Senate
5 October 1961

23rd Parliament · 3rd Session

  1. Senate
  2. 23rd Parliament
  3. 1961

The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 11 a.m., and read prayers.

page 887

QUESTION

QUESTIONS

Senator BENN:
QUEENSLAND

– Will the Minister representing the Prime Minister inform me whether, when a senator refers to a Commonwealth department for inquiry or advice any matter concerning an elector residing in the State for which that senator has been elected to Parliament, it is the practice of the department to notify the senator making the request of the results of the inquiry and, simultaneously, similarly to notify the member of the House of Representatives in whose division the elector resides? If this is the practice, who authorized it? Is the Public Service ‘Board aware of the practice? Will the Minister consult with the Prime Minister on this matter so that the childish practice may be terminated forthwith?

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

– The procedure in these matters is well established. My recollection of the position is that State members should address -their inquiries on -federal matters through federal members, il have no recollection of a procedure -whereby when a senator makes an inquiry the federal member concerned is notified of that inquiry. I ask ‘the honorable senator to place his question on,the -notice-paper so that I may obtain the facts. It ‘may ‘be that such a practice -has developed as an act of courtesy to the member who holds the seat concerned. If the question is .placed on ‘the notice-paper I will get the facts for the honorable senator, because-at the moment I am not clear on the point.

page 887

QUESTION

COAL

Senator ARNOLD:
NEW SOUTH WALES

– My -question is directed to the Minister for National Development. There -have -been several conflicting reports lately -regarding the loss of coal export orders due to lack of loading facilities at Newcastle. Will the Minister inform the Senate what is the true position in regard to the coal export trade?

Senator SPOONER:
LP

– I have some figures with me relating to the coal export trade. The importance of this trade is evidenced by the programme that the New South Wales Government is carrying out. The importance that the Commonwealth attaches to this trade is evidenced by the Commonwealth’s support of that .programme. I am pleased to note that the Premier of New South Wales recently said that the Port Kembla works could be completed ahead of schedule. I understand there is some conflict of -opinion at Newcastle about whether loading facilities should be erected. I hope that conflict will be resolved shortly. I express no view on the various .proposals, because the whole -matter -is -very much a technical one. However, I should like to see Newcastle swing into stride as quickly as Port Kembla has, .because the information we are getting is that the inroads we are making into the Japanese coal trade have attracted a good deal of notice in the United States of America. That country is coming back on pretty competitive terms. It is not only a matter of price but also a matter of providing (loading facilities so :that -the trade can ‘be -handled -expeditiously.

The completion of -the facilities at Newcastle as quickly as possible is a matter of some consequence. That is apparent if one looks at the figures. In the year ended June last our total exports of coal -rose to -1,900,000 tons, returning an income of £7,700,000. That represented a big increase -on our exports in the previous year, which amounted to 1,100,000 -tons. The story is only starting to unfold itself, because the statistics that are available show that in the ‘last half of this calendar year -exports of coal from New South Wales will amount to 1,500;000 tons. Orders booked and -shipments arranged for the last three months of this year show that’900;00(9 tons will be shipped out of New South Wales - 500,000 tons from Newcastle, 200,000 tons from Port “Kembla and 200,000 tons from the port of Sydney.

Senator Ormonde:

– sis there anything in Sir Edward Warren’s fears?

Senator SPOONER:

– Yes. He expressed the view after coming back through America^ - I have had -it confirmed from other sources - that our American friends do not take too kindly to the fact that we will be exporting 1,500,000 tons -of coal from New South Wales in the last half of this calendar year. We must avoid any price war. The Japanese want our coal so badly - it is of such good quality - that there is room for every one to get a share of the market at reasonable prices.

page 888

QUESTION

EDUCATION

Senator DAVIDSON:
SOUTH AUSTRALIA · LP

– My question is addressed to the Minister representing the Minister for Territories. I preface it by saying that I understand that a scheme known locally as the crash teaching programme has been introduced in the Territory of Papua and New Guinea to speed up the training of teachers for primary schools within the Territory. Can the Minister tell the Senate how the scheme is developing, how many persons are being trained, and for what period it is proposed that the courses will continue?

Senator PALTRIDGE:
Minister for Civil Aviation · WESTERN AUSTRALIA · LP

– The courses to which the honorable senator refers are being conducted at the Malaguna Training Centre at Rabaul. They were commenced in January of this year. Students from the the first course commenced teaching in May, 1961, and students from the course at present being conducted will commence teaching early next year. It is envisaged that the courses, training about 60 persons at a time, will continue until such time as the immediate need is overcome.

page 888

QUESTION

PEARLING

Senator CANT:
WESTERN AUSTRALIA

– I address a question to the Minister representing the Minister for Immigration. On 22nd August last I placed a question on the notice-paper but have not yet received an answer to it. I now ask: Is the question embarrassing to the Minister and/ or the department? If not, when may an answer be expected?

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

– The honorable senator raised this matter, I think, two days ago. I took it up with the Department of Immigration as soon as question time had ended and asked the departmental officers to expedite the answer to the question. They gave me an undertaking that they would do so, and as soon as I receive the answer I shall let the honorable senator have it.

page 888

QUESTION

IRON ORE

Senator SCOTT:
WESTERN AUSTRALIA

– Has the Minister for National Development seen a statement to the effect that the Western Australian Government has received a further 200 applications for permits to prospect for iron ore? When a deposit of iron ore is found by a prospector and the discovery is reported to the Department of Mines in the State concerned, does that department make the relevant information available to the Commonwealth Government? Can the Minister state the extent to which discoveries of iron ore have increased since the lifting of the embargo on the export of iron ore?

Senator SPOONER:
LP

– I am sorry to say that I have not seen the newspaper report to the effect that the Western Australian Government has received an additional 200 applications for permits to search for iron ore. That is certainly a very interesting situation. I was confident that there would be an expansion of prospecting activities, but the fact that there have been 200 new applications certainly indicates a considerable increase in activity. Generally speaking, these matters are for the States to determine. The mines departments of the States do what is needed and work in very close co-operation with the Bureau of Mineral Resources. They have a gentleman’s arrangement; each knows what the other is doing. The Commonwealth would not come into the matter officially until such time as the State concerned had sponsored an application for permission to export iron ore. The Bureau of Mineral Resources would then make inquiries to satisfy itself about the extent of the deposit and the arrangements that had been made and would make a recommendation to me. I am confident that there would not have been any re-assessment of iron ore deposits since permission to export was given. It is a big job to measure and assess deposits, and I do not think that the work involved would be justified at this stage. I think we would need to wait for a year or so to see what the results had been

page 888

QUESTION

UNEMPLOYMENT

Senator SANDFORD:
VICTORIA

– Has the Minister representing the Minister for Labour and National Service seen a report published in to-day’s “ Sydney Morning Herald “ in which the financial editor of the newspaper states that the number of unemployed cannot be less than 177,000? Is it correct that that figure represents, not the 2.7 per cent, of the working population to which the Government has referred, but no less than 4.2 per cent.?

Senator GORTON:
Minister for the Navy · VICTORIA · LP

– I have not seen the report which is attributed to the financial editor of the “ Sydney Morning Herald “, whoever he may be. If it is accurately passed on to the Senate by Senator Sandford, all I can say is that, having regard to the figures which are compiled by completely impartial persons who have access to the registrations, the figures given by the financial editor of the “ Sydney Morning Herald “ are completely wrong. The facts indicate not only that the number of unemployed can be less than 177,000, but that it is in fact very much less. The figures showing how many people were registered as unemployed at the end of last month will be published shortly. I have no idea what the total will be, but I am quite sure that it will be much lower than the figure of 177,000 that has been mentioned, even though it will include the men at present on strike at Mount Isa and those who were temporarily laid off by General Motors-Holden’s Limited.

page 889

QUESTION

TELEVISION PROGRAMMES

Senator HANNAN:
VICTORIA

– I address a question to the Minister representing the PostmasterGeneral. Last week I asked a question about the Australian Broadcasting Commission and the “ Chifley Era “. I now ask the Minister: Has his attention been directed to a telecast from Melbourne last Monday night, quaintly titled “ University of the Air “, in which a political symposium was presented for the instruction of viewers? Is the Minister aware that the two members of the panel were Professor Harper - not a Liberal-Country Party protagonist - and Mr. Sam Cohen, the latter giving a straightout Labour political view of the Australian scene? Is this Mr. Sam Cohen the person who has been endorsed by a section of the Labour Party in Victoria as a Senate candidate at the next election and is he the president of the Jewish Council against War and Fascism, which was described last year by Mr. Jacobson, the President of the Jewish Chamber of Deputies, as a Communist front organization? Is it fair that, within two months of a general election, and following Professor Crisp’s effusion of last week, the Australian Broadcasting Commission should run this series of undiluted Labour propaganda? Does the Minister know whether next week’s “ University of the Air “ will feature Dr. Evatt, Mr. Calwell, Mr. Ward or Dr. Burton? Does the commission intend to run a similar series, covering LiberalCountry Party leaders, at this stage, so close to the date of the general election? Even though the writs for the election have not yet been issued, is it intended that this propaganda series will be taken into account when assessing the amount of television time to be made available to the Labour Party in the election campaign?

Senator WADE:
Minister for Air · VICTORIA · LP

– I did not see the telecast to which the honorable senator has referred. I do not know Mr. Sam Cohen, but if his interests are as diversified as the question implies, he certainly is a man of many parts. I do not share Senator Hannan’s concern about what might be described as the apparent liberal allocation of free time by the Australian Broadcasting Commission to Labour interests. I have a profound respect for the good judgment of the Australian people, and I am quite sure that the more they hear of Labour philosophy in the next few weeks the more enthusiastically will they support the Government on 9th December. The matters referred to by Senator Hannan have been brought to the attention of the PostmasterGeneral, who is having them investigated. When the investigation has been completed, I shall convey the results to Senator Hannan.

page 889

QUESTION

ANTI-SUBMAKINE AIRCRAFT

Senator BROWN:
QUEENSLAND

– My question is directed to the Minister for the Navy. Recently there appeared in the press a very interesting article dealing with the new and deadly submarine-killing Lockheed P2V-7 Neptunes to be supplied to the Royal Australian Air Force. The article stated -

Next April, with its Neptune 7’s at Garbutt, No. 10 Squadron will be ready again for any submarine that cares to poke up its periscope.

I ask the Minister: Of what avail would these modern aircraft be against submarines carrying Polaris missiles, which could fire thesedeadlyweaponswhiletotally submerged?

Senator GORTON:
LP

-Since the Neptunes referred to are weapons of theRoyal Australian Air Force, and do not comeunder the control of the Navy, nor were in fact ordered by the Navy, the question should be addressed to the Minister for Air.

Senator Brown:

-Let the. Minister, who should deal with the matter speak. He should answer my question.

Senator GORTON:

-Mr. President, the answering of questions relating to Air Force matters isnot my responsibility.

page 890

IMMIGRATION

SenatorBUTTFIELD.-Myquestionis directed to the Minister’ representing the Minister for Immigration. Is it a fact that in our immigration Jaws there are, some twelve or. fourteen provisions which, allow Asian people to live in, Australia either permanentlyor under contract but which make it perfectly clear, that persons who live here under contract. . shall leave at a specified time? Also is, it a fact thatalmost allAsiancountries have clauses in their immigration laws which exclude certain nationalsfromlivingintheircountries?As there . is seriouslack of knowledge, in both Australiaandoverseasregardingourpolicy, willtheMinisterconsidergivingwideand repeatedpublicitytotheprovisions allowing entry, of Asian nationalsintoAustralia, (a) bypublicizinginthepresstherelevant clauses,and(b).byhavingprintedsmall pamphletsofasizesuitablefordistribution? Ifdesired,suchpamphletscouldbeincluded in every passportissuedsothatAustralians intending to travel overseas can familiarize themselves with these aspects of our policy, thus enabling them. to. answer correctly any queriesor criticisms arising fromunimformed sources in foreign countries..

SenatorHENTY.-The . question that SenatorButtfieldhasaskedisofgreat importance.Idonotthinkthatwecan maketoomuchinformationavailableto our people about theimmigrationlawsin Australia andhowtheyaffectAsiansand others,particularlyincomparisonwiththe immigrationlawsofAsiancountriesthem- selves.Thataspectisoftenforgotten oroverlooked. The question, is of such importance, that I think it, would be. far better if thehonorablesenatorweretoput itonthenotice-paper.Ishallthen get the Minister for Immigration to prepare an answer for. her.

page 890

QUESTION

COMMONWEALTH ANDSTATE FINANCIALRELATIONSHIPS

Senator DITTMER:
QUEENSLAND

-I desire to ask the Minister representingthePrime Minister a question. Is he aware thatthe Queensland Budget for 1961-62hasbeen referred to as a “ booze and betting “ budget because of new levies to. be. imposed?Doesthe Minister know that both State. Government and Opposition members claim that Queensland’s unsatisfactory financial position is due to the parsimonious and. selfish attitude of the Commonwealth Government? In the light of the unsatisfactory position in Queensland, will the Government give an assurance that it will undertakemajor developmental works in that State in an endeavour to assist.it?

Senator SPOONER. Imakenocomment on Senator Dittmer’s description of the Queensland Budget.

Senator Dittmer:

– It is not mydescription. That was the description used, and I am merely repeating it.

Senator SPOONER:
LP

– It would have been more appropriate if youhadnot repeated it, if you do not hold that view yourself. If yourepeat it, by implication you yourself hold the view, and to say that you are merely repeating some one else’s views is, in effect, to retreat into a coward’s castle.

I come now to the substance of the question.The cash allocation to Queensland last year, by comparison withthe position threeorfouryearsago,showed a very substantial increase. Last year Queensland wasprovidedwith£106,000,000 £20,000,000morethanitwasprovided with in 1958-59. The total cash provision toQueenslandfromtheCommonwealth- Government in the last four years has amounted, to no less . than £386,000,000 In, those circumstances the honorable senator should not talkin,terms of parsimonious support, because to doso represents aprejudiced approach to the question.

The honorable senator has asked also whether the Governmentwillcarryout, developmentalworksinQueensland. He isaswellaware as I am that the Commonwealth Government isfinding £20,000,000 forthe reconstruction oftheMountIsa railwayand £5,000,000forbeefroads.As Itoldhimtheotherday, I think 60 per cent. of the total oil subsidy paid in the last twelve months, has beenpaidto people looking foroilinQueensland. There are quite substantial programmes for assisting the search for minerals in Queensland. A few days agoI mentioned that the work of the Bureau of Mineral Resources has unfolded the possibility of additional tin deposits in the Cairns area.If that forecast proves to be accurate, that tin willmakeavery nice contribution to Australia’s economic welfare. Senator Dittmer flogs a very dead horse when he tries to create the atmosphere that this Government is not supporting Queensland and ensuring that that State goes ahead.

page 891

QUESTION

QUESTIONS

Senator Brown. -Onapointoforder,

Mr. President,.Ishouldliketoaskyou WetheritisnotafactthatMinisters arenotcompelledtoanswermyquestion. Ishouldalsoliketoaskyouwhetheritis notafactthat,atleastover the 30, years thatIhavebeen in the Senate, if a senator asksaquestionandinadvertentlyaddresses itto the wrong Minister, the practice has been for the appropriate Minister, courteously to answer the question. If your answer is in the affirmative, do you not thinkitwould have been courteous for Senator Wade to answer my question about. Neptune bombers?

The. PRESIDENT; - I am in the same position as Ministers are. I am not compelled to answer questions either, so I can- not help the honorable senator.

The PRESIDENT:

– You asked me whether I. was compelled to answer questions.

Senator Brown:
The PRESIDENT:

– Ministers are responsible for the manner in which they answer questions addressed to them. That is in, their very good hands. They may do as they wish.

Senator Brown:

-Ihaveneverseen such discourtesy in alltheyearsI have been in this place,.

The PRESIDENT:
Senator Brown:

– I respectfully addressed a question-

The PRESIDENT:

– Order!

SenatorBrown.-IthinkIwillgooutside for a. while.

page 891

MENTAL HEALTH:

SenatorWEDGWOOD.- I direct a question to the Minister representing the Minister forHealth.Isitafactthatnomore money can be made available to Victoria and Tasmania under the States Grants (Mental Institutions) Act of 1955? Also, were theState Treasurers asked to submit their plans for financial assistance in respect ofmentalhealth and mental institutions for the future, and is. the CommonwealthDepartment of Health examiningtheirproposals?HastheMinistersaid that themakingofadditional grants to. Victoria and Tasmania would not necessarily, be held up because of the failure of other. Statestospendtheirallocations?Inview oftheimportanceofanearlydecisionon thismatter,cantheMinisterinformthe SenatewhethertheGovernmentispre- paredtoputatimelimitondiscussions, andifagreementbetweenallStatesisnot reachedwethertheGovernmentwill makegrantstoVictoriaandTasmania, whichhavealreadyprovedtheirabilityto prosecuteavigorousmentalhealthpro- gramme?

Senator HENTY:
LP

-BothVictoriaand Tasmaniaspenttheirallocationssomecon- siderable time ago. I think that Victoria was the first,andTasmaniathe second to do so. It is a fact that the Treasurers concerned.havebeenadvisedthatitwouldnot necessarily delay consideration of further. assistance to Victoria and Tasmania if the other States had not spent their allocations. I have no knowledge about a time limit. I shall consult the Minister on that matter and let the honorable senator have that information.

page 892

QUESTION

CIVIL AVIATION

Senator TANGNEY:
WESTERN AUSTRALIA

– I preface a question, which I direct to the Minister for Civil Aviation, by stating that some time ago I raised the matter of the spread of hours by aircraft crew flying passenger planes from the eastern States to Perth and back. The Minister then told me that this was not a general practice, but later, in a written reply during the recess, he informed me that it was the practice with Electra aircraft that crews fly the return trip between Melbourne and Perth, because of the special skills necessary to operate Electras. Yesterday, in reply to a question by Senator Cooke regarding the cancellation of Monday’s 11.55 p.m. flight from Perth, the Minister stated that the flight could not be carried out because two crew members out of three had exhausted their flying time and could not fly again until the next morning. My question is: Is it customary for airline Viscount crews to fly this return trip, that is, from Adelaide to Perth and Perth to Adelaide? What is the rest period between the forward and return journey? Is this practice common to both airlines? Is there any provision for relief crews to be available in Perth so that cancellations of services will not recur because of crew shortage?

