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Wednesday, 16 October 1974
Page: 1750

Senator CAVANAGH (South AustraliaMinister for Aboriginal Affairs) - I move:

That the Bill be now read a second time.

Again, as this second reading speech has been made in another place, I seek leave to have it incorporated in Hansard.

The DEPUTY PRESIDENT (Senator Webster)- Is leave granted? There being no objection, leave is granted. (The speech read as follows)-

The main purpose of this Bill is to amend certain provisions of the Australian Coastal Shipping Commission Act 1956-1973 in order to alter the name of the Commission; increase the number of Commissioners from five to seven; make specific provision for the appointment of a full-time Chairman of the Commission; to alter the basis on which the Commission is reimbursed for losses in the operation of a shipping service undertaken at the direction of the Minister for Transport; to eliminate an anomaly in the present Act relating to rights and benefits of the Commission's officers formerly employed in the Australian Public Service. At the same time the opportunity will be taken to make several amendments of a machinery nature in relation to financial provisions of the Act and to effect some largely formal amendments including those arising out of the Statute Law Revision Act 1973. The proposed amendments are intended to update the Act and enable the Commission to more effectively perform its role as a national shipping line in both coastal and overseas trading.

I would like to draw to the attention of honourable senators the development of the Australian National Line since the Commission was established in late 1956. The fleet then comprised 42 ships, with a total deadweight tonnage of 250,960, representing an investment of $24.5m. The fleet now comprises 31 vessels, with a combined deadweight tonnage of 65 1 , 1 36. The Line now has total fixed assets, at cost of $ 183m. Turnover of the Line has increased from $32m in 1957-58 to over $100m. The Commission's important contribution to the increased efficiency of Australia's coastal shipping services is well known. It has a proud record of innovation and development of new and more efficient ships, terminals and handling methods. The Une was, for example, the first to introduce the roll-on roll-off concept of transportation into Australian coastal trading, as a fast convenient and economical method of moving passengers, vehicles and cargo. The Line has a further 5 ships for the coastal trades on order. After an absence of 40 years the Line returned the Australian flag to regular overseas operation. It now has 4 modern vessels in our overseas liner trades and these are to be joined shortly by another two, with a third on order. Four large bulk carriers for the overseas bulk trades are on order. The Government sees the Australian National Line as the pacesetter for implementing our declared objective to achieve a more equitable share of the carriage of our overseas trade in Australian flag ships. This development and expansion places a great responsibility on the Commission. The Government considers that some changes are required to permit the Commission, now entirely a parttime body, to be better equipped to handle the challenges of continued growth, increasing technological development and complexity of operation.

Let me now speak separately to the main provisions. Firstly, the Commission's name is clearly an anachronism. Overseas operations are already a significant portion of its activities and will become more important. It is proposed therefore that the name of the Commission be changed to the Australian Shipping Commission to more accurately reflect its proper function. Honourable senators will be aware that the Commission was established under the Australian Coastal Shipping Commission Act in 1956 and since then has consisted of 5 Commissioners, one of whom is appointed Chairman and another Vice-Chairman, and all of whom, as I mentioned previously, act part-time.

The Government regards the separate public transport authorities in the different modes as important agencies through which its policies, not only in the transport, but in other fields, will be forwarded. This demands a closer understanding between the various authorities and the Minister and the Minister's Department. These policies, in respect of the Australian National Line, envisage the Line initiating programs in accord with the Government's objectives and these carry with them heavy investment decisions. Of course, a great deal has already been achieved. I shall detail these developments in a moment. However, with such major investment decisions the Government attaches great importance to ensuring that the Commission be afforded the assistance it will receive from the appointment of a full-time Chairman. His appointment will permit the continuing oversight of the Line's objectives and review of the Line's operations and financial arrangements. It will allow the Commission, as a whole, to be kept closely informed on all matters relating to the Commissioners' collective responsibility. Qantas

Airways Ltd already has a full-time chairman. It is proposed also to increase the number of parttime Commissioners assisting the Chairman to six. One of these 6 part-time Commissioners will be a Vice-Chairman.

