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Tuesday, 24 September 1974
Page: 1299

Senator BISHOP (South AustraliaPostmasterGeneral) - I move:

That the Bill be now read a second time.

Mr President,the Honourable the Treasurer (Mr Crean) referred in his Budget Speech to the need for higher Post Office charges than were previously proposed because of the Opposition's action in the Senate in July in deferring the increases which were to apply from 1 August, after the Opposition in the other place voted for the Bill. The deferment of those increases to 1 October would mean that Post Office receipts in 1974-75 would be about $30m less than was anticipated from that source. As far back as the Premiers' Conference of 7 June it was known publicly that the Post Office appropriation in the Budget would be held at last year's level of $385m. In the debate in this House I stressed that there would be no increase in that allocation. The effect of deferment has to be either higher charges to cover the shortfall or a cut in the Post Office's capital investment program. The Opposition's action has been strongly condemned from many quarters. The Prime Minister (Mr Whitlam) at his Press conference on 30 July, termed the deferment grossly irresponsible. He said:

It seems the grossest irresponsibility for an Opposition which, when it was in Government knew this would have to be done, which has now had that knowledge re-inforced by Sir James Vernon's Royal Commission, now to say it will reject these charges.

The daily newspapers and the financial Press condemned the Opposition's action in equally strong terms. The 'Age' editorial of 1 August said this:

Higher postal charges are not so much a part of the Government's anti-inflationary program as a first step towards making the Post Office commercially viable . . . Significantly, the Opposition did not oppose the increased postal charges in the House of Representatives. Their rejection in the Senate must be seen as a tactical manoeuvre based on opportunism rather than a valid objection based on reason or principle. One way or another, the public will have to pay.

On 3 1 July the editor of the 'Australian Financial Review', under the heading 'B. M. Snedden 's Seven Cent Heroics ', wrote:

Every so often opportunism can be dressed up to pass muster as considered rational policy. However, Mr Snedden was the man who campaigned on the necessity of pruning the expenditure side of the Commonwealth Budget. It is almost totally inconsistent of him to espouse this and at the same time scheme to prevent the Government increasing postal charges.

The Government is not prepared to vary its previous decision and allocate more from the Budget to the Post Office because this could only be at the expense of our priority programs in the fields of education, welfare and health. It is generally accepted that the Post Office should finance a significant proportion of postal and telecommunications expansion. The report of the Vernon Commission recommends that 50 per cent of fixed asset expenditure should be financed from internal sources- profits and provisions for depreciation and long service leave. This enables the Post Office to meet demand for service at a higher level than would be possible if finances were restricted to borrowings available through the Budget. If borrowings through the

Budget were increased, the percentage of telecommunications capital investment which is internally financed would fall well below SO per cent.

After close study, the Government has also decided that it would not be appropriate to cut Post Office capital investment by some further $30m and let existing telephone applicants increase by 40,000 to 163,000. That would mean a telecommunications engineering construction program 6 per cent below the 1973-74 level of effort. It would obviously require substantial retrenchments in the Post Office's 18,000 capital works staff and in the telecommunications manufacturing industry staff of 20,000 where skilled resources have been built up over many years.

In considering how some $30m should be raised from extra higher charges in 1974-75, the Government considered that the postal service with its huge losses must bear a significant part. The basic postage will therefore be increased to 10c, with other increases in associated charges which I will outline shortly. On the telephone side, it seemed completely inequitable for the residential subscriber to pay more directly because of the Opposition's action and it was therefore decided that the remaining shortfall should be borne by business subscribers. Business telephone rentals will be increased to $85 and there are also some further increases in telex call charges and rentals, for installation and removal fees for miscellaneous telephone facilities and for telegraphic code addresses. Otherwise the increases are identical with those included in the previous Bills. Full details of all the charges are given in the schedule circulated to honourable senators, but the major items are:

Telephone service connection fees are being increased from $60 to $80 for new applicants where new plant is necessary and from $30 to $40 where an existing subscriber moves to another address and new plant is required, to raise $6m in 1974-74.

Government and business rentals will increase by $30 to $85, instead of $75 previously proposed, and residential and other rentals by $10 to $65, to raise $58m in 1974-75.

The local call fee will rise from 4.75c to 6c, but this will not be reflected directly into trunk call charges. Day time calls will rise by between 3.5 per cent and 5.3 per cent only, except for those over 645 kilometres where the increase is 26 per cent Night rates are being reduced by 3 per cent to 40 per cent, with the shortest distance calls up to 50 kilometres costing only 6c- that is the local call fee- for each 3 minutes. Variations in call charges will raise $31 min 1974-75.

The basic postage for standard and nonstandard postal articles will be 10c and 11c, instead of 9c and 10c previously proposed. These higher increases will be reflected into charges for heavier weight items, bulk presorted mail, Category 'C registered publications, householder mail, overseas mail, airmail and priority paid mail. Variations in all postal charges will raise $43m in 1 974-75.

The total extra receipts in 1974-75 from all increases is $146m. This is the same amount which would have been raised if the deferred proposals had applied from 1 August. A substantial amount of justification for the individual variations was given when these measures were first announced and it is not necessary to repeat it because it is readily available. In addition, more complete financial information is available in the annual Post Office White Paper which has been presented. It must be realised by the Opposition that the Government is determined to ensure that the costs of the Post Office are met by the users of the services. This is in line with the recommendations of the Vernon Commission, which saw the need for the Post Office to operate in a similar manner to other Government undertakings. Higher borrowings from the Treasury, year after year, are not the answer to the cost increases faced by the Post Office, and this Bill endeavours to correct the situation that has been accentuated by the Opposition's recent actions. I emphasise that but for these recent actions, the basic postage paid by the Australian people would be 9c instead of the 10c now necessary; the telephone rental on business and government services would be $75 instead of the $85 they must now pay. The price of the Opposition's previous irresponsible decisions is lc on every letter and $ 10 on every business telephone service. The people of Australia and the business community in particular will remember that.

The date of effect of the variations to charges in the Bill is 1 October. The Opposition has had some 3 months to study them. It can consider them in the context of the Budget. It can now see the implications of its previous decision. What is needed is expeditious action to pass this legislation to avoid the Post Office being affected yet again.

The purpose of this Bill is to amend the Post and Telegraph Rates Act in respect of postal and telegraph charges. Another Bill will amend the

Post and Telegraph Act and associated Regulations. Certain miscellaneous charges will be adjusted by administrative action. I commend the Bill to honourable senators.

Debate (on motion by Senator Durack) adjourned.

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