Senator PALTRIDGE:
LP

– The particular instance arose, as I explained yesterday, out of a most unusual sequence of occurrences. The flight from Adelaide was undertaken to replace a flight then in progress by a DC6B aircraft. The crew at Adelaide flew to Perth, and one or two of the crew were then out of hours and could not go back before the following morning.

Senator Tangney:

– There was no relief crew in Perth?

Senator PALTRIDGE:

– There was no relief crew in Perth for that aircraft. It was not expected that that aircraft would arrive at Perth. The expectation was that the aircraft arriving would be a DC6B. The whole matter, as I explained in answer to a question yesterday, is currently under review. I pointed out that it was a most unusual occurrence. Nonetheless, I am having a look at it to ensure that the possibility of its occurring again is reduced to an irreducible minimum.

page 892

QUESTION

UNEMPLOYMENT

Senator CANT:

– I direct to the Minister representing the Minister for Labour and National Service a question which is related closely to one asked earlier by Senator Sandford. Can the figures presented to the Senate concerning unemployment be accepted as the positive maximum number of unemployed persons in Australia? Alternatively, do the figures represent only the number of persons registered for employment? If the answer to the latter part of the question is in the affirmative, on what information does the Minister base his statement that the number of persons unemployed in Australia is less than 177,000? Can that information be made available to the Senate?

Senator GORTON:
LP

– The figures presented to the Senate are those of people in Australia who have registered for employment. In addition, figures are presented showing the number of people in Australia who are in receipt of the unemployment benefit. The number of persons who have registered for employment includes, as always, transient workers, people who have registered for employment and who have since obtained a job but have not passed that information on to the Department of Labour and National Service, people who have left school and have registered for a job for the first time, and so forth. It may be assumed, therefore, I think, that those people in Australia who are in need of a job will be registered for employment with the Commonwealth Employment Office. Having regard to what I have said as to all the categories of people who may be registered for employment, the figures of the number so registered for employment - that is, those people who have gone to the trouble of saying they want a job - bear no comparison to the figures referred to by Senator Sandford.

page 892

QUESTION

POLIOMYELITIS

Senator COOKE:
WESTERN AUSTRALIA

– Over the last few months, and as late as yesterday, I asked the Minister representing the Minister for Health for particulars concerning poliomyelitis - the incidence of the disease in Australia, the number for cases reported, the number of deaths, information concerning immunization and information in relation to the availability of Salic vaccine to the respective States. I understand that the Minister now has that information.

Senator HENTY:
LP

– Senator Cooke has always evinced a great interest in this subject. Yesterday, he sought to know the number of poliomyelitis cases that has been notified this year and last year. At the time I did not have the information. However, I have since had an opportunity to read the interim report for 1960-61 of the Director-General of Health. On page 4 of that report it is stated that 176 cases of poliomyelitis were notified during the year and six other cases still await confirmation. There were 86 confirmed cases in 1959-60.

page 893

QUESTION

WESTERN AUSTRALIAN NAVAL BASE

Senator TANGNEY:

– Has the Minister for the Navy seen a report in last Tuesday’s press to the effect that the Western Australian Government has expressed concern at the lack of a naval base on the west coast of Australia owing to the uncertainty prevailing as a result of the contemplated merger of Singapore and the Federation of Malaya, which would render the naval base at Singapore unavailable to Australia in the event of an emergency? Will the Minister review the Government’s previous decision with regard to the provision of a naval base on the west coast of Australia and not leave this matter in the Kathleen Mavourneen stage?

Senator GORTON:
LP

– I have not seen any recent specific statement by the Western Australian Government regarding the building of a naval base in Western Australia. All that I can say in reply to Senator Tangney is to repeat what I have said on previous occasions in reply to similar questions asked in this place. The establishment of a naval base in Western Australia would cost tens of millions of pounds and would require either a great addition to the defence vote or a great reduction in the defence effort at present being made. I would add that, although I have seen newspaper reports concerning the future of the Singa pore naval base, I emphasize that they have been no more than newspaper reports. The base is a British base and anything that may happen to it in the future is a matter for Britain and the country in which it is situated. Nothing has happened yet.

page 893

QUESTION

ROAD SAFETY

Senator BRANSON:
WESTERN AUSTRALIA

– I direct my question to the Minister representing the Minister for Shipping and Transport, lt deals with the toll of the road. Has the Minister concerned seen the report released by the Commonwealth Statistician on Tuesday last in which he states that 2,605 people have been killed on the roads in Australia so far this year? Is the Minister able to say whether the recommendations of the Senate Select Committee on Road Safety can be implemented in some way in order to reduce this very tragic and unnecessary toll of the lives of the Australian people?

Senator PALTRIDGE:
LP

– I have not seen the report to which the honorable senator refers. It has been Commonwealth policy for a number of years to support the road safety campaigns conducted by the various State organizations, some of them being governmental or conducted by government departments, and others being committees consisting of people drawn from the general community. I cannot say offhand how much the Commonwealth contributes towards road safety, but its contribution has been significant. The actual implementation of recommendations for road safety practices is not and never could be a Commonwealth function. I will see that the matter raised by the honorable senator is brought to the notice of my colleague, Mr. Opperman, in order to ascertain whether any further information that may be of assistance to the honorable senator may be provided.

page 893

QUESTION

CIVIL AVIATION

Senator LAUGHT:
SOUTH AUSTRALIA

– Will the Minister for Civil Aviation state whether his department has in mind any plan to compel airlines engaged in passenger traffic to place passenger seats in such a way that they face opposite to the direction of flight of the aircraft?

Senator PALTRIDGE:
LP

– The question raised by the honorable senator is indeed an interesting one. This matter of rearwardfacing .seats has been > the subject of .discussions : at a number of conferences of the International ‘.Civil Aviation Organization and by .’a ‘ number -jo£ committees of that body. ‘Australia has taken Ja

page 894

QUESTION

TELECOMMUNICATIONS

Senator O’FLAHERTY:
SOUTH AUSTRALIA

-asked -the Minister representing the “PostmasterGeneral, upon -notice -

  1. ‘IS ‘a ‘telephone >and telegraph .cable -being laid -by the Overseas Telecommunications Commission to .connect Australia wi’th ‘Hawaii and thence with the United States?
  2. Has the commission alrea’dy arrange’d that the ‘American ‘.Telephone anil Telegraph Company shall i ha ve ‘ the .sole; right . to use* the .’circuits - between Hawaii and Australia, and thus have the monopoly of the, circuit?
  3. If the .answer to 2 is -in the affirmative, will such an arrangement have the -effect of holding “Australia to ransom, with “no “redress ‘ for the Australian people ‘who - want to use the cable?
Senator WADE:
LP

– The .PostmasterGeneral has (supplied the following information: -

  1. A telephone .and telegraph .cable ‘-is being laid, jointly by -the -United -Kingdom, -Canada, New -Zealand and .Australia between Australia, New Zealand, “Fiji, ‘Hawaii and ‘Canada during 1962 and 1963. 2 and 3. Negotiations have been entered into by the partners to the ‘Commonwealth Telegraphs Agreement with the American Telephone and Telegraph Company for the use of a limited number of circuits in the cable between -Hawaii and Australia. This will not create a monopoly or adversely affect the financial or other interests of Australia in the Pacific cable. Discussions are also proceeding with other communication authorities, such as the Radio Corporation of America, and, insofar as traffic agreements are negotiated, they will be afforded traffic rights on the same basis of payment as ‘applying to the American Telephone and Telegraph Company.

page 894

QUESTION

POSTAL DEPARTMENT

Senator CANT:

asked the Minister representing the ‘Postmaster-General, upon notice - l.-Is ‘it a fact that ‘the ‘Postal ‘Department ;has sent -out circulars advising that the postal clerksintraining course 1962 intake for which examinations were to be held on the 30th September, 1961, has been cancelled owing to unforeseen circumstances?

  1. Is -this the -real reason for the cancellation of the - examination?
  2. What are i the unforeseen circumstances?
Senator WADE:
LP

– The PostmasterGeneral has supplied me with the following replies: - 1 and 2. “The examination to recruit the 1962 intake of postal clerks-in-training will be held on 30th September, 1961, as arranged. ‘However, candidates in Western Australia ‘have been advised that ‘there wilt be- no intake for’ training and subsequent .placement in Western Australia. A small number will -be recruited in that State and trained in ‘Perth but will be required to take up duty in Victoria upon completion of training.

  1. ‘The main reason’ for cancelling the course for Western Australia is that, ‘following the reorganization ‘-of -the Post Office -in ‘August -this ‘year postal clerk positions were transferred from the Third Division ‘to the ‘Fourth Division; as a result, more officers are expected to qualify for advancement as postal clerk through -normal advancement examinations than was originally estimated. It will. now be possible to meet-staffing requirements ‘ in the postal clerk group in Western “Australia without the ‘nee’d ‘for ‘a training course.

page 894

QUESTION

DAIRY ‘INDUSTRY

Senator WRIGHT:
TASMANIA

asked the Minister representing the ‘Minister ‘for “Primary Industry, ‘upon ‘notice -

What is the latest announcement by the Government about ‘any decision on the report of the McCarthy committee -“on the dairy -industry?

Senator WADE:
LP

– The Minister for ‘Primary ‘Industry ‘has -‘furnished ‘the ‘-following answer to ‘the ‘honorable senator’s question: -

The Government announced some time ago that lit was ‘willing to ‘discuss -with the State gove’rnments and the industry -organizations several issue’s arising from the report -and ‘recommendations -df the Dairy .Industry Committee of .Inquiry.

The two principal items .for -discussion ‘are -in respect of a new five-year stabilization .plan to succeed the present agreement which terminates on -30th June, 1962, ‘anil the ‘reconstruction of that :section -of the ‘.industry which ‘the committee .believes ?is in ‘unsatisfactory economic circumstances.

Negotiationswiththeindustryorganizationson newstabilizationproposalswillcommenceatan appropriatetime,whentheideasoftheGovern- mentandtheindustryhavebeenfullyformulated. Thereconstructionaspectsaretobeconsidered atthenextmeetingoftheAustraliaAgricultural Council,which,onpresentindiciations,willtake placeearlyin1962

page 895

COMMONWEALTH AND STATE FINANCIALRELATIONS

SenatorPALTRIDGE.-On6th September, Senator Laughtaskedthatalist be preparedshowingCommonwealthcapital expenditurerelativetoallCommonwealth departments,commissions,instrumentalities andagencieswithinSouthAustraliaforthe tenannualperiodssince1stJuly1950.

In reply, I wouldpoint outthe : parliamentary appropriations arenotrestricted, generally,toexpenditureinanyparticular State.TheCommonwealth’sexpenditure isrecordedinrespectofeachvotefrom detailsofindividualpaymentswhichare broughttoaccountthroughtheSub- TreasuryineachStateandineachCom- monwealth Territory. An attempt to allocatetheexpenditurebetweenStateswould beamajorundertakingand,moreover,, theanalysiswouldbeofverydoubtful value. Expenditure brought to account byaparticularSub-Treasurymayinclude forexample,paymentstointerstateand overseassuppliers.Furthermore,expenditureinoneStateisoftenfor equipment andsuppliesforprojectsinanotherState. Inshort,thepaymentsrecordedinany Sub-Treasurydonotpurporttoindicate theexpenditurewhichmaybeattibutable toCommonwealthactivitiesorservicesin thatStateor Territory.

page 895

QUESTION

NEWSPAPER REPORTS

Senator McMANUS:
VICTORIA

– Mr. President,I ask for leave to make astatement.

Senator Arnold:

-Iwitnessedanunfor- tunate incident recently when anhonorable senator sought leave to make a statement without sayingWhatkind ofstatement he intended to make. I shall not offer any objection if Senator McManus tells the Senate the kind of statement he intends to make.

Senator McMANUS:

– I desire to make a statement in refutation of attacks that have been made upon my character as a senatorintheAustralianpress in the last two days.

ThePRESIDENT. - Is leave granted? Therebeing no objection,leave is granted.

Senator McMANUS:

– Ithank the Senate for its indulgence in enabling me to reply to the attacks to which Ihave referred. They relate, apparently,tothe issue of an anonymous circular regarding a member oftheVictorianbranch ofthe Australian LabourParty-Mr.S. Cohen. Attacks have been made on me, my supporters and my party. Thoseattacks appeared in ‘the official Australian ‘Labour Party columns of the Melbourne “ Herald”’ of Tuesday last, 3rd October, and the Melbourne “ Sun News-Pictorial “ of Wednesday, ‘4th October.Theywereaddedtoinapress statement made by theHonorable A.A. Calwell, the Leader ofthe Opposition in another place.

Theattackswhichappearedinthe Melbourne”Herald”andtheMelbourne “SunNews-Pictorial”aretheculmination ofaseriesofinsultingpersonalattacks whichhavebeenmadeonme,nodoubt withaviewtotheelectonon9thDecember bythesecretaryoftheVictorianbranchof theAustralianLabourPartywhosename, accordingtomylastinformation,wasCyril Wyndham.Iassumethatisstillhisname! IntheMelbourne”Herald”ofTuesday last,Mr.Wyndham,referringtothis anonymouscircularofwhichImysup- portersandtheAustralianDemocratic LabourPartyhad no knowledge, went so far as to say that it was diabolical political treachery, issued ; by the enemies of the Labour Party “ to bolster the declining

D.L.P. votefor Senator McManus “. When one considers the result of the last Victorian election, the suggestion that the D.L.P. vote is declining shows great optimism on the part of Mr. Wyndham.

Not satisfied withhavingsaid that, on the following morning he published this statementin the Melbourne “ Sun ‘Newspictorial “ -

The desperation of theD.L.P. to secure the re-electionofSenatorMcManusisreflectedinthe political trickery in which the partyisnow indulging.

Mr.Calwellsupplementedthatstatement withapressattackinwhichhesaid -

It is evident that the leadersoftheD.L.P andtheLiberalParty-

Supporters of the Government are in it now, too - are relying heavily on character assassination and abuse as substitutes for reasoned argument.

After making a plea for reasoned argument, Mr. Calwell, without any evidence at all, went on to attack me and others and to say that it was obvious that the late Senator McCarthy of the United States of America had a lot of admirers in this country who were prepared to emulate his worst practices by distorting the truth and purveying falsehood. He said the document was undoubtedly the work of a few fanatics. Mr. Calwell did not produce one shred of evidence.

Senator Ormonde:

– Did he name you?

Senator McMANUS:

– I was named in the other statements. As regards Mr. Calwell’s statement, with due humility I suppose 1 would be regarded as being a leader in my party - considering there are only two of us, anyway. Mr. Calwell made his statement without a shred of evidence. I have great sympathy for the members of his party in this chamber. I recall how their feelings were harrowed when an attack was made by Senator Cole, without evidence they said, on some one. I remember how deeply hurt they were that that kind of thing should have been done. But I am not going to imitate Senator Poke, who suggested that Senator Cole ought to be deported for attacking a person without evidence. I am not going to ask that Mr. Calwell be deported. I would not want Mr. Wyndham to be deported. He is the greatest asset that the D.L.P. has in Victoria.

I have not replied previously to Mr. Wyndham’s attack because in his letters and statements in the press he has revealed such abyssmal ignorance of the Australian Labour Party that his attacks have carried their own refutation. Fancy the spokesmen for Labour attacking me-

Senator O’FLAHERTY:
SOUTH AUSTRALIA · ALP

– Mr. President, I am forced to rise to order. I understand that leave was granted for the honorable senator to make a statement to protect himself against some attacks that had been made on him. I direct your attention to the fact that he is not protecting himself but is attacking other people, including members of the Australian Labour Party. I suggest that his remarks in that respect have no connexion at all with the leave granted tohim to make a statement.

The PRESIDENT:

– Senator McManus,. I think you are wandering a little from thescope of a personal statement. If you. confine yourself to making a personal statement you will not offend against the Standing Orders.

Senator McMANUS:

– I want to say,, again, Mr. President, that if there had. been a shred of evidence given in regard to these bitter and insulting attacks upon, me and my party it might have been possible for me to say something about it; but no evidence has been given. Instead,, we have been traduced in every newspaperin the Commonwealth. I was traduced, and apparently the matter was of so much importance that it appears to-day on page 1 of the “ Sydney Morning Herald “.

Neither I nor any associate of mine hashad anything to do with the issuing of the pamphlet, and neither has the D.L.P. I say with great deliberation, in view of Mr. Calwell’s attack on me, that he, I know, has many good friends among the Jewish, community in Melbourne. He knows the sources from which that pamphlet emanated. He knows, too, that those sources have noassociation with the D.L.P. and that the pamphlet involves a faction fight among, supporters of his own organization. I therefore invite anybody who wants to make an attack on me or my party to produce the evidence and we will reply to it. We have a pamphlet and we have statements, made in it. There is no attempt to reply to the statements in the pamphlet. Instead, there is action to create a diversion in another direction. I conclude by saying, that the attacks that have been made on me have no basis whatever in fact, and neither have the attacks made on my associates and my party. What has happened in regard to the circular is that there is a faction fight amongst the supporters of the Australian Labour Party. We have noassociation with it, other than that we are looking on at it from a ringside seat.

page 896

AIRLINES AGREEMENTS BILL 1961

Second Reading

Debate resumed from 4th October (vide page 882), on motion by Senator Paltridge -

That the bill be now read a second time.

Senator ARNOLD:
New South Wales

– 1 am tempted to enter this debate because, in my fairly long experience of the Senate, I have never seen a more extraordinary bill introduced in this chamber. Almost the sole purpose of the measure is to prop up a public company. Over the years, I have heard the supporters of the Government continually praising the efforts of private enterprise to run this country. We have been told that the only way for Australia to prosper is to give private enterprise the opportunity to compete in various fields of activity and that only in that way will there be efficiency. On this occasion we have an example of a privately operated enterprise being opposed to a government enterprise. Despite the fact that the private organization is a vast one, we now find that the Minister for Civil Aviation (Senator Paltridge) and the Government deem it necessary to subdue the government organization and prop up the privately owned organization. I think that that is an admission by the Government that private enterprise has fallen down on the job and has not been capable of a sustained effort in competition with the well-run government enterprise.

