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Friday, 24 November 1905

Senator CLEMONS (Tasmania) - I have been trying to find out the facts in connexion with the mail service to the Pacific Islands. The first difficulty which has confronted me, and I believe every one else, is that the Minister cannot tell us, first, whether there is a contract in existence, and, secondly, if there is, when it will expire.

Senator Playford - A contract has been sent to the parties for their signature. That is the position at the present time.

Senator CLEMONS - The Minister has said that a contract is on the point of being signed, and I believe he has led the Committee to understand that it is being entered into in pursuance of an agreement which has been in existence for some time. Even so, it is most material to know how long it is to run. In connexion with every other service, whether it be an oversea service like the Orient mail service, or a sendee across the seas within the Commonwealth, we have generally agreed that the first thing to be done is to call for tenders. I believe that no tenders have been invited for the mail sendee to the Pacific Islands, although it involves an expenditure of ^£12,000. In my opinion, some one is very seriously to blame for failing to call for tenders. I do not care whether the blunder was made by the present or previous Government. I hold that such a very great mistake should be corrected as soon as it is discovered. I shall take any steps which seem to me to be necessary to prevent a contract from being entered into under those terms. We hear a great deal of talk in regard to shipping rings. We hear on all sides an express desire to throw all shipping matters open to competition. But when the Commonwealth has to deal with an important mail service, involving an annual expenditure of £12,000, we find that, for some reason or other, the various purely Australian shipping companies - and I venture to say that, perhaps, twenty of them are competent to tender for this service - have noi been afforded an opportunity to send in, a tender. I cannot believe that such a state of things os right. ' It will be noticed that we are asked to vote, first, under the head of transferred " expenditure, a subsidy of £3,600 towards the mail service to the New Hebrides, Banks, Santa Cruz, and Solomon groups; and, secondly, under the head of " other " expenditure, an additional subsidy of .£400, to be granted on the condition that black labour is not used, and an additional subsidy of .£2,000 for extension of the services. I desire to know why the additional subsidy for the extension of the services is put down as " other " expenditure, while the expenditure on the original service is put down as " transferred " expenditure.

Senator Guthrie - That was a New South Wales contract which the Common- > wealth took over.

Senator CLEMONS - Yes ; but it is carried on under these Estimates. That seems to me a most anomalous position. The three items to which I have referred involve a total expenditure of £6,000. I must confess that I cannot understand why the two additional subsidies are put under the head of " other ' ' expenditure.

Senator Givens - It is only a means to avoid allowing New South Wales to escape the charge of £3,600.

Senator CLEMONS - That may be the case; but it is a very important deviation. It seems to me to be playing fast and loose with "other" expenditure and "transferred " expenditure. It will be observed that the first three items under the head of mail service to the Pacific islands are called subsidies, but that, in the case of the fourth item, the word " subsidy " is not used. I assume that the fourth item of ,£6,000 under the head, which is put down as "other" expenditure, is really a subsidy.

Senator Playford - It is a continuation of the same service.

Senator CLEMONS - It is not quite a continuation of the same service.- It is a different service.

Senator Playford - Only in the sense that it is different from the original New South Wales service.

Senator CLEMONS - It is a service to different parts.

Senator Givens - In the last line of the item it is called " New services to Solomon, Gilbert and Ellice, and New Guinea."

Senator CLEMONS - Precisely; but it will be noticed that the word " subsidy " does not appear in the item. I believe I am correct in saying that this vote of £6,000 is a direct subsidy, and is charged to "other" expenditure. This, besides being interesting -in itself, is also interesting in regard to other items with which we shall have to deal. Here is a case of a subsidy for a mail service between Australia and one of its Dependencies which is classed as "other" expenditure. That is in striking contrast with the method in which the payment for the mail service between the continent and Tasmania is debited. When we come to the Postmaster-General's Estimates, I intend to move a request with regard to that mail service. I could have no stronger proof of the desirability of altering the present method of debiting the mail service to and from Tasmania than is furnished by the items under the head of mail service to the Pacific islands. Either one method or the other is wrong. Either it is wrong - and I do not think it is - for the expenditure on the Pacific islands mail service to be charged on a per capita basis, or it is wrong for Tasmania to be charged with the total cost of conveying its mails to and from the mainland. If they think that this item of £6,000 is not properly classed as " other ' ' expenditure, I suppose they will agree with me that the cost of the mail service to and from Tasmania is not rightly charged as " transferred " expenditure. But if, as I think they will agree, it is properly charged as "other" expenditure, I feel sure that they will agree with me that, in the case of the Tasmanian service, there is an error which needs correction. I intend to vote for the request of Senator Givens, because I think he has clearly shown tha* there is a wrong which needs to be righted

Senator Playford - Both Houses voted the money last year.

