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Wednesday, 1 November 1905


Senator MATHESON (Western Australia) - I think that, without exception, this is the most remarkable proposal that has ever been placed before the Senate. Both the mover and seconder of the motion had not a single word to say in favour of it. They condemned it from every possible point of view, except - so far as Senator Keating was concerned - the sentimental aspect ; and1 I submit to the Senate "that sentiment is not altogether a matter which should induce the Government to bring in an expensive proposal of this sort. The only thing that Senator Smith could say in favour of the motion was that in the course of a year or two we might get a more efficient service ; and' when I pressed him as to what benefit to Australia a more efficient service would be he was absolutely nonplussed. It was simply a parrot cry which he took up from Hansard, or from hearing some one else make such a remark in the Chamber, and he personally could not justify the sentiment to which he had given expression. Senator Smith enumerated what our exports were. With one exception our exports by these subsidized steamers are articles produced in Canada. It must therefore be clear that no extra- efficiency in the subsidized service would1 be of the least avail in increasing our exports to that country. The export of coal to Vancouver is the only trade that shows any, promise, and the coal is not carried iti the subsidized steamers. I therefore fail to see that any more efficient service would benefit Australia in the least in this respect, unless we are entitled to anticipate a largely -increased export of cocoanut oil, which is not produced in Canada. Our exports of this commodity at present amount in value to £[2.000, and I hardly think that even Senator Smith would consider an increased export of cocoanut oil sufficient to justify the payment of a subsidy of £[66,000. I need not make a long speech, because Senator Keating has admitted very frankly, first of all, that this service is of no value whatever as a mail service.


Senator Givens - The honorable senator said it was of very little value.


Senator MATHESON - I took the Minister's words down most carefully, and what he said was that he could not defend the service as a mail service in any sense.


Senator Best - He said practically the same of it as a trade service.


Senator MATHESON - The honorable senator practically said the same thing of it as a trade service. He showed by the statistics he quoted that our trade was falling away each year, until last year, when it increased in value by some few thousands of pounds. As a matter of fact, this subsidized service has been, according to the admission of the members of the Government themselves, a failure from every possible point of view. Yet they come before us to-day and ask us to renew the contract'. Really they d'o not leave us any option, for they have practically renewed it already because a term of months has intervened between the termination of the extension of the last contract and the commencement of the contract we are now asked to affirm, and we certainly must go on with this contract.


Senator Best - Are we committed to it?


Senator MATHESON - We are practically committed to it. We really have no option but to ratify it. It is another of those cases commencing with the naval subsid'y agreement, in which the Government have come before us time after time to say, " You have no option but to confirm what we have done, because the Government are pledged."


Senator Clemons - What would happen if the Senate did not ratify the contract?


Senator MATHESON - I cannot tell the honorable senator what would happen. I «an only suggest that he should ask Senator Keating, as representing the Attorney - General. The honorable senator will no doubt ask for notice of the question, and will then be able to supply Senator Clemons gratis with a legal opinion on the subject. I have no desire to waste time in dealing with what has been admitted by the Government already. But what I do desire to deal with is their colossal impudence in coming before us and suggesting that Australia should pay for this fiasco on a -per capita basis. It is necessary to touch upon the history of this contract. The original contract was made in 1893, New Zealand, New South Wales, and Fiji being the three Australasian partners with Canada in the payment of the subsidy. The contract was then admittedly a _ trade contract. It was anticipated that an improvement in the commercial relations of the various countries concerned would be fostered bv this service. The contract was renewed for a further period of three years in 1896 by the same parties. In 1899 it was again renewed for four years, but at this stage New Zealand retired, and Oueensland took her place. Again, I should say that at that time it was considered a trade subsidy, and not a mail subsidy, in any sense. In 1903 the contract was again renewed by the Commonwealth - and this is the point to which I direct special attention - on behalf of the two States interested, Queens- 0 land and New South Wales. That is a point which was carefully evaded by Senator Keating in his speech, but it is of most material importance in the consideration of the proposal now brought before us bv the Government. The subsidy paid in 1893 by New South Wales and New Zealand was £17,500. The contract was renewed in 1899 at the same figure, the amount being paid by New South Wales and Queensland. In 1903, when the Commonwealth arranged for a contract on behalf of the two States- interested, the subsidy was increased - this also is most important - and became £25,863, payable by the two States of New South Wales and Queensland, the increase in the amount being £6>3<33-


Senator Stewart - What was the reason for that?


