Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Wednesday, 22 October 1913

Senator BAKHAP (Tasmania) . - It was very largely with a view to expedite the proceedings of the Senate at the time, that I refrained from making any contribution to the debate on the motion submitted by Senator Ready.

Senator O'Keefe - The reason I did not speak was that I wanted a division to be taken at once.

Senator BAKHAP - Every one knows that the numbers were a foregone conclusion. With the strength enjoyed by the Opposition in this Chamber, Liberal senators may be regarded all the time as being in the net of the retiarius. It would not have mattered if the debate had been prolonged for a week; the result would have been the same. Had I thought it worth while, I might have analyzed the motion submitted by Senator Ready. I could have shown how ingeniously it was drafted, and that it was designed to commit ali those who were in favour, in certain circumstances, of. a Commonwealth-owned service between Tasmania and the mainland to support a Commonwealth ownership of lines of steam-ships trading to the Old Country and elsewhere. Once an honorable senator voted for that motion, his vote could bo construed as lending support to the principle of Commonwealth - owned steamers, not merely trading between the States, but between the Commonwealth and all foreign countries. I am not one of those- who are frightened of the term " Socialism." I regard all these matters which are termed " Socialistic " at times, from the point of view of expediency. As Senator O'Keefe has done me the honour to read from the report of a Committee of which I was chairman, I may be allowed to quote a little of that report, for which I was largely responsible. This is a very important matter. It is probably one of the practically live questions in" Tasmania, and we can well understand that the people of that small State are geographically so isolated that the matter of communication with the larger

States of the mainland is of first im- *portance to them. It was in recognition of the existence of a great deal of feeling on this matter that the Tasmanian House of Assembly, at my instigation, consented to the appointment of a Select Committee to inquire into this very vexed and many-sided question. Honorable senators may run away with the idea that it is a matter which is capable of a very simple solution. But if men with judicial minds commence to investigate it, they will find that it is of a much more complex character than they had anticipated. Senator O'Keefe is certainly right when he says that it is by no means a party question in Tasmania. It is a question of the first importance to the inhabitants of that State, irrespective of their political colour. The Select Committee, which was appointed, committed itself to the view which was put forward by the Honorable George Collins, a strong Liberal, who is responsible for a very great deal of good work in Tasmania. Indeed, he may well be regarded as the Sir Henry Parkes of that State. The Committee reported -

This point of view is best demonstrated by an illustration drawn from the evidence of the Honorable George Collins, in which the witness states, in effect, that if the slenderest isthmian connexion existed between Tasmania and Vic toria, long ere this a railway would have been constructed to connect the two communities, and that a train would leave Launceston and Melbourne daily for alternate destinations. The conclusion is then advanced that as this service is physically impossible of achievement there should be a daily steamer service each way in lieu thereof.

Had Tasmania been merely an elongation of Wilson's Promontory I venture to say that the contention put forward by Mr. Collins would have been realized in the form of railway communication.

Senator Pearce - Owned by the State ?

Senator BAKHAP - Yes. As that is physically impossible honorable senators must not run away with the idea that the public men of Tasmania, without exception, are opposed to the establishment of a Commonwealth or State-owned service. But when we come to deal with marine matters we are dealing with matters which are substantially different from a railway proposition. It is well known that the State has the power to prohibit competition with State-owned railways. But no State-owned steam-ship service, between Tasmania and the mainland, can eliminate all competition with itself in the same way as it could eliminate competition in the matter of a railway service. So that the question of profit at once enters into consideration. Of course, a whole generation of people has grown up since 1888. But in that year I came from Tasmania to the Exhibition in Melbourne, and I distinctly remember having to pay £4 10s. for a return ticket. Will Senator O'Keefe tell me what is the present " extortionate " charge, as he calls it? It is substantially less than it was then.

Senator O'Keefe - If the honorable senator is going to institute that comparison he might go back only two or three years.