I should have thought, Sir, that this new privately owned organization, with all its ramifications, with its intra-state services bringing customers for its interstate aircraft, with its coaches, hotels and all the rest, would have been capable of running Trans-Australia Airlines out of the skies. But what do we find in this bill? As I have said, it is the most extraordinary measure that I have seen a government introduce. First, the Government says, “ We will do everything we can to prevent our own airline from being successful, and then we will see that the other airline not only has all the advantages but makes a profit of something like 10 per cent.” I do not know why it does not apply that line of reasoning to all the other private enterprise undertakings, such as the Broken Hill Proprietary Company Limited. Why not give them a protection to make 10 per cent.? The Government is saying to a public utility: “We feel that you ought not to have competition that will compel you to bring down your charges. You ought not to render to the public the best possible service at the lowest cost. What you ought to do it to see that your shareholders receive the benefit of a profit of not less than 10 per cent.”

That is the problem that brings me to my feet. lt appears to me that the Government has caught a tiger by the tail and dare not let it go. The Government says, “ We want to have two airlines. We have T.A.A., which is operating successfully and economically and is setting the standard in Australia. We have also the private airline, which is not doing very well. We will have to prop it up and see that it does not have to meet too much competition. Above all, we must assure the shareholders, not that the private company will earn a reasonable profit, not that it will earn a profit of 6 per cent, or 7 per cent.” - that is higher than the profits earned by many industries in Australia to-day - “ but that it will earn a profit of not less than 10 per cent.” The Government goes on to say, “ We shall ensure that Ansett Transport Industries Limited will make a very handsome profit and, in addition, will be permitted to allocate a certain amount of money to reserves “.

Down through the years we have seen private companies setting aside money for reserves and, after a while, making bonus issues of shares, so that the shareholders receive the benefit of the reserves. The Broken Hill organization now has something like £65,000,000 in capital and I make bold to say that no more than onehalf of that sum was subscribed by the public. Down through the years big industrial concerns have been able to capitalize their reserves by bonus share issues, thus giving the benefit of the reserves to their shareholders. That is very nice for the shareholders. The Government is saying that Ansett Transport Industries Limited will be allowed to set aside reasonable sums as reserves. Who is to say what is a reasonable sum? The people who will set the money aside for that purpose will be the directors of the company.

Senator Wright:

– Is there a provision in the bill or the agreement relating to a reasonable sum for reserves?

Senator ARNOLD:

– Have not you read the legislation?

Senator Wright:

-I did not notice that provision.

Senator ARNOLD:

– My colleague will find it for me. It is in the legislation, and I will read it out in a minute. My colleague now says that the matter was referred to in the Minister’s second-reading speech. When, a Minister makes a secondreading speech, it is right for an ordinary member of the Parliament such as myself to accept what the Minister says in that speech as representing the intentions of the Government. In the passage in the secondreading speech, dealing with this matter the Minister used the delightful term “ reasonable, private, enterprise standards “. If I could obtain shares in a show that made a profit of not less than 10 per cent. all the time, after putting aside certain amounts to reserve and after meeting depreciation charges and taxation, that would suit me. I should think that I was on a pretty good wicket. What the Government considers to be reasonable in this connexion, I do not know, but the Minister said-

In orderto meet reasonable private enterprise standards, Ansett Transport Industries Limited must have a target of the order of 10 per cent. after taxation and a reasonable allocation to reserves.

As I have said, I do not know what the Government wouldregard as a reasonable allocation to reserves, butI do know that ifI were adirector of the company, knowing that the profits were guaranteed by the Government orknowing thatmy competitor would be compelled to run his business in such a way as not to prevent me from making a profit of 10per cent,, Icertainly shouldallocatea very adequate amountto reserves. I should also ensure, ifI were a directorof the company, that depreciation would be well covered -that the value ofbuildings, land- equipmentand everything else would be written down to such a degree that, ifitbecame necessary, they could well be replaced out of the reserve set aside. We see that reserves, depreciation andtax charges willbe taken intoaccount.

Ansett Transport Industrie’s has a number ofsubsidiarycompaniesand theposition could arise thatlosses incurred by subsidiaries were covered by themajor undertaking. It could be possible for losses incurred by subsid iariestobecoveredby the airline. For instance, Ansett Trans port Industries operates coach services. Not very long ago passengers were carried free of charge from airports to the city offices of airlines, but now they have to pay for that service. If the Ansett coaches were not doing very well, would there be anything to prevent Ansett-A.N.A. from doubling the charge made for transport from airports and using the extra revenue to offset the losses on the coaches?

The act provides that the Minister, not later than one month before the commencement of each financial year, will determine the percentage of the capital of the Australian National Airlines Commission that would represent a reasonable - he uses that delightful word again - return to the Commonwealth for the operations of the commission in that financial year. If he found that the private airline was not earning enough money, he could alter that determination at any time during the financial year. He is taking that power to himself. He is not satisfied with taking power only to set a target for T.A.A. for twelve months. He is not satisfied with having power to say, “In the next financial year T.A.A- must make so much profit. This will give its competitor a chance to make a similar profit but, even if it makes less, this will remain the target.”

Senator Kennelly:

– I do not know much about shares, but this seemsvery good for the shareholders in Ansett Transport Industries.

Senator ARNOLD:

-Ishould have liked to have bought some of the shares before this legislation was introduced. Anybody whois fortunate enough to be a shareholder willmakea very good profit on his shares, because this legislation props up the company. If, after a few months, it appeared that T.A.A. was competing too successfully with Ansett-A.N.A., the Minister could say to the Government airlines “ You must lift your sights a little; you must make more profitthis year. Increase fares by 5 percent.” Ansett-A.N:A., however, could increaseits fares by only 4per cent., which wouldenableitto take traffic away from T.A.A., and so increase itsprofits.

We haveseen some extraordinary things happen in this country. We have seen monopolies arise and gain control of a whole industry. Althoughtheyhavebeen inefficient, they have still been able to make profits. Because of the conditions under which they have operated, they have been able to mulct the Australian people in whatever profits they wanted to make. I thought that was an extraordinary position. We are in that position to-day, and apparently it is intended that we shall go a step further. Not only is there a monopoly, but the Government’s policy is to hamper a government enterprise which is competing against a private monopoly show, so as to give the private monopoly all the advantages. The Government says to its own industry, in effect: “ We want this private show to make a considerable profit. We want it to flourish and to have such reserves that at any time it will be so solid and strong that nobody can run it out of the air. We want to see that year after year it makes a profit of at least 10 per cent, after covering all the other contingencies that private industry in other fields has to .meet.” The Government also decides to give the private airline these advantages for another sixteen years.

Senator Dittmer:

– That is politically immoral.

Senator ARNOLD:

– What the honorable senator says is true. I ;cannot understand how any government. can bring in -legislation such .las this solely .to .enable a .group of private individuals to make a profit. The Government is saying to the fortunate shareholders df Ansett ‘Transport Industries in effect: “You have -put your money into this show. It ‘has not ‘been ‘going too well although we have tried to help it over the last seven or :eight years. It has got to the stage now at which you .really must have some extra help. Now we are .going, to put you .in the position for .at least another fifteen or sixteen years where you will make a profit of 10 per .cent., and if that is not enough the Minister .can, at any time, determine to give you a little more.” When my friend, Senator ‘Dittmer, says that it is immoral, T think .that .he describes .the. position perfectly. The Government is dissipating the money of” the people in order to give it to a group of private individuals.

Senator Toohey:

– -It is creating .millionaires by legislation.

Senator ARNOLD:

– These private individuals will at least do very well out . of it.

The onus -is to be put on the Minister himself to specify the dividend target. What a responsibility to put on >a Minister! As we were told by the Minister in the secondreading speech, .the Government has decided on a profit of 10 per cent. The Minister has pointed out also that the Australian National Airlines .Commission is at a disadvantage because of the ^greater spread of overhead of its principal competitor. The Government is taking that into consideration, of course, in determining what the dividend rate . shall be. The Minister himself will weigh the position up and then authorize the specified dividend target of the commission.

The Government is not concerned about the commission at all. It is not concerned about how much money T.A.A. returns to the Commonwealth; it has never been interested in that. The Government has never taken any account of that factor previously, but suddenly it is interested in how much money T.A.A. is to make for the Commonwealth. Anybody can see that the whole thing is a subterfuge.

Let us consider these two airlines. TransAustralia .Airlines is running successfully, making a profit and .offering a great service to the people of Australia. It is a government show. .The other line .is .a private enterprise undertaking. The Government has said that it is determined to have two airlines, but it is also determined that the private enterprise airline will .do very well. That is why it has cooked .up this scheme. The Government says that T.A.A. has to return a decent dividend to the Commonwealth. That is just a lot of hooey. Nobody believes it. The -Government has imposed on T.A.A. a target rate of profit , which can be reviewed at any time during the year if so desired. In effect the Government is compelling T.A.A. to add to its expenses a certain amount of money which will have to be recouped either by charging the public more to travel, or by effecting some economies in the organization. .After all, the ‘ government airline is a pretty efficient organization now. It has demonstrated that by making the private enterprise show look so foolish that . it has had to be given all these advantages by the Government.

This legislation .will, in effect, cause T.A.A. to charge the public more “for air travel, lt is only in that way the organization will make a profit of 10 per cent. As a matter of fact the Minister might feel that in one year things are not too good and he may decide therefore that the profit target should be 12 per cent, or 14 per cent. There is nothing to stop him from doing that; it is up to him. If he so desires there is nothing to prevent him from determining that the government airline shall pay a 10 per cent, dividend, or any other percentage that he determines. This arrangement will leave the way open for Ansett Transport Industries Limited to charge such fares that it will be able to compete inefficiently with T.A.A. and still make a profit. I never thought 1 would see the day when this type of proposition would be put up in the Senate. The Government is determined to make huge sums of money available to a private enterprise organization, to enable it not merely to struggle along, but also to make a handsome profit for its shareholders.

What do the people of Australia get out of all this? I suggest that they will get an inefficient airline charging more for its services than ought to be charged. They will also get a government airline which is compelled not to compete against the private airline. Other honorable senators have pointed out just how the government airline has been hampered. My leader, Senator McKenna, pointed out last night very pertinently that Mr. Reg Ansett had written a letter in which he said that these were the sorts of things that he would like to have done. The Government acquiesced in the whole lot of them. The Government has given preferential treatment to this airline. The Government has given it all the money it wanted, and is now going to see that its profits are assured.

I repeat: What do the people of Australia get out of all this? Can the Government guarantee that they will get an efficient airline? It cannot. The Government itself has said that the only way in which this system of air services can work is on the basis of free competition which brings about efficiency. The Government has eliminated free competition with the result that inefficiency will follow. The people of Australia will not get an efficient airline out of this arrangement. All they will get will be the delightful responsibility of keeping Ansett-A.N.A in the air whilst their own airline is so hampered that it cannot develop and give to Australia the type of service it ought to have.

If an organization such as Ansett Transport Industries needs this artificial assistance in order to keep its aircraft flying, it is an inefficient show. If it were efficient it would be able to compete with T.A.A and give a good service to the people of Australia. This is the first time in my experience I have seen a small group of shareholders given this preferential treatment by a government, and being enabled to make a profit as a result of government legislation. The Government is blatantly handing this plum to Ansett Transport Industries and I feel that its action on this occasion surpasses anything I have ever seen before.

Senator BRANSON:
Western Australia

– I should like to refer to the note on which Senator Arnold finished his speech. Anybody who was listening to him would have thought that this Government had money directly invested in Ansett-A.N.A. That is completely untrue. The Government certainly has given guarantees, but the moneys that have been borrowed by that company are covered adequately by mortgages over assets. It is quite untrue to imply that the Government has lent money to Ansett-A.N.A.

There is another misconception in respect of the terms and period of operation of these civil aviation agreements. The original 1952 agreement was for a period of fifteen years and normally would have expired in 1967. What appears to have been overlooked is that sub-clause (5.) of clause 3 of that agreement provided as follows: -

No guarantee shall be given by the Commonwealth under this clause in respect of, nor shall any then existing guarantee apply to, any moneys borrowed by the Company after the expiration of a period of fen years from the date of the commencement of this agreement . . .

That is, from 1952 to 1962. The period of five years after 1962 covers the repayment of loans outstanding in 1962. The agreement itself expires in 1962. So, it is for a period of ten years, not some of the periods that I have heard stated in this chamber.

This 1961 agreement extends the period in which guarantees can be given from 1962 until 1972 and allows, as was the case in the 1952 agreement, a period of five years for the repayment of loans. Sub-clause (6.) of clause 4 of the agreement which is now before the Senate reads as follows: -

A guarantee shall not be given by the Commonwealth under this clause in respect of any moneys borrowed by Ansett Transport Industries Limited or Australian National Airways Proprietary Limited after the expiration of a period of ten years commencing on the eighteenth day of November, One thousand nine hundred and sixty-two.

So, this agreement provides for the period up until 1972, but also provides for a period of five years after that year for repayment. However, moneys cannot be lent under this agreement after 1972. lt is essential that while any loan is not repaid the Commonwealth should have full access to the accounts of Ansett Transport Industries Limited. Clause 16 of this 1961 Civil Aviation Agreement, under the heading “ Commonwealth access to Company’s accounts “, states -

For so long as a loan or any interest on a loan the repayment of which has been guaranteed by the Commonwealth under clause 3 of the Civil Aviation Agreement 1952 or clause 4 of this agreement remains unpaid, officers employed in the Commonwealth Service shall have full access at all reasonable times to the financial accounts of the Company . . .

So, for a period of five years after this agreement expires, as far as loans are concerned, in 1972, the Commonwealth still will have access to the accounts of Ansett Transport Industries Limited; that is, until 1977.

Senator Kennelly stated that the crosscharter arrangements between AnsettA.N.A. and Trans-Australia Airlines had been to the disadvantage of T.A.A. I wonder just how that airline would have fared with Viscount aircraft on its flights to New Guinea. We all know that they are very good aircraft, but their operational distance is limited. Would Senator Kennelly suggest that T.A.A. take one of its Electras off the very high-earning capacity runs within the Commonwealth and transfer it to the New Guinea run? I do not think that would have been a practical proposition. Without the

DC6B’s, how would the government airline have entered the New Guinea run? I believe that having the use of the DC6B’s worked to the advantage of T.A.A.

During Senator Kennelly’s speech, by way of interjection I asked him whether he really meant that both airlines would have to re-equip with the same class of jet aircraft. He said that of course they would. I pursued my interjection and pointed out to him what the Minister for Civil Aviation (Senator Paltridge) had stated in his secondreading speech. Apparently the Minister impressed Sir Giles Chippindall because on 29th September Sir Giles said that he did not believe that the Government would insist on both airlines re-equipping with the same type of jet aircraft. That statement was published in the press. The Minister, in his second-reading speech, said -

Under our two-airline system, I think past experience suggests that it is axiomatic that the airlines must re-equip with jet aircraft comparable in size and performance- and I emphasize these words -

. although not necessarily of the same type.

The Minister said that and Sir Giles Chippindall believed him. It is also argued that neither airline should be permitted to obtain an advantage in the delivery dates of the jet aircraft. I will come back to that a little later. I wanted to refute the suggestion made by Senator Kennelly that both airlines would have to re-equip with the same type of aircraft.

Honorable senators opposite have said that this agreement is a blow to T.A.A. and a straight-out, direct assistance to Ansett-A.N.A. Will they please remember that up until now that private operator has had a ceiling of £9,000,000 on its drawings, and this agreement curtails that to £6,000,000? Also, in the past AnsettA.N.A. enjoyed the assurance that if it could not raise on the loan market the £4,000,000 loan that had been guaranteed, the Government would find that money. The clause to that effect has been withdrawn from the agreement. No longer is the Government responsible for finding that £4,000,000.

Senator O’Flaherty:

– But the Government guarantees it.

Senator BRANSON:

– The Government guarantees, the. loan; but if the company cannot, raise that, loan the ‘Government) does not. have to find, the.- money.

To my mind, the legislation, now before the Senate falls under four headings. First, it re-affirms the Government’s policy of a two-airline system. I remind the Opposition that for a period of twelve years this Government has gone to the people on a policy, and part of that policy is that the Government believes in a two-airline system.

Senator Wright:

– That has- been only, for the last ten years.

Senator- BRANSON. - I stand corrected; For the last ten- years the Government- has been re-elected on its policy of a two-airline system. Is it- not the responsibility of the Government to carry out the policy on which it was elected? Goodness gracious me,- 1 believe it is If members of . the Opposition went to the -people and said that theybelieved in a nationalized’ airline, I’ would expect them to honour their promise, if they were elected. They probably would honour their promise and nationalize the airline.

Senator Ormonde:

– Would you stop another airline, starting, if it. had the money?

Senator– BRANSON. - The Government has stated that it believes in a two-airline system: I’ cannot envisage a third companywanting; to come into the- airline business to-day because that business is still tryingto get on its feet. I will not go as far as Senator Henty went the other- day; but if the honorable senator reads that speech I think he will agree that it .was not a bad one.

Senator Wright:

– You cannot envisage’ that so long as the. industry has? government competition, government licensing . and government control.

Senator- BRANSON. - Yes: The secondfeature of the bill is that there- will be no increase in navigational charges greater than 10 per- cent, per annum. Thirdly, if there is any increase in tax on’ aviation- fuel, theincrease will ‘ be related to the increase in tax on motor fuel. Fourthly, the bill’ will consolidate rationalization procedures:

The Airlines Agreement Act of 1959, which introduced detailed provisions- for the rationalization of aircraft flights, was designed to ensure- that neither airline had excess capacity and that, the- acquisition , of additional, aircraft would, be governed by principles that ens-used., that, neither aircraft had a qualitative advantage over the other. The bill: provides- for the purchase of jet aircraft, for delivery not before June, 1964. Re-equipping with jets by then will mean that we shall not be. disposing of other aircraft before they have reached the end of their life. The. jets, by that time, . should take up the normal, increase in traffic, which is running at the rate of - 6 per cent, a year. We may expect an increase of 18 per cent: in traffic, in three years. The report of Trans-Australia Airlines states that; the three Electra aircraft in 1959-60 carried 27 per cent, of the traffic, so the introduction of two jets will mean that we shall not have to get rid of the front-line aircraft that we have to-day. The jets will take up the normal 6 per cent, increase in traffic. The. two jets should meet, the 18 peri cent, increase. The bill is being introduced now, I: understand, because if orders are. lodged by June, 1962, the aircraft ordered will probably not be delivered until June, 1964. I am comforted by the Minister’s statement that neither airline will be permitted to obtain an advantage in delivery dates. . Section. 13’ of the Airlines Equipment Act i of- 19-5.8 is admirably- designed to achieve this- objective andi it is- therefore proposed- that1 all’ applications- for turbojet aircraft, will. be. determined in accordsance with the principles of that act.