Senator MATHESON - The sole reason for the increase in the subsidy was that the contracting steam-ship company said that they could not carry on the service for the subsidy they had previously been paid. There was no stipulation then made for increased speed, or an improved service. No advantage whatever was reaped by the Commonwealth in securing an extension of the contract for an increased subsidy on behalf of the two States. There was no consideration for the increase of the subsidy, except the continuance of the existing service on the same lines. Now we are asked to ratify a contract involving, the payment of a subsidy of £26,626, or an increase of about £3,000 on the last increase. There is no alteration whatever in the terms of the contract stipulating for increased speed, or improvement of service. We are simply to pay the extra £3,000 for the continuation of the service under existing conditions. I wish to prove to the Senate that when the renewal of the contract took place in 1903, it was perfectly understood, and clearly recognised by all parties that New South Wales and Queensland were the only States interested, and that the .subsidy was increased by the Federal Government, simply and entirely on their behalf. I shall not ask the Senate to take my ipse dixit for that, as I propose to quote shortly two or three remarks made by leading statesmen when the matter was before Parliament at that time. The references may be found in Hansard for the 1st July, 1903. At page 1642 it will be found that Sir Edmund Barton is reported to have spoken as follows : -

If the proposal now put forward is adopted by the House, the Commonwealth on behalf of New South Wales and Queensland will pay ^6,363 12s. gd. extra. ... It will be £23,863 12s. gd. instead of ^17,500 on behalf of Queensland and New South Wales. ... As the bulk of the advantage to be obtained from it will be reaped by New South Wales and Queensland, it has appeared to us to be right and constitutional that the expense shall be charged back in the way proposed.

On the same page it will be found that he said -

The service, however, is a promising one, inasmuch as the number of passengers is increasing, and a full cargo is taken from Canada nearly every trip.

I have quoted that to show how very in-, accurate in his forecast Sir Edmund Barton was in this respect. I take it that it was very largely upon his representations to Parliament that the contract was renewed in 1903. He is also reported at page 1643 to have said -

The carriage of mails to England by the Canadian route occupies three or four days longer than by the Suez route.

That, therefore, was known at the time. Sir William McMillan also spoke on the subject. He represented Wentworth in New South Wales, and may be taken to have known what the feeling of the New South Wales Government was. He said -

It is understood that 'the Governments of New South Wales and Queensland knew of the proposed transaction, and acquiesced in it.

Mr. JosephCook, who is also a representative of New South Wales, spoke on the subject.


Senator Stewart - Is he a statesman?


Senator MATHESON - He is now the deputy leader of the Free-trade Party in the House of Representatives, and I assume that he fairly comes under the heading of " statesman." At page 1645 °f Hansard, for 1903, he complained that the House had not received particulars of the agreement, that they were asked to enter into it blindfold, and that the service was not paying. Mr. Watson, another statesman, a representative of New South Wales, and one who. I believe, if I have not been misinformed, is the leader of the Labour Party in the House of Representatives, is reported at page 1654 of Hansard, for 1903, to have said -

Honorable members need not fear that States other than New South Wales and Queensland will be called upon to bear any burden in this connexion. . . . To my mind there is no doubt that the proposed expenditure is as much transferred expenditure as would be the payment of an increased sum for the carriage of mails between two towns in any one State.

I think I have made it clear that, at the time this contract was renewed in 1903, it was perfectly understood that the subsidy would be paid by the two States of New South Wales and Queensland only, and it was considered by Parliament to be a perfectly fair and just arrangement that the payment should be made in that way. With one exception, I am unable to find that a single person raised a voice in protest, and I will deal with the protest that was raised later on. From a postal point of view, it has been already pointed out that this ser- vice is of very little value. The time taken to transport mails between Brisbane and England, via Vancouver, has been shown to be 37 days 10 hours. By the Suez Canal, the time taken from Brisbane by the Orient boats is 33 days 7 hours, and by the Peninsular and Oriental boats, 31 days 16 hours.


Senator Styles - From Brisbane?


Senator MATHESON - Yes, from Brisbane. These are figures which were given in another place; they are Ministerial figures, which I have taken from Hansard, and I presume they are accurate. It has also been pointed out that if the mail matter carried by this service were paid for at' poundage rates, it would cost ,£3,200, which leaves a balance of £[23,000. This £[23,000 is admittedly paid as a trade subsidy for the encouragement of commerce. A most remarkable fact ds that, without any subsidy whatever, the San Francisco line, simply because this is the natural mail route, carries 81,000 lbs. of mail matter as against 38,000 lbs. carried by the Vancouver line. It is perfectly clear that the Minister was quite justified in saying that, so far as the mail service is concerned, this subsidy has no justification. I lay some stress on this point, because, unless it be a mail subsidy, I see not the least justification for the Government attempting to debit States other than Queensland and New South Wales with any portion of the expenditure.


Senator Clemons - The honorable senator is entirely overlooking the speed and regularity of the Vancouver service.


