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Thursday, 4 April 1957

Mr McEWEN (Murray) (Minister for Trade) . - I have listened closely to the remarks made by the honorable member for Lalor (Mr. Pollard) on a matter which, I assure him, is viewed with concern not only by the Opposition, but also by the Government and its supporters, as well as by the entire Australian community, because it deeply affects Australia's economy. I make no protest about this issue being raised and thrashed out here. It is an issue of prime importance. We must bear two things in mind. We may readily express our disappointment - and carry it to an expression of disapproval - at the increase of shipping freights that bears so heavily on Australia's economy. It is another thing to come to a conclusion about what the Australian Government, or the Australian interests concerned, may with justification, properly and legally, do about it.

Mr Ward - Get your own shipping line.

Mr McEWEN - There is the voice of a socialist. " Get your own shipping line ", says the honorable member for East Sydney (Mr. Ward).

Mr Pollard - The primary producers have said it, too.

Mr McEWEN - But the honorable member for Lalor (Mr. Pollard) did not say it.

Mr Pollard - I say it now.

Mr McEWEN - He says it now. The socialist remedy for everything is for the Government to own everything and conduct everything, lt is not a doctrine that finds approval in the Australian democracy, or which, when put into practice, has often saved money for the community. Let me take this matter up for the moment. Is it proposed that the Australian Government should buy, or build, a shipping line that will carry all our cargo? I remind honorable members that 100 ships are engaged in this run. To build a fleet of those dimensions would cost not less than £150,000,000.

Mr Pollard - It could be done over a period of years.

Mr McEWEN - Would they be manned under Australian terms?

Mr Pollard - Qantas is, is it not?

Mr McEWEN - The honorable member immediately dodges the question. Would they be built in Hong Kong, or in Australia?

Mr Ward - In Australia.

Mr McEWEN - At what cost? Would the fleet be manned by Lascars, or by Australians?

Mr Ward - It would be manned by Australians.

Mr McEWEN - Tt would be built in Australia at' probably double the cost. Already we have to subsidize Australian shipbuilding by not less than 25 per cent, because, demonstrably, our costs are between 25 per cent, and 33$ per cent, higher than those of other countries. If we were to follow Labour's suggestion we would load ourselves with this huge capital cost, and would then man the ships under the Australian terms. We would, after all this, save money for the Australian community! What utter drivel and nonsense! The Labour party would realize, if it will have the mental integrity to face the situation, that that is no solution to the problem. The remedy is not to be found in a national shipping line. Is it proposed that we should have two or three ships - a sort of toeinthewater operation? What would we do with two or three ships built in Australia and manned under Australian conditions? I will tell honorable members opposite. We would merely make out a case for higher freight rates than now exist.

Mr HAROLD HOLT (HIGGINS, VICTORIA) - That is what happened last time.

Mr McEWEN - That is so. That is why the Australian overseas shipping line was sold. In the 'twenties the strongest possible justification that the overseas shipowners had for increasing freights was the fact that the proposed rates were still lower than the Australian costs of operating a government overseas line. That is history, and it cannot be disputed. I admit that this is a completely proper matter to bring before the House, but it will be most effectively raised only if a constructive approach is adopted. The basic fact is that neither the Australian Government nor even Australian interests own the ships upon which we depend for the carriage of our overseas cargo. In such circumstances we can examine, first, whether it would be better to own a line - and I immediately say that the virtue of this cannot be demonstrated - or, secondly, how we may best deal with a situation in which we depend so vitally, for the carriage of our inward and outward cargo, upon ships that are not owned by Australians.

This issue has been faced fairly and squarely before. The Australian Overseas Transport Association, which is recognized under statutes of this Parliament, has operated with satisfaction over the years. It enables the shipowners, collectively - and here, I take it, we are discussing the European and Continental trade, though the principles have a similar application to other trades - to bargain with the Australian export interests. The composition of the Australian representation was decided many years ago. I am not going to say that I believe it to be a perfect composition for to-day's circumstances. Indeed, I have already said to various interested parties who have approached me that I will, with the aid of departmental officers and the best advice that I can get, study how it can be improved. I tell the Labour party now that I am receptive to constructive suggestions from that side of the House. The honorable member for Lalor said, pretty specifically, that the provision in the Australian Industries Preservation Act, which enables this structure to exist should be repealed.

