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Wednesday, 22 June 1904

Sir WILLIAM LYNE (Hume) - I do not think that the Postmaster-General should be held wholly blameworthy in respect of the system of which complaint has been made. There is a good deal to be said in favour of the practice of allowing a responsible firm to take up a number of contracts, for if the Department does j not secure a strong financial firm to deal with them, it is likely in times of stress to be placed in a very awkward position. I hold, however, that care should be taken to prevent subletting to the extent to which I believe the practice at present prevails. It has been urged that, instead of grouping a number of contracts, it would be better to invite small contractors to tender separately, and to accept the lowest tender. I disagree with the contention that it is desirable in every case to accept the lowest tender, for the adoption of that practice would, in a great number of cases, result in the worst form . of sweating. In many districts a man accepts a mail contract at so low a rate that it is necessary for him to sweat every one employed in connexion with it. Under the grouping system, no firm should be allowed to sublet a contract at sweating rates. If the system is to continue the Department should be informed of any proposal to sublet a contract, and subletting should not take place without the express approval of the Department. The Department would take care that a contract was not sublet at a price that would not allow a man to carry out the work under reasonable conditions.

Mr Kennedy - No subletting.

Sir WILLIAM LYNE - I do not think that my honorable friend realizes the magnitude of the postal service of Australia.

Mr Page - The honorable member for Hume spoke against subletting when the Post and Telegraph Bill was before the House.

Sir WILLIAM LYNE - I am not in favour of subletting as a general rule, but the Department should have a full knowledge of the cases in which it is resorted to. and should see that the prices paid will enable the sub-contractor to carry out the work without resorting to sweating. In travelling in various parts of Australia I have often found mail coaches so underhorsed and under-manned as to render a long journey both difficult and trying. That should not be the case ; but when I have spoken to the drivers of these coaches, or to the contractors, they have invariably replied, " What could you expect at the price we are getting?" '

Mr Kennedy - If they do not receive a reasonable rate they have no one to blame but themselves.

Sir WILLIAM LYNE - I agree that that is so. and for that reason I am not in favour of the Department accepting, in every case, the lowest tender.

Mr Watkins - Why should the Government pay two persons in respect of one contract ?

Sir WILLIAM LYNE - The distribution of a number of mail contracts, relating to remote parts of the Commonwealth, might perhaps be carried out to better advantage by a sound financial firm than by the Government. Such a firm would probably carry out the system better than would the Government, and could be compelled to observe the full conditions of the contracts. The honorable member for Maranoa has referred to the attempt made by Cobb and Co. to rid themselves of the responsibility for a mail service in Queensland, owing to the difficulties which they experienced as the result of the long-continued drought. No doubt they lost money in connexion with the contract.

Mr Mcwilliams - Some contractors were ruined.

Sir WILLIAM LYNE -Doubtless Cobb and Co. lost money in connexion with the service in question, but their contracts were not cancelled. Had those contracts been let separately, no doubt, the whole' system would have gone by the board.

An Honorable Member. - What about the guarantor?

Sir WILLIAM LYNE - I have had considerable experience of guarantors of contracts, and have 'found them in manycases to be men of straw. I wish it to bedistinctly understood that I am , not infavour of the Department invariably accepting the lowest tender. The officers of the Department should fix what is a fair rate to allow for an effective service. If that were done we should have no sweating, and the service as a whole would be improved.

Mr Skene - How would the honorable member distribute the contracts?

Sir WILLIAM LYNE - It seems to me that in certain cases the Government would not be able to distribute the contracts as well as would a strong financial firm. It is for that reason that I think that, with the exception of services in respect of the more freely settled districts of the Commonwealth, the system of accepting tenders for a number of contracts from a strong financial firm is better than that of accepting separate tenders for small services from individual contractors who have no financial backing. In my own electorate; - and, indeed, in many parts of New South Wales - small contractors are not receiving half as much as they should in respect of mail services.

Mr Chanter - Many of them have taken contracts at starvation rates.

Sir WILLIAM LYNE - Quite so; and the position will become more acute. In many localities men who submit tenders for the carriage of mails look upon a contract merely as a means of securing wages, and fail to give any consideration to alterations of season. Some little latitude should be allowed the Department. There should not be a hard-and-fast rule that in all cases the lowest tender shall be accepted, for if that system were adopted it would be of no benefit either to the public or to the contractors. The officers of the Department should be able to estimate what is a fair amount to pay in respect of any service. I would remind the honorable member for Franklin, who interjected just now, that I know of a case in his own electorate in which a contractor took up a mail contract at a starvation rate.

Mr Mcwilliams - It ruined him.

Sir WILLIAM LYNE - If a strong financial man had been behind him that would not have happened.

Sir John Forrest - How would the honorable member decide to whom a tender should be given?

Sir WILLIAM LYNE - I think the Department should be advised of any proposal to sublet a contract. Representative firms should not be allowed to sublet at starvation rates. If the subletting, however, is at a fair price, I should have no objection to the practice, because I firmly believe that in various parts of Australia the work can be better carried out in that way than under the direct supervision of the Postal Department, the offi cials of which may be many hundreds 0; thousands of miles away. The Department ought to have somewhat of a free hand, always providing that there areno starvation sub-contracts, and that the. Commonwealth does not lose a large sum byallowing group contracts to be farmed out at large profits to individuals. But we must not forget that those large firms have to undertake financial responsibility. They are answerable for the proper carriage of the mails, which, if the Department does its duty, must be accomplished, no matter what are the variations of the season. On this account those large firms are entitled to some consideration. Having regard to all the circumstances, I think that some alteration is necessary, though I cannot agree with the honorable member for Grey that every contract, no matter how small, should be direct with the Government.

Mr.Mcwilliams (Franklin). -I have great sympathy with the PostmasterGeneral, because this is really one of the most difficult administrative matters with which a Minister can be Called upon to deal. In districts where there are no railways, and where so large a proportion of the travelling public depend on the vehicles which convey the mails, this question is one of great importance. But I protest against the Department being allowed to use their judgment as to who shall or who shall not receive contracts. Such a discrimination would open the door - I will not say to fraud or improper influence, but to charges that contracts were given to or taken from persons on account, it might be, of political influence.

Mr Frazer - The Department is not compelled now to accept the lowest tender.

Sir William Lyne - And in some cases the Department does not accept the lowest tender.

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