Senate
21 November 1957

22^nd Parliament · 2^nd Session

QUESTION
- UNIDENTIFIED SUBMAKINE OFF CAPE YORK
QUESTION
- HOSPITAL AND MEDICAL BENEFITS SCHEME
QUESTION
- VISIT OF JAPANESE PRIME MINISTER
QUESTION
- PETROL
QUESTION
- INDUSTRIAL ACCIDENTS
QUESTION
- MOTOR REGISTRATION
QUESTION
- AUSTRALIAN CONSTITUTION
QUESTION
- HOUSING
QUESTION
- TELEVISION AND BROADCASTING IN WESTERN AUSTRALIA
QUESTION
- ATOMIC WARFARE
QUESTION
- REPATRIATION
QUESTION
- COPPER
QUESTION
- AUSTRALIAN CONSTITUTION
QUESTION
- DECIMAL COINAGE
QUESTION
- UNEMPLOYMENT
QUESTION
- RADIO TELEPHONES IN WESTERN AUSTRALIA
QUESTION
- REPATRIATION
QUESTION
- NOTE ISSUE
GOVERNMENT BUSINESS
- Precedence
SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL 1957
- Second Reading
WOOL REALIZATION (DISTRIBUTION OF PROFITS) BILL 1957
- Second Reading
COMMONWEALTH AID ROADS (SPECIAL ASSISTANCE) BILL 1957
- Second Reading
CIVIL AVIATION AGREEMENT BILL 1957
- Second Reading
AIR NAVIGATION (CHARGES) BILL 1957
- Second Reading
LOAN (WAR SERVICE LAND SETTLEMENT) BILL 1957
- Second Reading
ADJOURNMENT

The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 1 1 a.m., and read prayers.

page 1409

QUESTION

UNIDENTIFIED SUBMAKINE OFF CAPE YORK

Senator BROWN:
QUEENSLAND

– I desire to ask the Minister representing the Minister for the Navy three questions. Is it a fact that Sir Raymond Huish, Queensland President of the Returned Servicemen’s League, told the R.S.L. Congress a few days ago that when an unidentified submarine was sighted off Cape York the observer reported the sighting to the Harbours and Marine Department at Thursday Island, which department reported it to the police at Thursday Island, who reported it to the Brisbane police, who, in turn, passed on the information to the Department of Customs and Excise; that that department referred the matter to the Navy, and that the Navy, having no ships available, reported the matter to the Air Force, which, two days later, sent an aircraft to investigate?

If that is so, then, granting that we are not at war at present, what hope would our coastal cities have in war-time if enemy submarines carrying nuclear missiles attacked this country? Even if we brought our defences up to date, could our coastal cities be defended successfully from enemy submarines carrying modern nuclear weapons?

Senator HENTY:
Minister for Customs and Excise · TASMANIA · LP

– I read the report in the press to which the honorable senator has referred. I shall place the matter before my colleague and ask him to give me the full facts.

page 1409

QUESTION

HOSPITAL AND MEDICAL BENEFITS SCHEME

Senator WADE:
VICTORIA

– My question is directed to the Minister representing the Minister for Health. Is it a fact that in all States, with the exception of Victoria, a flat rate of subscription operates for medical and hospital benefits, regardless of the age of the subscriber? If the answer to that question is in the affirmative, will the Minister say whether the position in Victoria is due to a regulation issued by the Victorian

Government, or to the bias of some officer administering the Victorian Department of Health? Are the insurance organizations in all States of the Commonwealth equipped with substantial reserves to enable a flat rate to be imposed?

Senator COOPER:
Minister for Repatriation · QUEENSLAND · CP

– I am sorry that I cannot give an answer to the honorable senator’s question immediately. As far as I know, each society has the same subscription rates in each State. I shall ask the Minister for Health to furnish me with a report on the rates payable in Victoria and I shall pass on the information to the honorable senator.

page 1409

QUESTION

VISIT OF JAPANESE PRIME MINISTER

Senator AYLETT:
TASMANIA

– I desire to ask the Minister representing the Prime Minister a question. I am prompted to ask the question by the very unsatisfactory answer which the Minister gave -me yesterday in reply to a question concerning a leading article in the “ Age “ newspaper. Is it a fact that, in an attempt to foster friendly relations, the Prime Minister has invited the Prime Minister of Japan to visit Australia? If so, has the Prime Minister also considere’d inviting other Asian neighbours who were our allies in the last war? I refer to the Prime Minister of the Philippines, the Prime Minister of red China and. the Prime Minister of Russia. Has our Prime Minister asked them to visit Australia for the purpose of developing friendly relations?

Senator O’SULLIVAN:
Attorney-General · QUEENSLAND · LP

– The Prime Minister has not informed me.

page 1409

QUESTION

PETROL

Senator PEARSON:
SOUTH AUSTRALIA

– My question is directed to the Minister for National Development. Is it a fact that, following the Tariff Board’s inquiry some little time ago into the oil refining industry, petro] prices were reduced by Id. a gallon? If it is, does the Minister consider that this reduction fully met the position as established in the Tariff Board’s report? If not, does he consider that a further reduction is warranted? Is the half-penny a gallon increase, which was imposed at the time of the Suez crisis because of higher shipping freights, still being charged?

Senator SPOONER:
Minister for National Development · NEW SOUTH WALES · LP

– The honorable senator asks a question which has wide ramifications and is not easy to answer offhand. Petrol prices are governed not only by freight rates, but by stocks, and the movement of stocks, in Australia and so on. The effect of the new refineries on the price of petrol is governed by the purchase of crudes and the production of products other than motor spirit. The whole situation has, of course, been altered by the recent Tariff Board inquiry. I can only attempt to give a reasonable answer to a reasonable question and say that in my opinion, on the information available to me, the time is opportune for the oil companies to examine the selling prices of their various products with a view to further reducing those prices. That is my impression on the information available to me.

page 1410

QUESTION

INDUSTRIAL ACCIDENTS

Senator KENNELLY:
VICTORIA

– I ask the Minister representing the Minister for Labour and National Service whether he has seen, in the Tariff Board’s latest report, a statement generally supporting the view that accidents in industry cost Australia £20,000,000 annually. Has he taken particular notice of paragraph 43 which reads -

Many large and important industries have done excellent work in installation of safety measures, and in encouraging their work people to exercise greater care. There is still, however, a wide field for useful work in accident prevention, not only for the cost-saving benefits, but for the prevention of the sorrows of bereavement and of the pain and suffering of victims.

Senator COOPER:
CP

– The act clearly states that treatment shall be given at repatriation general hospitals for disabilities that are war-caused or which have been aggravated by war service. Persons who are in receipt of a 100 per cent, pension may enter hospital for non-war-caused disabilities or diseases provided they are not suffering from chronic or infectious or certain specified diseases. Persons in receipt of a special rate pension also may be treated for nonwarcaused disabilities. War widows and war widows’ children may be treated for disabilities that are not chronic or infectious, provided beds are vacant in a female ward. At the present time, every repatriation general hospital in Australia has female wards. For many years there were no female wards in Tasmania, with the result that war widows and. war widows’ children were not allowed admission to the repatriation hospital in that State. I do not know the facts of the specific case raised by the honorable senator, but if an accident happened and a repatriation hospital were the hospital closest to the scene of the accident, there is no doubt that the injured people would be admitted to the repatriation hospital. It might be a matter of life or death. They would be admitted to the repatriation hospital and would remain there until they were well enough to be transferred to another hospital. They would have no rights under the Repatriation Act; their admission would be only an act of grace or a humanitarian act. The repatriation hospital being the hospital nearest to the scene of the accident, they would be taken in and given treatment until they could be removed. I think that is all the information that I can give to the honorable senator.

Senator TANGNEY:

– I desire to seek further information from the Minister. If compensation or insurance were payable in respect of such an accident, would the repatriation hospital be recouped the expense incurred in treating the patient?

Senator COOPER:

– Yes. If a successful claim were made by the patient on an insurance company, the repatriation hospital would naturally have first call on any money paid to cover the cost of the treatment that had been given to the patient. The Repatriation Department would be entitled to recover the cost of the treatment from the insurance moneys paid to the individual.

page 1414

QUESTION

NOTE ISSUE

Senator AYLETT:

asked the Minister representing the Treasurer, upon notice -

What was the value of treasury-bills, if any, (a) issued by the Commonwealth Bank, and (b) redeemed, during each of the financial years 1951-52 to 1955-56 inclusive?
At the end of each of the same financial years, what was the value of (a) treasury-bills still owing to the Commonwealth Bank, and (b) dollars and sterling owing by Australia to overseas lenders?

Senator SPOONER:
LP

– The Treasurer has supplied the following information: -

1951-52- £45,000,000 (net issues); 1952-53- £71,720,000 (net issues); 1953-54- -£35,000,000 (net redemptions); 1954-55 - £30,000,00 (net redemptions); 1955-56- £5,000,000 (net issues). 2. (a) At 30th June- 1952, £153,280,000; 1953, £225,000,000; 1954, £190,000,000; 1955, £160,000,000; 1956, £165,000,000.
1. Public Debt of Australia redeemable in North America and the United Kingdom -

page 1414

GOVERNMENT BUSINESS

Precedence

Motion (by Senator O’Sullivan) agreed to -

That, unless otherwise ordered, Government business take precedence over general business after 8 p.m. this sitting.

page 1414

SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL 1957

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Spooner) read a first time.

Second Reading

Senator SPOONER (New South WalesMinister for National Development [11.40]. - I move -

That the bill be now read a second time.

This bill, in conjunction with the sales tax bills to be brought forward later, is designed to give effect to the Government’s Budget proposals for sales tax relief. The principal item of relief is the reduction to 8 per cent. of the tax on household furniture and equipment which have hitherto borne tax at the rate of 10 per cent. The reductions affect a wide range of household furniture and appliances, including domestic refrigerators, washing machines, radiators, crockery, cutlery and kitchen utensils and hardware. The rate of tax applicable to the complete range of handbags, travelling bags, attache cases, suitcases and comparable goods is being reduced from 25 per cent, to12½ per cent. A similar reduction will apply in respect of baskets of a kind used for private, personal, domestic or office purposes. Industry is being given some measure of relief by an exemption of industrial gases, and of cylinders in which those gases are marketed. Exemption is being granted also in respect of equipment for use on ships, other than goods of a kind ordinarily used for household purposes. Industrial equipment used in repairing or reconditioning ships or railway rolling-stock will be exempt, as also will fire extinguishers and other fire fighting equipment.

Another new exemption which should be of benefit to the fruit-growing industry is that relating to carbonated beverages containing not less than 5 per cent. pure fruit juice. Primary producers already enjoy exemption from sales tax in respect of a wide range of equipment and these exemptions are being extended to cover acetylene gas generators and associated equipment. The provision for exemption of preparations which have been recently evolved for the reduction of water evaporation in dams should also be of interest to primary producers. The new exemption of steel strapping of a kind used to secure goods for marketing or delivery will dispose of an anomaly in that this strapping is used in competition with wire and lashing which were extempted by earlier amendments of the law. The bill provides for a number of other amendments which are designed to remove anomalies and administrative difficulties and clarify certain provisions of the law.

Details of the amendments are set out in the explanatory statement which is being circulated for the information of honorable senators. The amendments are deemed to have commenced on 4th September, 1957, except where some earlier date is indicated in the circulated statement. The concessions involve an annual loss of revenue amounting to approximately £4,000,000, or £3,000,000 for the current financial year. I commend the bill to honorable senators.

Debate (on motion by Senator Armstrong) adjourned.

SALES TAX BILLS (Nos. 1 to 9) 1957.

Bills received from the House of Representatives.

Motion (by Senator Spooner) put -

That so much of the Standing Orders be suspended as would prevent the questions with regard to the several stages for the passage through the Senate of all or several of the Sales Tax Bills Nos. 1 to 9 being put in one motion, at each stage, and the consideration of all or several of such bills together in committee of the whole.

The PRESIDENT (Senator the Hon. Sir Alister McMullin). - There being an absolute majority of the whole number of senators present, and no dissentient voice, I. declare the question resolved in the affirmative.

Standing Orders suspended.

Bills (on motion by Senator Spooner) read a first and second time, and committed pro forma.

Progress reported.

page 1415

WOOL REALIZATION (DISTRIBUTION OF PROFITS) BILL 1957

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Paltridge) read a first time.

Second Reading

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– I move -

That the bill be now read a second time.

The purpose of this bill is to amend the Wool Realization (Distribution of Profits) Act 1948-1955, with a view to extending the period permitted by this act for the distribution of Joint Organization profits to woolgrowers. In addition, some minor amendments are proposed which are designed to facilitate the disposal of such profits which may remain unpaid at the completion of the distribution or are not used for the specific purpose for which they were set aside.

The desirability of the amendments will become clearer if I traverse briefly the events which led to their present introduction. It will be recalled that, in 1945, the Governments of the United Kingdom, Australia, New Zealand and South Africa formed an agency known as the Joint Organization to dispose of the wool accumulated in war-time. The disposals were completed by the end of 1951 and resulted in considerable profits, of which Australia’s share, together with interest, amounted to approximately £93,000,000.

When it became apparent that the disposal scheme would yield large profits, Parliament passed in 1948 the Wool Realization (Distribution of Profits) Act to give effect to the Government’s decision to distribute Australia’s share of the profits to wool-growers. Under the act, the Australian Wool Realization Commission, then the Australian subsidiary of the Joint Organization, was entrusted with the task of disbursing the profits to woolgrowers in proportion to the appraised value of wool submitted by each grower. Five interim distributions and one special distribution were made between 1949 and 1955, and by now the distribution of all the profits with the exception of about £2,500,000 has been effected. The question of the distribution of this amount has given rise to the present bill.

The outstanding sum of £2,500,000 comprises two main categories. First, there is an amount of approximately £300,000, which represents profits on wool submitted for war-time appraisement through selling brokers. These moneys have been returned to’ the commission by brokers because their owners could not be located through the post, or because they failed to present their distribution cheques for payment within the prescribed time. However, the commission has been able to locate many persons entitled to these moneys, and is of the opinion that further payments can be effected.

The balance of the outstanding amount, namely, £2,200,000, represents profits payable to those growers whose wool was submitted for war-time appraisement by dealers, as distinct from brokers. These moneys are commonly known as dealer wool profits, and their distribution was held up until recently due to the protracted litigation known as the Poulton case.

In this litigation, which commenced in 1949, a wool dealer named Poulton alleged that dealers and not growers were entitled to these profits. Rulings on the case were given in November, 1952, and December, 1953, by a single High Court judge and by the Full Court respectively. In both instances Poulton’s claims were dismissed. However, in view of the stated intention of the plaintiff to seek leave to appeal to the Privy Council, the distribution of the profits was further delayed. This stalemate existed until May, 1956, when the Government authorized the commission to proceed with the distribution. An application for leave to appeal to the Privy Council was subsequently made by Poulton, in July, 1956, but was refused by the High Court in October, 1956.

Under the present act the period for the distribution of Joint Organization profits expired on 17th March, 1957. The act further stipulates that any profits not distributed by that date are to be paid into the Wool Research Trust Fund. However, in view of the delay occasioned by the protracted Poulton litigation, it has not been possible for the commission to disburse the dealer wool profits by the date fixed in the act.

The commission has, to date, received 5,050 claims for dealer wool moneys, and has paid 3,570, amounting in all to £486,780. Approximately 1,480 claims remain to be dealt with, and further claims are still being received.

In these circumstances, the Government considers that the period governing the disbursement of the moneys should be extended so that every woolgrower whose entitlement can be established will receive his share of the profits. This view is also shared by the Australian Wool Realization Commission. Accordingly, provision is made, in the bill for the period tq be extended until 30th June, 1959, or such earlier date as may be determined. It is considered that this extension will enable the commission to distribute the dealer wool profits as far as possible. At the same time, the commission will also endeavour to locate the owners of the profits which have been returned to it by brokers.. Any moneys which the commission has been unable to distribute by 30th June, 1959, or the earlier determined date, will be paid into the Wool Research Trust Fund and used for the benefit of the wool industry generally.

I should also like to refer to two other amendments. The first relates to that provision of the present act which permits the commission to pay into court any profits, the ownership of which is in doubt. If such moneys subsequently remain unpaid for a period of three years, the act requires that they be repaid to the commission and regarded as unclaimed moneys. However, if any moneys are paid into court in the future, the three years allowed for the retention of such moneys will expire after the final proposed date for the disbursement of profits. For this reason, and as it is not envisaged that the commission will continue in existence for any length of time after the final date fixed for the distribution, provision is made in the bill for any moneys paid into court, but not paid out at the expiration of the three-year period, to be passed to the Treasurer for payment into the Wool Research Trust Fund.

The second amendment concerns moneys which have been set aside from the profits for the purpose of meeting unforeseen claims and other exigencies. The commission has retained an amount of £10,000 for this purpose. To date this reserve has not been drawn on but it is considered that it should be continued for the new extended period of distribution. Under the present act this amount, if not used for its original purpose, may be made available for distribution to all growers who submitted wool during the war-time scheme. However, in view of the delay caused by the Poulton litigation combined with the fact that the sum received by each woolgrower would be infinitesimally small, it would not be practicable to arrange such a distribution. Accordingly, the amendment provides that any moneys in the reserve not used for their original purpose by 30th June, 1959, or a date prior thereto, shall be paid into the Wool Research Trust Fund. The remaining amendments of the bill are of a consequential nature.

In concluding, I wish to say that the bill aims at enabling the distribution of the Joint Organization profits to woolgrowers to be completed as far as possible. The bill should thus satisfactorily close a memorable chapter in the history of the Australian wool industry.

I commend the bill to honorable senators.

Debate (on motion by Senator McKenna) adjourned.

page 1417

COMMONWEALTH AID ROADS (SPECIAL ASSISTANCE) BILL 1957

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Paltridge) read a first time.

Second Reading

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– I move -

That the bill be now read a second time.

The purpose of this bill is to provide for the appropriation of £3,000,000 in both 1957-58 and 1958-59 to supplement the payments already authorized under the Commonwealth Air Roads legislation. In 1949-50, when the present Commonwealth Government first took office, the Commonwealth Aid Roads allocations amounted to £9,367,000. At that time, the annual allocation for roads from the petrol tax consisted of 3d. per gallon in respect of imported petrol and of 2d. per gallon on locally refined petrol plus an amount of £3,000,000 for roads in rural areas. The petrol tax allocations for roads purposes have been increased by the present Govern’ ment on a number of occasions since 1949-50, and they now stand at 8d. per gallon in respect of both imported and locally refined petrol. As a result of these larger allocations and of the rise in petrol consumption, the Commonwealth Aid Roads allocations this year are expected to reach £34,000,000. This represents an increase of nearly £25,000,000, and is about three and a half times as much as was being provided when the present Government first took office eight years ago. Indeed, during this eight-year period, the Commonwealth will have provided under the Commonwealth Aid Roads legislation no less than £180,000,000, as compared with a total of £80,000,000 provided by successive Commonwealth governments during the preceding 24 years from the inception of the Federal Aid Roads scheme in 1926. Any government would have good reason to feel proud of this record.

Nevertheless, the Government has decided that some further assistance should now be given to the States for roads. The existing Commonwealth Aid Roads legislation will expire on 30th June, 1959, and the whole question of Commonwealth assistance for roads will therefore be reviewed before that date. In the meantime, however, it is proposed in the present bill to make available for roads an amount of £3,000,000 in each of the years 1957-58 and 1958-59. As honorable senators are aware, action has also been taken to impose a tax of ls. a gallon on automotive diesel oil consumed in road vehicles, thus ensuring that the operators of diesel-driven vehicles make some contribution towards the cost of building and maintaining the roads they use. The proceeds of that tax are estimated at £2,000,000 this financial year, and £3,000,000 in 1958-59.

As the present bill is essentially an interim measure, the Government felt that it would be preferable to leave the existing Commonwealth Aid Roads legislation intact and to seek authority for this additional payment in a separate bill. In adopting this procedure, the Government has sought to avoid anticipating the results of the review of the main legislation which will be made in due course.

As in the main legislation, the bill provides that the moneys granted to the States may be used either by the State governments or be passed on by them to their associated local authorities for expenditure on roads or for the purchase of roadmaking equipment. The small portion retained for roads serving Commonwealth purposes may be used by the Commonwealth for expenditure on roads in the Territories or on other roads in which the Commonwealth might have a special interest. I might add that it was considered unnecessary, in this interim measure, to repeat some of the detailed provisions in the main act relating to such matters as rural roads and works connected with transport.

Under the Commonwealth Aid Roads distribution formula, Tasmania receives 5 per cent. of the total grants, and the balance is distributed among the other States, threefifths in proportion to their population and two-fifths in proportion to their areas. When determining the distribution of this supplementary payment of £3,000,000, the Government considered various alternative methods which have been suggested in recent times to take account of factors additional to area and population. It has finally decided that, rather than adopt at this stage a new formula which might be taken as anticipating its review of the main legislation, the special grant of £3,000,000 should be distributed in the manner set out in the schedule to the bill. The question as to whether or not any change should be made in the distribution of the main Commonwealth Aid Roads grants is a matter which will be considered in due course.

It is estimated that, after taking account of this special assistance of £3,000,000, the total Commonwealth Aid Roads allocations in the current financial year will amount to £37,000,000, or nearly £5,000,000 more than last year. Further details are given in a table, and, with the concurrence of honorable senators, I incorporate it in “ Hansard “.

