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
Thursday, 26 September 1974
Page: 1456


Senator DURACK (Western Australia) - These Bills, which are part of the Budget, implement the highly extensive, we might almost say vicious, increases in postal and telecommunication charges. The Bills are not simply repeating the charges that were proposd a couple of months ago. In fact, they are proposing even higher charges than the ones which were before the Senate 2 months ago. I do not propose to take up the time of the Senate in going through the details of the proposed increased charges because they have become fairly well known and I think there are more important things to be said in this debate. But in order to set the scene, so to speak, I will refer broadly to the nature and size of the proposed increased charges. They include an increase of 43 per cent in the basic postal charge. Indeed, in regard to articles that just do not happen to fit into the category of standard articles I think that the increase is approximately 66 per cent. There is an increase of 33 per cent in the telephone service connection fee for new applicants for telephones, a 30 per cent increase in the local telephone call fee and an overall increase of 50 per cent in telegram charges. I just refer in broad terms to these percentage increases so that the Senate and the public will have a clear idea of the magnitude of the proposed charges. They can virtually be described, as I have said, as vicious increases.

A couple of months ago the Government sought to justify these proposed increased postal charges as part and parcel of an alleged package deal to fight inflation. Of course, we remember very clearly that between the time when the Government proposed these increased charges and the time when they were presented to the Senate the Government 's plans for fighting inflation had already been thoroughly emasculated, although at that stage not completely overturned, by the Caucus and Dr Cairns. As I have said, the proposed increases were presented as part of a so-called anti-inflation package deal. But by that stage the thing had been emasculated and the proposed increased postal charges were really the only anti-inflation proposals put forward by the Government. We thought it was very strange. We found it difficult to understand how proposals which were presented as fighting inflation increased- perhaps not by the amount proposed in these Bills, but certainly in a very substantial way- the charges for postal and telecommunication services. We in the Senate were mystified by the Government's action and we said to the Government: 'Surely this ought to be re-thought and reconsidered'. We did that so that the Government, before it came before the people with its Budget for the current financial year, would have had an opportunity to consider these charges in the whole context of that Budget.

Although we were starting to have serious doubts about how much the Government was really concerned about fighting inflation even 2 months ago, nevertheless we believed that the Government or the senior members of it were still rather concerned about the problem of inflation and intended to do something about it. But of course the view that we held then was entirely unjustified and we had presented a week ago a Budget which not only does not attempt to do anything about inflation at all, but which in fact is designed to increase greatly the rate of inflation. It will certainly have a rapidly growing effect in that direction in the coming months. As I pointed out recently, revenue derived from income tax and company tax will increase by 46 per cent in the current financial year. There is to be a 46 per cent increase in income tax collection alone. In round figures, increases of about $3,000m by way of increased income tax and company tax alone are to be imposed on the Australian people. The Government is not doing that because it is proposing to adopt a responsible policy regarding inflation. The Government is proposing to spend every cent of that money. In fact, it has proposed an increase of 32 per cent in public expenditure.

We look at these proposed increased postal charges as part and parcel of the Government's Budget which we in the Opposition devoutly wished and in fact until recent weeks believe would represent a serious attack upon inflation, that it would be a responsible Budget and would be designed to do something about this grave and fundamental problem facing the nation. But, as I have said, we have a Government which has completely abdicated its responsibility in regard to the economy. It has abdicated its responsibility as a Government. Obviously it has presented a Budget which will not only do nothing to arrest inflation, or even to steady it, but which in all probability will inflame the raging fires of inflation.

The Postmaster-General (Senator Bishop) in presenting the Bills which provide for these great increases in postal charges sought to throw further responsibility on the Senate in the old hackneyed way which has become so familiar to us and to the public in recent months. At every opportunity this Government seems to try to repeat these old, tired cliches about Senate obstruction, the Senate adopting a negative attitude and so on. I think that the speech by the Postmaster-General on these Bills beats all other efforts at this type of attack. Now the Government is trying to say that in some curious way the Senate is responsible for the size of the proposed increased postal charges. I have received comments, which I will be quoting, from many people in the community who believe that the Senate adopted a very responsible attitude to the proposed increased postal charges that came before us 2 months ago in isolation but as part of some alleged anti-inflation deal. Because we adopted that responsible attitude and said to the Government: 'For goodness sake, go back, think again and try to do a bit better', the Government now is trying to say that that is some evidence of irresponsibility and obstruction by the Senate. In fact, it is trying to say to the people: The Senate's action is costing you $30m more than you would otherwise have had to pay'.