Senator MATHESON - Exactly the same speed and regularity are afforded by the San Francisco line.


Senator Clemons - Do the boats of the latter line run as often as the boats of the other liner


Senator MATHESON - The boats of the San Francisco line run every month > but that fact is not very material, considering that, almost without exception, the English mails are sent by the Suez Canal-

The result, as has been very fairly pointed out, is that we are actually subsidizing steamers to bring manufactured goods from Canada to compete with the manufactured goods of Australia.


Senator Clemons - Surely that is not objectionable to the honorable senator, as a free-trader ?


Senator MATHESON - If the competition were flowing in the natural channels of trade, I should have less objection; but that we should put our hands into our pockets to enable the manufacturers of Canada to send goods here more cheaply than they otherwise would, seems tome to be a most extraordinary proposition to come from an alleged protectionist Government. I use the word "alleged " because it is obvious that the result of the subsidy is that just described.


Senator Guthrie -The Government have never alleged that they are protectionists.


Senator MATHESON - I understand that the leader of the Government has repeatedly alleged that he is a protectionist, and has advocated, in theory, protectionist measures."


Senator Clemons - "In theory."


Senator MATHESON - I carefully said " in theory." We have been told that the Postmaster-General of thelate Government entered into this contract ; but when I refer to the printed paper placed_ before us, I discover, to my amazement, that the draft agreement was submitted to the skipping company only onthe 20th September of this year. Under these circumstances, how could the late Postmaster-General have possibly entered into this agreement?


Senator Playford - Most likely the Postmaster-General had promised, in the course of correspondence, to enter into the agreement.


Senator MATHESON - This draft agreement was submitted to the company on the 20th September, and it was only on the 2nd October that the present Government received the acquiescence of the representatives of the company in New Zealand to the terms of the contract.


Senator Best - The agreement may have been actually entered into long before the formal agreement was drawn up.


Senator MATHESON - Senator Bestis a lawyer, and he suggests an explanation which certainly had not occurred to me. Some evidence ought to have been brought forward to prove that the late Postmaster-

General did commit us to this agreement. No correspondence of any sort has been produced, and we have simply to rely on the word of the Government, which, while it does not run counter to, does not seem to run parallel with the printed paper. An even more important point is that the agreement under discussion is simply a short one adopting two previous agreements, which are called "A" and " B." Being of an inquisitive disposition, I went to the Postmaster-General's office, and asked to be shown copies of these two agreements; but, as the Senate will learn with surprise, I was told that the agreements were locked up in the safe, and were not available. That is very curious, especially when we remember that during the debate of 1903 exactly similar conditions prevailed. Mr. Joseph Cook, Sir John Quick, and several members of another place complained that particulars of the agreement were not available. I take the strongest exception to this mode of bringing business before the Senate. We are asked by the Government to ratify an agreement, the particulars of which are not within our knowledge, and have not been available since 1903. I consider that this is a scandalous method in which to lay business before the Senate.


Senator Givens - The Government are squirming under the criticism of the honorable senator !


Senator MATHESON - I do not expect that my criticism will have the least effect. I am prepared to see the business carried on now in exactly the same way that it has been carried on since Sir Edmund Barton formed the first Commonwealth Ministry. So long as the Government have a majority, they are absolutely indifferent to the condition in which business is placed before us. So long as a brutal majority can force through a measure, the Government ignore the claims of Parliament to that information to which we undoubtedly have a right.


Senator Playford - If there was no " brutal " majority there would be no Ministry !


Senator MATHESON - I have always found Senator Playford most reasonable, and I ask him whether he thinks it right that we should be asked to ratify an agreement which honorable senators are unable to peruse? As to the sentimental aspect of the case, it is rubbish to urge this contract on the ground that it provides for an " allred " route. The service to the Cape is an "all red" route, and yet we are not asked to subsidize it with ?26,000.


Senator Pearce - And there is the service to Singapore..


Senator MATHESON - That also is an "all red" route from one British Colony to another; and we might multiply the simile over and over again. It has just flashed across my mind that there is one export which might be increasedifSenator Smith's idea were adopted, and we had a more efficient service. I can quite believethat the same idea was lying at the back of Senator Smith's mind, namely, that we should by this means enable wealthy tourists to travel with greater ease to Canada. That seems to me about the only possible, export which we could increase.


Senator Dobson - Does the honorable senator not think, that trade would be increased ?


Senator MATHESON - I say distinctly that I do not think it possible that the export trade from Australia to Canada could be increased by this means. We have been told that the articles exported are butter, coal,cocoanut oil, hides, timber, and wool, and I do not think that any honorable senator is honestly of opinion that the trade with Canada, in these commodities could be increased to any large extent by a subsidy.


