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Tuesday, 21 June 1949

Mr CALWELL (Melbourne) (Minister for Information and Minister for Immigration) . - I move -

That the bill be now read a second time.

This bill deals with the amendment of the Post and Telegraph Rates Act 1902- 1941 to adjust certain postal and telegraph charges in order to give an equitable return for the services provided under present costs and conditions. The existing rates for letters, letter-cards and post-cards will not be increased, but the war postage of1/2d. an article, which was introduced in December, 1941, will be included as part of the normal rates for all classes of postal articles. Commonwealth and State Hansard will continue to be carried at the existing concession rate of l1/2d. for each 12 oz., andparcels will -also be conveyed at current charges. The rates for other postal articles will be increased in some respects, namely -

Commercial papers, patterns, samples and merchandise. - The existing rate of l1/2d. for the first 2 oz. will be continued, but the charges for each additional 2 oz. will be increased from1d. to l1/2d.

Printed matter, that is, printed papers, circulars and catalogues, and also books, newspapers or periodicals not registered for transmission as such. - The existing rate of lid. for the first 4 oz. will be continued, but the rate for each additional 4 oz. will be increased from1d. to l1/2d.

Books, registered for transmission as such, and also newspapers and periodicals registered for transmission but not posted in bulk. - The existing rate of l1/2d. for the first 6 oz. will be continued, but the rate for each additional 6 oz. will be increased from1d. to l1/2d.

Publications registered for transmission as newspapers and posted in bulk. - The existing rate of 2d. for each 20 oz. will he increased to 21/2d. for each 16 oz.

The bulk rate for publications registered for transmission as periodicals will continue at 21/2d. for each 16 oz. Braille and Moon postal articles are conveyed with outcharge under the provisions of section 8 of the act. Other articles for the benefit of blind people, such as special recordings, are now available, and it is proposed to amend the act to provide for the transmission, free of charge, through the post of such other articles for the use of the blind as are prescribed.

Increases in existing registration fees and express delivery charges are also proposed, but these services are covered by the Postal Regulations, which will be amended suitably. The base registration fee will be raised from 3d. to 6d. and the amount of compensation for loss or damage will be increased from £2 to £5, with corresponding adjustments in higher fees. The express delivery charges will be increased on the basis of a minimum fee of 6d. instead of 4d. Minor revisions in the postage rate to Empire countries and Ireland, and to foreign countries, will be made, the former to correspond with the proposed domestic rates and the latter to meet the requirements of the Universal Postal Union of which Australia is a member. Those adjustments will be effected by Executive action.

As I have said, it is proposed to increase the bulk postage rates on registered newspapers from 2d. for 20 oz. to 2£d. for 16 oz., thus bringing them into line with the charges for registered periodicals. The new rates will still represent a valuable concession to the publishers of newspapers and will be far below the costs incurred by the Postal Department in handling and distribution. It is difficult to determine the difference between modern newspapers and periodicals for registration purposes, and the one rate will represent a more equitable basis of treatment. Few other countries extend bulk rate concessions, and in the United States of America, where a lower charge operates, a loss of about 150,000,000 dollars yearly is being incurred by the Postal Department under the bulk rate system.

The bill also makes provision for increasing the base rate for ordinary telegrams not exceeding fourteen words from 9d. to ls. 3d. where the offices are not more than 15 miles apart, and from ls. to ls. 6d. in other cases. No increase will be made in the rate of Id. for each additional word. The practice of charging double the ordinary rates for urgent telegrams will be continued. The rates for press telegrams concerning parliamentary, executive, departmental and. other Commonwealth proceedings will not be disturbed, but the charges for other press telegrams will be raised by 50 per cent. The rate for lettergrams, referred to in the act or letter telegrams, will be increased from ls. 3d. to ls. 6d. for the first 30 words, but the present charge of id. for each additional word will be continued. The bill does not cover telephone rates, which are to be increased. The adjustments in the existing charge schedules will be effected by amending the Telephone Regulations. Telephone subscribers' rentals will be raised on a sliding scale ranging from 5s. yearly at small rural exchanges to 15s. in Hobart, £1 2s. 6d. in Brisbane, Adelaide and Perth, and £1 5s. in Sydney and Melbourne; the unit fees for local calls Will be raised by id. in country districts and by Jd. in the metropolitan areas; the charges for trunk-line calls will be increased according to the direct distance between the terminal exchanges; the special night rates which now apply between 8 p.m. and 7 a.m. will be abolished, and the intermediate rate extended to embrace that period ; the " particular person " fees on trunk-line calls will be raised on calls exceeding 15 miles; the charges for miscellaneous items, such as extension telephones, private lines, block type entries in the telephone directories and extension bells and the like, will also be increased.