Senator BAKHAP - If the honorable senator has read this report, and the evidence upon which it is based, he will find that there has been a substantial reduction of fares within the past twenty years. There has been a little reflex action since. Owing to the increase in the working of steamer services - this increase has been reflected in the profits derivable from State railway services - it has been found necessary to increase fares and freights. Senator O'Keefe knows perfectly well that at its last meeting the Adelaide Steamship Company declared that it was impossible for it to pay a dividend.For the first time for many years in its history no dividend was declared, because of the fact that the increase in the cost of running -the service had so entrenched upon the profits earned that sufficient money could not be put by to enable a dividend to be paid. The facts are that the representatives of the steam-ship companies admitted that the trade between Tasmania and Victoria was profitable, but not particularly so, and Captain Evans stated that the trade between Tasmania and . New South Wales was not at all profitable, and that a profit was only shown by failing to make any allowance for depreciation. Captain Evans has been a Premier of Tasmania, and he is the manager of Huddart Parker and Company, one of the companies engaged in this traffic. Here is a question which I put to him when he appeared as a witness before the Select Committee of which I have spoken -

As a reasonable man- of course, the Committee know the company has to make its profits - you do not think the freights and fares charged are such as to unfairly handicap the public of Tasmania? - Taking them all round, I think they are very fair. The freight ques tion has been exercising the minds of the directors for some time past with the idea of increasing them even higher in the future.

You say they think it a commercial necessity? - It has been exercising their minds for some time. They have no desire to do it as long as there is a fair margin of profit between revenue and expenditure. We are, of course, hopeful that there will be no necessity for the rise; but that is the inclination.

Seeing that the companies are likely to incur odium by raising freights and fares, it is unlikely that they would adopt that course at this juncture without reason. It is a fair and judicial assumption that they would not get themselves into bad odour with the people of Tasmania by raising freights and fares if such action were not absolutely imperative.

Senator O'Keefe - The honorable senator is a very trusting individual. They have a monopoly. What do they care for the people of Tasmania ?

Senator BAKHAP - I may tell honorable senators that there were representatives of the Labour party on that Committee, and an equal number of representatives of the Liberal party, with myself as chairman. As the result of our deliberations, a unanimous report was secured. The Committee declared that the question which it had investigated was a very complex one, and that it found it more difficult to make practical recommendations than to listen to suggestions. It made five recommendations, as follows: -

1.   That one or more of the companies now trading from Melbourne up the eastern coast of Australia to Northern Queensland be approached by the Government with a view to ascertaining on what terms they would provide steamers to alternately call at one or two ports of Northern Tasmania and at Hobart. The Union Steamship Company and Huddart Parker Limited could be included in these negotiations.

2.   That the companies now engaged in trade between Launceston and Melbourne be asked on what terms they will provide another, vessel of the Loongana type to run in the trade.

3.   That, in the interests of the tourist traffic and the full development of Tasmania's trade resources, the Government should open up negotiations with the Commonwealth Ministry with a view of ascertaining the largest amount of subsidy that will be paid to the" State of Tasmania in the event of the Tasmanian Government deciding to build two vessels of a modern type to trade between Northern Tasmania and Victoria, and that action . be taken according to the nature of replies received to the above questions.

4.   That whenever the Marine Board of Hobart decides to take action in connexion with dock construction, the Government of the State should give reasonable assistance to the undertaking.

5.   Finally, your Committee recommends that in any negotiations with the companies now engaged in the trade between Tasmania and the mainland, the companies should be asked to remember that Tasmania's interests, owing to her geographical position, require low freights and fares to rule between this State and the other parts of the Commonwealth, and that they should negotiate on the basis of a moderate trade profit on the capital' invested and necessary for improved services, if they desire to see the State refrain from competition with them.

There is a recommendation which in itself conveyed a warning to the shipping companies to be commercially just in their negotiations with the State and the Commonwealth.

Senator Ready - No doubt they were very frightened.

Senator O'Keefe - Does the honorable senator know whether the Tasmanian Government adopted that recommendation ?

Senator BAKHAP - Senator O'Keefe is well aware that the recommendations of the Committee were only presented to the Tasmanian House of Assembly in December last. Soon after a dissolution of that Chamber took place, a general election followed, and almost upon its heels came the general elections for this Parliament. Since the advent of the Liberal party to power action has been taken to give Tasmania an improved service.

Senator O'Keefe - It is not the action which was recommended by the Tasmanian Government in the report from which the honorable senator has quoted.

