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Wednesday, 29 June 1938

Mr HARRISON (Wentworth) . - I confess at the outset that my remarks would be more appropriately made in committee; but as they concern the department of the PostmasterGeneral, and as there is an Acting Minister in this House who is looking after the interests of that gentleman, I feel that if any consideration is to be given to the matters I intend to raise, obviously some time must elapse before they are dealt with. Further, as this House will not meet again before the budget has to be examined, the present is quite a fitting occasion for me to make certain observations to which consideration may be given by Cabinet when the budget proposals are being framed.

I should like to analyse the various departments of the postal administration, and compare them with similar departments in the sister dominions of New Zealand and South Africa. I think that I shall be able to convince even the PostmasterGeneral of the necessity to give some consideration to the provision of additional services, both postal and telephonic. Although the Prime Minister, when Postmaster-General, probably heard this story over and over again, I do not think any of its force will be lost in the re-telling of it. For example, I find on picking up the report of the PostmasterGeneral for 1936-37 that the huge surpluses which have been a feature of his department during the last six years at least have been maintained. In the year 1936-37 the surplus in all departments totalled nearly £3,500,000, representing approximately 20.88 per cent. net profit on turnover. A profit of that nature in any business enterprise would cause considerable satisfaction amongst the shareholders of the enterprise. The accumulated profits over a period of six years aggregate the colossal sum of £12,750,000. That should cause concern to every person who is taking advantage of these essential services. The general public feels that these surplusesshould be devoted to the provision of additional facilities, and that the department should not become merely a monopolistic revenueproducing concern. Either the facilities available to the subscriber should be enlarged, or necessary reductions of charges should be made so as to spread the profit as widely as possible over those services which provide benefits for the public. When the department becomes a rapacious medium for the collection of revenue, the public generally is quite justified in feeling that all is not as it should be.

Let us see what happens to the accumulated profits of this department. As I have previously pointed out, they are not used exclusively for the provision of additional services but are transferred to Consolidated Revenue. Yet when the department wishes to erect new buildings it has to obtain a loan from Consolidated Revenue and pay interest upon it. Actually, therefor, the subscriber is paying interest on his own profits. This matter is worthy of the attention of the Auditor-General, who in his next report should indicate to the House and to the public generally his opinion as to whether the accounts of the Postal Department are being legitimately compiled and are not being used merely as a cloak to cover the department's operations. The report for 1936-37 points out that during the year there was a capital investment of £2,500,000. That must have been repaid over and over again out of the accumulated profits. It could have been repaid even out of the profit of £3,500,000 which was returned for that year. Interest has been paid on the £2,436,000 drawn from revenue account, and invested as capital. I suggest that that is not the correct way in which to deal with the profits of the department. Certainly such a method would not be permitted in any business ofrepute.

I direct the attention of the House to the details of the various departments. I shall make certain observations upon them, with a view to seeing whether it is possible for the Postmaster-General to give some relief to the subscribers. Let us consider first the profits of the postal section for the year 1936-37. That section made a net profit on turnover of 29.78 per cent., the amount being over £2,000,000. The department and Cabi net should give some consideration to the reduction of the postal charge from the 2d. an ounce which is being paid at the moment to1d. or l½d. an ounce. On the figures given in the report, a reduction to l½d. an ounce would mean a loss of revenue amounting to £1,500,000.

Even if that amount were taken from the surplus for the year the department would still break more than even in the event of no additional demand being made on this section of its operations. The results associated with the adoption of sucha proposal prove that a greater use is made of the service and the loss of revenue is recouped.

Mr Anthony - The honorable member does not seriously believe that.

Mr HARRISON - I do. It is a well known business axiom which applies even to the Postal Department. Business houses, instead of delivering correspondence by hand and issuing second and third class mail matter, would take advantage of the reduced first class mail rates. That is exemplified in New Zealand, not only in the telephone service, in connexion with which a flat rate has been adopted, resulting in New Zealand occupying fourth place in the world in the matter of telephone subscribers, but also in regard to parcels post, in connexion with which the Government of the dominion of New Zealand experimented by reducing the inland rates. I shall quote from the report of the New Zealand Post and Telegraph Department for 1936-37 in support of my contention. On page 18 that report says -

A review of the first year's working of the inland parcels post under cheaper rates introduced in 1036 confirms the expectation that the reduced rates would attract a larger amount of additional business.