Iri passing, I mention that I have notheard any- one make reference to -the type of’ jet aircraft- that may, be considered; The only, information,that I.have been, able to. obtain is that at this point it appears that four pure jet aircraft may be con? sidered. These are. the. De Havilland Trident, the. Boeing 727,’ the French Caravelle, and. the British Aircraft Corporation’s aircraft known as XXXX 111. Only time will tell which . of “ these will’ be. chosen. Government guarantees to Ansett-A.N.A. in the past could, have reached a ceiling of £9,000,000: This bill reduces the ceiling to- £6-000,000, and removes the provision that th’e Commonwealth will find up to- £4,000,000 - if ‘ the- company is– unable to raise the total amount by way of loan’.

Senator- Hannan. - Do- you know the stage- of “ development reached by the British 111?

Senator BRANSON:

– No. According to the Minister,- the cost of the aircraft, dependent upon the type- selected, will be between £1,200,000 and- £-2,000,000. Having regard to the minimum requirements over the ensuing ten- years, the Government has decided that the- £9,000,000 ceiling considered appropriate in 1952 should be replaced by similar arrangements authorizing guarantees for the repayment of loans not exceeding at -any one time £6,000,000. This- figure will, of course, enable the company to purchase significantly more than the two turbo-jet aircraft con> templated for 1964.

The Minister went on to say that it was the Government’s intention to take whatever steps were reasonably necessary to ensure that the commission- was- in- a position to purchase all turbo-jet aircraft for which a certificate was issued. It- seemsprobable that the commission will be able to finance at- least- the first of the turbojets from its own resources, but in any event* appropriate steps will: be taken to ensure that it is not prejudiced, in playing its rolein the two-airline policy, because of lack’, of capital or limitation of its borrowing, powers. The Minister also said that further purchases by the company would be geared to purchases by the commission. That is an important factor.

It is rather, significant, in view of Her Majesty’s Opposition’s attitude, that all of the proposals of the Minister have met, with, the approval of both the commission and Ansett-A.N.A. Figures in relation to the growth of T.A.A. have been given, but one set of figures that J.’ have not heard mentioned relates to the number of. personnel employed. In 1948-49, T.A.A. carried 454,759 passengers and at that time its staff, numbered 3,393. That is shown by the 1949 report. In 1961 the number of passengers carried jumped to 1,071,000 - well”, over double - but the staff. had increased to only. 4,168. An increase in staff of only 775 has accounted for more than double the. traffic.

T.A.A. issued a. rather, interesting publication on- its fifteenth- anniversary. It makesme, smile when, the Opposition keeps saying, that this Government is* trying to driveT.A.A. out of the air and doing everything in- the world- to impair?’ it’s growth and existence. For twelve- out of the fifteen years of its life, T.A.A. has been- run by this Government, and since 1956 it has been in the very capable hands of my Western Australian colleague, Senator Paltridge. It is significant to look at the period from 1956 to 1961, but I shall go back a little further to examine the position of this airline that the Government, according to my friends opposite, is still trying to drive out of the air.

In May, 1951, two years after this Government took over,- T.A.A. carried its 2;000,000th passenger. In- 1954 it carried its 4;000,000th- passenger and one year later it carried- its 5,000,000th passenger. This is the airline- that is being restricted and curtailed! In 1959, the- total number of passengers carried had jumped to- 8,000,000. In 1960 T.A.A. became the first Australian airline to carry 1,000,000 passengers in twelve months. This is a- very fine record for an airline that is- being, kicked and subjugated by all sorts of restrictions! By June, 1961, it had carried its 10,000,000th. passenger. Mr. Acting* Deputy President, I ask for leave to continue my remarks at a> later stage:

Leave granted; debate adjourned.

page 903

CATTLE SLAUGHTER, LEVY COLLECTION BILL 1961

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 Civil Aviation · Western Australia · LP

– I move -

That the- bill be now read , a, second time.

The purpose of this bill and the associatedmeasure, the Cattle and Beef Research Bill, is to introduce certain amendments to the existing legislation to meet the position arising from the issue by certain meat interests of a High Court writ challenging the validity- of the cattle and beef research legislation of I960”. It may facilitate consideration of these bills if I review briefly the situation which- has held up the active, approach to beef research that is so important to the welfare of the Australian beef’ cattle industry. The cattle and beef research legislation provides for the collection of a levy on all cattle slaughtered for human consumption over 200 lb. dressed weight. The levy is payable by the person owning the cattle at the time of slaughter. The maximum rate of levy is 2s. per beast.

The research scheme was developed on the premise that while the owners of the stock at the time of slaughter would be responsible for the payment of the levy, the impact of the levy would actually be borne by the cattle-producing section of the industry through adjustment of the livestock purchase price in the same way as allowance is made by the meat works operators in the ordinary course of events for changes in the supply and demand situation, overseas market price trends and outlook, killing charges and freight or other operating costs.

After the slaughter levy came into operation on 1st July, 1960, meat operators began to deduct the amount of the levy from the selling agents’ invoices in respect of cattle purchased at auction. The result was that the selling agents, with no legal right under the legislation to deduct the levy from the account sales of the vendor of the cattle, had in many instances to bear the impact themselves. In the case of private treaty sales, meat operators were deducting the levy from the account sales of the producer without any apparent difficulty.

Following representations by various interests, my colleague, the Minister for Primary Industry (Mr. Adermann), met a combined deputation of meat industry and cattle producer representatives on 28th July, 1960. At that meeting the meat operators contended that they could not make allowances for the amount of the levy in their buying limits at auction sales, and, like the selling agents’ representatives, they requested that the existing legislation should be amended to ensure that cattle producers are made directly responsible for financing the research plan, since the major producer organizations had sponsored the plan and had indicated the willingness of the cattle raisers to finance it. The cattle men in turn maintained that in fact the producer interests would bear the levy through adjustments in the purchasing limits of the meat operators. The Minister informed the deputation that, if after a reasonable trial, the scheme proved to be unworkable, he was prepared to consider an alternative method of collection if the industry as a whole submitted and supported a satisfactory proposal. Subsequently, an announcement by the selling agents that they intended to take concerted legal action to recover the short payments that had been made by meat operators in respect of the cattle slaughter levy culminated in the High Court action. Following the issue of the High Court writ the Minister for Primary Industry agreed to suspend the collection of the cattle slaughter levy as from 14th October, 1960, pending the decision of the High Court as to its validity.

In an endeavour to find a satisfactory solution to the problem various alternative methods of collection other than by way of a slaughter tax were examined, including a stamp system on cattle sales and a tax at the point of purchase with authority for selling agents to make an immediate deduction. It was found that all the alternatives examined contained serious practical or legal difficulties. The fact that some of the big operators own large properties and breed cattle themselves for slaughter is an added complication. The crux of the problem, therefore, is that the meat operators and the selling agents both want the legal authority to pass on the incidence of the slaughter levy to the last vendor of the live-stock.

The main meat producer organizations have now agreed in principle to the amount payable in respect of the levy being deducted as a separate charge from the account sales of the vendor and the amendment proposed has the full support of all sections of the industry. This bill provides for the present scheme to be extended to give meat operators and selling agents the legal right to relieve themselves of the incidence of the levy at the time the cattle are purchased for slaughter. The levy itself will be payable by the owner of the stock at the time of slaughter, but the amendments proposed will ensure that the impact of the levy will in fact fall on the vendor of the cattle as was the original intention of the plan.

As a further practical step towards resolving the present issue the Government on the recommendation of the industry has decided to exempt all parties from financial obligation as from 14th October, 1960, when the collection of the levy was suspended, until 14th October, 1961. In order to implement the recommendation of the industry it will be necessary to provide for the revocation of the levy for that period and at a later stage I shall be introducing the Cattle Slaughter Levy (Suspension) Bill for this purpose.

Representations were also made by the industry requesting that the levy collected prior to the High Court challenge should be refunded to the selling agents in all cases where documentary evidence established that the agents concerned had in fact borne the impact of the levy. The Government was not agreeable to this course and meat operators have since indicated that they are prepared to forgo any claims to refund of levies paid by them to the Commonwealth and that they would negotiate with the selling agents regarding moneys that had been deducted by them in respect of their purchases of the cattle on which they had paid such levies in the period concerned. This offer was made by the operators in the full knowledge that if the agents were not satisfied with the settlement arrangements, they would still have the right of recourse to legal action.

On the general issues relating to the High Court action the principal concern of the Government was to overcome the present impasse and get the scheme operating again as quickly as possible with the maximum of goodwill all round. This attitude was also evident on the part of meat producers and consequently, no action was taken by either party to proceed with the High Court writ. The Commonwealth legal advisers did, however, hold the view that the Commonwealth may well have succeeded in maintaining the validity of the existing legislation, but in order to remove any doubt as to its validity, provision has been made to amend the Cattle and Beef Research Act, by describing the research that may be undertaken as research that would be of benefit to the export of beef and the raising of cattle in the internal Territories of the Commonwealth rather than as research described in general terms not expressly related to Commonwealth powers, as in the existing legislation.

While it is regrettable that the active approach to beef research has been delayed through the present unfortunate stalemate, the important consideration is to get the beef research scheme on the move without further waste of time. As recently announced, the Government has agreed to make available substantial finance for cattle roads in northern parts of Australia to assist in developing the beef industry. It is essential that increased research activities should go hand in hand with these developments. I commend the bill to honorable senators.

Debate (on motion by Senator O’Flaherty) adjourned.

page 905

CATTLE SLAUGHTER LEVY (SUSPENSION) BILL 1961

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 Civil Aviation · Western Australia · LP

– I move -

That the bill be now read a second time.

The purpose of this bill is to revoke the cattle slaughter levy in respect of cattle slaughtered on or after 14th October, 1960, and before 14th October, 1961. As some meat operators have continued to pay the levy after 14th October, 1960, provision has been made for the refund of levies collected in respect of the above-mentioned period from the Cattle and Beef Research Trust Account. In addition there is provision for meat operators to refund to producers all express deductions for the levy in respect of cattle slaughtered during the period specified.

I commend the bill to honorable senators as a necessary complement to the Cattle Slaughter Levy Collection Bill.

Debate (on motion by Senator O’Flaherty) adjourned.

page 905

CATTLE AND BEEF RESEARCH BILL 1961

Bill received from the House of Representatives.

Standing Orderssuspended.

Bill (on motion bySenator Paltridge) read a first time.

SecondReading.

Senator PALTRIDGE:
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 Cattle and Beef Research Act so as to describe the research that may be undertaken as research that would be of benefit tothe export of beef from Australia and the raising of cattle in the internalTerritories of the Commonwealth rather than as research described in general terms not expressly related to Commonwealth powers, as in the existing legislation.

I have already explained the reason for the amendment in my second-reading speech on the Cattle Slaughter LevyCollection Bill. The provisions in the legislation will not place any practical limitation on the activity of the Australian Cattle and Beef Research Committee. “I commend the bill to honorable senators.

Debate: (onmotion by Senator O’Flaherty) adjourned.

Sitting suspended from 12.59 to 2.15 p.m.

page 906

AIRLINES AGREEMENTS BILL 1961

Second (Reading.

Debate resumed (vide page 903).

Senator BRANSON:

– Prior to the suspension of the sitting, Mr. President, I stated that in June last Trans-Australia Airlines carried it 10,000,000th passenger. I was supporting my contention that, far from the Government curtailing the activities of T.A.A., it had a magnificent record in respect of the government-owned airline. Ifwe look back to the days when this Government took over from the Australian LabourParty, we see that the airline’s front-line fleet at the time consisted of five Convair 240’s, three DC4’s, nineteen passenger DC3’s, four freighter DC3’s, and four DH84’s. To-day, we find that the airline controls three Electras, twelve Viscounts, ten Friendships, two DC6B’s, three DC4’s, eleven DC3’s, four C47’s and two H12E helicopters.I should have thought that if the Government wanted todo as the Opposition suggests we would nothave seen such growth.

From the time of the inception of T.A.A. untiltheLabourParty went out of office, T.A.A. had never shown a profit or paid adividend, but since thepresent Minister has been in charge of the administration ofthe Department of Civil Aviation there has been a series of profits.Itis interesting to note that the balance-sheet for 1956-57, which was thefirst presented after he took over, showed a 5 per cent. return. There was also a5 percent. dividend in1958, 1959 and 1960.

SenatorO’Flaherty. -You do not give him credit for that, do you?

SenatorBRANSON. - Who implements the policy of the Government, other than the Minister?

Senator O’Flaherty:

– It had nothing to do withhim.

Senator BRANSON:

– I think it did.I am giving credit where it is due, and if Senator O’Flaherty wereon this side of the chamber he would do the same.

SenatorO’Flaherty. - This is a mutual admiration society.

SenatorBRANSON.- That is not so in this instance.I ampayinga tribute because a 5 percent. dividend has beenpaid.I understand that that rate will be exceeded this year.

The Opposition is crooked on the Government because it has made T.A.A. pay. The airline, under this Government, hasmade a profit and paid a dividend. Frankly, I do not thinkthat honorable senators opposite like to see anybodymaking aprofit. Let us consider the operations ofthis airline that we are said to be curtailing and trying to kill.If we refer to the airline’s annual report for 1959-60, we see, first, that it is controlled by six very solidcitizens, one of whom, I believe, was appointed under aLabour government. At page3we note that the trading profit forthe year was £352,938, the highest earnedbytheairline. I understand that this year’sprofit will be higher still. The reportstates that trading during the year was buoyant. The number of passengers carried was 24.1 per cent, higher than in 1958-59. The total payroll was. £5,296,4.82, which, was paid to a staff of 4,168 persons, or an average amount, including overtime, of £1,289 for the year, or about £25 a week. This is the airline that we are said to be trying to put out of business.

Senator O’Byrne:

– Could you give the Ansett-A.N.A. figures?

Senator BRANSON:

– No, I have not got them, but Senator Scott gave them recently. If I remember correctly, Ansett Transport Industries Limited employs about 6*000 people. T.A.A.’s revenue from1 all sources in 1959-60 amounted to £14,622,213, which was 19. 6 per cent, above the peak revenue earned in 1958-59.

The report contains some figures which 1 should particularly like to have recorded in “ Hansard “. To my knowledge, they have not so far been referred to during this debate. They show how each £1 of revenue is made up. Passenger fares and charters accounted for 16s. Id. in the £1, or 80.6 per cent.; freight, 2s. 6d., or 12.4 per cent.; mail, 8d., or 3.2 per cent.; and incidentals, 9d., or 3.8 per cent. Of the total revenue, 36.2. per cent., was spent in remunerating staff, which accounted for 7s. 3d. in the £1; 17.9 per cent, was expended on fuel and oil consumed by the aircraft fleet units, which was 3s. 7d. in the £1; 10 per cent, was provided for depreciation and obsolescence of fixed assets, which was 2s. in the £1; 33.5 per cent, was expended on services and other expenses not elsewhere classified, which was 6s. 8d. in the £1; 2 per cent, was set aside for payment of a five per cent, dividend on capital, which was 5d. in the £1; and .4 per cent, was retained to strengthen the financial position of the business, which was Id. in the £1.

In order further to indicate T.A.A.’s consolidation under this Government, I think it should be noted that while the assets of the organization were about £4,500,000 at 30th June, 1949, shortly before the Government took office, they now amount to more than £17,000,000. I remind the Senate that since 1957 T.A.A.’s passenger traffic has increased by more than 35 per cent., while that of the Ansett group has increased by only 21 per cent. How can honorable senators opposite substantiate their claim that the Government is trying to drive T.A.A. out of the air? If they look at the annual reports of the airline when they were in office and compare them with the. annual reports since then,, they must agree that the organization has been expanding and has been doing a remarkable job.

This is a good bill, Mr. President. I think its. provisions, wilt keep Australia in the forefront of civil aviation. With the introduction, of jet aircraft by 1964, we will have even more reason to- be proud of our record. Much of the credit for that record is due to the Department of Civil Aviation, and to. the administration of the Minister.. I congratulate both the department and the. Minister and support the bill.

Senator McMANUS:
Victoria

.- My remarks will be very brief, Mr. President. Senator Cole and I, representing the Australian Democratic Labour Party, will support the bill. The policy of our party is opposed to monopolies, whether they are run by private enterprise or by the State. As we have said on previous occasions, notably a couple of years ago when a somewhat similar bill was being discussed, because we are opposed to monopoly we are prepared to give the private airline a reasonable opportunity to compete with the State airline. I emphasize that we are in favour of giving the private airline a reasonable opportunity to compete with the State airline. A couple of years ago I expressed doubts as to whether a private organization could compete with the State in a field so costly and so difficult as that of air transport. Although I was doubtful that a private organization could compete successfully with a State organization in such a field, I believed that if the private organization sought the opportunity to do so it was entitled to be given its chance. However, I expressed the view at that time that if ever I thought an inordinate degree of protection were being given to the private airline, my opinion would change. I have examined this legislation very carefully and I do not think it proposes an inordinate degree of protection. There are one or two points on which I am not entirely certain but, taking the legislation in general, I feel that we are entitled to give the people running the private airline an opportunity to prove that they can compete successfully.

There are very sound arguments in favour of having two airlines, if you can keep them in operation. First, I believe that monopoly is bad, whether it be State monopoly or private monopoly. Therefore, I am in favour of having two airlines. Experience in other fields where monopolies exist shows that, under monopolies, the tendency is to give the public inferior services. Secondly, I believe that from the defence viewpoint it is an advantage to have two airlines with modern aircraft, providing transport opportunities, employing skilled staff and training skilled staff. I believe that where there is competition there is more efficiency. We must pay some regard to the fact that both airlines have notable records for efficiency, and J believe that to some extent that is due to the rivalry between them. In my view, with two airlines in competition you get better aircraft, better facilities and better services.

I have a lot of respect for the Minister’s judgment, and I listened carefully to what he had to say. I would not like to think that we were being unfair to either airline in this matter, and I believe the Minister’s statement that in this instance he is actuated by a desire to be fair to both sides. I would not like, in particular, to see action taken which would result in the private airline closing down now, because that could lead to considerable unemployment and the dispersal of a skilled organization which could be very valuable to us in time of war. I emphasize that T am careful to examine all bills of this nature because I do not believe that we should give inordinate protection to the private airline. In this case I do not think we are giving protection beyond that which should be given.

I have read the debates that occurred when we considered legislation similar to this two years ago and I have been struck by the gloomy forecasts that were given then on this side of the House regarding the effects of the legislation on TransAustralia Airlines. Reading the debates, one imagined that T.A.A. would have to close down, but, in fact, the reports of the airline indicate that probably it has never been better off than it is now.

