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Wednesday, 22 June 1904

Mr SKENE (Grampians) - The honorable member for Denison, with his intimate experience, has, I think, put this matter very well, that is as to whether we should do away with these large group contracts, or whether we should call for special contracts for every small postal line. I do not intend to go into the question referred to by .the honorable member for Hindmarsh. I do not know that any illegality has been committed. I am not one to raise my voice in favour of the commission of an illegality. But to my mind it is a question as to whether these subcontractors are not better in the hands of lar?,e contractors than in taking a contract from the Government.

Mr Hutchison - No; the point is, has there been a breach of the law ?

Mr SKENE - That is quite another question.

Mr Poynton - And let the main contractor take more than half the money ?

Mr SKENE - In every line of business a contractor takes a big risk. He may make a profit on one line, and a loss on another. I have risen to give a concrete instance which came within my own knowledge, and which illustrates what might occur if the system of allowing small contracts to be taken, direct from the Government were enforced. In the district which I represent a mail contract was accepted at so low a rate that the guarantors had to come in and take it over from the original contractor.

Sir Philip Fysh - That frequently occurs.

Mr SKENE - I have no doubt that it does. I do not remember who was PostmasterGeneral at the time to which I refer, but the guarantors asked me to look into the matter, to see if anything could be done for them. The original contractor, whom they had guaranteed, was unable to carryon the service, partly because of the high price he was called upon to pay for horsefeed on account of the drought, and the guarantor who had to take over the service from him, and who knew nothing whatever about the work, asked me for advice.

Mr Poynton - Every sub-contractor has to find a substantial man to back him up.

Mr SKENE - The only advice I could give was to submit to the first loss, and to get out of the affair in the best way they could. As I have said, they knew nothing about running a mail service, and had no horses of their own, so that they were actually losing on every week's working. A company such as Cobb and Co., however, would probably take all the circumstances of a case into consideration. They would not be bound by hard and fast lines.

Mr Page - We know that companies generally do take all the circumstances of a case into consideration.

Mr SKENE -There are liberal men connected with the management of companies, just as there are liberal men elsewhere; and in the case of the failure of a subcontractor there are no guarantors to suffer hardship. If the sub-contractors fail, the principals carry on the service themselves, or find some one else to do so. If the sub letting of contracts is made illegal, the Department will be bound to a system under which separate contracts will have to be let in many cases for lines of five or ten miles in length. At the present time, by reason of the disorganization of the railway service in Victoria, through the discontinuance of trains, a number of small road services have had to be arranged by the Postal Department; but the persons employed are not a whit better off than they would be in the hands of a contractor such as Messrs. Cobb and Co. It seems to me that it would be. absurd to put on one side a firm such as that of Cobb and Co., which, under several managements, has been taking contracts ever since I was a boy. But if we make subletting illegal, that is what must happen. The Department will be bound to let out the mail services in small contracts throughout the whole Commonwealth.

Mr Page - Why not?

Mr SKENE - One reason why they should not is that such an arrangement would increase the cost of the service as a whole, and would not be as efficient as that which at present obtains.

Mr Page - In Queensland it has decreased the cost.

Mr SKENE - My recollection of the Victorian mail coach services is a pretty long one. Those services have always been good, and we are now falling back upon them again, in some of the country districts, in place of the railway service, because they are more frequent. I do not see how we can get along without letting large contracts. The honorable member for Grey has given only a few instances of subletting.

Mr Poynton - I have mentioned fifty - one cases.

Mr SKENE - There has been only one complaint.

Mr Poynton - It is not a question of complaint ; it is a matter of principle. Do honorable members believe in the subletting of contracts?

Mr SKENE - If contractors are not guilty of an illegal act in subletting, we cannot prevent them from doing so, unless we change the law.

Mr Poynton - The Crown' Solicitor says that they are guilty of an illegal act.

Mr SKENE - The Postmaster-General has not said so. The question resolves itself into a consideration as to whether it is better that the large contractors should be abolished. I feel myself that the small sub-contractors are no worse off in the hands of the large contractors than they are in the hands of the Government, and I speak from personal experience in the case I have mentioned.

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