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Wednesday, 31 October 1956

Mr O'CONNOR (Dalley) .- In view of the fact that in 1953-54 transport costs represented 32 per cent, of Australian domestic expenditure, any bill relating to transport that comes before the Parliament is of the highest importance. This bill proposes that the stevedoring industry charge shall be increased from 6d. to ls. 7d. a man-hour. The Minister for Labour and National Service (Mr. Harold Holt), in his second-reading speech, criticized the waterside workers and, in effect, told the House that responsibility for improving conditions on the waterfront rested on the Waterside Workers Federation. He gave five reasons why he thought that this increase was necessary and then he suggested that a final solution of the problems of the stevedoring industry depended on the approach of the Waterside Workers Federation to those problems. 1 think that the Minister was completely unfair, as also was the honorable member for Balaclava (Mr. Joske). There is abundant evidence that many of the difficulties that confront us on the waterfront arise from sources other than the Waterside Workers Federation. I think it would be as well for me to go on record as saying, in defence of the Australian waterside workers, that when honorable members opposite refer to the turbulence on the Australian waterfront as something unique to Australia they are not being accurate, because the waterfront industries of the United Kingdom, the United States of America and some European countries have many of the characteristics of the Australian waterfront industry. That being so. 1 submit that the statement that the Australian waterside worker adopts a unique approach to the problems that he meets from day to day is contrary to the truth.

The Minister, in' his second-reading speech, informed the House of the possible extent of the costs involved in the nev. award. He suggested that the increase of attendance money from 16s. to 24s. would cost approximately £380,000, and that benefits the waterside workers were recently granted in the way of sick pay and statutory holiday pay would cost approximately £1,000,000. Like the honorable member for East Sydney (Mr. Ward) I am very pleased indeed' to know that the waterside workers have made some ' gains in this respect. But like him 1 emphasize that the shipowners also received favorable consideration in the last award made by Mr. Justice Ashburner. Although the Minister has told the House approximately how mu:h the new award will cost, he has not indicated how much revenue the increased charges are expected to bring in. I suggest that it was within the capacity of the officers of the Department of Labour and National Service to prepare for presentation to the House an estimate of the expected revenue from the increased charges.

For the want of information from the Minister, I have been forced to turn to the last report of the Australian Stevedoring Industry Board and to make estimates based on the figures in that report. My figures may not be strictly accurate, but they will be near enough for my purposes. With a charge of 6d. a man-hour the income of the board for the financial year 1954-55 amounted to £998,000. This means that when the charge is increased to ls. 7d. a man-hour an additional £2,000,000 approximately will be received. On the figures submitted to the House by the Minister the recent award involves an additional cost of approximately £1,500,000. If that is so, why is it necessary to increase the charge in order to obtain so much as the Government proposes to obtain?

The Minister stated that some of this money will be devoted to providing amenities on the waterfront throughout Australia. That is all to the good. 1 think the Stevedoring Industry Board deserves credit for whatever amenities have already been provided. Before the board came into existence conditions on the waterfront were deplorable and utterly disgraceful, and it has contributed a great deal towards their improvement. Nevertheless, 1 suggest that it should have done more. Much remains to be done still. The last report of the board indicates that during the six years ended 30th June, 1955, it spent £220,226 on the operation of cafeterias and on other amenities. This represents approximately £35,000 a year. I suggest that, since the administrative costs of the board averaged about 48 per cent, or 49 per cent, of its expenditure, the waterside workers have not received so much in the way of amenities as they might have received. The board itself pointed out that certain plans have been considered from time to time, but various factors prevented them from being put into operation. Nevertheless, I suggest that the board could have done a great deal more than has been accomplished. 1 do not say that with any intention of detracting from what it has achieved.

The Government proposes to increase the stevedoring industry charges sharply, and it is open to question whether such violent fluctuations of charges are conducive to stabilization of the industry. The Stevedoring Industry Board, in its sixth report, which was presented to the Parliament in March last stated -

For six years from the establishment of the Board until 30th June, 19SS, the charge averaged about 5i pence per man-hour. In the Board's view it is in the interests of all parties that the rate should not be subject to violent fluctuations such as have occurred in the past. At the risk of a charge of being wise after the event, it is pointed out that the steep increase from 4 pence to 11 pence which occurred in 1952 would not have been nnecessary had the original rate of 4i pence been maintained and not reduced drastically to 2i pence in 1949 because of a temporary surplus of cash funds.

