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Tuesday, 20 October 1964

Senator CANT (WESTERN AUSTRALIA) - This is a public service. Much of the high investment in the Postal Department is brought about by the construction of developmental lines. Surely developmental lines should not be a charge upon the users of the service. The development of Australia should be a charge on the community as a whole and not upon a section of it. I do not know any reason why the interest rate should be fixed at approximately 41 per cent, on money which was put into the Post Office at the turn of the century. This money was extracted from the people by way of taxation. It was money that the Government got for nothing except for the service charge for collecting it. When it was put into a public utility, however, interest was charged on it. Surely if an interest component is to be charged, it should be only the interest component necessary to take care of the servicing costs and not the interest component one would expect private enterprise to charge on money invested so as to produce a profit.

Senator Scott - What did the Public Accounts Committee think of this?

Senator CANT - The Public Accounts Committee heard evidence the other day from representatives of the Postmaster General's Department that because of the impost on the people caused by increased charges, the Department was considering issuing quarterly accounts. It was realised that the increased charges would be a heavy impost, and it was considered that if accounts were issued quarterly, the people could pay them more easily. Senator Scott will have an opportunity to speak later and I suggest that he reserve his comments until then.

It was estimated that aggregate expenditure by the Post Office since Federation amounted to £340 million at the time of the inquiry. By 1962-63, this aggregate had increased to £556,534,000. That gives an idea of the rate of increase. It must be realised that the Telephone branch is highly plant intensive rather than a high labour intensive in relation to other operations of the Postal Department. Therefore, its equipment is very costly. In a document entitled " Post Office Tariff Adjustments " distributed to honorable senators by the PostmasterGeneral (Mr. Hulme) the Minister stated -

Although the Post Office was a public facility, it must also be run on business principles and it was more desirable that the users of the service - 1 emphasise those words - bear any increased charges than the community as a whole . . . Chiefly affected would be residence services, which would be brought into line with business rentals.

The Minister was saying, in effect, that if you use the telephone you must pay for it. You must meet the cost of this service. He has openly admitted that the impost will fall heaviest on those with residence services. 1 would add that, while the cost falls heaviest on residence services, there will be no increase in respect of business services. That is because telephone charges are part of the cost of running a business and are allowed for taxation purposes. Then again, the cost of operating a telephone is loaded into the cost of the commodity sold by the business and is passed on to the community. In spite of that, the Minister says that the increased charges should not be paid by the community as a whole but only by those who use the telephone service. I repeat that in respect of the greatest users of telephone services the cost will be paid by the consumers or by the community as a whole. For the Minister to say that those who use a telephone must pay the cost of the service is to mislead the community.

The increases were listed in a document that was circulated by the Minister. We note that the Department is not able to satisfy the needs of all applicants for telephone services. The Department installs what are known as party lines, but a party line is available for use only if somebody else who is linked to the line is not using it. The result is that one is not always free to use the line. However, the charges for those lines are to be increased. Some of the charges for this type of service are fairly steep, particularly in what are known as the capital cities, which now include Canberra and Newcastle. Because Canberra has been moved into the capital city class, the rental charge for a residence service has been increased by fi I 15s. per annum, from £8 5s. to £20. The rental for a duplex or two party system, and for a three or more party system, has been increased by £6 2s. 6d. in Brisbane, Adelaide, Perth, Hobart and Newcastle. In Sydney and Melbourne the increase for a two party line or a three or more party line will be only £5 7s. 6d. There will be an evening up, but it will be no more than an evening up. There is no suggestion of any overall reduction. I believe that the Government would have been more successful in achieving the desired results if it had decreased charges instead of increasing them. The Minister has said that those who use the service must pay the cost of the service. I suggest that had the Minister considered reducing or leaving untouched the rental charges and service connection fees, and instead had increased the call charges, those who use the telephone would then pay for the cost of the service. Because service connection fees, and particularly rental charges, have been increased, people who make very little use of the telephone will pay the increased charges irrespective of whether they use the telephone, simply because it is installed. That state of affairs does not accord with the Minister's statement that those people who use the service must pay the cost of the service.

