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Thursday, 20 June 1946

Mr CALWELL - Yes. Theconditions will be set out either in the legislation or in an agreement which will be made between the company and the Government prior to the establishment of the commission, or subsequently between the commission and the company.

Employees of the two companies who have been exclusively employed by them on telecommunications in Australia for a period of three years or over, and for whom suitable employment can be found by the commission, will' become entitled to appointment to positions in the service of the commission, with preservation of their accrued pension, superannuation, furlough and other rights. If, however, it is not found possible by the commission to re-engage all the enlployees affected, it is proposed by the Government to come to an arrangement with the companies so that the employees affected will not be placed at a disadvantage.

The powers, functions and duties of the commission are detailed in clause 20 of the bill. The commission will acquire, operate and maintain all the overseas telecommunication services hitherto owned and operated in Australia by Cable and Wireless Limited and Amalgamated Wireless (Australasia) Limited, including in the latter case the operation of coastal and island radio stations which handle wireless traffic with ships at sea and similar traffic exchanged within and between territories of the Commonwealth. It is proposed that the national corporations which will be setup right throughout the Empire will undertake research and developmental work with the object of improving the efficiency of the overseas telecommunication services. This work will be co-ordinated by the Commonwealth Telecommunications Board in London, and that board will also undertake research work on behalf of all the partner governments. It is contemplated that the commission shall, if so desired by another national body established by any of the other partner governments, undertake to act as agent on agreed terms in maintaining and operating overseas telecommunication services in regional areas adjacent to Australia.

Power is conferred upon the Minister in clause 24 of the bill to approve of any contracts where supply, either directly or indirectly, of imported equipment or material of a value exceeding £5,000 is involved. This provision will ensure that due consideration is given by the commission to the use of equipment manufactured in Australia before steps are taken to import material of any appreciable value from abroad. The powers to be conferred on the commission do not detract in any way from those entrusted to the Minister administering the Wireless Telegraphy and the Post and Telegraph Acts. Provision to this effect is made in clause 28 of the bill. In clause 60 it is provided that the commission shall obtain all necessary licences, permissions and approvals required for it3 purpose from the Minister responsible for administering the Wireless Telegraphy Act. This ensures to the Minister the exercise of his discretion as to the terms and conditions under which licences will be issued to the commission to conduct radio services, and vests in him the final authority for the co-ordination and control of wireless communication activities in Australia.

The conditions under which advances will be made to the commission shall be determined by the Treasurer. Similarly, the- form in which the Commission will keep its accounts- will be subject to the approval of the Treasurer and to inspection and audit by the Auditor-General. Annual reports and financial statements of the commission, accompanied by a certificate of the Auditor-General, will be submitted to the .Parliament as a normal course.

As a government instrumentality conducting overseas communication services similar to those provided within Australia by the Postmaster-General's Department, the commission will, under clause 36 of the bill, be relieved from the payment of certain rates, taxes and charges. The commission will maintain a close liaison with the PostmasterGeneral's Department in the operation of its overseas telecommunication services, and the department will provide certain land-line and other facilities previously made available to Cable and Wireless Limited and Amalgamated Wireless (Australasia) Limited, respectively, to meet the requirements of the commission. The commission will arrange free handling of meteorological telegrams exchanged with ships at sea and, when required, of similar messages exchanged between Commonwealth meteorological offices and stations. The commission will also handle free on behalf of the Postmaster-General's Department other telegrams for transmission within the Commonwealth in cases of interruption to land-lines,- in return for which the PostmasterGeneral's Department will arrange free transmission of messages relating to the commission's administrative affairs.

The duties and functions of the Commonwealth Telecommunications Board, which, will replace the Commonwealth Communications Council, are set out in detail in the second schedule to the overall agreement which becomes a part of the. bill. The costs of the Commonwealth Telecommunications Board are to be met hi agreed proportions from the net revenues of the several national bodies throughout the Empire.

