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Wednesday, 25 July 1906


Mr KING O'MALLEY (Darwin) . - I see very serious objections to the ratification of the proposed contract. It is intended to enter into an agreement for ten years. Within a decad'e, millions of persons are born and die, and wonderful improvements are effected in the industrial arts, and in the means of transit, and so on. We may reasonably expect that, before the next ten years are past, we shall have steamers running between Australia and Europe within very much less time than is now occupied in the carriage of our mails. Only lately the steamers employed on the large lakes in America have been able, by the use of oil as fuel, and other means, "to accelerate their speed to such an extent that they can make as good time as the railway trains. We are proposing to enter into a contract under which we should be denied the advantages of any improvements such as I have indicated. The Postmaster-General, who ought to be the guardian of the people's rights and interests, has entered into an agreement which will not bind the company to give special rates for the carriage of Australian products to the markets of Europe. Brindisi is to be the European terminus, whilst Adelaide is to be the Australian stopping point. We .guarantee to pay the company a subsidy of £.125,000 a year, so that at the end of ten years we shall have paid away £1,525,000, inclusive of interest at the rate of 4 per cent. We have no guarantee, however, that the company will in any way improve the condition of the producers of Australia bv giving them better facilities for the carriage of their exports than they have hitherto enjoyed. This is a serious matter. The farmers, manufacturers, and business men of Australia generally cannot1 enter into direct agreements with the company, arid the Postmaster1 General, as the representative of the whole of the people, should have inserted in the contract a clause requiring the company to give our producers reasonable terms. It should have been stipulated that in the event of the company and the Government rinding it impossible to make satisfactory arrangements in this regard, the whole matter should! be submitted to arbitration. A subsidy of £125,000 per annum should be a. bait, enabling the Commonwealth to make a splendid contract from the stand-point of the producers, and yet nothing is to be done for them under this agreement, which will extend over ten years. Where shall we be at the end of that period? It is all very well to say that the vessels of the company must call at Melbourne and Svdney, in order to secure the cargo necessary to enable the company to create a profit, but the fact remains that no such condition has been made. As the Age points out this morning, the company might prevent other steam-ship companies entering the Australian trade, and, having once destroyed opposition, they would be able to charge whatever rates they pleased. I should infinitely prefer to devote the subsidy to the establishment of a State-owned line of steamers as proposed by the honorable member for Barrier.


Mr Salmon - We shall have some control over the company


Mr KING O'MALLEY - The control we shall have will be something like that which this Parliament is supposed to exercise over three-fourths of the revenue of the Commonwealth. We may talk a lo.t, but talk is cheap. I think that the contractors have outgeneral:ed the Government. It will be open to them to determine the contract in the event of this Parliament passing legislation which in their opinion diminishes their income-


Mr Higgins - They will have to prove that it has diminished their income.


Mr KING O'MALLEY - What constitutes a diminution of income? If a member of the Labour Party moved that an improvement be made in regard to the carriage of produce, or if some other proposal relating to shipping were carried, the company would be able to say, " This is a violation of the spirit of our contract; the course proposed is detrimental to us," and it is impossible to say what the Commonwealth would have to pay in order to recoup the company the resulting losses. The agreement provides that if, as the result of legislation passed by the Commonwealth, the company loses at least £5,000 a year, thev are to be recouped. What is £5.000 to a big steam-ship company. It would represent produce that could be stowed away in so small a space that one would need a microscope to find it. And yet this concession was made as an inducement to the company to enter into the contract. This is one of the most dangerous provisions that has ever come before this House. We shall find that it is something like the solicitor's bill of costs in connexion with the

Butter Commission'. Five thousand pounds seems a very small sum, but when the time comes for us to fight over the question of losses, it will certainly grow. If we ratify this contract, and subsequently pass a Navigation Bill in accordance with the recommendations of the Navigation Commission, the company will be in a position to demand from us an increased payment.


Mr McWilliams - If the Bill interfered with the contract they would be able to do so.


Mr KING O'MALLEY - And no doubt it would interfere with the contract. If, as the result of the passing of the Australian ludustries Preservation Bill, a stop were put to dumping, and the volume of our imports was in that way reduced, the company might claim that it had suffered a loss which the Commonwealth should recoup. I believe that this contract is a trap for the Labour Party. I can see dangers throughout its provisions, and yet the Government smilingly ask us to accept it as a good thing.


Mr Salmon - The Chamber of Commerce also says it is a good thing.


Mr Knox - If carried out it certainly will be.


Mr KING O'MALLEY - I am not quite sure, but I believe that a number of gentlemen connected with the Chamber of Commerce were rather sweet on the " butter business."


Mr Knox - I do not think the honorable member has a right to make that statement.


Mr KING O'MALLEY - We have shipping rings, and industrial and banking rings, all over Australia, as well as in other countries. I believe there is only one company to tender for the mail service between Tasmania and the mainland, and all the shipping companies are members of rings. When the honorable member for North Sydney asserts that it would cost the Government more than it costs a private company to run a mail service, I feel constrained to ask how private companies manage to carry on? According to the honorable member, the Orient Steam Navigation Company has been losing money ever since it started, and yet it is not bankrupt. It is like a bookmaker. When one speaks to such a man, one is always assured that he is losing money, and yet, although he produces nothing, he invariably lives in a fine house. And so with Melbourne merchants. If these private companies are constantly falling behind, is it not time for the Government to come to their rescue and to take the whole business out of their hands, in order to save them from complete bankruptcy ?


Mr McWilliams - That is not a good argument.