Senator CLEMONS - If we did wrong last year, surely the Minister does not expect us to do wrong this year ?

Senator Playford - I admit that; but the item was considered and voted last year, and we need not make so much of it now.

Senator CLEMONS - No matter .by which Ministry the wrong was done, the responsibility ought to be sheeted home. If the method is wrong, it ought to be corrected at the earliest moment, and that is why I intend to support the request of Senator Givens.

Senator PLAYFORD(South Australia - Minister of Defence). - I have been asked a question as to when this contract commenced and when it terminates. I am now in a position to answer that question. The contract was entered into in 1900 for ten years, and it terminates in the year 1 910. I learn that it cannot be terminated except . on the condition that Parliament does not vote the money.

Senator Clemons - If Parliament refuses to vote the money, does the Minister say that the contract will terminate?

Senator PLAYFORD - I understand that that is so.

Senator HIGGS(Queensland).- The Minister is entitled to some sympathy when he is asked for information which he is unable to give, and perhaps we can excuse him for saying that the reason why he does not talk is that he wants to get the Bill through. But if there are reasons why the Appropriation Bill should be sent up in time to enable us to discuss it, we ought to be permitted to press for information. I am glad that the Secretary for External Affairs is now present. I think that the Secretary of each Department ought to be present when the part of the schedule with which he is concerned is under discussion. It is a slight to the Senate that the Secretaries of these Departments should not put in an appearance on such occasions. The Minister, in the first information which he supplied from a written statement, did not .give the Senate a fair idea of the case. He spoke of a ten years' contract. There is no ten years1 contract. The Secretary of External Affairs should have stated the full facts. The information has been to some extent completed since the Secretary put in an appearance. The facts are that Parliament can absolutely stop the contract at once by refusing to vote the money.

Senator Playford - There is a ten years' contract, nevertheless.

Senator HIGGS - It is subject to annual ratification by Parliament. Therefore, virtually, it is merely a twelve months' contract. The matter has frequently been discussed in the Senate, and every time the. criticism has been met byl the Minister stating that Parliament voted the money last year. Parliament votes the money frequently because so little time is given for the consideration of the schedule. I was informed by a previous Government that care would be taken that in the new contract with Burns, Philp, and Company a condition should be inserted limiting their right with respect to freight charges and passengers' fares. That very reasonable proposal was agreed to for the reason that Burns, Philp, and Company is a trading firm, and this subsidy would have the effect of enabling it to compete unfairly with unsubsidized traders and shippers.

Senator Playford - Those conditions are in the new contract.

Senator HIGGS - When was the new contract prepared ? Is it not a fact that it was only prepared during the last few days? That is a question which the Minister might put to the Secretary of External Affairs. The honorable senator might ask whether the contract has not been hanging up in the External Affairs office for months. This payment of £12,000 is, in my opinion, unconstitutional. It is not a payment for a mail service;. As Senator Drake admitted when he spoke as a Minister of the Crown|, it cannot be defended as a mail service subsidy. It is merely a subsidy for the purpose of1 developing trade between the islands.

Senator Drake - It is for carrying mails also'.

Senator HIGGS - Incidentally; but mail matter to the New Hebrides is mostly carried on the -French steamers. The reason why the Government should at- an early date call for tenders should appeal to every one. There is a firm in Cooktown - Clunn and Sons - which has written to various Governments offering to run a line of steamers to Cooktown if it could -get a small subsidy. The Government has given that firm no consideration. It now appears tha't Burns, Philp, and Company, either with the consent of the Department of External Affairs, or otherwise, has altered the route which its steamers have followed for many years1, and is now competing with this Cooktown firm. What chance has any individual small firm in competition with a large and rich subsidized company like Burns, Philp, and Company ? The policy of Burns, Philp, and Company is always to crush out the small competitor. -- a storekeeper starts in business in New Guinea, Burns, Philp, and Company will start a store alongside him and squeeze him out. In a matter like this, it is preferable -that the Government should call for tenders, separately and jointly, in order that other firms may have an opportunity of contracting. In all probability, the work will then be carried out at lower rates, and the - Commonwealth will be better served. I trust that the request will be agreed to, unless the Minister is prepared to undertake, on behalf of the Government, that tenders shall be called for, say, before Tune next, for a service to commence from June, 1906. If the Minister will give that promise there will be no occasion to reduce the vote. If he cannot do so, it appears to me to be necessary to bring the matter prominently before the other House, as would be done by carrying a motion for a request to reduce the vote by £1