Obviously that expectation was engendered by experience of the result of the reduction of the postage rate to1d. and of the charge for the telephone service to a flat rate. It was conclusively proved that the reduction of the charges resulted in an increased demand for both services. I suggest that our department might give consideration to that matter.

Mr Anthony - Does not the honorable member think that the surplus of tho department ought to be utilized in increasing country facilities, and the remuneration of sweated country post office employees?

Mr HARRISON - I prefaced my remarks by saying that either additional facilities should be given to subscribers, or the charges should be reduced.* I should like to be able to concede the honorable member his point, but cannot admit that his contention, is justified, because practically every request which I have made to the department to decrease rates for this service has been met by the reply that the department is giving such service to residents in outlying areas that users in metropolitan areas must be prepared to pay for these services. If the honorable member has a case to advance on behalf of residents of country areas it is quite obviously his duty to do so.

Mr Anthony - I should like to take the honorable member on a trip around the electorate which I represent.

Mr HARRISON - I am more interested in seeing that those who subscribe to the general revenue of the department in a way which may enable advantages to be given to residents of country areas should receive more equitable treatment, and not be obliged all the time to provide bounties and general facilities for country residents. I do not wish, however, to enter into a discussion of city interests as opposed to country interests.

In order to place before the department indisputable evidence that similar services are being rendered elsewhere at much less cost, I propose to compare the existing postage charges in Australia, with those prevailing in New Zealand and South Africa. In respect of first-class' mail matter, the rates are: In Australia 2d. an ounce for letters, and 1-Jd. for lettercards; in South Africa, Id. an ounce and 1-Jd. for letter-cards, and in New Zealand Id. an ounce, and ½d. for letter-cards. The respective charges for second-class mail matter, consisting of commercial papers, which show a corresponding discrepancy, are: Australia, Id. for 2 ounces, South Africa and New Zealand ½d. for two ounces. In respect of printed matter, catalogues and newspapers not registered for transmission by post, the

Australian charge is Id. for 4 ounces, and in both New Zealand and South Africa the charge is $d. for 2 ounces. For third-class mail' matter, consisting of periodicals and newspapers registered for transmission by post, the Australian charge is Id. for 6 ounces, the South African charge is -|d. for 4 ounces, and the New Zealand charge is ½d. for 3 ounces, and Id. for weight up to 16 ounces. Furthermore, the New Zealand charge for transmission of third-class matter to Australia is Id. up to 16 ounces, whereas the Australian charge for transmission of' similar matter to New Zealand is Id. up to 6 ounces. This comparison is definitely against Australia, particularly when we remember that we have a greater population to take advantage of our postal services. If greater advantage were taken of our greater demand for these services the department's overhead charges would be reduced considerably. I know definitely that many Australian firms are sending matter by bulk postage over to New Zealand to be reposted to Australia in order to take advantage of the reduced New Zealand rates applying to third-class mail matter. We can readily understand the reason for this practice when we realize that the number of circulars involved would run into hundreds of thousands. Our postal department is losing considerable revenue by not taking advantage of. its huge annual profits to reduce these charges. Furthermore, as these profits represent unfair taxation on them, those firms which use the postal services most cannot reconcile themselves to a position under which the revenue they provide for the department in this way is simply paid into Consolidated Revenue and loaned on interest to the department. Thus they are driven to take advantage in the way I have mentioned of the lower rates prevailing in New Zealand.

I also draw attention to a practice which has crept into the department in regard to the sale of postage stamps. Honorable members will recall that at one time it was the custom of the department to pay a commission on the sale of stamps over the counter by many firms and newsagents, but in recent years that practice was abolished after the commission bad been reduced for some years. The Postmaster-General's annual report, however, reveals that the department collects certain commission on the sale of duty stamps on behalf of other departments. For the year 1936-37 it earned £210 as commission oh the sale of beer duty stamps, £11,019 on the sale of duty stamps on promissory notes, and £29,604 on the sale of taxation stamps. As the department itself accepts commission on the sale of stamps on behalf of other departments, it should not be averse to granting a commission to vendors of postage stamps. On this point I have received the following letter from W. C. Penfold & Company Limited, printers, stationers and systematists, of Sydney: -

For many years tho Postmaster-General's Department paid to registered vendors of postage stamps, a commission of li per cent., if memory serves us right, on all stamps sold. This was a cheap enough rate of commission for the trouble and responsibility taken by the vendors. Later this department reduced the commission to 10s. per week for -the sale of £100 worth of stamps or over. Later again this commission was cut out altogether.