Senator Dobson - I should be sorry to think that trade could not be increased by this means.


Senator MATHESON - When Senator Dobson speaks it will be interesting to learn' in what, particular commodity, in his opinion, there is likely to be an increased export by means of the subsidy. I trust I have satisfied the Senate that this is an old service instituted for the benefit of twospecific States, and that it would be absolutely contrary to the Constitution to' charge such a service on a per capita basis against the other States. I hope I have satisfied Senator Playford on those points. The honorable senator is again' silent. I should here like to quote from remarks made by Mr. Deakin in 1903, when he was, I believe, AttorneyGeneral, on the question of assessing this charge against all the States per capita. I am glad to see that Senator Keating has come back, because I was asking a, question just now in reference to the constitutional aspect, of this proposal. I understood him to say that, in his opinion, it was quite contrary to constitutional prac tice to allocate this subsidy to two States only - in other words, that it should be distributed per capita on a constitutional basis amongst all the States.


Senator Keating - If I am right in regarding it as a trade subsidy, and not as a mail subsidy..


Senator MATHESON - The honorable and learned senator draws a special distinction between a trade subsidy and a mail subsidy. The payment is increased to a slight extent, but in other respects it is on all-fours with the agreement of 1903 as I think the Minister admits. What the Prime Minister said in 1903 will be found in Hansard, at page 1659. Mr. Wilks had moved the addition of the following words : - "Such increase to be equitably apportioned among all the States," and his amendment was intended to have the effect of the proposal which is submitted to us by the Government to-day. After referring to the service to the Pacific Islands, Mr. Deakin said -

In addition, to that, we arranged for an entirely different service. Provision was made for a new boat to carry on a two monthly service to the Gilbert and Marshall Islands. This almost doubled the distance covered by the service, we multiplied the number of stopping places to the extent of nearly doubling them, and made arrangements for land settlement. Therefore the contract Was practically a new one, with conditions designed to confer benefits upon the whole Commonwealth. The present proposal -

That is for an extension of the Vancouvermail service - is for an extension of an existing contract for two years only. At the end of that time itwill be necessary to take the whole of the mail contracts of. the Commonwealth into consideration,

Mr. JosephCook. But a new agreement has to be made.

Mr. DEAKIN.No, there is merely a continuation of the old agreement with very slight alterations, in, the direction of providing greater conveniences.

In the present extension there are no greater conveniences provided, so that Mr. Deakin's opinion would be stronger in regard to this agreement than it was in regard. to that of 1903.


Senator STANIFORTH SMITH (WESTERN AUSTRALIA) - Smith. - Was. he speaking of Burns, Philp, and Co.'s Pacific Islands mail service.


Senator MATHESON - No; of the Vancouver mail service, and on an amendment by Mr. Wilks.


Senator Staniforth Smith - The Van couver, mail service does not go near the Gilbert and Marshall Islands. Mr. Deakin was talking about another contract.


Senator MATHESON - I need not stop to explain to the honorable senator that Mr. Deakin was talking about the CanadianAustralian mail contract, as that is generally understood. He went on to say-

The additional sum is being granted on the ground .that the former subsidy was insufficient to defray the cost of the service.

Mr. JosephCook. Does not the fact that an additional sum is being granted necessitate a new agreement ?

Mr. DEAKIN.No. Every year a number of mail contracts fall in, and they are renewed at certain rates, perhaps higher or lower, than those hitherto prevailing. The money paid in respect of them continues to be transferred expenditure for the maintenance and continuance of the Department as at the time of transfer. The fact that contracts fall in, and new tenders are called for the same service, does not involve new expenditure, because the contracts are intended to secure the maintenance of the Department as at the time of transfer. The mail service proposed is precisely the same in every respect as that which was formerly carried on, except that a larger sum is to be paid to the company. As time goes on, existing contracts will expire, and new contracts will be made, involving changes of routes or other material departures, and these will involve new expenditure; but the renewal of a contract such as this one cannot come within that category. The amendment of the honorable member can have no effect, in view of the provisions of the Constitution, and I hope therefore that he will withdraw it. The honorable and learned member for Bendigo had called attention to what must be a prominent consideration when we are dealing with any contract in regard to the present service, or any others which fall in within the next two years, and he may rest assured that it will receive due consideration at the hands of the Government.

After reading Mr. Deakin's careful and considered opinion in 1903, I am amazed at the Government, with tha* gentleman as Prime Minister, daring to propose in 1905 that this subsidy should be apportioned per capita among the various States. I move -

That the following words be added to , the motion : - "(c) That such subsidy shall, as heretofore, be borne by the States of New South Wales and Queensland, the remaining States contributing only, as heretofore, upon a poundage basis in respect of their mail matter carried."







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