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Thursday, 4 April 1957

Mr DUTHIE (Wilmot) .- After listening to the honorable member for Balaclava (Mr. Joske), I feel sorry for the Australian people, particularly the primary producers. I am convinced, having heard what has been said by honorable members on the other side of the House this morning, and having read what the Minister for Trade (Mr. McEwen) has written in letters to me, that the only hope for the Australian people is a change of government at Canberra. This Government has failed tragically to protect the interests of the people in this matter of freights, and it cannot argue its way out of blame for the position that has arisen. If ever a government lay down and let the shipping monopoly walk over it, this Government has done so. lt has fought the monopoly with kid gloves. We of the Opposition have been battling for years in this chamber on this subject. We have made representations about it from month to month. We could see what was coming, but the Minister for Trade - and I shall read one of his letters shortly - did nothing of a constructive, practical nature to stop this rise. He merely brought certain people together at a conference. Apparently, he then said, " O.K., boys. I have arranged the conference. Now you go to it ".

The formula that was mentioned by the honorable member for Balaclava was worked out in October and November, 1956. and* it guaranteed to the shipping companies a 14 per cent, increase of freights, on a cost-plus basis. 1 should like to refer, as my friend, the honorable member for Lalor (Mr. Pollard) did, to the statement of Mr. T. C. C. Sanger, the president of the Graziers Federal Council of Australia. When commenting on this formula, he said -

This is a rigid contractual obligation which makes no provision for consideration of the ability of Australia's exporting industries to pay.

In other words, it is a case of " Pay up, or else " ! If we do not pay up, there will be no ships. That is the kind of agreement it is. No appeal from this decision, or anything of that kind, is available in the formula. It is simply a blackmailing way of getting the Australian exporters to sign on the dotted line.

I wish now to read from an article written by John Eddy, the Melbourne " Herald " economist, and not a Labour man, written on 17th January, 1956. He said -

The new rates are on the unsatisfactory " costplus " basis. The so-called low percentage of profit rate is on the basis of giving the shipping companies new and better ships for old at our expense, se inflating their capital. It shows that the exporters who succumbed to the negotiations in London were by no means unanimous.

The wool-growers and the meat men did not agree wholeheartedly to this arrangement, but they knew they were trapped by majority vote, and they had to give in to it. It provides a 10.4 per cent, profit for shipowners. Sir William Currie said, at the annual meeting of the Peninsular and Oriental Steam Navigation Company, last Mav -

The yards that have gone sleepy on cost-plus for a decade or more will have only themselves to blame if we have to do our shopping in a better market.

Those are the words of men who understand the situation from the inside.

The shipping freight rise of 7i per cent, in 1955, approximately eighteen months ago. has meant an added cost to our exporters of £10.000.000 a year. The 14 per cent, increase this year has meant an additional cost of £23.000,000, on top of our previous freight charges. Let us think of this matter in cold facts. Freights have increased by 2H per cent, in less than two years, adding £33.000,000 to our total freight bill, and bringing the total to £115.000,000. Some of our overseas markets for primary products are already only just holding on by the skin of their teeth. Any slight increase of freights could push us overboard, and the Argentine, European countries or South Africa could come in and say, " Very well. We shall shoulder our way in now. You cannot compete with us any more ". The buyers on the other side of the world would no doubt say, " Certainly ", and they would take goods from the other countries. These increased freight rates could topple us from the markets of the world.

Let us compare our position with that of South Africa. The Assistant Government Trade Commissioner in Djakarta, Mr. R. B.

Hines, in an article in the journal " Overseas Trading " about eighteen months ago, wrote as follows: -

Another factor affecting Australia's position visavis South Africa is the lower freight rates from South Africa. This is counter-balanced to some extent by quicker delivery from Australia, but we are still in a disadvantageous position. In Malayan trade, too, Australia is burdened with dangerously high freight rates. Most of the shipping lines conducting this trade are controlled by the same Conference line companies which are seeking an increase on our freights to Europe. Their rate is 12s. on a case of fresh fruit shipped from here to Singapore. From South Africa, a longer voyage, it is 8s. 2d. a case. Our canned fruit carries a rate of £9 17s. 6d. a ton. Yet from South Africa it is £4 13s. 9d. a ton. Cut-rate non-European labour helps keep the South African rate down. lt was pointed out. however, that this was not the only reason for the lower charges. The article continued -

But this does not explain why there are these comparable rates on a ton of machinery imported into Singapore.

The writer pointed out that the cost of importing a ton of machinery into Singapore from South Africa was £5 12s. 6d., from Australia,' £9 1 7s., and from Great Britain, the longest voyage of all, £8 8s. 9d. Those facts give one cause to wonder where the sympathies of the accountants who worked out the figures, lay.

The Australian Egg Board was mentioned by the honorable member for Lalor. In 1953, Australia shipped 500,000 cases of shell eggs and 17,000 tons of egg pulp to Great Britain, but in 1956 we shipped only 200,000 cases of shell eggs, or 300,000 cases fewer than in 1953, and only 8.000 tons of egg pulp - a reduction of 9.000 tons compared with 1953. The president of the Egg Board, Mr. Blake, said -

That tragic decline of our exports of eggs and egg pulp is due, in large degree, to excessive freights.

The cost of shipping about £3,250,000 worth of egg products was £540.000. In other words, 16 per cent, of the total earnings from those exports was used to pay freight charges. The 14 per cent, increase would mean additional freight of £75,000.

In my view, the recent 14 per cent, increase is a modern version of piracy on the high seas. I call it a modern example of buccaneering. The fact that a shipping monopoly of 22 shipping lines, operating as the Conference line, decided - at a secret meeting, mark you - to fix the freight rates for Australian exports clearly illustrates that the monopoly has a power beyond that of this Parliament. It calls the tune to which our primary producers, exporters and manufacturers must dance. It has dealt a blow at our economy from which 1 do not think we shall really recover for years to come. It is obvious that these shipping companies have the country and the Government by the throat. The Government retreated from its responsibilities by failing to promote a collective endeavour to prevent this rise. In January, the Minister made some very weak statements on the issue. On 17th January this year, after [ had made several representations to him on the matter, supported by my friend, the honorable member for Bass (Mr. Barnard), he wrote me a letter in which, amongst other things, he stated -

When the Australian Industries Preservation Act was amended in 1930 to enable this procedure to be followed-

He referred to the Australian Overseas

Transport Association - no basis was established for Government par ticipation in negotiations.

That is the great weakness of the procedure. Either this Government, or a Labour government, when we come into power, must ensure that the act will be amended. It is the responsibility of the Commonwealth Government to see that it has a voice in discussions which affect the pockets of every primary producer and every consumer in Australia. The Minister said, also, in his letter -

As I stated last week, I would support any justifiable stand against unreasonable freight rates.

Obviously he does not regard the present rates as unreasonable. Listen to this! He went on to say -

The Government, however, has not been furnished with any facts or evidence which would reveal the freight rate case.

What does he want? He had a conference with representatives of some of the biggest producers and exporting organizations in this country, who put the facts before him, but he says, in effect, that there was not sufficient evidence to warrant interference by the Government. We claim that an independent tribunal should be established to fix freight rates, as is being done in South Africa, and that a competitive Commonwealth shipping line should be operated on overseas routes in order to force rates down.

Mr ACTING DEPUTY SPEAKER - Order! The honorable member's time has expired.

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