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Thursday, 29 October 1964

Senator PALTRIDGE (Western Australia.) (Minister for Defence) . - I move -

That the Bill be now read a second time.

The purpose of this Bill is to make four relatively minor amendments to the Aus tralian Coastal Shipping Commission Act which are intended to maintain the Government's policy of allowing the Commission the maximum flexibility in its operations consistent with the necessary overall Ministerial control. The main amendment relates to the Commission's borrowing powers contained in section 30 of the Act. The Commission is faced with substantial capital expenditure over the next few years for the construction of new vessels which it has on order or intends to build, and for associated shore facilities. The Commission presently has on order the " Empress of Australia " for the Sydney to Tasmania passenger and cargo trade, the "Musgrave Range", a 21,000 ton bulk carrier, both of which vessels are expected to be completed in the near future, and also a 47,000 ton bulk carrier, due for completion in 1966. The Commission also has announced its intention of constructing two fast rollon rolloff vessels for use between Melbourne, Sydney and Brisbane and there is a possible requirement for another 47,000 ton bulk carrier.

Under the Act as framed at present, the Commission is limited to borrowing for temporary purposes on overdraft with a maximum of £5 million. The proposed amendment retains the limitation of borrowing to a total of £5 million but extends the sources from which funds may be obtained. The proposed new section is in the same terms as section 31 of the Australian National Airlines Act 1945-61, which controls the operations of the Australian National Airlines Commission. Under the new proposals the Commission will be able, subject to the necessary approval, to borrow money other than by a bank overdraft, and also to borrow from the Treasurer out of moneys appropriated by Parliament for the purpose. The £5 million upper limit provided in the present Act will remain, and the interest rate and other terms of loans from the Commonwealth will be as determined by the Treasurer, who, in making such a determination will fix an interest rate not less than that payable on the preceding long-term Commonwealth loan raised from public subscription in Australia.

As I have already mentioned, the Commission has undertaken a substantial programme of new construction, and it is felt desirable to provide for loans from the

Commonwealth, within the existing limitation of its borrowing powers, to ensure that its programme is not delayed by any temporary shortages of finance. A further improvement introduced by the new provisions is that the Commonwealth has the alternatives of providing additional funds either by increases in the Commission's capital or by loans in the manner described. This will enable the Commission to maintain a balance, as circumstances may require, between capital and borrowed funds.

The proposed amendment will give the Commission greater flexibility in the use of its borrowing powers to finance its construction programme, and to manage its borrowing in line with its needs.

Section 22 of the principal Act requires the Commission to obtain the Minister's approval to any staff salaries exceeding £2,500 per annum. The amendment proposes to increase this limit to £3,500 per annum in line with the general rise in wage and salary rates since the Act was originally passed in 1956. The final amendment proposed relates to the use of any money held by the Commission but not immediately required. At present section 32 sub-section (2) of the Act provides that it may be invested on fixed deposit with a bank or in Commonwealth securities. Since the Act was passed the Commonwealth Reserve Bank has sponsored the development of a short term money market which enables the investment of surplus cash for short periods at rates of interest which generally are higher than those available for fixed deposits, although the loans are secured against Commonwealth Government securities. The amendment seeks to add such investment to the other two possible uses of surplus funds.

I feel sure that honorable senators will agree that the Commission since its establishment in 1957 has made a substantial contribution to the efficient operation of the Australian coastal shipping trade, not only by the efficiency of its operations but also by the lead it has taken in the development and construction of modern vessels. The proposed amendments will assist the efficient operation of the Commission and I therefore commend the Bill to the Senate.

Debate (on motion by Senator O'Bryne) Adjourned.

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