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Friday, 12 September 1969

Mr PEARSALL (Franklin) - Shipping is the life blood of Tasmanian commerce. Being an island State, Tasmania has not had the advantage of the alternative forms of transport that are available to the other States for both interstate and overseas trade. Any fluctuations in the charges and timetables of our shipping schedules vitally affect our exporters and their welfare. I do not want the Committee to think that we in Tasmania do not appreciate the assistance that has been given over the years by the present Government. Ships have been made available and they have almost revolutionised our shipping. I will have a little more to say later about the freight costs and the proposal to introduce containerisation.

When the co-ordination and rationalisation of shipping was embarked upon in 1966 the Tasmanian exporters were assured of a regular shipping service. Unfortunately this is not proving to be the case as we move towards the advent of containerisation. Tasmanian exporters did not disagree with the prospect of a faster and better overseas service. In fact, together with other States, Tasmania welcomed the innovation. But Tasmanian exporters have been lulled into a false sense of security, I regret to say. A Senate select committee was set up to report on the container method of handling cargoes. The Committee made special reference on two occasions to the position of the feeder ports or outports. Tasmania falls into this category. I want to take the time of the Committee to remind honourable members of the feeling of the Select Committee at the time it made its report. I shall quote two sections of the report. This is what the Committee had to say in paragraph 70 under the heading '"Feeder" Services':

As the cellular ships of the British consortia will operate only from the ports of Fremantle, Melbourne and Sydney, a comprehensive service of feder' ships is planned to cope with trade from as far apart as Darwin and Tasmania. The Committee was given assurances by the shipping companies concerned that there would be a uniform rate applicable to cargoes from main ports and feeder ports.

I wish to emphasise this next point:

The Committee is adament that, in accordance with these assurances, there should be no differential rates applied to cargoes from feeder ports.

This matter is referred to again at page 77 of the report in paragraph 9 of the Committee's recommendations. The report states:

The shipping consortia should conform to the assurances given to the Committee that no differential freight rates will apply to cargoes exported from feeder ports as distinct from terminal ports.

Having been given these assurances, the people of Tasmania felt quite satisfied that they were to receive a fair deal in shipping and that they would suffer no greater disadvantage than people shipping from the northern ports of Queesland or from closer ports such as Adelaide or Brisbane. We were further reassured by an answer to a question in this House on 23rd February this year by the Minister for Trade and Industry (Mr McEwen). This is what he said in reply to a question asked by one of his colleagues:

The ships will load and unload in only three Australian ports- Sydney, Melbourne and Fremantle - and there will be feeder container services from all Australian ports to these major terminal ports. The cost of the feeder services will be absorbed so that there will be a single Australian freight rate. This is a very important aspect. 1 think some disappointment was felt because Hobart was not accepted as one of the terminal ports. We in Tasmania realised that we were somewhat isolated and that some of our major export crops would, perhaps, still have to be exported by conventional shipping. I believe that fruit will be one of the last commodities to be containerised. Nevertheless we still felt that, although we had been ignored and the advantage of a terminal port had been overlooked, the Tasmanian exporters would be at no greater disadvantage than their counterparts on the mainland. We began to feel some cause for apprehension when, in June 1969, a statement was made by the Minister for Trade and Industry. I have before me a letter which states:

Mr McEwen said that container ships were calling at Fremantle, Melbourne, and Sydney, and cargoes from Brisbane, Newcastle and Adelaide were being fed into these two ports.

At this stage the cost of feeding cargo from other centres, either by land or sea, is additional to the basic service charge. However, it remains the clear intention of the container consortia, as notified two years ago. to provide feeder services from all Australian ports. But this can only be done when it is economically feasible. At the rates currently being quoted for feeder services from Tasmania, it is certainly not economic, but studies into this problem are proceeding.'

Mr McEwensaid the Government would continue watching the position of Tasmania to see that no exporter was put at a disadvantage.

