that 80 per cent, of the cost of electricity produced in the Snowy Mountains was due to a fictional interest charge imposed on the Snowy Mountains Authority. That shows how interest increases charges. Senator Spooner made the very good point that if we did not charge the Snowy Mountains Authority this interest, we should throw its charges for electricity out of relation with those of the States, whose undertakings are financed with loan money, upon which they have to pay real interest. He said that it would be utterly unfair to cut in under them. I can go that far with him, but this Government fails because it does not take the next step and say. “ We charge interest to keep things on an even keel, not to discriminate in favour of some people in Australia by using national money and letting the others go to the wall “. The Government imposes an annual interest charge of £5,000,000 or £6,000,000 - it may be more now - on the Snowy Mountains Authority. Did it ever occur to the Government that it has a duty to keep costs down in this country and that, it might apply that £5,000,000 or £6,000,000’ coming in from the Snowy Mountains Authority to subsidize all governmentowned electricity undertakings in Australia,, so that everybody’s electricity costs could be cut down - the people in their homesand the people in industry? There may be a reason for charging interest in the case of the Snowy Mountains Authority, but the Post Office, which has no competitor, has no similar problem in determining its charges. What is the idea of saying that the Post Office ought to pay interest when its functions are those that I described earlier in the course of this talk? I would be interested to know what is in the mind of the Government. I strongly .urge the Minister to say, when he replies to this debate, what is in the mind of the Government with regard to bringing up to date the capital cost of the Post Office and imposing an interest charge at bond rates on it. When is that penalty to be imposed on the people of Australia? It is coming. If anybody has read the Treasurer’s speech, or has listened to him, and cannot see that it is coming, he is blind. The Government is paving the way for further increases in charges.
One is unhappy about the whole position when one sees in a considered Budget provision made for increased charges in relation to bulk postage and then, within a week, sees the Government beating a most undignified retreat. The Prime Minister made a most unprecedented remark on this subject. He said, “ We were somewhat in the dark.” He did not know what was meant by the charges. He was very much in the dark, but the difficulty is that the people of Australia are in the red as a result of his being in the dark. The Government had to recant within a week. It had to recast its Budget proposals because of the harm and the injustice they would have done. I am saying to the Government now that in its proposals to increase the capitalization of the Post. Office and to charge interest, it is doing a great disservice to the people of Australia from every viewpoint. It is denying them facilities that should be made available to them more and more freely. It is boosting inflation. It is adding to the costs of industry and those increased costs will be reflected in the prices of Australian goods sold here and overseas.
We must face the fact that the accounts we look at do not really show the basis on which the Post Office is allowed to operate. I refer to the balance sheet and the profit and loss account. Every penny that is collected by the Post Office is paid into Consolidated Revenue, and every penny that is spent is appropriated from Consolidated Revenue. The Post Office does not handle its own money and it does not build up its own reserves. It builds up fictional or notional reserves.
The accounts for last year show an overall profit of £4,010,000, but that is not the true profit. Let us consider superannuation. The Post Office paid £2,000,000 in the year in respect of superannuation payments to past employees, but it transferred an additional £2,500,000 from profits to a reserve. Why was this done? It does not matter why, but the net result was to conceal the profit to that extent. When I use the word “ conceal “, I am not using it against the Post Office in an invidious sense. I am simply saying that it transferred this £2,500,000 to a reserve in the year at which I am looking. In that year it actually spent £2,000,000 on superannuation payments. That was all that it was required to obtain from the Treasury to pa-y the superannuation of its employees for that year, but it put away an additional £2,500,000 for a reserve in case it had to pay more at some time in the future. It is the practice of the Post Office, year by year, out of its revenues, to pay the whole of the superannuation cost in that year. Where is the need for any reserve? Why take out as much again in case something goes wrong? To the £4,000,000 profit for the year 1957-58 that we have under review, we can immediately add £2,500,000 overtransferred in respect of superannuation. We can add the best part - I do not say the whole - of an amount of £1,700,000 transferred by way of excess depreciation. A sum of £8,500,000’ was appropriated for depreciation. Not all that sum was required when transferred to the equalization account to cover renewals, demolition or property and the rest. There is a balance of £1,400,000 which also goes over to reserves, and the major part of that would have an element of profit that should properly be added to the £4,000,000.
So we reach the position that a profit of £4,000,000 is disclosed. Add to it an amount of £2,500,000 in respect of superannuation, another £1,700,000 in respect of excess depreciation - or equalization account, if you like. We come to one more figure. This great utility works at cost for other government departments of all kinds - their names and titles are set out in the financial statement and T need not repeat them. The value of transactions carried out on behalf of these bodies and government departments alone was £253,327,266 in 1957-58. If the Post Office is to be run on a commercial basis, why does the Government demand that it should do that work at cost? Why cannot that be in the profit element, too? Is it unfair to suggest that the Post Office should make a profit on those activities? Why; when the Post Office does all this work,, is it tied down to the bare cost of performing: services for all the other departments? On these transactions amounting to £253,000,000, the Post Office earns only £1,100,000, which is less than 5 per cent. If this work were being performed on a. commercial’ basis, the Government departments and the Commonwealth Bank would have: to pay the Post Office 2i per cent. On the basis of 2i per cent, of £253,000,000, the Post Office would receive £6,000,000 for this work. Accordingly, if the remuneration were based on a commercial actuarial calculation the profit of the Post Office would be enormous.
Let me repeat this analysis. A profit of £4,000,000 was: disclosed. Add to that sum £2,500,000 in respect of superannuation, £1,700,000 in; respect of excess depreciation or balance in the equalization account; and another £4,000,000 to £5,000,000 for work performed for’ other departments. Who says, on a. proper commercial accounting basis from beginning to end; that the Post Office is not making a profit?’ I claim that if its present operations’ were placed on n proper commercial basis it would make a profit vastly in! excess of the profit now disclosed.
The ACTING DEPUTY PRESIDENT (Senator Pearson). - Order! The honorable senator’s time has expired.
– The duty of Her Majesty’s Opposition is to oppose, and we do noi expect, in a debate on a legislative enactment that contemplates increasing postal charges, to receive words of commendation from the Opposition. But I do think it is fair to claim that the Leader of the Opposition (Senator McKenna) did not go about the establishment of his case in the logical, methodical fashion that we have come to expect from him. We pay him the tribute that when he opens a big debate or a debate on a big issue he generally outlines the problem and proceeds to the attack in a methodical way. We pay him tribute for his methodical approach, even though I can never understand the logic which impels him to reach the conclusions that he subsequently reaches.
On this occasion, 1 think it fair to say that his case has not been established in that way. For instance, he devoted a good deal of his time to expressing his views upon interest charges, which, I think, are not of the great significance that he attempted to attach to them. Senator McKenna quoted what the Treasurer (Mr. Harold Holt) said in his Budget speech about the proposal to appoint a committee to inquire into the basis on which the commercial accounts of the Post Office should be prepared without mentioning what seem to me to be three important paragraphs which qualified what he said. The first paragraph was one to the effect that over the long period of time from federation to the end of the Second World War the Post Office earned substantial surpluses, which enabled it to pay off its capital debt, and to make sizeable contributions to revenue. The second paragraph stated that it was obvious that the capital expenditure of the Post Office must continue to increase. The third paragraph stated that it was necessary for the Post Office, from the nature of its responsibilities, to render services the cost of providing which Was greater than the revenue received from them, and that this must be offset by revenue obtained in other directions.
This leads me to the conclusion that in the long while honorable senators on the other side have been sitting in Opposition they have lost touch with the realities of the position. In terms of Post Office techniques and administration, and in terms of the demands that the Post Office makes for modern machinery and all that goes with it. the days of 1949 were really horseandbuggy days in Post Office administration, just as they were horse-and-buggy days in so many other directions. Post Office thinking must be brought up to date. One of the main purposes for which the committee is being established is to have a look at the situation in the light of the tremendous capital investment that it has been necessary to put into the Post Office and in the light of the very great capital investments which are inevitable in the future.
– We are getting a bit up in the air now.
– We are never up in the air about this matter; we are always down to earth. You have to be down to earth these days. As Senator Courtice will know, having held ministerial rank, it is one thing to be high, wide and handsome when you are in Opposition; it is another thing when you are in office and have the responsibility of government.
– Who will comprise the committee?
– In reply to the interjection, I can only say that the committee has not yet been appointed, and that being so I cannot take the matter any further.
Let us try and look at this matter in perspective. What the bill contemplates is the increasing of postal charges to the tune of some £10,000,000 this financial year, and £16,200,000 in a full year. That is a large amount, but it does not seem so large when it is contrasted with the general level of prosperity in the community - a prosperity which is continually irksome to the Opposition but which it has not yet been able to gainsay. Nor is the proposed additional revenue large when it is contrasted with a Budget which contemplates the expenditure of approximately £1,700,000,000. In other words, times have changed. The Post Office has had to be modernized; there is a continuing demand for improvement. We must move with the times and ensure that the cost of this is met, in reasonable measure, from revenue.
I shall not enter upon the well-known field of interest charges; I have been through that before. However, I would remind honorable senators that there is a difference between the taxpayer and the user of the Post Office, just as there is a difference between the taxpayer and the user of any other government utility. In short, it is necessary in some way to hold the balance as between users of government utilities and taxpayers. Let me make this further point: There are, generally speaking, two ways of providing the extra capital that is needed by a utility or business. The first is by increased revenue or borrowing, and the second is by cheeseparing in administration. I should like to utter a word of warning, through this Senate, to postal employees. They will need to be careful indeed that the Utopia which the Leader of the Opposition (Senator McKenna) envisages does not involve cheeseparing within the department and the lowering of standards of efficiency, conditions of employment and living standards generally. We must adopt a forward and progressive approach to Post Office administration, and that approach must be equitable to all sections of the community, to users of the Post Office as distinct from taxpayers. This, in the judgment of the Government, is the reasonable way of solving the problem.