I commend the bill to honorable senators.

Debate (on motion by Senator Kennelly) adjourned.

page 1418

CIVIL AVIATION AGREEMENT BILL 1957

Second Reading

Debate resumed from 20th November (vide page 1407), on motion by Senator Paltridge -

That the bill be now read a second time.

Senator KENNELLY:
Victoria

.- When the Senate adjourned last evening I was about to deal with the Civil Aviation Agreement Act 1952. It is most interesting to recall the great benefits that accrued under that legislation, particularly to Australian National Airways Proprietary Limited. The route charges owing by A.N . A. were reduced by two-thirds and subsequent charges were reduced by 50 per cent. The legislation provided that those reduced charges should be frozen for fifteen years. It provided also that a loan of £3,000,000 should be made by the Commonwealth Bank to A.N.A. to enable it to purchase heavy aircraft, and the Government guaranteed loans up to £4,000,000. Those loans were repayable in fifteen years. One rather contentious provision was that half the airmails, then carried by Trans-Australia Airlines, had to be carried by A.N.A. These two operators were given equal access to all government business, which formerly had been more or less exclusive to T.A.A. It was further agreed that there should be a rationalization of air routes, time-tables, fares and freights on services where A.N.A. and T.A.A. were already in competition.

– For the life of me,, I cannot see any logic in that. Furthermore, the Government extended to A.N.A. the right of access to Commonwealth air traffic

I come now to the only new principle in the legislation before us. Tn 1952, T.A.A. did not want to have anything to do with rationalization, but, for some reason best known to the commission, it now subscribes to rationalization for the purpose, 1 believe, of having two major airlines in this country. But neither the Government nor the commission can say with certainty that there will not be more than two major airlines in Australia. Under the Constitution, it appears that any person who so desires may establish an airline, but he would probably have to come to some agreement with the Government in relation to the use of airport facilities. In view of the provisions of section 92 of the Constitution, the Government might find itself in trouble if it impeded the activities of a newcomer to the field.

Senator Henty:

– Would you put any “ dough “ in a new airline?

Senator KENNELLY:

– I would not put any “ dough “ in any private airline, but I do not want to be unfair to Mr. Ansett, whom I know fairly well, because he cannot be afforded an opportunity to answer here.

I should like to know how the Government reconciles what it is doing with the principle of free competition. Most supporters of the Government, particularly those who engage in business and professional activities, know that this bill will result in the very opposite of free competition. I remember what was said from the other side of the chamber at the time the Government was disposing of the whaling station in Western Australia and of its shareholding in Commonwealth Oil Refineries Limited. By the measure now before us, the Government is certainly departing from its policy of free competition.

Between 1952 and 1957 the Government did in fact help the private airline. In the 1956 legislation imposing additional taxation of 3d. a gallon on petrol, the airlines were exempted from this impost. At the time, the Government must have known that this provision would help A.N.A. more than

T.A.A., because T.A.A. was then acquiring Viscounts, which do not use petrol as fuel.

Senator Wright:

– In what year, did the honorable senator say?

Senator KENNELLY:

– The exemption was announced in the little Budget of March, 1956. To cap it all, the 1957-58 Budget contained a proposal to impose a tax on kerosene used in aircraft. I am amazed that the Government has not seen fit to bring on the debate on the Excise Tariff Bill 1957, which is still listed fairly well down on the business-paper. I admit that there might be some trouble in collecting the tax on diesel fuel. I have been worried about the way the cards have been juggled, if I may use that term in relation to the placing of business on the notice-paper. The relevant bill is at the bottom of the stack and we do not seem likely to see it for a while. That, however, is the concern of the Government and not of me.

I direct attention, however, to the fact that the Government has placed a tax on aviation kerosene when it knows that, of the thirteen aircraft in Australia which use that fuel, eleven are operated by T.A.A. and two by the Butler organization. The Government knows also that T.A.A. will operate two more aircraft which use aviation kerosene early in the new year. Apparently, for half of this financial year, T.A.A. will pay eleven-thirteenths of the tax on aviation kerosene. That seems a peculiar way to help the Government’s own airline.

When money was loaned to A.N.A. under the 1952 agreement, special provision was made for a proportion of the money to be spent on the purchase of Viscount aircraft or aeroplanes of other suitable types, lt cannot be said that A.N.A. did not know that such aircraft as Viscounts were available. For some reason best known to the management of A.N.A. - and I have no quarrel with it - the management decided to buy petrol driven aircraft knowing that the company would have to pay the petrol tax: and knowing also that the company was able, under the 1952 agreement, to buy aircraft using fuel on which it would not have to pay any tax. The company did not buy aircraft which use aviation kerosene.

It seems remarkable to me that this Government should take, for the moment, at least, eleven-thirteenths of the tax on aviation kerosene from its own airline. Supporters of the Government would not take such action against their own private businesses. I say with the greatest respect that they have a greater personal obligation to guard the money of others whether they are acting as a Government or in private firms. My greatest objection to the Government’s action in this connexion is that its members are not applying, as a Government, principles that they would apply to their own private business concerns. That is difficult to understand.

The tax on aviation kerosene is estimated to yield about £362,000 in this financial year. On that basis, T.A.A. will pay about £300,000 of that revenue. Supporters of the Government should know how much profit T.A.A. made last year. I have not the exact figures before me, but from memory I would say that this tax will reduce T.A.A.’s profit to about £1,000 or £1,600 a year. That means that T.A.A. will have to do what the Ansett-A.N.A. group is reported to be contemplating doing, namely, increase fares by 5 per cent, on 1st December. Supporters of this Government continually complain about our high cost structure and its effect upon the sale of our products overseas, but in this case, of their own volition, they are taking action which must automatically raise air fares.

Immediately T.A.A. goes into the “ red “, to use a colloquial expression, there may be some members of Parliament on the Government side who will want to implement the intention they have stated here, and get rid of the whole T.A.A. organization. It is much easier to get rid of a concern that is showing losses than one which is showing a profit. One wonders, therefore, what is the ultimate intention of this Government. I do not want to throw any bouquets at the Minister for Civil Aviation, but I will say that I would be quite content to leave the future of T.A.A. in his hands alone, but I am not so sure about others.

– Tt was not that we were placing great or little reliance on them. All that we were saying was that the statements were made. It was up to Government supporters to refute them, because they were pretty strong statements. If Government supporters had the answer to them, they woud have put their answers on the table. They would have said, “ This newspaper is one of our erstwhile friends, lt has fallen away from us a little, but we hope to get it back at a time that really counts. It is palpably wrong now because we have answered these statements a, b and c.” But time is running on.

– What I understood Senator Wood to say was that there had been less occasion to have a casual overhaul of the engines of A.N.A.- aircraft than of those of other aircraft. He did not suggest that they did not carry out the periodical routine overhauls.

Senator KENNELLY:

– If that is so, I Stand corrected. I have no desire to be other than fair. I was delighted that Senator Wood did not speak in the same strain as that in which he spoke in this chamber on an earlier occasion. 1 should like some information from the Minister in regard to rationalization. As the ordinary person understands the proposal, it will apply to the two main operators, Ansett-A.N.A. and T.A.A., Mr. Ansett having given his word that the terms of the agreement will apply to the new organization. Am 1 right in suggesting that there will be more or less a rationalization of the services of both organizations? To the mind of the ordinary person, that would mean that certain routes, certain timetables and certain fares will be prescribed, and that each organization will agree to operate certain aircraft on a certain route whether it be on a daily, weekly or other basis. If that is to be the position, it will mean a division of the passengers between the two airlines. From my reading of the T.A.A. reports, it seems that the present members of the Australian National Airlines Commission now agree to that proposal, although they disagreed wilh it in 1952.

What will happen to intra-state routes, or those routes on which T.A.A. is not permitted to fly because of the provisions of the Constitution? As the Leader of the Opposition said, in Queensland T.A.A. is in the same position as any other operators.

That arrangement was agreed to by the late Mr. Hanlon, as the Premier of Queensland, before the passing of the 1945 act. The 1945 act provided that any State which desired to give to T.A.A. the right to fly on intra-state routes would pass legislation to that effect. No doubt the Commonwealth was obliged to pass complementary legislation. Tasmania has provided intra-state facilities for some years, but the Commonwealth has not passed complementary legislation.

I am concerned particularly about the Butler services. We all have read in the press about what is happening in regard to the Butler organization. It seems that within a very short space of time that organization will be drawn into the Ansett-A.N.A. company. A person who lives in Bathurst and wants to go to Melbourne usually books out of Bathurst on a Butler aircraft. Although that person has a freedom of choice when he travels on the interstate route, no one can say that there is competition on the route from Bathurst to Sydney.

Sitting suspended from 12.46 to 2.15 p.m.

Senator KENNELLY:

– Prior to the suspension of the sitting, I was speaking on the rationalization agreement. As far as T.A.A. is concerned, the agreement will apply only, and can apply only, to interstate traffic. If this agreement is to succeed, it is the Government’s responsibility to make every effort to induce those States that have not yet given permission to T.A.A. to operate intra-state to pass legislation giving that permission. If T.A.A. desires to operate intra-state, it should be given the opportunity to do so. As I have said before, the responsibility rests upon this Government immediately to introduce complementary legislation, if that is necessary, to give T.A.A. the right to operate intra-state in Tasmania, in view of the Tasmanian act that was passed after this Parliament passed its 1945 act. If the Government were to do that, from my point of view it could then justifiably say, “The Australian National Airlines Commission desires rationalization; we are attempting to cover all avenues “.

The “ Airlines Guide “ sets out certain routes on which T.A.A. cannot operate. Those routes include, in Victoria, MelbourneHamilton, Melbourne-Mount Gambier - Adelaide and Melbourne - Mildura-

Deniliquin-Hay-Griffith-Narrandera. There are also a number of Butler Air Transport routes in New South Wales, on which T.A.A. cannot operate. If the Government desires to have rationalization, there should not be only a cutting-up of traffic on the main routes. The present arrangement is one-sided. It provides for a sharing of passenger traffic on main trunk routes, but says nothing about freight traffic. Naturally, the bulk of the freight traffic will remain with the private airlines because of the people who, no doubt, will still have some interest in the private airlines. The records of the Department of Civil Aviation show that whilst T.A.A. is well ahead as far as the carriage of passengers is concerned, it is well down as regards the carriage of freight. That, of course, is quite understandable.

– We went to America but-

Senator HENTY:

– Of course you did. A.N.A. applied for dollars with which to buy aircraft, so that it could maintain a service and give the demanding public the seats that they needed. As a major airline, it was entitled to those dollars, but the dollars were refused.

– Of course, it did. It did not possess any landing leases. Honorable senators opposite know quite well that during the whole of the period during which Labour was in office it was frightened to attempt to force A.N.A. and Ansett to pay those charges. It knew what it was doing was illegal, or it would have tested the matter in the courts. The Government knew very well that the courts would show the charges to be out of order, yet they were allowed to accumulate year after year until the disputed debt amounted to £1,000,000. The government of the day was simply not game to do anything about it. I think that answers the suggestion that this money was really owed. It was, in reality, a disputed and illegal charge.

I want now to refer to a few of the discriminatory measures that were employed against A.N.A. as a result of the establishment of the government airline. They include the imposition of landing charges, and the withdrawal of the opportunity to carry airmail.’ In this matter, a peculiarly monopolistic degree of control was given to the government airline alone. Government passengers were sent on the government airline. The private airline had to submit to pay-roll and sales taxes, while the government airline paid neither. Every penny of sales tax that Australian National Airways paid went into the national purse, as did every penny of pay-roll tax paid by that airline. Honorable senators opposite talk about discrimination, yet they asked Australian National Airways to compete against an airline that paid neither pay-roll tax nor sales tax! Do honorable senators opposite suggest that there was any element of fairness in the discriminatory treatment they meted out to A.N.A. in an attempt to drive that airline from the Australian skies? These matters should be remembered; and when I heard the story told last night by honorable senators opposite, 1 thought it just as well that those who remember what took place then should recall it now an ti put it on record afresh for the benefit of honorable senators who have come here since those days, and so that the discrimination shown by the Labour party in carrying out its desires will not be forgotten.

Senator Toohey:

– Tell us about the plums you handed out to A.N.A.

Senator HENTY:

– I am working up to that. The honorable senator does not need to worry; I shall tell everything.

I come now to an interesting statement that was made last night by way of interjection; as honorable senators know, I do not believe in making interjections. When Senator Kennelly referred to what we had done to Trans-Australia Airlines under the 1952 agreement, Senator Courtice interjected, “ They sabotaged it “. Let us examine the facts, for, after all, the facts are what really tell the true story. We do not take much notice of all this propaganda emanating from honorable senators opposite; we look at the facts to learn what happened to Trans-Australia Airlines since we came into power in 1950. I repeat that I like to recall these things because it is interesting to note what did happen.

Trans-Australia Airlines has never shown a loss in the years during which we have been the Government. That airline has paid pay-roll tax and all the other taxes that private airlines have paid, and has made a profit. I repeat that it has never shown a loss since we have been in government. The reason is that once we obtained control of the airline we put it on a proper and fair competitive basis. We had it put its house in order. Honorable senators may recall that many times in this chamber I spoke of what I regarded as the falsity of the balance-sheets of Trans-Australia Airlines in the early days. All suggestion of falsity has been removed now. The last four or five balance-sheets have been in perfectly clear and proper form; and honorable senators have heard no complaints from me since those balance-sheets were put in proper form to show the true position of the airline.

Trans-Australia Airlines now has an accumulated surplus over expenditure of £971,391. That amount has been accumulated only in the last six years, during the period we have been in office. In the first year, the surplus was, in round figures, £136,000; in the second year it was £14,000; in the third year £221,000; in the .fourth year £302,000; and in the next year it was £308,000. And this is sabotage! This is the way this Government has sabotaged this airline! We have actually built up for that airline an accumulated profit of nearly £1,000,000! If that is sabotage, then I wish somebody would sabotage me, for I could do with a bit of that type of sabotage. It is idle to suggest that we set out to sabotage an airline to which we have accorded fair and equitable treatment and which, during the time we have been in office, has been able to build up substantial reserves whereas under the Labour Government it was able to show a profit in only two years. All these matters should be kept in mind.

I now refer the Senate to a recent statement by the chairman of A.N.A., Mr. Haddy, who said that the foundations of the great private airlines had been whiteanted by the governments of earlier days and had never been given an opportunity to recover. That is why we introduced the competitive airline system to extend over fifteen years, and which has enabled a properly balanced air service to be established.

Senator McKenna said that we took half the business - passengers and mails - from Trans-Australia Airlines. He is as entitled to his form of expression as I am to mine, and I suggest that we returned half the stolen goods to the previous owners.

Senator Toohey:

– Only half?

Senator HENTY:

– Yes. We took only halE; we distributed them equally between the two airlines. We put both airlines on a proper taxation basis and each has stood up to the competition since. We now have a better competitive airline system than we have had for some time. 1 was interested to read in this morning’s press the statement by the chairman of the Australian National Airlines Commission which operates Trans-Australia Airlines that Australia was entering into a period of stabilized competitive airlines. Stabilization is of paramount importance in this airline business. I think we are all agreed, too, that the safety of the passengers in Australia must be our prime consideration, that we must always work to achieve absolute safety for the passengers. This cannot be done while we have cut-throat competition between major airlines.

– I pass now to the proposed new agreement because I think it redounds to the credit of my colleague, the Minister for Civil Aviation (Senator Paltridge). I believe that we are now entering a period when we shall see further great developments in the airline business in Australia. It is not an easy business to conduct; in fact, it is a most difficult business. Its development will call for great skill and great imagination, and I pay tribute to the Minister for his initial work in straightening out difficulties that had arisen over the last year or so, and for what he has done to carry out the Government’s policy of maintaining a sound competitive airline system in Australia.

Honorable senators opposite asked, quite fairly, “ How was it competitive? “ The competition lay, most of all, in the service. The employees of both A.N.A. and T.A.A. are as keen as mustard to fight one another in giving service to the public. If the Opposition had had its way and developed a government monopoly, as it aimed to do when it was in office, and there had been only one airline, owned by the Government - heaven forbid that that should ever come about - we would have lacked the service, drive and energy that are obvious now in both the major airlines, and that my colleague has set out to perpetuate in the agreement which we have before us.

In civil aviation in Australia, there are four features of which we can be proud. We have the greatest overseas airline in the world in Qantas Empire Airways Limited, the shares of which are owned by the Government. That organization is one of the greatest examples of the blending of the genius and drive of private enterprise management with government capital. Qantas gives a world-wide service, and it can compete with any airline in the world. At its head is that great man of private enterprise, Sir Hudson Fysh, always driving it forward with the aid of government capital.

That airline is a tremendous success. It started as a private enterprise organization, in Queensland, and later was purchased by the Chifley Government. Seeing the writing on the wall, and knowing the Chifley Government’s determination to push all private airlines out of business, the company decided to sell out before it was pushed out. I remind the Senate of what happened to the poor boys who were conducting a service from Townsville to Mount Isa. Three good returned airmen were carrying on a good service. What happened? Along came T.A.A., and conducted fights on the same days as they did. No new service was provided. The two organizations were making flights at almost ‘the same times, and the private organization was being driven out of the air, until A.N.A. assisted it to carry on. What new developmental work was done by driving three lads, returned airmen, out of the air between Townsville and Mount Isa? That is an example of the sort of thing that went on throughout Australia.

The second feature of which we can be proud is the Ansett airline. It is a great airline, and will become one of the major airlines of the world. It gives a service of which we Australians can be proud. The third feature is T.A.A., and I am quite prepared to give full credit to it for the services that it has developed. It had the advantage of the genius of that great businessman, Mr. Coles, who instilled into the employees a desire to give service. Some of the employees of T.A.A. are so keen that one would think that they owned the airline themselves. I pay a great tribute to them. The airline is something of which we can be proud.

The fourth feature of which we can be proud is our Department of Civil Aviation. We all know what it has done to make the safety record of our airlines one which cannot be bettered anywhere in the world. I am sure that everybody in this chamber wishes to see the Department of Civil Aviation continue to bring to the Australian air services all the modern safety devices and all the latest developments which such a department can bring only when it is headed by keen and enthusiastic people who wish to give service to all airlines, irrespective of who controls them.

There is one other point which I would like to mention before I sit down, because it is peculiarly a matter within the jurisdiction of my department. Senator McKenna referred to the fact that although we lifted the 10 per cent, primage duty from aviation spirit, we did not lift the 10 per cent, primage duty from aviation kerosene. If I interpreted his remarks correctly, he was suggesting that in that matter there was discrimination on the part of the Government against T.A.A. In fact, we had a Tariff Board report on the importation of aviation spirit and its manufacture in Australia. At that time, the protective tariff was lid. a gallon and there was a 10 per cent, primage duty, which amounted to 2d. a gallon. The Tariff Board recommended that locally manufactured aviation spirit be protected against imported aviation spirit to the extent of Hd. a gallon. Because of that recommendation, this Government abolished the 10 per cent, primage on imported spirit, and so established a difference of lid. There was no protective customs duty on imported turbine kerosene. It attracted only a primage charge of 10 per cent., and that continues to apply to-day. Of particular interest, I think, is the fact that almost all of the kerosene supplied for aircraft is locally manufactured and, therefore, attracts no primage at all. There is no discrimination in this matter against any airline. Those are a few facts that I want to place on record so that when in the future anybody is studying the opinions expressed in the Senate on this matter-

Senator Grant:

– You have been giving us your opinion on it for years.

Senator HENTY:

– Yes, and 1 will do so for as long as I can, because I think that honorable senators opposite are the greatest band of discriminators that I have ever met. While we have the present set-up, we will make progress. 1 read in the press to-day a statement by Mr. McDonald, the chairman of the Australian National Airlines Commission - I noticed that Dr. Evatt did not agree with it - that we are entering a period of stability in civil aviation. I believe that that is something which all of us in this chamber would want. We hope that both of the major airlines will continue to prosper and make profits, because profits are necessary for the development of these airlines so that they may give greater service to the people of Australia.

Senator BENN:
Queensland

– It appears that this debate, which has been in progress for approximately five hours, hinges upon the question of whether private enterprise or public enterprise should supply the airline services in the Commonwealth. The supporters of the Government who have spoken so far have put forward everything that is favorable to the continued operation of private enterprise in the field of airlines. If any honorable senators on the Opposition side have put forth slightly, or in a modified way, reasons why public enterprise should have, shall I say, a monopoly of the air services of the Commonwealth, just to differ from them I will put forward something, shall I say, dispassionately - entirely non-politically.

In a way, I thought it was a shame that Senator Henty had anything at all to say on this matter, because, up to the time he spoke, the debate CoUld have been described as a neck-and-neck contest. Goodness me, Senator Henty gave a very pathetic story about the growth and demise of A.N.A. It only remains for that concern to be buried and then we will be free to forget all about it.

I shall not waste my time in dealing with other matters that the Minister mentioned, although I want to nail one or two points that he did not make very clear.

I notice that clause 4 of the 1952 agreement refers to the payment of £337,717 6s. by A.N.A. to the Commonwealth. In all humility, I ask Senator Henty why that matter was included in clause 4 of the agreement. I hope that he will not tell me that a company conducted on strict business lines over the years agreed to pay that amount of money to the Commonwealth for nothing - merely as a goodwill gesture! I do not believe that, and I will not believe it. I trust that the Minister will offer some explanation of this matter. I shall again refer to it at a later stage of my remarks.