I have listened to the suggestions that this legislation will be a bonanza for the shareholders of Ansett-A.N.A. I am not an expert on the stock exchange - I have never had enough money to acquire the necessary knowledge - but I looked at the financial columns of the Melbourne “ Age “ during the luncheon period. I saw that the 5s. shares of Ansett Transport Industries Limited are valued at 5s. 8d. to-day. That does not indicate that they are regarded as gilt-edged securities. I read also in the Melbourne “ Age “ that the shares dropped Id. yesterday. That does not indicate to me that people with money to invest consider that those shares are 100 per cent, investments. Let us be quite candid. Having regard to the difficulties with which a private body is faced in competing with a public body, I suppose many shrewd people say to themselves, “ It may be that the private body will not make a go of this, so I do not think I should put my money into it “.

Statements have been made to the effect that you cannot socialize air transport because, under the Constitution, there is no power to do so. My mind goes back to the days of the bank nationalization legislation, which I supported. I remember that at that time some people in the party to which I belonged asked, “ Why did the Prime Minister take legislative action to nationalize banking when we could have done it so much more effectively and easily by using our powers to compete the private banks out of existence? “

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– in reply - I want to devote the opening sentences of this speech to an assessment of the approaches made to the airlines question by the Government parties and by the Opposition. I think that is necessary because some of the speeches that have been made by honorable senators on the other side of the chamber may have left on some minds the very strong impression that, despite all that happened in the past, the Labour Party is not now in favour of a government monopoly of airlines. Those speeches may have given the impression that what happened in 1947 or thereabouts happened almost by mistake, and that from the time when the High Court of Australia ruled against the Labour Government in relation to the operation of interstate airlines the Labour Party adopted a completely different approach to the problem and is now not intent at all on establishing a government monopoly.

Let me refer to a publication which, I should think, will be widely used as a Labour Party handbook during the forthcoming election campaign. It is the biography of Mr. Chifley, written by Professor Crisp. To give Professor Crisp his due, he acknowledges in the preface that he has been a supporter of the Labour Party all his life. Certainly, nothing that he has written in the book would induce me to believe that the book was not written for the express purpose of supporting the Labour Party. Therefore, what is written in it can be taken as accurate from Labour’s viewpoint. At page 178 he refers to Mr. Chifley’s approach to nationalization in the following passage -

In addition to the evidence relating directly to this issue, it is worth recalling that in another matter dealt with at the same time - air transport - Chifley was unhesitatingly for nationalisation. Replying to the Second Reading debate on the Australian National Airlines Bill in July, 1943, he said: “ I have supported no other Bill so strongly and warmly as I support this one. I was a member of the Cabinet committee which recommended it to the Government. My only regret is that the Constitution confines the Government to interstate airlines, but I do not despair about the prospects of our controlling intrastate airlines. The proper monopoly, if there is to be one, is a government monopoly. That is our purpose.”

Having regard to the policy laid down at that time, it is rather surprising to hear in this debate that some members of the Opposition retire blushingly from that policy. In point of fact, they do not. The Leader of the Opposition (Senator McKenna) said yesterday that after the defeat in the High Court on the airlines issue there was a realization by the Labour Party that it could not nationalize air transport, but the fact is that from then on the Labour Party, then in government, pursued with even greater vigour a policy of driving out private enterprise and of establishing a government monopoly. It will be recalled that at that time action was taken by the Labour Government against private enterprise in this field. It introduced a scale of air navigation charges which were designed to be crippling. There was the uncontrolled competition of the government airline against the private entity, the expropriation of the private airlines, particularly the expropriation of the private airline which operated to Darwin. to which I shall refer a little later. To come more up to date, 1 recall that ii was only in 1957, when the issue of airlines was attracting the attention of the public, that Mr. Calwell, the present Leader of the Labour Party, said that when his party came to office it would tear up the civil aviation agreement of that year. It is only eighteen months ago that Mr. Whitlam, the heir to the throne - with his eyes on the distant goal - said that there will be a government airline, and one airline only within the foreseeable future. 1 suggest that it is difficult for the Labour Party now to establish that it does noi intend, as it always has been intent upon, to establish a government monopoly and to cripple private enterprise in this field.

Senator Ormonde:

– We say, where necessary.

Senator PALTRIDGE:

– You said, where necessary, but from your actions, and what you have said in recent times, you obviously regard it as necessary for only one airline to operate.

Now let me come to the debate itself. Senator Kennelly led for the Opposition with his usual vigour. While not wishing to be offensive to the Deputy Leader o) the Opposition in the Senate, I must say that he never fails to remind me, when he speaks on airlines, of the tipster who stands outside the gate at the races selling tips to those people who are going to back their fancy inside. Like that tipster, who is usually unreliable, Senator Kennelly has been selling the wrong tip for too long. He has a decreasing number of supporters who are all a little tired of this story that the Government has been intent upon killing Trans-Australia Airlines. Contributions from my side of the chamber, for which I am grateful, have indicated unmistakably that the progress made by T.A.A. under this Government has, in fact, been remarkable when compared with the progress of any other airline in the world.

The Government’s approach has never been, as Senator Kennelly repeated throughout his speech, one of concern only for T.A.A. The Government’s approach has been that the airline industry is valuable and essential, and that the Government has the obligation to look after, not only one part of that industry, but the entire industry. The Government’s record shows that it has done this with success. The really galling part of the success of this policy, so far as the Labour Party is concerned, is not that T.A.A. has not made progress, but that it has. The Opposition’s big beef about the success of the Government’s policy is that while T.A.A. has been making giant strides forward, the private enterprise operator has been going forward in consonance with the general march of progress in this country.

Senator Marriott:

– And has employed 5,000 people.

Senator PALTRIDGE:

– And is employing some 5,000 people - something which I do not forget. Our concern has been to see not only that the employees of T.A.A. have a future, but also that the 5,000 employees of Ansett-A.N.A. have a future. Our concern has been to see, not that the government airline alone has prospered, but that the private airline, in which 53,000 Australian people have shown their faith by investing money in it, has also gone forward.

In pursuing the line that he invariably takes, Senator Kennelly said that the Government has taken action after action to cripple the government airline, and he quoted a number of instances. The first action was the tax on aviation kerosene. He said that that tax was imposed so that T.A.A. would not reap the advantage of having purchased the Viscount aircraft. The fact, of course, is that T.A.A. operated Viscounts using av-ker for two or three years before a tax was imposed. The tax was not imposed until the private enterprise airline had arranged to purchase aircraft which, like those operated by T.A.A., used av-ker.

Senator Kennelly harked back to the cross charter. Every one of us, of course, remembers the circumstances of that charter. For a long time my friend breathed fire about this particular agreement. Despite the fact that the Australian National Airlines Commission, seeing a commercial advantage in the cross-charter agreement, signed it, he claimed that the agreement would operate to the disadvantage of T.A.A.

Senator Kennelly:

– So did Mr. McDonald at the time.

Senator PALTRIDGE:

– Mr. McDonald at the time did nothing of the sort. Indeed,

I tabled that portion of Mr. McDonald’s report which dealt with this aspect of the matter. It proved that Mr. McDonald’s view was not as Senator Kennelly described it. Honorable senators will remember that when this matter came before this chamber that document was made available, and this issue, which was to be made a veritable blood bath, as far as the Government was concerned, collapsed. The debate was the most pitiable that has ever been initiated by an opposition in this chamber. The Opposition failed completely to establish the point it wanted so badly to establish, namely, that the cross-charter agreement, entered into by the commission of its own free will, operated to the commission’s disadvantage. If any confirmation of that fact is needed, surely it is provided in the measure now before the chamber. To the full agreement - which is annexed to the first bill with which we are dealing - the commision subscribes its name. That agreement provides for the continuance of the cross-charter deal until the first of the jets are commissioned.

Senator Ridley:

– lt had Hobson’s choice.

Senator PALTRIDGE:

– My friend says that it had Hobson’s choice and Senator Kennelly said that the chairman of the commission at that time was against the deal. As those honorable senators well know, the commission went into that deal because it saw the advantage for it that was in the deal. That is the only reason why it went into the deal.

Senator Kennelly harked back to the choice of aircraft. He said that in 1957 or 1958 the Government again sorely handicapped T.A.A. by imposing on it a certain type of aircraft. He said that the Government refused T.A.A. permission to purchase Caravelle aircraft. I will remind the Senate of the circumstances of that. The Government said to both airlines - I repeat, to both airlines - “ No pure jet aircraft will be introduced into Australia at this time “. The Caravelle was then available and it was a pure jet. The Government said that neither the Caravelle nor any other pure jet would be admitted into Australia at that time. Having regard to the experience of the last four years, who will say that that was not the wisest decision that the Government could have made at that time? From our studies of jets and their operations round the world we were aware that they imposed great strains in the provision of the necessary ground facilities in this and other countries. In our opinion, there were aspects of their operations which would take a little time to assess properly. How right did our decision turn out to be!

In 1957, lacking all the ground facilities that were needed for the introduction of jets and also ‘lacking the operational experience -which is always desirable, we said, “ No pure jets shall be used on the domestic airlines at this time”. Pure jets were excluded. I suggest that that was the wisest decision that could have been made at the time. It applied equally to both operators. Incidentally, both operators then turned elsewhere and bought two different types of aircraft. Both operators bought Electra aircraft and both operators bought Viscount 800 aircraft. No handicap was suffered by T.A.A. as a result of that decision.

Senator Kennelly:

asked us quite pointedly, “ Why don’t you be honest and sell T.A.A.?” I repeat that we do not sell T.A.A. because we do not believe in a monopoly, as members of the Opposition do. We believe .in a two-airline policy. We have sustained that policy for ten years and we plan to sustain it further. That is why we do not sell T.A.A. As an earnest of the Government’s intention, I remind die Senate that the preamble to the 1957 agreement included a passage which said, in effect, “ There shall be two and not more than two operators on the trunk .routes, one of which shall be the commission”. What nonsense it is for members of the Opposition to say continually that we intend to sell T.A.A. or we intend to cripple it, when, as a basis of the policy that we follow, the preamble to that agreement contains a provision that there shall be two airlines, one of which shall be the commission. For good measure, that provision is written into the agreement that we are now discussing.

Senator Kennelly criticized rationalization. He said that it has worked harshly. It has worked so harshly that after four years’ experience both operators have concluded that it has been so good that they should agree to extend it for a further ten years. Both operators have signed an agreement to that effect. The honorable senator also referred briefly to the Government’s desire to standardize equipment. The Government has never expressed any desire to do that; it has always spoken in terms of parity both of quality and quantity. In my secondreading speech I referred specifically to the fact that the aircraft, whilst being similar types in general, need not be of the same make or the same model.

Senator Kennelly reviewed lightly, I thought, the board .management of T.A.A. He expressed a preference for what might be .regarded as executive management rather than board control. We could develop a pretty nice argument on this point. In passing I note only that the executive management is the same type of management that the socialist party, when in office, foisted upon the Commonwealth Bank to the disadvantage of that institution and the Australian people.

The Deputy Leader of the Opposition then referred to the -co-ordination of routes. This was an interesting part of his speech. He said that T.A.A. had lost all the tricks. He said that the government airline had pioneered routes throughout Australia only to see them taken away and given to some one else. He instanced Queensland of all the States of the Commonwealth. He said Queensland was pioneered by TA.A. What utter rubbish! Queensland was pioneered by one of the real pioneers of the airline industry, the privately owned enterprise of Captain Ronald Adair, as my friend Senator Courtice well knows. T.AA.. did not arrive on the scene until it was put into that State by a Labour government.

Senator McKellar:

– And New South Wales was pioneered by Butler.

Senator PALTRIDGE:

– Yes.

Senator Ormonde:

– And where has his company gone?

Senator PALTRIDGE:

– It is a pity about Arthur Butler. No one will deny that his private enterprise company pioneered air services in the back country of New South Wales.

Then Senator Kennelly had the gall to refer to Alice Springs and Darwin. He said that that air route was pioneered by T.A.A. and has been taken away from that operator to the extent that its competitor has now been given access to that route. What is the story of the Alice Springs and

Darwin air route? It includes one of the most cruel and vicious actions of a Labour government. A Labour government expropriated that air route from a private enterprise group for £25,000. The route was conducted as a monopoly for ten years after that happened. A profit of about £1,000,000 was made over that period of ten years by the monopoly that was established by the Labour government.

The honorable senator said that TAA got nothing out of the New Guinea airlines. What about the Lae, Rabaul and internal services? Did it not get the services to Honiara and Hollandia? Who gave the honorable senator his information? Obviously he does not know that T.A.A. received those benefits.

Then he gave us some of his views on intra-state operations. It is pertinent to say here that, in any event, intra-state operation accounts for only 10 per cent, of the passengers listed in Australia. But, asked Senator Kennelly, why do we not let T.A.A. operate intra-state? This is a great little idea! The story of the feeder airlines in Australia is a stark one, whether we like it or not. With the exception of the Guinea Airways group in South Australia, no feeder operators, regarded as a whole, can operate at a profit within Australia. Each and every one, with the exception of the Guinea group, has to be subsidized. Senator Kennelly says that there are two operators in New South Wales. Both of them, for the purpose of bringing this modern, very desirable form of transport to country people, are subsidized. Senator Kennelly’s serious suggestion, made in this place, is that T.A.A. should be admitted to New South Wales, so that instead of subsidizing two airlines we can subsidize three airlines. I put it to the honorable senator that even his keen affection for T.A.A. should not carry him to the point of absurdity.

Senator Kennelly:

– How many times has T.A.A. asked for it?

Senator PALTRIDGE:

– What has that to do with it? It has nothing to do with it! The point is that the Australian taxpayer is supplying the money. The honorable senator’s suggestion is simply that three airlines should be put in there and subsidized, rather than two airlines.

Senator Kennelly:

– It is easy for you to put up Aunt Sallies and knock them over.

The ACTING DEPUTY PRESIDENT (Senator Wood). - Order!

Senator PALTRIDGE:

– lt reminds me, if I may say so - to let the honorable senator’s temper cool a little - that his own view in respect of the operation of intrastate airlines coincides almost precisely with some of the objectives of his leader in another place, Mr. Calwell, who recently went to Western Australia and, in a television interview, explained what was wrong with this Government and claimed that it should be spending £60,000,000 a year in the north. The interviewer said, “ Mr. Calwell, how would you propose spending this money? “ “ Oh, well “, he said, “ you could standardize the rail gauges and you could build dams along the rivers.” The interviewer said, “ What rivers, Mr. Calwell?” Mr. Calwell replied, “Why, all of them, of course “.

At last, Senator Kennelly came to the bill, and the only really pertinent thing that he said about it was that the agreement was to be extended for ten years. He asked why we were doing this now. We do it now because the guarantee provisions of the existing agreement cut out in 1962, and both airlines - and for that matter the Department of Civil Aviation - must know in good time what the position is going to be so that both airlines and the department may plan for years ahead. These things cannot be done in 24 hours or in a month. They must be planned ahead. Because the guarantee provisions will expire next year, we are taking the opportunity this year of letting the airlines and the public know what the position is to be.

Senator Kennelly had a good deal to say about the profit target. I was interested in this, and I was prompted to look back and see what the honorable senator had said in 1957 about the profit target and profits generally. This is what he said -

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.

He was, of course, saying then, just four years ago, that our particular plot at that time was to run this airline into the red so that we would then have justification for selling it. Senator McKenna on that occasion also expressed himself in much the same terms. This is worth listening to. He said -

We believe that the Government is deliberately turning T.A.A.’s successful run of profit into a loss.

The PRESIDENT (Senator the Hon. Sir Alister McMullin). - Order! The Minister’s time has expired.

Motion (by Senator McKenna) proposed -

That so much of Standing Orders be suspended as would prevent the Minister for Civil Aviation (Senator Paltridge) speaking in reply for more than thirty minutes.

The PRESIDENT:

– There being present an absolute majority of the whole number of senators, and no dissentient voice, I declare the question resolved in the affirmative.

Senator PALTRIDGE:

– I thank the Senate. I shall not detain it a great deal longer. The point then, so said the Opposition, was that this Government was going to run T.A.A. into a loss so that the Government would then have justification for selling it. Of course the record, so frequently referred to throughout this debate, shows that far from that occurring, in the following year the profit went to £283,000, in the year after that to £254,000, and last year to a record of £363,000. This year that record profit will be improved upon, lt is a bit difficult for the Opposition to set itself up as a reliable prophet in view of what happened in that respect, particularly as Senator Arnold this morning seemed to be taking the opposite view that by forcing up the profit level we are going to make the airline so profitable as to wreak disaster on the industry just the same.

I want to say something about Senator McKenna’s speech. It is regrettable that I have not the time to refer to other aspects of the debate. He referred to the emergence of a third operator. He said that if that should occur it could be disastrous to a two-airline policy. It is theoretically possible for a third operator to attempt to start an airline in this country but I do not think that it comes within the bounds of practical business. 1 do not think that any one in Australia or elsewhere would propose to put into the establishment of a third airline in this country the many millions of pounds that would be required for that purpose. If that remote possibility did come to pass, it would be a difficulty which the Government would have to face and solve. Let me say to Senator McKenna that in those circumstances this Government would administer the civil aviation laws of the land, and the relevant regulations made under those laws, in a completely constitutional way. We would not attempt in any way to evade the Constitution.

Senator McKenna suggested, as he did on another occasion, that the rationalization proposals might offend section 92 of the Constitution. I think it is well known that I never argue legal points with a lawyer. When a legal point arises, I myself generally run for a lawyer. However, on this occasion, not in any dogmatic way, I say to Senator McKenna that the rationalization effected under this legislation is effected by way of a mutual agreement reached between the two operating parties. That, I think, may place a completely different complexion on the matter. Senator McKenna referred to what he called the hypocrisy of the Government in maintaining an overseas airline as a monopoly - a hypocrisy apparently stemming from the fact that whilst we have one overseas airline, we encourage a two-airline policy domestically. I point out to Senator McKenna that he is trying to compare two things that are not alike. I am sure that he knows that. In any event, he should not draw the conclusion that because we do not have two Australia-owned overseas airlines there is no competition on overseas air routes. Our overseas airline is to-day more than just an airline. It is an instrument of government policy in many respects. There are good reasons, extending far beyond the factors that we are discussing here, why a government, in this modern world, should own or at least control its own international airline.