What an idiotic proposition that is. I cannot understand why the Postmaster-General, for whom I have a good deal of respect, would put forward such a proposition. Certainly I have no respect for his advisers who present that to the Senate as being in any way a reasonable argument, because the fact of the matter is that if these proposed increased postal charges had been imposed 2 months ago, the people who use the services would have been paying that additional amount of money over the last 2 months. What the Government is saying is: 'Well, because you have not been paying it over the last 2 months you will have to pay a bit more in the future'. It is the same amount of money, whether it was paid over the last 2 months or whether it is paid over the next eight or nine months. The people have not had to pay any additional amount of money because of* the Senate's action. It really is incredible that responsible people- I believe that the Postmaster-General is a responsible person- would put up such an argument. If ever there was an attempt to mislead the people of this nation, that argument is a classic example of such an attempt. Moreover, the increase in the basic letter rate from 7c to 10c, instead of the previous proposal of 9c, will not be taken off at the end of the financial year. If the Government's argument was in any way honest that is what the proposition would have done because, if the Government has lost this alleged $30m in the last couple of months and it has to recoup it over the next eight or nine months, the Government's Budget proposal to increase the basic letter charge rate to 10c means that the loss will be recouped by 30 June next year. As I said, the Government's argument is a stupid one. If it were an honest argument the increase would have to come off and there ought to be provision within the legislation to take it off on 30 June next year.

The Post Office is saying- as I said, it is not a credible argument- that in order to recoup the alleged loss of $30m incurred during the past 2 months the people of this nation will have to pay forever an extra lc on letter articles. That charge will continue and it will snowball beyond this financial year. It will be built into the letter rate charge and any increases in this charge in future years will be added to a base rate of 10c instead of 9c. It is utterly ludicrous to try to blame the Opposition in the Senate. As I said, I really find it hard to believe that people could honestly believe that the Government's argument is a credible one.


Senator Young - It is a good excuse just to get a bit more revenue.


Senator DURACK - As Senator Young says, it is a good excuse to get a bit more. That is exactly what it is. I wish that the Government was honest enough to say so, but unfortunately for this nation it is not. I want to deal briefly with the alleged amount of $30m which the Government says has been lost over the past 2 months. I will commence by referring to a statement made by the Prime Minister on this matter 2 months ago. We all know that the Prime Minister is not very strong on economics. He is certainly a good deal weaker in arithmetic. We well know- this is repeated in the Postmaster-General's second reading speech- that the object of the exercise of viciously increasing postal and telecommunication charges is to increase the total revenue of the Post Office in the present financial year by $146m. The Postmaster-General has told us that this will give the Post Office a profit of $60m. The reason why it wants that profit is to assist it in its capital expenditure. I will deal with that matter later.

I just want to deal with the arithmetic which has been presented to us on this matter by the Government. As I said, I will start off with what the Prime Minister said. The Postmaster-General said that when the increased charges were proposed 2 months ago the purpose was to provide an amount of $1 46m additional revenue which would leave the Post Office with an estimated profit of $60m. Let us see what the Prime Minister had to say about the matter. No doubt his whole attitude to it is coloured by his obsession with the Opposition in the Senate. In speaking about this subject he chose language with which we have become very familiar. I will read what he said about us and the action we took in the Senate in rejecting the earlier proposed increase. He said:

They're grossly irresponsible. The Post Office in this new financial year, if there is no increase in its charges for postal and telegraphic services, will suffer a deficit of $ 142m.

He could not even get the figure right. It should have been $146m. But what is $4m to the Prime Minister or to this Government? It is nothing. They do not have to worry about accuracy. The Prime Minister said, in effect, that if there was no increase in postal charges there would be a loss of $ 142m. As I have already pointed out, one of his own Ministers, the Postmaster-General, had made it perfectly clear that as a result of an increase in charges there would be a profit of $60m. So the Prime Minister conjured up that figure out of the air. It is rather interesting that the members of the Press should take up this sort of thing. They take the Prime Minister's word at his Press conferences as though they were graven words from heaven.


