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Wednesday, 30 May 1973
Page: 2899

Debate resumed from 23 May (vide page 2504), on motion by Mr Charles Jones:

That the Bill be now read a second time.

MrDAVIES (Braddon) (8.56)- As indicated by the Minister for Transport (Mr Charles Jones) the King Island Harbour Agreement Bill provides for a Commonwealth contribution of $1.355m towards the cost of the construction of an all-weather seaport at Grassy on the basis of half loan, half grant. The terms of the agreement closely follow previous Commonwealth assistance in respect of port development in other parts of Australia and was negotiated in March last year on a government to government level by the then Liberal Premier of Tasmania, the Honourable A. Bethune, and the former Prime Minister of the Commonwealth. When Mr Reece returned to office in Tasmania in April after the general elections last year, he intimated that he accepted the Commonwealth offer and hence this legislation now before this Parliament.

Similar legislation has already been passed through both Houses of the Tasmanian Parliament and I pay tribute to the Premier of Tasmania, the Honourable Eric Reece, who has been a very strong supporter and keen advocate of a better shipping service not only for King Island but also for the far northwest corner of Tasmania known as Circular Head. He has been pressing for many years now for the introduction of the triangular service that will come about by the expenditure of the money proposed in the Bill before the House.

The Minister, in his second reading speech, referred to the difficulty that the shipping operators had had in providing a reliable economic service to King Island owing to the hazards of entering or leaving the port of Currie in bad weather. He referred also to the restrictions on the size of the vessels that were able to use the port of Currie. The main operator in the days referred to by the Minister was Captain R. H. Houfe who had formed a company in 1954. He operated a very efficient service to the benefit of the people of King Island first with the 'Loatta', then with the 'Darega', which he purchased from New Guinea, and then with the 'King Islander' which he had designed to his own specifications. It was a revolutionary type of ship weighing only 220 tons and it was constructed in Devonport. It operated much like a Bristol freighter, with bow end loading facilities as a roll-on, roll-off vessel. These ships were frequently delayed in port at Currie because of bad weather, making it impossible for them to clear the harbour. I refer to an article in the 'King Island News' of Wednesday 16 September 1970 concerning a story that the 'King Islander' was aground with a damaged propeller. The story indicated that the vessel had run aground while negotiating the entry channel to Currie Harbour in rough seas. This sort of incident occurred on several occasions when the vessel scraped coming through the narrow channel to get into the harbour at Currie. On several occasions it damaged propellers and rudders.

It was because of this problem of the size of the harbour, together with the fact that by 1966 the 220 ton 'King Islander' could not cope with the cargo that the then Minister for Shipping and Transport, Mr Freeth, asked Captain Houfe what could be done to upgrade the King Island trade. There was also a great deal of pressure from the stock owners because at the peak of the season stock was kept waitting for up to 3 or 4 months at a time before they could Se transported to the mainland market in Melbourne. This was brought about by 2 factors - because the harbour facilities were very small and this limited the size of the ships that could operate in and out of Currie and also because of the upsurge in stock numbers on King Island. It is interesting to note that in the past 7 years the number of beef cattle on the island has more than trebled, from some 13,000 to 42,000, and the number of dairy cows has increased from 7,000 to a static figure of about 11,000.

On Friday, 23 August 1968, I accompanied the then Minister for Shipping, Mr Sinclair, on an aerial survey of possible new port sites on King Island. He advised me that following negotiations with the Tasmanian Government the Commonwealth Government was prepared to share up to $100,000 of the cost of the survey to determine the feasibility for a new port. Tenders for this survey closed on Friday, 31 January 1969, and the tender was let to the engineering firm of McDonald, Wagner and Priddle. It became obvious that the survey would take some months and then possibly a few years for the construction of a deep water port. The shipping position at King Island and Circular Head in Tasmania at that time had deteriorated to such an extent that Captain Houfe obtained an import licence to bring into the service from overseas 2 sister ships as an interim measure to relieve the pressure. In June of that year, however, it was decided for various reasons not to proceed with the plan. The report submitted by McDonald, Wagner and Priddle in June 1969 recommended Currie as the port with ships of up to 300 tons. The report indicated that extensive dredging and other works at Currie harbour would be required. The Commonwealth Government was then paying a freight subsidy and it was estimated that if this were capitalised over a period of 20 years it would provide at least 75 per cent of the estimated cost of the improvements to Currie harbour. I have previously criticised this report in this Parliament. I have referred to the fact that in one section of the report McDonald, Wagner and Priddle gave a list of people with whom they maintained they had had discussions. They referred to the Marine Board of Circular Head, the Duck River Co-operative Butter Co. Ltd and Hardwoods Australia Pty Ltd. I know from my own discussions with these companies that McDonald, Wagner and Priddle at no time saw any of them. The study cost about $100,000 which was shared jointly by the Commonwealth and the State. As I said to the previous Minister for Shipping and Transport, the Government should have sued the firm for the return of the money.

I am not an expert in shipping matters. I have never contended to be one. But the report was criticised also by the main operator to the island, Captain Houfe. He said:

The recommendation for a 300 ton vessel to operate into Currie harbour is completely unrealistic in this day and age of increasing tonnages and knowing the difficulties of operating small tonnages especially into a main port such as Melbourne.

The question of maritime unions has been overlooked and this, to me, is a problem of extreme importance when one considers that the reason Australian coastal shipping has changed for ships of larger tonnage is on account of high operational costs forcing this trend, in fact it is the same the world over. 1 ask the question, would ANL or other companies engage in an interstate trade with a vessel of 300 tons? I know they would not, and there are many reasons why they could not, especially operating from a main port such as Melbourne, to Currie on the west coast of King Island whereby the vessel and crew are subjected to endless nights of turbulence with the vessel rising and falling at times 20-30 feet in 5 seconds and rolling constantly 30-40 degrees, and then the return voyage of cattle and other livestock.