Senator PULSFORD(New South Wales). - I am much surprised that there should be such a debate on this matter, seeing that it was gone into very fully last year. It was shown a year ago that the contract was only entered into after very prolonged investigation. It originated with the first Deakin Government. Then the Watson Government came in and approved of the arrangements that were being made. The Reid Government followed, and it approved of and completed the arrangements. Last year, the whole matter was debated at great length. I think there was a -general feeling that a wise course had been adopted. Certainly, no £12,000 was ever granted, concerning which deliberations of such a continuous character took place.

Senator Givens - Does not the honorable senator think that it would be. wise to call for tenders?

Senator PULSFORD -I think that after a contract has been entered into that question does not arise. I draw the attention of the Committee to the fact that since we discussed this subject last year, the firm of Burns, Philp, and Company, in carrying on its trade in the South Sea Islands, has had a severe rebuff at the hands of the German authorities in the Marshall and Caroline Islands.

Senator Staniforth Smith - That was not within the scope of the subsidized service.

Senator PULSFORD - I am aware of that ; but the trouble has occurred since we last debated this subject, and in connexion with the same company's South Seas service. The new contract did include the islands in question, and I think that there is a widespread recognition of the fact - for it is a fact - that the Commonwealth of Australia owes a great deal to the enterprise of Burns, Philp, and Company. There is no firm in existence that has done so much to carry the name and business of Australia throughout the South Seas. I think it is thoroughly recognised that the amount of money that has been paid bv the Commonwealth has been exceedingly small for the services rendered. I believe that the firm is employing no less than six steamers in the trade ; and any honorable senator who knows anything about the heavy expense that attends the running of steamers will be aware that the amount that is being paid is not large in comparison with the services. I therefore look to this vote being agreed to unanimously.

Senator GIVENS(Queensland). - The matter under discussion has received full consideration. That is very gratifying to me, because it is exceedingly important, as Senator Pulsford has pointed out. to recognise that Burns, Philp, and Company has done a great deal to develop trade with the Pacific Islands. No doubt the firm has suffered disabilities and hardships in pursuing its business. I admit all that. But is it not also a fact that other firms have taken as great risks, and suffered equal hardships and reverses, although they have received no subsidy from the Government? My only desire is to have tenders called, and to place Messrs. Burns, Philp, and Company on the same footing as other firms. Messrs. Burns, Philp, and Company ought not to be helped in their private enterprises in such a way as to enable them to create a monopoly at the expense of other firms. The cost of the whole of these services is bulked together, but I believe that in the Department it is estimated that the New Guinea service costs £2,000 per annum; but I have a letter in my pocket, showing that Messrs. Chinn and Sons, of Cooktown, are prepared to give an equally good service for £600 per annum.

Senator Pulsford - That is not so.

Senator GIVENS - That i3 only a surmise on the part of the honorable senator.

Senator Staniforth Smith - What is the tonnage of the ship that would be employed ?

Senator GIVENS - The firm I have mentioned offer to place on the line a new vessel of not less than 100 tons.

Senator Staniforth Smith - But the Ysabel is 1,000 tons.

Senator GIVENS - A vessel of 100 tons is quite sufficient, and sometimes more suitable for a mail service of the kind. The mail service from Townsville North is carried on by means of very small steamers, these having been found more suitable than large steamers, owing to the shallowness of the water at up-river towns and other places where they have to call.

Senator Pulsford - If £600 is asked for the services of a small launch, how much should be paid for the services of the barger steamers used now?

Senator GIVENS - We do not pay in accordance with the size of the vessels, but in accordance with the services they render.

Senator Pulsford - The vessels render services in proportion to their size.

