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Wednesday, 4 April 1973
Page: 1060


Mr SINCLAIR (New England) - Since the Australian Labor Party came into office, 2 shipyards in Australia have closed. Shipbuilding is a difficult industry. It is an industry which involves a considerable number of persons. It is an industry which is not only a major source of direct employment but is also a major source of indirect employment. Indeed, it is because of the employment aspects of the industry that I think all of us have looked on the shipbuilding industry as being one of the significant extensions of industrial development in Australia since World War II. Of course, the problem in the shipbuilding industry has been complicated by the very significant degree to which in Australia there is a real dependence upon cheap freight. The cheapness of sea cartage of goods depends upon the availability of adequate cargoes, the availability of adequate tonnage to move those cargoes, the reliability of the forms of transport of those cargoes and the degree to which the turnaround in the ports can be accelerated so that the vessels are kept at sea. In any examination of shipping policy it is important that the cost of moving cargoes and persons, as well as the aspects of shipbuilding, be taken into account.

My condemnation of the Labor Government is that, since it has come into office, the Minister for Transport (Mr Charles Jones) has not presented an adequate reason either for the closure of the yards or for what he is endeavouring to do in extending Australian ownership and Australian operations into the maritime industry. In his speech this afternoon he referred to several trades. I want to refer briefly to one of them and then come back to what I see as the major issue. He made a number of allegations about the economics of the 'Straitsman'. Honourable members have not been informed - I certainly have not - of the economics of the 'Straitsman' in operation. I commend to the House a letter dated 28th March 1973 written by Mr R. G. Fry, the Managing Director of Queensland Engineers and Agents of Cairns, Queensland. That company built the 'Straitsman'. This letter appeared in the 'Australian Financial Review'. I do not propose to read it but ask for leave to incorporate it in Hansard.

Mr DEPUTY SPEAKER (Mr Armitage)Isleave granted?


Mr Charles Jones - On one condition, that Mr Fry comes and operates the ship if it is such a good thing.


Mr DEPUTY SPEAKER - There can be no conditions. There being no objection leave is granted. (The document read as follows) -

$1.25M STRAITSMAN LEFT HIGH AND DRY

What is wrong with the Straitsman?

Straitsman was built in Cairns at a cost of $ 1.25m.

It was designed by a leading naval architect and to the requirements and experience of Captain Houfe who we understand conducted some years of research on this type of vessel.

We are not so naive as to think that the Government authorities who constructed the wharves at Grassy and Stanley did not know of the design of this ship and this would have been taken into their considerations in spending so much money on 2 ports.

The vessel is classified Al at Lloyds Register of Shipping, has passed all of the Commonwealth Department of Shipping requirements as to stability and safety requirements and was tank tested in England.

The present price of this ship is estimated at more than $2.2m. This is based on recent tenders received for a smaller vessel of 450 tons. The highest tender was about $1.6m before subsidy. The vessel is also built to the requirements of the Australian Seamen's Union as regards accommodation and amenities.

It seems incredible that after 8 months of wrangling and discussions all of the shipping people who knocked the Straitsman and might operate the ship have now stated that the Straitsman is the vessel they would use in this particular trade.

The Government still maintains it is an uneconomic proposition. This is difficult to understand. In discussions with Captain Maddock (Tasmanian Transport Commission) on King Island, he showed me an extended schedule for the Straitsman and claimed that it would then be a viable proposition. He has also confused the issue by reportedly stating that it was too big for the trade and then suggesting that it be lengthened at a cost of $300,000 to give it sufficient payload.

The ANL looks at a loss of $300,000 to $500,000 per year.

On a freight rate based at about $16 a ton to King Island and on freight forecasts by both R. H. Houfe and William' Holyman, the ship should make a reasonable profit allowing for a 75 per cent dwt cargo carriage.

We do not profess to be expert ship operators but we are closely associated with the shipping industry in both shipbuilding and repairing of ships. We have established an engineering business in Cairns and expanded it from 3 employees to 350 in 20 years which is financially controlled by the Fry family (Cairns) and claim thatwe know something of business and finance in engineering and shipping.

It is also essential that industry can accept with confidence undertakings and promises from Governments.

We also think' it is time that politics were put aside and that business sense prevailed and the Straitsman brought back into the service with some rearrangement of capital and/or management.

R.   G. FRY,

Managing Director,

Queensland Engineers and Agents, Cairns, Qld (Builders of the Straitsman).


