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Wednesday, 23 March 1966

Mr JONES (Newcastle) .- Mr. Deputy Speaker,the Bill will amend section 30 of the Australian Coastal Shipping Commission Act, which now permits the Minister for Shipping and Transport to authorise, with the approval of the Treasurer, borrowing by the Commission without limit. I hope that the Minister for Shipping and Transport (Mr. Freeth) will accept the challenge that he has issued to himself and to the Commission to extend the activities of the Australian National Line. The honorable member for Warringah (Mr. Cockle) expressed concern at the idea that a Socialist government would accept this challenge and extend the activities of the Line into overseas trade. I can assure him that I, as a supporter of a Socialist government, will most assuredly accept that challenge and that I will bring pressure to bear in an endeavour to have the activities of the Line extended into overseas trade for reasons that I shall outline to the House this evening.

The Line is a Socialist undertaking. I may say that the Minister is proud of his Socialist shipping line. The honorable member for Warringah, though he is a Government supporter, likewise is proud of this organisation, for I have heard him in this chamber on numerous occasions congratulate the Line on the excellent work that it does. Clearly, this free enterprise Government sees some worth in this Socialist undertaking. We on this side of the House believe that there is a need to extend the activities of the Australian National Line, not only on the Australian coast but also into the overseas trade. I become concerned when I read Press reports such as one that appeared in " The Australian " on 10th March this year. It was headed: " U.S. shipowner wins $18m. deal" and was in the following terms -

An American shipping owner, Mr. Daniel K. Ludwig, has won a multi-million-dollar contract to ship bauxite from Weipa in the new alumina refinery at Gladstone in Queensland as part of plans to make a spectacular entry into the Australian coastal trade. Mr. Ludwig, reputed to be worth more than $450 million, is the man behind Universe Tankships Incorporated and National Bulk Carriers, the American firm which made a takeover bid for R. W. Miller's tanker fleet last year.

This Mr. Ludwig has already gained a footing in Australian industry by buying out certain Australian coalmining interests. He is primarily concerned with shipping and will no doubt start to transport his Australian coal in ships owned by his own company.

Of what value to Australia are investors of this kind? We in Australia know how to build ships and we know how to transport bulk cargoes. This $18 million contract will represent merely an additional charge against our overseas balances because the gentleman concerned will make a substantial profit out of the contract itself and also out of the purchase of Australian coal mines and the transport of coal from those mines to overseas ports. The letting of the contract to this investor will simply result in an increase of our freight costs, which now stand at $340 million annually and which are a charge against our overseas balances. These are the kinds of considerations that cause me concern. 1 am pleased that the Minister has issued his challange by removing the ceiling on the amount that can be borrowed. With the £5 million maximum that applied previously the Australian Coastal Shipping Commission found itself somewhat circumscribed. Now, however, there is no maximum amount laid down and the sky is the limit. I believe that the first thing the Minister should do is to institute an inquiry into shipping and shipbuilding in this country. He should try to find out what shipping is required and what cargoes we should transport so that the appropriate types of vessels for those cargoes can be built. He should try to find out what cargoes could be transported not only interstate but also overseas, so that we may know where best to move in this field.

There is any amount of opportunity available. We have already negotiated iron ore contracts with Japanese interests covering the next 25 years, under which 197 million long tons of iron ore and 162 million tons of pellets will be transported to Japan. None of that iron ore and none of those pellets will be transported in Australian ships. All of it will be taken in ships owned and controlled by overseas interests. In the main they will probably be Japanese. It may be argued that the Japanese are the purchasers of this material and as such are entitled to transport it in their own ships. If that argument is validly applicable to the transport of iron ore, surely it can also be applied in the case of Australian purchases of crude oil from overseas. The latest figures available disclose that we purchased 4,545 million gallons of crude oil from overseas. The transport of that oil from the point of purchase to the Australian refineries would keep 35 tankers fully employed. I hope it will not be necessary for us to continue importing this quantity of oil for much longer and that we will find sufficient oil deposits in Australia to meet our internal requirements. However, I believe I should point out these facts.

As I have said, the Minister, having now removed the ceiling on the amount of money that can be borrowed from the Commission, should go further and move into the field of overseas transport. It is not much use lifting the maximum amount that can be borrowed if we are not prepared to formulate a plan. I believe the first thing to be done is to decide whether we will extend the activities of the Australian Coastal Shipping Commission, and then to decide what cargoes we will transport. There are many kinds of cargoes that we could look at, and I shall just mention a couple of them. Wheat is a bulk cargo on which we could save a considerable amount of money in freight charges which at present deplete our overseas balances. We send overseas annually $297 million worth. Meat is another cargo the transport of which from this country has been greatly exploited by the various shipping lines. I would like to deal more fully with that matter later. There is also our wool cargo. I believe that all these products should be transported in Australian ships. I call on the Minister to institute, as a first move, an inquiry to establish what ships will be required and where the necessary money will be obtained. We should at least make an endeavour to stop a serious drain on our overseas balances.

I do not think there is any doubt that the Australian shipbuilding industry is capable of meeting any requirements placed on it by the Commission. Let me refer the House to a statement by Sir Colin Syme, Chairman of the Board of Directors of the Broken Hill Pty. Co. Ltd. In his supplementary report on 18th February he said -

It is pleasing to note that new techniques now in use and the excellent work of our shipbuilding organisation and management have brought about substantial increases in efficiency, with a consequent shortening of construction times.

This shows that the Chairman of the Board of Directors of that large Australian company is satisfied that the company's yard is competitive in the construction of vessels, as regards both costs and the time factor. From my own knowledge, the other yards, such as those of Evans Deakin and Co. Pty. Ltd. and Cockatoo Docks and Engineering Co. Pty. Ltd. and the State Dockyard at Newcastle, are also efficient and can meet any requirements imposed on them by the Minister if he decides to extend the activities of the Commission to include overseas trade.

I do not think there is any doubt that there is a need for this to be done. It must be obvious to honorable members that this country has been taken for a ride on the question of freights. We had an example of this only last year. In the middle of the year the United States-Australian Conference Lines decided arbitrarily - there was no discussion with the Minister or the Government - that freights would be increased by 10 per cent, from 1st October and, for good measure, that there would be a further increase of 17 per cent, from 1st January. Thanks to the intervention of the Israeli-owned Maritime Fruit Carriers shipping line, these increases were not imposed on the dates announced. The Israeli company said it was prepared to transport beef from Australia to North America at the same freight rates as those that had previously applied. As soon as that company came into the field the Conference Lines had another look at the matter and deferred the 10 per cent, increase until 1st December. Finally they deferred the increase until 1st January and decided that the 1 7 per cent, increase would not apply until 1st March. The Israeli shipping line then declared that it was still prepared to transport beef from Australia to North America at the old rates until 1st January 1968.

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