I should like to refer to many other points that were raised. One of them was the letter that Mr. Ansett circulated to all members of the Parliament. The Leader of the Opposition took the view that receipt of this letter had prompted the Government to take certain action. 1 ask the honorable senator to look objectively and fairly at the letter. It did not say anything that was not in fact well known to everybody who had addressed himself for a long time to the problem of civil aviation in Australia. Every point that Mr. Ansett raised was one that had been discussed and canvassed in airline circles for years.

Senator Ormonde:

– What was the purpose of the letter?

Senator PALTRIDGE:

– Mr. Ansett’s purpose, as he. stated in his letter, was to make members of this Parliament aware of the problems that were being experienced in the airline industry, particularly from the point of view of a private enterprise operator.

Senator Ormonde:

– He wanted to educate you, did he?

Senator PALTRIDGE:

– Exactly. There is no doubt that many of the things to which Mr. Ansett referred were not fully understood by many members of this Parliament. Mr. Ansett took the opportunity of circulating a comprehensive statement in what was, whether youlike him or not, a characteristically forthright and courageous way. He did not address himself only to Government supporters. He addressed himself to honorable senators opposite - his enemies - just as much as he addressed himself to Government supporters. The fact that he wrote as he did had no weight at all with the Government and in no way influenced the introduction of this legislation.

One of the important things about this legislation is that the majority of its provisions - indeed, its main provisions - have been accepted and adhered to by the two operators concerned1. Both operators have said that the things about which there has been so much complaint - the provision of jet aircraft, the provision of guarantees and advances for T.A.A. to buy those aircraft, rationalization and even to some extent comparable cost structures - are all necessary in a two-airline policy. The fact is that they have been accepted not only by Ansett-A.N.A. but also by T.A.A. As has been pointed out by one or two speakers in the debate, a noteworthy signatory to this agreement on behalf of Ansett-A.N.A. is none other than Sir George Jones, the Labour Party candidate for Henty in the forthcoming elections. Whilst honorable senators opposite have criticized the agreement and all that it contains, one of their endorsed candidates has signed it on behalf of the private enterprise entity. I mean no offence at all to Senator McKenna or to Senator Kennelly - I listen to them with great respect on many matters that are discussed here - but dealing with the operation of airlines, although I do not know Sir George Jones, I would be prepared to accept his view rather than theirs.

Senator O’Byrne:

– Sir George Jones is an air vice-marshal. He should know what he is talking about.

Senator PALTRIDGE:

– He should. Why is it that honorable senators opposite do not agree with him? The bill proposes amendments to the act. Those amendments will govern the conduct of civil aviation in this country over the next fifteen years. I suggest that a review of the debate would show clearly that not one of the provisions of this measure has come under serious challenge from the Opposition or from any other quarter of the chamber. Honorable senators opposite have spoken against the bill for political reasons only. They have not taken any of the proposals individually and tackled them on their merits. Although I could say a lot more, I will leave the matter there.

Question put -

That the bill be now read a second time.

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

AYES: 31

NOES: 22

Majority . . . . 9

AYES

NOES

Question so resolved in the affirmative.

Bill read a second ‘time, and committed pro forma; progress reported.

page 915

AUSTRALIAN NATIONAL AIRLINES BILL 1961

Second Reading

Consideration resumed from 28th September (vide page 727), on motion by Senator Paltridge -

That the bill be now read a second time.

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

AYES: 31

NOES: 22

Majority 9

AYES

NOES

Question so resolved in the affirmative.

Bill read a second time.

In committee:

Progress reported.

page 915

AIRLINES AGREEMENTS BILL 1961

In committee:

Clauses 1 to 6agreed to.

Clause 7 (Second Schedule).

Senator KENNELLY:
Victoria

– The agreement embodied in the second schedule binds the two airline operators not to introduce jet ; aircraft before 1964. That is a great improvement on the Electra aircraft episode which the Minister so glibly glossed over in his reply to the second-reading debate. He did not say anything about Mr. Ansett wanting to purchase a certain type of aircraft, of the Minister saying, “ No, you musthave Viscounts “, and of Mr. Ansett thengoing to the Prime Minister (Mr. Menzies) and telling him he wantedElectra aircraft. The Minister did not say that the Prime Minister replied, “ All right, Mr. Ansett, have Electras”. The Minister did not tell us, ofcourse, that he had to bow to what his chief had said. We all have to bow to superior authority at ‘some time or other, however nauseating it may be to doso.

Although the Minister said nothing about that matter, he did make one rather remarkable statement. He said that the reason why he did not agree to T.A.A. introducing Caravelle jet aircraft, was, in effect, that the aerodromes andrunways were not suitable for them. I hope I am quoting the Minister’s words correctly. I should hate to follow his example and put up an Aunt Sally only to knock it down, which is the easiest way to debate anissue. I hope I may take it that whatI have said, in fewer words, is an accurate interpretation of his remarks. Surely the Minister is not trying to convince tire Parliament and the People of thiscountry that ‘he wasso ignorant of the position when T.A.A. asked for permission to purchase Caravelles. As I have said, he stated, in effect, that if TA.A. bought Caravelles they could not be used.

Senator Paltridge:

– No.

Senator KENNELLY:

– You said that if they brought them into this country they could not be used because of the runways, and so on.

Senator Paltridge:

– No.

Senator KENNELLY:

– I was listening with great respect to the Minister’s remarks, as I always do. They intrigued me.

I agree that T.A.A. has been most successful, but it would have been much more successful if it had been allowed to compete freely instead of being hamstrung here and there. Without attempting to give the exact words that the Minister used, I took it that the reason he refused permission for T.A.A. to purchase Caravelles was that they could not be used effectively.

Senator Kendall:

– There were only a few airstrips, such as those in New South Wales, which could take them.

Senator KENNELLY:

– That also seems remarkable to me. As the Minister has said, T.A.A. has achieved great success. Every one must agree that that is so. But we are claiming that it would have been much more successful if it had not been hog-tied. I personally am delighted with its success, and I think that the Minister is. too. Nevertheless, our claim is that if he hart got out of the way and allowed it to compete as freely as he has so often claimed it has, we both could have basked in the greater glory of that enhanced success. Instead, the airline has been pulled back to the field.

The Minister’s remarks in his reply to the second-reading debate astounded me because I do not think for a moment that the people who run T.A.A. have so little knowledge of the aircraft industry that they would want to purchase aircraft of a certain type for their fleet if, as the Minister said, they were unsuitable, not in carrying capacity but because of something to do with runways. I am pleased that the two airlines are to be given a fair go when they are able to obtain jet aircraft. At least, the Government is not saying that operator A may obtain jet aircraft earlier than operator B. I hope that no one will say that TA.A. must purchase some other type of aircraft. If that happens and there is interference, I will be well on the side of T.A.A., although I suppose it will not matter very much whose side I am on. 1 am sorry that 1 am not a shorthand writer and was not able to take down the actual words that the Minister used. As I have said, I thought they were rather remarkable. Over the years the Minister has acquired an extensive knowledge of the airlines industry and I am sure he will admit that if T.A.A. had been allowed to buy Caravelle jets when it asked for them, this country would have had jet aircraft in about 1957, or seven yeaTS before we will in fact have them. I do not think that even the Minister could convince me that if T.A.A. had bought jet aircraft, runway difficulties or other factors would have been allowed to prevent their use on the main Australian trunk routes.

Senator ARNOLD:
New South Wales

– There are two matters on which I would like some information. It is proposed to guarantee a loan of up to £6,000,000. What consideration will Ansett Transport Industries Limited give to the Government in return for the guarantee of such a huge sum? When loans are made to the company, what unattached securities will the company give? What real securities are available?

Senator McKENNA:
Leader of the Opposition · Tasmania

– There are a number of points in the schedule to which I wish to advert, but at the moment I will advert to one only. I notice that four parties to the agreement are referred to in the first paragraph of the schedule. They are the Commonwealth of Australia, of the first part; the Australian National Airlines Commission - that is T.A.A. - of the second part; Ansett Transport Industries Limited, of the third part; and Australian National Airways Proprietary Limited, of the fourth part. I was under the impression that Australian National Airways Proprietary Limited had changed its name to AnsettA.N.A. It appears from the way in which the company is described here that it has not done so and that it is operating under the trade name of Ansett-A.N.A.

When I first read this bill, that left me in some doubt and confusion. I suggest that it would have been of advantage to insert after the words “Australian National Airways Proprietary Limited “ the words “ carrying on business under the trade name of Ansett-A.N.A.” I ask the Minister whether Australian National Airways Proprietary Limited is in fact carrying on under another trade name. If that is so, I mildly regret that that fact was not recorded in the agreement in such a way as to bring a description of the company up to date.

There is another allied matter to which I wish to refer. Clause 3(1.) of the agreement begins with the words -

The Commission and the Company . . .

When I reached that point, the questions that arose in my mind were: “ Which company? Are we now referring to the party of the third part, Ansett Transport Industries Limited, or to Australian National Airways Proprietary Limited? “ Two companies are mentioned, and then there is a reference to “ the Company “. I found the explanation in clause 23, where the following definition appears - “ the Company “ means Ansett Transport Industries Limited and every company or firm in which Ansett Transport Industries Limited has from time to time, whether directly or indirectly, a controlling interest.

That definition picks up the two companies, Ansett Transport Industries Limited and Australian National Airways Proprietary Limited, in addition to every other company in which from time to time, whether directly or indirectly, they may have a controlling interest. 1 now take the Minister back to 1957, when I was very critical of a similar provision in the legislation of that year, naming the parties and requiring Ansett Transport Industries Limited to be bound in respect of subsidiary companies in which it had a controlling interest. I pointed out then in my second-reading speech and at the committee stage that that left the position open to Ansett Transport Industries Limited to form a new company, which would not be bound, and I said there was a danger that, with the acquisition of Butler Airlines, a third operator would be in the field immediately and that that operator would not be bound by the rationalization agreement of 1957. I put that argument very strongly, and I should like to read to the Minister the reply that he gave. At page 1461 of “Hansard” of 21st November, 1957, he is reported as having said -

I am advised by the law department that those 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.

I am delighted to know that the Minister has abandoned that viewpoint and that the term “ the Company “ is now expressed to include not only Ansett Transport Industries Limited but also all the companies in which from time to time that company, whether directly or indirectly, has a controlling interest.

Senator Wright:

– What legal operation has that?

Senator McKENNA:

– It applies throughout the agreement, I would say.

Senator Wright:

– How could it bind a subsidiary company in which Ansett Transport Industries had no actual authority?

Senator McKENNA:

– There is a contractual arrangement between Ansett Transport Industries Limited and the Commonwealth of Australia, pursuant to this agreement, that Ansett Transport Industries Limited will bind any of its subsidiaries either now in existence or later created. In 1957, the company was bound only in respect of subsidiaries then in existence. With regard to the legal effect, it flows generally from the definition of “ the Company “. The very same terms are used again and again in the agreement. For instance, clause 17 states -

Ansett Transport Industries Limited will do everything within its power to ensure that the companies or firms in which it has from time to time, whether directly or indirectly, a controlling interest will do all such acts and things as this agreement and the Civil Aviation Agreement 1952 . . . provides

Senator Wright:

– How do you reconcile the expression “ from time to time “ with the introductory words to clause 19; “ Upon the. commencement of this agreement”?

Senator MCKENNA:
TASMANIA · ALP

– In clause 19 appear the words - the term “ the Company “, where, it appears in the clauses . . . shall mean Ansett Transport Industries Limited

Senator Wright:

– The introductory words “ Upon the commencement of this agreement “ govern the three paragraphs of clause 19.

Senator McKENNA:

– Frankly, 1 do not follow the point that the honorable senator is making. Are you referring to paragraph (<5 in particular?

Senator Wright:

– Yes.

Senator McKENNA:

– The paragraph reads - fc) the term “ the Company “, where it appears in the clauses of the Civil Aviation Agreement 1952 as affected by this agreement, shall mean Ansett Transport Industries Limited and shall include every company or firm in which that Company has from time to time, whether directly or indirectly, a controlling interest.

That rs from the commencement of this agreement.

Senator Wright:

– No, upon the commencement of this agreement, not from.

Senator McKENNA:

– Yes. [ would say that that paragraph gives retrospective effect to this definition. Upon the commencement of this agreement, the term “ the company “ shall relate right back to the 1952 agreement in the conditions specified. That would be my reading of it.

At this time, 1 wish to direct attention to what I consider to be a grave defect in the agreement of 1957 in not extending the agreement so as to pick up companies that might be formed at a later date by Ansett Transport Industries Limited. The Minister said it was not necessary to do so because the agreement was wide enough for that purpose. However, I direct attention to the fact that in more than one place in the agreement before us the viewpoint I have just expressed has been adopted. It is made perfectly clear in the new agreement that the term “ Ansett Transport Industries Limited “, picks up Australian National Airways Proprietary Limited, in which the organization has a controlling- interest, and other subsidiaries in existence now, and also picks up, in future, any other companies in which Ansett Transport Industries have either a direct or indirect controlling interest.

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia: · LP

[3.481. - I am sincerely pleased that the Deputy Leader of the Opposition (Senator Kennelly) sees the importance of the matter of the delivery of these aircraft. I look forward with extreme pleasure to the occasion that he has forecast when he and I might stand together and hold the same view on some particular point. As for the rest of his comments in connexion with the choice of the Caravelle aircraft, I put the following proposition to the Deputy Leader of the Opposition, entertaining as. 1 do the faintest suspicion that, in the unlikely event, of the Labour Party becoming a. government, he may well be the Minister for Civil Aviation. If he obtains that portfolio, he will find he is in what can be fairly described as a skin game when it comes1 to dealing with airlines. Whether the airline concerned is government-owned or privately owned, it knows how to go about getting its own way.

Senator Kennelly:

– You have pulled them back a bit at times.

Senator PALTRIDGE:

– No. Although the position was as I described it in respect of the introduction of Caravelles, it was not beyond the thoughts of the Australian National Airlines Commission, or the thoughts of the other entity, to take some further action, if such a course suited it, which would have got further again in advance of the date on which the Government desired to undertake it, or thought it wise to undertake it.

Senator Kennelly:

– That is not what you said about half an hour ago.

Senator PALTRIDGE:

– I am not withdrawing one bit from what I said before. I am merely explaining that had the facilities been developed to a desirable point, that would have been a factor which any airline wanting this particular type of aircraft would have regarded. It would have ordered the aircraft and during the time lapse before the delivery date pressure would have been applied to the Government to provide the necessary facilities.

Senator Kennelly:

– That is a bit thin. I cannot have that.

Senator McKenna:

– But was not the refusal based on the cost of re-equipping?

Senator PALTRIDGE:

– I am coming back to that point. I am merely making this introductory observation to Senator Kennelly.

Senator Kennelly:

– I am trying to pin you down to what you said in your reply to the second-reading debate as it is different from what you are saying now.

Senator PALTRIDGE:

– Let me repeat what I said when I replied to the secondreading debate. I said that the introduction of the Caravelle aircraft would have posed very severe problems in the provision of facilities. The plain fact is that we were not ready to introduce pure jet aircraft on the domestic airlines. If I look for support for that statement I look to the experience of many countries which now acknowledge that as a result of a too-early introduction of pure jet aircraft they made mistakes which subsequently proved most costly. They found that their facilities subsequently proved to be deficient or unsuitable in some way. The provision of appropriate air terminals is only one instance of this. Because of blast and excess noise special treatment has to be given to an air terminal which is servicing jet aircraft. Many airports in other countries found that out to their great cost. I am not now referring to the highly technical matters.

The honorable senator reminded me that in 1957, and since, I have referred to the cost of the introduction of pure jets. I am glad he raised the point, and I took a note of a comment he made when he was speaking. He commented on the probable ability of the commission to provide sufficient funds from its own reserves to purchase these jets in 1964. The point he made was interesting because in 1957 T.A.A. did not have sufficient funds to provide for Caravelles. Now, however, the commission may be able to find the funds from its own reserves to meet this cost in 1964, only because, by that time, its depreciation reservations will have been built up to a level to provide sufficient reserves. That was certainly not the case in 1957. At that time it would have meant an excess subvention to purchase the Caravelles, and at the same time a pretty significant writeoff in the values of the existing aircraft.

Senator Arnold:

asked a question about the guarantees and the type of security. He wanted to know what sort of security Ansett Transport Industries Limited gave in return for the guarantee extended by the Commonwealth. One of the terms of the granting of the guarantee, which is contained in clause 12. (1.) of the 1952 agreement and continued in the current agreement, is as follows -

If at any time during the continuance of this agreement the Commonwealth is involved in war or the Minister informs the Company that there is an immediate danger of the Commonwealth being so involved, the company will, if requested so to do by the Minister, make available for use by the Commonwealth in such manner and for such time as the Commonwealth requires the whole or such part as may be required of its aircraft, spares, accessories, equipment, hangars, workshops, buildings and facilities.

Senator Arnold:

– You do not regard that as a concession, do you?

Senator PALTRIDGE:

– I say that it is a consideration in the granting of the guarantee.

Senator Arnold:

– Surely that is not a consideration. If there is a war the Government may take over the airline: and that is that.

Senator PALTRIDGE:

– That is a condition of the guarantee.

Senator Wright:

– May I have some information? Does that clause mean that the aircraft will be provided without payment by the Commonwealth?

Senator PALTRIDGE:

– No. The next sub-clause provides for the terms of payment. Clause 12 (2.) reads -

Subject to the next succeeding sub-clause, the Company shall be entitled to be paid such reasonable compensation for the use of its property under the preceding sub-clause as is determined by mutual agreement or in the absence of agreement by arbitration in accordance with the laws relating to arbitration in force in the State of Victoria.

The security, about which the honorable senator asked, is in the form of a lien or mortgage taken by the borrower over the aircraft. In addition, there is a floating charge over the assets of Ansett Transport Industries Limited.

On the point raised by Senator McKenna about the signatures and the absence of the trade name “ Ansett-A.N.A.”, I am advised that it is not usual to import into a legal document the trade name of the concern because the legal name is the important thing. Just as, for example, the Australian National Airlines Commission operates Trans-Australia Airlines but the name “ Trans-Australia Airlines “ is excluded from this agreement, so it is with Ansett-A.N.A.

Senator McKenna:

– Its inclusion would be a great convenience because there is great confusion between Australian National Airways Proprietary Limited and the Australian National Airlines Commission and people have lost sight of Australian National Airways Proprietary Limited now. I agree that the way the company is named in the agreement is legal and completely right.

Senator Wright:

– What is the trade name of Ansett-A.N.A.? Is it just Ansett-A.N.A.

