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Tuesday, 22 August 1972
Page: 287


Senator WILKINSON (Western Australia) - Mr Acting Deputy President, I apologise for the fact that I was not present in the chamber when this debate was resumed. In the last half an hour the business of the Senate advanced very rapidly and I was just getting my documents at the time when this debate was resumed. I ask for leave to continue my remarks now.

The ACTING DEPUTY PRESIDENT (Senator Laucke) - Is leave granted? There being no objection, leave is granted.


Senator WILKINSON - The inquiry conducted by the Senate Standing Committee on Primary and Secondary Industry and Trade into the freight rates on the Australian National Line's shipping services to and from Tasmania was an extremely interesting exercise for those honourable senators who were members of the Committee. Weapplied. ourselves very keenly to the subject. We thought we would deal with it in a few short weeks, but when we started we found that one thing led to another and eventually it took some months to reach a satisfactory conclusion and to present a report to the Senate.

I think it would be as well for me to summarise for the benefit of the Senate, some of the things that happened because the report was presented last year. We took evidence from some 60 witnesses in Canberra. Melbourne and various ports in Tasmania. We looked at the operations of the ANL as well as of other shipping companies. We held 33 meetings, of which 18 were public hearings. Quite a lot of interest was shown by both individuals and representatives of the Press who came along to see how we were conducting the inquiry. We were specifically asked by the Senate to do a number of things. The Committee was given the following terms of reference:

That there be referredto the Standing Committee on Primary and Secondary Industry and Trade the following matter -

The operation of the Australian National Line's shipping services to and from Tasmania with regardto:

(a)   the factors considered in establishing freight rales;

(b)   the appropriateness of the current level of freight rales; and

(c)   any amendments necessary or desirable to the governing legislation to enable the operation to be carried out at the lowest possible freight rate.

We went very thoroughly into those matters which we were asked to investigate. I want to refer to page 70 of the report which contains the conclusions and recommendations of the Committee, because I think that they should be brought to the attention of the Senate. In regard to the first aspect, which was '(a) the factors considered in in establishing freight rates', we said:

The questions posed here are broad and complex and are not amenable to a specific answer. The Committee's consideration of them ranges throughout the report.

It was impossible to put in a very succinct phrase the factors considered in establishing freight rates. The report indicates how we examined this aspect. In regard to the next aspect, which was '(b) the appropriateness of the current level of freight rates', which was the important matter that we were specifically charged to inquire into, we said:

The12½ per cent increase in freight rates in ANL services operative from 1st August 1970 was fully justified by thefinancial position of the Line.

I am giving the brief conclusions and recommendations set out in the report, but the basis for those conclusions and recommendations is to be found throughout the report. In regard to the third aspect, which was '(c) any amendments necessary or desirable to the governing legislation to enable the operation to be carried out at the lowest possible freight rate', we said:

The Committee, in accordance with specific conclusions which it has reached on this aspect, makes the following recommendations:

That at the earliest available opportunity- and no later than the re-negotiation of the Australian Coastal Shipping Agreement - the Australian National Line be empowered to act as a freight forwarder if it so chooses.

Honourable senators will note that the Committee used the words 'be empowered'. It did not say that the Australian National Line should act as a freight forwarder. Under its present charter the Line is not allowed to act as a freight forwarder, but there are some special circumstances which could make it advisable for the Line to have the power to become a freight forwarder if it so desired. The manager and other representatives of the Line assured us that they would welcome this power. They said that they could operate as a freight forwarder, not that they would necessarily do so but that this would give them a bargaining position. The next recommendation regarding this aspect was:

That subject to the requirement that the ANL meet its statutory obligations to pursue a policy directed towards securing revenue sufficient to meet all its expenditure properly chargeable to revenue, and to permit the payment to the Commonwealth of a reasonable return on this capital, the present tonnage limitation should be revised and the Line should have equal opportunity with private operators to provide any additional tonnage required on the Australian coast.

I do not propose to go through all the conclusions and recommendations that we made, but the conclusions and recommendations to which I have referred are the important ones. We gave them significance by referring to them in the first part of our conclusions and recommendations. We said that they were matters that ought to be considered.

I do not propose to make a long speech, but shortly I want to refer to the reservations that were expressed in the report by 3 members of the Committee. I have always believed that a committee should do everything in its power to achieve a unanimous report. This is a most valuable way of operating. To reach unanimity, if it is possible, is a desirable objective and one which members of committees should go out of their way to achieve.

