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Thursday, 4 April 1957

Mr HULME (Petrie) . -I endorse the comment of the Minister for Trade (Mr. McEwen) that there was resistance by honorable members on this side of the House to the recent rise in freight rates. I think it would be unfortunate if the members of the Opposition or the community generally were to believe that the Government simply accepted that rise as something which, having regard to all the facts, was completely unavoidable. 1 believe that the basis on which the increase was arrived at was a completely unusual basis for a price increase. In June of last year, the overseas shipping companies indicated to the Australian shippers that they believed an increase of freight rates to be desirable, and they invited representatives of the shippers to go to London to make the investigation which was referred to by the honorable member for Balaclava (Mr. Joske). Lest there be any misunderstanding, let me inform the House of the interests which were represented at the meeting which was held to consider that proposal to send delegates to London.

Among those present at the meeting were representatives of wool and meat growers, dairy producers, fruit and egg interests, meat exporting interests, wool buying interests, the Australian Canned Fruits Board, the Commonwealth Dried Fruits Control Board, the Associated Chambers of Commerce, the Australian Exporters' Federation, the New South Wales Exporters Federation and the New South Wales Exporters Oversea Transport Committee. The proposal was well received by those people, although they were not completely unanimous. Certain representatives, including those of the wool and meatgrowing interests, expressed reservations, but they did not oppose the motion to accept the proposal, even though they did not vote for it.

Subsequently, a committee went overseas and the members appointed a wellknown firm of chartered accountants in the Old Country to assist them in their investigations. Later, reports were presented to the interested parties in Australia, and the following statement was made: -

The accountants have since supplied exporters with a most comprehensive report. This says that the accountants had received and examined detailed audited statements supplied by the shipping companies' accountants, including the following: grand summary of voyage results (both to and from Australia) showing figures of each line separately; summary of profits earned during 1955 and capital employed in the Australian trade; analysis of fleet by age groups; comparison of statistical results for 1955, second part of 1955, first part of 1956; and voluminous information on the subject of fleet depreciation.

I believe that an accountant possessed of that kind of information would be in a much better position to make a determination and to offer advice to interested parties than are the members of the Opposition. As a result of the investigation, a formula was negotiated. The increase in freight rates would have been a 16± per cent, increase, because included in the formula was a return of 12 per cent, on the capital employed by the shipping companies, but the companies said that they were willing to take a 1 4 per cent, increase, which represented a return of only 10.4 per cent, on capital invested, before payment of taxes. ( believe that that is not an unreasonable return. I stress the fact that it was accepted generally by shippers' interests in Australia.

It will not be unreasonable to look at the freight increases which have taken place since 1949, because the Opposition always talks in terms of what has happened since this Government came into power. In 1951, there was an increase of 15 per cent.; in 1953, 7i per cent.; in 1955, 7± per cent.; and as from 1st February of this year, 14 per cent. There has been a 51 per cent, increase of freight rates since 1949. Let us compare that with other increases of costs in Australia. Average weekly earnings for males increased by 89 per cent, between 1949 and 1956. The C series retail prices index indicates that in the same period prices of food and groceries increased by 96 per cent., and prices of clothing by 51 per cent., or the same as the increases of freights for overseas traffic. If the percentage increase in freight rates on the railways in Australia were calculated it would be found to be considerably more than 51 per cent. The Labour party, which is in charge of many of the State governments, gave little consideration to primary producers when these freight rates were increased.

I want to say, as did the honorable member for Balaclava, that there have been increases in freight rates right throughout the world, as between Australia and the United Kingdom, the United States and the United Kingdom and the European continent and the United States and Japan and other countries in the Pacific. Overall, there has been a freight rate increase which is comparable to the freight rate increase applied to goods shipped to and from Australia from the beginning of last February. The Opposition contends that the Government should do something about it. The Government, of course, could fix freight rates by legislation, but it cannot force the shipowners to provide the ships.

Mr Ward - So the Government surrendered to the private shipping lines?

Mr Pollard - That is the whole point.

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