Senator PALTRIDGE:

– Yes. That is the trade name of Australian National Airways Proprietary Limited and Ansett Transport Industries Limited.

Senator McKenna:

– It all becomes very confusing. I believe that it would be an advantage to have the trade names of both concerns recorded.

Senator PALTRIDGE:

– It may be, but

I put the point of view that any one who will be interested enough to read this legal document will be aware of the legal entities involved. I do not regard it as being very likely that anyone who is not informed on the matter to that extent will read the document.

On the other point to which the honorable senator addressed himself, I say that the alteration made this time, and about which he spoke on the last occasion, is regarded not as being essential but as making doubly sure of the situation.

Senator KENNELLY:
Victoria

.- 1 do not want to hark back and I will try to make my speech in a few words. The second excuse put forward by the Minister for Civil Aviation seemed remarkable to me. He suggested that TransAustralia Airlines asked for Caravelles knowing that it could not use them. At least T.A.A. can say that the turbo-prop aircraft it bought proved to be much better aircraft than the piston-engine aircraft

Australian National Airways Proprietary Limited bought. I think I shall have to get information on that at a later date. When a person has had two bites at the cherry and the information he has been given does not agree, if he has another bite it will make the confusion worse confounded. So, I will just let that matter go. 1 thought that for the sake of simplicity and in order to get through this legislation we would take the clauses in the agreement one after the other, but the Minister does not seem to want to do that. The agreement provides for each airline to have only two jets. This agreement is for ten years. How do the operators get on after that time? Is there any way that the Government can re-impose the stranglehold that it has got used to over the years? I am not saying that the Government will do that, but I would just like to make certain that it will not.

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– The agreement itself provides the answer to the honorable senator’s question. It says that section 13 of the Airlines Equipment Act applies. That is a long section which deals with the issuance of certificates for the purchase of aircraft and the conditions which have to be satisfied before such certificates are issued.

Senator KENNELLY:
Victoria

– I wish to raise another matter. What is the purpose of laying down in clause 8 of the agreement that the air navigation charges payable by each airline will not be increased by more than 10 per cent, each year? With great respect, the Government does not know how much the Tullamarine airport will cost. It is true that in the initial stages the jets may be able to land at the present Melbourne aerodrome. That is a matter for the experts and not for me. But still, the Government has no idea how much the Tullamarine airport will cost. It seems to me that 10 per cent, is a small percentage for increases in air navigation charges. Is that provision in the agreement because the agreement will operate until 1977 and therefore it will bind future governments as to what they can do? It seems rather remarkable to me that this Government should attempt to bind a future government on financial matters. This involves the finance of the nation. Is that provision in the agreement so that the Government will ensure that both airlines will continue to fly?

Over the years the States have complained about the tremendous amount of interest they have to pay on their railway debts. If the Government keeps on putting money into aerodromes and the airline industry year after year, as it has been doing, the time will come in the not-far-distant future when the amount owed by the airline industry to the Commonwealth is nearly as much as that owed by the State railways. I believe that both Trans-Australia Airlines and the private airline are entitled to be run as businesses. The people will probably want this great facility of air travel even if fares have to be increased so that the airlines can repay the Commonwealth for the work it has done and so that the government airline can earn a profit. According to the second amending bill - I hope that I am not out of order in alluding to it - the Government estimates that the rate should be 10 per cent. net, which could be about 16 per cent. gross. It seems to me that both airlines are being pampered very greatly. I know the Government’s concern for both airlines; I am not implying that it is not concerned for them. But it seems that the Government is making the taxpayers who do not use the airlines pay for a service that is used only by a section. The Minister must have some estimate of the cost of Tullamarine airport. I have referred to only one capital city. What about the others?

I have not great hopes that the Government will increase the amount that each airline pays for ground services. I am concerned that these amounts may be increased by not more than 10 per cent. each year. Is it the Government’s intention to increase them each year by 10 per cent.? There is nothing in the schedule to indicate that this will be done. The provision is for an increase of not more than 10 per cent., not of the cost but of what the airlines are paying now. Neither is paying much. The people as a whole are subsidizing this industry greatly. I suppose that this is not the only country to subsidize such services, but I should like to know what the Government proposes to do. If there is to be no increase between 1961 and 1964, will the Minister cast his mind a little further afield? Is it the Government’s intention to apply a 10 per cent increase when jet aircraft are introduced?

Senator WRIGHT:
Tasmania

.-I rise to refer to clause 8 of the agreement, just to make the comment that in my view it is a remarkable anomaly that the Government gives an undertaking to a subject not to exercise in a certain way a taxing power which it has in the public interest. I should have thought that that was one of the inalienable and unqualified rights of government which was not the subject of any contract.

Having said that, 1 next want to delve into some of the mysteries of the phraseology of the clause. It reads -

In implementing its policy of full recovery of the cost of facilities properly attributable to civil air transport, the Commonwealth will take into account the level of air fares, the rate of growth of the industry and the requirement of the airlines to provide a reasonable return on capital . .

That is the first part of the clause, but the operative part is that which prescribes absolutely that irrespective of that provision, the Commonwealth will not -

  1. increase the rate of air navigation charges payable by the Commission and the Company by more than ten per centum in any period of twelve months; or
  2. increase the amount of tax (including customs and excise duties) payable in respect of each gallon of aviation fuel in any period of twelve months by a greater amount than the corresponding amount of any increase in tax on motor fuel in that period.

I may be wrong, but even if I attribute to this clause some business - if not legal - significance, it seems to me to say that whatever the rate of fares, however high the dividend rate of the company, and whatever the growth of the industry, the increase in air navigation charges shall not be more than 10 per cent. and the increase in tax, including customs and excise duties, shall not be more than the corresponding amount of increase in tax on motor fuel. I ask: Why?

Senator McKENNA:
Leader of the Opposition · Tasmania

– On that point, I -should like to ask the Minister, in addition to replying to what Senator Wright has just put, to explain -why the prohibition on future governments is to operate for sixteen years from this time.

Senator PALTRIDGE:
Minister fox Civil Aviation · Western Australia · LP

– - The questions posed, first by Senator Kennelly, raise the whole question of the proportion of total cost which is fairly attributable to the civil aviation industry, rates of traffic growth, ability of the industry to pay, and factors -of that nature. The clause refers, in fact, to the policy of full recovery of attributable cost, lt -has never been the practice of governments to acknowledge all costs of civil aviation as being attributable to «civil aviation. I think that it will immediately be seen that costs of this nature include a proportion Which is fairly attributable to defence and a proportion which is fairly attributable to development.

Senator Wright:

– No more than in the case -of roads -and railways, though.

Senator -PALTRIDGE. - I do think so. 1 think , that in the modern world the proposition that roads are more a defence measure than airports is not one that can be sustained. Quick movement of troops by aircraft is an essential of defence. I think it is fair to say also that in respect of development airports can more fairly be charged -with a larger proportion of cost than can roads.

Senator Wright:

– There is only a difference in degree ;and proportion.

Senator PALTRIDGE:

– I am putting it as .a great .difference -in degree. I am making a case for the proposition that civil .aviation charges have within themselves costs which can definitely be attributed to both development and defence. If we have regard to that factor we must try to assess what should be recovered and over what period it should be recovered. We could move in on the airline industry to recover next year, let us say, an .attributable cost of 50 per cent, of the facilities provided. But in so doing we would probably get the result that the operators would have to increase fares to such an .extent that the number of times an airport was used would be greatly decreased and there would be no profit at all in the airline industry. Considering those factors and having regard to the -experience of the past - taking into account, as I mentioned in -my secondreading speech, the estimated growth in traffic - 1& 10 per cent, increase in the basic costs of an industry of this nature is assessed to be reasonable. Inevitably there will always be dispute as to the exact figure, both as to attributability and the extent of the increase that is permitted. After long consideration the Government believes that this assessment is the right one or as nearly right as it is possible to obtain.

Senator Wright referred to factors .that should be considered. The level of air fares was the first factor. I have already explained that .by taking action to increase costs,” and, as a consequence, fares, you will decrease the density ,of usage of the airport and of the airways facilities. Thus, with fewer unit charges, you will defeat your own purpose as well as creating an effect on the airlines. The rate of growth is another element that is very pertinent to the whole proposal. A reasonable return on capital, having regard - I say this quite unblushingly - to the delicate -financial state of the industry, and to its obvious vulnerability to changes in costs and economic conditions, is fairly a factor that should be considered.

Senator KENNELLY:
Victoria

.- I ask the Minister: How can ‘he reconcile the binding of future governments to this agreement? The agreement will be in force until 1977. The Government proposes to bind , future governments, irrespective of their political colour, not to increase the tax on aviation fuel except in accordance with increases in the tax on motor fuel. Does that not take certain rights away from future governments? The people of this country may want to change the government. What right has this Government to bind future governments? Is the Government taking this action because it fears that it may not have the numbers in the Senate .after 30th June next? Let us look at these matters from a practical, political point of view. It is palpably wrong for the Government to bind future governments until 1977 on matters relating to taxation. I would like to hear some of the constitutional lawyers on this point. Is the Government acting in contravention of the Constitution? I arn amazed that any government would do this. In acting in this way the Government is not playing the game with the people.

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– This Government and this Parliament have an obligation and a duty to look to the future in respect of the airline industry that will operate within this country. Having regard to that factor, to the factors that I have mentioned earlier and to the fact that re-equipment calls for the investment in this industry of vast sums of money, the industry is entitled to know and must know what its basic costs will be for a long period ahead. It is entitled to know by bow much its costs will be increased. If it is any comfort to the Deputy Leader of the Opposition to know that this clause will have the effect of preventing a government hostile to a private industry airline from attacking that airline by the air navigation charge, as was attempted in the past, or by the fuel tax, then I say that that is an additional, but not the basic, reason behind this clause.

Senator KENNELLY:
Victoria

– I am amazed that the Government has acted in this way. Let me come now to clause 10 of the agreement set out in the schedule, which deals with the power of the rationalization committee. This clause effects one significant change. Can the Minister tell me why the matter of air routes has been taken out of the hands of the Co-ordinator of Civil Aviation? Under the 1952 and 1957 agreements the coordinator had power to deal with routes as well as other matters. I cannot see in this clause any reference to routes. The clause deals with time-tables, frequencies, stopping places, aircraft types and proposed variations in the levels of fare and freight rates. Can the Minister say why air routes have been taken out of this clause?

Senator Mattner:

– What about paragraph (d)?

Senator KENNELLY:

– There is no reference to routes there.

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– It is all a matter of phrasing. The effect under this agreement is the same as it was under the earlier agreements. The 1957 agreement stated - . . will take immediate steps to review and will keep under review at all times during the continuance of the agreement air routes, timetables, fares and freight . . .

The new agreement contains these words -

  1. . the following matters in relation to air services within Australia and the Territories between Australia .and the Territories and between the Territories . . .

The term “ air services “ means the same as “ air routes “.

Senator KENNELLY:
Victoria

– I often wonder why you do that sort of thing. One has to be a little suspicious about these matters. Of course, being suspicious is foreign to my -nature! In view of what the Government has done in the past, one always has to be careful.

I refer now to clause 13 of the agreement, which deals with the functions of the arbitrator. That person is to be appointed by agreement between the parties or, in the absence of an agreement, is to be a justice of a federal court other than the High Court. I ask this question, with great respect to the judiciary: Is it the intention of the Government to have the same judge act continuously as arbitrator so that he will gain an insight into the airline industry?

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– Yes, the same judge will continue to act. The appointment will be for an indefinite period. Just as Sir John Latham occupied the office of chairman for a number of years, so will the judge who is appointed to act as arbitrator continue to hold that office.

Senator KENNELLY:
Victoria

– Clause 16 will give the Commonwealth access to the accounts of the company. That is a much better provision than was contained in the old agreement. Will the Government instruct the company that it must keep a special set of accounts for its airline? I remind the Minister that the Government is dealing with Ansett Transport Industries Limited which, as has been stated, has quite a lot of ramifications. Some of its activities may be incidental to the airlines industry, but they are not actually part of it. It is the intention of the Government to have access to the company’s accounts only as they affect the airline industry?

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– The whole group of accounts of Ansett Transport Industries Limited will be available for scrutiny.

Senator Kennelly:

– It will be interesting to see whether the company will get a return of 10 per cent, on all its activities - especially if the hotels show a loss.

Senator PALTRIDGE:

– From your point of view, will that not be an advantage? You will have surveillance over the whole group of accounts.

Senator Kennelly:

– I do not want to hamper Mr. Ansett. I only want to know about his airline.

Senator PALTRIDGE:

– It is the practice for the subsidiary airline company to maintain its own set of accounts. If those books are not kept in a manner which my officers believe exposes fairly, properly and adequately the result of the airline’s operations and of Mr. Ansett’s other operations separately and apart, we will take the necessary steps to see that that is done.

Senator McKENNA (Tasmania - Leader of the Opposition [4.29]. - Did I understand the Minister to say that one of the reasons for providing that air route charges would not be increased beyond a certain percentage and that excise duty on aviation fuel would not be increased beyond a certain quantum for a period of sixteen years was to prevent a government other than one of a complexion similar to that of this Government from altering this Government’s broad policy? I presume the same reason would apply to clause 20 of the agreement, which extends the 1952 agreement for an additional ten years beyond 1967. If I understood the Minister correctly in the first place, is not that the main, indeed the only, reason why the Government has extended the term of operation of the agreement? I can understand some extensions of the agreement until the proposed jet reequipment programme is complete. Is there any other reason for extending the agreement apart from the Minister’s desire to tie the hands of a future government of a complexion different from that of this Government? That is the main question that I direct to the Minister.

I now refer to clause 7. (2.), which reads -

The obligation specified in paragraph (c) ot section 13 of the Airlines Equipment Act 1958 shall not apply to aircraft with an all-up weight of less than twenty thousand pounds (20,000 pounds).

Section 13 of the 1958 act prohibits the airlines from purchasing, leasing or otherwise obtaining aircraft without a certificate from the Minister. I presume that provision is there for some particular purpose. I ask the Minister what type of aircraft would be included in the definition of 20,000 lb. and under. Have any such aircraft been bought by either of the major airline operators? Would such aircraft be used for general transport operations or would they be suitable only for executive use?

An allied question arises in relation to clause 19, which provides in paragraph (b) - the term “ aircraft “, where it appears in clauses 8 and 9 of the Civil Aviation Agreement 1952 as affected by this agreement, shall refer only to aircraft with an all-up weight exceeding fifty thousand pounds (50,000 pounds). . . .

The relevant sections of the 1952 agreement provide that no purchase or hiring is to be made without the certificate of the chairman of the co-ordination committee. Why is a limit of 50,000 lb. provided here and a limit of 20,000 lb. provided in the other case to which I have referred? Will the Minister indicate what type of aircraft are involved in both categories?

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– Earlier I gave a very real and very substantial reason for the provision relating to fuel tax and air navigation charges. I indicated that an investment running to many millions of pounds will be involved, that the re-equipment programme to commence in 1964 will run for a period of ten years, and that payment will extend over a period of fifteen years. So the provision relating to fuel tax and air navigation charges really becomes conterminous with the completion of the re-equipment programme.

Clause 7(2.) has been included In the agreement at the request of both operators.

The DC3 aircraft weighs about 26,000 lb. Aircraft which weigh more than 20,000 lb. are regarded as transport aircraft and those which weigh less than that amount are regarded as non-transport aircraft in the commercial sense.

Senator Wright:

– They are the wheelbarrows.

Senator PALTRIDGE:

– Yes. They include helicopters and Piaggio aircraft. The sub-clause refers to aircraft in respect of which both operators say, “ For our practical purposes we do not want them included in the agreement”.

Senator McKenna:

– Are many aircraft of 20,000 lb. or less used by either operator?

Senator PALTRIDGE:

– No. There are not many types. They include the Cessna, the Piaggio, the Drover, and helicopters of two types.

Senator McKenna:

– Would an operator be free to have as many helicopters as he wished to have?

Senator PALTRIDGE:

– Yes. He could purchase them against the issuance of the certificate.

Senator McKenna:

– Without obtaining your approval under the rationalization agreement?

Senator PALTRIDGE:

– No, I am sorry. A certificate is not needed.

Senator McKenna:

– In other words, the operators could buy as many of those aircraft as they liked without reference to the co-ordinator of the Minister?

Senator PALTRIDGE:

– Under the financial terms of this bill, Trans-Australia Airlines would have to have ministerial approval to purchase them.

Senator McKenna:

– Even helicopters?

Senator PALTRIDGE:

– Yes, even helicopters which weighed about 25,000 lb.

Paragraph (b) of clause 19 of the agreement relates to the purchase of aircraft from a Commonwealth authority. When the 1952 agreement was framed, what was in mind was the disposal of the aircraft then held by British Commonwealth Pacific Airlines. They were DC6’s. Having regard to modern circumstances and the all-up weights of the newer aircraft, such as the Electras, the Viscounts, and so on, which exceed 50,000 lb., a weight limit of 50,000 lb. is considered adequate to cover aircraft which might be available in the future for disposal from a Commonwealth authority.

Clause agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 925

AUSTRALIAN NATIONAL AIRLINES BILL 1961

In committee: Consideration resumed (vide page 915).

Clauses 1 to 3 agreed to.

Clause 4 (Financial policy of Commission).

Senator KENNELLY:
Victoria

.- This is the most remarkable clause in the bill. The Minister stated in his secondreading speech -

In contrast, in order to meet reasonable private enterprise standards, Ansett Transport Industries Limited must have a target of the order of 10 per cent, after tax and a reasonable allocation to reserves.

The Minister did not use the words “ should have “; he said “ must have “. That means that Ansett Transport Industries Limited, in order to be satisfied with the return from its airline business, must receive 10 per cent, on its capital after payment of tax and allowing a reasonable amount to be set aside for reserves. During the secondreading debate Senator Arnold paid particular attention to this clause. He wanted to know the meaning of the word “ reasonable “ in the passage to which I have referred. As the present rate of company tax is, I think, 8s. in the £1. Ansett Transport Industries Limited, in order to make a net profit of 10 per cent, would have to make a gross profit of 16 per cent, or 17 per cent. Much depends, of course, upon that very pleasant word “reasonable”. The level of 10 per cent is not mentioned in the bill, but the Minister mentioned it in his second-reading speech. We can assume that he expects T.A.A. to make the same profit as Ansett Transport Industries Limited - that is, 10 per cent. I believe that at present T.A.A. is making a profit of 3 per cent. or 5 per cent. Perhaps the Minister will help me there.