The Post Office estimates in figures published in a financial and statistical bulletin - and there is no reason to disagree with the figures - that the average number of local calls per service in 1962-63 was 998. The figure includes both business and residence services. There is no doubt that the majority of the calls would be made by business houses, just as the trunk line facilities are used more by business people. It has been estimated that the average number of local calls made by residence service subscribers each year is about 360. The annual rental charge is £20. On the basis of a charge of 4d. per call, the real cost of each local call made by a subscriber therefore is Is. 6d. This charge might almost be called exorbitant. It is true that the time for each local call by a private subscriber is not limited. Nevertheless, most people do not abuse this privilege and use the telephone in a proper and sensible manner. The charge of ls. 6d. for each local call appears to bc pretty heavy, and is especially so for blind pensioners and other pensioners. There has been considerable agitation in this Parliament for the granting of concessions to pensioners in respect of telephone, rental and call charges. The agitation has been unavailing. In fact, the position now is that instead of receiving concessions, pensioners must pay increased rental charges for telephones, which are so essential to their way of life.

The burden must also be borne by people who have fixed incomes and cannot obtain additional income to help pay the increased charges. If they cannot meet the increased charges, the service will be discontinued. In our community many people live alone and the telephone is of great value to them. I refer particularly to women who may be left alone while their husbands arc required to travel because of their occupations, and to unmarried women who have the telephone installed partly as protection. In every capital city special numbers are provided so that the police, ambulances and other urgently required services may be obtained quickly. To women living alone the telephone is of great value, but they will be forced to pay the increased charges. Then, there are many married women wilh young families who are not able to go out to do their shopping. They use the telephone to ring their orders through to their butcher, baker and grocer. If these people could take their families with them when they went shopping, the costs of bus fares or of running a car would be added to the cost of the commodities that they wanted to buy. Therefore, they use the telephone for the purpose I have mentioned. Now, they will have to absorb the increased telephone charges.

Other people will be affected by the increases. There are lonely people who have the telephone installed for the purpose of companionship. They ring their friends. This is probably the only means of communication with them that they have. People who are not able to get about by public or other forms of transport use the telephone in order to relieve their loneliness. The telephone is an essential part of the way of life of the people in all the categories 1 have mentioned. They cannot pay the continually increasing cost of the service. Even to those people who are able to get about and who do not require the service for any of the reasons I have mentioned, the telephone has become a part of their way of life, lt is part of the high standard of living of which we in Australia are so proud. Yet, although we are encouraged to have this high standard of living, we find that increased taxes arc levied upon us to maintain such services as that provided by the telephone.

It is also stated in the document entitled " Post Office Tariff Adjustments "

The Minister pointed out that lower rentals for residence telephones was a concession granted in the early 1930's to stimulate the connection of telephone services and to make use of equipment that was then readily available. The equipment position has since changed.

Honorable senators know that this is so because we are constantly asking the Postal Department on behalf of constituents to install telephones for them. The general answer that we receive is that equipment is not available for the installations. Because this system of lower rentals has been so successful in increasing the demand for telephone services, the Department now finds (hat it has to take measures to dampen down this demand. I know that it will be said that comparatively few people have applied to have their telephones disconnected since these increases were announced, I think that it is too early to take that matter into consideration. Generally, people do not find that these charges are beyond their capacity to pay until the accounts come In. After these Increased charges have been operating for a sufficient length of time and the accounts start to come in, people who then find they are unable to continue to meet the charges will be applying for their telephone service to be disconnected. In this way, the action of the Government could rebound on it. Some people will use telephones less because they will not be able to afford the cost of the service. Other people will have their services disconnected, or will cancel their applications for services. So there could be a falling off in revenue in respect of this particular section in the Department.

The Department shows that it appreciates the problem of the payment of the higher accounts. It is to render accounts quarterly to telephone users in an effort to assist subscribers to pay those accounts when they fall due. The Department realises that it has no right to demand that a subscriber pay his account each quarter, because the regulations fix an annual rental. Any one who does not want to pay in a lesser time than a year cannot be forced to do so. The Department would have no right to cut off a subscriber's telephone because his account was outstanding on a quarterly basis. No doubt the system of quarterly accounts is being considered by the Department because it realises that the increased charges will fall heavily upon telephone users and that many will not be able to pay their telephone bills if they are issued on a yearly basis. The Department intends to assist subscribers in this way. The issuing of accounts on a quarterly basis will also, of course, alert the Department to those people who are getting into difficulties and are not able to pay their telephone bills. The Department can keep an eye on those persons and cut off their telephones when it becomes necessary to do so.

The Minister stated that the increase in rentals and in the service connection fee was necessary because the average cost of providing a new telephone is £570 and the Post Office loses, on an average, £7 a year on each new service added to the network. This is a matter that needs to be considered in the light of the Minister's statement that the Post Office is a business concern and must be run as a business concern. I do not know of any other business concern operating in Australia that would make provision for a loss on each service that it provided, but the Minister said that in the case of the Post Office there is a loss of £7 on each service provided. As I have mentioned, he said also that the average cost of installing a service is £570. Surely it is not fair to take the total cost of telephone connections, arrive at a average and say that that is the cost of each connection.