In 'the third schedule to the overall agreement a form of tripartite agreement is drawn up for execution in due course by each partner government concerned, the Commonwealth Telecommunications Board and the local national telecommunications body. This tripartite agreement defines the relationship which will exist between the several parties thereto and, in particular, to mutual responsibilities of the local national body and the Commonwealth Telecommunications

Board. It also provides for the establishment of a central fund into which the national bodies will pay annually their net revenues.

The board will open for each national body an account to which the net revenue paid over will be credited. Net revenue for this purpose is to be arrived at after deduction of denned outpayments and working expenses, and will exclude revenues derived from certain specified services, such as ship-to-shore radio traffic and civil aviation and meteorological services. A debit will subsequently be raised by the board against this credit in respect of, first, the expenses of the board, and, secondly, in the case of the dominion and Indian corporations, their contributions on a defined basis towards a ny deficiency . in the net revenues of the United Kingdom corporation resulting from the expense incurred in the maintenance of the submarine cable system. The combined contributions to be made by the dominions and India in this respect are not, however, to exceed in total in any year the annual cost of cable maintenance and provision for cable renewals. The basis of contributions towards cable maintenance is referred to in the third schedule to the overall agreement and is considered reasonable and equitable from the viewpoint of Australia, bearing in mind the revenues which will be derived in Australia from cable traffic, and the extent to which the cables will be used for the disposal of telegraphic traffic. After deduction of the foregoing costs from the contributions of the nation corporations to the central .fund, the balance remaining to the credit of each national body will be refunded to it.

For the information of honorable members, I should explain that at present the divisions of receipts from interEmpire telegraph traffic, both in respect of outgoing and incoming telegrams, is effected according to the services rendered by each party sharing in the handling of the messages. Under the procedure proposed in the third schedule to the overall agreement, however, each national- body will retain the full amount of the collections on traffic originating in its own territories but will receive no proportion of the collections on messages incoming from other Empire countries. Settlement will, however, still require to be made by each national body with foreign administrations and companies in connexion with outpayments on telegrams exchanged with places beyond the Empire. The proposed new method of adjusting traffic receipts will greatly simplify the accounting arrangements which have previously applied.

The main object to be served from the adoption of the recommendations of the Commonwealth Telecommunications conference, as provided in the bill and in the legislation which all other Empire countries have agreed to pass, is a unification of government policy and financial interests which will enable the telecommunication systems of the British Commonwealth to be developed as a whole using both cable and wireless to the best advantage and without the artificial routeing of traffic to which a divergence of cable and wireless interests naturally tends.-

To Australia this Empire-wide scheme brings an added advantage. Although the efficiency and enterprise of Amalgamated Wireless (Australasia) Limited in operating and developing overseas radiotelegraph services are beyond question, there are in the agreements negotiated between the Commonwealth Government and the company in 1922, 1924 and 1927, certain disadvantages from the Government's point of view which have affected the relationship between the Commonwealth and the company, and have at times led to the embarrassment of the Government in its relations with foreign governments. The fault perhaps lies not so much with the company as with the governments who negotiated the agreements and conferred more power and authority upon the company than is consistent with, proper government control where external relations with other countries are bound to be affected. Apart from differences arising from interpretation of different clauses in these agreements, there has been over the years an aversion on the part of the company from any form of government direction on policy. It was this, factor in particular that led successive Commonwealth governments since 1930 to reach the conclusion that the telecommunication services conducted by Amalgamated Wireless (Australasia)

Limited should be brought wholly under government control.

Apart from that, communication services whether internal or external are essential public utilities. The internal communication services are owned by the nation in the national and public interest, and it is illogical to have the external services operated by companies whose first duty is to their shareholders.' There are very obvious reasons why the profit motive should be dissociated entirely from the conduct of these external telecommunication services. If excess revenues are derived from their operation they should be applied in reduction in charges to the public or in improving the services, rather than for the benefit of private shareholders.