Mr KING O'MALLEY - I put it from a philanthropic stand-point. Perhaps my socialistic tendencies will not permit me to go far enough. It is said that we have a duty to perform. We should say to those gentlemen who have been operating these private corporations for years, "While you have grown fat, and lived in palaces, your companies have been losing money, and before we allow you to become absolutely bankrupt we will take over the mail service in which they are engaged." It would be far better for the Commonwealth to face this problem now, and to establish its own fleet without delay. Our banks are paying from 10 to 15 per cent. by way of dividends. Their coffers are full, and the country is prosperous.


Mr Knox - What banks are paying from 10 to 15 per cent, in dividends?


Mr KING O'MALLEY - Occasionally I pick up the balance-sheets issued by the banks, and see what they are paying. The Australasian Insurance and Banking Record declares that those dividends are being paid, and shows that the banks have millions sterling in their vaults. All this money is lying idle. Surely they cannot have a better investment than would be afforded by the opportunity to sink that capital in Commonwealth stock at 3 per cent. ? I can borrowmoney at 4 per cent., and surely the Commonwealth ought to be able to get it at 3 per cent.


Mr Higgins - The honorable member wishes us to incur our first loan for the purpose of establishing a national fleet of mail steamers ?


Mr KING O'MALLEY - No. I am opposed to loans; but I can tell the honorable and learned member how this difficulty can be overcome. A national fleet of steamers could be constructed if the Commonwealth adopted the example of the United States, when they fought the War of Secession.


Mr McWilliams - By means of " Greenbacks " ?


Mr KING O'MALLEY - By issuing as legal tender Commonwealth notes based upon the products, the properties, and the revenues of the Commonwealth. We should not then have to dependupon the moneymongers, pawnbrokers, and Stock Exchange gamblers of Europe. The project can be financed in such, a way that Australia will prosper. I shall vote with the honorable member for Barrier, and if the Government is not high enough to be seen across its own wife's kitchen, let it step out. I am willing to conduct the show. I believe that the Postmaster-General has the courage to support the establishment of a Commonwealth line of mail steamers. He sees that this country is rich enough and strong enough to own, not only steamers running to Europe, but vessels trading all round Australia. We should then be able to prevent the continuance of the cursed system of granting rebates and of making discriminations. Under present conditions, the little man has almost been dispensed with. Nowadays nobody wants him. There is no room for him in Australia. We want a system which will help the little producer, the little distributor, and the little trader - a system which will pick up the people who are cast out by the big institutions. Unless the Postmaster-General consents to the insertion in. the contract of a clause which will make it impossible for the contractors to recover damages from the Commonwealth in case we enact legislation which is unacceptable to them, it should be rejected. It is very easy to get oneself into trouble, and very difficult to get oneself out of it. I do not want to see lawsuits entered upon after this contract has been ratified. Under the terms of the agreement, if we demand an improvement in the service during the currency of the contract, the contractors may demand an extension of their contract at an advanced rate.


Mr Wilks - The honorable member should vote against the agreement.


Mr KING O'MALLEY - I shall have to do so unless the Postmaster-General can give me an emphatic assurance


Mr Austin Chapman - Do not vote against it.


Mr KING O'MALLEY - I shall be guided by what the honorable gentleman has to say regarding the manner in which he proposes to deal with this matter.


Mr Wilks - Does not the honorable member think that five years is a sufficiently long period for the contract to cover?


Mr KING O'MALLEY - I think that three years is long enough. If a similar contract had been entered into before the dis covery of steam, and if the application of steam power to locomotionhad been introduced immediately after it had been ratified, we should have had our mails carried by stage coaches for nine years whilst the trains were running alongside of them. I want the Government to recognise that they must do something for the producers. They must endeavour to obtain conditions which will insure that the contractors shall charge the producers reasonable prices for carrying their produce to the markets of Europe, and the Australian people reasonable prices for the conveyance of their goods from Europe. After the next election I hope to see a Tariff Bill introduced into this House which will discriminate between Australia and the cheap labour countries of the world. If such a Bill were submitted, as a protectionist I should feel bound to support it. If by means of such legislation we enabled the Australian people to manufacture all that is necessary for their own requirements, would not our action diminish the income that would otherwise be derived by the mail contractors, in which event they would be able to terminatethe contract or demand an increased subsidy from the Commonwealth, or take legal action. I wish to say that the Court which gave judgment in the Taff Vale case would not have much hesitation in giving a verdict against the Commonwealth.


Mr Wilks - No provision ismade in the contract for the conveyance of perishable products.


Mr KING O'MALLEY - Exactly. It really seems to me that there is something wrong with the Government. I confess that during the past year I have been sitting back like a well-saddled back. I have remained silent, and have always been prepared to vote. The Government have not always been able to depend upon themselves, but they have had the knowledge that the Labour Party was like a rock of ages behind them. Yet what has the Postmaster-General done for the potato-growers on the West Coast of Tasmania or for the fruit-growers of Franklin ? We are asked to pay a subsidy to a private company which may at any time join a great combination and so bring about our destruction. If we paid that subsidy to the Commonwealth it would be sufficient to cover the interest upon the money required for the construction of a national fleet of steamers, and to provide a sinking fund, so that eventually the fleet would become our own. The estimates put forward by the Shipping Commission are reasonable from every stand-point. Why should the Government be required to insure its property with private institutions? The honorable member for Barrier has estimated insurance at ^£150,000 per annum, and he has allowed i\ similar amount for a sinking fund. I think that his calculations all round are splendid, and by establishing a national fine of mail steamers we should be acting far more wisely than we shall be by throwing away £,1,525,000 upon the proposed contract. Under the Government proposal our last condition will be worse than our first. I intend to vote for the amendment of the honorable member for Barrier, and, if it be defeated, I shall endeavour to reduce the term of the contract to a period of five years. I shall give notice of an amendment with that object. I may say that this is not intended as an expression of want of confidence in the Government, because I do not want the job of Minister for the next three months, since it would not be worth while to accept it for that period.







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