This is a developing country, but unfortunately it is developing very badly from the point of view of communications. The development is taking place right around our coastline, which means that a very long system of communications has to be provided. Some time ago the Weapons Research Establishment at Woomera decided to set up a station at a place in Western Australia known as Talgarno. The station was to be established for the purpose of observing missiles launched from Woomera, and it had to be connected with the Australian communications system. This meant that lines had to be taken over some 1200 miles and new exchanges established. As this had to be done in the back country of Western Australia, it was very costly. Eventually Talgarno was abandoned. I should like the Minister, when he replies, to tell me, if he can, what part of the cost of providing that service was loaded on to the ordinary costs of the Post Office and what part was borne by the Weapons Research Establishment or the Department of Defence. Every Government department makes extensive use of telephone services, But the whole cost of providing such services is loaded on to the costs of the Post Office.

The case of Talgarno is not an isolated case. This sort of thing is happening right around Australia. Small communities many miles from large centres of population have to be served by telephones. Telephone subscribers generally are expected to pay for the cost of lines that extend across country that is not in use. By averaging the cost of a service at £570, the Department is inflating the real costs. Most of the telephones in Australia are to be found in the capital cities and in the suburbs of those cities. As suburbs expand, it is found that insufficient lines are available, and there is a constant necessity to provide new lines. When an area develops quickly, the number of lines put down originally very soon proves to be insufficient to cope with the demand, and there is a need to duplicate the work by providing more lines. This adds to the cost of connecting telephones.

In some instances it takes only a few minutes to connect a telephone and the cost would not be more than, perhaps, £5. It is completely unrealistic to average out the cost, particularly in view of the need to develop communications throughout Australia. The provision of these communications should be regarded as a part of the development of Australia and the cost should be borne by the community as a whole. The money should come out of revenue that is provided by all of the people. If the cost of providing communications services to develop Australia were charged under that head, it would be found that the telephone service connection fee could be reduced because the cost of installing a telephone for the normal subscriber would average out at less than the £570 that has been mentioned by the Minister.

Whichever way we consider this problem, it is evident that, because of an increase in population, the cost of operating the Post Office will continue to increase. If the Government were to implement the decentralisation policy put forward by the Australian Labour Party, that would further increase the costs. The replacing of obsolete equipment and the providing of new and improved equipment will continue to cause an increase in the capital invested in the Post Office and in the interest payable on the capital investment. I was interested to see whether the Prime Minister had given any indication in his policy speech that this increased tax, as it is in reality, would be imposed upon the people. I have searched through the policy speech of the Prime Minister and I cannot find any reference to increased charges. It is another one of the Government's gimmicks. Once having been returned to power, it imposed the charges. No doubt the Government said: " We cannot be put out of office for another three years, and by that time the people will have forgotten about the charges ". Surely if you intend to impose increased charges upon the people, it is honest government to warn them about the charges at the time when you come before them. Throughout the policy speech of the Prime Minister, there is no reference whatever to increased charges in connection with the Postal Department.

Another complaint that we make in moving for the disallowances of the regulations which impose these increased charges upon the community is that they have been applied without reference to Parliament. Taxes are being imposed upon the people without reference to the representatives of the people. No attempt has been made to introduce a bill into the Parliament and to allow its merits or demerits to be debated. The Executive has proposed that increased taxes be applied to the people. The necessary formalities have been carried out, and the increased taxes have been imposed. 1 say to the Executive that this is treating Parliament with contempt. The representatives of the people are here to express an opinion of behalf of the people and to protect their interests in the development of Australia for the Australian people. Surely when taxes are to be levied on the people's purse, it should be done openly in the Parliament and not by the backdoor methods of executive government. The same position applied to the Air Navigation Regulations which we debated recently. The powers of the Parliament are being usurped by the Executive. This is a matter about which all honorable senators should protest.

I think that the increased rentals and service connection fees are beyond the capacity of the community to pay. They are rather savage increases. They should not be applied, as they have been applied, to residence service subscribers. They have to bear the brunt of the increases and are not able to pass them on. Smaller increases nave been applied to the business community, which gains taxation advantages and is able to pass on the increased costs to the community. Therefore, Mr. Acting Deputy President, I have much pleasure in moving this resolution and in asking that honorable senators support it.

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