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Wednesday, 10 July 1946

Mr CHIFLEY (Macquarie) (Prime Minister and Treasurer) . - . Negotiations with respect to taking over the telecommunications services of Amalgamated Wireless (Australasia.) Limited date back to 1930. Sir Ernest Fisk represented the company in those discussions. I did not hear the remarks made to-night by some honorable members regarding these negotiations. The Leader of the Australian Country party (Mr. Fadden) suggested that the Government should appoint a select committee to go into this matter. In respect of certain aspects of the rights held by Amalgamated Wireless (Australasia) Limited it is most difficult to determine the basis- of payment, and I do not think that anybody realizes that fact more clearly than the Leader of the Opposition (Mr. Menzies). I know that he and others had some doubt a3 to what might happen should lengthy litigation take place concerning the acquisition of the telecommunications assets of that company. When the late Mr. Curtin initiated negotiations to take over the telecommunications rights _ of Amalgamated Wireless (Australasia) Limited, Sir Campbell Stuart visited this country in the capacity of adviser to the British Government. At that time a proposal was made that the Commonwealth should come into the negotiations under a scheme whereby, by 1962, it would become the complete owner of the telecommunications services' of Amalgamated . Wireless (Australasia) Limited, and also acquire the rights of the Cable and Wireless Limited, in this country. As time went on other plans were evolved, one being known as the Anzac plan, which was not entirely acceptable to the then Coalition Government in Great Britain led by Mr. Churchill. .1 understand that thai Government appointed a sub-committee of the British Cabinet to investigate the matter. Following a divergence of opinion, Lord Beith visited Australia and the other dominions in order to learn whether it was not possible to modify the Anzac plan. The proposal to acquire .the telecommunications services conducted by Cable and Wireless Limited, had been the subject of discussion in government circles in Great Britain for a considerable period, and,, finally*- as honorable members are aware, a decision was reached by which the British Government planned to take over all of those interests. In the early negotiations, with Sir Ernest Fisk, the late Mr. Curtin, the Attorney-General (Dr. Evatt), the Minister for Supply and Shipping (Senator Ashley) who was then Postmaster-General, and I devoted many weeks to see if a basis could be arrived at by which the telecommunications assets and. rights of Amalgamated Wireless (Australasia) Limited could he acquired by the Government. I do not propose to Cover the details of the proposal then made, but I point out that portion of the agreement relating to Cable and Wireless Limited was not acceptable to that company, which was represented in those negotiations by Sir Edward Wilshaw. Ultimately, that plan was abandoned. Later, the Coalition Government in Great Britain led by Mr. Churchill took up the matter, and subsequently evolved a' plan for taking over telecommunications services throughout the Empire by the various governments. Later, the plan outlined by the Minister for Immigration (Mr. Calwell), in his second-reading speech, was adopted by all the dominion governments, including that of Southern Rhodesia. The honorable member for Moreton (Mr. Francis) has had something to say about the socialization of industry. The fact is that all of those governments, some of which are very conservative, admit the need for controlling telecommunications services as a governmentowned utility. I was pleased to hear the honorable member for Wentworth (Mr. Harrison) admit this afternoon, without committing himself to the broad principle of nationalization, the wisdom of such a plan. He dealt with the subject very fairly, pointing out that particularly in time of war it was very desirable that telecommunications services be under government control. Eventually, when the Empire plan was decided upon, Australia as a party to the agreement was faced with the task of taking over the telecommunications rights of Amalgamated Wireless (Australasia) Limited. The Leader of the Opposition knows of some of the incalculable factors in any attempt to assess the- value *of the rights held by Amalgamated Wireless (Australasia) Limited. It lias been said that certain of those rights are interminable ; and it has been "nobody's guess " as to what might be done with regard to compensation, or what, litigation might ensue upon failure to reach agreement. In the original agreement, it. was proposed to acquire the rights of Amalgamated Wireless (Australasia) Limited at a cost of approximately £1,250,000. Certain conditions were stipulated. The agreement was to operate till 1962. I am speaking now from memory. I did not anticipate that any suggestion would be made that any expenditure involved in this matter might be challenged as a misuse of the taxpayers money. I have had the advantage of participating in all of these negotiations during the last fouf years; and trying to solve the particular problem of assessing the value of the assets of Amalgamated Wireless (Australasia) Limited. Some people would say that the old agreement was fairly generous, whilst others would say that if the matter were taken to court no one could possibly guess the figure at which the company's rights .might be assessed. Some have said that it would be an astronomical figure. A considerable time ago we again resumed negotiations, having in mind the Empire agreement. I was rather sorry that the matter of cost was raised, because the House will have the opportunity later to discuss that phase of the matter. After all, the private shareholders are entitled to ask that the negotiations be not discussed in detail until their representatives have had -the opportunity of putting the proposed agreement before the board of directors of whom the right' honorable member for North Sydney (Mr. Hughes) is one.

