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Tuesday, 20 October 1964

Senator O'BYRNE (Tasmania) .- The Minister for Customs and Excise (Senator Anderson) has indulged in some rather frothy rhetoric in trying to divert attention from the main purpose of the Opposition and the Opposition's attitude to the amending regulations affecting post and telegraph charges. The Opposition has directed attention to seven amendments of the regulations which imposed excessive charges on a section of the community. The Minister has referred to a particular attitude of mind during an election campaign. I remind the Minister that all over Australia the people have noted these new charges in their little black books and they will show how strongly they feel about them at the first opportunity. This has been mainly responsible for the striking reverse and the political lesson that was administered to the Government of Victoria recently.

Senator Scott - No.

Senator O'BYRNE - There will be further repercussions from this atmosphere later but for the purposes of this debate, the Opposition is seeking to show that these amendments to the regulations are bad. I assure the Minister that the Opposition is not attacking the PostmasterGeneral's Department. This has always been an efficient and conscientious section of the Public Service with an unequalled record. The Postal Department is merely implementing Government policy. So the Opposition's attack in this debate is directed at Government policy and at the policy of the Treasury. The Minister for Customs and Excise has said that the case put by Senator Cant for the Opposition was not convincing but the fact is that the Government, by regulation, is imposing charges which will have a tremendous impact on the whole of the business of the PostmasterGeneral's Department as I shall prove later. These charges are affecting immediately the taxpayer who is also a consumer of these departmental services.

Senator Scott - Not all of them.

Senator O'BYRNE - Every consumer of the services of the Postmaster-General's Department is also a taxpayer. This means that the taxpayer who provided the funds in the first place to set up the Postal Department is now being asked to pay the increased charges that have been brought about as a result of the enormous increase in interest charges that have been imposed on the Department. I remind Senator Scott who has been continually interjecting that he will have an opportunity to discuss this matter later. Let us have a formal debate rather than a disjointed approach to the subject.

I propose to cite the words of the Prime Minister (Sir Robert Menzies) to illustrate a point concerning Government policy but before I do so, I propose to refer to the report of the Ad Hoc Committee of Inquiry into the Commercial Accounts of the Post Office. This report was brought down in 1960. The Ad Hoc Committee was set up by the Treasurer and consisted of five members. They were Sir Alexander Fitzgerald who was Chairman, Mr. L. B. Evans, Mr. G. Packer, C.B.E., Mr. E. W. Easton representing the Post Office and Mr. J. F. Nimmo representing the Treasury. As a result of the recommendations of the Ad Hoc Committee, the Government imposed the tremendous interest burden which is the reason given by the Government now for increases in Post Office charges. The Government acted on a majority report of the Ad Hoc Committee but this was a majority only of one. Two members of the Ad Hoc Committee, Messrs. Packer and Easton, brought down a minority report which was much different from that accepted by the Government for the purposes of assessing the capital value and overall investment down the years in the PostmasterGeneral's Department. At this point, I wish to refer to the report of a conference between the Prime Minister and the State Premiers held in Canberra in March 1959 to consider Commonwealth-State relations. The Prime Minister was questioned about relations between the States and the Commonwealth and the right honorable gentleman said in reply to the Premier of Victoria, Mr. Bolte -

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?

Mr. Boltereplied ;

You do it in the case of the Snowy Mountains scheme, because there the States or the consumers will pay for it.

I might interpolate here that these charges have gone back over the years. If the Government wanted to attack a problem such as this, there are post offices in central areas in various cities of the Commonwealth which would bring in hundreds of millions of pounds if sold today. None of these matters have been considered. The Government has thought up a figure in the vicinity of ?400 million which it has imposed on the Post Office to make it appear to be a bigger interest producing organisation. The financial report of the Australian Post Office for the year ended on 30th June 1964 shows that interest on all services amounted to ?23,663,767. I want to examine this charge which has been imposed on the Postmaster-General's Department by the Department of the Treasury. Before I do so, let me return to the conference between Commonwealth and State Ministers held in March 1959. Referring to the payment of interest on funds advanced for Government works Mr. Bolte said -

You do it in the case of the Snowy Mountains scheme, because there the States or the consumers will pay it.

Mr. Menzies,as he then was, replied ;


Then Mr. Bolte said -

But, in relation to non-productive 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. Menziesreplied ;

I wonder what the effect would be if we had.

Further on, Mr. Menzies said -

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. . .

He referred to the Post Office and the Commonwealth Railways.

Senator Ormonde - That is the big issue.