The first reservation expressed in the Committee's report comes from Senator Lillico. I regret that, through ill health, he is not here today. I understand that he is progressing satisfactorily. I am not going to say anything against Senator Lillico. I am referring to his reservation only because he was a most faithful member of our Committee. We went to a great many pains and much trouble to discuss with him the points that he brought up. I was under the impression that we had achieved unity with Senator Lillico on those points. Honourable senators will notice that in his reservation he is concerned specifically about the single port authority that he felt that the Committee was suggesting. He almost came to the conclusion that we were recommending one port for Tasmania. That is not so. The Committee did not feel this.

It considered that a very good argument existed for the maintenance of the 4 major ports that operate in Tasmania now. What the Committee suggested was that there should be a single port authority to coordinate the work of the existing major ports. Those ports which retain their own operating authority for carrying out their own work in the area covered by each ports; those ports which retain their own ommended was put forward as a possibility and not as a recommendation that should be carried out. Its purpose was to coordinate operations and to bring about, perhaps in this way, reductions in costs. We felt that this could be done. I thought that we had explained this to Senator Lillico and that we had reached agreement with him on it. I was rather surprised to find that he had put in a reservation on the report with regard to the single port authority proposal.

The other matter that he brought forward concerned the question of subsidies. The Committee made many inquiries from responsible people, including representatives of the Department of the Treasury, to ascertain the value or otherwise of a subsidy and how it could be applied. We were forced to the conclusion that in the case of shipping to Tasmania it was extremely difficult to see any way in which a subsidy could be applied. It would need to go across the board and also to apply to every other means of transporting goods to Tasmania. The situation seemed to be almost an impossible one. So, we did not feel that we could recommend the introduction of a subsidy at this stage. Those were the 2 points contained in the reservation put forward by Senator Lillico.

I turn to Senator Rae who, in his reservation, had quite a deal to say with regard to the report. I felt - this is my own opinion - that unfortunately Senator Rae was not able to take a full part in the work of our Committee because of the demands of another Committee of which he was Chairman. This made it difficult for him to be present at a large number of the meetings of our Committee. He did come in again at the end, but-


Senator Rae - That is not so. I was present for the vast majority of the hearings of evidence. Having heard that accusation made by others I checked, and I found that I was present for the vast majority.


Senator WILKINSON - Perhaps the honourable senator when he speaks will be able to give us the actual number of times when he was present. I am not criticising Senator Rae on that ground. I felt that he was not able to participate actively in the latter portion of our inquiry to the degree that he did when he started out on the Committee. At that time he played a large part in the questioning. In the latter portion of the inquiry he did not take anywhere near the significant part that he had earlier. I felt that a great deal of what he brought forward had been dealt with already in the Committee and we reached a conclusion which was at variance with what he has put forward. This does not prevent the honourable senator from bringing up a reservation report. But, from memory, Senator Rae, because of other commitments, was not able to be present at a number of the private discussions that we held to consider the evidence that had been presented to the Committee.

I feel that, in his reservation, my colleague, Senator Wriedt, has introduced a number of different matters that could have been brought up when the Committee was interviewing witnesses. The exploration of these matters before the Committee would have been of great value to its deliberations. A number of the matters that he introduced in his reservation had not been touched on by the Committee. Their consideration might have been of value.

I am placing on record my feeling that members of committees should endeavour to be at committee meetings on every occasion when they possibly can and that they should produce reservation reports with considerable care, if they have not been able to acquaint themselves fully with what has gone on. That is my reservation in that regard.

Finally, I wish to come back to the matter that was brought up by the Minister for Works (Senator Wright) in his address this evening regarding the costs of industrial unrest to the waterfront and to shipping. The members of this Committee were quite concerned to get some of the facts about this matter. I think that each member of the Committee asked questions about it. I wish to read from the Hansard minutes of the Committee hearing on 27th May 1971. Talking of the loss sustained by the Australian National Line, Senator Lillico asked:

It is difficult to assess with any accuracy its effect on actual freight rates?

Mr Morgan,who was then the Assistant General Manager (Commercial) of the Australian National Line replied:

Well, this is a non-recurring item of expense. It will be reflected in the financial results for this particular year. We anticipate that the effect of the more recent industrial problems will mean in round figures a cost to the Tasmanian trades of something like $600,000.

Because he said 'to the Tasmanian trades' we then were careful to inquire as to whether he meant to the ANL trade, to the whole trade, including the Union Steam Ship trade or the cost to the trade overall. Senator Wriedt asked a question on that same day, as reported at page 612. He put this question:

Could we clarify this? As I understand it, you have already used 3 terms. You have used 'cost to the ANL', 'cost to Tasmania' and 'loss to the ANL'. What do you mean precisely, What are the figures related to? Can you go through them again? There is a figure of $600,000, for instance. What was that?