No increase in the fee of 2d. for a call made from a public telephone is proposed. During the present period, when the department is unable to meet all requests for subscribers' services, public telephones are more important than ever from the stand-point of the general community, and as they are being used to an everincreasing extent it is felt that the call fees should not be disturbed.

The proposal to discontinue the half rates on trunk-line calls after 8 p.m. will probably be criticized by some people, but it should not be overlooked that a concession rate equal, as a general rule, to three-quarters of the day rate will be applied after 6 p.m. In most overseas countries only two rate periods are in operation, and in adjusting its tariff schedule to provide for two periods, instead of three as at present, the Australian Postal Department will follow international practice. The concession night rate was introduced in the Commonwealth twenty years ago when trunkline channels were idle during the late night and early morning hours, but this state of affairs does not now exist. The elimination of the night rate will spread traffic more evenly, reduce the volume of late night calls, and thus assist in providing staff during peak periods at a time when it is not possible to secure an adequate supply of suitable girls.

The " particular person " fees aTe being increased on calls over distances exceeding 15 miles, but the new rates will still be less than those justified on a service cost basis. The additional trunk line time involved in securing the attendance of « particular party on a trunk-line call is appreciable, as a general rule, and in other countries the fees are much higher than those proposed in Australia.

It has been the policy of the Government to provide postal and telecommunication facilities in country districts at the lowest possible rates, and public necessity and convenience, rather than the financial aspect, have been the determining factors. This principle is being followed in connexion with the present revision of the charges, and the additional costs will be distributed appropriately with due regard to the need for applying specially low rates in country areas. As I have already told honorable members, the increase in telephone rentals will be only 5s. a year at rural exchanges. The extra mileage charges on lines beyond 2 miles from an exchange will not be raised, and there will be no increase in the rentals for additional telephones connected to services which are wholly or partly owned and maintained by subscribers. With these facts in mind, surely it cannot be argued seriously that the new rates will press unduly on country subscribers.

The combined additional revenue which it is expected will be received from the revised postal, telephone and telegraph charges is in the order of £5,500,000 yearly, this representing a net increase of about 16 per cent, in the total earnings of the Postal Department. It will be agreed that this is a moderate increase, bearing in mind the steep rise in costs of labour and commodities since the end of the war and the fact that the overall effect of the 1941 and the present adjustments involves an increase of less than 25 per cent.

The Government has given careful consideration to the proposal to increase Postal Department charges, and much has already been said concerning the reasons for adjusting the rates at this stage. For the benefit of honorable members, I will show why the adjustments are necessary and inevitable, despite the utmost care, economy and sound management which have been exercised by the department. As a business undertaking the Postal Department necessarily prepares its accounts on a commercial basis, and includes full credit for the value of services rendered to other departments, such as the transmission of nearly 4,000,000 meteorological telegrams yearly, the payment of pensions and child endowment, and so on.