Senator Young - They are changing now.


Senator DURACK -I hope they will. This is a good illustration of why pressmen should look critically at and take a little more care with what the Prime Minister says. But they swallowed this. I noticed in the Press the day after this conference that reports continued to quote the Prime Minister's statement that the Post Office would have a loss of $ 142m as a result of the Senate's action. At his conference the Prime Minister went on to say, with reference to the proposed increases:

If they are rejected in the Senate, it will be 2 months before they can be brought in in the Budget.

As we know, that is what has happened. He went on to say:

That means that we will have subsidised those losses from taxes to an extent of about $2 5 m.

He said that as a result of the action taken by the Opposition in the Senate the taxpayers would have to subsidise the Post Office for the revenue it would forgo in those 2 months. But we now have another one of his broken promises because the taxpayers will not be subsidising the Post Office. The proposal is- the Government makes great play on this-that the taxpayers and the postal users will pay twice over. They will pay 46 per cent more in income tax, and they will make up this loss by increases amounting to $30m. The Prime Minister said that it would be $25m, but now we are told that it will be $30m. It is the same old thing. The Prime Minister cannot do his arithmetic. It does not worry him whether the loss will be $146m or $142m. He does not pay regard to $4m here or there. We now find that the Prime Minister's estimate of $2 5m has been upgraded to $30m. If one cares to do the arithmetic correctly, one will find that the amount of revenue that the Post Office has forgone over the past couple of months is about $24m. That figure is obtained by using elementary arithmetic to divide $ 146m- which the Post Office still intends to obtain- by six which represents the period of one-sixth of a year in which revenue was lost.

The Government also seeks to justify its argument by quoting statements from some Press articles which it believes give it comfort and support for an increase in postal charges. The PostmasterGeneral quotes from reports in the 'Age' and also from reports in the 'Financial Review' of 3 1 July this year. I do not propose to repeat what was said. But I want to say that at the time we took the action in this Senate to reject the proposed increases many people wrote to me and to other members of the Opposition expressing views, and newspapers also expressed views, which were in commendation of the stand that the Opposition took. One of those newspapers is the Geelong 'Advertiser'. Referring to the stand that had been taken in another place by my colleague the honourable member for Gippsland (Mr Nixon) it stated that the suggestion made by Mr Nixon- that was the same suggestion as we made here- that the proposed increases in postal charges should be deferred until their effects on inflation, could be determined was one of the few sane suggestions which had been made in Canberra with regard to the present economic crisis. Government supporters like to quote from the Financial Review' or the 'Age'. I have just cited the view of another newspaper in Australia. I have referred to the many letters and telegrams which I have had from individuals and associations in Australia about these postal charges. I propose to quote a few of them which I have received recently. I think the Government should rapidly disabuse itself of the idea that people in this country are in any way prepared to accept these increases as being justified. I have a telegram here from the Australian Mailing Service. It states:

The Senate must act as the prices justification tribunal for the PMG and again refuse proposed postal increases stop many proposed increases exceed 60 per cent stop savage increases of this sort will result in decreased volume not increased revenue.

I have a telegram from Mr Johnston-Bell of the Postal Users Council which states:

Proposed increases in postal rates unacceptable to the public industry business and will effect increases in unemployment and inflation.

The twin problems facing the nation today are unemployment and inflation. As forecast by the Postal Users Council these increases in fact will worsen both these problems and will not in any way alleviate them. I have another telegram from Mr Weldon, the managing director of the Hamlyn group of companies. He states:

The effect of these additional increases will be further price escalation and significant reduction in the level of our mail order activities which will contribute towards unemployment.

I also received a letter from the Australian Direct Mail Association, written to me on 23 September. It is a long and very interesting letter. I shall refer to parts of it again. On this subject it states:

In terms of inflation, it is clear the proposed increases represent a very significant cost additive to both business concerns and to private individuals . . .