It might be as well to begin by looking at what the bill proposes. It contemplates increasing charges designed to result in a net gain in revenue of £10,000,000 this financial year and £16,200,000 in a full year. One should also look at the effect of the proposed increases. They will yield revenue amounting to £119,700,000 in 1959-60 against an ordinary service expenditure within the Post Office of £109,000,000, to produce a cash surplus of £10,000,000 per annum. That seems a substantial sum until one remembers that this year the need for capital funds amounted to £39,400,000. If all goes well, and the surplus is realized, the funds needed for capital works and services will still have to met. in part by the taxpayer.
– Is the surplus of £10,000,000 expected this year, or in a full year?
– In this financial year. In other words, the pessimistic comments of the Opposition notwithstanding, the Post Office is in circumstances similar to those of most other businesses in the Australian community. It has need for substantial capital expenditure to meet the demands, first, of a growing Australia and, secondly, of a more mechanized and uptodate Australia. The Post Office, in seeking a surplus of £10,000,000 to help meet its need of £39,400,000, is merely doing what has been found necessary by most other great public utilities throughout Australia. Looking at my colleague Senator Wright, I am reminded that the charge made for electricity in Tasmania includes provision for expenditure on further capital works.
– Provision for replacement, not expansion!
– I think the honorable senator will find that the charge makes provision for expansion also. That situation is occurring not only in business but in government utilities.
– I could not accept the assertion as to provision for expansion.
– I believe it to be true, but I should have difficulty in proving it to the honorable senator. Those charged with electricity generation have admitted the need to provide for that aspect.
These funds have to be drawn from some source, be it the taxpayer or the user of postal facilities. Let me illustrate the need for additional funds, using as a yardstick the demand for telephone services. Each year, 12,000 new applications for telephones are made. This year the total demand was for 160,000 services.
To instal each telephone service involves capital expenditure of approximately £300. To me, that is a surprising figure.
– Is not that section of the department paying?
– I am speaking at the moment not so much in terms of profit as of capital requirements.
– If they are now showing a profit-
– No matter .what profit you are earning, it does not decrease the need to provide capital so that you may earn a profit. You must have the capital provision first. The cost of the demand for new telephone services has risen at the rate of £3,600,000 a year - not a total sum of £3,600,000 a year, but an increase of that amount.
I think it is true to say that the Post Office is the greatest single governmental activity. It has more than 86,000 employees; its operating and maintenance expenses exceed £100,000,000 per annum. Australian citizens, through Consolidated Revenue, have invested, in post-war years, no less than £400,000,000 in the Post Office. The taxpayer, as distinct from the user of postal services - and his interests have to be considered - has received not one penny piece of interest on that £400,000,000 to reduce his taxation liability, nor has he had back any repayment of that principal, that capital investment. In those circumstances, I find it difficult to accept any argument other than that there is need for a new approach, a need for the Post Office to yield a greater return than it has yielded.
– So it means that, aftei 58 years of governments of various political colours, this Government now says, “ Interest has to be found on capital so far as the buildings of the Post Office are concerned “.
– The interjection shows that Senator’ Kennelly does not understand the situation. It is stated in the Budget speech that for a long period the Post Office made a contribution, but in the transitional stage, in the post-war years, that has not been done. What is in contemplation is some comparatively small contribution towards what is wanted.
– What has caused the change in the position?
– I have dealt with that. Apparently the honorable senator was not then in the chamber. I did so in proving - I hope not offensively - that the Leader of the Opposition had looked at this matter from the point of view of 1949, when conditions were in .the horse-and-buggy stage by contrast with the conditions that exist at present. But I shall never finish my speech in the time allotted to me if J answer rail .the interjections that are made.
I want to make the point, as have otherhonorable senators, that in no circumstances do I place blame on the employees of the Post Office. With a vast service in which there are 86,000 employees, no one would defend every transaction, but there is no doubt at all that the Post Office has done a good deal to improve its efficiency. During the past three years Post Office traffic has increased by 20 per cent., while the staff has increased by only 8 per cent. The number of man-hours of labour involved in installing a telephone has been reduced from twelve, as it was in 1948, to 8.3 in 1958.
– Does the honorable senator know whether those figures refer to total installations?
– I cannot say.
Sitting suspended from 5.45 to 8 p.m.
– I resist the temptation to reiterate or elaborate the arguments that I advanced before the suspension and I shall continue my remarks from the stage I had reached. I was posing for the consideration of the Senate that it was really a nice point to determine the extent to which the taxpayer should provide funds for new capita] outlays by contrast with ‘what should be provided by the users of the service. They are not indentical people. I made that point earlier. Some use the Post Office facilities more than do others. Some get Post Office facilities at low rates and use them comparatively seldom. I think it is a sound view to advance that taxpayers generally should not be expected unduly to provide below cost a service which they themselves do not use. That has been the position to date, and a fine point is: To what extent should we move away from that position, in justice to the community generally?
I was interested to notice that in the debate on this bill in another place the Deputy Prime Minister (Mr. McEwen) advanced and discussed the same point of view. He pointed out, amongst other things, that it was ‘necessary to have some clear thinking on this point, because it was the policy of the Government and of the Post Office to improve the service that the Post Office provides. That brings in its train the need for increasing capital investment. The Deputy Prime Minister mentioned, amongst other figures ‘illustrating the volume of transactions, that about 160,000 new applications for telephones could be received in the current year. I shall return to that in a minute, but 160,000 applications for new telephones present <a demand that has to be met in some logical form. He went on to say that in spite of this great demand, outstanding applications, which four years ago were 86,000, had been reduced by over 50 per cent, to 41,100 now. It is symptomatic, I think of the progress and forward-looking in the Post Office, and of the Government’s support of the Post Office, that the arrears are being overtaken in the face of such a tremendous demand.
For my part, I should like to pay a tribute to my colleague the PostmasterGeneral .(Mr. Davidson) for the zeal and enthusiasm he has brought to his portfolio. When I hear the Leader of the Opposition say that, as a result of this legislation, there is some rift in the lute between the Australian Country Party and the Liberal Party, all that I can say in reply is that, so far as the Opposition is concerned, the wish is father to the thought. Nothing is further from the realm of reality, and one pleasure 1 should like to have this afternoon would have been to hear the throaty chuckle from Sir Arthur Fadden -at the suggestion that he would have done better in these circumstances than his old friends and colleagues, Mr. McEwen and Mr. Davidson, are doing. He was too long in the heart of politics to be taken in by that sort of attempt to sow discord. I made the point earlier - and I repeat, because it is worth while saying again- that I believe it to be true that the Labour Party, because of its long period in opposition, is out of touch with events. I shall reply to two points that Senator McKenna made.
– Sheer humbug!
– Listen to my reply to his criticism and see whether it does not substantiate my point. Senator McKenna gave statistics to show a decline in ‘telegraph business. No picture of the decline in telegraph business is complete without taking into consideration, modern .conditions, with the increased use >of the teleprinter, the increased use of air mail facilities, and the increased use of telephones, lt would have been more appropriate if, -instead .of citing figures -of decline, he .had .said .that in the period that he cited the trading results of the telegraph section of the Post Office had been so transformed that a loss of £1,250,000 per annum had been reduced to a loss of £330,000 per annum. I should be the first to admit that one cannot measure the service of public utilities by profit and loss, but I should be the last to admit that in a. big organization like the Post Office, which prides itself upon its efficiency, and which provides a career for so many able public servants, there is not justification for a great deal of pride and satisfaction in the fact that it has been so able to order events as to make that tremendous improvement, reducing the loss from £1,250,000 a year to £330,000 a year.
– In telegraphs it was on account of the revolutionary machinery that was introduced.
– Are we to stand in the path of progress? Should these machines not have been introduced?
– Yes, but I want you to tell the full story, not half of it.
– The point I was was making is that it is due to these influences. Senator McKenna gave further figures, as I understood them, showing the decline in the number of telephone calls per subscriber. Those figures, too, are misleading. One gets the correct picture only by looking at the overall level of telephone calls. During the period for which he gave figures, the total number of telephone calls increased from 972,000,000 to 1,300,000,000, so there was an increase of some 45 per cent, to 50 per cent, in the total volume of telephone calls. The fact that there was a smaller number of calls per telephone was entirely due to the fact that, with the great increase in the number of telephones installed people were not using each telephone to the extent to which it had been used before the increased services were available. Indeed, one of the practical problems that faces the Post Office is in the fact that private telephones, which cost approximately £300 each to install are, when installed, perhaps used only two or three times a day. But in fact the total volume of telephone calls has increased by 4.5 .per -cent .or :50 per cent. There has been a certain amount of criticism .of the fact that postal charges have been increased. Before I .deal with -that criticism .let me say that I think that, to present a balanced view, we should consider the benefits as well as the increased charges that are contemplated.
This is not a question of one-way traffic. Great benefits will be provided to the users of the Post Office. Take the extension of air mail services as an example. Very shortly, we shall be in a position at which letter form airmail will be carried without surcharge. The Post Office estimate is that no less than from 150,000,000 to 200,000,000 extra letters will be carried by airmail. It is estimated that very nearly 25 per cent, of letter form mail will be carried as airmail in future instead of by other methods. At present, only 7 per cent, of letter form mail is carried as airmail.