Surpluses shown in the Treasury accounts, which relate only to cash receipts and expenditure for each year, are not as large as those recorded by the Postal Department under its commercial system. The chief reasons are that a smaller adjustment is made for services to other departments, some of which the Postal Department is required by legislation to render free of charge; and that a charge is made for sinking fund payments on loan moneys spent on Postal Department works. Since the Labour Government assumed office, profits have been recorded in the Postal Department commercial balance-sheets totalling £35,914,646 for the six financial years ended the 30th June, 1947. The surplus of £6,674,595 in 1944-45 was almost double the greatest pre-war profit of £3,625,371 recorded in 1938-39. It must not be overlooked, however, that the profits in the war and first two post-war years included about £14,000,000 from surcharges introduced in 1941 to obtain additional revenue for general war purposes, and as a business concern the Postal Department was not justified, in the strict sense, in regarding this amount as normal earnings. Then again, the deferment of maintenance works to enable the department to concentrate on war demands, and the release of 8,000 employees for war service, contributed greatly to the increased profits, but only at the cost of a reduction in the standard of service, the accumulation of huge arrears of maintenance and the absorption of plant reserves. Following the cessation of hostilities and the transition from war to peace-time conditions, the Postal Department profit fell from £5,103.886 in 1946-47 to £1,849,781 in 1947-48. The estimated deficit for the current financial year is £3,500,000, and a loss of £6,000,000 would probably occur during 1949-50 if existing charges were maintained.

Reference has been made by some honorable members to the fact that the annual report of the department for the financial year 1947-48 has not been presented to Parliament. It is regretted that, due mainly to printing difficulties and the general shortage of staff, the report is not yet available, but as I have already mentioned, the results of the operations of the Postal Department on a commercial basis for that year show a surplus of £1,849,781. The change from a handsome profit in 1946-47 to a much lower one in 1947-48 and a substantial deficit this year calls for explanation; so let us examine the underlying causes, which are definite and clear-cut. Prior to being placed on a war footing in 1939, the Postal Department had attained a high level of efficiency and was providing facilities with reasonable promptitude. Due, however, to the parsimonious attitude of non-Labour governments, the department had not been given sufficient money in past years to enable it to erect all the buildings and to provide the plant and facilities required to meet development, with the result that there was little long-range planning, and the Postal Department was more or less existing on a hand-to-mouth basis. During the war, a comprehensive programme of special defence works had to be ' implemented quickly and effectively. Supplies of equipment of all types were diverted to the communication needs of the Australian and Allied fighting services, and the contribution that was made in this connexion evoked the high praise of the leaders of those forces. Not only did the Postal Department staffs provide postal, telephone and telegraph services of an amazing magnitude, but they also supplied special facilities, such as radar, radio transmitters, switchboards, and millions of pounds worth of technical equipment which was manufactured in the department's workshops. In these circumstances, it was inevitable that normal maintenance and developmental work had virtually to cease, the attention of the Postal Department as the war proceeded being focused more and more on providing effective communications for the Services. Naturally, a good deal of the work done was of little value for civilian use, either then or now, but the urgency and necessity to furnish services for military use will not be disputed. The diversion of labour and equipment to meet war needs meant an ever-increasing strain on plant, equipment and personnel and, what is important to remember, developmental and replacement works, which are normally carried out each year for civil needs, had to be suspended, with the result that reserves in underground cables and telephone exchanges, for example, were used up, and relief plant could not be installed.

Let us examine the position facing the Postal Department when the war ended. It had -a depleted staff, because such large numbers of its key men and technical employees had joined the Forces, or had gone to assist the war effort in other spheres. Normal reserves of indoor and outdoor plant of all types had been absorbed, and building accommodation for essential facilities was lacking. Coupled with this, the Postal Department was faced with a record demand for services to meet the growth of industries and the requirements of the returning servicemen as they were rehabilitated. In short, the department was confronted with the problem of meeting a heavy increased demand for facilities which it was unable to supply because of depleted reserves. Due to the inevitable results of a long war in which the nation was an active participant, the standard, of service had deteriorated seriously, facilities available were overloaded, and the staff was far below the minimum requirements. Certainly, some replacements of staff were made during the war years, but it could not be expected that the men and women who came forward would possess the skill and experience of officers who had been with the department for many years. The Postal Department did not lack vision or courage to .meet what can be truly said was the greatest emergency in its history. With the backing of the Government, and under the leadership of a Postmaster-General who is a keen and able administrator, the department initiated a special rehabilitation programme covering works to the value of £42,000,000 over a three-year period. It placed orders on a long-term basis for millions of pounds worth of badly needed equipment and materials; it re-organized and decentralized activities; it streamlined practices and procedures, and it adopted the latest developments in mechanical aids and techniques.