This charge was introduced in 1947 at the rate of 4d. a man-hour. After some fluctuation it stood at lid. a man-hour in 1952. In 1954 it was reduced to 6d. a man-hour, and the Government now proposes to increase it to ls. 7d. a man-hour. The Government has stated that certain developments will follow from this increase, but the Minister has not attempted to inform the House what the Government proposes to do about shipping freight rates. If history repeats itself the shipping interests, both Australian and overseas, will take advantage of the opportunity to raise their charges. Honorable members will recall that when the stevedoring industry charge was reduced from 1 Id. to 6d. a man-hour some Australian companies engaged in the coastal shipping trade reduced their freight rates correspondingly, but the overseas shipping owners made no reductions of freight charges. They continued to charge on the basis of a stevedoring charge of lid. a man-hour.

The Government cannot escape its responsibilities in this matter, and it is idle for Government supporters to talk about the behaviour of members of the Waterside Workers Federation of Australia when increased shipping freight charges will cost the country another £15,000,000 unless the Government takes preventive action. The Government is in a position to take action, although it has declined, so far, to do so. lt has in its hands an instrument that could at least curb the proclivities of private shipping interests in respect of increases of freight rates. That instrument is the Australian Shipping Board. If the Government insisted that that board break loose from the shipping monopolies, and should not be a party to any move to increase rates further, we would soon prevent the recurring increases of freight rates from which this country has suffered in recent years. That insrtument is right in the Government's hands but, unfortunately, the history of the Australian Shipping Board during this Government's regime has not been a very happy one in respect of freight rates. The Government cannot escape that responsibility. It was proved at the committee of inquiry, the second edition of whose report we have before us, that at the conference dealing with freights, which was presided over by no less a person than the chairman of the Australian Shipping Board, the board fell into line with whatever freight increases were proposed. The holding of this country to ransom in respect of shipping freights must end somewhere, and unless we are to be completely priced out of world markets - as we shall be if the freight rates for our export goods continue to rise - the Government will have to act before it is too late.

Any one seeking evidence of the attitude of overseas shipping interests to Australia would find it interesting to read the report of the committee of inquiry, which shows how much concern those interests have for the Australian economy and Australia's national welfare. The overseas shipping interests completely refused to supply information requested by the committee about costs and earnings. The Australian shipping companies supplied the necessary information, but the overseas shipping companies adopted an attitude which is described in the report as follows: -

The position in respect of requisitions addressed to overseas shipowners was markedly different. The overseas shipping companies after a considerable delay informed the Committee that they were not prepared to supply voluntarily information requisitioned by the Committee in respect of voyage costs and earnings, annual accounts and related information. It was stated in evidence that the information called for by the Committee from these companies was not available in Australia and this being so there was no. means available for the Committee to compel its production.

From the legal point of view, that might be so, and 1 leave it to members of the legal fraternity to argue the point whether overseas' shipping interests could be made to produce such information. But here we have a case of an outright and forthright refusal, on the part of those interests, to supply information requested by the committee of inquiry. We have heard a lot of criticism of the Waterside Workers Federation, and its effect on costs, and also a lot about profits. Honorable members opposite have attempted to depreciate the allegedly small earning capacity of the shipping interests, but their defence of those interests will not stand up, because it is quite apparent that when some one tries to analyse the operations of the shipping interests in this country it is found almost impossible to ascertain not only what a particular shipping company is, but who runs it. The report showed that the committee attempted to analyse costs and the like, but was not able to obtain the necessary information from private shipping companies in Australia, or from overseas' shipping companies, on matters that would assist it in making a determination. It is odd, indeed, to hear honorable members opposite bewailing the financial condition of Australian shipping companies. I think it should go on record that many of those companies have been in existence for 80 or 100 years, and have made considerable profits out of the shipping industry, and have invested the money they made not only in the shipping industry but also in other ventures, lt is impossible to make an accurate assessment of the position, as in many instances they are private companies, and are not independent companies, because they are subsidiaries. Therefore, when honorable members opposite claim that private shipping interests on the Australian coast are having a parlous time, 1 submit that the record of these companies will not admit of such a conclusion.

I think it is also well to make some reference to the structure of overseas' shipping interests by whose activities our economy is being very badly affected. If members are asking for some action to reduce- costs to bc taken, surely here is a case where they could demand action to give Australia protection, rather than talk about the Waterside Workers Federation. T quote from the report of the committee of inquiry a passage under the heading of " Structure of the Australia-United KingdomContinental trade ". These paragraphs show conclusively that the set-up of the overseas combine is such that it is impossible to analyse it properly. The paragraphs read -

All shipowners engaged in the Australia-United Kingdom-Continental trade are members of the Australia-United Kingdom-Continental Conference. Nominally, there are twenty-two separate operators in this trade. However, when account is taken on the one hand of subsidiary companies (i.e. companies wholly owned by another) and associated companies (i.e. partly owned by another to the point of a direct or indirect controlling interest) and, on the other, of the volume of trade lifted by each operator, it appears that almost all of the trade is in the hands of seven British and rive Continental Groups or Lines.

