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Thursday, 3 December 1936

Senator BRENNAN (Victoria) (Assistant Minister) . - I move -

That the bill be now read a second time.

This bill is designed as a contribution towards maintaining the supremacy of the British mercantile marine as a vehicle of communication between Australia and New Zealand, and as a safeguard in times of emergency. During recent years British shipping companies trading across the Pacific have found difficulty in competing with subsidized American ships. The British lines affected are not only those carrying on the service between Australia and North America, via New Zealand, but also those trading solely between Australia and New Zealand. The Matson line previously ran three old vessels - the Sierra, the Sonoma and the Ventura - but in 1932 they were replaced by three modern luxury vessels, the Monterey, the Mariposa and the Lurline, the first two of which are engaged in a regular four-weekly service between the United States of America and Australia, via New Zealand. For the construction of those vessels the Government of the United States of America advanced threequarters of the cost at low rates of interest, said tobe 2 per cent. in respect of the Mariposa, about 1 per cent. for the Monterey, and three-eighths of 1 per cent. for the Lurline. For the construction of the Mariposa and the Monterey, $11,700,000 was advanced. Assuming a saving of 3½ per cent. against borrowing in the open market, the annual saving of interest on loans for those two vessels would amount to $409,500, or £105,000 in Australian currency at the present rate of exchange.

Apart from loans on construction, the Matson company receives a subsidy of $10 a mile on each outward passage of 7,607 miles from San Francisco to Sydney, plus 575 miles from Sydney to Melbourne. As a four-weekly service is maintained, this subsidy amounts annually to $1,063,660 or £273,000 in Australian currency. The total government aid received in respect of the Mariposa and the Monterey therefore amounts' to about £378,000 per annum.

The American vessels trading between the United States of America, New Zealand and Australia also have another advantage over British vessels in that, whilstup to the present they have not been debarred from participating in the trade between Australia and New

Zealand, non-American vessels are, by legislation, not allowed to engage in the lucrative trade between Hawaii and the United States of America.

The vessels of the Matson line do not carry cargo between Australia and New Zealand, but have a substantial and increasing share of the passenger traffic. During 1933 this line carried 3,297 passengers between the two dominions, amounting to 11.2 per cent. of the total passenger trade. The figures for subsequent years were : - 1934 - 4,182 persons or 10.9 per cent. of the total passenger traffic; 1935 - 5,108 persons, or 13.3 per cent. of the total passenger traffic; January to June, 1936 - 3,128 persons or 13.5 per cent. of the total passenger traffic. If the Matson line is prevented from carrying passengers between Australia and New Zealand the earnings of the British vessels engaged in that service will be increased by at least £50,000 per annum. The subject of foreign shipping competition in the Pacific, including the best means of protecting British shipping against it, has been under consideration 'between the British and Dominion Governments for some years. In September, 1934, the Governments of Australia and New Zealand made a joint statement drawing attention to the unfair competition of the Matson line, and stating that the two dominions were in consultation with a view to common action for safeguarding the mutual shipping interests of the dominion and the Commonwealth. The governments took the view that the existence of adequate and efficient local shipping services in the trade between Australia and New Zealand and the future improvement of such services by the construction of further new vessels would be jeopardized by a continuance of the subsidized competition of the Matson liners in the passenger traffic between the two dominions. This view is still held by the Government's of Australia and New Zealand. Following upon the joint government statement of September, 1934, the Union Steamship Company of New Zealand proceeded with the construction of the Awatea. In October last the New Zealand Government passed an act enabling it to exclude from the passenger and cargo trade between Australia and

New Zealand the ships of any country to which it is applied on any of the grounds mentioned in the act, namely: -

(a)   That by the operation of the laws of that country British ships are prohibited from carrying passengers or goods between ports of that country orbetween that country and any territory or territories belonging to that country; or

(b)   That by the operation of the laws of that country restrictive conditions, that are not applicable to ships of that country, are imposed on the carriage by British ships of passengers or goods between any ports or territories of that country; or

(c)   That the ships of that country receive from any sourceany subsidies, concessions, rebates, allowances, or other valuable privileges whatsoever which enable them to compete on unequal terms with British shipping in the carriage of any passengers or goods. A section in the act prevents its application to any country if rights conferred on that country by any treaty or convention would thereby be infringed. The bill now before the House is based upon the New Zealand legislation and differs from it only in minor details. The British services and vessels available at present for the passenger trade between Australia and New Zealand are: - Union Steamship Company of New Zealand Limited - Awatea, 14,800 gross tons; Monowai, 10,900 gross tons; Makura, 8,100 gross tons; Maunganui, 7,500 gross tons; Marama, 6,500 gross tons. Huddart Parker Limited - Wanganella, 9,600 gross tons. Canadian-Australasian Line Limited - Aorangi, 17,500 gross tons; Niagara, 13,400 gross tons. The two vessels of the Canadian-Australasian Line Limited are on the VancouverSydneyAuckland service. In addition to the passenger services, about twenty British cargo vessels are regularly engaged in the trade between the two dominions. In the Awatea the Union Steamship Company has provided for the Australian-New Zealand passenger trade a modern liner superior to the vessels of the Matson line. This vessel has accommodation of the latest type for 550 passengers and is fitted with the latest radio-telephone and electrical equipment. The speed of the Awatea is 23 knots. Of the existing ocean-going vessels capable of a speed of 22 knots or over, only six are owned in the British Empire. If the " crosschannel " steamers are excluded, the only British vessels faster than the Awatea are the Queen Mary and the Empress of Britain. The prohibition of the vessels of certain countries from engaging in the trans-Tasman trade does not mean that passengers travelling between Australian and New Zealand or shippers of cargo between these countries will be exploited, nor does it mean that the passenger service will be carried on by antiquated vessels. The power of the Government to revoke the act at any time will prevent exploitation, and it is in the interests of the shipping companies themselves to provide an up-to-date service. Modern conditions demand such a service. The shipping companies realize this and have provided two luxury liners - the Wanganella and the Awatea. Up to the present the companies have hesitated to expend large sums on the construction of new vessels which may incur heavy losses from the competition of vessels of certain foreign countries whose governments are determined to expand their merchant marines regardless of cost. With the reservation of the trans-Tasman trade, however, the shipping companies of Australia and New Zealand engaged in that service may look to the future with confidence.

Debate (on motion by Senator Collings) adjourned.

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