Senator BAKHAP - The honorable senator will admit that a good deal of water has run under the bridge since December last. Notwithstanding the fact that there is u widespread, not altogether justified, opinion in Tasmania regarding the tremendous profits that are alleged to be made by the Union Steamship Company, no Tasmanian investors can be found sufficiently plucky to put up the money to form, a company to compete with those who are alleged to be making tremendous profits. That matter was discussed by the Select Committee, and information was elicited from the witnesses. But, notwithstanding the fact that I have introduced the name of the Honorable George Collins as being an enthusiastic advocate for a daily service, I want to say, in justice to those gentlemen who have pronounced Liberal proclivities, and who tentatively have spoken in favour in the first instance of a Stateowned service, that they desire, in the interests of Tasmania, to see any nation alized or State-owned service absolutely controlled from the Tasmanian end. For it is to the Tasmanian people that this question is most vital.

Senator Rae - They do not mind the Commonwealth finding a bit of money, though.

Senator BAKHAP - Why should not the Commonwealth find the money when we in Tasmania have to help to find the money for building a desert railway?

Senator Needham - Where is it?

Senator BAKHAP - From. Port Augusta to Kalgoorlie, if the honorable senatorwishes to know.

Senator Needham - That is not a desert railway.

Senator Pearce - Have you ever seen the country?

Senator BAKHAP - I have read dozens of reports about the country.

Senator Pearce - You do not know anything about it.

Senator BAKHAP - I know that it is in contemplation - unwisely, in my mind - to build a line across the central Australian desert. Honorable senators who talk about nationalizing steam-ship services of the Commonwealth at present- hardly think of what the nation has to shoulder. We have now one battle cruiser, which has recently come into Australian waters to defend our commerce, and these honorable gentlemen, who will presently realize the tremendous burden on the shoulders of the people - a necessary one, I will admit, in connexion with the scheme of Naval Defence - actually in the most light-hearted manner, talk of nationalizing all the ordinary marine services existing between the Commonwealth and other ports of the world, to start, of course, with Tasmania. I know my duty to the people of that State as well as any of those who assist me in its representation do, hut my sense of duty to those people does not blind me to my sense of duty in regard to those larger issues that the Parliament of the nation has to face. While we have only one cruiser on the seas to protect the large volume of Australian commerce, it would be quite premature, even admitting the expediency in certain circumstances of such a line of action, for the Commonwealth to embark upou the owning of all the services now existing between ports of the Commonwealth and other ports of the world.

Senator O'Keefe - We are discussing this one line.

Senator BAKHAP - My honorable friends refused to do that; they wanted us to support a motion which would have committed every honorable senator who voted for it to the principle of the nationalizing of the Commonwealth's steamship services.

Senator O'Keefe - Do you deliberately say here that you were not in favour of a State-owned line between Tasmania and the mainland ?

Senator BAKHAP - In certain circumstances, I am in favour of a Stateowned line across Bass Strait.

Senator O'Keefe - That is all that I charged you with.

Senator BAKHAP - But if it is going to be of value to Tasmania - to which State the question is particularly vital - it must not be a Commonwealth-owned service, but a Tasmanian-owned service. I recognise the proper distinction there is between the actions of the Tasmanian Parliament and those of . the Commonwealth Parliament; and what I have been striving to do, I think with reasonable prospects of success, is to provide a Tasmanian administration, be it a Liberal or Labour one, with the money to enter into competition with the steam-ship companies, if, after a proper investigation, it comes to the conclusion that those companies are not acting fairly to the people of the State. I know that my remarks, although they are somewhat disconnected, and made on the spur of the moment, will be recorded and read by large numbers pf Tasmanian people. If the Tasmanian Legislature, in its wisdom, has decided to spend a very large sum in nationalizing the hydro-electric works, at the Great Lake - I am not questioning its wisdom, as it is responsible to the people of the State - if it really feels that the people of Tasmania are being unfairly treated by the combination who own the so-called ferry service, at a smaller cost than it has incurred in connexion with the acquisition of the hydro-electric scheme, it can build a boat, or a couple of boats, to enter into competition with those companies; and it will be in this happy position, that, if this service does i"-t pay. it will be able to sell the boats. If the Tasmanian people really believe that the proposed contract is unsatisfactory to them, it is absolutely within the scope of their Legislature, which has full power in this matter, to build vessels, and enter into competition with the companies.