Mr Morganin reply said:

The figure of $600,000 was the cost of the recent strike to the Tasmanian services of ANL. I am talking about ANL only.

We were not satisfied with that point. He had told us of the loss of ยง600,000, but we wanted to ascertain just how it had occurred. We explored further with the witnesses and made the point that a great deal of freight which is left on the wharf when a ship is not running is picked up when the ship resumes operations. Thus this is not a complete loss. We pointed out also that the Line was not paying wages to some staff. We pointed out too that a ship tied up in port is rather like a motor vehicle in a garage; that it is less costly to leave the vehicle in the garage than to run it on the road. Of course, these were not by any stretch of the imagination comparable costs, but we were exploring the principle behind them. It is interesting to report that the Committee having taken them to task about these points, the witnesses were still of the opinion that the actual net loss, taking into account the loss which would be reduced when the ship finally picked up the freight, was $600,000. Senator Bull, who was chairman of the committee at that time, asked Mr Morgan:

Would you give us the main reasons in your view for this estimated loss of $600,000, excluding the strike at the moment.

He was speaking of the stewards strike. Mr Morgan replied:

The paramount reason is continuing increases in costs. I listed in my second submission the national wage case, the increased bunker charges which have gone up by something like 60 per cent from 1st January, and variations to the awards to sea-going personnel which have had quite a significant effect on our ship operating costs.

We were trying to find out the losses the ANL was experiencing over this period which necessitated an increase of freight rate by 121 per cent, and this came out. I have given the information in case Senator Wright did not pick it up in Hansard.


Senator Rae - Would you relate that to page 47 of the Committee's report?


Senator Wright - Which I quoted.


Senator Rae - The Committee does state as a positive fact:

As mentioned earlier, we were told in evidence that the cost to the Line was estimated at approximately $600,000 in net loss of revenue, a major contribution to the Line's profitability problems in the current financial year.

Apparently that was the finding of the Committee.


Senator WILKINSON - We looked al all of these points. I had the document open at this page because I wanted to deal not only .with the report but also what we obtained from the witnesses and so incorporated in our report. I have referred to the passage which reads:

As mentioned earlier, we were told in evidence that the cost to the Line was estimated at approximately $600,000 in net loss of revenue . . .

I have not said anything different from that.


Senator Rae - I am sorry. I thought I may have misunderstood you and I wanted to direct your attention to that passage to be sure of it.


Senator WILKINSON - That is exactly what I said.


Senator Rae - lt resulted from industrial stoppages.


Senator WILKINSON - I read the reply to Senator Bull's question whether it was as a result of industrial trouble or some other trouble. I gave that answer.


Senator Rae - The heading on page 47 of the Committee's report is 'Industrial Troubles'. The loss referred to is a loss as a result of industrial troubles. T wanted to hear what you had to say about that, because it seems that there is some conflict between what you have said and what appears in the report.

The ACTING DEPUTY PRESIDENT (Senator Laucke) - Order!


Senator WILKINSON - The Acting Deputy President has perhaps taken my point better than the honourable senator has. The other point 1 wanted to bring out was the increase of 12.5 per cent which we looked at. We found that other increases had taken place, particularly in the realm of the freight forwarder; this was a major increase in costs to Tasmania. Other increases came from wharfage dues and so on, but this was a major cost. However, it was not a cost which was of considerable interest to the public generally or to the people of Tasmania because it was imposed by a very small percentage every couple of years. M.y recollection is that it was an increase of 1 .5 or 1 .75 per cent every 2 years or so. lt accumulated, however, to a very much higher figure than the 12.5 per cent increase which the ANL was forced to ask as a result of having kept ils costs down constantly from about 1967. Had the ANL increased charges by a very small percentage each year - say one per cent - it would have been in the position in which it finished by increasing the cost by 12.5 per cent. However, the public would not have experienced that long period of low freight rates by which the ANL was losing revenue while freight forwarders were increasing their charges.

In my opinion the ANL came out of the inquiry very well. I think the ANL was doing the best it possibly could for Tasmania; it was investigating every avenue by which it could cut costs. The unfortunate part was that the Committee was not able to see how a competitive service could be made available to Tasmania like that enjoyed by other States in the Commonwealth through road and rail transport which are in opposition to sea transport.

This was a disturbing factor for the Committee and we went to a great deal of trouble to seek a possible solution to it. As a member of that Committee I am very gratified at the enthusiasm that was expressed by all other members of the Committee and by witnesses who came forward and gave us information as freely as they possibly could. We had very few in camera' sessions, though the ANL presented some financial information in camera. The inquiry generally was open to the public and available to all, and many people were interested in it. I have much pleasure in supporting the motion that the report be accepted.







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