Now let us look at the factors which have contributed so greatly during recent years to the costs of operating the Postal Department. Since the beginning of 1947 the increase in direct labour costs immediately attributable to the cost of living rises and the upward movement of wages, coupled with the 40-hour week, have advanced the department's annual wages bill by more than £7,000,000, apart altogether from the wages of new staff. The 40-hour week itself is not the major cause of the increase in labour expenditure, since it represents only 15 per cent, of the extra wages bill. Increases in prices of materials used in enormous quantities by the Postal Department have also added greatly to costs. Let me quote a few examples: The price of copper has soared by 150 per cent., lead by 75 per cent., cable by 250 per cent., automatic switching equipment by 100 per cent., certain telephone instruments by 145 per cent., and paper for telephone directories by 275 per cent. In fact, there is not one commodity in general use by the department which has not risen sharply in price. In the light of these increased costs, the change from substantial war-time profits to the expectation of an equally substantial deficit for 1949-50, is neither surprising nor inexplicable. Indeed, it would have been amazing if this were not so, and what is really surprising and is a tribute to the competent manner in which the Postal Department services have been operated, is the ability of the department to meet the position by making such a moderate overall increase in charges - only 16 per cent., remember - in a period of eight years. Can any honorable member cite any other industrial or business undertaking which can say that over the past eight years .it has a similar record ?

Before deciding to revise the Postal Department's charges, every possibility of rectifying the financial position was examined carefully. No concern in Australia, public or private, exercises closer scrutiny of its expenditure or applies more scientific methods to staff recruitment, training and its general operations. The most modern mechanical aids have been adopted, both in the field and internally.

Procedures have been streamlined, decentralization effected, and delegations extended to enable responsible officers to act speedily and effiectively and, coupled with these, there is an overall scrutiny of all items of expenditure to make sure that each passes the test that it is essential in present circumstances. Since the department exercises such a prudent control of its economy, and the Government has every confidence in the controlling officers of the Postal Department in this respect, the only courses facing the Government in the light of the inescapable increases in costs were -

(1)   to reduce expenditure by withdrawing or restricting services;

(2)   to operate the Postal Department at a loss and meet the deficit from Consolidated Revenue; or

(3)   to increase the charges in a reasonable manner.

The first course had to be dismissed in the public interests. The withdrawal of facilities and the restriction of services at a time when the demand for an expansion of these facilities is at the highest level in history, would give rise to justifiable nation-wide criticism and retard national development which the Postal Department has always actively assisted and promoted. The operation of the department at a heavy financial loss would place an added burden on taxpayers generally, whereas an increase of charges for the services rendered means that the users of these service will make the necessary increased contribution. Equity demands that the last course be followed. Of course, savings in expenditure could be secured by reducing the supply of materials or cutting the wages bill, either by sacking men or lowering wages. If materials supplies were reduced appreciably, the plans to restore Postal Department services to a reasonable grade of efficiency would have to be thrown overboard. Thus, an essential public utility would be deprived of the opportunity to play its full part in developing Australia, and many workmen, the majority of whom are ex-servicemen, would be dismissed after they had been trained for special work of vital importance to the whole community. A cut in wages could not be effected by the Government because officers of the Postal Department are paid in accordance with Arbitration Court awards. In any case, does any honorable member seriously take up the attitude that any members of the community should be singled out for discrimination in the matter of salaries because they have elected to serve a great national enterprise rather than go to private industry ?