So far as employment is concerned, the sudden imposition of such increases must cause cutbacks in mailings with resultant immediate effects upon employment in many fields such as, for example, the printing industry. That such cutbacks will take place is certain. Indeed the Vernon Committee acknowledged that past experience shows that demand for postal services generally drops for a period following a substantial tariff increase (see page 186 of the Vernon Report).

I have quoted a few of those telegrams and letters which I received. As I have said, I received many others from individuals. Many of my colleagues have received such letters as well. I think the Government gives a completely false picture in presenting to the Senate, as it does, the view in the second reading speech that somehow or other the public accepts these increases as being necessary, desirable and, indeed, reasonable.

I turn generally to the question of policy in regard to determining the rate of postal charges. I accept, as I expressed in the debate 2 months ago, that some increases in postal and telecommunication charges are necessary. The figures as presented by the Postmaster-General in the previous debate- and there is a financial analysis in the Vernon Commission's report- clearly indicate that if these charges are not increased to some extent there will be significant losses by the Post Office. The Vernon Commission estimated that in the current year the loss will be something like $90m, but very likely it will be greater because of the rapidly growing rate of inflation since April when the Vernon Commission's report was submitted.

Although I think it has been accepted for many years that the community should accept a loss on postal services- in fact, the postal services have been making a loss since 1961- the overall result of the Post Office, with the profits made on the telecommunications side, should be kept fairly well in balance and the general policy should not be to make a loss overall. But the Postmaster-General in his previous speech and again when he referred to it in his second reading speech set out the policy of this Government when he stated: the Government is determined to ensure that the costs of the Post Office are met by the users of the services. This is in line with the recommendations of the Vernon Commission, which saw the need for the Post Office to operate in a similar manner to other government undertakings.

I believe that this proposition which seems to be accepted by the Government is far too simple a view to take broadly in regard to the Post Office and is the reason for these very large increases which, as I have said, are really larger than necessary. But the Government takes the view that the user of the service must pay. As I said here the other day in relation to broadcasting and television licence fees which have been abolished in this Budget, this is a remarkable contradiction of policy. The user of the broadcasting and television service is not paying any licence fee. He should get that for nothing. But the poor old user of the Post Office has to pay and, my word, he certainly will be paying through the nose for it as a result of these increases. This is not really a true application of the Vernon Commission's recommendations. I do not want to be taken as accepting the Vernon Commission as gospel by any means, but in relation to broad government policy on postal and telecommunication services in its summary which appears at the beginning of the report it states:

The Commission sees the APO as an organisation which: offers a comprehensive range of postal and telecommunications services and at standards which meet, within reasonable and responsible limits, the requirements and needs of the whole community. offers those services on the basis of a tariff structure which:

(i)   provides tor the reasonable costs of those services to be recouped from revenues received from customers;

(ii)   ensures that the community contributes to the revenues of the APO in proportion to the use each member makes of those services;

(iii)   provides a reasonable return to public revenues for the use of community funds employed in the enterprise. is administered in accordance with accepted principles of business management so that the efficiency and vitality of the organisation is constantly under review.

Sitting suspended from 1 to 2.15 p.m.


Senator DURACK - Prior to the suspension of the sitting for lunch I was quoting the Vernon Commission's basic statement of what the broad policy should be in relation to the Post Office. I did so, because I do not think that the Commission as quoted by me would support the Government's policy, as stated by the Postmaster-General, that the Government is determined to ensure that the costs of running the Post Office are met by the users of the service. I believe that the Vernon Commission made it quite clear that some balance has to be struck between the reasonable requirements and needs of the whole community and what would be reasonable costs of the tariff structure. The Commission used the word 'reasonable' in relation to that balance. I believe that the Government, in its approach to these charges, is now going far beyond that. It has committed itself to the proposition that the user, more or less, must pay no matter what it costs. That is the reason the charges are of this magnitude.