I was interested to hear what Senator Henty said about the four main factors in the air services of the Commonwealth, with some of which I agree wholeheartedly. I endorse everything he said about Qantas, having had an opportunity to sample the service that it provides. I am not in a position to compare Qantas with other air services operating throughout the world, but I should say that the standard of meals provided by Qantas is equal to that of State banquets. I do not think that any airline could provide better accommodation generally than is provided by Qantas. If it is necessary for me to pay a tribute to the present Minister for Civil Aviation (Senator Paltridge) for the way in which the Qantas air service is conducted, I freely pay that tribute to him.

I have had an opportunity of comparing the air services of the Commonwealth with those of the United States of America, and I should like to say, briefly, that Australia has nothing whatever to learn from the United States in this connexion. I found that the seating accommodation on the American airlines was too cramped - too many seats were installed in each aircraft - and that generally the service was in no way comparable to the service provided by the airlines - including A.N.A. - in Australia.

In America, the airline companies do not provide transport for passengers between the city offices and the airports; the passengers must provide their own transport. Of course, America is a land of private enterprise! Let us say that 32 passengers were booked for a certain flight. Each would have to arrange his own conveyance to the airport at a cost equivalent to about £10 Australian.

Senator O’Byrne:

– Plus 35 cents a case.

Senator BENN:

– If one desires to travel by air from New York to San Francisco, the cost of getting from New York City to ldlewild airport is the equivalent of about £10 Australian. In Australia, we have a system that was copied probably from a European nation. 1 earnestly hope that it will always continue.

Having said that, and still speaking dispassionately, 1 point out that but for the activities of public enterprise, not one privately owned aircraft in Australia could operate. In referring to public enterprise, 1 make it clear that I mean” the governmental services in the Commonwealth. In order to illustrate my point, I need only say that a reference to the civil works programme that was submitted to us when the Estimates were recently under discussion shows that last year £12,000,000 was expended on works for the Department of Civil Aviation which were not completed. In this financial year, £3,500,000 has been provided to complete those projects. The amount of £15,000,000 has been spent on aerodromes and buildings that are used by the air services. How could any private airline company operate unless this vast amount had been spent by the Commonwealth on airport facilities over the years? Up to the present time, an amount of £10,000,000 has been expended on Mascot aerodrome in Sydney, lt would not be possible for Butler airlines or A.N.A. to carry out even a single flight if the Commonwealth had not expended that large sum of money on the airport and its facilities.

When we speak about private airlines providing the service that is required in a country having a population of approximately 10,000,000 people, I point out that it would be beyond the capacity of private enterprise to maintain the airports and facilities necessary to enable the air services to continue. I am not guessing now because I have copied these figures from the financial records that have been submitted to this Parliament.

Expenditure last year for the maintenance and operation of civil aviation facilities was £4,671,833. The meteorological services cost £583,146. The total for the two - I shall be precise here - was £5,254,979. No honorable senator on the

Government side can tell me that A.N.A., the major private airline service in Australia, could meet that expenditure. Who provided the funds? They came out of Consolidated Revenue supplied by the people of the Commonwealth. That is public enterprise for you! The people of Australia provided the aerodromes, the buildings on them and all the facilities for flights to be made. If the people of the Commonwealth have provided these things, surely they must have some say in conducting air services. Surely they should be allowed the privilege of conducting their own air service if they have to pay taxes to provide the facilities for flights to be made. As an individual, I have no strong objection to private companies. I have never hesitated to use whatever air service suited my convenience. If I wanted to proceed from one place to another and arrive somewhere at a certain hour, I have used the air service that suited me, so I am not speaking with tumours in my eyes when I speak about this matter. I do say that A.N.A. could not have functioned over the past ten years but for public enterprise.

Perhaps I could give an analogy with what honorable senators on the Government side are asking to be done when they seek, not a continuation of the agreement that was made in 1952, but its perpetuation. When the Labour Government was in office, it began the Snowy Mountains hydro-electric project. After it had started the work, it established a commission and gave all powers for the construction of the project to that commission. Only a year or two ago, I had the pleasure of attending the opening of the Guthega project. It is a hydro-electric power scheme. The electricity is generated there and it is now being sold to the Electricity Commission of New South Wales. I believe that the profit that was made last year amounted to approximately £500,000. If supporters of the Government are logical, and if they are going to be consistent in their attitude regarding the future of A.N.A., they would sponsor a private company to control a Guthega hydro-electric station, build a tunnel, install transformers and power plant, erect hightension lines and reticulate the electricity to Sydney or elsewhere. Would they sponsor and encourage such competition against the Commonwealth project? There you have public enterprise doing a job efficiently. If

Government supporters are logical, surely they would agree that the proposition I have made is a fair one.

Senator Gorton:

– What harm would it do if private companies took over?

Senator BENN:

– The work is being done adequately and efficiently now. Why try to improve on it? Perhaps I could take the analogy further. In view of the proposition that supporters of the Government are advocating regarding A.N.A. and the AnsettA.N.A. group, I should think that honorable senators opposite would encourage a private company to construct diesel-electric engines, obtain rolling-stock and run the Commonwealth railways as a private concern. That proposition is too absurd to countenance for a second. But that is what Government supporters are advocating regarding the private airlines when they support a continuation of the scheme that has operated for the past few years. It is just the same thing.

The other night, I heard some comment about the train service between Canberra and Sydney. I have travelled on that service, and I have always found it satisfactory. It is a good service, and those who would say otherwise have not sampled the railway services through the length and breadth of Australia. The service that exists between Canberra and Sydney would compare with the best service in Queensland.

Senator Wade:

– That is not a standard.

Senator BENN:

– I said when I started my speech that I would be dispassionate about these things. Victoria is a closely settled State. It is only a cabbage patch compared with a big State like Queensland. I would say that the best train services in Victoria compare favorably with the train services anywhere 1 have been in the world, including the United States of America.

I am now giving an illustration of transport and what is involved in it. From Brisbane to Cairns is a distance of about 1,000 miles. The train that travels from Brisbane to Cairns takes approximately 40 hours - two nights, a full day and part of a day. Now, because of T.A.A. operations, a person can fly from Brisbane to Cairns in approximately three hours. There is the difference. I mention that only to indicate where the real competition lies. The competition in relation to air services is not between air services competing for patronage, but between the State government railways, a few of the shipping companies and the air services. No person would travel from Brisbane to Cairns by rail if he could travel by air, and by the T.A.A. service in particular.

It is interesting to recall how T.A.A. was established in the first instance. It is also necessary, perhaps, to consider what power the Commonwealth Government has to conduct an airline. 1 shall quote now from the twenty-fourth report of the Public Accounts Committee. It investigated the affairs of the Department of Civil Aviation and covered many subjects. It had this to say about the power that the Government had first of all to establish an airline. The report of the committee states -

Following the decision of the High Court in the first Goya Henry case, in 1936, the Civil Aviation Board, which consisted of four members and a Secretary, was set up and was made responsible for regulating civil aviation. The Board continued to operate as a unit of the Defence Department until January, 1939, when it was abolished and the Department of Civil Aviation was established under the Minister for Civil Aviation. This is still the position. The Permanent Head of the Department is designated Director-General of Civil Aviation.

The report further states - and this is rather interesting -

No general power in respect of civil aviation has been conferred upon the Commonwealth. We were informed that its regulatory power varies in scope with the particular legislation affecting civil aviation. Thus -

The Commonwealth has full power to make laws with respect to air services within a Territory.

The Commonwealth has full power to make laws with respect to international services, by virtue of the overseas trade and commerce and external affairs powers and the assumption of extensive obligations under various civil aviation conventions.

The Commonwealth may make laws regarding interstate air services by virtue of its interstate trade and commerce power, but the exercise of this power is subject to section 92 of the Constitution.

In respect of intra-state air services, legal power is vested in the States and not in the Commonwealth. Each State has, however, provided by legislation that the Commonwealth Air Navigation Regulations as applicable to the Territories are to apply to air navigation within the State. 1 shall not read the next paragraph of the report in its entirety, but shall read a legal opinion that was given in this connexion. It is- . . r.o combination of State and Federal powers could eliminate the restriction which section 92 imposes. Until the recent transport case concluded, it had been thought that there was a reasonable possibility, on analogy with State transport licensing decisions, that the Commonwealth could, if the need arose, attempt to coordinate and rationalize interstate trade and commerce by denying licences for other than purely safety reasons. The airlines case did restrict the Director-General solely to the imposition of safety conditions. He was required to grant or refuse a licence, depending on whether he was satisfied with the safety of the operations. I think it is fairly clear that, from now on, the limited view that we have always taken of the Director-General’s powers to license interstate services must remain a permanent view. In other words, the Director-General is necessarily restricted to purely safety factors in granting or refusing interstate licences.

When the original agreement came before the Senate, the shareholders of A.N.A. were substantial companies that operated in the sea transport industry. I felt at the time that they were not sincerely engaged in the air transport business, and that their heart was not in air transport in the same way that it was in sea transport. I always had the opinion that they regarded shipping as being their principal business-, that A.N.A. was only an experiment, that it was conducted merely as an adjunct to their sea transport business, and that if the agreement proved to be all right for them all would be well but that if it did not everything would collapse. I was one of many members of the community who was not the slightest bit surprised when A.N.A. sought to establish a holding company so that its shares could be taken over, because I always felt that it was only an adventure on the part of the shipping companies. “Reference has been made to-day to competition. No one can convince me that the agreement under consideration will create competition. The prime purpose of the agreement is to stultify competition. I do not propose to examine the agreement in detail, because other speakers spent much time yesterday and this morning dealing with the terms of it. The present agreement re-enacts the purposes of the old agreement and allows Ansett-A.N.A. to take over the financial obligations that were those of A.N.A. a short time ago.

Reference has been made to the fact that T.A.A. is a government-owned airline. It is not the only air service in which the Commonwealth Government is interested. The Government is also interested in two others, Qantas Empire Airways Limited, which has been mentioned, and Tasman Empire Airways Limited. I think it is generally known that Tasman Empire Airways Limited is operated jointly by the New Zealand Government and the Australian Government. We heard, also, a good deal about the profits that have been made by T.A.A. over the last few years, and about the losses that were made, in its early days. Every one knows that some businesses cannot escape making losses when they are first launched, and an airline service is a business of that type. Newspapers, too, always incur losses during the first two or three years of their lives. That is an experience they cannot escape. But the business principles upon which T.A.A. was founded were such that after a few years of operation, the airline was assured of making satisfactory profits.

– After spending millions of pounds upon aerodromes and runways, surely the Government is not going to change its policy to one of non-ownership. A few months ago I visited Darwin and saw the runway that is being laid down there at a cost of several million pounds to the Commonwealth Government. I have a fair idea just how costly it is to lay down a runway. I am sorry that all honorable senators did not have an opportunity to visit Darwin to see what is being done by the Air Force in the construction of a new runway so that jet planes can be handled at the aerodrome there. Millions of pounds are also being spent in Brisbane, Sydney and other capital cities, as well as in other towns. Over the years the Government has encouraged local authorities to construct aerodromes, with the object, at some later date, of taking them over. That information was given on oath. I know of one local authority that borrowed the sum of £30,000 to establish an aerodrome. It constructed the aerodrome with loan funds, on the understanding that the Commonwealth Government would later take it over, but the local authority is still waiting for that to happen. I have found, from an investigation of this matter, that the Government has no consistent policy. The aerodrome I have just mentioned is at Innisfail in north Queensland. There is one at Casino, in northern New South Wales, which was actually constructed at the request of the Department of Civil Aviation.

The Government is doing all it possibly can to stifle the operations of T.A.A. Honorable senators opposite are not secretly wishing for, but openly advocating, a policy which will entirely destroy T.A.A. I can imagine what kind of festivity would mark the attainment of their objective. Invitations will be sent to almost everybody. There will be a state banquet and some of the Government senators will be missing for a day or two. They will be throwing their hats in the air for a week or two afterwards, saying, “ At last we have destroyed T.A.A. We have been loyal to the principles of the Liberal party “.

Senator WRIGHT:
Tasmania

.- It is somewhat of a reproach to a responsible House of Parliament to be treated to a display of hypnotism such as Senator Benn has just given. I feel that I should make the observation that when he asserts, in support of an argument that he is putting forward, that the statement on which the argument is based was given on oath, knowing, as we do, that he is a member of the Public Accounts Committee, the inference we can draw is that the evidence to which he is referring was given before that committee. I make that observation and say emphatically that if he continues with that procedure he will destroy a most useful agency of this Parliament. It is of the utmost importance that a committee of that sort should have the full confidence of every member, irrespective of party, and, therefore, that evidence collected by the committee should not be made use of in parliamentary debates, except when the deliberations of the committee have been submitted to the Parliament by way of report.

The bill which is engaging the attention of the Senate was initiated in this chamber. Therefore, honorable senators have the responsibility of passing first judgment on a bill which is of profound political significance. It involves political principles, the solution of which neither side of this chamber has yet provided. I want, by way of developing my theme, to go back as far as 1945 and 1946, when the government of the day announced that it would acquire A.N.A. Its constitutional right to do so was challenged by the company. The High Court subsequently interpreted an important section of our Constitution as guaranteeing to interstate trade and commerce absolute freedom. This interpretation has been of great force ever since.

Senator Cameron:

– What does the honorable senator mean by “ absolute “?

Senator WRIGHT:

– The word might also be used to describe the dynamism of Senator Cameron, which has remained constant from the Boer War until now. I wish that there were more such purposeful people around. That interpretation preserved the right of every one to engage in interstate commerce. It was held to be impossible to prohibit such free trade, or to confiscate any company’s undertaking so engaged, by any executive or legislative action. It was a tremendously important principle, and when the Labour government sought to confiscate the private banks, that was the rock on which it perished.

– In the ordinary courts of the land any such attempt to pass oneself off under a name that had acquired goodwill by another’s efforts and experience would be regarded as business fraud. I am surprised that that fraud has been permitted to continue. Secondly, T.A.A. cut fares. Thirdly, it received favoured treatment in regard to dollar exchange. Fourthly, it paid no interest to what this morning were most misleadingly described as its “ shareholders “. I intend that term to be placed in inverted commas as a quotation from Senator Kennelly’s speech. When the Treasury contributes capital it gives what it has already taken away from its taxpayers. So the people are not shareholders in T.A.A. at all. That instrumentality was established with capital out of revenue, and was not asked to pay interest upon that sum. It was freed of the obligation to pay income tax and, up to 1952, sales tax also. I hope that the Minister will correct me if I am wrong in saying thai it has always contributed pay-roll tax. Lastly, T.A.A. possessed enormous advantages by reason of its association with the Government. Some of those advantages were derived from the fair implementation of policy, but others sprang from a very dishonorable use of government power.

After three years, T.A.A. succeeded in converting its loss to a small profit of £11,000. Thereafter, it remained a profitable undertaking, earning at the rate of £200,000 or £300,000 a year. I wish to say quite frankly that, so far as my acquaintance with it affords a basis of judgment, the standard and quality of T.A.A. service is an example to any business undertaking in the country. T.A.A.’s efficiency and enterprise prompt no criticism from me. In this way, T.A.A. developed as a business organization providing a service to the people, and in 1949, when the Prime Minister enunciated his election policy, he made specific reference to the airlines position. I ask honorable senators opposite not to seek to misrepresent the actual terms of that policy speech on this subject when they speak of us as unqualified supporters of free enterprise. The Prime Minister said -

As for the government airlines which were designed by the Chifley Government to be monopolies and failed to be so only because of a High Court decision, we shall put them on to a true competitive basis with no preference either in cheap capital or dollar expenditures.

Due to the growth of this Government enterprise, and the continued existence of the pioneer private enterprise airline, a political problem of almost unique proportions was presented. The solution offered in 1952 was the Civil Aviation Agreement of that year, on which, I have just reminded myself, I remained silent, although, from the fact that I was a dissentient in one division promoted by the government at that time, there is a small piece ot evidence of my anxiety as to the fruitfulness of that agreement. My colleagues know that I had real anxiety with regard to this agreement in the course of the original debate and on this supplementary agreement. After some thought extending over five years, I am more concerned than ever as to the appropriateness of this solution. I am not prepared to reject this bill. The Government has entered into this agreement, and I do not pit my opinion against that of the Government. I am supporting the bill, but with considerable disquiet.

The 1952 agreement was said to be foi the purpose of ensuring the continued existence of the company, as well as the commission, as an operator of airline services within Australia, for the maintenance of competition between the commission and the company and the efficient and economical operation of air services within Australia. On paper, those purposes sound very well but, from the point of view of practical achievement, and in the light of experience in the interval, I think we may well be permitted to have some second thoughts.

The first point that strikes one is that an airline company, A.N.A., was then sick at heart, needing guarantees from the Government to finance its capital replacements of aircraft, disputing to the point of maintaining its existence a £1,000,000 claim for air route charges that had accumulated over a number of years. It was a private enterprise firm, and its accounts were not public, but the Minister did say in his second-reading speech in 1952 that its loss for 1949-50 was £216,682 and £10,221 for 1950-51. Judging by the default in June, 1957, I think it is a pretty fair inference, although we have not actual access to its accounts, that the undertaking has been sickening from the financial point of view from 1952 to date. It may be that it has made some profit in one or two years, but I think a general assessment would defy denial that it has been sickening.

What should we do in 1957? We have a situation in which an efficient government enterprise is maintaining its business on a basis of giving satisfaction to the travelling public and bearing imposts, as if it were a private undertaking, in the form of income tax, sales tax, pay-roll tax and interest on capital. To destroy an enterprise of that sort would be considered an act requiring very great justification. On the other hand, it would require the heart of a vandal and a completely irresponsible political mountebank to destroy the pioneer private enterprise unit whose history was so grandly expressed by the Minister for Customs and Excise (Senator Henty) this afternoon. I shall not stay to repeat that, but it was the pioneer of the risks of civil aviation in this country, a department of communication that has done more than any other to knit Australia together as one economic unit, not only with its capital, but with its life blood. Every honorable senator from Tasmania will remember proudly the late Captain V. C. Holyman, who went down in one of the earliest flights across Bass Strait. For those reasons, I say that this promotes a problem of the first magnitude.

Let us see how it is dealt with. First of all, be it noted that the Trans-Australia Airlines organization was not made a party to the 1952 agreement. Secondly, let it be noted that in section 5 of that agreement, by the compulsory force of the legislation of this Parliament, the commission was required to do all the things that the agreement required it to do.

I ask honorable senators to examine this question on the basis of the financial assistance that was given by way of government guarantee to A.N.A., amounting to £3,000,000, and up to £4,000,000 in some circumstances. If we turn to clause 4 of the schedule to the 1952 Civil Aviation Agreement, we find, first, a compromise on the air route charges. Then, in sub-clause (3) of clause 4, we find the Commonwealth undertaking that -

The air route charges charged to the Company by the Commonwealth shall not, subject to this clause, exceed one-half of the charges set forth in Air Navigation Order Part 99 dated the twentyseventh day of May one thousand nine hundred and fortynine, as amended on the first day of August of that year, unless and except to the extent that an increase becomes necessary because of the provision of additional or improved facilities and services or because of higher costs of maintaining and operating facilities and services.

Then we find that clause 7 provides for what is called the rationalization of services, having reference to routes, freights, timetables and fares. The arbiter of that provision was to be a former judge, and that function has been performed with distinction by Sir John Latham. The clause reads -

The Commission and the Company will each -
1. prior to purchasing or hiring an aircraft . . apply to the Chairman for a certificate of approval;
2. not purchase or hire any such aircraft without a certificate of approval of the Chairman.

It provides that any aircraft purchased otherwise are to be pooled.

I refer now to the provisions of clause 10. These are thought-provoking provisions, and propose a solution of a problem which 1 have not elsewhere seen proposed by the Government, the Parliament or the law courts. They plumb the very depths of jurisprudential consideration. Clause 10 provides -

The Commonwealth will not exercise any of its powers under or by virtue of an Act, including a power to make regulations, so as to discriminate against the Company.
The Commonwealth will during the continuance of this agreement accord to the Company substantially equal treatment with the Commission in relation to the grant of import licences and the allocation of airport facilities.

There we have, by agreement, an undertaking by the National Government - the nation - that it will fairly exercise its sovereign powers, whether by act of Parliament or regulation. That is the measure of the guaranteed equality and equity that A.N.A. acceded to by this agreement. I mention these matters, not because I am critical of them - I do not presume to be critical of them - but because to me they are imponderable.

Senator Vincent:

– Is that provision in the new agreement?

Senator WRIGHT:

– I shall come to that, if you will permit me. These provisions, as guarantees of the future field of operation of the private enterprise partner over the fifteen-year period of this agreement, should provoke the most intense examination by those who are dedicated to guaranteeing fairness and equity and to opposing the unfair use of governmental powers, whether in the collection of revenue or in the exercise of controls.

T.A.A. was not a party to that agreement, but section 5 of the act provided that T.A.A. should observe the provisions of the agreement. Clause 15 of the agreement provides -

The Commonwealth will introduce in the Parliament of the Commonwealth such legislation as is necessary to ensure that the Commission will do all such things as this agreement provides that the Commission will do.