I hope that I do not have to enlarge in great detail upon the benefits that this will provide for the community as a whole, but for the residents of country areas in particular. On the average, they will get very great benefits, indeed greater benefits than the residents of metropolitan areas.
– But why should not the cost be borne by those who benefit instead of by the users as a whole?
– I have been pointing out all along that the great difficulty is to draw the line of demarcation between what should be borne by the users and what should be borne by the community as a whole. Our proposal will give tremendous benefit to the country areas. People of the outback whose mail very often is carried first by road contractor to the rail head and then by rail to cities and. towns, and then perhaps by rail again to capital cities, will have their mail delivered in future by air in a matter of hours instead of days. I do not need to amplify to honorable senators from the outlying -States - Queensland and Western Australia - what a benefit it will be to be able to get postal matter by air instead of by other methods.
One point that has been overlooked and which I think is worth making is the boon that our proposal will confer on the residents of capital cities. At the present time, letters, when posted at the end of the day’s work in the ordinary way in one capital -city for despatch to another capital city, take some days to arrive at their destina tion. For instance, a letter posted on Monday at 5 o’clock, 5.30 or 6 o’clock in the afternoon gets to the capital city to which it is addressed on the Wednesday. It misses perhaps the afternoon mail and the night train and therefore will not arrive at its destination until the Wednesday. Under our proposal to carry them by air at the ordinary rate, letters posted in the capital cities on one afternoon will be delivered in the other capital city the following morning. Add to that the fact that all other articles except letters, packets, parcels and publications, will be sent by air in future on payment of a surcharge, but that surcharge will be only half th? present surcharge rate. Under the proposed re-arrangement of categories, all mail carried by air in future will bear a smaller charge than at present.
I am not walking away from the situation that, on the whole, the proposals set out in the bill increase postal charges, but I do point out that it is a balanced programme. It provides benefits; it portrays evidence of progressive administration of the Post Office.
There will be no increase in the basic rates for telegrams. I do not want to recapitulate the great steps forward there will be in the provision of better and more telephone services. I think the Minister stated in his second-reading speech that in the view of the administration of the Post Office the new and simplified telephone arrangements will add up to avoiding additional operating costs of between £30,000,000 and £40,000,000 over the next ten years. I am concerned to establish that, as I said before, this is not a question of one-way traffic. It is a question of progressive administration which is seeking, fairly, additional income with a programme ahead of it which justifies the confidence of granting to it that increased income, because that programme indicates that the additional income will be spent wisely and in providing better services.
The other side of the picture has to do with postal increases, and I shall recapitulate them as quickly as I can. The existing rate of 4d. for the first ounce for letters and lettercards will be increased to 5d. The charge for each additional ounce will be raised from 2Jd. to 3d. As to publications registered at the General Post Office, the general rate of 2£d. for the first 6 oz. and 2d. for each additional 6 oz. for registered Australian books, newspapers and periodicals posted as single copies will become 5d. for each 8 oz. The rate for these publications, except books when posted in bulk, will be 5d. for each 12 oz. but on the total weight of the consignment, irrespective of the number of individuallyaddressed postal articles contained in it. I have further notes as to other additional charges, but I do not propose to go through them. 1 merely recite them to make it quite clear that I am not attempting to gloss the picture over. I want to present the pros and cons of the situation.
Nobody likes to increase postal rates, but I do think it fair to say that my advice is that after these increased rates become operative postal rates in Australia will compare favourably with those throughout the rest of the world. We have some small disadvantages in pinpointing contrasts. For instance, it is not fair to contrast the basic rate, which will be 5d. in Australia, with the 3.75d. in England and New Zealand because Australia, in area, is so much greater than those countries. Australia is something like 30 times the size of Great Britain. But when we turn to Canada, where conditions are comparable, our basic rate of 5d. compares favorably with 5id. in that country. I am told that that is a fair comparison and that after these increases are made Australian postal rates will compare favorably with postal rates throughout the rest of the world.
I should like to deal in particular with one aspect upon which I think some extravagant statements have been made. I refer to the proposed increases in the rates for periodicals and newspapers. I remind the Senate that on both these activities substantial losses have been incurred by the Post Office over a long period of years. If my memory serves me aright, the Opposition, when it was last in government, increased those rates by no less than 100 per cent, in 1949. That indicates the order of the problem that these activities present to the administration of the Post Office. In 1951 this Government increased the rates also by 100 per cent. Very large increases in the rates for this particular category were made because the items included were being carried at such low rates in the past. The actual situation is that the increases which will be at the rate of 5d. for each 12 oz., becoming operative from March 1960, will affect postage rates for weekly periodicals in this way: The postage for a copy of a periodical weighing 1 oz. will be increased by 5d. per annum: for one weighing 2 oz., by lid. per annum; for one weighing 3 oz., by ls. 4d. per annum, and for one weighing 4 oz., by ls. 9d. per annum. I am told that many, if not most, of the weekly country newspapers weigh 2 oz. or less. The increased postage rate for a copy of a weekly country newspaper weighing 2 oz. or less will amount to lid. per annum.
It is an unpleasant task to have to increase any rates. We have great joy and satisfaction when we can increase social service rates. Nobody objects when the basic wage is increased. We all know the satisfaction that occurs then. The increases in the present case have been subjected to a lot of criticism, and extravagant statements have been made to the effect that they are going to put country newspapers out of business, but I have just shown that for a weekly country newspaper weighing 2 oz. or less the total increase in postage will amount to lid. per annum per copy.
Further criticism has been levelled against the increase in the postage rate for greeting cards. It is necessary to remember that the possibility is that a substantial proportion, if not the majority, of greeting cards, are sent at the ordinary postage rate, because generally there is a written message on the card and so it attracts the ordinary postage rate. Most people send their greetings on a personal basis. Greeting cards are expensive to handle. They are of odd sizes and are sent in large envelopes. I believe that the statements that have been made about the effect of this increase upon the printingindustry have been very exaggerated.
I have tried as best I can - I will not rise to the height of saying that I have done so impartially - to put the pros and cons of this legislation before the Senate. It is three years since the Parliament last approved of variations in postal rates. Many of the existing postal rates have remained unchanged for eight years, extending back to- 1951. Since 1951 increases in the basic wage alone have added £22,000,000 per annum- to the cost- of conducting the’ Post Office’. Adding other increased costs; we find that since 1951 the cost of conducting the Post Office and its various activities has increased, by no less, than £30^000,000 a1 year. Since 1951 two sets- of increases have taken place. In 1955 the cost’ of public telephone calls- was increased-, yielding £475,000 per annum: In- 1956 more far-reaching alterations to> charges’ yielded an additional revenue of £7,250,000’. Let me contrast the increase in costs with the increase1 in charges. Since’ 1951- the cost of administering, the Post Office- has increased by £30,000,000 per- annum, while revenue has increased by only £7,750000 per annum.
We need to remember also the extraordinary large demands for capital investment in the Post Office. I pointed out earlier that the provision for that capital investment this- year- is £34,900,000” and that the increase is proceeding at the rate of £4,000.000 per’ annum. So if we put £34,900,000’ on one side this” year for capital works and services for the Post Office, the demand will be about £38,900,000 twelve months’ hence. I have pointed out that the community as a whole is receiving from the Post Office no return by way* of interest and repayment of that Heavy capital” investment: The total of the increases now proposed, is of the order of £10;000,000. for the remainder of this year and £16,000,000 in a full’ year. The. Post Office, on its current trans? actions, is making only a small profit, without any provision for interest and without any provision for the repayment of the capital invested in it. In those circumstances,. I feel sure that I have established an extremely strong, case, for this legislation.
I conclude on this note: I said! earlier in my speech that the. Post: Office is probably the largest government activity of all, with some: 86,000 employees on its pay-roll. The point I wish tor put to the Senate is that, you cannot run an enterprise, of that magnitude in an. undecisive fashion. You have, to move forward with the times. You have to provide the equipment that is needed, and. you: have to maintain, the: morale of the people in the organization.. There, is no place for. indecision; about whether funds, should, be provided. There* is- surely every justification, for saying that those funds should: be- provided in. an equitable- fashion.
The obligations of- the- users- of the Post Office- should’ be measured alongside the obligations of the community as a- whole. When you approach* the- problem from that point of “ view, I- submit the increased charges are- justified.
.- As one who was privileged to be associated with the Post Office, from 1945 until. 1949, I can. agree with the: Minister for National Development (Senator Spooner) that it is the biggest: and most, competent department in the whole, of the government service. As one who has. travelled extensively, in, the different States- and seem for himself the manner in which the work of the Post Office is done, L have no- hesitation- in endorsing what Senator Spooner has said in that respect, but I do not endorse what he has said about the need for the additional charges. The Minister for Repatriation (Senator Sir Walter Cooper) stated’ in his second-reading speech that the proposed increased charges will produce additional revenue of £10,700,000 in that part of the financial year 1959-60 in which they will operate and £17,400,000 in a full year; The Minister’s speech occupied twelve typewritten’ foolscap pages. It is obvious that the officers who- compiled’ it had’ much longer time in which to’ study the proposals than honorable- senators’ will’ have: How can’ we justify our existence if, for all practical purposes; we act as a rubber- stamp to set approval on the Government’s decisions and’ endorse’ without question the proposed increases?