Unfortunately, the standard bookseller, &c, cannot afford to cut out the sale of stamps, and in many cases (we ourselves sell approximately £500 worth per week), it is necessary to keep one person practically continually employed selling stamps.

If the sale of stamps by registered vendors was cut out altogether it would necessitate the employment of more civil servants, and we think you must agree this increase in the civil servants should be stopped if possible.

Might wo respectfully suggest that you take up with the Postmaster-General the possibility of giving some of the profit of last year's sales, which have been filched from the people who arc helping the department, back to those people.

The department does not hesitate itself to collect commission on the sale of stamps on behalf of other departments, but denies to a private vendor commission on tho sale of its own stamps. I submit that it should give careful consideration to my suggestion,, particularly in view of the present buoyant state of its finances.

The telegraph section of the department showed a net profit last year of 5.50 per cent, on turnover, or a total profit of £79,790, and claimed to have established a world's record for the distribution of telegrams at the rate of 2.3 a head of the population. Despite that record, I suggest that revenue from this source could be increased if the department fully exploited its opportunities. Certain firms take advantage of the service made# available by the department for the reading of telegrams over telephones, which, by the way, they have installed for this purpose at their own expense. Desiring to confirm the contents of messages received in this way, some of these firms have asked the department to deliver the telegram when a messenger happens to be passing their way; but the department, whilst replying that it is only too pleased to deliver the telegram, insists that such additional service must be paid for. I suggest that that is grossly unfair. Furthermore, it discourages a greater use of telegraphic facilities by many firms, with consequent loss of business to the department because, if it gave this additional facility free to such subscribers, they would most likely increase their use of the ordinary telegraphic services. I venture to say that no manager of a company would decline to give a corresponding service free to a client if by so doing he could attract a greater share of business'.

Last year the telephone section of the department made a net profit of 15.44 per cent, on turnover, or a total profit of £1,117,458, and stated that telephones installed in Australia were in the ratio of one to every twelve of the population, this country occupying seventh position on the list of world's users pf telephones. I have already pointed out that complaints with respect to this section of the department are legion. The department, for instance, could profitably adopt a flat rate as is the practice in New Zealand. The report of the PostmasterGeneral on the Post and Telegraph Department of New Zealand for the year 1936-37 states-

The latest available world statistics, showing the position as at the 3 1st March, 1936, indicate that, with a telephone density of 10.59 per hundred of population, New Zealand occupies a high place in comparison with other parts of the world. The only, countries with a higher density are the United States of America (13.C9 per cent.), Canada (11 per cent.), and Denmark (10.64 per cent.). A further interesting fact in connexion with the New Zealand telephone system is that 70 per cent, of the connexions are of a residential status, which indicates that the service is provided upon a basis which makes it available to the average resident of the Dominion.

New Zealand occupies fourth place among world countries as a user of telephones. It is highly desirable that a flat rate for the use of telephones should be adopted in Australia. The department would see the wisdom of this suggestion if it would consider the advantage of encouraging the use of telephones in private residences. If it adopted a flat rate instead of the present rental or toll system, Australia would very soon rival New Zealand as a user of telephones. The reduction of charges in New Zealand has attracted increased business and the initiative of the administration has been fully justified.

Mr Price - Is the telephone system of New Zealand paying its way?

Mr HARRISON - I cannot give the honorable member exact figures at the moment, but obviously it is a profitable service.

Numerous complaints are made from time to time about the unsatisfactory nature of the service rendered by our telephone department. One of the commonest relates to the inflation of telephone accounts. Very many telephone subscribers contend that they are charged for more calls than they make. Honorable members of this chamber have frequently urged the Postmaster-General to install recording meters in the homes of subscribers. I understand that the objection to this proposal by the departmental authorities is that it may lead to a curtailment of calls; but I do not think that that is likely to occur. In any case, the installation of meters would tend to develop a spirit of contentment with the service. Meters are supplied in connexion with water, electrical, ga,s and other services and I can see no reason why they should not be supplied in connexion with the telephone service.

Frequent complaints are made against the exorbitant charges for removing and replacing telephones. I have known of cases in which telephones have been shifted for only about three feet, involving the use of an additional three or four feet of flex, and charges of 7s. 6d. and more have been made for the job. Fixed charges are levied for removals and replacements irrespective of the length of flex or the amount of labour required. This, in my opinion, is inequitable.