We have there a problem which, to me, is imponderable. If it is clear to those who propound those provisions as a solution, I shall be a most attentive listener when they explain it.

We then come to the attitude of mind revealed to-day and yesterday by the Labour senators, who still seem to be dripping with the malice that was the cause of the fight wherein they were first defeated in their unfair implementation of their policy of socialization. Even after the failure of A.N.A. under the improvised arrangement of 1952, they seem to have lost none of their prejudice against A.N.A. It was even said that the proposed agreement is an attack upon T.A.A., in which there are 10,000,000 shareholders.

I want to say only that the espousal of the cause of public enterprises by socialist governments is a mere facade. Indeed, in some fields of the law, it would be properly classified as a false pretence. It gives rise to the structure of a business arrangement under which the political entrepreneurs can, not with money collected for the enterprise, but with money exacted from the people by taxation, step out into the field of business and obtain commercial power which they have never earned by work. They get it by the exercise of their parliamentary authority to levy taxes. It is proper to raise revenue for the purpose of government, but entirely improper to raise it for the purpose of using it to subjugate the very taxpayers from whom it is exacted. With those few brief words, I express my adamant rejection of the view that has been expressed on the Labour side of the chamber during this debate.

Senator O’Flaherty:

– It took you a long time to say that.

Senator WRIGHT:

-Not so long. It can be said in those terms in much less time than would be taken by the honorable senator who interjects with his repetitive way of speaking. We now come to the agreement that is immediately before us. T.A.A. is a party to this agreement. But there is no novation by this agreement of the 1952 agreement. T.A.A. does not adopt in their entirety the provisions of the 1952 arrangement. T.A.A. is a party to this agreement only to the extent of the terms of the agreement which adopt the rationalization provisions of clause 7 of the old agreement, but in this instance rationalization will be, not under the direct control of a chairman only, but primarily under the control of a three-man committee, comprising a repre.senative of the Minister, a representative of the commission and a representative of the company, with a right of appeal to the chairman. Apart from that, T.A.A. does not adopt the 1952 agreement. That is the first respect in which I see an opening in the wall of this edifice. When we remember the equal protection that is given by section 92 of the Constitution to government enterprise and private enterprise as interstate traders, it may be fruitful to remind ourselves of the extent to which T.A.A. is a party to the agreement.

Secondly, this agreement renews the guarantees of the loans that were made to T.A.A. Thirdly, it has something to say on waiving the June default. The Government and T.A.A. seem to have identical outlooks, if we read together the report of T.A.A. that was published yesterday and the Minister’s speech of last week, in which the Minister announced that the Government had reached the stage where it expressed the policy of maintaining competition by two, and two only, operators on the main routes. I shall be corrected if I am wrong. If there is any Minister whose contribution to the work of this chamber and this Parliament I greatly appreciate, it is the Minister in charge of this bill. I offer criticism only because it is the hallmark of the integrity and helpfulness of the Minister that he appreciates criticism of a constructive kind. I believe that it has been announced as government policy that competition should be confined to two main operators. It is only in the last two weeks that I have realized, for the first time, that that is the position.

What is there to lead us to believe that this supplementary agreement of 1957 will be any more productive of success than the 1952 agreement? I think it would be foolish to pass a final judgment on this matter, because, as has been pointed out by Senator Benn, in this Parliament we do not have access to the accounts of a private company. It might be proper at a future time to consider whether, on the occasion of a bill like this, a committee should be appointed to go into the matter for a week to inform itself on the position. I think even that would be a little invidious. For myself, I am prepared to rest upon the judgment of the Minister who, with his advisers, has doubtless scrutinized the accounts and brought judgment to the problem.

We, as mere members of the Parliament, have no factual knowledge of the present financial structure of this merged enterprise, Ansett-A.N.A., that would enable one to pass a judgment as to its prospects. But from the point of view of its political environment, assisted or embarrassed - whichever you like - by this agreement, and under a beneficent government having the experience and having to admit failure in the period from 1952 to 1957, what are the prospects of a continuance of the company with that beneficence or if that changes into a viciously hostile government? What safeguards are there? I just want to say that competition by two independent entities of this sort may be the solution. Under a coordinating committee such as this agreement provides, T would think that the absolute enforcement of the provisions of that agreement on the subject of rationalization would be difficult in a court of law. This, I remind the Senate, is an agreement that is intended to be justifiable in the courts. It is not an agreement such as the Japanese Trade Agreement which, Senator McKenna submitted on a former occasion, was legally enforceable by a court. I mention that because 1 say, quite advisedly, that this agreement is the type of agreement that is intended to be enforceable by a court; but in view of the vague terms in this supplementary agreement and in the 1952 agreement with regard to rationalization, it is difficult to specify that there is any precision in the terms and ambit of the protection that is guaranteed to private enterprise when it comes to the real test and the heat is turned on with the encouragement of a hostile government.

I was glad to be reminded by Senator Benn that Senator McCallum expressed the view in 1952 that the then agreement was an experiment, because, in the very few notes I made here this afternoon for my speech, 1 had concluded with one to the effect that “ this is a political experiment which, under a beneficent government, has the result perhaps of intensifying the sickness of the patient. The future is clouded with doubt. Under a hostile government, and with an unsympathetic medical attendant, the prospects do not excite me.”

Senator ARMSTRONG:
New South Wales

– Senator Wright finished on a note of gloom, but in view of our experience I think that was more than justified. I should like to deal with one or two matters that he mentioned. I shall not discuss in any detail the measure before the chamber, because both the Leader of the Opposition (Senator McKenna) and the Deputy Leader (Senator Kennelly) have already dealt with it in a most comprehensive manner. The things that excite me are rather those things that have been said in the debate since my leader and deputy leader spoke.

Senator Wright was very upset indeed that when the Government set up its airline, known as Trans-Australia Airlines, it was placed under the Australian National Airlines Commission. That, Senator Wright felt, was in the lowest category of business burglary. 1 should like at this point to say that Australian National Airways - A.N.A. as we now know it - had no right ever to take that name. A.N.A.’s was the fraud in the first place, because in parading that name the company suggested, first, that it was an Australian airline, and, secondly, a national airline, when, in fact, it was never either, except in the earliest stages. It was not Australian. Who owned it? It was owned by Holymans, the Adelaide Steamship Company Limited, Huddart Parker Limited, the Union Steamship Company Limited and the Orient Line. The P. & O. Company Limited is behind Holymans, behind the Union Steamship Company Limited and behind the Orient Line. So that, first, it was not an Australian company, and secondly, it was not a national company.

That brings me to this point: Too many names are paraded that should not be allowed to be used in that way. If the supporters of the Government want to fill in some idle hours, they should list the names that should not be used for private business purposes. I think that certain names, such as Anzac, which means somuch to Australia, have already been prohibited for use by private business - and rightly so. The same thing should happen in relation to the words “ Australian “ and “ Commonwealth “. It is completely wrong to convey the impression that the Government is behind a certain venture, as it was conveyed very strongly by this particular airline. Speaking from memory, I think that when British Empire Airways first started, it was a private company. When Imperial Airways first started and got the first contract to carry mails, at the time that Smithy was battling to get a start, it was a private company. I do not think that private companies are entitled to assume national names. The only airline in Australia that is entitled to use the name “ Australian National Airlines “ is the one for which the Government is responsible.

Senator Kendall:

– But when it started, A.N.A. was the only airline and it was serving the nation.

Senator ARMSTRONG:

– It was serving the shipping companies - the shareholders; what it did for Australia was a secondary consideration. Its history shows that.

When Senator Wood said last night that the Opposition hated A.N.A. it was obvious that he was in that certain state of mind that ascribes to the other what he himself is guilty of. It is obvious that Senator Wood hates T.A.A., and he considers that the Opposition hates A.N.A.

But look at the story of A.N.A. I mention, in passing, one of the unfortunate aspects we encounter when studying this matter. Even when the Government brought down the 1952 bill it could not produce to this Senate any set of books from A.N.A. It was primarily wrong for the Senate to have to consider a bill giving tremendous aid to A.N.A. and to vote on it when honorable senators had not seen a statement of the company’s assets. I do not know whether A.N.A. showed the figures privately to Cabinet. Even that could not be established, but certainly the figures were not shown to the Parliament.

– Yes, and A.N. A. finished up with 15 per cent, of the passenger traffic out of Canberra. Is there not something -radically wrong with an organization which will let itself be beaten for traffic to that extent. Government supporters can answer me if they are able to do so. Yet Mr. Haddy blamed everybody else for his troubles and laid no blame on his organization. I will not accept that.

Senator Wright:

– Is the traffic out of Canberra a proper test? My God! Is that the test?

Senator ARMSTRONG:

– I am used to silly interjections, but that would be the silliest I have heard. I have cited the Canberra figures as an indication of what happened throughout Australia. I just happen to have the figures for Canberra with me; Senator Wright can check the figures anywhere in Australia. Let us compare the load capacity utilized on the DC6 aircraft with that on the Viscount. On the Viscount about 85 per cent, of the capacity is used compared with between 40 per cent, and 50 per cent, for the DC6. Those are the things that have :put A.N.A. into trouble at a time when it had the .protection of the 1952 rationalization effort by the Government, so the company cannot blame the Government.

A.N.A. has blamed everybody else for its failure. It attacked the Treasurer, not -during the Labour government’s term of -office but during this Government’s regime, although frankly I do not know how much more this Government could have done for the company. Ansett-A.N.A. is providing a better service already although the organization has taken control only over the past month or so. When Senator Wood attacks everybody else - as Mr. Haddy also did - I, for one, will not take it.

In a small capital city, an amount of £42,000 was embezzled in an A.N.A. office. One of the auditors discovered it and pinned the thief who was dismissed. He went to gaol, and the manager was sacked. About six months later, the company brought the manager back as a traffic officer because nobody else could run the place. When he was asked about the defalcations and whether he knew that the man concerned had an office of his own around the corner where he spent most of the day, he replied, “ I did not know that “. A year or eighteen months ago, T.A.A. reached the stage where, because of the weakness of A.N.A.’s position, its own service started to slip back. Those of us who travelled by air in the days when A.N.A. had a monopoly remember the shocking service that was provided by that organization. When T.A.A. commenced operations, A.N.A. pulled up its socks and tried to give better service. But when A.N.A. had that monopoly, it was worse than is any government department, including even the famous Department of Trade, for pushing one around.

I would prefer not to refer to A.N.A. in this manner. As Senator Wright and all our other legal geniuses would say, demortuis nil nisi bonum. As there is no one here who can translate that phrase, honorable senators will not know what it means! It -means that one should not say too many bad things about a fellow who has gone, because he might be able to hurt one from where he is! I repeat -that I would have preferred not to discuss A.N.A. in this way, but after listening to the tirade by Senator Wood I felt that some one ought to rise and say that most of A!N.A.:’s troubles were due to its own fault.

When the buy-up was on between Ansett and A.N.A., I felt that if ‘it was true, as was :stated by A.N.A., .that it was .impossible to :compete and run at a profit the Governments energies .would be directed towards making -it -easier for that (organization to make a profit, because it is the policy of the Government to keep two airlines alive. But the first thing that the Government did was to cause T.A.A. and Butler’s to raise their fares because of an increase of the excise on kerosene. I have not worked out the figure, but I understand that the additional revenue to the Government will be approximately £300,000 per annum.

Senator McKenna:

– Approximately £400,000.

Senator ARMSTRONG:

– That extra cost must be spread over the people who travel on T.A.A. and Butler services. That is a peculiar way of trying to effect rationalization. I should have thought that, as A.N.A. had tried to prove that it could not carry on on the existing basis, help was needed. Therefore, I was rather amused when the Government decided to take from the airlines another £400,000 which, of course, must be paid for in the form of increased fares.

It has never been proved to my satisfaction (hat only two airlines should compete on the major routes. We have seen what has happened as the airlines have introduced better aircraft. We have seen the lift that has been given to the Butler organization following the introduction of Viscount aircraft on country air routes. I do not want to decry particular kinds of aircraft because I do not know a lot about the subject, but I should like to refer also to the Elizabethan aircraft. That is a petrol-driven aircraft which has been used a lot in Europe. It has a long range and can fly the Atlantic, and also has a large passenger carrying capacity. I think it carries about 40 passengers. It is only about 50 miles an hour faster than the DC3, but is much more comfortable. The Elizabethan has been well supported. When it is not on the run and it is necessary to use the old DC3 aircraft, passengers are quite disappointed. No one would have thought that T.A.A. could have got from the Viscount the loading it has got. The Viscount has gripped the imagination of the Australian travelling public. We have not by any means reached the limit of the use of aircraft by the Australian population. As more modern aircraft are introduced, particularly as we move further towards the use of the pure jet aircraft, I think there will be greatly increased support of air travel. Air travel has grown rapidly in the past, and I am sure that it will continue to do so.

I am quite certain that, if a strong enough competitor emerged, it would not be possible, under the Constitution, to prevent him from entering the field. T.A.A. has said that it does not particularly want rationalization, that it can carry on quite well without it. I do not know that Mr. Ansett wants too much of it, either. He is used to battling and fighting, and he will get the best out of his airline. I think he will worry T.A.A. a lot more than did A.N.A. I can recall that, when the 1952 rationalization bill; was introduced, men like Ansett, Butler and Sir Macpherson Robertson were completely ignored. They were just as much pioneers as were the Holymans, except that their organizations did not grow so big. They played quite an important part in building Australian airlines, but the Government introduced a rationalization bill that put them at a very grave disadvantage. Despite the introduction of that measure, Ansett was able to establish himself on the main capital routes. He did so, not only against the wishes of the Government, but also in the face of bitter opposition from A.N.A. and T.A.A. It will be recalled that the first tourist coach service that was established in Australia was provided by Ansett without the benefits of rationalization. In fact, he was chased and harassed as much as possible by the big companies.

I oppose the bill, as did Senators McKenna and Kennelly. It is a political experiment, as Senator Wright has said in 1957 and as Senator McCallum said in 1952. Whereas Senator McCallum was looking forward five years, Senator Wright is now looking backwards. As a matter of fact, Senator Wright has said that, even with a beneficent government in office, he still may attend a funeral, but that with a Labour government in office he feels certain that he will attend a funeral.

The Opposition is keen to see efficient air services in this country. We do not apologize for our efforts in 1945 to socialize the Australian air transport industry. We feel, as Senator Wood pointed out, that particularly in time of war Australia’s internal airlines become her front line of defence. .There were many reasons why

Labour should take the step that it took. A.N.A. had a monopoly in those days. That organization, like the steamship owners, could run a good race when it was not opposed. A.N.A. made profits when it could control and raise its fares.

The Opposition opposes the bill.

Senator McCALLUM:
New South Wales

– I must thank Senator Benn for referring to some words which I apparently used in 1952. He said that I had stated that I supported the bill as an interesting experiment. I support this measure as a still more interesting experiment. I must confess that in 1952 I had grave forebodings and felt that we had not heard the last of the matter. I rise now simply to put my own views before the Senate so that, if this matter comes up again, people will know where I stand. When certain little paragraphs appeared in the press, I wrote to the Minister for Civil Aviation and asked him not to make a certain decision. I discovered later that he had made up his mind and that my letter was unnecessary. He had done what I hoped he would do.

I wish to present a few general ideas on the attitude of the party of which I am a member towards this problem and the whole problem of government and private enterprise. It may be quite true that there are people supporting our party, both inside and outside the Parliament, who are doctrinaire individualists of the old school, who would trim government enterprises so that we got back, perhaps, to the conditions of the nineteenth century. But that is not the policy of the Liberal party. It never will be the policy of the Liberal party. Any attempt to make it the policy of the Liberal party would cause the party to disintegrate. Our policy has been clearly declared by the Prime Minister (Mr. Menzies) at every election since 1949. It is simply that in all business matters, in all supplying of the ordinary wants of the people, we prefer private enterprise, but we do not exclude government enterprise in banking, transport or in any of the great basic services to the community.

The doctrinaire individualist and the doctrinaire socialist, of whom we have some opposite - I do not accuse every honorable senator opposite of being in that school - are to-day equally anachronisms. I admit that at the age of sixteen years I believed some of the things that I hear proclaimed loudly from the opposite benches by men of 60 years and more, but I will “ not stretch the folly of my youth to be the shame of age “. I think a man can show no greater evidence of complete incapacity to sit in this chamber than to reiterate the old catch-phrases which have been proved wrong.

Senator Cameron:

– Private enterprise.

Senator McCALLUM:

– Private enterprise is essential to freedom, just as government services are essential to private enterprise. The person whose mind contains only a mixture of slogans and opinions which he is incapable of examining or changing should have no place in this chamber.

I accept this bill for two reasons, first, because I dread the possibility of a complete government monopoly of transport, of which I have had experience, and second, because I trust the capacity of the members of the present Cabinet, particularly the Minister in charge of this bill. I have read his speech, I have read the bill and I have listened to the debate. I have listened carefully to speakers from both sides of the chamber. I tried to glean anything I could from either side. I must support the bill because the alternative is the complete destruction of a great private enterprise and the setting up of a government monopoly. I know what has resulted from a government monopoly of transport. Every State has built up a monopoly, or almost a monopoly, of railway transport, and some States have monopolies of virtually every form of transport except motor transport.

I know the history of the railways of New South Wales. I know many of the men who have served their country in the higher ranks of the railway service, including engineers and even commissioners. I know that the railways of New South Wales have been efficient only when the State Government has chosen a commissioner and other high officers of outstanding merit and has refused to interfere with them.

Senator Reid:

– The railways have been efficient when they have been free from political interference. li

Senator McCALLUM:

– When my friend, Senator Reid, was in power and his colleague, Colonel Bruxner, was- Minister for Transport in. New South. Wales, we had the efficient state of- affairs to which I have referred. In those circumstances, the New South Wales Government Railways were highly efficient. But after almost seventeen, years under a Labour government they have become almost utterly inefficient. There are little spots of efficiency. I agree with Senator Benn, when he says that the train running between Canberra and Sydney is a well-run train. I agree with him, too, that there are several other trains that are quite good: Bub when one knows what the railway system was like and compares that position with what he sees to-day, he must have great sympathy and understanding for men like Mr. McCusker, the present Commissioner, and his colleagues, who are endeavouring; in the face of sabotage all around them, including sabotage from above, to make the railways pay.

Consider the New South Wales bus system. It was pioneered by private enterprise and then was stolen by the State Government. To-day, it is almost a laughing stock for the people of Sydney. We find that ordinary people are hiring taxis, even though they cannot really afford to do so. I have been almost driven to taking taxis, a practice I abhor, because the bus service in my suburb is most inefficient, though one of the best in Sydney. I will say without hesitation that Trans-Australia Airlines is a most satisfactory, and efficient enterprise. I will not make comparisons between that enterprise and Australian National Airways. I have obtained, good service from both. As far as services go, I would not say that one was better than the other.

Why is T.A.A. efficient? First, as the Minister for Customs and Excise (Senator Henty), told us, because it was modelled on A.N.A., and, secondly, because Mr. Chifley, with great wisdom - honorable senators opposite cannot live on Mr. Chifley’s wisdom forever - selected men to run it who were trained in the school of private enterprise. T.A.A. owes a great deal to Mr. Coles, one of the outstandingly successful businessmen of this country - a man who, when he left the Army, was informed by some pundit in the Repatriation Department that the Government could not help him because- he showed no capacity for business. He became one of the most successful entrepreneurs- in the country. The, present Government’ carried out- the same policy. It appointed the most efficient men it could- find to run T.A.A. I happen to know Mr. Gerald Packer, one of the most active members of the commission. He was appointed by us. I have been abroad with him. I have never known a man- with a more efficient mind.

That is why T.A.A. has succeeded. But let a government come into power that intends to use. the service merely to purchase votes and is afraid to support its officers when they do something which is not popular to maintain discipline. What kind of a service will we have?

I do not intend to speak at any great length on this- subject. Insofar as the debate stems from people who are completely doctrinaire socialists or individualists, it has little relevance to the bill. The policy of our party is to let the Government give a service if the service does not come naturally from private enterprise and to let the Government give a service if that is necessary to prevent a monopoly by private enterprise. For. that reason this bill is, I think, infinitely better than the one I supported, five years ago. It is much more businesslike in its clauses and in the agreement, that depends on them. It gives us hope that we shall see a continuation of the great traditions of the very fine air services given to us by both public and private companies.

Senator COOKE:
Western Australia

– The Opposition opposes this bill. Although the Government claims to support competition, it is doing everything possible to eliminate legitimate and keen competition. Senator McCallum and previous speakers described this measure as an interesting experiment. If that is so, it is an interesting experiment being carried out with public moneys. The Government is giving guarantees that would not be given by any private financial corporation. I should have imagined that people who support private enterprise with such vigour would go to financial institutions controlled by private enterprise.

A.N.A.’s balance-sheets and financial statements were not available in 1952 when the Government first decided to break into this unusual field, but we can reasonably assume that the company’s general business condition- was such that no private enterprise would back it. The Government, which claimed that it wanted to make competition free and equal, backed A.N.A. to a substantial extent, committing itself heavily without- giving the Parliament an opportunity to examine the matter closely at all., We did not know whether public money was being properly protected, but we accepted the Government’s assurance that it was, and that the final result would be effective competition for T.A.A.