The Leader of the Opposition. (Senator. McKenna) has pointed out that the Post Office is a government monopoly;’ it has no competition’. Therefore, it is in a position to control its finances’ in a manner that should be acceptable to the people; But it does not do so. As far’ as I am able to judge, the Post Office; as such, has always paid its way and recovered its capital cost. Apparently the Government now intends that the Post Office shall make a Big profit. As< I> have said before in this chamber, profit can be made only- by underpaying the workers’ om the- job and overcharging the customers; there; is no other way of making’ a1- profit. And that; is: exactly what is proposed to: be done in this’ instance. F have noticed- that the: people who speak: so learnedly about profits, in. an attempt to justify the making of big profits, never say precisely how profits are made. If working men and women employed by the Post Office or in any other industry were paid according to the value they create by their labour power, very few people would be wealthy as a result of the appropriation of profits made possible by the working people. In the last analysis, on the whole, profit amounts to so much unpaid labour. A government monopoly cannot justify that state of affairs. I contend that in a government monopoly such as the Post Office and the railways, the charges should be in conformity with the actual expenditure on labour power employed, materials and the cost of maintenance. No more should be charged. If more is charged, other people are penalized.
The Minister stated that there has been a big increase in costs, and he referred particularly to the recent increase in the basic wage. I shall repeat what I have said previously in this chamber. There is no real increase in costs at all. If anything, costs have been reduced. Senator Spooner correctly implied that costs are reduced to the extent of the man-power saved when additional work is performed by machines without extra cost. Therefore, what we have been told - that there has been an increase in cost’s - is not true. Reference has been made to the recent increase, socalled, of 15s. a week in the basic wage. As I have said previously, in my opinion and according to the official figures, there has been no increase whatsoever because today the Australian £1 is only worth 3s. compared with the £1 of 1914. When we multiply the present basic wage of about £14 by 3s., we obtain a result of 42s., which was the basic wage in 1907 in terms of gold.
Costs can be measured in value only in terms of labour, time or gold. Other increased costs, so-called, are simply established by book-keeping processes for the purpose of misleading people who do not understand the position fully. I must say that this is done most ingeniously and successfully. For example, hundreds of women cleaners are employed permanently on a part-time basis by the Postal Department, Irrespective of the period of time that they serve in this capacity, they are not entitled to long service leave. Usually they retire at 60 years of age. In recent years, with the introduction of cleaning -machines, these women have had to clean more rooms than formerly. They have not received an increase of pay and, as 1 mentioned a moment ago, they have no long service leave entitlement. Senator Spooner and his supporters must feel proud of the fact that these women are kept on the lowest possible level. Most of them are widows, or deserted wives with children, or have invalid husbands. Yet this is the way that they are imposed upon by the Postal Department. Of course, I am not blaming the officers of the department, of whom I know many; I meet some of them pretty well every day in the week. They have told me that they would not have a bar of the proposed increased charges, which are to be imposed in conformity with the Government’s policy of subordinating, exploiting, and impoverishing unfortunate women so that they will remain on the lowest social level. This is what is happening in our prosperous community - to use Senator Spooner’s term. This may be Senator Spooner’s idea of prosperity, but it is not mine. I do not believe in impoverishment, in conformity with the policy of the Government, which is preventable. That applies to male workers also.
I was a tradesman in the horse and buggy days to which Senator Spooner has referred. The work that I did then, for which I was paid tradesman’s wages, can now be done, with the aid of a machine, by a junior. Many of my fellow tradesmen, having retired at 65 years of age, are now suffering semi-starvation. They include, of course, retired postal workers. It is estimated that, by the end of this year, the number of such people will reach 550,000. A substantial percentage of these people are capable of earning a decent livelihood. But, since it is cheaper to pay them the dole or a pension and engage juniors with machines, they are not given the opportunity.
The additional charges will be met, directly and indirectly, by the lower income groups - the wage workers and small salary earners. They will pay directly when they buy ‘Stamps or use the telephone and, as Senator McKenna has pointed out, they will also pay the whole cost indirectly through charges for food, clothing, rent and so on. They will carry the whole burden. Those who can pass on the burden will, of course, do >so. The big business houses will, as Senator McKenna has said, take the opportunity to make a little extra profit as well. That is the system under which we are working - a system designed to increase poverty, in the midst of plenty, in this country and others. It is condoned and justified by Government supporters. Interest payments are really another form of indirect taxation. The recipients of big interest payments are certainly not the workers - the producers of wealth, who do the useful and necessary work of society. For these reasons I claim that a Government monopoly, such as the Post Office, is not justified in demanding interest taxation.
The depreciation of the currency, to which I referred earlier, is another aspect of the situation which should be studied. On 14th September a meeting was held by Australian Foundation Investment Company Limited. The chairman of directors of the company, Mr. Staniforth Ricketson, who is also the chairman of a number of other companies, and is accepted as an authority on finance in Australia, had this to say about postal matters -
It is no cause for satisfaction that people are buying equity shares as an anti-inflationary hedge. Inflation is, in fact, one of the most damaging factors at work in the Australian economy to-day. It is continually eroding the value of fixed interest securities and bank balances, and its effects in many directions are denying industry the full fruits of its’ enterprise and individuals the full reward of their labours.
The individuals to whom he refers are, of course, the workers.
The Governor of the Commonwealth Bank, Dr. Coombs, is to be congratulated on directing attention to the dangers of inflation in an impressive address at the annual conference of the Australian and New Zealand Association for the Advancement of Science in Perth last month.
The Federal Government’s Budget measure for direct increases in postal and telephone charges is, more than anything else, a symptom of the ravaging effects of inflation. Unfortunately, the very act of increasing these charges can only serve to aggravate the position, unless someone can devise a magic means of mitigating their effects on the costs of business and industry. Whether or not inflation can be curbed without discouraging economic growth is a question which has not yet been given a convincing answer. All we can hope for is evidence that the Federal Government is treating the problem with the priority consideration which its urgency demands.
That gentleman is accepted as one of the leading financiers of Australia. It is not the first time that he has directed attention to the way in which the money economy of this country is being deliberately faked by the Government, working in collaboration with the banking and financial interests. That is the main reason why the Government proposes increasing the postal charges.
On 25th August, in another place, the honorable member for Bradfield (Mr. Turner) gave a convincing and forthright explanation of what was happening as a result of inflation. He was the only member of that place to attempt to explain exactly how the people - the working people especially - were being misled and robbed by the depreciation of the currency.
Mr. Turner referred to the increased postal charges as a pricing tax, as an additional tax that would increase the price of all the services provided by the Postal Department, for the purpose of trying to balance the Budget. As far as I know, no’, one member of the Government or one supporter of the Government in another place has attempted to deny the truth of what he said. To some degree, our friend Senator Wright said something similar last week. The Government has dealt only with the effects of inflation; it has never attempted to explain the cause of inflation or to suggest what could be done to halt it. Mr. Turner, to whom I have just referred, suggested, in effect, that there must be drastic controls. I agree. You cannot get anywhere without controlling the machine that you are operating. But he did not say exactly how the control could be enforced.
I have no hesitation in saying, as one who has been closely associated with leading officials of the Postal Department, that these extra charges are not justified. A postal official who occupied a very high position said of the proposal, “ 1 would not have a bar of it “. I believe that if responsible officials of the Postal Department had had their way, a very different pro position would have been submitted for our consideration this evening. But they are acting in conformity with Government policy that implies, without qualification, that £1 to-day is worth the amount of money that it was worth when the Government was elected in 1949. That, of course, is not true. It is not denied that there has been a sustained deterioration and reduction in the value of the £1. Mr. Ricketson has said that the people who are suffering most from both of those things are those in receipt of wages or small salaries, and the recipients of small incomes from other sources. Take, for instance, superannuitants who paid in to a superannuation fund pounds worth twenty shillings. They now receive pounds worth three shillings. Those who put money in a savings bank before the war find that the pounds that they withdraw from the bank to-day have not the same purchasing power as the pounds that they put in. To me, the whole process amounts to a colossal fraud on the part of the Government, with the approval of its supporters.
As I have pointed out previously, and as Senator McKenna also indicated, the exTreasurer, Sir Arthur Fadden, said that this was a matter for the people. The Prime Minister (Mr. Menzies) said something similar. Here we have men charged with the responsibility to manage the affairs of the country in the best interests of the people, and that is the sort of thing that they not only tolerate but actually condone and encourage. Men prominently and actively associated with financial arrangement!., in Sydney, Melbourne and throughout the country, are becoming very much perturbed. What is to be the outcome? Surely the Government does not think, because these extra charges can be enforced and collected, that that will be the end of it. If it does, it is disposed to be a lot more optimistic than I am. As Mr. Ricketson has said, in effect the increases will make the position worse instead of better. The people who will suffer most are those who can least afford to do so.
Honorable senators will have noticed that Senator Spooner had nothing to say about the reduced purchasing power of the £1, nor was any reference to that subject made in either the Minister’s second-reading speech or the Budget. The supporters of the Government are completely silent on the matter and they will remain silent until Ihe position becomes unbearable. Then we shall find, as we found in the ‘thirties, that a good many people will be running for cover.
Reference has been made to the periodicals that are likely to be priced out of existence. Periodicals have been priced out of existence ever since this Government came to office. When these additional postal charges become effective more periodicals will disappear. They will no doubt include periodicals issued by religious groups, by trade unions, and by other organizations. Of course, that will help the monopoly press because if such organizations are not able to issue their own publications and state in them their views in their own way, they will have to do the best they can through the privately owned public press.
Senator Spooner referred to telephone services. While I was Postmaster-General, I pointed out that when new settlements were being established or new houses erected, provision should be made for telephone services if required. Provision is made for electric power and for water supply, whether those services are used or not. There is no lag at all in the supply of water and electric power, but there has always been a lag in the provision of telephone services.
– They are supposed to be efficient.