Senator O'BYRNE - The issue is as stated in the report of the Ad Hoc Committee which inquired into the commercial accounts of the Post Office. Under the heading " Concept of the Post Office as a Business Undertaking " this passage appears -

The aims of most Government businesses differ in some ways from those of most private businesses. Whereas private businesses are primarily concerned with the achievement of a satisfactory level of profit, Government businesses usually have to take wider considerations of national interest into account. For example, the Post Office has been required to render some services at uneconomic rates in accordance with Government direction.

At page 5 of the minority report under the heading "Part II. - Interpretation and Dissent", this paragraph appears -

The Post Office is the largest business undertaking in Australia and its fundamental purpose, taking one year with another, is to maintain an efficient standard of service without profit or loss. It must plan its facilities to meet the national interest. It must operate some of its services at uneconomic rates for reasons of Government policy and under conditions that no private business concern would entertain . . . Above all, we do not believe it possible to disregard the national and essential character of the Post Office.

That part of the minority report reflects my views on the function of the Post Office.

The regulations we are considering provide for very severe increases in the charges made to consumers. The financial report for the year ended 30th June 1964, to which I referred earlier, reveals that for the year in question the sum of £6,474,251 was debited for superannuation liability. It is interesting to note that that is an actuarial entry; it is not factual. What happens is that all revenue goes into the Consolidated Revenue Fund, and all the money that is required for administration and to pay debts comes out of Consolidated Revenue. I repeat that the debiting of £23,663,767 for interest and £6,474,251 for superannuation payments are actuarial entries. The Post Office has no reserve fund of its own, because it is deemed that the Commonwealth will be able to care for such matters as reserves and superannuation funds.

We regret that the Minister for Health (Senator Wade) is indisposed. We hope that he will be back with us very soon. It is unfortunate that, having opened the debate on the Post and Telegraph Rates Bill as Minister representing the PostmasterGeneral in this place, he is not here now. He said on that occasion that people who use the service should pay for it. That is the nub of the whole matter. The people who are using the service have already paid for it in the form of taxation. If they have not, then their fathers and mothers have paid for it. The assets of the Post Office have been built up over the years from Consolidated Revenue. Of course, the argument advanced now is that the activities of the Post Office must be put on a sound business footing.

Let us see what is happening in the Post Office as a result of Government policy. The "Financial and Statistical Bulletin" issued by the Postmaster-General's Department for the year ended 30th June 1963 shows that in 1950 a total of 17,465,900 registered articles were posted for delivery within the Commonwealth. Then the Department, as a result of Government policy, reduced the value of its service and would not guarantee that a registered article would be delivered into the hands of the person to whom it was consigned. The public showed its opposition by declining to use ibc service. Consequently, in 1963. only 9,675,800 registered articles were posted for delivery within Australia. Those figures illustrate that the public is rather sensitive about what the Government does through the Postmaster-General's Department. Very little alteration was made to the charges for registered parcels and cash on delivery parcels. Nevertheless, the population has grown.

The ACTING DEPUTY PRESIDENT (Senator Benn). - Order! The time allowed under Standing Order No. 127 for discussion of the Business of the Senate, Notice of Motion No. 1, has expired. The orders of the day will be called on.

Motion (by Senator Anderson) agreed to-

That the consideration of the Orders of the Day be postponed until after the disposal of Business of the Senate, Notice of Motion No. 1.

Senator O'BYRNE - I have demon.trated to the Senate that increase in Post Office charges induce a severe reaction by the public and substantially affect the activities of the Post Office. It is a great pity that the old system of handling registered letters and registered parcels has been changed, because it seemed to me to be as safe as placing a letter in a. courier's hands. The reputation of the Postal Department promoted a feeling of security that it would reach its objective. Because the service has been changed there has been a tremendous reduction in the volume of business handled by the Post Office.

Undoubtedly telephone services have become part of our way of life. They are essential today. We cannot do business or satisfactorily make personal contact unless we have a telephone. In 1950 there were 1,109,984 telephone services installed and the proportion per hundred of the population was 1 to 13.57 at that time. In 1963, 2,522,522 telephone services were installed and the proportion per hundred of population was 1 to 4 in that year. Although technical advances have enhanced the efficiency of this section of the Department, the increased charges will be felt most heavily by the people who avail themselves of the telephone services.

I wish now to illustrate how increased charges in the past quite easily could be reflected in the future activities of the Post Office. In 1950, 28,704,257 ordinary telegrams were sent. The Government greatly increased the charge for each word in a telegram and last year the number of ordinary telegrams sent fell to about 16 million, a reduction of about 45 per cent. For urgent telegrams the charges are higher. In 1950, 1,988,987 urgent telegrams were sent. In 1963 this figure was reduced to 492,160.

Senator Cooke - In spite of the great increase in population.