Five years have since passed, and A.N.A.’s position has deteriorated progressively. Indeed, despite the guidance and assistance of a sympathetic government, it is in a worse position than it was when, in 1952, the Government acted to save it from elimination as a result of free and unfettered competition. The present agreement, and’ that of 1952, are mere instruments for’ tying the hands of T.A.A., and stultifying its progress at the expense of Australia’s national welfare. The convenience of the travelling public has been of secondary consideration, and any move to provide cheap fares and freights has been retarded. It is plain that the Government will continue to be guilty of this.

The Government, while speaking of free and unfettered competition, limits the application of this agreement to two operators only. Why has it done this? Why should A.N.A., because, as a result of inefficiency it has been unable to compete with T.A.A., be given tremendous advantages over other airlines doing equally important work? Indeed, from a pioneering point of view, they are doing more essential work.

The present Minister for Shipping and Transport (Senator Paltridge) inherited the 1952 agreement from his predecessor. It has since proved unsatisfactory as a means of meeting the air transport requirements of Australia. It has not saved A.N.A., it has increased freights, and it has led to a worsening of services. The Government, having committed itself to an extent to which no private financier would: be guilty, has now to pass this bill, bolstering a private undertaking to the national disadvantage. No matter what the Government says, that is clearly the position. The Government has stopped at nothing in its attempt to retard the- efficiency of T.A.A. and prevent-‘ it from doing the national- job that was visualized by Labour when it established T.A.A. as’ a- national airline.

No one can accuse us of detracting from the ability of those, who have been in control of T.A.A. Their judgment has been good, and, until the Government entered the field, their object, was. the provision of better services, and cheaper freight rates than were offered by any. other, airline in the world. T.A.A..’s maintenance schedule was safer than- that of any other commercial airline. It has always changed engines after a specified, number of. flying hours, which it has kept as low as possible. The company’s aim- has. been to eliminate risk as far as possible and it has become known - pray God it will continue to be known - as the safest airline in the world. It has never’ suffered a serious accident. However, as soon as the Government intruded there were changes in engine maintenance, and in its attitude towards its staff. T.A.A. has suffered considerable duress. It was not a party - indeed, it was hostile to - the 1952 agreement, between the Government and A.N.A., which was intended to defeat it and its attempt to reduce freights and improve services. T.A.A.’s efficient management of those days would still object strongly to the Government’s efforts to retard it in the air transport field.

I have said that transport is the most important factor in the development of a nation. No nation can ever be great unless it has its own shipping and other transport facilities. If the nation is not to suffer excessively it must operate, efficiently. T.A.A. and Qantas showed that Australians could run the nation’s airways in a most efficient manner: T.A.A. did not desire to push out any competition that wished to enter the field, but it did desire to maintain, a high standard of efficiency. On the other hand we have a private company, with’ monopoly associations, such as the shipping concerns which, for ages, have been preventing progress and holding Australia to ransom by charging excessive freight rates’. This monopoly over which the Government has no control, and does not seek control, is tied up with A.N.A. The monopoly group intended to hold the nation /to ransom. While T.A.A.. operated freely, as it was doing, it was impossible for any company to hold this nation to ransom in connexion with rates and charges. All the Government has done has been to insist that the Ansett organization must use the name A.N.A. and accept A.N.A.’s shareholders. The Government has insisted that the A.N.A. monopoly be accepted in toto by the Ansett organization and, in order to ensure this, the Government is prepared to commit the Australian people to guarantees amounting to millions of pounds, leaving the management and efficiency or otherwise of the company in the hands of the same people, with a certain amount of supervision by a board or committee. To me, that seems a strange kind of competition. T.A.A. ‘s rates have been forced up and the efficiency of its services is deteriorating.

Senator Henty:

– That is not so.

Senator COOKE:

– It is. It is not progressing at the same momentum as it was before the intrusion of the Government “into the field of competition between A.N.A. and T.A.A.

Senator Wade:

– In what manner is it deteriorating?

Senator COOKE:

– It is deteriorating in the sense that overhaul and maintenance periods have been extended. What was once the minimum is now the maximum. I am told that it is a fact that the T.A.A. workshops worked longer hours than did the workshops of A.N.A. and other private airlines and that T.A.A. has been told to cut down on this work.

Further, the Government has taken from T.A.A. for its own purposes every penny it could extract from that airline and has limited its standard of operations to the best that A.N.A. can do. I know from speaking to previous managers of T.A.A. that this organization could do much better but when they made suggestions for an improved service and higher efficiency they were told that until A.N.A. could match the proposals they must not do anything. That is not competition; it is doing no more than setting what might be termed a fair average quality standard of service - not the best standard - and the f.a.q. standard was what A.N.A. could offer. The policy seemed to be that so long as T.A.A. did not get out of line and improve its service beyond that of which A.N.A. was capable it would be tolerated. Such a policy is the quickest way of destroying efficient management, and the effects of it are being noticed in the working of T.A.A.

The other day, I asked the Minister for Civil Aviation (Senator Paltridge) a question relating to the dissatisfaction at present evidenced by the airline pilots of Australia. That dissatisfaction is not caused solely by conditions of employment or rates of remuneration. The airline pilots complain that with the change in administration the policy adopted is based, not on proper competition and maintenance of high efficiency but on giving poorer service because there is now what might be termed only the one all-in company in operation. Another cause of dissatisfaction is the unnecessary and unreasonable transfer from one State to another of established and settled pilots. The Government should use its best endeavours to see that the efficiency of the A.N.A. organization is raised to the same pitch as that of T.A.A., because nothing can be more calculated to reduce an organization to a mediocre standard than a policy under which suggestions for improvement are rejected until such time as inferior competitors can match the standard. Many enterprising officers of T.A.A. have said that it is not wise to be ambitious, that it is dangerous to seek to go above a certain standard.

Senator Wade:

– You are not serious?

Senator COOKE:

– My word, I am serious, and that state of affairs will continue under the proposed agreement! I go further and say that if the Ansett-A.N.A. organization is backed by government finance and increases its rates, we shall have a standard of service that will pay dividends.

It is sheer hypocrisy for the Government to suggest that the proposed agreement will stimulate competition. Actually it is tying the hands of T.A.A. and seeks to subsidize and bolster A.N.A. I suggest that the reason is that A.N.A. is so closely associated with one of the biggest combines in the country - the shipping combine. It seems that the Government’s objective is to put the air transport of Australia in the same position as the local and overseas shipping. It seems that the Government wants to place full control of civil air lines in the hands of th’e shipping combine. For those reasons, the Opposition has every justification for opposing the measure. The proposed agreement seeks to give this private company preference and financial backing against which no other organization can compete. The Senate should reject the measure.

Senator MATTNER:
South Australia

– The bill we are discussing seeks to ratify an agreement which is supplementary to the one accepted by this Senate in 1952 relating to what we might call two partners in air transport in Australia - A.N.A. and T.A.A. I well remember when the Labour Government, in carrying out its avowed intention to nationalize everything in the country, set about the establishment of T.A.A. with a view to making it the only airline in Australia. No one quarrels with any government for seeking to put its policy into effect, but the position was that at that time A.N.A. was already established and giving good service to the country. It had pioneered the way to efficient civil aviation. There was never any thought or suggestion that A.N.A. had a monopoly of air service in Australia, nor was it ever suggested, even by the Labour party, that the services that company had been rendering to Australia were not safe, sound and well conducted.

However, the Labour Government set about putting into effect its policy of establishing T.A.A. and giving it all the help and consideration, financial and otherwise, of which the Government was capable, irrespective of whether T.A.A.’s competition with A.N.A. was fair. This afternoon, the Minister for Customs and Excise (Senator Henty) traced the history of T.A.A. He pointed out that one of the greatest assets that organization enjoyed was the Labour Government’s financial backing. That is a tremendous advantage to any company, because it does not need to worry about raising finance. It was provided by a generous government. There were many other things which T.A.A. did not have to do. I want to join issue with Senator Kennelly, who said that T.A.A. belonged to the people. He said also that we wanted to dispose of T.A.A., in which 10,000,000 Australians were shareholders. As far as I know, that is quite a new conception of a shareholder in a company. He meant that each and every person had contributed some capital to purchase , shares in this organization. That is entirely ridiculous. The people have not invested one penny as shareholders.

Let us look at the profits that T.A.A. has made. It made profits only after our Government took charge of it. According to its balance-sheet, it made a profit last year of £308,829, on an original capital of £4,370,000. The declared dividend of 5 per cent, amounted to £218,500, and £50,000 was transferred to the general reserve. An amount of £63,867 was carried forward to the profit and loss appropriation account, after subtracting what is called “ Payment to the Treasurer in nature of a dividend; 5 per cent, on capital “. That left a profit of £90,329 on a capital advance very conservatively estimated at £4,370,000. I do not think, therefore, that T.A.A., even with all its advantages, is making a very great profit.

The bill seeks to ratify an agreement which is supplementary to the civil aviation agreement of 1952. The latter agreement was made between the Government and Australian National Airways Proprietary Limited. By 1957, these facts had emerged. One partner to the agreement, A.N.A., failed in June, 1957, to meet part of its commitments in regard to three loans. These were a loan of £1,500,000 from the Commonwealth Bank, of which £600,000, plus six months’ interest, was still owing at June, 1957, A.N.A. having repaid £900,000; a loan of £1,500,000 from the Commonwealth Bank, of which £1,019,000, plus six months’ interest, was still owing at June 1957; and a loan of £1,050,000 from the Australian Mutual Provident Society, of which the whole amount, plus six months’ interest, was owing at 30th June, 1957.

The original agreement was that these loans were repayable over five years in ten half-yearly instalments. Unfortunately A.N.A. could not pay three of the instalments, amounting to £435,000. In the face of those facts, two courses were open to A.N.A. It could either sell its business or go into liquidation. Ansett Transport Industries Limited has now purchased the business of A.N.A., but I think it is fair that the public should know that if A.N.A. had gone into liquidation, it had sufficient funds to repay all of those loans and the interest due upon them. The Opposition wished to give the public the impression that A.N.A. could not pay its way.

Senator Aylett:

– Nobody said that.

Senator MATTNER:

– I repeat for the benefit of Senator Aylett, the keen financier, the genius of finance, that A.N.A. had sufficient assets to repay all the loans and the interest due, so the Government and the A.M.P. Society would not have sustained any loss. I mention this fact because it has a very great bearing on the agreement. If the company had gone into liquidation, 3,000 employees would have lost their occupations. I mentioned that figure, because honorable senators opposite may say that 500 have been dismissed already. I have taken that into consideration in assessing the figure of 3,000 employees. They would have been thrown into the unemployment pool. Once again, the Government has shown that it does not wish to see the people of this country unemployed. Are honorable senators opposite going to chastise the Government for keeping these men in employment? From their silence, I take it that the answer is “ No “. The maintenance in employment of 3,000 employees, and the value of the assets of A.N.A. fully justify the Government’s actions and the intentions of the bill.

Ansett Transport Industries Limited has purchased the business of A.N.A. and has incurred every liability of A.N.A. The point I want to make is that A.N.A. has net assets worth from £3,000,000 to £3,500,000, after deducting £3,600,000 in outstanding loans .and interest. The Ansett organization paid approximately £7,000,000 for A.N.A., and not the £3,300,000 suggested in the Senate by the Leader of the Opposition. It is safe to say - and I think it is fair comment - that the Australian National Airlines Commission approved of the purchase by the Ansett organization and that it believes that the proposed new agreement :embodied in the bill is in the best interests of :air transport as a whole.

The bill deals with the default by A.N.A., about which we have heard so much. The amounts outstanding of the loans negotiated under the 1952 agreement, £1,350,000 to the A.M.P. Society, and £600,000 and £1,019,000 to the Commonwealth Bank, plus accrued interest, are to be refinanced over a period of five years, the first instalment to be paid six months after the execution of the agreement. I think that is mighty good business, and I pay to Senator Paltridge the tribute that he has keen business ability and has protected the assets by negotiating this agreement.

Senator O’FLAHERTY:
SOUTH AUSTRALIA · ALP

– It is a pity he does not come from South Australia.

Senator MATTNER:

– But he did. The training that he received there has stood him in good stead. I appreciate the interjection, which has given me an opportunity to let the public know that South Australia is capable of producing men of the outstanding ability of Senator Paltridge.

Another good feature of the bill is that it establishes a committee, which will comprise a co-ordinator nominated by the Minister for Civil Aviation and two other members, one nominated by the Australian National Airlines Commission and the other by Ansett Transport Industries. I am sure that the committee will place air transport on a truly economical basis. With all due respect to the Minister, I do not like the word “ rationalization “. It sounds too much like “ rations “-

Senator Pearson:

– Bully beef?

Senator MATTNER:

– Yes. It reminds one of the stories of leakages from the quartermaster’s store to the troops. As I have said, I believe that one of the reasons why the agreement was accepted by the Australian National Airlines Commission and Ansett-A.N.A. is that it will place transport on a truly economical basis. The agreement gives evidence of the really good business ability possessed by the Minister.

I strongly support the bill, because I believe that the agreement is in the best interests of air transport in Australia. This agreement gives the lie direct to honorable senators opposite who have said that the Government wants to sell out T.A.A. The present agreement strengthens the agreement that was made in 1952. If the Government had wanted to sell out T.A.A., it could have done so during the last five years. But under the able administration of “the Minister, T.A.A. has gone to greater strength. I emphasize that if the Government had wanted to destroy T.A.A. it could effectively have done «o during the last five years. But, as I have said, during that period, under this Minister’s guidance, T.A.A. has gone from strength to strength. I trust that the agreement, to which the Commonwealth and Ansett-A.N.A. are signatories, will maintain air transport in Australia on a proper basis.

Senator AYLETT:
Tasmania

.- At the outset, I should like to say thai my sympathies in relation to this matter are with the Minister for Civil Aviation (Senator Paltridge). Having listened attentively throughout this debate, it seemed to me that, up till the last speaker from the Government side, the Minister had played a lone hand in support of T.A.A. If ever I have heard biased speeches about T.A.A., I have heard them’ from Government senators with the exception,, as I have said, of Senator Mattner. They have been very biased indeed. One- could only wonder, after listening to them, how T.A.A. had continued to exist for so long.

I should like to correct a statement that was made by Senator Mattner. He accused the Opposition of implying that A.N.A. did not have sufficient assets to meet its liabilities - money owing plus interest. No Labour senator even hinted that that was the case. What we have said is that, due to keen competition, A.N.A. was going under. That is different from saying that the company did not have sufficient assets to meet its obligations. I have no doubt that it had a surplus of assets. As a- matter of fact, I believe that A.N.A. was a better risk, from the point of view of the agreement, than the new organization. I am not saying that the new shareholders have not got adequate assets. I give the Minister due credit for safeguarding the interests of the people of Australia in this agreement.

Last night, Senator Wood delivered a very biased speech. I did not think that he could be so biased. I am sure that all Opposition senators give due credit to the late Sir Ivan Holyman for his ingenious work in the early days of A.N.A. I do not think that anybody has attempted to take away any credit that is due to Sir Ivan Holyman and his family for the work they did. during the pioneering days of civil aviation in. Australia.

Senator Kendall:

– Labour only wanted to take the airline from them..

Senator AYLETT:

– I thank the honorable senator for his interjection, which does not deter me in the slightest, because after the company expanded, the Holymans were only very small fry indeed. As the company grew into a big organization, it claimed that the use of business methods was just in competition but it had no regard for any small airline it came up against. If, by applying business tactics, the company could force out a small man, it showed him no mercy. But when the company came up against real competition, it was an entirely different story.

The Government put up its best legal brain, in the person of Senator Wright, to state its point of view. The honorable senator’s main criticism of the Labour party was on the score of T.A.A. being brought into existence under the administration of the Australian National Airlines Commission. It was the term “ National “ that the honorable senator objected to. That was his main point in opposition, but I believe that Senator Armstrong has, adequately answered Senator Wright.

T wish to refer now to another point that was made by Senator Wright, and if I breach the rules of conduct in this House, as Senator Wright alleged that Senator Benn had done, I hope that you will stop me; Mr. Acting Deputy President. I have in my hand the printed report of the Public Accounts Committee, which was presented to this Parliament on 31st May, 1956. I take it that when a report of this sort is presented to the Parliament and printed, it becomes public property. Anybody can get a copy and quote from it, and members of this Parliament may quote from it in- debate. That is the report from which Senator Benn was quoting.

Senator Wright:

– If that is so, I withdraw unreservedly my criticism.

Senator AYLETT:

– Thank you. I shall say no more on that point. The report sets out definitely that the policy of the Government at about the end of May, 1956, was to own all airfields. That policy was followed by the Department of Civil Aviation and, in my opinion, correctly. There is nothing wrong with that. We have had to provide runways which have cost millions of pounds. The Government provides navigational aids and every facility for the safety of those who fly in Australia. The Department of Civil Aviation has done wonderful work in that direction. Would it be fair and just to ask the department to establish those aids on private aerodromes when they could be confiscated by the owner at any tick of the clock? It is only fair and proper that the Department of Civil Aviation should control all the aerodromes and provide the necessary aids for the safety of the public.

In those circumstances, is there anything wrong with the government of the day, whatever its political colour, operating its own airline in competition with private airlines? Honorable senators on the Government side have opposed Government control or ownership of airlines. When T.A.A. was established, it was one of the most essential factors in the defence of Australia, and it can be so counted now. I am not detracting from anything that was done by A.N.A. during World War II. It did plenty, but why should it not have done so? Everything it did assisted in the defence of its own asset, and it was well paid.

We can see what is happening. Mr. Ansett showed his hand even before he had closed it on his new deal. He said, “ I want a 5 per cent, rise in fares “. Even before his original deal with A.N.A. was clinched, he was trying to buy out the Butler concern and bring it under his thumb. He made no secret of the fact that he wants to control all major airlines in Australia. That may be all very well to-day. I do not know who are the shareholders in the Butler organization, but let us take it for granted that they are good, honest Australians. ls there anything to prevent them from selling their shares to anybody else, or even to foreigners who might want to control our . airlines? Is there anything to prevent all the private airlines from coming under the control of one monopoly which could be held by a foreign power? There is nothing on the statute-book to prevent that happening. There is nothing to say that a shareholder cannot sell his shares to anybody who offers to buy them. In a time of emergency, we might find that some foreign power, unfriendly to Australia, could disrupt all the airlines in Australia by an act of policy and sabotage. That could be done. That is one good reason why we should have a government airline.

Let us consider the army of technicians who are being trained constantly and can be used in time of crisis. An airline is just as essential to our defence as any branch of the armed services. Therefore, T.A.A. not only serves a useful purpose in transporting passengers and keeping air fares down, but is also necessary for defence in an emergency. The Labour government had that in mind when it established T.A.A. In addition, it did not want to see the people of Australia exploited by high fares. We wanted to see the outer parts of Australia developed, and air services were necessary for that purpose.

I have not heard one supporter of the Government give any credit to governments of the past which subsidized A.N.A. in developing isolated areas. All the credit has been given to A.N.A. Reference has been made to the losses that were suffered by T.A.A. in its early stages of operation. At that time, T.A.A. was helping in the development of air routes which have since become profitable. Is there anything wrong with T.A.A. competing with private airlines in the interests of Australia? Would this Government oppose any private airline entering into competition with the existing organization? I do not think so. That would be contrary to the policy that Government supporters had been preaching. If the Government favours keen competition, what is wrong with competition from T.A.A.?

Supporters of the Government are sore because the management of T.A.A. was so efficient. I am not saying that it could not be more efficient, but the fact is that it was too efficient for the management of A.N.A. If the Government had not gone to the rescue of A.N.A., which was competing against its own airline, A.N.A. would have disappeared from the sky altogether. To maintain competition against the people’s own airline, this Government went to the financial assistance of A.N.A. It guaranteed A.N.A. an amount almost equal to the cost of establishing T.A.A.

I fail to see how private enterprise, which went under in the face of keen competition, did such a wonderful thing after it expanded when no longer in the grip of the Holymans. After listening to what the Government has had to say, one would think that some grave injustice had been done to the Holyman family, which pioneered the A.N.A. enterprise. No grave injustice has been done to the Holymans, and no credit has been taken from them for the work they did in pioneering that airline.

The Government should be honest in claiming that it likes to see fair competition. Fair competition is the competition that is provided by the ablest and fittest. I want to know whether Government supporters, who speak about A.N.A. getting an unjust deal think in terms of unjust deals when they are fighting a political election. Do they consider that they are then engaged in fair competition? In the manufacturing industries, if one man can beat his opponent to the jump and obtain a better machine to put out goods at a reduced cost and in greater number, he does not go to that opponent and say, “ I know of a better machine. 1 am going to install it.” He simply installs it, and if he can push his opponent out, he does so. That is fair, keen competition. Because A.N.A. could not stand up to fair, keen competition, it is said that that organization was unfairly treated.

I ask the Government to be honest when it talks about keen competition. Let us have a little keen competition, but do not let us try to nurse a private enterprise that has failed utterly and which would have been completely out of business if the Government had not come to its rescue. I do not blame the Minister for Civil Aviation, because he is only one in a Cabinet that seeks to implement Government policy. I ask the Government not to put its own airline out of business. To do that is the policy of most Government supporters; they just could not hide their attitude when they spoke.