As I have said, I believe there is justification for reasonable increases. Increases of this size which will give profits of the size budgeted for are away beyond the policy enunciated and recommended by the Vernon Commission to the Government. The Government's claim is that it has to make these profits because the Government's policy is to limit the capital advance to the Post Office to the same sums as last year, $385m. I do not know how the Government can justify that limit when, in fact, this year it is budgeting for a rate of inflation of more than 20 per cent and with increases in salaries and wages of that order. Obviously, by following the policy of pegging the advance to $385m, the Government is in fact considerably reducing- probably by 20 per cent or more- the advances to the Post Office. The Government's justification for limiting the advance is that if it were to increase the advance to the Post Office beyond that figure it would be at the expense of other government priority programs in the field of education, welfare and health. But there are other vast areas of government expenditure which, in the view of the Opposition, are quite unjustified and which could be used to pay for a reasonable increase in the advance which the Post Office requires.


Senator Mulvihill - What is your definition of reasonable'?


Senator DURACK - I am referring, for instance, to the millions of dollars which will be spent on the pipeline authority and petroleum and mineral authority. I believe that the Minister for Minerals and Energy (Mr Connor) is even going to build a treatment plant for uranium. These are the sorts of areas in which the Government could economise. They are areas in which the Government should not be involved. Private enterprise is perfectly prepared to provide the capital for these projects. It is the area in which the Government ought to be looking to provide the necessary increases in capital for the Post Office, rather than do it by increasing charges in this way. But this is all a question of basic budget policy. The Opposition, I believe, has rejected the whole concept of this Budget. These charges are part and parcel of the Budget and we do not intend to oppose them. We are exercising our rights and are at liberty to point out the basic fallacies in the Budget of which this is a part and the contradictions and, indeed, the stupidities in many cases of the arguments that are being advanced by the Government in support of these increases in postal and telecommunication charges.

There is just one other point I wish to touch on before concluding and that is that these Bills provide for the establishment of a courier service within the Australian Post Office. I was very pleased to hear the Postmaster-General confirm yesterday, in answer to a question from me, that the Government does not intend to prevent private courier services from operating. The intention of the Government is that the Post Office courier service should act in competition with other private services. I sincerely hope that the Postmaster-General and the Government will stick to that policy and will not be pressurised by its doctrinaire Caucus to eliminate private courier services which I have no doubt many members of the Caucus would wish to do.


Senator Webster - Is it proposed that there be any separate accounting for such services?


Senator DURACK -I hope there will be. That is something we will be keeping an eye on, no doubt. Of course, the private courier services have proliferated because the Post Offices' own services have been deteriorating so rapidly in recent years. The private services have mushroomed all around Australia. That is an excellent example of private enterprise taking the initiative and satisfying community needs which were not being provided by the Post Office.

Instead of the Post Office following the policy of putting up its charges I would hope that it would be looking all the time more and more into the question of improving its own efficiency, which is desperately needed, to see where it can cut costs. The Post Office should be following that policy rather than the policy of despair whereby postal charges will be increased year after year. The Vernon Commission report seems to blandly assume that postal charges can go up 15 per cent every year as a solution to the problem. It may be good enough for the Vernon Commission and it may be good enough for this Government- in fact, the Government is increasing its charges more than recommended by the Vernon Commission. It is certainly not good enough for the Opposition. I hope it would not be good enough for this Parliament to accept that as the solution to the problems of an enterprise the size of the Post Office or any other enterprise.


Senator Sir Magnus Cormack - When Slater gets his hands on the courier service that will not work either.


Senator DURACK -One of the big problems of the Post Office is industrial. I do not want to move into a great debate on that topic. I have been speaking at length already. But I want to emphasise the necessity for the Post Office to look to increasing efficiency and a way to cut costs as the prime way of maintaining solvency. It should not simply take the attitude: 'Well, if we make a loss we can always put up the charges'. That is not good enough and we in this Opposition, so long as we are the Opposition, take the attitude that we will scrutinise that sort of thing as we have done already. However, I think that a more effective method of scrutinising these increases will have to be found. It is not fully within the power of the Parliament to be able to scrutinise these increases effectively. When all is said and done this Government insists that industry should justify its increases in charges before the Prices Justification Tribunal. The Government is extending the jurisdiction of that Tribunal. If it is good enough for private industry to have to run the gauntlet of the Tribunal, it is good enough- it ought to be a requirement- for all large government business undertakings to do the same or a similar exercise. 1 am giving notice to the Postmaster-General that the Opposition will seriously examine this aspect of the problem and that in future we will insist that there be proper and full public investigation of these sorts of charges.







Suggest corrections