Mr Fadden - The Commonwealth Government is the biggest shareholder. Why does not the Government put this before the people?

Mr CHIFLEY - The Commonwealth Government holds half the shares plus one.

Mr Archie Cameron - More than that.

Mr CHIFLEY - It is entitled to hold half the shares plus one, but it is true that it does hold more than that. I was surprised to hear some one say that I, as Treasurer, am a generous fellow. That is a departure from the usual charge against any . treasurer. I have ,taken an active part in the negotiations, and I say that it -is difficult to assess just what is fair compensation for the private shareholders' rights in the telecommunications side of Amalgamated Wireless (Australasia) Limited. I have spent many hours as a member of the Cabinet sub-committee in dealing with this matter. We did reach a possible agreement which has to be submitted to the directors aud, I presume, the representatives of the private shareholders and finally to the shareholders themselves. The general manager of Amalgamated Wireless (Australasia) Limited, Mr. Hooke, and I discussed, the matter in consultation with- qualified accountants from the Treasury of equal standing to any in private life. I do not propose to go into the figures in the agreement, because I do not think that would be fair to the people associated with Amalgamated

Wireless (Australasia) Limited, who still have to discuss with their shareholders whether the agreement is acceptable. 1 have spoken on this matter, because I have been informed that some suggestions have been made that the financial arrangements that we are negotiating with Amalgamated Wireless (Australasia) Limited are extremely generous and that we are throwing away taxpayers' money. The figure that has been determined on as the basis for negotiation is a long way below the figure originally submitted to me as acceptable to the private shareholders. I do not mind what other charges are made against me and my Government, but I do not want any charge of dishonesty to be made against the Government or its officers. .

Mr Fadden - That is not suggested.

Mr CHIFLEY - The two officers concerned are the Secretary to the Treasury, Mr. McFarlane, and the Director-General of Posts and Telegraphs, Mr. Fanning, than whom no two morereputable men are to be found in the Commonwealth Public Service. They worked very hard, as did Mr. Hooke. I shall have no objection to a later discussion of the agreement if it should be accepted, but I do deprecate any suggestion that in these negotiations, which have been going on for years, the Treasury, the PostmasterGeneral's Department or the subcommittee of Cabinet, which consisted of the late Mr. Curtin, the Attorney-General, the then Postmaster-General (Senator Ashley) and myself, were ' not out to make the best possible 'bargain, having regard to all the unusual circumstances of what might be deemed to be the assets, goodwill and rights of the private shareholders on the telecommunications side of the Amalgamated Wireless (Australasia) Limited. I rose only to make it perfectly clear that everything has been done to reach a satisfactory agreement. It is easy to argue that the figure might be £100,000 too much or too little. I believe that the proposal still to be considered by the private shareholders is the best that could be reached in the circumstances.

Debate (on motion by Mr. Conelan) adjourned.

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