– Well, Senator Ashley-

Senator COLE:

– Before the suspension of the sitting I was dealing with certain remarks that Senator Ashley had made in his speech on the Civil Aviation Agreement Bill. I am sorry that Senator Ashley is .not in the chamber to-night. I thought that he would be here at 8 o’clock so that he could hear what I had to say. There is one other statement he made upon which I desire to comment. He referred to a person who is not a member of this House and who, of course, cannot take action on his own behalf. Senator Ashley made the statement that Allen Manning is now the paid stooge of monopoly capitalism. That is a very severe thing to say. It is peculiar that it should come from a member of the Evatt party. I point out that certain senators who are members of that party are not paid stooges of capitalism, but are themselves capitalists. I refer to the fact that the present Leader of the Opposition in the Senate is a director of a hirepurchase company.

Senator Aylett:

– Do not be jealous about it.

Senator COLE:

– When statements such as the one to which I have just referred are made about us, I think it is only right that I should put the matter in perspective. If Allen Manning is a paid stooge of monopoly capitalism, a few hundred thousand or a few million other people could be classified in that way. As I have said, there are capitalists in the Evatt party. Senator Ashley’s own leader is a director of one of the hire-purchase syndicates or companies about which the Evatt party has a great deal to say.

I think I have sufficiently refuted what Senator Ashley said in regard to myself. I state emphatically that my party has no connexion whatever with Ansett-A.N.A. Our attitude to this bill is not influenced by any such relationship. It may .be that some of the members of the Evatt party in Victoria are very much closer to that organization than we are. We do not rely on money from such sources to finance our political campaigns, but I know that a great deal of the money provided for the Evatt party’s political funds does come from big business sources. Nobody can deny that. Our party is not receiving any money from those sources. Once again, I deny the allegations that were made against me and my party in the speech made by Senator Ashley last night.

Senator TOOHEY:
South Australia

– In what is obviously the dying stage of this debate, I have no intention of speaking at length. I would not have spoken at all if it had not been for some of the statements made by honorable senators opposite in defence of the measure. Senator Wood and the Minister for Customs and Excise (Senator Henty) had a lot to say about T.A.A. They referred to its early history and argued that not until the Menzies-Fadden Government assumed office did the company begin to show a profit. I interjected at the time and said that that was the most specious argument imaginable. I noticed that Senator Wright, with whom I disagree frequently in this chamber, was not foolish enough to follow the same line of argument. Indeed, Senator Wright refuted the statements made by Senator Wood and the Minister for Customs and Excise when he admitted that T.A.A. had, in fact, made a profit during the last two years in office of the Labour government.

Senator Henty:

– If you care to read my speech you will find that I said so, too.

Senator TOOHEY:

– Senator Wood did not say that. In fact, the statement that the company has made a profit only during the term of office of the present Government was made repeatedly by honorable senators on the Government side. By making that inaccurate statement, they sought to establish that there was something extraordinary in the fact that T.A.A. had not made a profit during the first five or six years of its life. Anybody who has even an elementary knowledge of the operation of new enterprises knows that it is impossible for any major enterprise of that character to make a profit in the first few years of its life. That was why I interjected and said that the argument advanced by Senator Wood and the Minister for Customs and Excise was specious in the extreme. I am prepared to go further and say that the argument was childish, stupid and futile, and that nobody but the honorable senators who advanced it will accept it.

What disturbed the Government was that it inherited an enterprise which was paying handsomely. Government supporters, right from the inception of T.A.A., said that it was another governmental enterprise on which the dead hand of socialism had fallen and, as a consequence, it was doomed to financial failure. If honorable senators want to refresh their memories on the matter, they can look through the “ Hansard “ reports of our proceedings in the early years of the existence of T.A.A. They will find that repeatedly members of the parties now on the Government side said that T.A.A. was doomed to failure, that it would become another burden on the taxpayers, and that the dead hand of socialism was already on its brow. Much to their discomforture, when they assumed office, they found that it was making a profit. Despite the methods they adopted to assist its private enterprise compe’titor, Australian National Airways Proprietary Limited, it continued to flourish. It has been an embarrassment to the Government ever since, but the Government has not been game to take the action that it took in dealing with other national enterprises such as the Western Australian whaling industry and in disposing of its holdings in Amalgamated Wireless (Australasia) Limited. These assets were disposed of pell-mell. T.A.A. had become a symbol of service in this country and the Government thus became the unwilling parent of a baby thai was troublesome in the extreme. Ever since, the Government ‘has bent its efforts towards frustrating T.A.A. by whatever means it could.

Government supporters have had a lot to say about A.N.A. and the Holyman family having pioneered civil aviation in Australia. They seem to have forgotten such men as Sir Charles Kingsford-Smith, Bert Hinkler, Charles Ulm and Sir Ross and Sir Keith Smith, who pioneered civil aviation before the Holyman family was ever thought of. Whatever the Holyman family might have done to foster civil aviation in its early stages, those men were the true pioneers.

Senator Henty:

– And Qantas, also.

Senator TOOHEY:

– I should say that the protest I voiced on behalf of TransAustralia Airlines in connexion with the matter applies equally to Butler Airlines, and to Qantas, if Qantas is affected. 1 say it is an imposition. The measure, designed to restrict the operations of TransAustralia Airlines, has been unjustly drafted in favour of some private airlines in this country. If this measure becomes operative, it is inevitable that in the not so distant future Butler Airlines and other airlines that may be affected will be coming to the Government asking for some relief. That must be an inevitable consequence of’ the action the Government proposes taking as one of the steps it has worked out for the destruction of Trans-Australia Airlines.

Let me say finally that this airline which was established by the Chifley Government against the unqualified opposition of those who constitute the present Government, which has survived its teething stages and which has gone on to become the greatest airline in the country, might be temporarily embarrassed by whatever action this Government may take, but we on this side have the greatest confidence that ultimately it will overcome even the great inroads made into it by the Menzies-Fadden Administration and again become the greatest airline in Australia.

Senator Henty:

– Mr. President, under Standing Order 410, I should like to make a personal explanation. I wish to correct the statement made by Senator Toohey that I omitted to state during my speech that Trans-Australia Airlines made a profit in the two years preceding this Government’s return to office. I clearly stated in my speech that it did make a profit. I should like it to be recorded in “ Hansard “ that I clearly stated that for the two years immediately prior to this Government’s attaining office. Trans-Australia Airlines made a profit.

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– in reply - In rising to close, this debate, I want first to make some reference to the safety of aircraft in Australia because, during the discussion; reference was made to the relevant safety of aircraft, and,, quite unintentionally, the impression might have been created that, some- aircraft being safer than others, by inference some aircraft may not be safe or may not be quite safe.

Every aircraft that flies in this country has to conform to the regulation safety standards set by the Department of Civil Aviation, and those standards are the highest, and most effective in the world. This means, in effect, that every aircraft that flies in the skies of Australia is a safe aircraft, and I lose no opportunity of giving currency to that thought.

The bill itself has provoked a. very long and very interesting debate. I have listened, I think, to every word of it. r do not propose to answer every word of it, because, I think that in the cut-and-thrust of debate most of the charges made and most of the points raised have in fact been answered. But there are one or two things I do want to say. I want to refer, in particular, to some of the remarks made by the Leader of the Opposition (Senator McKenna)- because he did in fact lead the debate, and T think that, generally speaking, his remarks crystallized what was said subsequently.

Of the bill itself I want to say this: It is presented to the’ Parliament in complete good faith. I take the opportunity to congratulate the officers of the Department of Civil Aviation, who have addressed themselves to the task of finding a solution of what has proved to be, in recent years, a most tantalizing problem - the problem of the successful conduct of civil aviation in Australia. The result of the best thinking in Australia on civil aviation and its conduct finds its place in this bill.

I want to refer again to something which I mentioned in my second-reading speech and which I regard as being of first-class importance. The agreement which is annexed to the bill has the support of those operators who will be affected, by the bill and who will be charged with the important duty of conducting civil aviation. I do not want to go over old ground, but I suggest that it is not by accident, not by coincidence, not by chance that the commission is a willing- party to the bill. It is not by chance that* Ansett subscribes his name to a rationalization agreement. As Senator Armstrong reminded me, Ansett himself has not always championed the idea of rationalization. I suggest, that both operators, who were probably faced - let us put it on the lowest level - with the problem of finding a solution in their own interests, have been compelled to the conclusion that the agreement Which is the schedule to the bill represents the best and most effective solution which can. be found. I personally believe that to be the case. For what it is worth, I have given this problem a year of continuous study with my officers. I think that the solution proposed: by the bill will in the next few years provide an effective basis for civil aviation in Australia.

That brings me to a point which the Leader of the Opposeition made during hisspeech. He referred to what he- described as the Government’s endeavour to confine interstate air activity to two operators. Let me make the position clear. The Government accepts, as indeed it must accept, that’ it could not confine interstate air operations to two operators. That is not constitutionally possible. But what the Government has said, and what it had a duty to say, is that from its study of the position it was convinced that there was room for effective, economic and profitable operation for only two operators on the major trunk routes. The Government made it clear that although any other prospective operator could operate on those trunk services,, he would not be eligible for the type of support which the Government was. prepared to offer, and had offered for a. number of years, to the two major trunk route operators.

The second point of interest was Senator McKenna’s comment that the policy is completely unreal because of the presence of section 92 in the Constitution. I do- not have to tell any member of the Senate that I have no law, but the best advice I can- get is the advice of the Attorney-General’s Department, which, in respect of. the comment made by Senator McKenna, is- in these terms -

Insofar as the rationalization provisions rest on agreement between the airline companies, Sec- lion 92 can have no application. The airlines are free to agree on restrictions’ on their interstate operations;

The only clause which gives rationalization any dependence upon legislation is Clause 4 which authorizes the Commission to enter into the Agreement and to carry out its obligations under the Agreement. It has been argued that this might involve a limitation: of the Commission’s interstate operations. A similar question arose in connexion with the Shipping Agreement Bill and our legal advice was then, and is now, that what the Commonwealth Parliament can create it can also cut down or limit. If Section 92 applied to prevent this, we would have the absurd position that once having created an instrumentality with power to engage in interstate trade and commerce, Parliament could not abolish that instrumentality because of Section 92.

The Leader of the Opposition then proceeded with an argument in which, he endeavoured to show that there was some important conflict between the Government’s policy in respect of the operation of overseas airlines and its policy in respect of domestic airlines. He pointed out; I think, that the overseas airline was entirely government-owned. He asked: Why, then, should not the domestic airlines be governmentowned? I suggest that we- are talking about two completely different things in two completely different contexts. Overseas airlines are owned, or are heavily sustained; by subsidy or otherwise; by their governments. That is done for a number of reasons. One very pertinent reason, obviously, is that a country feels compelled to- have in the fleet of its overseas airline the1 latest and, necessarily, the most efficient aircraft. The capital required for such aircraft is large, which makes it not an attractive proposition - possibly an impossible proposition - for private enterprise to support an overseas fleet. In the background; I suppose, is the question of national pride and prestige. A country’s flag carrier, it might be thought, should be owned by the government.

Senator McKenna then said that we were proposing for our internal airlines a system which did not permit of- competition, because there was- rationalization, but that the overseas airline competed, openly with the fleets of other countries.. That is not right. I was glad that the honorable senator, made that, point, because it. gives validity to what, I have been trying, to say in respect of the rationalization, of. domestic operations. Qantas operates in a parallel, partnership with the British Overseas Airways Corporation, but no one would .say= there was not very active competition between those two airlines. However, their services are rationalized so that there is economical and, indeed, profitable operation. The competition exists, but it is rationalized and each operator is able to sustain, himself. That, broadly, is the type of arrangement that is successful in overseas operations which, it is suggested, should be applied to Australian domestic operations.

The Leader of the Opposition then spoke - as well he might do - in eulogistic terms of the work that T.AA. is doing in Queensland, particularly in the Channel country, and of its developmental services generally. It should not be thought that those developmental services are conducted at the cost of T.A.A. They are subsidized services. They do a grand job; long may they continue! They do the kind of work that Connellan airlines does in the Northern Territory and the MacRobertson-Miller airline does in the north-west

Senator Benn:

– By whom are they subsidized?

Senator PALTRIDGE:

– They are subsidized by the Government.

Senator Vincent:

– By the taxpayers!

Senator PALTRIDGE:

– Senator McKenna then asked why we do not call tenders for the carriage of air mail. I think the most effective answer to that was given by my colleague, Senator Henty, when he said, “ Probably for the same reason as when Labour was in office “. In point of fact, the carriage of air-mail in Australia sustains, the development of air services. It is abundantly right that the carriage of airmail should be split among the airlines providing services to isolated areas such as those operated by T.A.A., Qantas, the MacRobertson-Miller or any other fine service.

Senator McKenna then referred to the Government’s decision that T.A.A. should pay a dividend, and’ he implied that that would impose an unfair burden on T.A.A. I reject that suggestion, as probably every other honorable senator who sits on this side of the chamber will reject it. That is a perfectly normal business arrangement. An operating utility such as this should pay something, comparable to a dividend.

I was interested that Senator McKenna and his deputy, Senator Kennelly, alluded to the fact that a Labour government had made the airline pay the bond rate. Although this has been treated as a dividend, it has never, 1 think, risen above the current bond rate since this Government has been in office.

Senator McKenna then alluded to the fact that rationalization eliminates competition. 1 have endeavoured to show, in respect of overseas services, that that is not the case, that what rationalization does is to eliminate duplication and wasteful competition. In other words, what rationalization does is to produce a better economic result. As I have pointed out, the Australian National Airlines Commission, Ansett-A.N.A., and other operators now accept as basic for the success of aerial operations a proper rationalization of services. Mr. McDonald, in the statement that gave rise to the ire of the Leader of the Opposition in another place, Dr. Evatt, made that point quite forcibly a day or two ago. If I can give further point to this story, let me indicate that under the rationalization now proposed there will be no fewer than twenty nights a day between Sydney and Melbourne. Can any one say that competition will not exist in those circumstances? Of course, there will be competition - intense competition - for traffic. But it will be rationalized; planes will leave at such times as to give the best service to the public and to produce the best possible economic result.

I rather think that the Leader of the Opposition spoke in haste when he referred to the fact that A.N.A. was to be forgiven - I quote him - the full amount owing in June. In point of fact, A.N.A. is to be forgiven nothing. It is granted a short extension of time in which to pay - some months.

Senator Vincent:

– And it will pay interest on the money.

Senator PALTRIDGE:

– I suggest that that aspect of the re-arrangement of business is nothing more than would have been done in any similar circumstance in any normal commercial transaction.

Many honorable senators opposite have referred at some length to the incidence of the kerosene tax and have stated that this is, in effect, a thrust at the heart of T.A.A., a deliberately designed device to bring about the early death of T.A.A. But what is the position? It makes interesting reading. In Australia, the Department of Civil Aviation spends no less than £7,000,000 a year on the maintenance of its facilities, and it gets back a very small amount - some £1,300,000 of the £7,000,000 expended. Nothing was being paid towards that vast outgoing by way of a tax on the kerosene fuel used. The Government thought it only right that kerosene being used for a similar purpose as aviation fuel should be the subject of a similar tax. I suggest that there is nothing wrong with that.

The Opposition has taken the point that the only operators which will be asked to pay this tax will be T.A.A. and Butler Airlines. As every one knows, conventional engines using aviation fuel are gradually disappearing from Australia and their place is being taken by engines that use kerosene. Mr. Ansett, the man whom, according to the Opposition, this proposal was designed to help will be using kerosene fuel next year. It cannot be said that the imposition of this tax is anything more than a fair and reasonable arrangement. I was interested to have handed to me, only tonight, as I walked into the chamber, a letter from the chairman of the Australian Airlines Commission. That is the instrumentality which, according to the Opposition, this tax will send broke. In an early estimate of next year’s result, the chairman of the commission, Mr. McDonald, has informed me that he expects an increase of revenue, and that the commission will be able next year to pay a dividend at least similar to that paid this year, namely 5 per cent. I cannot see, nor can the chairman of the commission, how this tax will send T.A.A. broke.

Other points were raised by the Leader of the Opposition and other speakers on the Opposition side. A point made persistently was that we were preventing T.A.A. from competing on its former scale. The Leader of the Opposition used the expression that we were putting T.A.A. in a cell. He said we were preventing it from expanding. I turn again to the letter that I have just received from the chairman of the airlines commission. Does that letter suggest any prevention of expansion? Does it mean that this airline will not operate at an expanding rate and with a better financial result? The Leader of the Opposition said that this arrangement would increase costs. I suggest that all the evidence points to the fact that in the long term greater rationalization and better utilization of aircraft will lead to reduced costs. Indeed, that is the whole purpose of the exercise. The last and most persistently stated point, and the one with which we are getting so sickenly familiar, is the Opposition’s charge that we are preparing to sell T.A.A. I do not know how any grown man who has had this legislation before him and has seen the statements issued on behalf of the Government in recent months could reach such a foolish conclusion. Is this the sort of legislation we would be passing if we were preparing to sell T.A.A.? Is this the sort of thing we would be doing - ensuring that it retains an effective place in a properly conducted rationalized air service - if we intended to sell T.A.A.? I think not. Every policy statement that has been made on this subject in recent months has repeated over and over again that it is not the intention of the Government to sell T.A.A. Every action that has been taken by us has supported that statement.

Senator O’Byrne:

– It is the only asset the Government will not sell. It has sold everything else.

Senator PALTRIDGE:

– I have heard that statement before, but it is particularly unfortunate that the honorable senator has addressed it to me again, because I remember the time when, month after weary month, I have come into this chamber to hear no fewer than three questions addressed to me every day, asking me when I was going to sell the national shipping line? The point is that when this Government finds it necessary to conduct these services it takes appropriate action to conduct them profitably and on a business basis.

Other statements were made, but possibly they were of lesser importance. I wish to refer, however, to the speech that was made last night by Senator Ashley. I noticed with amusement that Senator Ashley had the honorable member for East Sydney (Mr. Ward) sitting behind him and he made a speech which implied that there had been some conspiracy - that is familiar, is it not? - between the Government and

Mr. Ansett. Senator Ashley directed a number of questions to me. I had proposed to answer them specifically and categorically but I have not the time to do so. What I want to tell the Senate is that the Government, and I, particularly, on behalf of the Government during all the months that these lengthy negotiations have taken place, have consistently made statements whenever possible informing the Senate, the Parliament, the public and all those who are interested in airline operations of the intentions of the Government. Every one who was interested in the operation of airlines knew what was the policy of the Government. Everybody who was interested in submitting a quotation or examining the possibility of buying A.N.A. knew particularly the kind of conditions which the Government was prepared to fulfil.

The PRESIDENT:

– Order! The Minister’s time has expired.

Question put -

That the bill be now read a second time.

The Senate divided. (The President - Senator the Hon. Sir Alister McMullin.)

AYES: 29

NOES: 20

Majority . . 9

AYES

NOES

Question so resolved in the affirmative.

Bill read a second time.

In committee:

The bill.

Senator McKENNA:
Leader of the Opposition · Tasmania

– As we are dealing with the bill as a whole, I shall deal at once with a number of matters. I refer the Minister, first to clause 5 (2.), which provides for a fresh guarantee. I have already submitted to the Minister that in the re-arrangement there was a waiver or a forgiveness by the Commonwealth of the default of A.N.A. in relation to the 1952 agreement, which conferred upon the Commonwealth the right to relieve itself of the need for guaranteeing any further loans if default were made. Inherent in clause 5 (2.) is the forgiving of a default and the entering into of a fresh guarantee by the Commonwealth.

Senator Wright:

– To which clause in the agreement is the honorable senator referring?

Senator McKENNA:

– I have not got it before me at the moment. I shall quote it before I resume my seat. Still confining my remarks to clause 5 (2.), I ask the Minister the following questions: Was the interest owing by A.N.A. as at 30th June last capitalized as part of the new loan? What was the exact amount of the interest? Was it in the neighbourhood of £70,000? Will the Minister give to the committee some indication of the security that is held by the Commonwealth or upon which it relies to protect the guarantee that it has given?

I realize that, if the Commonwealth is called upon to pay under the guarantee, it will step into the shoes of the lenders and take over the lenders’ securities. I do not think there is any doubt about that position. But can the Minister indicate what type of securities the lenders hold which, I take it, constitute the Commonwealth’s major security for this guarantee? Are they debentures, first charges on assets, or mortgages on real estate? Without particularizing, can he give some indication of the general nature of the securities that are pledged to the lenders and to which no doubt the Commonwealth would look if it were called upon to pay under the guarantee? .Apart from that, does the Commonwealth hold any direct or separate security from A.N.A. in respect of the guarantee that it has given to the two lenders - the Commonwealth Bank and the Australian Mutual Provident Society?

I refer now to the first clause of the agreement and direct the Minister’s attention to what I claim is a defect in it. The effect of the clause is that all airline companies or firms in which Ansett Transport Industries Limited has a controlling interest will take steps to review routes, timetables, and so forth, with the other parties to the agreement. It is very well known that the Ansett group has been seeking to get control of Butler Air Transport Limited, and that it has very nearly succeeded. That attempt has been the subject of litigation in the last few weeks, and lt may well be that it will succeed presently. I submit to the Minister that, if it is successful, this agreement is so drawn as not to cover the Ansett group in that new capacity.