Senator Rae - As the two companies would be subsidized, where would the State be? The State service would be crippled.

Senator BAKHAP - Does the honorable senator so give away the case of .his party as to believe that the service would be unprofitable to the steam-ship companies without the subsidy of £15,000?

Senator Rae - That is not the point at all, as you know. Surely a service which has a subsidy of £15,000 would be in a better position than one which got no subsidy.

Senator BAKHAP - No. If £15,000 alone is the margin between profit and loss on the part of the companies in connexion with their operations, then the service is, on the honorable senator's own showing, not so profitable to them a's is alleged by most of the members of the party opposite.

Senator Rae - That is trickiness.

Senator BAKHAP - It is commonsense; it is finance.

Senator Rae - It is trickiness for you to twist what I -said.

Senator de Largie - There would not be so much profit if there were two companies competing against each other.

Senator BAKHAP - I remember when there was a freight and fare war - it is alluded to in the report of the Select Committee - between these companies. What was the result?

Senator Rae - A combine.

Senator BAKHAP - The result was a combine of a sort. The companies had to put their heads together, and see how they could secure themselves from ruinous loss. They standardized the freights and fares, and, in the iniquitous sense of the word " combine," I venture to say that a combine does not exist, for in the evidence it was fully disclosed to the members of the Select Committee that, while there was an agreement in regard to the standardizing of freights and fares at what -was supposed to be a satisfactory profit-level, the companies competed most keenly between themselves for the trade which was available.

Senator Needham - Who paid for the standardizing ?

Senator BAKHAP - I told the honorable senator that the standardized fares are considerably less than the fares of ^twenty years ago, when there was no allegation or suggestion of standardizing.

Senator Needham - Who paid for it?

Senator BAKHAP - There are no Tasrnanian investors who believe that the opportunity for competing with the existing companies is so profitable as to be embraced at once. There was at one time the Tasmanian Steam Navigation Company, but it was absorbed by the Union Steam-ship Company. After a very ruinous competition - a competition which brought the companies right to the verge of financial death's door, so to speak-

SenatorRae. - The strongest won.

Senator BAKHAP -Yes, and let me tell the honorable senator that the fares and freights at present are considerably lower than they were when the strongest won.

Senator O'Keefe - You are going back nearly a quarter of a century. Has not the world progressed in the last few years ?

Senator BAKHAP - Will the honorable senator deny the truth of the illustration I instanced a few moments ago that one of the most important of these so-called parasitical, blood-sucking shipping companies of Australia was unable to pay a dividend the other day, because of the fact that the increase in the running cost of their services had absorbed practically all the profits earned ?

Senator McGregor - Who lost the Yongala and the Koombana ?

Senator BAKHAP - Is not that the very argument used to justify the increases of the freights and fares which have been made during the last year or two in the Bass Strait service? In appealing to judicially-minded men, it is absolutely certain that the companies, knowing that they would incur a lot of odium by an increase in freights and fares, would not take that step unless they found it was necessary to commercially fortify themselves in that regard. Here is another paragraph in the report which honorable members have done me so much honour by advertising.

Senator Rae - Read the lot; nationalize it.

Senator BAKHAP - What is the use of a State-owned line from the Tasmanian stand-point, unless it secures lower freights and fares to its people? Seeing that honorable senators opposite do not want a State-owned line to be run at a loss any more than a privately-owned line desires to be so run, will they straightforwardly lay down the proposition that they believe that large profits are to be made on the scale of fares and freights, and that therefore an opportunity for the profitable running of a ,. State-owned service exists ?

Senator Rae - Did the companies give you any evidence ?

Senator BAKHAP - Most decidedly. We took very voluminous evidence.

Senator Rae - Did they give you their balance-sheets ?

Senator BAKHAP - No; because in Tasmania we had no power to get hold of the leading men in the Union Steamship Company, which is owned in New Zealand.

Senator O'Keefe - The report states clearly that the Committee could not get the evidence.

Senator BAKHAP - Their representative at Hobart - Mr. Eva - who gave most useful evidence, said that the service was profitable, but he would not like to say that it was very profitable.

Senator de Largie - Could you expect him to do so ?

