Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Wednesday, 22 June 1904

Mr MAHON (Coolgardie) (PostmasterGeneral) . - I do not complain of the action of the honorable member for Grey in calling attention to this matter, because there are undoubtedly some very important principles bound up in this apparently trivial case. In the first place, as the late PostmasterGeneral pointed out, the question arises whether large contracts should be let in groups, or each individual mail service separately advertised by the Department. The subject is so important that I think this is not a proper occasion for its discussion. Such an occasion will arise when the Estimates of the Postmaster-General are under consideration. There is little doubt in my mind, and there can be little doubt in the mind of any one who has considered the matter, that to let every individual mail contract to a separate contractor would largely increase the cost of the postal services of the Commonwealth. That being so, I think that the matter is one with which the House should deal on an occasion when honorable members are prepared for its consideration, and not in connexion with the discussion of the isolated case brought under notice by the honorable member for Grey. He has referred to ihe Ballarat-Rokewood contract as being beyond doubt a case of subletting, and I understood him to say that the contractors themselves have admitted the fact.

Mr Poynton - The contractors do not admit it, but the Crown Solicitor does.

Mr MAHON - The . Crown Solicitor considered it a case of subletting, but the contractors do not. They say -

In form our agreements are for hiring and service. We also affirm that they are such in substance and fact, and were certainly intended as agreements for ' services at specified wages. All our dealings with the employes named have been strictly as between master and servant.

There is no admission there of subletting.

Mr Poynton - The contractors are not likely to make such an admission.

Mr MAHON - These contracts will expire within a few months.

Mr Poynton - It is twelve months since I first drew attention to the matter, and it will be another twelve months -before the contracts expire. .

Mr MAHON - I am informed that they will all expire very shortly. / '

Mr Poynton - They will expire about the middle of 1905.

Mr MAHON - That is not my information. The practical consideration which confronted me was this, that if the Department had cancelled this particular contract^ it would have had to defend an action at law.

Mr Poynton - Has the honorable member no faith in the Crown Solicitor?

Mr MAHON - I have the utmost faith in him ; but his opinion would not save the Department from the cost of defending an action at law, if we cancelled the contract, and I am doubtful whether we are justified in putting the public to that expense.

Mr Hutchison - How does the honorable member propose to prevent the same thing being done again with the next contracts ?

Mr MAHON - I should say the best way will be to submit the whole matter to the House, and to allow honorable members to say whether these mail contracts shall be let in groups, or separately.

Mr Poynton - The question is not whether they should be let in groups, but whether they should be sub-let.

Mr MAHON - There can be very little subletting if there is no letting in groups to large contractors. I do not express any opinion on the subject now, though I must say that the group system has worked fairly well in the interests of the public, and certainly of the Department, and should not be judged by an isolated 'case. I say that in all kindness and consideration to the honorable member for Grey. He has also drawn attention to the disparity between the amount paid to the sub-contractor and the amount received by the contractor; but my information is that the sum of ^72 a year given to the sub-contractor is not the only consideration which he received. I" am informed that Messrs. Cobb and Co. agreed to withdraw their coaches from the mail line on which Mr. Leviston was running his coaches.

Mr Poynton - Messrs. Cobb and Co. are running their coaches there to-day. The honorable member takes exception to Mr. Vines'- evidence, but he will not take notice of the other man's statement.

Mr MAHON - I do not know either party. I am stating the facts as they have been furnished to me by officers of the Department.

Mr Poynton - The official papers show that Mr. Leviston denies that emphatically.

Mr MAHON - I have not seen the documents to which the honorable member refers. ' I have here a statement compiled from the official papers by the Secretary to the Department.

Mr Poynton - It does not state the case fully.

Mr MAHON - As the honorable member has not seen the paper from which I am about to read, it is rather rash for him to say that it does not fully state the case. I hope he will allow me to read it before he forms his opinion. This paper was prepared by the Secretary to the Department, who, like myself, knows neither party, and is absolutely impartial. It contains this statement -

In the case brought under notice by Mr. Poynton, a complaint appears to have been made to him on behalf of Mr. Leviston, who entered into an agreement with Cobb and Co. to carry on that particular service, Ballarat and Rokewood, for £72 per annum, for which Cobb and Co., as contractors, were receiving £160 per annum. There was, however, a further consideration, Cobb and Co. withdrawing their coaches, which were being run in opposition to Leviston, and transferring to him their business on that road, and the good-will thereto.

Mr Poynton - Mr. Leviston has emphatically denied that.

Mr Hutchison - How did the honorable member find that out?

Mr MAHON - I do not know how that information was obtained - whether by a Mahatma or not - but it is certainly not here.