The clause refers to those firms or companies in. which Ansett Transport Industries Limited has a controlling interest. I submit that that means now, that “ now “ means at the date of this agreement, and that there ought to be added after the word “ has “ in the second line of the clause the words “ or may hereafter acquire “ so that the relevant part of the clause shall read -

The Commission, the Company and Ansett Transport Industries Limited, and all airline companies or Arms in which Ansett Transport Industries Limited has or may hereafter acquire a controlling interest . . . will take immediate steps to review and .will keep under review at all times during the continuance of this agreement air routes . . .

I submit that, just as the 1952 legislation was defective from the Government’s viewpoint in that it was confined to routes that were then in existence, and as the Government has seen fit to extend 4he agreement to include routes that have come into being in the interim, so this clause in the new agreement is confined to the present situation and to companies that are at present in the field. I submit to the Minister that, if the agreement goes through in that form, and if after it is signed the Ansett group acquires the Butler interests, Butler Air Transport Limited will not be bound by this obligation to review its operations and submit to the rationalization agreement.

That view again obtrudes in relation to clause 6 of the new agreement which provides -

Ansett Transport Industries Limited will do everything in its power to ensure that the airline companies or firms in which it has a controlling interest will do all such acts and things as this agreement provides they will do and that those companies and firms will not do anything inconsistent with the provisions or purposes of this agreement.

I submit that that again is a narrow outlook, that the clause simply casts an obligation upon Ansett Transport Industries Limited in relation to such bodies as are now in being, and that it is not wide enough to cover those bodies of which the Ansett group may get control in the future.

My final question to the Minister is in relation to the format of the agreement. The agreement is between five parties. Primarily it is confined to rationalizing arrangements between the various airline operators. Did the Government give any consideration to the re-enactment of the 1952 agreement to which all parties to this second agreement might well have been joined? If consideration was given to that, what were the reasons that actuated the Government in not proceeding under that arrangement?

I think I undertook to give Senator Wright the reference to the provision in the 1952 agreement freeing the Government. I have not got it before me at the moment. I shall refer him to it when I have had time to find it.

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Aus< tralia · LP

– Securities for the No. 1 loan from the Commonwealth Bank are 2 DC6 aircraft; for the No. 2 loan from the Commonwealth Bank, two DC6B aircraft; and for the No. 3 loan from the A.M.P. Society, two DC6I aircraft.

Senator McKenna:

– Would they be under bills of sale?

Senator PALTRIDGE:

– Yes. There is a considerable quantity of spares as well as the aircraft themselves. Senator McKenna asked about outstanding interest. I have the figure for the interest due on 4th October, 1957, the date of take-over. I regret that I have not the figure for 1st July. The interest was capitalized and, at 4th October, amounted to £170,000.

I turn to the question of the position of companies acquired by Ansett Transport Industries after the signing of the agreement, or companies in which Ansetts may acquire a controlling interest after that date. I am advised by the law department that these provisions are expressly to apply to all airline companies in which A.T.I, has a controlling interest. These words speak at all times during the continuance of the agreement so as to include companies in which A.T.I, acquires a controlling interest at a later date. Any other interpretation would be meaningless since at the present time A.T.I, only has a controlling interest in A.N.A. and Ansett Airways. Both these parties are parties to the agreement. Furthermore, the fourth recital declares the parties’ intent that the agreement shall be construed having regard to the stated objectives of the parties.

Senator KENNELLY:
Victoria

– Before I ask the Minister for Civil Aviation one or two questions, I desire to refer him- to a speech he made on the Australian Coastal Shipping Commission Bill. Previous to that, he had said that the Opposition was under the impression that the Government intended at some time to sell the Commonwealth Shipping Line. He had been asked questions day after day and he said that the Opposition’s impression was quite wrong. But, looking at page 1125 of “ Hansard “ for 31st May, 1956, I find that the Minister said -

This Government believes in private enterprise. It has been an open secret for some years that it has been exploring the possibility of disposing of the Commonwealth-owned vessels to private enterprise.

I do not wish to go further than that at the moment. Certain questions were asked during the second-reading debate about intra-state operations in Queensland. The Tasmanian Government has already passed legislation, and is waiting for complementary legislation to be passed by this Parliament, to give T.A.A. intra-state rights in Tasmania. Is it the intention of the Government to permit that to happen? In view of the rationalization arrangements provided for in clause 1 of this agreement, is it the intention of the Government to request States other than Queensland and Tasmania to take any action in this matter? T.A.A. has intra-state rights in Queensland, and the Tasmanian Parliament has passed a measure to give it intra-state rights in Tasmania. Is it contemplated that the Government will seek permission for T.A.A. to operate intra-state in other States?

In my speech during the second-reading debate, I said that if the Government wants rationalization it should not confine it to certain main routes. In New South Wales and Victoria, T.A.A. will be at a great disadvantage in not being able to operate feeder services to connect with the main routes. If we are to have rationalization, we should have it throughout. The commission - unfortunately, from my point of view - desires rationalization. It may know more about the running of aeroplanes than I do, but I am one who believes that when you are in a thing, you should be right in it. If you win, that is all right. If you do not, you have to take the consequences. I do not think that we can have a fair and equitable scheme for both airlines unless legislation is passed by the States to put both airlines on the same footing. The Minister should not be so long in thinking about this matter as he has been in thinking about the Tasmanian legislation.

Senator O’BYRNE:
Tasmania

.- During the course of his summing up in the second-reading stage of the debate, the Minister for Civil Aviation said that the Commonwealth Government was subsidizing airline services to the Channel country of Queensland and to other remote areas. [ point out that the Postmaster-General’s Department pays substantial sums of money to mailmen serving remote areas throughout Australia. The people in those areas further subsidize the mailmen by promising them the job of taking their products to the railheads. That is an accepted practice in the back country areas of Australia. Contracts are let by the PostmasterGeneral’s Department, often after tenders have been called. It is rather strange that in our consideration of the Estimates year after year we have never been told about any substantial sums in subsidies of this kind paid to T.A.A., or to the Australian National Airlines Commission. Perhaps the Minister would outline the nature of these subsidies, as distinct from ordinary subsidies paid for the transport of mails.

Paragraph 1 of the schedule to the agreement before us states -

The Commission, the Company and Ansett Transport Industries Limited, and all airline companies or firms in which Ansett Transport Industries Limited has a controlling interest (all of which Commission, companies and firms are in this agreement collectively referred to as “ the airline operators “) will take immediate steps to review and will keep under review at all times during the continuance of this agreement air routes, time-tables, fares and freights and other related matters in respect of routes (in addition to the routes specified in sub-clause (1.) of clause 7 of the Civil Aviation Agreement) on which both the Commission and any one of the other airline operators operate.

For some considerable time we have been making representations to the Minister seeking some amelioration of the position in respect of Flinders Island, in Bass Strait. For some reason, A.N.A. has consistently refused to institute a service connecting Flinders Island with Melbourne. Over the years that company has had a more or less traditional lien on the business from Flinders Island, and likes to bring passengers back to Tasmania. From a business point of view, that is quite understandable, but I should like to know whether the new agreement gives sufficient scope to enable T.A.A., the commission itself, or, for that matter, Ansett-A.N.A. to extend the present service from Launceston to Whitemark, and then on to Melbourne, rather than force the Flinders Island people to pay the extra fare involved in going to Launceston on their way to Melbourne. The people on the island have long been at a great disadvantage as a result of this trading arrangement. The new agreement provides an opportunity to examine that procedure and afford the residents of Flinders Island some justice. They could be given a regular air service which would give them direct access to Melbourne and the mainland.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I wish to refer briefly to three matters. I now find the provision which I was seeking a while ago in paragraph (7) of clause 3 of the 1952 agreement. It reads -

In the event of any default by the Company in the repayment of moneys secured by a guarantee, or advanced by the Commonwealth in pursuance of this clause, the Commonwealth shall thereupon be under no obligation to give any further guarantee or to facilitate the raising of any further borrowings by the Company pursuant to this clause.

A.N.A. having, in recent months, defaulted, that clause became operative. Thereafter, the Government was under no obligation to give any further guarantee or help in the raising of funds or borrowings by the company. In the light of what the Minister said earlier to-night in the Senate, the Government has obviously waived its rights under this clause and forgiven the default by A.N.A. It has gone on to guarantee further loan raisings.

Senator Wright:

– Has Senator McKenna not read clause 7 of the 1957 agreement, which specifically provides that that default shall be waived?

Senator McKENNA:

– I am taking the matter up with the Minister, because of his earlier denial that there had been any waiver or forgiveness. I have certainly read the provision in the 1957 agreement.

Senator Wright:

– The Minister said that there had not been any forgiveness.

Senator McKENNA:

– What is the difference between waiving rights under a default and forgiving a default? The honorable senator is splitting straws. The Minister controverted my claim that there had been a waiver or forgiveness by the Commonwealth in respect of A.N.A.’s default. I am simply reaffirming the position.

Senator Wright:

– You asserted forgiveness in the sense of forgiving a debt, not a default.

Senator McKENNA:

– I used the word forgiveness in relation to A.N.A.’s default. I did not refer to forgiveness of a debt. If the honorable senator will look at what I said he will see that. I spoke about waiving or forgiving the default. As Senator Wright has pointed out, the current agreement itself contains a waiver of past omissions and defaults. I am merely impressing upon the Minister the fact that he was in error when he contradicted me earlier this evening. If my comment regarding the forgiving or waiving of a default is now before him he will recognize the point that 1 am making.

The Minister did not refer to my question as to whether any consideration had been given to redrawing the agreement of 1952, with the addition of the new parties which are joined to the present agreement. If that was not done, what were the Government’s reasons for not doing it?

My third point is that I thank the Minister for his explanation. I notice the reference in the fourth schedule to the effect that the agreement is to be construed having regard to the objects of the agreement. With due respect to the Minister’s advisers, the Commonwealth would be in a much safer position if it took clear power in the agreement itself to bind Ansett Transport Industries Limited in respect of any future interests that it might acquire.

Senator LAUGHT:
South Australia

– I wish to focus some attention on pararaph 1 of the agreement, which, as a result of the way in which it has been drawn, suffers from a rather important omission. The clause reads -

The Commission, the Company, and Ansett Transport Industries Limited, and all airline companies or firms in which Ansett Transport Industries Limited has a controlling interest . . . will take immediate steps to review and will keep under review at all times during the continuance of this agreement air routes, timetables, fares and freights . . . so as to avoid unnecessary overlapping of services and wasteful competition.

I believe that there is great scope for the better co-ordination of services. This new arrangement has got away to a rather bad start from the point of view of coordination, as distinct from the unnecessary overlapping of services. Perhaps I might be permitted to give two illustrations which affect South Australian users of the two airlines. An Ansett-A.N.A. plane arrives in Melbourne from Western Australia and South Australia at five minutes past nine each morning, but the next Ansett-A.N.A. plane does not leave until about 4 o’clock in the afternoon. One of that line’s planes leaves Melbourne twenty minutes before the arrival of the 9.5 a.m. aircraft. In other words, the Western Australian and South Australian passengers miss a connexion by twenty minutes, so there is no co-ordination there.

I give another illustration of lack of coordination. A plane arrives from Adelaide at 11.45 a.m. on the Ansett-A.N.A. service. A T.A.A. plane leaves for Canberra at 11.20 a.m., just 25 minutes earlier. There again, there is no co-ordination. Incidentally, the next plane does not leave until about 4 o’clock in the afternoon. Even though the clause does not require co-ordination but rather requires the avoidance of overlapping,, co-ordination appears to me to be quite important if there is to be efficiency in this set-Up

I invite the attention of the Minister to those two illustrations - there are possibly many others - where- co-ordination: has not yet- taken place. I appreciate that this scheme is passing through the teething stages of its existence, but I do invite the Minister’s attention to that matter, and although clause 1 does not require it, I ask that the meaning that I am attempting to give should be read into it. To my way of thinking, coordination is just’ as important to the interests of the travelling public as is the elimination of overlapping.

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– Replying to Senator Laught first, I point out that, as he says, there is reference in clause 1 to overlapping and wasteful competition. If the particular schedules to- which he refers are hot covered by those two terms, then I am advised they certainly would be covered in the reference to- the timetable. That position is covered; and will be a matter for considera-lion by the co-ordinating committee.

Senator McKenna referred to default and the manner in which I have treated the subject. I read the reference to the forgiving of the default made in June to mean a forgiveness of the debt or some part of it. I regret that my understanding of the position was apparently at fault.

As to the format of the agreement, I am advised that the 1952 agreement is incorporated by reference.

Senator McKenna:

– Only portion of it. I’ refer to clause 2 and portions of clauses 7 and 14.

Senator PALTRIDGE:

– Only the parts that require reference are referred to. Ansett Transport Industries, so far as it controls A.N.A., is still bound by the 1952 agreement.

Senator McKenna:

Senator PALTRIDGE:

– Senator O’Byrne asked about- the Flinders Island service. A service between Flinders Island and Melbourne could be introduced if any of the airlines desired to do so. When operated in- the past, it has been subsidized by the Government. Consideration will be given to Senator O’Byrne’s suggestion.

Senator O’Byrne also asked about the subsidization of Queensland back-country services. There is a reference to that in T.A.A.’s report at page 8. I think that will give all the information required as to- the amount of direct subsidy paid by the Department of Civil Aviation for these services in the outback of Queensland.

Senator Kennelly:

asked about the Tasmanian service. The Government has been in communication with the Department of Transport in Tasmania in connexion with the provision of air services, particularly to the north-west coast. Many problems have to be solved, not the least of which is the provision of aerodromes. Both AnsettA.N.A. and T.A.A., of course, operate services between the major ports of Tasmania.

Senator Kennelly also asked about the granting of intra-state services in Tasmania, and other States. That will be taken into consideration, from time to time as the pattern of civil aviation development takes shape. I am not prepared to say to the honorable senator now that the Government has any specific plans, but it is one of the matters which will be watched, and action will be taken when and if necessary.

I think the only other reference the honorable senator made was to the sale of the ships. I say that the answer he read from “ Hansard “ was in complete line with the answer I gave him. We are a private enterprise government. We would have sold the ships had we been able to sell them on terms which were considered satisfactory and had we received from the shipowners guarantees as to the maintenance of the services which we considered satisfactory.

Senator KENNELLY:
Victoria

.- 1 do not want to get into any controversy in respect of “ Hansard “ because 1 cannot lose, and I do not like taking sitting shots. After what has been said, I think we had better forget that. I was surprised at the Minister’s coming back on to it.

I am extremely concerned over the Minister’s answer with relation to intra-state trade. I do not mind the Government being a free enterprise government, but it should be fair. The Minister will admit that if the Government kept out of this matter altogether, the two major airlines would fight to the death. That would mean that either one would come out on top, which may or may not be good, according to what one believes. But if there is to be a rationalization of services, I cannot see what justification the Government can have for not doing what the Tasmanian Government has asked it to do. That Government has gone so far as to pass legislation to allow T.A.A. to conduct intra-state operations in Tasmania, which indicates that the Tasmanian Government wants there the facilities that T.A.A. can provide. How can this Government say that it is not now taking a most unfair advantage of its own airline? The Minister knows the year in which that legislation was passed by Tasmania, and his reply indicates that the Commonwealth Government has done nothing up to date.

I do not think that any one can look with any ‘hope for this action to be taken for some time. I cannot understand ‘how any one can say there is any justification for the Government’s attitude. The Government proposes to have in this country only two major airlines. It is true that there will be some other extremely small airlines, but in the main there will be two, Ansett and T.A.A. The court has said that it will be only a matter of time before Ansett takes over the Butler services. Here is a clear indication that what we said is correct. I ask the Minister to give some consideration to this matter. I can assure him that he will receive quite a number of questions about it, because I do not think it is a fair go at all. It only bears out what we said was the position. The Minister in reply attempted to contradict our statements. He said that all of our fears were groundless. I would take it from the Minister’s remarks that the Government had no intention of adversely affecting T.A.A. The Government believes that there should be two major airline services, in order to give better service to the people. If that is what the Government wants, that is what it should provide. All I can say is that the Minister’s answer is most disappointing, and it shows clearly, and without equivocation - I say with the greatest respect - that if the Government can .affect T.A.A. adversely, it will do so. That is the only assumption that can be drawn from the reply. I regret it, and I trust that the Minister will use his influence to put the two operators on a par. I can say no more than that I am extremely disappointed with the reply.

Senator WRIGHT:
Tasmania

.- Would you permit me, Sir, to make one comment on the answer which the Minister, at the instance of his advisers, gave to a previous question by Senator McKenna as to the operation of clause 1 of the 1957 agreement in relation to all airline companies >or firms in which Ansett Transport Industries Limited has a controlling interest. Clause 6 of the agreement places an obligation on that company to -

. do everything within its power to ensure that the airline companies or firms in which it has a controlling interest will do all such acts and things as this agreement provides that they will do and that those companies and firms will not do anything inconsistent with the provisions of purposes of this agreement.

When the Minister replies that that is a continuing obligation for the duration of the agreement, and that it will relate to airlines in which the company later acquires a controlling interest, I, with great respect, place on record that I take leave to doubt his advice. I do so “because I think; it is desirable to puncture the assumption of infallibility with which the Minister is accustomed to take legal advice in this remote city, which is not justified by the record of the Attorney-General’s Department in High Court litigation.

Senator O’BYRNE:
Tasmania

.- Under this agreement, Ansett-A.N.A. and Trans-Australia Airlines are to rationalize their activities. We are also to have a similar set-up to that which existed when T.A.A. and A.N.A. were in competition, with Ansett as the third force. Butler Air Transport Limited may become a third force in spite of the efforts of the Ansett organization to absorb the Butler organization, and it may be able to undercut prices because of the rationalization restrictions that will be necessarily imposed on both of the airlines which are a party to this agreement. In the Minister’s view, what would be the position if Butler Air Transport Limited were to become equally powerful with the other two main operators? In view of his previous statement that the Government was a private enterprise government and would have sold the Commonwealth ships if some one had offered the right price, would the Government sell T.A.A. to the Butler organization if the right price was offered?

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– It has been stated as a policy that the Government has no intention of disposing of T.A.A. With regard to the matter pressed by Senator Kennelly, I merely want to make this further comment. I think he puts rather too fine a point to hi% representations. In fact, intra-state services are conducted in Tasmania by T.A.A. as incidental to its interstate operations.

Senator Kennelly:

– But those services could be stopped.

Senator PALTRIDGE:

– They could be stopped, but in point of fact for a long time T.A.A. has conducted intra-state services from Launceston to Devonport and Wynyard, and from Hobart to Launceston. The position is possibly not quite as hopeless as it is represented to be by Senator Kennelly. At this juncture I am not prepared to give him any advance on the assurance that I gave him earlier. That is one of the matters that will be watched and will: be considered as and when necessary.

Senator McKENNA:
Leader of the Opposition · Tasmania

– Just very briefly - I am not desirous of detaining the Minister - I advert again to the bill itself. Clause 3 provides -

The execution on behalf of the Commonwealth of an agreement in accordance with the form in the Schedule to this Act is approved.

When this bill is passed the agreement - apart from the filling in of the blanks - win be frozen and will not be capable of variation between the Commonwealth and the various parties. I draw attention to that in view of the support that Senator Wright has accorded to my view that the Government would be wise to make sure that bodies formed after the date upon which this agreement becomes operative and controlled by Ansett Transport Industries Limited are caught up in the Government’s net. I suggest to the Minister that he should not take the representations he has received lightly, and that though he may not be prepared, on the strength of the debate to consider .the suggestion now, he should consider it in the time that elapses between the passage of this measure here and its consideration elsewhere.

I hope that the Minister will be good enough to give us a word on the suggestion I made that the right should be extended to T.A.A. to operate a New Guinea service. It seems to me that that is a service that might well be operated by the Australian airline, T.A.A., instead of by Qantas. It would certainly be an overseas service in the sense that the aircraft would fly over the sea, as it does to Tasmania. New Guinea is a part of Australia, and I think it might well be incorporated in the local service on the same basis as flights to Tasmania are incorporated. This is another field that might be given to the local airline rather than to the strictly overseas airline, and it is one way in which the local organization might well be helped.

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– I want to assure Senator McKenna and my good friend, Senator Wright, that at no time when it is put to me - as it has been put to me - that an agreement might be capable of improvement, would I treat the suggestion lightly . I shall certainly take note of what has been said in respect of this matter, and I will see that it is closely examined again before the agreement is finally ready for signature.

Senator McKenna referred to the possibility of T.A.A. being granted the right to extend its service to New Guinea. The honorable senator might recall that when I made a rather lengthy policy statement in September, I referred particularly to the omission of specific mention of services to New Guinea or internal services, but said that I intended, as soon as I had time to catch my breath, to conduct such an inquiry. I say that in order to indicate my frame of mind in the matter but not, indeed, to indicate any commitment one way or the other, because there are obvious problems associted with it. I assure the honorable senator that I have the matter well in mind.

Bill agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 1467

AIR NAVIGATION (CHARGES) BILL 1957

Second Reading

Debate resumed from 13th November (vide page 1214), on motion by Senator Paltridge -

That the bill be now read a second time.

Senator McKENNA:
Leader of the Opposition · Tasmania

, - The purpose of this bill is to increase by 10 per cent, the air route charges to the airlines operating in Australia. The Opposition is not opposing this measure at all, and I shall be brief in addressing myself to it.

The charges were first introduced in 1947. They were cut by 50 per cent, in 1952, and this bill proposes that the existing rates shall be increased by 10 per cent, with effect from 1st January, 1958.