A good deal has been said in previous debates by some honorable members regarding the so-called inefficiency of the Postal Department, and one honorable member even alleged that two letters entrusted to the department had been opened before delivery. I am assured definitely by 'the Postmaster-General that the Postal Department does not open letters, other than those dealt with in the Dead Letter Office, which handles postal articles that cannot be delivered, generally through the failure of the sender to address an article correctly or even to address it at all. In any case, let us view the efficiency of the Postal Department, not from isolated cases where a postal article or a telegram or a telephone call is unduly delayed or mishandled, but in the light of the huge volume of transactions which is conducted by the department with efficiency and despatch. An organisation which handles yearly more than 1,300,000,000 postal articles, nearly 1,000,000,000 telephone calls, and 34,000,000 telegrams to the satisfaction of the public, excepting in rare cases, cannot be rightly charged with being inefficient, and I am confident that most honorable members will share this view. The Postal Department is the largest commercial undertaking in Australia, and it has an obligation to serve all areas, whether they be in cities, townships or outback settlements, with prompt and dependable services. The department is doing this effectively in accordance with the traditions of a great national enterprise.

As I have said, the world war severely checked the normal expansion of the Postal Department, which has now adopted the latest developments in techniques and procedures and has set out vigorously to restore all its services to the highest state of efficiency possible. Cer- tainly, there are imperfections at present, but these were unavoidable as the result of the war, and, even in its present condition, the Australian Postal Department is providing services equal to those available in most other countries of the world ; and what is also important, these facilities are made available at costs which compare favorably with those operating overseas. The Postmaster-General and the controlling officers of the department are realists, and they are fully alive to their responsibilities and the importance of improving and developing the postal and telecommunication facilities of this country. The great body of the staff are imbued with the ideal of service to the public, and are naturally resentful of remarks, which have no basis in fact, regarding their alleged inefficiency. Once again I say, efficiency is the keynote of the Postal Department, and the department will press on with its task of providing prompt and dependable services at costs which do not debar any member of the community from enjoying the benefits which modern post office facilities supply.

In considering the value of the services furnished by the Postal Department, the many and varied tasks which are performed for other Commonwealth departments should not be forgotten. It is true that these services do not come directly within the scope of communications, but it is fortunate for the community, from, the standpoint of both economy and convenience, that they can be carried out by an organization which serves every town and village in the Commonwealth. The post office is the focal point for the public, and in the majority of cases it can perform work for other departments without involving additional staff. There is no doubt that if other departments were compelled to set up separate establishments or agents for the payment of, say, pensions and other social benefits, the overall cost to the taxpayer would be greater than it is to-day. Can any one honestly say that the Government, the Postmaster-General and the controlling officers have not taken every possible measure since the war ended to restore and expand the services of the Postal Department? As I have pointed out, millions of pounds have been voted for works programmes, huge orders' have been placed for materials, staff has been recruited and trained as rapidly as possible and, for the first time in its history, thanks to the enlightened policy of the Government, the department has been able to plan its capital works on a long-term basis. There is no short road to overcoming the effects of the war years on the postal services any more than in other establishments which diverted much of their organization and facilities to war purposes at the expense of normal progress. Hard work and energy are necessary to restore and expand the Postal Department services, and the vast amount of work that has been done since the end of the war is adequate testimony to the vigor and enthusiasm with which the department has approached the job.

Let me quote a few figures showing what has been accomplished by the department since the beginning of 1947: 107 new buildings have been completed and 124 buildings are under construction; 62 buildings have been remodelled or extended, and 60 similar works are in hand; 146,000 telephones have been added to the system; 240,000 miles of cable have been laid; 1,100 public telephones have been installed ; 115,000 miles of trunk line channels and 25,000 miles of telegraph channels have been provided ; 51 automatic exchanges have been established in metropolitan areas and rural districts, and seventeen automatic exchanges are being installed at the moment. The plans for next financial year, 1949-50, provide for a greater amount of works, consistent with the accelerated deliveries of equipment. To mention one instance only, 46 automatic exchanges in metropolitan areas and 150 rural automatic exchanges are to be installed. At the same time, more liberal conditions have been introduced in relation to mail services, housetohouse letter deliveries, letter receivers and so on, in conformity with the progressive policy of the Government. The rehabilitation programme of new works which was set in hand two years ago is to cost well over £42,000,000, of which £36,000,000 will be spent during the first three years. Up to the present, about £20,000,000 has been spent under this programme, and expenditure so far has been financed from Consolidated

Revenue. If this expenditure had been financed from loan moneys, annual interest and sinking fund payments would have been increased by nearly £1,000,000 a year. Even if all the profits of the Postal Department in recent years had been set aside as a reserve for financing the capital works of the department, the amount would not have been sufficient to meet the cost of the initial three-year programme. Moreover, honorable members must not overlook the fact that thi* programme will have to be extended from year to year until the huge arrears of essential works have been overtaken.