Let me indicate in more detail the extent of the Commission's current involvement with initiatives taken since the Government took office. Since December 1972 there has been unprecedented activity by the Australian Government in all forms of transport, because this Government takes a multimodal approach to the total national transport task. Shipping must take its place amongst the whole range of transport policies that the Government is striving to implement. Additionally, in relation to shipping, it was not expected that we could achieve overnight the policy objectives announced by the Prime Minister in his 1972 policy speech. However the opportunities for expanding coastal and overseas shipping were examined as soon as we won office and the first proposal aimed at expanding the Australian National Line's coastal shipping operations was put forward as early as 15 December 1972.

Since that time a progressive increase in Australia's share of trade from Japan from 17.2 per cent to 30 per cent by 1979 has been successfully negotiated. The Line has already achieved an increase in the wool trade to Japan from 23 per cent to 28.3 per cent. To carry this increased cargo volume a hybrid roll-on roll-off cellular container vessel, the 'Australian Emblem', is being built for use in this trade and was launched on 9 August. This is a 22,400 d.w.t. vessel with a capacity of 1,431 twenty feet length containers. The Line's Australian partner in the Eastern Searoad Service, the Flinders Shipping Company, has negotiated the purchase of a similar vessel.

The 2 vessels already in this trade, 'Australian Enterprise' and 'Matthew Flinders', are to be diverted to the East Asia trade to provide an entirely independent Australian flag service to Korea, Hong Kong and the Philippines. The Commission has arranged to purchase 'Matthew Flinders' from the Flinders Shipping Company. The placing of an order by the Line for the construction of a 29,000 d.w.t. cellular container ship for the Australia-Europe cargo liner trade has also been approved. This ship is expected to be delivered in 1977 and will join 'Australian Endeavour', also operated by the Line, in the Associated Container Transportation (Australia) Ltd-ANL service to Europe.

Steps have been taken to secure, for the first time, regular participation by Australian flag vessels in our bulk minerals export trade. In November last year the ordering by the Line of 2 bulk carriers of 121,000 d.w.t. each for use in the Australia-Japan ore trade was authorised. Delivery of these vessels is expected in July 1976 and May 1977 respectively. More recently, the placing of a further order for 2 bulk carriers was approved. Each of these vessels is 140,000 d.w.t. and they are also planned for use in the Japan ore trade. These ships are expected to be delivered in July and December 1976. For coastal trading the Line has been given approval to purchase 2 general cargo vessels, the first of which is scheduled to enter service in February next year and the second a year later. In addition the Line has ordered 2 25,000 ton bulk carriers and these vessels are expected to enter service in November 1976 and May 1977. These 11 ships currently on order for ANL and the associated seaborne equipment necessary for their operation involve a capital expenditure of approximately $235m.

Discussions have been held with the New Zealand Minister for Transport concerning an Australian flag shipping service in the transTasman trade. Feasibility studies have been conducted by the Commission but vessels have not been introduced into the trade as speedily as the Government would have wished, mainly because of the problem of securing suitable vessels in current market conditions. The search for suitable tonnage is continuing. The problem of securing suitable tonnage has also been the main difficulty standing in the way of total Australian flag participation in the Christmas Island rock phosphate trade. Early this year I decided not to renew the exemption of this trade from the coasting provisions of the Navigation Act. Such an exemption had been granted by our predecessors in Government, the effect of which was to enable the use of foreign flag vessels for carrying phosphate from Christmas Island to Australia. I have asked the Australian National Line to seek suitable tonnage on the world market to ensure that sufficient Australian manned tonnage is available to handle the total trade. Negotiations are currently under way for the Line to acquire its first vessel for this trade and I expect to be in a position to make an announcement shortly.