Senator GIVENS - Certainly not. No one would employ an elephant to crack a nut, or puLl a half-ton trolley. Messrs. Clunn and Sons still offer, on receiving six months' notice, to provide a steamer of not less than 100 tons, of nine knots speed, for a subsidy of £800 if a white crew be used, and £600 if a mixed crew be employed. Messrs. Clunn and Sons have been transacting business between the mainland and New Guinea for a number of years, and, as I said before, the present subsidy may enable Messrs. Burns, Philp, and Company to drive the other firm out of the business, to the great inconvenience of the public, seeing that then there would be communication only once a month. If the service to New Guinea is worth £2,000, a fortnightly service might be arranged by paying Messrs. Clunn and Sons £600, and Messrs. Burns, Philp, and Company £1,400. That would be something like a business arrangement, by which the Commonwealth would get better value for their money, and no injustice would be done to any firm. I intend to proceed with, the request, unless the Minister can assure me that within a reasonable time tenders will be called. Even if the services rendered by Messrs. Burns, Philp, and Company were infinitely greater than they are, a good principle should not be abrogated on their behalf.

Senator PLAYFORD(South Australia - Minister of Defence). - I cannot make any absolute promise without consulting my colleagues. I have, however, been much impressed with what' Senator Givens and other honorable senators have said, and, personally, I am inclined to favour the' view they have presented. I am not sufficiently acquainted with all the details of the question to be able to express an opinion off-hand ; but I promise to bring the matter before my colleagues, with a view to meet the. wishes of honorable senators as far as possible. Personally, I am favorably inclined to the views which have been expressed.

Senator Givens - Will the Minister urge those views on the Cabinet?

Senator PLAYFORD - I shall do so.

Senator GIVENS(Queensland). - In view of the promise made by the Minister of Defence, I ask leave to withdraw the request. But if something is not done, I promise that the discussion on the item this year will be but a circumstance to the discussion there will be next year.

Request, by leave, withdrawn.

Senator CLEMONS(Tasmania). - I see that amongst the miscellaneous items, a sum of £200 is set down for advertising the resources of this immense Commonwealth. Ig there any additional sum provided elsewhere* in the Estimates for this purpose ?

Senator Playford - Not a hal-f-penny.

Senator CLEMONS - The amount provided seems ridiculous for such a purpose.

Senator Playford - It is ridiculous.

Senator CLEMONS - This £200 ought to be multiplied by at least twenty-five, or ought not to find a place in the Estimates. Perhaps Senator Playford can explain how this money is expended, and whether there has been any return.

Senator PLAYFORD(South Australia - Minister of Defence). - I cannot say what return has been got from the expenditure. An arrangement was entered into by the late Prime Minister, Mr. Reid, with a Sydney gentleman, Mr. John Plummer, on the 1st July, last year, and that arrangement terminates on thd 20th of next month. One of the conditions of the arrangement was that six months' notice to terminate it might be given on either side, and that notice was given to Mr. Plummer on the 30th June. I have heard that Mr. Plummer wrote articles about Australia for the newspapers.

Senator Clemons - Where is the advertising being carried on?

Senator Drake - Mr. Plummer was employed correcting the statements made in England about Australia-

Senator PLAYFORD - I understand that Mr. Plummer wrote to the newspapers in England.

Senator O'Keefe - And ran Australia down !

Senator PLAYFORD - The money has been practically spent, and as the agreement is about to terminate, I do not think it worth while to discuss the matter further.

Senator CLEMONS(Tasmania). - I am glad to hear that the arrangement or contract is about to terminate.

Senator Guthrie - How did it come to be made?

Senator Turley - Will it be renewed?

Senator Keating - No.

Senator CLEMONS - I do not care who made the contract. I am here to express my views, no matter how the arrangement came about. The item suggests the important consideration that we all desire " the resources of the Commonwealth " - the phrase used in the item - to be, not exactly advertised, but made fairly known, especially in England. Is there any provision on the Estimates for work of the kind ? If not, I should like an expression of opinion from the Minister as to whether there ought not to be provision. We ought to be prepared to vote, not £200, but ^5,000 or ,£10,000 to be judiciously ex- l>93J pended in making known the resources of the Commonwealth.

Senator PLAYFORD(South Australia - Minister of Defence). - That question of making the resources of Australia known is being considered in connexion with the appointment of a High Commissioner. When that appointment has been made, a sum of money will be placed on the Estimates for the purpose indicated by Senator Clemons. At' present, we have in Mr. Coghlan one of the very best representatives that could be obtained for the Commonwealth. Honorable senators will have noticed the excellent work that gentleman is doing in making known the resources of the Commonwealth as a whole.. The late Ministry placed no item on the Estimates for the purpose indicated, nor did the present Government see their way to do so, for the reason, as I say, that the matter is being considered in connexion with the appointment of a High Commissioner. So long as Mr. Coghlan remains at home there will always be some one to promptly reply to any misstatements regarding Australia, and no better man that I know of could be obtained for the work.

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