Sir, Iam sure that all honourable members here who have a sense of fair play and justice will realise the apprehension of the Tasmanian exporters at the present time. It would appear that all our ports are now to be subject to separate negotiations with the shipping companies which will provide feeder services to the main container ports. We are told that costs cannot be averaged because of the high cost of Tasmanian freights. We are not disagreeing with the point about Tasmanian freights being high - we regret that they are high - but we have been given no evidence that shipping costs, as distinct from shipping freights charged, are any higher between Tasmania and the mainland than they are from Adelaide to Melbourne or from Brisbane to Sydney. In both cases, from Adelaide to Melbourne and from Brisbane to Sydney, the sea links are longer than the links from Tasmania. But these ports have been included in the basic rate and they will enjoy a benefit that Tasmania does not enjoy. Is the reason for the application of the base rate to the other capital cities on the mainland that feed the container ports that there is competition from road and rail? Tasmania, of course, has no alternative but to resort to the use of shipping.

The question of freight rates is a grave problem exercising the minds of Tasmanian exporters. Freight rates have a vital effect on their very existence, particularly if they are not able to benefit by the averaging of charges that was envisaged initially and about which we were given constant assurance until mid-1969. We are being forced into negotiating with the feeder services and we realise only too well that, in many cases, we will be negotiating with a consortium which, although admitting that charges from Tasmania are too high, owns the subsidiary company that is freighting goods from Tasmania.

Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) - Why do you not talk to them?

Mr PEARSALL - What does the honourable member think I have been doing? It also appears that the mainland outports will have to negotiate separately with the major shipping consortia. A review of the activities of the Australian National Line would indicate that the Tasmania run is profitable. A profit is being made on that run, but heavy losses are being incurred on the Darwin run. People on the island cannot escape the thought that in all probability the Tasmanian business is subsidising the Darwin trade. We are not satisfied that that is not, in fact, the case. We are not satisfied that the freight situation has been reviewed as carefully as the position justifies. Perishable goods are exported from Tasmania to Great Britain where they come into direct competition on the open market with the same products from mainland Australia and from New Zealand. It is eminently desirable from every point of view that Tasmanian goods be landed at the overseas markets in as good a condition as possible. It is necessary to have fruit and lamb exports conveyed under refrigeration but these are not compatible cargoes because of the different temperatures at which they must be held. We should not have to rely on the irregular services that it seems we must contend with in the months ahead. We should not be faced with changes in temperatures which can vitally affect the condition of lamb carcasses. Hide and skin merchants who are exporting from Tasmania to the European markets hope to be able to get a regular service so that they can assure their overseas purchasers of a receival date. This is not possible with the present system of shipping that is inflicted upon us.

As an islander I hark back to my earlier point that we are dependent entirely on shipping for our livelihood. We cannot allow the situation to go unchallenged. We must either be accepted into the uniform scheme, which was promised by the Senate Select Committee originally and later by responsible members of the Government, or be given a subsidy to cover the additional freight costs that will be incurred.

Apparently there will be temporary delays in containerisation but we hope these will not be extensive. I believe that the abrogation of a major principle is involved here. If it cannot be rectified by an averaging of the freight rates from Tasmania to the container port of Melbourne, I believe the Government has no alternative but to assist

Tasmania with a subsidy to cover the additional freight rates that will apply. This will be the only way by which some of our industries can survive.

If the system is to be of overall benefit to Australia - if, indeed, it is to be a Commonwealth undertaking - how can we justify a situation where we enable some ports to enjoy the enormous benefits that contameristion may well bring in its wake and allow outports to be so desperately disadvantaged? This does not appear to me to be a Commonwealth undertaking. It is most unreasonable that we should countenance the situation that may well develop where freight rates to the container ports shall determine where industries shall be established and so determine the effect on the future of Australian exporters. Unless there is an averaging of freight rates it will mitigate against the best interests of the isolated areas of Australia which we hope to build up and, by so doing, encourage decentralisation and encourage people to produce what they are capable of producing. Failure to average freight rates will inhibit development and will have detrimental effects. I make the strongest appeal to the Minister for Shipping and Transport who has been most helpful so far - and I hope that he will be in the future - to rectify the parlous situation.

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