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Wednesday, 11 December 1974
Page: 3371

Senator EVERETT (Tasmania) -The Senate is debating the King Island Shipping Service Agreement Bill, the purpose of which is to approve an agreement between the Australian Government and the Government of Tasmania for the provision of $ 1.45 m by way of loan from the Australian Government to Tasmania in order to finance the purchase on behalf of the Transport Commission of Tasmania of the motor vessel 'Straitsman'. In the few minutes before the Senate adjourned last night I had deplored the fact that the Opposition had deliberately chosen to turn the debate on this beneficent measure into a low standard party political brawl. That fact was the more to be deplored because of the record of the Liberal-Country Party Opposition when in government in 2 respects. I briefly restate them. In the last 6 months of the LiberalCountry Party Government in 1 972 that is, between June and December, the 'Straitsman' in fact was not operating that service because it had encountered economic difficulties. The then Liberal-Country Party Government deliberately chose to allow the King Island service to remain virtually non-existent, apart from what little relief could be afforded. Its attitude was expressed in a letter dated 30 August 1972 written by the then Prime Minister, Mr McMahon, to the Premier of Tasmania. I have the authority of the Premier to quote from that letter. In order to save time, I seek leave of the Senate to have the letter incorporated in Hansard.

The DEPUTY PRESIDENT-Is leave granted? There being no objection, leave is granted. (The letter read as follows)-

Prime Minister


30 August 1972

Dear Mr Reece,

I refer to the previous correspondence between us concerning the State's request for financial assistance for the shipping service to King Island, and the discussions that have been held between our officers on this matter.

As the Commonwealth understands the position, the State is requesting either a grant of $300,000, or a loan of that amount on concessional terms as to interest, to enable the State to relieve R. H. Houfe & Co. Pty Ltd of its financial problems so that the vessel the 'Straitsman' can resume its service to King Island forthwith. It would seem that the judgment has been made that the discharge of the Company's liabilities to an amount of $300,000 is sufficient to enable the resumption of the shipping service.

The Commonwealth has noted that the State Parliament has passed the Bill introduced by your Government to guarantee the repayment of monies proposed to be borrowed by R. H. Houfe & Co. Ltd up to $300,000 from any source approved by your Government, and the payment of interest thereon. It is also understood that the Company has been engaged in negotiations for a loan to be guaranteed under this legislation.

This action by the State is of course consistent with its responsibility to see that its community on King Island has available to it an adequate shipping service. Having regard to the security involved in a guarantee from the State Government, it would not be unrealistic to expect that a loan should be forthcoming from commercial sources on reasonable terms.

In these circumstances, and having regard to the provision for a loan to the shipping operator in the King Island Port Facilities Agreement (to which I referred in earlier correspondence), it seems clear that your Government does not now have to consider providing a loan to the Company. This means, in turn, that in the current circumstances the question of whether the $300,000 could be found from the State's Budget can be set aside, and that there is no need for the

Commonwealth to consider as an alternative the provision of this amount to the State.

You indicated in your telegram of 1 8 July that you saw the provision of Commonwealth assistance as a grant or lowinterest loan as a means of aiding the viability of the shipping service. This would, of course, amount to subsidisation, as well as the financing, of the shipping service. However, I am advised that the information supplied by the Company indicated that operations by the 'Straitsman' are estimated to show a small surplus for a year ahead, after allowing for the raising of a loan of $300,000, interest on the loan at 8 per cent per annum, and depreciation on the ship. If it eventuated that the Company could not carry the full rate of interest, on the above figures amounting to $24,000 per annum in the first year, any subsidy that may be necessary in this respect would be too small in relation to the State 's Budget to justify the Commonwealth giving consideration to providing assistance for it to the State.

Moreover, the Commonwealth stated its attitude on the matter of subsidisation of the shipping service when it made its offer of financial assistance totalling $1,355,000 towards the development of the port at Grassy. Your predecessor, in his letter of 7 April 1 972, accepted this offer but he went on to say that the State could not unreservedly renounce the right to approach the Commonwealth at any time requesting a further subsidy arrangement. You indicated a similar view in your letter of 9 June 1972.

On this matter the Commonwealth can understand the State wishing to reserve the right to approach it at any time concerning a further subsidy arrangement. The Commonwealth wished to make it clear that the shipping subsidy previously provided was to cease when the new ship commenced to operate, and that in the Commonwealth's view the State should carry full responsibility for any future subsidy it thought to be necessary. This is of course of some relevance to the present circumstances. It is noted that, as with the Commonwealth, the State has discontinued the subsidy it formerly paid in respect of the service.

The Commonwealth Government plans to introduce legislation for the financial assistance towards the port development as soon as possible.

Yours sincerely,

William McMahon

The Honourable E. E. Reece, M.H.A.,

Premier of Tasmania,

HOBART, Tas. 7000

Senator EVERETT -The crux of the letter, expressing the Commonwealth 's attitude at that time, is contained in these sentences:

The Commonwealth wished to make it clear -

This is Mr McMahon writing- that the shipping subsidy previously provided was to cease when the new ship -

That is the 'Straitsman'- commenced to operate, and that in the Commonwealth's view the State should carry full responsibility for any future subsidy it thought to be necessary.