Mr SINCLAIR - The letter in one part states:

On a freight rate based at about $16 a ton to King Island and on freight forecasts by both R. H. Houfe and William Holyman, the ship should make a reasonable profit allowing for a 75 per cent dwt cargo carriage.

Mr Frygoes on to point out that the Straitsman' was built in Cairns at a cost of $ 1.25m. It was designed specifically to meet the requirements of the Australian Seamen's Union in regard to accommodation and amenities. The 'Straitsman' was designed to specifications which accommodated the requirements of the trade. According to at least one source and on the only facts we have before us - we have no other source and the allegations of the Minister today as to the economics are not in any way justified by any facts he has presented to us - the vessel could be operated profitably.

It is true that under the sections of the Australian National Line Act the Australian National Line is in a position to take over the vessel. Section 17 of the Act enables the Government to direct a special service. I am told that the receiver in possession of the ship has had no approaches from either the Commonwealth Government or the Tasmanian Government and in the interim the Tasmanian Government is apparently being given support by the Federal Government to import another vessel. How will that help the shipbuilding industry? Let me turn to the other aspects of shipbuilding. The Minister for Transport has made a few major proposals about the bulk cartage ships around Australia. These ships will not be built in Australia. The Minister is talking about building 100,000-tonners. I completely endorse his objective of moving into building bigger vessels, but let us be realistic. How many ports in Australia are capable of handling 100,000-ton cargo ships fully laden? Those 100,000-ton vessels, if they could be operated, would make our heavy industries more competitive, but the ports to which they seek to operate, such as Newcastle, Port Kembla and Whyalla, cannot take these big vessels. Yet these are the ports to which these ships should go.

Realistically, what the Labor Government is doing is, to mix one's metaphors, pulling the wool over the eyes of the shipbuilding industry when it suggests that by permitting the import of a successive number of big bulk vessels the Australian shipbuilding industry will immediately benefit. Unless there is 8 significant upgrading of one or more of the Australian shipyards, I understand that it will not be possible to build a vessel in excess of 100,000 tons. That was certainly the advice given to me when the order came in from the Clutha Co. and we had a series of discussions with the Broken Hill Pty Co. Ltd in regard to extending its Whyalla yard so that it could build these bigger ships.

The tragedy, or perhaps the irony, of the apparent accommodation that the Minister thought he had come to with Evans Deakin Industries Ltd in Queensland is that, having gone to the company and made some sort of arrangement for the building of a shipbuilding rig, this was in accord with the arrangements that were traditionally provided by the previous Government. In other words, if a ship is built with a shipbuilding subsidy and it proves for various reasons to be uneconomic in the domestic service, to my knowledge there has been no request for the repayment of that subsidy. The previous Government permitted such ships to be exported. It did so because it had a concern for the Australian shipbuilding industry. The problem at Evans Deakin yard is essentially a combination of several factors, the major one being the very real industrial troubles that have occurred there. There is no doubt in a statement made by Mr L. T. Knevitt, the chairman of the company, that the principal reason for the shut down has been industrial stoppages which have caused the loss of 260,000 manhours in the last 2 years.

If the Labor Government believes that it can do something meaningful about the preservation of shipbuilding it should turn its attention to its allies, to the unions on which it relies for support and which it claims to represent here. If the Labor Government does represent the union movement and if it is true as Mr Knevitt suggests, that there has been this very high order of loss of output because of industrial stoppages, it will be quite impossible, irrespective of any policy that the Government introduces in relation to tariffs or anything else, for that company to continue in operation. In other words, the performance of this Government will not be judged on the subsidy support, that is provided but on the efforts it is prepared to make in a meaningful way to reduce the incidence of demarcation disputes and the impact of industrial stoppages in this whole area of heavy industry. It is because it is so essential that one looks at the through-flow of work in these yards that I believe there are very real problems in making an effective future for all the shipbuilding yards in Australia.

The Government must do as the previous Government did. It progressively moved into overseas shipping. The decisions to move into overseas shipping were taken by the LiberalCountry Party Government with the objective of getting the first vessels built overseas and then moving back to Australia to have the repair work and the building carried out. But ironically even today, according to this morning's 'Australian', the Australian National Line is giving a $I.5m order to West Germany for the refitting of one of its container ships. How ironical it is for the Minister for Transport to express concern for the shipbuilding industry when a company for which he is responsible finds it necessary to have its ships repaired overseas. The Government will stand condemned until it can produce both positive policies in the form of forward orders for the industry and in the form of a positive program of financial assistance and a positive program to reduce the measure of industrial unrest which for so long has plagued what otherwise would have been a very great heavy industry.







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