Of the subscribed capital in Amalgamated "Wireless (Australasia) Limited, amounting to £985,518, the Government owns 500,001 fully paid shares and private interests 485,517 shares. 'Under the agreements to which I have referred the measure of control exercisable by the Government is incommensurate with its majority shareholding. The agreements are so greatly in favour of the company that, apart from approval or veto of tariffs and the granting or withholding of licences for new services and - even this later right by the Government has been denied by the company - the Government has virtually little or no. control at all over the policy of the company! Government representation on the Board of Directors is limited to three out of a total of seven directors constituting the board.

Effective co-ordination and control of the overseas telecommunication services in Australia in the national interest is impracticable of realization so long as two separate companies own and operate the two respective means of overseas communication, cable and radio. The transfer of the services of both companies to > the Government will enable their complete co-ordination under a single operating authority, and will ultimately enable cheaper rates to be offered to the users of the services through the avoidance of existing duplication of effort and of overhead costs resulting from the conduct of the respective services by two separate undertakings.

The acquisition by the Government of the telecommunication .assets of Amalgamated Wireless (Australasia) Limited will involve a reconstituton of the company in order to enable it to continue as a manufacturing, commercial broadcasting and patent-holding sales and servicing organization. The Government proposes to retain its proportionate shareholding in the reconstituted company, if the private shareholders of Amalgamated Wireless (Australasia) Limited so desire. Provision for this would not, however, be appropriate in this bill, and suitable steps towards this end will be taken later, if necessary.

Before I conclude I should mention one other conference that has been held and which has an important bearing upon the success of the scheme which this bil! will implement. In November and December 1945, an agreement was reached at Bermuda between representatives of the Governments of the British Commonwealth and the United States of America on many outstanding problems affecting telecommunication services, particularly in respect of rates and direct radio- telegraph services. Honorable members will be pleased to know that full agreement was reached on all points. The Bermuda, agreement provides for substantial reductions in telegraph rates between certain countries of the Commonwealth and the .United States of America, and contemplates the eventual introduction of a world ceiling telegraph rate of ls. 6d. sterling per word, subject to the agreement of foreign administrations. The agreement includes a statement of the principles to be adopted in determining whether a direct wireless telegraph circuit should be established between two countries, the intention being that this statement should be presented for consideration at the next International Telegraph Conference. Broadly, the proposal is that such circuits should be opened as may be justified by traffic or service needs, and the adoption of the principles suggested at the Bermuda conference would enable the problems concerning the retention ,of direct 'radio-telegraph services established during the war to be largely met. The countries represented at the Bermuda conference recognized the important strategic role which cables play

Overseas[20 June, 1946.] Telecommunications Bill 1946. 1665 in a co-ordinated telecommunications system, and agreed that to secure the optimum development of telecominunication services, research and development work in both cable and radio communication is essential.

The Commonwealth Government believes that the agreement reached at Bermuda marks a notable event in the relationships of the United States of America and British . Commonwealth countries, and paves the way to a lasting understanding in the telecommunications field. The differential that has been maintained between the rates on Empire telegrams and the rates on telegrams between Empire countries and the United States of America., was too high and has led to many misunderstandings and some bitterness. This problem has now been resolved, and the solution has conferred an immediate benefit upon the peoples of the British Commonwealth and of the United States of America.

I have endeavoured to give honorable members not only a broad outline of the bill, but a summary in brief of the history of a quarter of a. century in Empire telecommunications, and an outline of the events which have impelled all governments of the Empire to agree to introduce legislation for the purpose of transferring those services to national ownership. The measure before the House is not a party measure; but one that is brought forward as part of an Empire-wide scheme to which all governments of the Empire have subscribed and which they are committed to introduce. It is in this spirit that I commend the bill to all honorable members.

Debate (on motion by Mr. Harrison) adjourned.

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