Paragraph 18 goes on to make this pertinent observation -

The evidence shows that wool is the most important single commodity carried in this trade accounting, in 1953-54,, for £326m. (approximately 60%) of Australia's total exports of £548m. to countries served by this trade.

As if that were not enough, the report continues -

The evidence also shows that shipowners determine by mutual arrangement the amount of wool which each Line may carry each year.

Talk about the Waterside Workers Federa, ion ! The report continues -

Each member of the Conference is given a wool quota " which it must not exceed without express permission of the Conference. This, in effect, determines the total tonnage of shipping which each Line operates in the trade: and this, in turn, determines the proportion of the total (rade carried by each Line.

That is rather an illuminating admission of how overseas tra le is carried on - by whom and for whom.

I turn now to the fixation of rates for interstate cargoes. The report states -

On the evidence submitted to us the committee finds that in general the Australian Shipping Board -

I referred to this body earlier - has been a dominant factor in the fixing of the rates for interstate cargoes, particularly in those trades in which it is itself engaged, and in this sense the Australian Shipping Board, which has been subject to the Minister, has acted as the regulator of interstate freight rates. The rates are as high, but not higher, than the A.S.B. wants or agrees to and the Minister approves. There is no statutory or contractual obligation for the private shipowners to charge rates neither higher nor lower than those required or accepted by the Australian Shipping Board, but in practice they have not done so.

Therefore, the committee of inquiry found, first of all, that a monopoly is operating overseas. The monopoly determines not only the ships which are to carry wool but what their cargoes are to be. The committee of inquiry stated that the Australian Shipping Board was a dominant factor in the fixing of interstate freights. Therefore, if the Government wants to combat this position, it has the answer in its own hands because, allegedly, the Australian Shipping Board is a government instrumentality.

I turn now to the difficulties that the shippers have encountered when trying to ascertain the shipowners' profits. I think that private individuals, the shippers, have had a very raw deal indeed from the shipping combine. The report stated -

It is clear that shippers have had to restrict their field of inquiry to the upward' movement in cost because shipowners, whilst prepared during 1953 and 1955 negotiations to make available to a third party (the Department of Commerce and Agriculture) on a confidential basis, information related to costs, have not been prepared to make available to shippers or the Department of Commerce and Agriculture information in relation to earnings and profits. The evidence shows that, in general terms, the basis of negotiations in 1953 and 1955 was to regard the year 1951 as a base year with shippers prepared to agree to increases in freight rates demonstrated to be commensurate with increases in costs since that date. The shippers had, of course, no means of ascertaining whether or not the profits being made by shipowners in 1951 were reasonable.

Here, again, we find the shipowners, apparently, determining the tune. Let me. finally, deal with this report as it concerns overseas freights. The report states -

Freight rates in December, 1947, were too low to enable either the Australian Shipping Board or the private shipping companies engaged in interstate trade to operate their vessels at a profit. With two exceptions, all the major operators, including the Australian Shipping Board, engaged in interstate trade experienced considerable losses on their operations in 1947-48.

I believe that is one of the most fantastic findings that any committee could make in regard to this industry. I have pointed out the structure of the shipping companies and their history. How the committee, in view of its own admissions that it was not permitted to make a thorough investigation into all the ramifications of this industry, could bring forth a finding of that kind, I do not know.

I conclude by recapitulating what I have said. The Opposition does not oppose the bill. We on this side are giving all the facts because we believe that the Minister for Labour and National Service, in his second-reading speech, tried to make it apparent that the only persons who had responsibility in this industry were the waterside workers. I think that I have proved that there are quite a number of bodies other than the waterside workers who have responsibility. Basing my opinions on the conclusions of the committee that has investigated this industry 1 say that many bodies, particularly the overseas shipping combines, do not come out of the inquiry very well.

The Government has admitted that the raising of the man-hour charge will mean an increase in freight rates. 1 submit that this is the responsibility of the Government. The Government has demanded that something be done to protect our overseas markets, but it has not been prepared, up to now, to afford protection to Australian industries, particularly primary industries, in this regard. When, in the past, these manhour charges have been increased the overseas shipping combines have shamelessly exploited the situation. I submit that the Government should prove to this House that a steep jump in man-hour charges is warranted. The Government has not submitted any detailed information as to what it will collect as the result of this increase. It has submitted data to show that the increase will result in an additional expenditure of £1,500,000.

Mr. ACTING DEPUTY SPEAKER (Mr. Lawrence).- Order! The honorable member's time has expired.

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