Peko-Wallsend Ltd also severely criticised the report of McDonald, Wagner and Priddle and the recommendation that the new port should be an enlarged edition of the port of Currie.

The main operator to the island, Captain Houfe, had decided that he needed a larger ship to carry more freight than was envisaged in this report so that he would endeavour to contain freight rates. He thought that the only way was to get a larger ship and carry more cargo. He thought that by this means he could contain freight rates and keep them at an economic rate for the people on King Island because they are an isolated community and their costs of living are exceedingly high due to other reasons apart from rates. By this time Peko-Wallsend Ltd had taken over the Grassy Scheelite Mine and was not interested in the recommendations of tha report either, because it realised that it would still encounter the same shipping holdups with small ships operating in and out of the port of Currie.

On 15 August 1969 Peko-Wallsend Ltd instructed Maunsell and Partners to carry out a study of the feasibility of constructing a deepwater, all weather port at Grassy on King Island. The consulting engineers reported in September that the project was feasible. It provided for a harbour at Little Grassy Bay with a berth for 200 feet roll-on roll-off vessels and moorings for a 500 feet tanker using overburden and reject rock from the mine as construction materials. The cost of this facility, complete with access roads and a reclaimed and paved marshalling area, would be approximately $1.3m. Negotiations began almost immediately between PekoWallsend Ltd and the Tasmanian Government on the new port for Grassy. The mining company bought capital equipment, including bulldozers, Euclid trucks and other earth moving equipment, in excess of $500,000 to start the breakwater. The breakwater commenced over a rocky shelf on the land end and then was constructed for a length of approximately 1,500 feet to connect up to a small island. Reject rock and overburden from the mine were dumped into this area into water of varying depths of up to 50 feet. Despite all the gloomy forebodings of some of the leading citizens of King Island, the work proceeded ahead of schedule. The mine management and the men employed on this project deserve the highest possible praise for the wonderful job they did.

The total cost of the project is estimated at $1.848m. Of this Peko-Wallsend Ltd provided a loan of $110,000 and the Tasmanian Government spent $383,000 during the financial year 1970-71. The balance of $1.355m will be provided under the Bill now before the Parliament. The non-repayable grant from the Commonwealth to Tasmania amounts to $677,500 and an interest bearing loan of a similar amount is repayable by Tasmania over a period of 15 years. Captain Houfe went ahead to call tenders for a new vessel, the Straitsman', to use the new facility at Little Grassy Bay and at the same time to provide for a triangular service linking Stanley in Tasmania with King Island and Melbourne. The tenders for the new vessel were called in 1970 and the contract was let to the shipyard of North Queensland Engineers and Agents Pty

Ltd in Cairns. Those of us who were vitally interested in providing an improved shipping service for both Stanley and King Island thought that all our worries were over when we received a telegram from Mr Fry, the managing director of NQEA, on Friday, 4 September 1970, to the effect that the keel for the new vessel had been laid on that day.

The standing committee on shipping for Circular Head worked very hard and for a long time to try to get a triangular shipping service. They had been turned down by the Australian National Line after a survey conducted by the ANL over a period of 12 months. The Australian National Line sent technical officers to America to look at seagoing tugs and barges to see whether these were a feasible operation but they finally rejected them and also rejected roll-on roll-off facilities. The committee persevered, along with the people on King Island who were anxious to upgrade the service which was being given to the island. We were very pleased when Captain Houfe commissioned the 'Straitsman'. The vessel came into service in May last year but, unfortunately, after a few months - during the first week of June last year - was tied up due to financial difficulties experienced by the company and has remained there ever since. Despite strenuous efforts by all Tasmanian Federal members and by the Tasmanian Government, we have been unsuccessful in persuading the Commonwealth Government to take over the 'Straitsman'. The Minister commissioned an inquiry by the Australian National Line into the economics of the 'Straitsman'. The report of this inquiry indicated that the annual trading loss would be of the order of $500,000.

I simply point out that we were elected last December on the promise of open government, and the time is fast approaching when that report that was prepared by the ANL for the Minister will have to be tabled. I say this, especially in view of the fact that in evidence before the Senate Select Committee on Shipping Services between King Island, Stanley and Melbourne in Melbourne on Monday of last week it was stated that the ANL has now reduced this figure to approximately $300,000. In evidence on Monday of this week in Launceston the former secretary of the ANL, Mr Dawkins, indicated that the vessel would make a considerable profit. I think it is only fair that all members and not just I should have a look at the report prepared by the ANL to see the basis upon which it came up with an anticipated loss of $500,000 each year.

The people of Australia just cannot understand why a new ship should remain tied up now for 12 months when the shipping position both on King Island and in Circular Head is so critical, when hundreds of head of cattle and sheep have been bought for the Melbourne market but cannot be delivered because of the lack of shipping, and supplies of materials to keep the scheelite mine at Grassby operating are urgently needed. They cannot understand why alternative ships either have to be imported or have to be built in Australia when there is a ship in Melbourne which was specifically designed for the service. However the Minister is adamant about this matter and we have to resign ourselves to some alternative proposal. Details of the present proposal to overcome these serious shipping difficulties are now being worked out by the Minister for Transport and the Tasmanian Government. All we ask for now is the restoration of a regular service as quickly as possible in the interests of the people on King Island so that full use can be made of the excellent harbour facilities for which the funds are being provided in the Bill before the Parliament.

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