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Wednesday, 31 October 1956

Mr ACTING DEPUTY SPEAKER (Mr. Lawrence) - Order! The honorable member for East Sydney must cease interjecting.

Mr JOSKE - For those and other reasons, as the Minister pointed out, these freight increases must be imposed. The Minister went on to say -

The increase in costs . . stems almost entirely from the incidence of a series of awards of the arbitration tribunals ... in particular, our waterside workers have secured great benefits. But benefits and obligations go hand in hand. The obligation in this case is to the community - that the utmost should be done to assist in securing a more expeditious turn-round of shipping.

As to that aspect, the point is that the troubles on the waterfront are due not in any sense to the various figments of the imagination of the honorable member for East Sydney, but to the slackness of the men who work on the waterfront. The Minister finally said that the trade on the coast is likely to be diverted to other forms of transport, and he warned the stevedoring industry that it will go the way of other industries that have refused, or failed, to face facts. In other words, unless the waterside workers realize that they must work harder and cease the strikes that have been so prevalent in recent years, their work on the waterfront will disappear. It is interesting to note, in this connexion, that the coal-miners in New South Wales indulged in so many strikes over recent years that their industry is now in a parlous position. The waterside workers will find themselves in a similar plight if they continue their policy of striking.

I turn now to some of the comments made by the honorable member for East Sydney. I refer in particular to the subject of profits. He has suggested that it is because the profit rate is so high that these increases have become necessary. He said that the shipping industry could afford to meet the increased costs. If one studies the report of the Stevedoring Industry Committee of Inquiry, one must conclude that the profits of shipping companies could have no significant effect on freight rates. In 1953-54, the year of the highest profits, the profits amounted to ls. 4d. a ton of cargo handled. At that time it cost £6 lis. 6d. to send a ton of cargo from Melbourne to Sydney, and the weighted average of freight rates between Australia and the United Kingdom was £14 10s. a ton. In other words, these enormous profits that we have been told about amounted to ls. 4d. in £6 lis. 6d. for coastal freight, or ls. 4d. in £14 10s. for overseas freight.

What, then, is the cause of the increased costs? The board has made a finding in this regard. It has said that the main item of cost in the total costs of stevedoring operations is the cost of labour. Over all, labour costs represent about 80 per cent, of total costs. The fact is that very high wages have been paid on the waterfront for many years, and those wages have increased to a very great extent in recent years, while profits have been very low. The committee found as follows: -

The increase in freight rates between December, 1947, and June, 1955 . . . was greater than the increase in operating cos's between 1947-48 and 1953-54. However, a substantial proportion of the increased earnings flowing from higher freight rates went to restore profit-earning ability to the industry.

In other words, profit-earning ability had to be restored, because there had previously been no such ability in the industry. The committee went on -

The level of profits in 1953-54, the year of highest profit, was too low to provide from that source the estimated replacement cost at that time of the flees of the private operators engaged in the industry.

The average profit of the main operators engaged in interstate trade amounted, in 1953-54 (the year of highest profit) io 5.4 per cent, of the original cost of their vessels and to 3.3 per cent, of their estimated replacement cost.

If one takes the life of a vessel as 25 years, which is a reasonable time and the time that is usually accepted, the amount of profit earned by the shipping companies would not be sufficient to replace the vessel, and the profit rate would certainly have no appreciable effect on costs. [Quorum formed.] The Australian shipping companies far from making the enormous profits that were referred to by the honorable member for East Sydney in one of his flights of imagination, are in a deplorable financial position. I shall cite to the House an extract from a paper read to the Australian Institute of Political Science Summer School that was held at Canberra in January of this year. It was a paper on the Australian coastal shipping industry by Mr. A. G. Lowndes. He stated -

The Australian shipping companies are all relatively small when we are thinking in terms of capital. Two of the largest of them have not increased their capital since the early 1920's, their disclosed net profits after tax over the last four years have averaged less than 4 per cent, on shareholders' funds and, with the current trends in the profitability of shipping, their prospects of attracting capital to finance expansion are extremely small. Apart from the unattractiveness of coastal shipping as an investment, the Australian shipping companies with their present Meets are struggling to keep their heads above water. They have not yet solved their replacement problem on their existing number of ships and, unless this can be done by investment allowances, more just and enlightened policies on depreciation allowances for taxation purposes' or ability to trade more profitably, they must be reluctant to take on more ships except on extremely favourable terms.

That was a true statement of the condition of the Australian shipping companies.

The honorable member for East Sydney suggested that the whole of the trouble on the waterfront was due to the conduct of the shipping companies, but the committee of inquiry into the stevedoring industry, in its interim report, had this to say -

The Waterside Workers Federation has used its industrial strength and the weapon of stoppages to enforce its demands upon the employers. The vast majority of these stoppages have been of comparatively short duration, and very many of them have been limited to the men on a particular hold, or on a particular ship or at a particular port. Some of them arise out of petty disputes, even as to almost frivolous matters.

Then the report gave instances of the way in which work on the waterfront had been held up over the years by the conduct of the union. That matter was dealt with also by

Mr. Lowndesin the paper to which I have referred already. The waterside workers have had a good spin and they have had every opportunity to improve conditions on the waterfront. Mr. Lowndes stated -

The Waterside Workers Federation was given by law a virtual monopoly of employment on the waterfront, first during the war under wartime regulations, and since 1948 under the Stevedoring Industry Act, and it has exercised this monopoly without hindrance. lt is rare indeed - perhaps fortunately - that a union is given a monopoly of employment in an industry. But this union was given such a monopoly and has had every opportunity to make good use of it. Mr. Lowndes stated also -

This monopoly position of the federation . . . is a fundamental barrier to achieving reform and good work on the waterfront. The federation is under Communist leadership. The question must be raised as to whether its policy is really aimed primarily at improving conditions for the watersiders or whether it is intended to achieve some political object. Taking the most benevolent view, the leaders have clearly shown that they wish to take over the running of the job, to destroy the normal relationship between employer and employee and to pave the way for socialization of the industry.

Then he added these significant words -

In the meantime, measures which might make for the long-term security and welfare of waterside workers--

That, surely, should be the aim - and for the greater efficiency of stevedoring operations are resisted and rejected because they might in some way interfere with the strength of the union.

This union has used its monopoly of employment on the waterfront only to create turbulence. That is why there has been so much trouble on the waterfront over the years. It was because the honorable member for East Sydney wished to support this union and its policy of creating turbulence that he made the speech he delivered tonight. It was a flight of his imagination, lt was not a factual speech in any sense. By citing facts throughout my speech, I have endeavoured to show how far wrong he was and how far he departed from the facts. He tried to present a distorted picture, because he supports these men and the policy of creating turbulence which they have practised over the years.

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