Senator BAKHAP - I think that in this world there are some men who give their evidence without that mental reservation which the honorable senator unquestionably entertains

Senator de Largie - You would not expect him to give his case away, would you?

Senator BAKHAP - Does the honorable senator expect men on their oath to give false evidence? Is that his estimate of human nature? I have the honour of knowing these witnesses. I believe that, even if they were giving evidence without the formality of an oath, they would tell the truth. The paragraph I referred to reads -

If the State-owned line, besides insuring a more frequent service, did not cause a reduction in the amounts charged for passenger fares and cargo freights, the reasons for its establishment would not at any time carry much weight.

Will honorable senators opposite commit themselves to the statement that a Stateowned line across Bass Strait would insure a reduction in fares and freights?

Senator Long - Surely.

Senator BAKHAP - If there was a loss, of course it would have to be borne by the taxpayers, as, for instance, in Western Australia. You can have a steam-ship service if you like at the

Commonwealth or State expense between Victoria and Tasmania, which, will charge nothing for freights or fares, but the taxpayers must bear the tremendous loss which must ensue, and' we could not have a multiplicity of national services run on these lines for the Nation must make its services pay, just as an individual or corporation must 'do. The paragraph continues; -

This phase of the matter entails a survey of the commercial value of the Inter-State shipping trade. Naturally the most reliable information regarding this cardinal feature is in the possession of the companies now operating, and having in view the possibility of direct State action being advocated and recommended, your Committee thought it unfair to press for any detailed disclosures on this point from the shipping companies' local representatives, who were examined as witnesses.

It is fair to those witnesses to say that they were frank enough. The Tasmanian House of Assembly has no power to call for reports of corporations operating in New Zealand -

Mr. Eva,Hobart manager for the Union Steam-ship Company of New Zealand, acknowledged that the Hobart to Sydney service " was not unprofitable " ; but stated that only rarely were the vessels in the trade exercised to their full passenger or cargo carrying capacity.

Captain Evans, C.M.G., Hobart manager for Huddart Parker Limited, has held the honorable position of Premier of our State for some years. He said in his evidence -

That the s.s. Westralia, trading on his company's account between Hobart and Sydney, was a boat much better than those hitherto in the service, and was paying; but that a profitable result was shown only by not allowing anything for depreciation, and' that the companies engaged in the shipping trade between Tasmania and the mainland had recently seriously considered the prospect of having to charge increased freights and fares, but were reluctant to take the step unless forced by trade necessities.

Is it likely that, if the trade were so profitable, these people would have alienated a certain section of Tasmanian opinion and would have refused to build a second Loongana, unless a paltry £2,000 per annum additional subsidy were paid to them ? Is it likely that these commercial men, whose whole-souled energies are directed to business, would have hesitated to proceed at once to order a second Loongana to increase and develop the trade if it were so highly remunerative to them ? Surely they would have regarded the extra money as a mere bagatelle. I venture to say that they would not have haggled with the Honorary Minister, who has had to. take an important share in these partly satisfactory negotiations. I call them only partly satisfactory because nothing short of a daily service will be wholly satisfactory. As a matter of fact, the companies regarded the trade in such a light that they would not consent to anything more than an engagement not to raise freights and fares without Ministerial permission. I think that I have investigated this matter as carefully and as impartially as any public man in Australia.

Senator de Largie - Especially impartially.

Senator BAKHAP - I am glad that the honorable senator's sense of what impartiality is has at last been awakened.

Senator O'Keefe - Does the honorable senator still believe that there is no room for a reduction of freights and fares consistently with earning a profit?

Senator BAKHAP - I say at once that I should like to see freights brought down to 5s. a ton, and fares proportionately reduced. But my belief, after listening to the evidence taken in Tasmania, is that if the Commonwealth or the State Government entered into competition with the companies already operating, it is highly probable that the companies ;.nd the Commonwealth or State would operate at a loss.

Senator Long - Answer the question fairly.