Mr Hutchison - The Department should obtain its information from Mr. Leviston, as well as from Cobb and Co.

Mr MAHON - I presume that the information which I have read has been gathered from the official papers in the case, and from the testimony of the postal inspector of the district.

Mr Hutchison - It is a very one-sided statement.

Mr MAHON - The Secretary to the Department continues -

Even if Leviston made a bad bargain, and this is not shown, it is scarcely a fair thing to endeavour to bring pressure to bear upon the Department without making any complaint or statement to either the Department or any of its officers.

Mr Poynton - Are we to understand that unless a sub-contractor complains, the practice of sub-letting would be allowed to continue?

Sir John Forrest - Why did he not complain to the Department if he had a grievance? He seems to have gone to a Member of Parliament instead.

Mr MAHON - Some honorable members appear to have interpreted my interjection as to no objection having been lodged by other sub-contractors as indicating a state of mind which certainly does not exist so far as I am concerned. All I say is that, in the absence of objections on the part of the alleged sub-contractors,- and the public, there is every reason to suppose that the arrangement is working satisfactorily. It has been going on for thirty years, and this apparently is the first time it has been challenged. If the persons who are carrying on the work are content, and the public convenience is fully studied, is there no good reason why the present arrangement should not be allowed to continue?

Mr Poynton - But why should subletting be permitted, whilst we have a regulation providing that there shall be no subcontracting ?

Mr- MAHON.-It is denied that there has been sub-letting. The Crown Solicitor, of course, says that there has been a breach of the regulations, but the contractor says that he has not sublet, and threatens that if we cancel this particular contract he will take action at law.

Mr Poynton - That does not appear from the papers.

Mr MAHON - It is somewhere in the official papers.

Mr Poynton - It does not appear among them now.

Mr MAHON - All I can say is that Mr. Vines threatens legal proceedings if we interfere with his contract, and that, as a practical man, I object to involve the Department in very heavy law expenses in regard to a contract which will expire within a verv few months. Possibly it will save time if I read the rest of the remarks made by the Secretary of the Department in his memorandum. He there gives the reasons which have largely- guided me. He says -

In view of the fact that there are so many services which may be said to be in the same category - sublet - that no other complaints have been made by any of the parties concerned, or by the public, who appear to be well served, and especially in consideration of the fact that in order to redress the grievance of one individual, fifty others would be _deprived of their business, and probably their means of livelihood.

Mr Poynton - The Minister knows that that is not correct.

Mr Kennedy - That is a bit of special pleading.

Mr MAHON - Honorable members must recognise that if these contracts are cancelled, it does not follow that the men who are now carrying on the work will secure them, and thus be able to continue in their present occupation. To that extent the statement of the Secretary to the Department is quite accurate.

Mr Kennedy - But some other men would get the contracts.

Mr MAHON - The memorandum proceeds - that to cancel so many services could not but lead to considerable confusion and public inconvenience, and probably also to increased expense, while the Crown Solicitor is satisfied that Cobb and Co., acting on the advice of their solicitor, were satisfied that then- agreement under which the contracts were sublet, was not illegal, and in view of this, any action on the part of the Department adverse to them would probably be contested in the Law Courts.

There is the statement to which I referred.

Mr Poynton - That is not definite; it is all bluff.

Mr MAHON - The memorandum proceeds -

The Postmaster-General thought it better to allow these contracts to continue under the existing conditions until they expire shortly, and, in the meantime, to have the conditions of contract so revised as to preclude subletting of any kind, whether colorable or otherwise.

Mr Poynton - Has the Minister alreadydecided to allow the contracts to be completed ?

Mr MAHON - The Secretary says that the " Postmaster-General thought it better. ' ' I have not yet arrived at any decision in the matter. The memorandum concludes as follows : -

It may be as well to state that nothing was known of the practice complained of in the PostmasterGeneral's office until this solitary case was brought under his notice, and that it does not extend beyond the State of Victoria.

Mr Poynton - We have evidence that it does extend.

Mr Chanter - It extends into New South Wales.

Mr MAHON - It may so extend, for the reason mentioned by the honorable member for Grey, namely, that the contracts are let in groups. This House ought to decide whether that principle shall be followed. The burden of that responsibility should not be placed upon an individual Minister. If the House determines that it is inadvisable to let contracts in groups, and that each individual service shall be the subject of a special contract to different individuals, the' course to be pursued by the Postmaster-

General will be perfectly clear. If we interfered in the case referred to we should disarrange all the mail services around Ballarat, and involve the Department in a lawsuit, and it was owing to my desire to avoid these consequences that I hesitated to take action.

Suggest corrections