The Minister for Civil Aviation (Senator Paltridge) said in his second-reading speech -

It is proposed to keep the scale of charges under periodical review with the object of progressively reducing the gap between the cost of providing facilities and the revenue obtained from the users.

I offer the comment that this bill will make a most microscopic contribution to bridging the gap. I shall just indicate what the gap is. If one refers to the Budget papers at page 60, one- finds that the expenditure for this year in respect of the Department of Civil Aviation will amount to £9,862,000, representing the maintenance of that department for the year. In addition, there will be expenditure upon capital works amounting to £6,019,000. I forget about that, even though that money is paid from revenue for capital works and services, and in determining the gap I look merely at the amount of £9,862,000 and what the Government will get back in the coming year. As stated at page 17 of the Budget papers, that amount will be £1,372,000. It is made up of these items: Air navigation charges that we are now considering, £511,000; Qantas Empire Airways Limited, dividend, £377,000; Australian National Airlines Commission, payment in the nature of a dividend, £218,500; miscellaneous receipts, £265,500. Those amounts make, as I have indicated, a total of £1,372,000. The gap at that point is £8,490,000.

The revenue expected to be raised by the measure before the chamber - £50,000 - reduces the gap by an infinitesimal amount. The gap remains at £8,440,000. It may be claimed that there is a further amount to be added to it. The figures issued by the Statistician in respect of aviation spirit show that in respect of customs duty for last year two amounts were received- £1,077,962 and £137,062- whilst excise in respect of aviation spirit yielded £371,765. Those three items covering customs duty and excise duty total £1,286,789. Even if I throw that in, the gap would remain at £7,253,000.

Senator Hannaford:

– Largely on capital expenditure.

Senator McKENNA:

– Not at all. I have already indicated to the Senate - I think before the honorable senator returned to the chamber - that I excluded that specifically. Right at the outset, I pointed out that the ordinary annual running expenditure for the year is £9,862,000, and that the expenditure upon capital works is £6,019,000. I did not include the £6,019,000 for capital works even though they were paid for out of revenue. The figures relating to the ordinary annual running of the department cannot include revenue from all sources - air charges, dividends from Qantas and T.A.A. and miscellaneous revenue. Even if the figures included the total revenue derived from aviation spirit, the gap between the- revenue and expenditure of the department is £7,253,000. On the face of it, that does not look like a business proposition, because these figures relate to the operations of what we might term a business department.

I am not complaining about it but merely putting this matter into perspective, because Australia is a country of vast distances and empty spaces and it is essential, not only for civilian purposes but for defence also, to have well-developed aerodromes and- air facilities. I would not expect the civil airlines to bridge the gap entirely. There is a very big defence aspect in the matter. But it is still evident that in effect the Commonwealth Government is contributing what one might call a subsidy to airlines to She tune of £7,250,000.

Senator Wood:

– The Government does the same for road transport.

Senator McKENNA:

– I am not complaining about it. I say that it is in the nature of a subsidy. Of course, I am not pretending that it is a subsidy merely to the private or internal airlines of Australia. I ask the Minister - I do not know the answer - whether there is any differentiation in the matter of charges ‘between overseas airlines using our facilities and our own local airlines. It seems to me that it would toe fair not to subsidize overseas companies which use our facilities. I can well understand subsidizing our own, but I should like the Minister to inform me whether there is differentiation between the charges levied on overseas airlines, other than our own, which use our facilities. I am suggesting to the Minister for consideration that there might well be a differential rate of charges. I admit that I do not know the facts, and I am suggesting that there should be some discrimination between them.

The other suggestion that I invite the Minister to consider is this: I think that things would be put in very much better perspective if the charges to airline companies were based entirely upon their use of civil aviation facilities. Part of the revenue as I have indicated - a little over £1,250,000 a year - comes from customs and excise duties on aviation spirit. That is not a direct charge and I suggest to the Minister that’ this is not a proper way of collecting revenue from the airlines to bridge the gap. The more businesslike and appropriate approach would be to lift the air route charges to whatever level the Government- thought proper and abolish altogether the customs and excise duties on aviation spirit.

I do not think that this is the proper base to determine what operative airlines should pay for using the facilities provided by the Department of Civil Aviation. After, all’ is said and done, we can expect very great changes in the kind of fuel used. At the moment petroleum spirit, power kerosene, and derivatives from crude oil are used. That position is changing. Various grades and new types of fuel are being developed, and presently we shall be using atomic power. With each change in this scientific progress, the Government might find itself forced to seek revenue and to go on imposing fresh customs and excise duties. That could be a great irritant to companies which seek better fuels to improve their airlines and then find, to their dismay, that they are penalized for their progressiveness.

Does the Minister see any force in my argument that it would be better to make air route charges directly referable to the services used? The Minister has been good enough to: indicate how the charges are determined now. He indicated that the department takes the unit rating of an aircraft and multiplies it by a factor which has regard to the extent of facilities, including aerodromes, provided along the route of flight. That strikes me as a sensible and realistic approach to determine what the owner of an aircraft should pay, but should not the Government’s assessment of an appropriate charge be based wholly upon nights made, if you like with some reference to passengers carried, instead of making the most inappropriate low charges and then supplementing them with customs and excise duties? I think it would be better for everybody to know that they were being charged something appropriate having regard to the facilities provided for them.

No doubt the Minister will acknowledge that the charges, even as proposed to be increased’ under this measure, are completely inadequate as a payment for facilities that are made- available at vast expense By the Government. This is relatively only a token payment. It is supplemented by customs and excise duties. To be more real, would it not be better to take air route charges and make them referable to the actual fights made and the actual cost involved, and not clutter up the picture with customs and excise duties which may have to be varied with the frequency with which there are scientific improvements in the use of fuel? The Opposition recognizes the need for the increase and does not oppose the measure.

Senator WRIGHT:
Tasmania

.- In considering this bill, it is a fascinating reflection that one finds real interest in it from several constitutional points of view. In the first place, it is a bill which, one would have thought, prima facie, came within section 3 of the Constitution which provides that proposed laws for imposing taxation shall not originate in the Senate. But one is happy in the adoption of the view that has been taken, that this bill comes within the qualification that a proposed law shall not be taken to impose taxation by reason only of its containing provisions for the payment of fees for services under the proposed law. I wish to place that on record as a matter that has not escaped attention.

Secondly, as I pointed out in dealing with the Civil Aviation Agreement Bill, we have bound the Commonwealth Government, by an agreement adopted by statute in 1952, not to increase air route charges so as to exceed one-half of the charges specified in a certain order of 1949, except to the extent that an increase became necessary because of the provisions of additional or improved facilities and services, or because of higher costs of maintaining and operating facilities and services.

It is the duty of this Senate, scrupulous in compliance with the agreement with which the Commonwealth has committed itself, to obtain an assurance that this bill is accepted by all parties to that agreement as not in any way in disconformity with it.

Thirdly, I wish to direct the attention of the Minister to an amazing provision in the bill. It is one that I very much regret, and I hope that he will thoughtfully consider it before the measure is passed. I do not (propose to move an amendment or to offer any opposition to .the measure, because of a fourth matter to which I shall refer in a minute.

I ask the Minister to observe clause 9 of the bill, which seeks to amend paragraph 9 of the second schedule of The principal act.

Paragraph 9 provides -

The Minister or the Director-General of Civil Aviation may authorize such refund of the charge or additional charge . . . paid under, this Schedule in respect of an aircraft as he thinks just having regard to the nature, locality or extent of the operations of the aircraft.

That is significant of the fact that in, for some of us, the more acquiescent days of 1952 there escaped our criticism a provision whereby the Minister or the DirectorGeneral may take leave to refund statutory charges that have been levied where he thinks it is just to do so. The proposed new provision reads -

The Minister or the Director-General of Civil Aviation may authorize such remission or refund of the whole or any part of the charge or additional charge . . . payable or paid under this Schedule in respect of an aircraft as he thinks just having regard to the nature, locality or extent of the operations of the aircraft.

That was one of the claims that caused King Charles to lose his head!

Senator Kennelly:

– I hope that that has not any personal significance with respect to the present occupant of the portfolio of civil aviation.

Senator WRIGHT:

– I have already made it clear that the ministerial head to which the honorable senator has referred is one whom I would especially regret to lose. All I wish to say is that, when we give the Minister or the Director-General a power of dispensation in regard to statutory taxation, we are getting on to dangerous ground. A provision for remission of statutory taxation at the discretion of an officer dr a Minister is a porthole, as it were, in the fiscal structure of parliamentary control that we should allow to be established only deliberately. However, I am in an acquiescent mood in regard to that, not because of the hour of the day, but because of what I am about to say.

I now direct attention to proposed new section 6, which is introduced by the clause 3 of the bill. Section .6 of the principal act is to be repealed and a new section substituted for it. It will be noted that proposed new section 6 empowers the GovernorGeneral in the following terms: -

The Governor-General may make regulations, not inconsistent with this Act, prescribing all matters which by this Act are required or permitted to be prescribed, or which are necessary or convenient to be prescribed for carrying out or giving effect to this Act.

In my view, that is a perfectly proper regulation-making power. Proposed new section 6 (2) provides -

The regulations may, in respect of a flight not specified in the Table in the First Schedule to this Act, prescribe a factor for the purposes of paragraph 4 of that Schedule.

That specifically limits the content of any regulation that amends the statutory schedule. 1 speak with special responsibility as a member of the Senate Regulations and Ordinances Committee, which is charged by the Standing Orders with the responsibility to scrutinize not only the regulations that are made under statutes but also the provisions under statutes themselves which give an excessive extent to the regulation-making power. That is why I obtrude these remarks on the Senate, if indeed I need any special excuse for doing so. But I shall never need to offer an excuse, because I always take advantage of the opportunity if I feel inclined so to do. Let it be noted that the section which the Minister seeks to have repealed gives to the Governor-General power to make regulations not only in the general terms 1 have mentioned, but also in particular for amending the schedules of the act.

I wish to acknowledge with great earnestness the propriety of the way in which the section is to be cut down and a new section substituted which will limit the regulationmaking power, in my opinion, to a perfectly proper province. In my view, the old section, which gives to the GovernorGeneral the power to make regulations for the amendment of statutory provisions which fix the rates of taxation, goes quite beyond the proper scope of regulations. So, in regard to proposed new section 6 - if I do not misinterpret it, and unless I have failed to discover a nigger in the woodpile - I wish to place on record my most grateful acknowledgment of this evidence of a purposeful improvement by those who are responsible for the bill in recognizing that it is in the Parliament that taxation should te expressly prescribed without intervention or amendment by the executive officers of the day.

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– Senator McKenna addressed a question to me’ in regard to overseas airlines and the charges they pay. I am informed that, by and large, overseas airlines use facilities only when entering and leaving Australia. Accordingly, they are charged eight units for each entry or departure, and the revenue thus derived contributes substantially to the cost of providing those facilities. The charge is substantially higher than that which is levied on the local operators.

I listened with interest to what Senator McKenna had to say about the abolition of customs and excise on aviation fuel and the application of a charge in lieu thereof. His proposal is of immediate attractiveness. I had not thought of it before, but I shall be pleased to consider it further.

Senator Wright inquired whether the parties to the agreement had been informed of the proposed increase. They have been informed, but have not raised any objection.

Senator Wright:

– They are satisfied that the bill complies with the agreement?

Senator PALTRIDGE:

– Yes, as in fact it does. The increase that could have been levied was of the order of more than 14 per cent., but we are taking it to only 10 per cent. I think the last point, apart from the very welcome comments on the regulationmaking power, concerned the refund which could be made by the Minister or the Director-General. It is not a refund of taxes; it is a refund of a charge.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 1470

LOAN (WAR SERVICE LAND SETTLEMENT) BILL 1957

Second Reading

Debate resumed from 20th November (vide page 1381), on motion by Senator Paltridge -

That the bill be now read a second time.

Senator O’BYRNE:
Tasmania

. - When the debate was adjourned, I was speaking of war service land settlement generally, but I had made reference to Queensland’s closer settlement scheme with which is combined the war service land settlement scheme for that State. Although we are inclined to concentrate our interests on our own States, we can say that the war service land settlement scheme throughout Australia has been a marked success.

It may be of interest to the Senate to know something about the Queensland scheme. Land becomes available on the expiration of leases of pastoral holdings and other farm lands. Land is held by the State and is leased to various farmers and graziers for prescribed periods. When leases expire, the Land Administration Board in Queensland makes a re-assessment in the light of changed conditions. It has regard to the effects of pasture improvement, water conservation and improved transport facilities in various areas. It is interesting to note that during the post-war period 11,000,000 acres of land in Queensland have been opened up for closer settlement. During this period, the Queensland Government has combined its scheme for the land settlement of ex-servicemen, with its overall scheme for closer settlement, lt has not discriminated between civilians and ex-servicemen other than to allocate to ex-servicemen at least 50 per cent, of the total area of land becoming available. The usual procedure has been for the Land Administration Board to select 50 per cent, of the best land and make that available exclusively to ex-servicemen. Both ex-servicemen and others are then able to ballot for the remainder of the land. It is of interest to realize that in the period since the war during which 11,000,000 acres have been made available for closer settlement, 117,000 acres have been allocated on farm lands tenure under the group provisions of the Lands Act.

As 1 mentioned previously, we on this side of the chamber look upon the war service land settlement scheme as the Labour party’s baby. I could quote from the reestablishment pamphlet issued by the Labour Government during the latter part of the war, which described land settlement as a means of re-establishment which was provided so that the bitter experiences following the 1914-18 war would be avoided.

Many ex-servicemen were kept waiting for so long that in the end they withdrew their applications. I think that the Commonwealth Government, now that the scheme is tapering off, should review the matter with the aim of using the war service land settlement organization as, so to speak, a closer settlement department. A great deal of land is locked up in the hands of old land-owners and land-holders who are earning an income from it sufficient to keep them in comfort and are not taking advantage of the great advancements that have been made in the techniques of farming. In Tasmania, we have numerous old family holdings. The land was handed down to the present occupiers by their parents. In these days of pasture improvement, some of these families are occupying much more land than is necessary to provide them with a reasonable or even a highlevel income.

I think that the key to a prosperous country is the use that is made of the soil. We have seen the difficulties that the States have experienced in obtaining land for war service land settlement. We have seen how persons in a position to demand the highest possible price for their land have exacted that price from governments. However, time has shown that, even though the prices charged have been on the highest level, the introduction of pasture improvement methods, the eradication of rabbits and advancements on the scientific level have led to greater production from land that has been thrown open for war service land settlement. That poses a challenge to all governments. Whatever political beliefs we hold, whether we belong to a State or a Federal Parliament, we should consider ways and means of unlocking the land of Australia.

Debate interrupted.

page 1471

ADJOURNMENT

Imports from Japan - Borer Infestation.

The PRESIDENT (Senator the Hon. Sir Alister McMullin). - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -

That the Senate do now adjourn.

Senator O’FLAHERTY:
South Australia

, - I wish to bring to the notice of the Minister for Customs and Excise (Senator Henty), a national matter of some urgency. The afternoon press of Australia has reported in headlines that bamboo borers have been introduced to Australia in the handles of knives and forks brought from Japan. According to the report, the New South Wales Collector of Customs, Mr. T. V. Maher, said that the presence of borers had not yet been reported to him, but that he would make inquiries.

First, I would like the Minister to investigate thoroughly the allegation that borers have, in fact, been brought into Australia. I happen to know something about the bamboo borer, and I assure honorable senators that its introduction could prove enormously dangerous. Secondly, was there some defect in the particular indent form? I understand that the knives and forks have bamboo handles. The suggestion is that they got through the customs because the exact nature of the handles was not disclosed in the indent. Will the Minister investigate the matter speedily so that such borers as may have been brought in will not spread? I might say that there is only one way of dealing with bamboo borers, and that is to destroy completely all objects that they infest. All the fumigation in the world will not achieve anything.

Senator HENTY:
Minister for Customs and Excise · Tasmania · LP

– I have just seen the press report to which the honorable senator refers. It appears that the weakness is in the indent, and that the goods were incorrectly described. Ordinarily, where goods are described as having handles of wood, bamboo or anything of that kind, we ask the quarantine authorities to accompany the customs officer and inspect the goods. In this case the goods were apparently thought to have had ordinary metal, bone, ivory or casein handles. I will bring the matter to the attention of the Minister for Health immediately. I have already asked my officers to ascertain the facts concerning the invoicing so that we may take the matter up at once with the people responsible.

Question resolved in the affirmative.

Senate adjourned at 10.34 p.m.

Cite as: Australia, Senate, Debates, 21 November 1957, viewed 22 October 2017, <http://historichansard.net/senate/1957/19571121_senate_22_s11/>.

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Senate21 November 1957

QUESTION

UNIDENTIFIED SUBMAKINE OFF CAPE YORK

Senator BROWN:QUEENSLAND

Senator HENTY:Minister for Customs and Excise · TASMANIA · LP

QUESTION

HOSPITAL AND MEDICAL BENEFITS SCHEME

Senator WADE:VICTORIA

Senator COOPER:Minister for Repatriation · QUEENSLAND · CP

QUESTION

VISIT OF JAPANESE PRIME MINISTER

Senator AYLETT:TASMANIA

Senator O’SULLIVAN:Attorney-General · QUEENSLAND · LP

QUESTION

PETROL

Senator PEARSON:SOUTH AUSTRALIA

Senator SPOONER:Minister for National Development · NEW SOUTH WALES · LP

QUESTION

INDUSTRIAL ACCIDENTS

Senator KENNELLY:VICTORIA

Senator SPOONER:LP

QUESTION

MOTOR REGISTRATION

Senator SCOTT:WESTERN AUSTRALIA

Senator PALTRIDGE:Minister for Shipping and Transport · WESTERN AUSTRALIA · LP

QUESTION

AUSTRALIAN CONSTITUTION

Senator VINCENT:WESTERN AUSTRALIA

Senator O’SULLIVAN:LP

QUESTION

HOUSING

Senator CAMERON:Minister for Health · VICTORIA · LP

Senator SPOONER:LP

QUESTION

TELEVISION AND BROADCASTING IN WESTERN AUSTRALIA

Senator COOKE:WESTERN AUSTRALIA

Senator COOPER:CP

QUESTION

ATOMIC WARFARE

Senator SANDFORD:VICTORIA

Senator O’SULLIVAN:LP

QUESTION

REPATRIATION

Senator ANDERSON:NEW SOUTH WALES

Senator COOPER:CP

QUESTION

COPPER

Senator HANNAN:VICTORIA

Senator SPOONER:LP

QUESTION

AUSTRALIAN CONSTITUTION

Senator WILLESEE:WESTERN AUSTRALIA

Senator O’SULLIVAN:LP

QUESTION

DECIMAL COINAGE

Senator WARDLAW:TASMANIA

Senator SPOONER:LP

QUESTION

UNEMPLOYMENT

Senator CAMERON:LP

Senator SPOONER:LP

QUESTION

RADIO TELEPHONES IN WESTERN AUSTRALIA

Senator SCOTT:

Senator COOPER:CP

QUESTION

REPATRIATION

Senator TANGNEY:WESTERN AUSTRALIA

Senator COOPER:CP

Senator TANGNEY:

Senator COOPER:

QUESTION

NOTE ISSUE

Senator AYLETT:

Senator SPOONER:LP

GOVERNMENT BUSINESS

Precedence

SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL 1957

Second Reading

WOOL REALIZATION (DISTRIBUTION OF PROFITS) BILL 1957

Senate
21 November 1957

Senator BROWN:
QUEENSLAND

Senator HENTY:
Minister for Customs and Excise · TASMANIA · LP

Senator WADE:
VICTORIA

Senator COOPER:
Minister for Repatriation · QUEENSLAND · CP

Senator AYLETT:
TASMANIA

Senator O’SULLIVAN:
Attorney-General · QUEENSLAND · LP

Senator PEARSON:
SOUTH AUSTRALIA

Senator SPOONER:
Minister for National Development · NEW SOUTH WALES · LP

Senator KENNELLY:
VICTORIA

Senator SPOONER:
LP

Senator SCOTT:
WESTERN AUSTRALIA

Senator PALTRIDGE:
Minister for Shipping and Transport · WESTERN AUSTRALIA · LP

Senator VINCENT:
WESTERN AUSTRALIA

Senator O’SULLIVAN:
LP

Senator CAMERON:
Minister for Health · VICTORIA · LP

Senator SPOONER:
LP

Senator COOKE:
WESTERN AUSTRALIA

Senator COOPER:
CP

Senator SANDFORD:
VICTORIA

Senator O’SULLIVAN:
LP

Senator ANDERSON:
NEW SOUTH WALES

Senator COOPER:
CP

Senator HANNAN:
VICTORIA

Senator SPOONER:
LP

Senator WILLESEE:
WESTERN AUSTRALIA

Senator O’SULLIVAN:
LP

Senator WARDLAW:
TASMANIA

Senator SPOONER:
LP

Senator CAMERON:
LP

Senator SPOONER:
LP

Senator COOPER:
CP

Senator TANGNEY:
WESTERN AUSTRALIA

Senator COOPER:
CP

Senator SPOONER:
LP

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

Senator KENNELLY:
Victoria

Senator HENTY:
Minister for for Customs and Excise · Tasmania · LP

Senator O’FLAHERTY:
SOUTH AUSTRALIA · ALP