Senator BAKHAP - I desire to see freights and fares substantially reduced, but I am not sure that it is commercially possible to reduce them and run the service at a profit. I am quite satisfied that if the Tasmanian Parliament is allowed to develop the schemes that it has on hand, and if we provide it with the money that is due to it from the Commonwealth as an act of justice, we can safely leave it to determine whether it will be expedient to build two boats to compete with the companies already operating in the service. Honorable senators opposite, assisted by the newspaper representing the Labour party in Tasmania, have already dangled speciously before the eyes of the Tasmanian people a motion passed in the Senate at the instance of Senator Ready. I can easily justify the action taken by my Liberal co-senators in voting against that motion. But I want to make it quite clear that voting for it not only committed its supporters to the establishment of a service, Commonwealth-owned, between the mainland and Tasmania, but committed them to the principle of the nationalization of all the marine services operating between the Commonwealth and all other parts of the world.

Senator Ready - Utterly untrue.

Senator BAKHAP - Let the honorable senator read his own motion.

Senator Ready - The honorable senator does not understand it; that is all.

Senator BAKHAP - I do not pretend to have attained the colossal understanding of the honorable senator, but at the same time I point out that his very speciously-worded motion was designed to commit everybody voting for it to the principle of the nationalization of all the marine services between the Commonwealth and the rest of the world.

Senator O'Keefe - Why did not the honorable senator move an amendment ?

Senator BAKHAP - Would the honorable senator have supported such an amendment? "Vainly is the net spread in sight of the bird " ! The Premier of Victoria has recently made some remarks concerning the State-owned railways of this country.

Senator Needham - What is his name ?

Senator BAKHAP - I believe that the name of the Premier of Victoria is known over even a larger area of the world than is that of the honorable senator who has just interrupted. For some time past there has been a surplus on the working of the railways of this State. That surplus has been substantially reduced.. What is the reason given for the reduction ? It is the increase in the cost of operating the service. Here lies a cardinal objection to the extension of the principle of State enterprise - that all profits are absorbed, and will continuously be absorbed, by the ever-expanding demands of those engaged in the mechanical operation of State services. If the Commonwealth established a service between Tasmania and the mainland, and that service was successful, the profit would not" result in a reduction of fares and freights, but would be absorbed by the ever-increasing demands of the employes.

Senator Barnes - Why not? They are entitled to it, anyhow !

Senator BAKHAP - The honorable senator thinks that they are entitled to the lot, and that the taxpayers are to be continuously called upon to shoulder any loss. In the light of what has happened in connexion with State railway services in New South Wales and Victoria, and of what will happen in connexion with State-owned services throughout the Commonwealth, I say that it is hopeless for the Australian people in the future to think of the extension of the principle of nationalization in the hope that it will result in a substantial reduction of the cost of nationalized services. In this matter I am an expedientist. I will not be frightened from supporting a proposition merely because' it is called Socialistic. I admit that it may be desirable in some instances to institute State-owned services.

Senator Pearce - The honorable senator will report in favour of the principle, but never vote for it.

Senator BAKHAP - At no time during my political career have I ever been afraid to record my vote in favour of my expressed opinions. A few years is a brief period in the life of a nation, though a considerable item in the life of an individual. If we decided at once to establish a State-owned enterprise between the mainland and Tasmania it could not be consummated for some years.

Senator Ready - Eighteen months.

Senator Pearce - How long did it take to build the Loongana ?

Senator BAKHAP - The dockyards of the Old Country are overflowing with work at present.

Senator Pearce - It took only twelve months to build the Loongana.

Senator Clemons - Does the honorable senator say that it would be possible to build a ship in that time now ?

Senator BAKHAP - Seeing that this is not a party question, if, at the expiration of the period of the contract it is found that the people of Tasmania are really suffering, in comparison with the people of the mainland States, from the exorbitant demands of the shipping companies, I venture to say that very few will be found to object to the establishment of a State-owned, if not a Commonwealth, service. But in the meantime we must be content with the present service. The Tasmanian Parliament, assisted and subsidized by the Commonwealth, can, if it thinks fit, establish a service to supplement the existing service - a thing which no business people in Tasmania would feel justified in doing. Knowing the difficulties that "have had to be overcome - and no one should know them better, seeing that I was the chairman of the Committee which exhaustively inquired into this matter in Tasmania - I venture to say, in conclusion, that a very great deal of credit ' is due to the Minister, Senator Clemons, for the substantial measure of improvement which has been effected in the signing of this new contract.

Suggest corrections