Senator O'BYRNE - Yes. Because of Government policy people are reducing their use of the wonderful services provided by the Post Office. They resent the sectional taxation imposed by the Government. The number of Press telegrams sent has been reduced from 287,410 to 148,091. The Press has switched to another form of communication - teleprinter services. The Post Office's investment in teleprinter services is a very important matter. The teleprinter services have an infinity of uses, not the least of which is in our defence in a time of national emergency. Yet the present users of the telephone services must pay interest on the capital invested in their establishment.

I turn now to the differential rates charged to business organisations and to private citizens. The first regulation we seek to disallow is regulation 2. Extra charges imposed on a business organisation may be claimed as a taxation deduction and may bc added to the selling prices of the commodities of the business. Thus the consumer has to pay the increased charges. The private citizen has no way of passing on increased charges imposed on him, so that he suffers in two ways. He is forced to pay increased prices for ordinary commodities, in the selling prices of which the increased charges are included, and he must pay the increased charges imposed on private citizens. It is considered that the Government is adopting a concealed form of taxation. The Government does not have the political courage to say to those people who are best able to pay increased taxation: " The people who are making the most profit should pay the most taxation, because all the facilities available in this country are provided for you ". The vested interests are defended by our Army, Navy and Air Force. Overseas investors have all these benefits free and they are skimming the profits from our industries. In order to avoid making those people pay their full share of taxation, the ordinary citizen is asked to pay concealed taxes. They are no more and no less than concealed taxes.

I have already pointed out that the accounts of the Post Office are falsely presented so that Government policy can be implemented, first by the fixing of the amount of capital invested in the Postal Department; secondly by the amount of interest charged on sums which have been invested over the years; and thirdly, in the actuarial entries, which are not proper entries at all. They are not factual entries, and they have the effect of showing a total loss of £296,823. If the matter were closely examined it would be found that the Post Office is making a substantial profit and that it could continue to make a substantia] profit without the aid of this indirect, concealed tax with which the Government is socking telephone subscribers.

I have pointed out already that increased charges have led to a reduction in the use of many of the revenue producing services of the Post Office. I have pointed to the reduction in the number of registered postal articles and the reduction in the number of parcels and telegrams. However, telephone users are increasing in number, and the Government is imposing extra charges on them. Irrespective of Senator Anderson's charge that politics are being introduced into this debate, I still say that I believe that the Post Office essentially is providing public services, that it should operate for the benefit of the public and that the public should be able to obtain the services that it provides at cost. The imposition of fictitious interest charges on the various sections of the Post Office is a political or Treasury trick to obtain revenue easily instead of risking the odium that normally has to be faced when taxes are imposed by the Taxation Branch. In this instance the Government is using the facilities of the Post Office virtually to increase taxation.

The increased cost of collecting these extra charges should be considered. What is this going to cost the Department and, eventually, the users of telephones? Extra staff will have to be employed to issue accounts quarterly. The cost of a telephone call is 4d., and in some cases 6d. Possibly the cost of an ordinary call will be the equivalent of 6d. when decimal currency is introduced. As the inflationary process continues, instead of a private person getting a telephone bill for £15, £20 or £25 for a half year, his bill will rise to £50 or even £60i

He will need to receive his bills on a quarterly basis, so as not to disturb his budget for the year.

Senator Ormonde - The charges look smaller on a quarterly basis.

Senator O'BYRNE - That is so. In view of the budgeting system that has to be used today in most homes, it is necessary for people to have an idea of their accounts from week to week. Imagine the shock some people will get when they receive their telephone accounts. I heard the other day of a person who leased his home for a short period and on his return found that he had a telephone bill for £1,000. This was normal business procedure on the part of the Department, but apparently the unscrupulous people to whom he had leased his house had taken advantage of a weakness in their agreement. Imagine the shock of a person faced with a telephone bill for £ 1 ,000. The increased charges are such that telephone subscribers will have a shock when they receive their bills even though the Department is to send them out every three months instead of every six months.

I think I have shown that the policy of the Government, and of the Treasury, in increasing charges to telephone subscribers is a policy of increasing taxation in a way which, to honorable senators on this side of the Senate, is intolerable. To impose the increased charges by regulation is, as it were, to bring them in by the back door. It has been contended tim'e and time again that changes of this importance should be proposed in legislative measures which can be fully debated and which are brought to the notice of the public generally. My view is that these regulations should be disallowed and that other ways should be found to raise the money that the Government needs. The Government should have an urgent look at the Ligertwood report on tax evasion. The burden of paying taxes should not be placed on only a small section of the community. I support the motion moved by Senator Cant on behalf of the Opposition that the regulations be disallowed.

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