A complaint particularly' prevalent at the moment is that many of our automatic exchanges are seriously overloaded so that satisfactory service is possible only at certain hours of the day. The reply of the department to a complaint of this kind made in connexion with the Waverley exchange was that the Defence Department had taken over the cables, an engagement which prevented them from giving satisfactory service. Promises that additional installations would be provided as soon as the necessary equipment could be obtained from overseas have not been fulfilled although some are of long standing. The circumstances are such that subscribers would be justified in taking drastic action to have their grievances remedied.

Considerable dissatisfaction has been expressed also because the department is so reluctant to install telephone cabinets where they are desired in city and suburban areas, and also in some country districts. The department asserts that it has been unable to obtain a sufficient number of cabinets from the contractors, but surely this situation could be rectified with a little foresight. The stocks of cabinets should not be allowed to become so depleted. The department must be well aware of its normal requirements and it should be able to provide for them, just as other big business concerns have to provide for normal replacements and additions to their equipment. I cannot understand why any difficulty should be experienced in providing all the telephone cabinets desired, and I urge closer attention to this matter.

The unwillingness of the department to grant applications for new services in certain districts i3 hard to understand in' view of the huge surpluses which it is accumulating year by year. The invariable practice of the department when such applications are received, is to make a careful, but conservative estimate of the probable revenue from the service. If the figures do not show an immediate return on the expenditure involved, the services requested are not provided. Surely the department should display some confidence in future developments and not demand unduly heavy guarantees from applicants who desire to avail themselves of this public utility.

The position in relation to radiograms is also most unsatisfactory. Exorbitant charges are made in respect of calls to Australia compared with calls to New Zealand and South Africa. The following extract from The Wireless News relating to the charges on board the steamer Awatea is astonishing: -

Passengers are reminded that the radiophone on board the Awalea is open to the public throughout the voyage. Calls may be booked at the Purser's Bureau on "A" deck. The charge toNew Zealand is 10s. for three minutes' conversation and 3s. 4d. for each additional minute. The rate to Australia is £2 5s. for three minutes and 15s. for each additional minute.

Those charges show such a serious disparity that an immediate adjustment should be made. The traveller who desires to speak to Australia when nearing our shores should not be obliged to pay such a heavy fee compared with that required from the passenger who wishes to speak to New Zealand when the vessel is nearing that dominion. Our people should enjoy facilities at least equal to those offered to the people of New Zealand. This is one of the most glaring instances of the disproportionate fees imposed by a department which has gained an unenviable notoriety for its high charges.

The charges imposed for internal airmail matter in Australia are also most unsatisfactory. A fee of 3d. above the ordinary rate is made for each half ounce of air-mail matter, making the charge 5d. a half-ounce in this country. I believe that this rate will still apply when the new Empire service is in operation. Why should our people have to pay so heavily for air-mail matter when the corresponding charge in South Africa is only1d. a half-ounce? I understand that from the 1st July all the charge for air-mail matter for South Africa from Great Britain and other countries will be only l½d. a halfounce, as against 5d. for internal airmail matter in Australia. The charge for internal air-mail matter in New Zealand is 2d. an ounce which is equal to 1d. a half-ounce. Air-mail matter is not being sent overseas from New. Zealand at present so I have not been able to obtain comparative charges in that connexion in relation to that dominion. Unquestionably the Australian people are being imposed upon in this respect.

The charge made by the PostmasterGeneral's Department for the technical services it renders to the Australian Broadcasting Commission is also far too high. Listeners do not object to paying the proportion of the listener's fee, which goes to the broadcasting commission as it is used for the purpose of providing programmes, but bitter complaint is made about the proportion of the fee which goes to the Postmaster-General's Department. Last year £409,241 was charged by the Postmaster-General's Department for its technical services in relation to the broadcasting service, and the department showed a profit of £87,781 on the transaction. If the department's income from this source were devoted to the improvement of the equipment of the A class stations, the position would not he so unsatisfactory; but I am informed that the equipment of these stations is far inferior to that of many B class stations.

The fines on unstamped or insufficiently stamped letters are also too heavy. I have never been able to understand why the receivers of such letters have to pay the fines. That procedure seems to me like fining an innocent man after the guilty party has been convicted. The department should adopt the practice of returning unstamped or insufficiently stamped letters to the senders.

Mr Thompson - That would involve opening the letters.

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