– Yes, they are supposed to be efficient and they are efficient. There is no doubt about the efficiency of the technicians of the telephone branch. Almost anything can be made in the Postal Department. The technicians can do practically anything. They are efficient, but they are not masters of the situation. They are there to give effect to Government policy; they must either do that or lose their positions. So it is not a question of their efficiency.
It seems to me to be more than a coincidence that this lag of 41,000 telephones came into being after the charges were raised from £10 to £12. If telephones had been installed as quickly as they could have been installed, there would be no lag. 1 shall tell the Senate of the experience of a man who occupies a very high position in business. Mr. H. P. Powlesland, of 207 Collins-street, Thornbury, Victoria, has written to me as follows: -
Following on our conversation relating to the installation of a telephone at my private address.
On Friday 4th September, 1959, I called at the Spencer-street Post Office to enquire on the delay in having a telephone installed at mv home address. The clerk on duty informed me that the delay would be fourteen (14) weeks.
I hold the position of Credit Manager with the Albion Quarrying Company Pty. Ltd., cnr. Arden and Laurens streets, North Melbourne, and it is imperative that I have a telephone at my home to speak to clients, many of whom cannot be reached during the normal working hours.
As Thornbury is a matter of 4J to 5 miles from the G.P.O. it appears incredible that the installation of a telephone could not be made for a period of three months or more.
It would be appreciated if you could have enquiries made into this matter of telephone installation.
That gentleman was told, in the presence of a witness, that he would have to wait fourteen weeks for the installation of the telephone. He has now written enclosing a communication which he has received from the department. His latest letter is in these terms: -
Further to our telephone conversation, and correspondence, I enclose a letter received from the Postmaster-General’s Department.
You will note that this letter does not even give fourteen weeks as the waiting time, as stated by the clerk at the Spencer-street Post Office.
Any assistance that you can render in this matter will be appreciated.
The reply that he received is a roneoed letter to which it has been necessary only to add the signature at the bottom and the word “Sir” in the salutation “Dear Sir” at the beginning. It is dated 14th September, 1959, and it states -
With reference to your application for the installation of a telephone service in your premises, it is regretted that the Department is not in a position to provide the service at present as the necessary facilities are not available.
Plans are in hand to provide additional lines and equipment where required, but owing to the large number of similar works to be undertaken by the Department, it is not practicable to indicate precisely at this stage when the work will be completed.
The inconvenience which is being occasioned in the absence of a telephone in your premises, is appreciated and the connection will be established as soon as circumstances permit.
The letter was signed “ W. R. Moore, Acting Superintendent, Commercial Branch “. Most senators who have supported applications for the installation of telephones have seen similar replies.
– That sort of thing is not of recent origin, either. It has been happening for quite a long time.
– Apparently, a stock of these roneoed letters is kept on hand in order to reply to any application that comes in.
– Did the honorable senator, sponsor’ that capitalist?
– I did not sponsor this sort of thing. When I was PostmasterGeneral, of course, the Post Office was dealing with the aftermath of the war. Tremendous arrears had to be made up. I must say, in justice to the officers of the department, that they tackled the job well and did excellent work in the circumstances. However, arrears are still there. As I have pointed out, services such as water, gas and electricity supplies are available for all houses, but this, is not so in respect of telephones.
This Government has introduced what is known as the duplex service, which is very unsatisfactory, particularly if one of the two persons on such a service uses it continually, thereby making it impossible for the other party to use it. This Government amended the act in order to provide that intending subscribers had to ‘accept a duplex service whether they wanted it or not. The only people whose interests are protected now are those who had a service before the act was amended.
Mr. Acting Deputy President, I have indicated the position in which we are placed. It is all very well for Senator Spooner to say that charges for services in Australia compare favorably with charges in other countries. That is not the point. The point is: Are we doing as much as we are capable of doing and as much as we should be doing in this country without worrying about the cost in other countries? I say that we are not. We have the man-power and the materials required, and the money needed can be made available. Why is the work not being done? Why have so many thousands of people to wait so long for telephone services?
Senator McKenna has stated that the increased charges will reduce to a minimum the demand for services provided by the Postmaster-General’s Department. That is perfectly true. The more expensive a service is made, the less the people will use it. On the other hand, if charges were reduced and services were made available to all who wanted them, the people would avail themselves of the department’s services as much as possible. I am as certain as I atn that I am standing here that many people will find themselves unable to pay the increased telephone rentals.
The overall effect of the proposed higher charges for postal and telephone services will be to increase unemployment. I have already mentioned the effect of increased postal charges on periodicals. If the number published declines, fewer employees will be engaged in printing them, and unemployment in the printing trade will increase. The same thing may be said in respect of other matters. And the more unemployment reduces the consumption of wage-earners and people on small salaries by reducing their purchasing power, the further does production decline and the greater is the lag in the provision of the services that the people need. As Mr. Staniforth Ricketson has implied, the effect on certain individuals will be disastrous. Speaking of inflation, he said - its effects in many directions are denying industry the full fruits of its enterprise and individuals the full reward of their labours.
Those are the effects of proposals like those now before us. The denial of services where they are required means that workers on the job and others are denied the services to which they are entitled. So the overall effect is that their savings are being reduced, their prices are being increased, and their ultimate position must be even worse than it is to-day. That is particularly so of the unemployed on the dole, age pensioners, and the underpaid workers of the Postal Department, particularly the women who clean offices. I have yet to learn that any women’s organization has taken up the position of women cleaners. The Federated Miscellaneous Workers’ Union has had conferences with the Government in relation to them. I have a letter from the secretary of this union, which reads -
At the last meeting of the Union’s State Council, I was directed to request your assistance in having the Commonwealth Furlough Act applied to Commonwealth women office cleaners, who are permanent employees, but by the nature of their work are not required to work 40 hours each week.
An extract of the relevant section of the act, which excludes these women from long service leave, is attached
In the various Commonwealth departments, particularly the Postmaster-General’s Department, there is a large number of women office cleaners who have many years of service to their credit. Because the Government requires them to work only 20 or 30 hours each week, they are, at the completion of 20 years’ service, ineligible for long service leave, because they have not worked 40 hours a week.
If the women concerned were employed by the various State Government departments or by private enterprise, after 20 years’ service they would be eligible to receive long service leave, based on their ordinary pay. For example, if a woman cleaner worked 20 or 30 hours a week for a private employer, under the long service leave acts operating in Victoria and New South Wales, she would receive payment for thirteen weeks’ long service leave, based on 20 or 30 hours work each week.
About twelve months ago, the union brought’ under the notice of the Commonwealth Government a case where a woman cleaner at one period of her employment was engaged for 40 hours, and, as a result of a mutual agreement between the department and herself, her working day was reduced by 30 minutes. This arrangement was agreed to, to enable her to get home a bit earlier each day to look after her family. When she applied for her long service leave, after 20 years’ service, it was refused on the ground that she was not employed for 40 hours a week.
The union contends that the act should be amended to cover part-time office cleaners, because though they are not required to work a full week of 40 hours, they are permanent employees and perform a useful and necessary task. Apart from many other reasons, they are worthy of your consideration because of their very early starting times. They report for work between 5 a.m. and 6 a.m., every morning, which means that the average woman office cleaner employed by the Commonwealth Government has to rise between 4 a.m. and 4.30 a.m. each morning.
Women office cleaners are in a different category from most other women workers, because in the main they are widows or deserted wives and perform the major part of their work while other people are in their beds. If you could assist the union in the direction requested, it would be greatly appreciated.
That letter speaks for itself. I suppose honorable senators, who will support the proposed increases without any qualification or amendment, will be quite satisfied with their own remuneration and the hours they work and will have no thought whatsoever for the unfortunate women to whom I have referred. Of course, it is not a new experience for me to have the Government take up that attitude. It is no new experience for the Government to simply ignore the claims of those who do necessary work and are entitled to much better treatment. If I were Postmaster-General now, that state of affairs would not exist. I should make a few changes in the department in the direction of improving the conditions of postal workers. If sufficient support were forthcoming, I or anybody else could do that. But here we have a government that was elected in 1949, pledged body and soul to put value back into the £1, but ever since value has been taken out of the £1, with the result that women are treated in the way I have described and will continue to be so treated just as long as that state of affairs is tolerated by the trade union movement or the workers generally.
A great deal more could be said about what has been done, not only in the Postal Department but also in other departments. I suppose a person like myself will have to wait until the hard school of disillusion educates government supporters where reasoning has failed. I have always held that anti-Labour governments operate on the same principle as the wheelbarrow. They will go only so far and so fast as they can be pushed, and unless the pressure is forthcoming from the people who are being penalized, I cannot imagine the Government taking the initiative and doing anything better than it has done to date.
.- As I hear the fading tones of our old friend, Senator Donald Cameron, coming to their end in this centenary year of Fitzgerald’s wonderful Rubaiyat, I ask - “ What Lamp had Destiny to guide Her little Children stumbling in the Dark? “
And - “ A blind Understanding! “ Heaven replied.