The loss shown by the Australian Postal Department is not unique, since the United States Postal Department is budgeting for an increase of 250,000,000 dollars in postal charges alone to assist in meeting a deficit of 30.0,000,000 dollars. The increase of little more than £500,000 in postal revenue in Australia is small by comparison with the colossal rise in the United States. Other administrations throughout the world have raised their charges substantially in recent years, and the rates proposed for Australia generally compare favorably with those operating elsewhere. For example, a telegram of fourteen words may be sent from Brisbane to Perth at a cost of ls. 6d., whereas to transmit the same telegram from New York to San Francisco would cost 12s. A telegram from Sydney to Melbourne would also cost ls. 6d., but a wire from New York to Chicago would cost 5s. 6d. The proposed Australian rates for telegrams are also cheaper than those operating in the United Kingdom, New Zealand and South Africa. It has been stated in some quarters that the .letter rate in Great Britain was recently reduced from 2£d. to 2d. This is not the case, and charges operating from the 1st May of this year have increased substantially the United Kingdom rates for printed matter, commercial papers and registration fees.

Telephone charges in the United States of America have been stepped up in recent years and a government tax of 10 per cent, applies to rentals and local call charges, while a 20 per cent, tax operates on all trunk calls exceeding 20 cents. In Canada, also, telephone charges have been increased recently, and a Government tax of 15 per cent, applies to all trunk calls exceeding 20 cents. A telephone call from Melbourne to Sydney will cost 7s. 6d. under the new rates, hut a call for a similar distance would cost 9s. 5d. in the United .States of America and 16s. 7d. in Canada. The local call fee also compares favorably with that operating in other countries. For example, under the new rate schedule a subscriber in Melbourne or Sydney may call over a 15-miles radius at. a cost of 2d., but a similar call in London would cost 6d. sterling. The fact that the Australian Postal Department should be able to meet the position, provided no unforeseen rise in costs occurs, by increasing its overall charges by only 16 per cent, is an indication of the efficiency of its organization, particularly when allowance is made for the difficulties with which the department is faced in serving a relatively small population scattered over a wide area. These factors naturally influence costs and, in themselves, they would provide ample justification for making the charges higher than elsewhere. Fortunately for the community, however, this course has been avoided by prudent management and economical and businesslike methods.

After listening to my remarks, which I have endeavoured to make as brief as possible, honorable members will recognize these main facts: (1) Operating costs have increased to such an extent that revenue on the existing tariff basis is insufficient to meet them; (2) large arrears of maintenance, due chiefly to war-time conditions, have to be overtaken when costs are at a peak and these increased costs -more than offset financial savings on maintenance during the war period; and (3) an extraordinarily large programme of works has to be carried out to enable the Postal Department to meet the greatly expanded demands of the community for postal and telecommunication services.

I have given honorable members an outline of the conditions which have led to the proposal to adjust postal rates in harmony with prevailing costs. An unanswerable case has been presented, and if honorable members will approach the matter dispassionately and objec- tively, not only will they support the bill but they will also commend the Government for the economical and efficient way in which the Postal Department is being conducted; the progressive policy which is being followed to improve and expand services; the equitable manner in which the tariff adjustments are to be spread over the community; the special consideration which has been given to the rural areas and the moderate increases which are being made in the rates in comparison with rises imposed by business undertakings generally. With those remarks, I commend the bill to honorable members on both sides of the House.

Debate (on motion by Mr. Harbison) adjourned.

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