Mr Pollard - It ought to be looked at.

Mr McEWEN - The honorable member says now that it ought to be looked at. I have said that we will do that, but I gathered he said that the whole thing should be repealed. I do not want to engage in an argument on this, but I direct the attention of the House to the fact that one of the reasons for the Australian Overseas Transport Association arrangements was the operation of the previous " free-for-all " system. Under that system, freight rates charges on similar commodities were not always uniform as between shippers. To put it in simple language, a fairly natural state of affairs was disclosed as existing on certain occasions. The bigger fellows were able to look after themselves and the little fellows took the brunt of differential freight rates. One of the purposes of the Australian Overseas Transport Association arrangement was to ensure uniform freights on a given commodity. That is a very desirable objective, which I think the House would wish to preserve.

The second objective of this collective bargaining was born of a recognition that, important though freight rates are, they are not by any means the only consideration bearing upon the profitable conduct of Australia's export trade. The programming of shipping, the placement of ships, and the obligation of shipowners to lift the whole tonnage of Australian production within the categories carried under this arrangement are all highly important. I would remind honorable members - and they certainly include the honorable member for Lalor (Mr. Pollard)- who have a practical knowledge of such perishable commodities as meat and fresh fruit that to speak only of freights and ignore contractual obligations for the placement of ships is to overlook half the problem - and perhaps not the minor half. I should think that the exporters of apples and pears were, if anything, rather more concerned with the programming and placement of ships than even with freight rates. That is not underestimating the importance they attach to the freight rates. Out of this collective bargaining arises a situation in which it is possible to negotiate a programme that places important obligations upon the shipowners. That is something to be taken into account. Ships have to be placed, whether there is a full cargo or not. That is a contractual obligation under the arrangement.

I am not here defending the arrangement as being perfect; I make that quite clear. What I say is that being concerned at higher freight rates does not mean that it automatically follows that I think there is no case for a higher freight rate.

Mr Pollard - Ah! The big square-off.

Mr McEWEN - The honorable member for Lalor cited over the years the trend of increases in freight rates. " He could equally have cited over the years the trend of increases in wage rates and in the charges for other transport services in this country, including transport services owned by Labour governments. I say without fear of contradiction that a graph of freight rates charged by Labour governments for the carriage of certain important Australian primary commodities by Labour-owned transport services produces a vastly higher curve than the upward trend in shipping freights. It suits the honorable member to ignore that, but it is a relevant fact. 1 want to say, as a responsible Minister, that what T am concerned 'with' is not simply whether there is an increase in freight rates but whether it is a proper and justified increase in freight rates. Surely that is a proper attitude!

Who is best equipped to judge whether the increase is fair or not? Surely the people who pay the freights! On two occasions since I have been ' a Minister iri this Government, the ' 'people who pay the freights have come to me and said, " Though you have not a statutory right to intervene, will you aid us in compiling the facts and in- assembling the arguments, and will you act as a mediator?" 1 have done so with some success on two occasions.

Mr Cairns - Did the Minister get the facts?

Mr McEWEN - We got enough of the facts to produce results, anyway. On this occasion, the people who pay the freights, on a deliberate policy determination of their own, decided that they would negotiate right through to the end with the shipowners, and not invite the Government to come into the business at all. When great interests established in an organization set up by this Parliament are in negotiation with an authority Parliament provided, this Government does not consider that it is entitled to kick in the door and announce that it is there to tell them how to run their own business. The truth of the matter is that the exporters of Australia on this occasion decided to go to London.

Mr Pollard - Oh!

Mr McEWEN - The honorable member may sneer at the wool and wheat growers if he likes, but I can tei! him the facts. The exporting interests decided to go to London. They hired a firm of accountants, and were satisfied with the facts.

Mr. ACTING DEPUTY SPEAKER (Mr. Bowden).- Order! The Minister's time has expired.

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