Despite the lack of enthusiasm evinced at this stage of the debate, a real opportunity is presented by this bill to address ourselves to one of the really important undertakings in the public life of this country, namely the Post Office. Looking at the figures that are published in the annual report, as well as in the Financial and Statistical Bulletin, both of which publications do credit to the department from which they emanate, one can see at a glance that the assets in the financial year ended 1958 were stated at £448,000,000, the turnover at £928,000 000, earnings at £96,000,000, and work for other instrumentalities at £253,000,000, and that the whole of the undertaking was operated by a staff of 84,602. Having mentioned the last figure, it is a matter of real satisfaction to find within this undertaking men who have risen, by their values and skills, from the beginnings of service on a lowly basis to the very command of the undertaking. Not only those who began in the undertaking come in that category; it includes also many others who are doing executive work of the highest importance in guiding the operations of the undertaking. I am sure that everybody in this chamber pays tribute to their energy and skill and desires to encourage them in their work. During the debate, I heard reference to the technical skill that is to be found within this department. My knowledge of it is completely remote, and my understanding of it would be essentially dull; but, so far as I do understand the technical skills and, from the acquaintance I have made with this department, I must say that the impression left with me is that it is not simply a knowledgeable purpose that is being applied to the actual operation of all the mechanical skills that are necessary for this great undertaking of communications. The department is driven forward by a spirit of progress, and a determination to keep the tradition of this department level with that of any of its competitors here or abroad. It is for those reasons that I think anybody who occupies a place in the legislature and who may exercise the rights which that gives, has a real privilege in taking part in this debate.
I believe that some of the proposals relevant to the terms of this bill demand very earnest consideration. As I understand it, we have a proposal which deals in the main with three items - a proposal that Parliament should give authority to an adjustment of the rates with respect to ordinary postage, the rates with respect to bulk postage and the rates with respect to telephonic and allied services. As was stated in the Budget speech, it is expected that the upward adjustment of the charges for these services should require payment of an aggregate sum of £17,800,000 in a year from the customers of the Post Office. It is useless to deny that that is a source of real apprehension to anybody who deals with cost inflation, which is beyond the scope of management in this country at the present time. That issue of cost inflation does generate those influences in our economic system, complex as it is, which react to the injustice of many sections of the community. We shall never regain a proper basis for the utilization of the latent skills and the purposeful endeavour of our people unless we guarantee that their earnings can be put in a savings bank, or any other safe repository, and, whilst the depositors are at work, their earnings will retain their value. I believe that we ought to be very jealous of and alive to the fact that to authorize increases of this sort - to put up prices for services in the Post Office - is a further recognition of the cost inflation that is so serious in the country.
I am incapable of dealing with the proposed increases in terms of so much per ounce, a penny ha’penny a mile, and all that farmyard hen type of approach that I have heard so often during this and the Budget debates. I do believe, however, that it is well to take into account just what the financial results of this undertaking are recorded at up to the present time. The last statement I have is for the year 1957-58. It discloses that in that year the Postal Branch showed a loss ot £1.900.000. The profit in the Telephone Branch was £6,200,000. The loss in the Telegraph Branch was £300,000. The overall profit of all branches was £4.000,000. That contrasts with an overall profit of £3,100,000 in the previous year. If we glance at the history of profit and loss for the Post Office, it will be seen from the statement to which I have referred that the Post Office consistently made profits up to the year 1949; it then, with one or two exceptions, made losses for five or six years; and it was brought back into credit to the extent of £3,100,000 in the year ended 30th June, 1957, and to the extent of £4.000,000 for the year ended 30th June, 1958.
So it is quite obvious that at the time the pres. nt Government took office the Post Office had been allowed to drift into a stage where a profit was not being shown on its activities. This was due to the increased prices that were artificially generated by mechanisms that there has been no attempt to correct or remedy since and which have aggravated our economy. They became serious in the period 1949-51, and in 1953 they led the Arbitration Court to relieve us of the madness of the statistical adjustment. From then on, we had a little balance until some other erroneous influences induced the people in contol to let the thing go again, and we are in for another spate of inflation now.
The Post Office had a profit of £4,000,000 in 1958. We are told that the bigger profits that will be shown by the accounts for the year ended 30th June, 1959 - when they are produced - will be of the order of £10,000,000. I hope I shall be corrected if I am in error in that impression. As I understand the position, we are now budgeting for an increase of £17,800,000 in the amounts that our customers are expected to pay.
I should be unusually presumptuous if I pretended that I brought to the comprehension of the records of this great undertaking an adequate understanding, lt is a task which 1 suppose would defy any one other than a person with the highest skill and the most intimate acquaintance with the undertaking. But that should not daunt one from offering such comments as occur to one because we are here, with all the acknowledged limitations of ordinary elected representatives, to voice the opinions of the people who support us and to perform a duty, even if a criticism ottered has not a full understanding of its shortcomings, lt may induce Ministers - 1 wish mere were more ot them present now - to correct these misunderstandings in reply. 1 uo see one of my ministerial colleagues modestly sitting behind me, and 1 do not want to be thought to have been critical in making such a casual observation, it inspires one to clarify one’s ideas a little mo.e it one knows mat one is getting access to me ear of the Government.
There is a proposal to increase the rates for first-class mail, bulk postage, telephone and allied services. First of ail, 1 wish to deal with bulk postage. We all know the history of that. Proposals were announced by the Government, after its hi st consideration of the subject, which subsequently had to be modified. Bulk postage items had been carried by the Post Office at a great loss - an undue loss. I think it was about £4,500,000. Everybody must agree that it was necessary to start some corrective action. However, if anybody who runs a business approaches his customers with an announcement of a terrific increase in the prices he is charging, his customers will think very little of him. The increase in the bulk postage rates, under the Government’s revised proposals, amounts -to 334 per cent, of the previous rates. 1 am quite satisfied that the users of the bulk postage system should make that additional contribution to the service, as a commencement of the process of overtaking the actual cost of providing the service. Although many books of educational and informative value are sent through the post at bulk postage rates, the excessive cheapness of the rates has led to a congestion of the postal channels by a lot of material that is not worth the postage.
I have watched this position vigilantly since the first announcement was made. When I read of some of the imposts that were to be imposed upon people who had committed their livelihoods to this type of activity, I felt that such steep increases could not be supported. I am pleased that the Government, upon reflection, has come to that conclusion also. That, I think, is a proof of the continuing existence of the soul of our parliamentary system. It will prevent some of us who were nigh unto despair from utterly despairing to think that the arguments advanced for a modification of the steepness of the increases in bulk postage rates have been heeded. I think that the Government has come to a wise conclusion in deciding to increase the rates by one-third.
But then, Mr. Deputy President, we come to the ordinary postage rates. I was interested to hear it said in Senator Sir Walter Cooper’s speech that if the Post Office dignitary of penny postage fame - Sir Rowland Hill - were alive to-day, he would probably say, “ Pay me ls. now, because that is the equivalent in value of the penny of my day “. He would think that we who laboured in the favorable conditions of 1959 were lucky to be able to get our letters through the post for a payment of 5d. in current money. That argument may satisfy some people, but it is no consolation to me, because I reflect that the proposed increase represents a huge increase upon the rate of postage prevailing ten years ago. From then until now has been the period of our responsibility. That is the period in which we should have taken a reef in the economy, in view of all the wonderful mechanisms which we have for moving mails to and fro, and having regard to the increase in population, the increase in turnover, and all those other things that should give us a great advantage in reducing the cost of the transmission of mails.
I am worried because people now will be required to pay 5d. postage on an ordinary letter. There is undeniable strength in the contention of Senator McKenna that business and commerce, which will pay this impost in the first place, will transmit it with a percentage, and thus recover their extra costs from individual purchasers. That is where the inflationary spiral starts to spring. I feel that such an increase is one to which only grudging consent should be forthcoming.
I am more reluctant to give my consent when I realize that the real cause for the decision to revise these rates is the increase of 15s. in the basic wage awarded by the Arbitration Commission. That increase was awarded at a time when, on any responsible assessment of the economy, not nearly that amount of increase was warranted. That decision by the commission has imposed on the Post Office an additional burden of not less than £3,000,000 a year. Similar increases over the last ten years have been responsible for increasing the burden on the Post Office by £20,000,000 a year. How can those who are responsible justify their inattention to the contribution that this is making to the destruction of the value of the earnings of the farmer, the man on a fixed income and the small wage-earner? I do not disparage the part-time cleaners to whom Senator Cameron referred. They are included in my concern. People of that kind are suffering because of the diminution of the value of their earnings. We have to evolve a system whereby people will receive true value for the work they contribute to the community. I hesitate to mention the wages bill of the Post Office each year lest I should be wrong. But whatever it may be, £23,000,000 as at present registered year by year will be the product of this mechanism and it has to be financed by additional rates. That is a matter for concern.
How are we addressing ourselves to it? Not only are we told that we must cover that amount, but on the road somewhere some Pauls have come to us - the new light of truth - and the realization has dawned that in addition to costs we must finance interest in future. I am one of the first to argue that unless this country recognizes the difference between invested earnings and current earnings, everybody who earns will be deprived of the incentive to retain his earnings and provide for himself and his family. I speak as a small man. I realize that the system contributes in some way an advantage to the large capitalist; but let me say definitely that it is the very essence of the way by which the small earner who is prepared to put aside a part of his earnings and invest it in savings can earn not merely his current crust of bread but be independent. It is the way by which he and his family can face their competitors, including those who are prodigal and have not the disposition to save. Neglect of that principle will drive us all into the realms of irresponsible speculation. It will drive us all into the situation whereby we will be seeking a speculative asset that will ride the waves and pressures of inflation such as we see demonstrated in the share market to-day. It will deprive everybody of a confidence that should be possessed by us that if we put £50 or £300 into the savings bank this year, in ten years’ time it will provide the same number of boots, the same number of meals, the same coats on our back as it does to-day.