That was the clear attitude of the LiberalCountry Party Government of the day. The second reason for which I deplore the attitude of the Opposition last night to this Bill is that it was the Opposition, when in government, which by a confidence trick practised on the Liberal Premier of Tasmania of the day, Mr Bethune, got itself out of the obligation that it had carried since 1965 of granting a subsidy of $3.35 a ton, originally $5 a ton. It got itself out of that obligation by the specious device of offering a grant of $677,000 to the Tasmanian Government to pay for half the cost of development of the new port facilities at Grassy- a very good business deal, Mr Deputy President, when you can liquidate an obligation to pay $150,000 a year and capitalise it over 4½ years payments. Your nod and your business acumen is it, indicate that you agree with me. It was a very good deal for the Australian Government but not for the people of King Island.

However, by contrast with that, the fact is that in 2 years the present Government has cooperated with the Tasmanian Government to create the basis for a regular and adequate shipping service for King Island, and it has done that in 2 ways. Firstly, the Australian Minister for Transport, Mr Charles Jones, approved the importation of the vessel 'Rah', and I am pleased to inform the Senate that the 'Rah', arrived in Australian waters yesterday and has berthed. I discussed her immediate future with the Tasmanian Minister for Transport, Mr Chisholm, by phone this morning and he informed me that it is expected that after necessary tests and trials which are to be carried out immediately the vessel will be in actual service before the end of the month. The second way in which the present Government has co-operated with the Tasmanian Government to ensure a regular and adequate service to King Island is in relation to the agreement which is the subject matter of this Bill. The position is that the Straitsman' will be back in service by approximately the middle of next year after extensive refitting and recommissioning have been carried out. It should be recorded that a contract for the work worth approximately $750,000 was let by the Tasmanian Government to the Port of Launceston Authority. So much for the contrasting attitudes of the 2 Governments.

I want to pass briefly to a matter that was mentioned last night by Senator Bessell- and again I deplore this. He poured cold water on the capacity of the 'Rah' to operate a service from Grassy properly and he referred to so-called deficiencies. Again, in discussions this morning the Tasmanian Minister for Transport, Mr Chisholm, also deplored the fact that there have been many persons who have posed as knowledgeable critics who have no qualifications to be critics of the position regarding the 'Rah'.

By spreading what are false stories, they continue to blight the King Island situation.

The fact is that the 'Rah' was bought with the full knowledge that it would be necessary, in order to achieve completely efficient operations, for certain modifications to be made to the berthing facilities at Grassy. The vessel was inspected before its purchase by Captain Houfe, the most knowledgeable person there is in relation to the King Island shipping service. His experience contrasts very strongly with that of some of the illinformed critics who have sought to speak on this matter. Mr Chisholm has informed me that expert engineers on behalf of the Tasmanian Transport Commission have expressed the view that there is no doubt whatsoever that with the small modifications which it was foreseen would be necessary- they are mainly to the ramp facilitiesthe 'Rah' will operate a completely efficient service.

In view of all the tribulation through which the King Islanders have passed over recent years, I feel that it is deplorable and it should not pass notice that even now, with the help of the present Australian Government, when the end is in sight with respect to the shipping difficulties pf King Island a continuing attempt is being made to throw cold water on what is being done. The evidence of that is to be found in what Senator Bessell said last night and the insinuation of Senator Rae by way of interjection that it was a case of bad management. Obviously this was an attempt to discredit the Tasmanian Government.

This is how politics is being continually intruded into this situation; and I say that it is time that it stopped. The simple fact is that the people of King Island are tired of the political antics of the Opposition. This is an Opposition which has double standards- one standard when it is in office, as expressed in the letter of 30 August 1972 by Mr McMahon, and another standard when it is in Opposition as expressed in both the House of Representatives and the Senate by Opposition spokesmen on this Bill. If I can repeat an expression which seems to me to fit the bill and which has been used in relation to those Opposition spokesmen, they are very shallow water sailors.

The people of King Island want the long era of inadequate and ill-fated shipping services to be ended. They do not seek charity and they despise the political antics of the Opposition in relation to this matter. I confidently expect that we are on the eve of a new era in relation to the King Island shipping service, an era in which I hope Party politics will give way to a true appreciation of the resilience of the people of King Island and a recognition that they are for the first time in many years about to have a regular and adequate shipping service. This is all the more necessary because it is pleasing to be able to inform the Senate that the Tasmanian Government is very hopeful of significant extensions to the mining operations on King Island- both the mineral sands undertaking and the PekoWallsend scheelite mines. If those significant projected developments take place, it will be essential that there should be a regular, adequate and reliable shipping service which, I believe, is about to be established for the first time.

I mention one point only in conclusion. Both in another place and here, rather strangely it seemed to me, the question was asked by those who led for the Opposition in the debate on this Bill as to what the explanation was for the fact that the purchase of the 'Straitsman' was achieved at a cost of $1,000,070 whereas this Bill provides in the agreement for a loan to the Tasmanian Government of $1.4 15m. Those who ask that question obviously have not read the Agreement that is included in the Bill. The Schedule to the Bill, which sets out the Agreement in full, indicates quite clearly that it is not only the purchase of the 'Straitsman' that is being subsidised by way of this loan from the Australian Government, but it is- I quote from the Bill:

.   . together with additional ship 's equipment and some fork lift trucks and has had the vessel surveyed and certain alterations made at an estimated total cost of $ 1 ,4 1 5,000;

The explanation need never have been sought. It was to be found in the Bill itself, if the Opposition had been interested enough to read it. I enthusiastically support this Bill.

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