Discussions have also been held with the Chinese Government to undertake a feasibility study for the introduction of a direct AustraliaChina liner service. Officers of the Australian National Line are visiting China in October of this year to examine port facilities and to have further discussions on the practicability of a direct liner service between Australia and China. Before I sanction entry into any trade I require to be satisfied, and must be able to satisfy my colleagues, that the service is justified, can be done efficiently and is appropriate to the national interest. These responsibilities rest directly with the Commission. The Government is pleased that it has responded so directly and positively to the need for new initiatives. However, the Government is also aware of the extra burden these impose upon it. The measure now proposed should substantially assist the Commission to develop the role the Government requires of it and of the Australian National Line.

Turning to the Commission's operational activities, section 17 ( 1) of the present Act provides that, if desirable in the public interest, the Minister may direct the Commission to establish, maintain and operate a shipping service to meet the requirements of a particular area. If such a shipping service suffers a loss in any financial year, and, if an overall loss results from the Commission's whole operations for that year, the Commission is entitled to be reimbursed by the Australian Government to the extent of the lesser of the 2 losses. This provision is contained in subsection 4 (b) and (c) of section 17. This provision which was designed to protect the Commission can, in fact, be damaging to the Line's overall operations. The practical effect of such a direction under the present provisions of the Act is that the Commission is required to crosssubsidise such a service from other profitable operations.

The Government considers the Line's overall operation as a competitive shipping line should not be penalised as a result of providing an uneconomic shipping service, even though this is operated in the public interest. Subsidies made for such reasons in the Line's operations should be identified and repaid. It is, therefore, proposed that sub-section (4) of section 17 be amended to provide that when the Minister directs the Commission to establish a shipping service in the public interest, the Commission shall be directly reimbursed to the full extent of any losses sustained in operating such a service.

The provisions of the Act relating to the appointment of officers to the Commission also require amendment. Sub-section (1) of section 22 of the Act provides that the terms and conditions of employment of officers appointed by the Commission shall be as determined by the Commission. However, sub-section (2) of section 22 provides that the Commission shall not, except with the approval of the Minister, determine the salary of a position in the service of the Commission at a rate exceeding $7,000 per annum. The intention of the original Act was that the salary limit would equate with approximately the maximum of the top Public Service Third Division classification. This section was amended in 1 964 in order to retain such equality. It has not been updated since, with the result that more and more routine administrative matters must be referred to the Minister for approval. The current salary figure of $7,000 per annum is equivalent to a Clerk Class 2/3 in the Australian Public Service. To update this provision of the Act the figure of $7,000 is amended to $15,739, which is currently the maximum of the top Third Division classification. In order to avoid further similar amendments to the Act there will be provision for a higher amount to be prescribed, the intention being that the amount prescribed will be kept in line with the top Public Service Third Division salary.

In addition to the amendment to sub-section (2) of section 22 a further amendment is proposed to eliminate an anomaly which exists in respect of sub-section (3) of section 22. This latter sub-section of the Act purports to give officers of the Commission who were formerly employed in the Australian Public Service the same rights and benefits as if they remained in the Public Service. These rights and benefits are enjoyed by officers in other statutory authorities, such as Commonwealth Railways. As presently worded the sub-section does not provide for this. It is without meaning for the reason that Public Service rights and benefits are given pursuant to appointments under section 22 only, whereas appointment of officers is authorised only under section 2 1 and 23. Sub-section (3) of section 22 is to be amended appropriately to remove this anomaly. Because of the number of former Australian Public Service officers already employed by the Commission retrospectivity will be necessary. Several amendments are proposed to financial provisions in the Act including section 30 provisions relating to borrowings. The purpose of these amendments is to bring the principal Act into line with the provisions of comparable sections of legislation relating to other statutory commissions operating business undertakings. There are also some formal amendments and these are detailed in the Schedule to the Bill. I commend the Bill to the Senate.

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