The Labour Government conceived the idea, under the acute pressures of war in 1942, that it would be justified in confiscating revenue for capital works, so that those who were contributing to the revenue whilst war was being waged would give up their capital at a time when the fellows at the front were prepared to yield their opportunity to earn. But to carry that into a liberal disposition and because of the difficulties of managing your finances or because you have soured the confidence of the investors to go on confiscating revenues for capital works is a complete distortion of the capitalist system, in which the individual has the opportunity to earn his independence, in favour of a generalized socialization. To say that it is drivel to talk in these terms is to arouse my resentment.
Therefore, it is a matter of satisfaction to me to look at the 12th report of the Public Accounts Committee, printed on 13th April, 1954, and to find that the committee, which at that time had the advantage of having as one of its members our valued colleague the present Minister for Shipping and Transport (Senator Paltridge), went on record, after an examination of the Post Office accounts, as suggesting that the amount of the capital debits of the department should be determined without delay. The occasion, I think, is a little more than five years ago; five is half of ten; and ten is an unduly long life for a government. The ascertainment of the capital debits of the Post Office then was a matter of some intricacy, but this committee, over which Professor Bland presided and the members of which included Senator Condon Byrne and Senator Harrie Seward, considered that the capital debits of the department should be determined without delay.
The committee went on to discuss the question of interest, and interestingly enough it pointed out that under the guidance of a royal commission’s report in 1910 the Post Office had from then till 1929 always charged itself interest at 3i per cent, on all capital moneys which in those days, of course, were applied only out of loans. In 1929, honorable senators will remember, the loan position became grave and rates went up, and the Post Office from then until 1942 bore the actual cost of interest on its capital moneys. As I say, it was only in 1942, under the pressure of war, and with some justification during war-time, that capital works of the Post Office were supplied out of revenue, as all the capital works for defence had to be.
– Was that in 1942 or 1945?
– I know nothing of my own knowledge. I refer to paragraph 112 of this report, which states -
This practice has continued and now, as all capital expenditure since 1942 has been met from revenue . . .
That is my source of information. The report went on to say that at the time of its preparation there was only £16,300,000 of capital moneys still undischarged that had been devoted to the Post Office. The committee stated -
If this practice continues, in the not very distant future all this loan liability will have been repaid, and no interest will be debited to the Postmaster-General’s Department for its use of loan funds.
Paragraph 115 reads -
The Committee endorses the view that the position urgently needs re-examination; indeed, in the circumstances, it is a matter, both of surprise and concern, that the position has not been corrected long since.
And if I may be permitted to get some solace as 1 speak 1 am reminded of Swinburne, when he says, “ Even the weariest river winds somewhere safe to sea “. But five years is a long time in which to deal with a matter of urgency - a matter which, in 1954, this purposeful committee was surprised and concerned had not been dealt with long since. Therefore my theme is that it is not a matter of complaint that it is being corrected now, but rather that it has drifted all too long and has thus made remedy now much more difficult. My second complaint is that the proposal is now put forward without proper study first being made - indeed, in a way betokening not that sense of real responsibility which we, as Liberals on the back bench, ought to expect.
Why do I describe the proposal as lacking a sense of responsibility. First, because of a neglect of the Public Accounts Committee’s remarks for more than five years. Secondly, because I find in the Budget speech of the Treasurer (Mr. Harold Holt) - the record speaks - the following words: -
There is room for difference of opinion as to what the true capitalization of the Post Office should be in accounting terms,
I should have been misled by those words had I not delved more deeply and found other records which preceded them. The Treasurer said further - and so that the Government may have the best advice on that and other outstanding questions, we have recently decided to appoint a committee of competent outside people to study and report upon the basis on which the commercial accounts of the Post Office should be prepared.
This afternoon I asked the Minister who has the honour to lead the Government in this chamber whether he would vouchsafe to us the membership of the committee - the more especially as it was said to consist of outside people. I have no objection to that fact alone, but such persons are surely answerable to this Parliament and the Government should inform us with more particularity whom it has in mind, and the type of committee that it proposes to set up. Now that it has been disclosed that no committee has been set up, one would be neglectful not to offer criticism of the way in which the paragraph which I quoted was phrased. It led me to believe that, in the months just preceding the presentation of the Budget, instructions had been given to a committee, which was working on the subject. That is not the inevitable interpretation of the Treasurer’s remark, I agree, but it was the impression that I gained from reading it - and the matter is still in future. The position ought to be ascertained and a responsible decision made as to the degree to which the cost of services in the future should finance the interest that is properly payable on capital moneys devoted to the Post Office - but not so that the Consolidated Revenue shall gather the yield of the increased price of services and pocket the interest that they are supposed to pay.
I wish Senator Spooner were present at the moment because I should like to refer to a proposition this afternoon which amazed me. It was that we should continue to devote revenue to defraying the cost of capital works of the Post Office and, as we raised the price of services, defray the interest also, taking it, plus the increased price of services, to the credit of Consolidated Revenue.
I heard Senator McKenna putting forward the argument that the State Premiers are submitting with regard to an analogous question - Federal and State capital works programmes. Let me pause a moment to derive from that analogy an argument which illustrates the anomalous proposal involved in Senator Spooner’s observations. The Australian Loan Council, having the responsibility of inducing confidence in the people to support a loan programme that will adequately finance the public works of this country, failed to get the desired yield. This Government, recognizing the great value to the nation of maintaining development, in both the short and long term, most generously undertook, when the loan market commenced to fail, to maintain its taxation so that, out of Consolidated Revenue, it could underwrite the deficiency of the State loan programme. That has gone on as a yearly experience ever since. When the Commonwealth makes available £100,000,000 out of Consolidated Revenue to supplement the loan programme for the States, and treats that as loan money, asking the States to lay down a sinking fund that will recoup interest and capital, the States inveigh against that - not because there is no intrinsic merit in the proposition but because, they say, it is double-dealing. They say that the Commonwealth, not having borrowed the money, but rather having exacted it as part of current revenue, has incurred no obligation to repay and is not in any sense asking the people to invest - to use the term that Senator Spooner used here this afternoon. It is the most invidious investment that one could possibly imagine. The people are taxed for it. My complaint is not that the Federal Government, having made part of the taxes available to the States, with a proper sense of responsibility requires them to budget for their public works on the basis of a sinking fund and repayment of interest, but that it adopts the socialist attitude of confiscating by taxation the people’s earnings. Having been repaid interest by the States, the Government does not credit that to the individual taxpayers.
When the Commonwealth, with the assistance of the committee that is to be appointed, decides the capitalization of the Post Office, it will be a very proper thing for the Post Office to budget, as it did from the year dot until the year 1942, on the basis that capital contributed to it will earn interest. But as I see liberalism, it is most improper for a government to receive interest from the customers of the Post Office and not to credit that interest to the people whose moneys are financing Post Office capital works. Therefore, Mr. Acting Deputy President, faint but pursuing, I am still confident that in less than another five years, if interest is now provided for, it will be properly credited in the account as between the Government and the earner.
The man on a farm or at a factory who is prepared to put aside a few shillings or a few pounds a week does not get the opportunity to do so. We ask him to pay the money in taxes. But he should have this interest credited to him as an obligation on the Government, recognizable as an obligation, or as a bond that constitutes the independence of him and his family, not only against the future ravages of governmental taxation, but also against socialistic and capitalistic competitors. After all, we face this risky world with much greater fortitude if we have a little independence in the hip pocket, instead of having to rely on the largesse of governments, year in and year out, for whatever advantage we have above the crust line.
– Interest-bearing bonds?
– Of course, interestbearing bonds! Money is a commodity. What you pay me for my earnings is of value. If I put it in an asset for anybody else, he will pay me something for the use of it. Of course, at interest! If the expansion of the economy does not give us sufficient confidence to pay interest, or to make us believe that in due course the bonds will be repaid, all I can say is that our confidence in this country is not as great as we claim it is.
If the committee that is to be appointed gets to work, its problem, as I understand it, will be to analyse the accounts of the Post Office and to determine what is capital and what is revenue. For the life of me, I cannot see that it is good business to defer that matter for another two months. Why not make a stab at it? The Treasurer, in his Budget speech, stated that since 1945 the Government had provided some £400,000,000 for new buildings and equipment. So far as I am concerned - and I think I speak for all those optimistic bondholders who would hope to be recognized - in a spirit of generosity I am prepared to adopt a figure of £300,000,000. Let us start off with that handicap, but let us get to a decision on the principle of the matter and see whether we can kick off, in the next decade of this Government, so that Liberal supporters will be able to say, “The Post Office really has been helped by me, and what is more, the Government has recognized that fact. It has given me a bond for the £10 that it took from me.”
I turn now to the telephone charges. I am not able to assess the order of the increases, but I take as a guide one of the documents that has been circulated, in which it is shown that trunk line calls now costing ls. 3d. will increase to 2s., that those costing ls. 6d. will increase to 3s.. and those costing 2s. 6d. will increase to 4s. One does not need much imagination, Mr. Acting Deputy President, to appreciate that our telephone bills will rise, with increased charges for local calls, by from 40 per cent, to 60 per cent. That is a sizable increase. Everything that has been said with regard to reluctance to consent to increased postal charges applies also to the proposed increase of telephone charges, especially when we remember that in the year 1958 the Telephone Branch recorded a record profit of more than £6,000,000. Of course, we must not forget the importance of the highly skilled services that the branch supplies.
I have spoken of these matters because I think it will take a lot of explanation to justify a charge for interest on Consolidated Revenue contributions unless the Government recognizes that it is a trustee of that interest and that it has an obligation to the persons who earned the money and contributed it. But these proposals are a part of the Budget proposals, and primary responsibility for the whole Budget is with the Government, lt is not in line with my thought that this endeavour to provide for interest is wrong. Even if I thought so, I would not feel justified in voting against these provisions, because 1 think it is well recognized in this chamber that in a matter of this sort you have to be very clear in your conclusion before you vote against a budgetary matter, especially an important budgetary matter. As I have been reminded, under section 53 of the Constitution, this bill, although it is a bill for the imposition of taxation in one sense, comes within the saving clause in that it provides for a fee for a service. Therefore, it would be within our province to amend the measure. If time had permitted, and we had submitted the bill to the scrutiny of a select committee for about five days, with the assistance of the Director-General of Posts and Telegraphs for a couple of days, we might have gained a more adequate understanding. But that is not a course that I propose in this instance, and with those remarks I just say that I am prepared to consent to the measure.
I do not want to leave this matter, Mr. Acting Deputy President, without addressing myself to a particular part of Senator McKenna’s speech. It does less than credit to the responsibility that he carries. I refer to that part of the speech in which he said that the Post Office last year showed a profit of £4,500,000. He went on to say that an examination of the accounts showed that the Post Office paid out in cash £2,500,0C? in superannuation, but debited to its revenue £4,500,000 on account of superannuation. So, Senator McKenna said, it overstated its expenditure, its debit, by £2,000,000. You will rejoice to be re minded, I am sure, Mr. Deputy President, that this is precisely the fallacy into which the majority of honorable senators fell when dealing with another superannuation fund, namely that which pertains peculiarly to senators themselves. It was said that because there was a cash surplus in the account of, I think, £230,000 in that intance, the fund was solvent. The actuary has since pointed out - I shall not trespass on the debate I hope we shall have in a few weeks’ time - that when you undertake obligations of superannuation for a body of men, you must have in your bank account and in investments more than is payable out in pensions year by year, otherwise those who expect increased pensions and those who fall on the fund in ten years’ time will look to the fund in vain. For precisely the same reasons the Post Office recognizing, under the stimulus and advice of the Public Accounts Committee itself, the wisdom of amply providing for the contingent liability of growing obligations for superannuation in the future, from the point of view of both numbers and size of pensions, would be less worthy of confidence than I think it is if it did not provide for the superannuation fund £4,500,000, knowing that out of it this year it will have to pay £2,500,000 in cash. In fairness, and as a matter of honesty in business, it has to salt down the cash wherewith to meet its contingent liabilities to people who will become entitled to pensions.
– As the population grows, more are paying in than are drawing out.
– If the honorable senator would draw in more breath than he blows out, he would be better advised. Next, Senator McKenna called to his aid what he said was an excess depreciation charge of £1,700,000. He said, “These accounts are wrong. They have charged £1,700,000 excess depreciation.” He found somewhere an equalization account or reserve account in which, most prudently, the management of this undertaking sets aside a certain sum to cover anticipated repairs and renewals for the year. Let us say that it is £3,000,000. If in the course of the year only £2,000,000 were expended, Senator McKenna would say that there was an excess debit of £1,000,000. Nothing of the sort! It is idle to heed such an argument, when one recalls that the equalization account is fixed on the judgment of officers no less experienced than the Assistant Director-General (Finance) and the Assistant Director-General (Engineering). 1 submit that it is to play false with those who listen to Senator McKenna to make such a captious judgment as he suggests in the face of the responsibility and skill of those two high officers who most prudently set aside that amount of depreciation.
Finally, Senator McKenna said that the accounts were unreliable because the Post Office turned over, for the Commonwealth Bank, the Department of Social Services, and other departments, large sums of money, amounting, I think, to £253,000,000 a year. He said that it charged only 1 or li per cent, for that service whereas if it were in the type of business in which Senator McKenna claims to be more experienced, it would charge 2i per cent. On that basis, he said, it would receive from these other instrumentalities an additional £4,000,000. My information is that the Post Office costs the operation of servicing these other departments, adds something for rental and other overhead, and charges these other departments a properly costed figure.
– It does not.
– I leave it to the Minister to confirm or deny my information. I have taken the trouble to check it and I am certain that that is what the department does. Senator McKenna said that by proper bookkeeping the profit of £4,500,000 for the year ended 30th June, 1958, would be built up to £12,700,000. I have made observations on every one of the increments that he invoked. I submit that, with a rudimentary knowledge of accounting, one would not give twopence for any item that Senator McKenna sought to bring in to increase that profit, and I submit that he advanced a completely false argument in that respect.
The ACTING DEPUTY PRESIDENT (Senator Wood). - Order! The honorable senator’s time has expired.
– My observations on the measure will be very brief, but I want to say a little about bulk postage rates. I do not accept Senator Spooner’s contention that the proposed increases are reasonable. Journals that will be harshly affected by the increased rates include trade union, church, social, educational and scientific publications, women’s magazines and country newspapers. Publications such as trade union journals are prepared for the interest of members of the organizations. They are not profitable ventures and are conducted simply to inform members of the activities of the organizations to which they belong. There are no surplus funds on which to draw in order to meet increased charges, which means that the journals will probably have to go out of publication. This proposal is particularly harsh in its application to scientific journals and other publications of an educational character. I believe that this Government pays too little regard to the requirements of the population as regards education. I believe that the Government should be providing more money to subsidize the States in respect of higher education. The increases proposed here will prevent the circulation of scientific and technical journals which can only mean a reduction in the information available to the public.
I know that some days ago all honorable senators and members of the House of Representatives received from the Parliamentary Library a list of country newspapers together with a request to state which of them it was desired should continue to be placed at their disposal in the library. Of the 151 country newspapers listed, 75 are published in New South Wales, 31 in Victoria, 20 in Queensland, seven in South Australia, sixteen in Western Australia, and three in Tasmania. They are the publications which will be hit by the proposed increased charges, and the effect of these increases can only be to put more power into the hands of the monopolistic press.
We cannot afford to have any greater concentration of the present power of the monopolistic press because it already controls most of the newspapers, most of the broadcasting stations, and most of the television stations; in fact, it controls almost all the media for disseminating information. I am beginning to wonder whether the proposed action is part of a conspiracy by the Government to add to the strength of that monopoly, to add to the power of the press and so to condition the minds of the people that they will lose the power of constructive thought. And I do not know that even the Government can afford to do that because, despite what Senator Wright has said about this Government remaining in office for the next decade, there will come a day when the Government will not be in office and whoever follows it will use the same media for its benefit. The conditioning of men’s minds must, I submit, lead to the destruction of the democratic system as we know it.
If the Government continues to increase the charges on publications such as those to which I have referred, there is no question as to what will happen because it cannot be denied that the big monopolistic press is in a position to carry on. The monopolistic press will enjoy a subsidy, which is not warranted, because it is quite capable of carrying on anyway; but the subsidy must be given by the general taxpayer, or the people who use the first-class mail service if the smaller, independent publications are to survive. Of course, we must realize that those who use the firstclass mail service are the same people who use the second-class mail and the bulk postage services.
I suggest that the Government should have another look at these proposals because, when all is said and done, they are not the considered view of the Cabinet. These suggested increases have been altered on two occasions already, and I have even heard the Prime Minister (Mr. Menzies) say in another place that the Government had been in the dark about the matter. He promised that there would be some adjustment and that the new bulk postage rate would not come into operation until March, 1960. Subsequently, under pressure from the same group of newspapers that exerted pressure on the Government at the time of the Richardson report on parliamentary salaries and allowances, the Government was forced to look at the matter again and bring down a further set of postal charges. So it will be seen that the proposals before us now do not reflect the considered view of the Cabinet. If they do, I can only say that the considered view of the Cabinet at the time was most slovenly; and we shall find as we go along retreats from other parts of the Budget. Certainly on this occasion the Government has made a very nasty retreat.
Much has been made of the proposed reduction in the surcharge for the first half ounce of first-class airmail. I should like to be a little parochial here, and it is possible that members of the Australian Country Party will agree with me. The great bulk of first-class mail matter is not sent by airmail. The airmail postage represents only about 25 per cent, of first-class postage, and the proposed reduction in surcharge will not be of any great benefit to the people of Western Australia because air services are not used very much for the carriage of mails. They cannot be used much because we have not very many airline services. We have an airline service from Perth to Kalgoorlie, but all the country in between those two centres is not served by air. We have an airline service from Perth to Albany, but the country in between is not serviced by air. We have an airline service from Perth to Geraldton, and the country in between is not serviced by air. We have an airline service from Perth to Wittenoom Gorge, and the only places in between which are serviced by air are Mount Magnet and Meekatharra. The population of those two centres is very small. Then we have an airline service to the north-west parts of the State and on the milk run. As to distribution of population, I point out that of a total of 700,000 in the State, only approximately 16,000 reside in the north-west. That being so, it will be appreciated that the bulk of the population will not receive any benefit from the reduction in surcharge; on the contrary, those people will be required to pay an increase in the cost of ordinary postage.
The Government is attempting to make the people believe that they will gain an advantage from the reduction in surcharge. I say quite confidently that the majority of people in Western Australia will receive no benefit whatever from the proposal.
– Would you commen on the interstate service?
– The interstate service has been of advantage to the majority of people in Western Australia because of the great distance between them and the large centres of population in other parts of Australia. It is interesting to note that the Treasurer (Mr. Harold Holt) said in his Budget speech that this mail would be carried by air wherever that would expedite delivery. I do not know who is to judge what is contained in the mail that I post.
The DEPUTY PRESIDENT (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 Senate do now adjourn.
Question resolved in the affirmative.
Senate adjourned at 10.30 p.m.
Cite as: Australia, Senate, Debates, 22 September 1959, viewed 22 October 2017, <http://historichansard.net/senate/1959/19590922_senate_23_s15/>.