Senator Paltridge:

– It is 5 per cent.

Senator KENNELLY:

– I thought it was 5 per cent., but in the second-reading debate I was contradicted when I mentioned that figure. Incidentally, does T.A.A. make a profit of 5 per cent. after payment of tax and after reasonable allocations to reserves? In his second-reading speech the Minister said that Ansett Transport Industries Limited must have a target of the order of 10 per cent. Therefore, if the Government goes on with this proposal obviously it will require T.A.A. to make an extra 5 per cent. profit. How is that to be done?

Proposed new section 32 relates to the financial policy of the commission. Subsection (1.) begins with the words -

The Minister, with the concurrence of the Treasurer . . .

I do not think that that concurrence would be hard to get if any extra revenue for the Commonwealth were involved. Treasurers are always looking for additional money, so there will be no hurdles to get over there. The sub-section refers to the concurrence of the Treasurer, but the concurrence of the commission is not required. The words used are “ after consultation with the Commission “. I have had some experience in recent weeks about consulting with people. Consultation means nothing. When the Minister has the concurrence of the Treasurer, he will be able to go ahead and do what he wants to do. The subsection states further that, after obtaining the concurrence of the Treasurer and after consulting the commission, the Minister -

  1. shall, not later than one month before the commencement of each financial year, determine the percentage of the capital of the Commission that would represent a reasonable return to the Commonwealth from the operations of the Commission in that financial year, and give notice in writing to the Commission of the percentage so determined; and
  2. may, at any time during the financial year, by reason of a change in circumstances . . amend a determination under the last preceding paragraph.

So if the Minister thinks there has been a change in the circumstances or in the financial position of the commission, he may have a second go. Sub-section (2.) of proposed new section 3? states-

In performing their functions under the last preceding sub-section, the Minister and the Treasurer -

The Minister does not have to get the Treasurer’s concurrence in this instance - shall take into account, in addition to other relevant matters -

That is another of these vague phrases because what may be regarded as relevant when the Minister wants the commission to pay extra taxation may be regarded as irrelevant on other occasions -

  1. the profits, in relation to capital employed, that have been, and are expected to be, made by privately-owned air transport undertakings in Australia;-

The Government will have to separate the airlines activities of Ansett Transport Industries Limited from its many other varied activities -

  1. All matters tending to create disparity with respect to costs between the Commission and privately-owned air transport undertakings, including -
  2. any loans made by the Commonwealth to the Commission at interest rates less than current commercial rates.

Does that mean - I assume it does - that if the commission borrowed money from the Commonwealth four years ago, when the ruling rate of interest was, say, 4 per cent. and had not repaid the money, the Government would say that it had to pay extra tax, however little, because it had borrowed at less than current commercial rates? Would not that be a little hard on the commission? If I went into business five or six years ago, when the rate of interest was, say, 4 per cent., and borrowed money then, and if somebody went into business a few weeks ago and borrowed money at 7 per cent., would I be penalized by being required to pay extra tax because I had borrowed my money some years ago at the lower rate of interest? What would the farmers say if a scheme of this kind were applied to them?

Senator Paltridge:

– You cannot get loans for farmers at less than the current commercial rates, I think. If you know where loans can be obtained at less than those rates, will you let me know where they can be obtained?

Senator KENNELLY:

– Farmers do not always borrow money in order to see them through one- season. If a farmer obtained a long-term loan some years ago, he’ would; now be in a much better position than one who negotiated- a loan recently, although T admit that it would be very difficult to do so. It seems to me to be remarkable that T.A.A. is to be penalized and made to- pay extra tax because three or four years ago it borrowed money at a lower rate of interest than that at which its competitor is able to borrow to-day. What does the Minister regard as the current rate of interest? Is it the 9 per cent, which Ansett Transport Industries Limited is advertising in the- press that it is willing to offer on money lent to it? Or does the Minister regard the- current rate of interest as the normal bank interest rate?

As 1 have said, this is a remarkable proposition. Any one who starts in business to-day can look forward to the time when, because of a case put up by the present Minister for Civil’ Aviation, he will have to pay more tax than a competitor who started in business at a later date, because he borrowed money before his competitor did and at a lower rate of interest.

Senator Paltridge:

– May 1 interject? This is not retrospective. It is not legally retrospective.

Senator KENNELLY:

– I am delighted to hear that. If it is not retrospective, do you say that the commission will be able to get money more cheaply?

Senator Paltridge:

– Yes.

Senator KENNELLY:

– Ansett Transport Industries Limited offers in advertisements 9 per cent, and cannot get the money it seeks. We may read of an offer of 10 per cent. The bill mentions current commercial rates. It does not say bank rates. I ask the Minister whether in this clause the words “ commercial “ and “ bank “ are the same term.

Senator Paltridge:

– Yes.

Senator KENNELLY:

– If that is so, will the Minister agree to delete the word “ commercial “ and substitute the word bank “? I would be much more satisfied with the phrase “ current bank rates “. If the Minister says that the word “ commercial “ means the same as “ bank “ I think every one would be pleased to have the word “ bank “ substituted for “ com mercial “. We- have- some- control- over- bank rates of interest, but we have no control over commercial interest rates. Some- people pay as. high as 8 per- cent., 9 per cent, and 10 per cent. As the Minister has said that “ commercial “ means the same as “ bank “, every one- would know where he stood if “ bank “ were substituted for “ commercial “. Would that change be acceptable to the Minister?

Senator Paltridge:

– No.

Senator KENNELLY:

– Why must you, on this Thursday afternoon, be so basically unfair? You- have said that the two words have the same meaning. Any one borrowing money would rather be paying bank interest rates, - because the Commonwealth has some control over bank interest- rates, but has no control over commercial interest rates.

The Minister has informed me that it will not be made retrospective, so I will take his word for that. The position now is, in effect, that T.A.A. may be able to obtain money at 8 per cent, and Ansett Transport Industries Limited may be able to obtain it at 9 per cent, on the outside market. They will not be able to obtain the money from banks at the moment, although, of course, they may be lucky. At the present time Ansett Transport Industries is advertising in the Melbourne press offering 9 per cent, for money invested for five to seven years, and a lower percentage for a shorter period. I shall leave the matter at that, although I assure the Minister that he will not get away with this one, because I think, with great respect, it is the greatest piece of bushranging that has taken place since the famous Kelly was shot.

Paragraph (b), sub-paragraph (ii), of the proposed new section states that the Minister and the Treasurer shall take into account - the fact that moneys representing provision made by the Commission for staff superannuation are available for use in the business of the Commission;

I suppose that T.A.A., following the usual practice of government instrumentalities, accepts the risk of its own superannuation scheme. All superannuation funds either invest their money or, as is done in this instance, use it in the business with which they are associated. Trans-Australia Airlines could do the same as its competitor may or may not do, namely, go to one of the insurance companies and obtain a cover. A number of firms do this. I think the Australian Mutual Provident Society has a group superannuation insurance scheme. However, T.A.A., following the usual practice of government departments, accepts the risks in connexion with its own superannuation scheme. Why should it be penalized for doing so. If it so desired T.A.A. could pay the amount into a society or insurance company such as the Australian Mutual Provident Society. I do not know whether there is any provision in the Public Service Act to compel T.A.A. to have its own superannuation fund. This matter is of the greatest importance. I understand that the amount in the fund could be as much as £3,000,000.

The TEMPORARY CHAIRMAN (Senator Wood:
QUEENSLAND

– Order! The honorable senator’s time has expired.

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– I rise merely for the purpose of permitting the Deputy Leader of the Opposition to continue.

Senator KENNELLY:
Victoria

.- 1 thank the Minister for his courtesy. All that I have been saying is related to the fact that the Government is proud of the success of T.A.A. over the years. The Opposition’s contention is that if T.A.A. had not been shackled its success would have been much greater, and the people of Australia would not have had to pay as much in air fares. This practice in relation to superannuation funds is one of the many ways in which the Government has hamstrung T.A.A.

I pass now to the next sub-paragraph. The Minister and the Treasurer are to take into account, in addition to other relevant matters -

  1. all matters tending to create disparity with respect to costs between the Commission and privately-owned air transport undertakings, including -

    1. the conduct by, or by undertakings associated with, privately-owned air transport undertakings of commercial activities other than air transport services;

I suppose the sub-paragraph means that the Minister and the Treasurer will take that matter into account in assessing the 10 per cent, profit that the Government wants from the commission. I assume that the sub-clause means that in assessing, the 10 per cent, profit for the government airline only the money that Ansett Transport Industries Limited has invested in its airline operations will be taken into account, and that the Minister and the Treasurer will not go into the other ramifications of that company.

The Minister and the Treasurer will also take into account the operation of developmental services and essential rural services. 1 think I can see the hand of some one in that provision. I suppose that the service from Melbourne to Corowa could be called a rural service. That term could really apply to all services to places away from the main capital cities. Of course, that will not hurt Trans-Australia Airlines so much because the Government will not allow it to provide intra-state services in New South Wales and some of the other States. That fact must be taken into account, too.

In order to carry out the intention of this clause, the Government will have to say to T.A.A., “ You will have to raise your profit percentage from 5 to 10 per cent.”. The Minister, in his reply to the secondreading debate said that I said that T.A A. was run very efficiently. I think I said, in effect, that if it was not run efficiently the Minister had to carry the responsibility for that, however fair or unfair that might be. This provision means that the Government will absorb almost the whole of the commission’s present profit because the tax will be doubled. If the tax is 5 per cent, on £5,000,000 and my arithmetic is correct, the commission will pay £250,000 in tax. If all or portion of the provision for superannuation is to be taken into account, it must be remembered that the superannuation fund has certain liabilities each year in respect of people who have retired. The clause contains some nice words, such as the word “ reasonable “. I remember a song about sweet reasonableness, but it did not pet the one who practised it far. T do not like the use of the word “ reasonable “ in this bill.

The Minister, in his second-reading speech, said that Ansett-A.N.A. must return 10 per cent, after the payment of tax and after a reasonable amount was allocated to reserves. He also said that his desire is to put the two operators on the same footing. That can result in only one thing - an increase in fares. Otherwise, he must admit that the government airline is being run inefficiently. This is just one of a long list of conditions that have been referred to more than once to show that the Government’s great desire is to make things harder for T.A.A. and to help the private airline. T.A.A. would have made much greater profits if the Government had acted on our advice. I think this is a remarkable clause to incorporate in a bill. Why should the Government worry? Is it so concerned about what profit the private airline should make? The Government has helped it. The Government has a great desire to see that two airlines function in Australia. It is giving the private operator everything that it thinks should be given to that airline in order to keep it in the air. Surely to goodness, that can point to only one thing; namely, that Ansett-A.N.A. wants to be assured of the 10 per cent, profit which the Government says it must have. The operative word is “ must “, plus, plus. The Government intends to tell T.A.A. that it must do certain things.

In the debate on the previous bill - if I may allude to it for a moment, Mr. Temporary Chairman - the Minister said that in all probability T.A.A. would have sufficient capital to meet its own jet purchases in 1964. What is the Government doing? Does it desire to take away some of that capital so that T.A.A. will have to borrow money? As I said, I believe this is a frightful clause, and its insertion in the bill is just one of a long list of things the Government has done to hamstring and hurt T.A.A. It has done nothing else but that. If the Minister thinks that airline is inefficient, I say to him with the greatest respect that his job is to see that his officers make it efficient. I do not think that it is inefficient. Therefore, the extra tax will have to be taken out of what is left over - I think the Minister said last year that the amount was £250,000 or £350,000 - or fares will have to be increased. I ask the Minister to tell us what he believes the airline ought to do.

Senator McKENNA:
Leader ask the Minister a few supplementary questions on the matters raised by Senator Kennelly. This clause does not affect the two airlines. It is directed solely to the affairs of the Australian National Airlines Commission, or in other words, TransAustralia Airlines. Under this clause, the Minister, after conferring with the Treasurer and the commission, determines what percentage of profit T.A.A. is to make in the ensuing financial year. Proposed section 32 (2. · Tasmania

reads -

In performing their functions under the last preceding sub-section, the Minister and the Treasurer shall take into account, in addition to other relevant matters -

the profits, in relation to capital employed, that have been, and are expected to be, made by privately-owned air transport undertakings in Australia;

I ask the Minister whether that is concerned solely with the activities of companies engaged on the trunk routes. As the clause is expressed, it relates to all activities by privately owned air transport undertakings in Australia whether operating on trunk routes or not. If the consideration goes outside the Ansett-A.N.A. group, as defined in the definition of “ the Company “ in the agreement, under this legislation what right has the Minister to have access to the records of all the privately owned air transport undertakings? If the provision contemplates public companies, which publish balance sheets and profit-and-loss accounts, that would not be sufficient guide for him at all. There would be no opportunity for the Minister to know whether any concealed reserves had been created in one way or another out of profits. What is the scope of the activities of the privately-owned air transport undertakings contemplated in the clause? In the event of the Minister’s noi relying upon the profits that have been made by those bodies, and deciding to rely upon what they are expected to make, what would be the measure for determining their expectations?

Does the Minister take any power under this legislation to ensure that he gets adequate information from the privately owned air transport undertakings? I point out to the Minister that he is required to take into account the profits, in relation to capital employed, that have been, and are expected to be, made by privately owned air transport undertakings in Australia. The term is quite wide enough to apply to every such privately owned undertaking. .Does the Minister think that it is completely relevant to look at the earnings of companies that are concerned with intrastate operations alone? Are they to be taken into account in conjunction with the earnings of interstate operators? What access will the Minister have to accounts? I think that Senator Kennelly asked for a definition of commercial rates. I merely put it to the Minister that “ commercial “ might have a different interpretation according to whether one talks of banks, finance companies, or companies which borrow on unsecured notes or on secured notes. There is need for a clear definition of “ commercial “.

Senator Kennelly:

– The Minister said that it meant bank rates. When I asked whether he would include the word “ bank “, he said that he would not.

Senator Paltridge:

– I said that it could mean bank rates.

Senator McKENNA:

– I point out to the Minister that there are companies in the community that pay up to 15 per cent, for money. Commercial rates would range from 7 per cent., the highest bank rate, to nearly double that amount, which is paid to attract money to industrial undertakings. The Minister may take his pick. The rate may range from 7 per cent, to 15 per cent. All of those rates would be commercial, whether in relation to banks, finance companies, pastoral companies, or other undertakings. There needs to be some clear definition. Otherwise, the scope of the Minister to determine what is a commercial rate is altogether too wide.

I should like the Minister to indicate which of the five items appearing in proposed section 32 (2.) (b) might clearly be expected to favour T.A.A. on the adjustment, and which might be to its disadvantage. I put it to him that the first might be expected to be entirely against T.A.A. It means that the Minister has to take into account matters tending to create disparity of costs between the commission and the private undertakings, including Joans made by the Commonwealth to the commission at rates less than current com mercial rates. As I understand it, if the Commonwealth lends money to the commission at a lower rate than that at which private companies can borrow on the open market, the commission will be required to earn the difference between the two interest rates, in addition to paying tax, making appropriate provision for reserves and earning L0 per cent., assuming that to be the determination. So there would be four elements that would have to be covered in the total profit earned. That provision would be adverse to T.A.A.

So also would be the next one, and 1 shall refer to it. The Minister is to take into account all matters tending to create disparity between the commission and privately owned air transport undertakings, including -

  1. the fact that moneys representing provision made by the Commission for staff superannuation are available for ase in the business of the Commission.

I take it that the intention would be to compel the commission to recover interest at some rate in respect of that in its profits, and to recover it in its total revenues, putting Ut on par with the private airline trunk-route operator. So there are two provisions that obviously would operate to the detriment of T.A.A., forcing it to make more and more profits,

I should like the Minister to give an indication of how the next three provisions will operate because in none of them is laid down the principle to be followed by the Minister in making a determination of the percentage of profit. There is only a general reference in the third provision to - the conduct by, or by undertakings associated with, privately owned air transport undertakings of commercial activities other .than air transport services.

That may operate in favour of T.A.A., which I understand has no other activities than the provision of air transport facilities, whereas Ansett Transport Industries Limited is concerned with other activities in transport, apart from air transport. Would the Minister explain whether it is intended to divorce the non-air activities of Ansett Transport Industries Limited from its air activities. Will they be disregarded in establishing par? Who. will make that assessment? Will it be the officers of the Minister’s department? Is there any provision whereby the Auditor-General might survey that field? The fourth, provision to be taken into account in these matters is - the operation of developmental services and essential rural-, services..

I should Mice the Minister to- indicate whether he regards; that as operating in favour of or. against the commission. Who has. the developmental services at the moment? Who- operates to rural areas? How- will that factor be brought into account in determining the percentage of profits to be earned?

I now come to the fifth provision to be taken into account, namely - the extent of their non-competitive air transport operations.

If T.A.A. operates a route without competition, what factor is to be taken into account - mileage flown, passengers carried, gross revenue earned, or net profit? There is merely a general’ intimation to the Minister to have regard’ to the extent of the non-competitive air transport operations of T.A.A. and Ansett-A.N.A. No principle as to- the application of those factors is laid down in the bill. When the Minister is in a position to reply, I’ should like him to indicate how those five factors will operate and what principle he will apply. Let me say in general, on. this clause that I. agree entirely with what Senator Kennelly has already submitted to the committee. It is obvious that if the Minister had to make a determination to-day he. would arrive at a figure of 10 per cent., after allowing for taxation and reserves of an. unspecified amount.. While on the matter of reserves I would like to ask the Minister what he considers a* reasonable amount for T.A.A., on its. present; statement of accounts, to put away each year, ft is clear from the nature of events that T.A.A. must put away, over the life of an aircraft, the amount of depreciation involved. There can be no argument about that. Normal business practice is to- put” a certain sum away each year if profits permit.

Senator Paltridge:

– If profits permit.

Senator- McKENNA. - If profits permit. That is done to provide- for future expansion. That is an aspect of. company life that has* developed very acutely under this Government. We have seen the phenomenon of prices being called upon to- provide not only for taxation and dividends but also for heavy reserves. The amount that has- gone to reserves for capital expansion has increased as a matter of routine practice. If the Minister had to make a determination to-morrow what would’ he have mi mind1 as a reasonable amount for TIA.A. to’ set aside out of profits for reserves, apart from’ the routine things that axe- created through the establishment of depreciation accounts? Does he consider that in the amount set aside for reserves there should’ be any element providing for future- capital’ development-?’ If so- what does he think: would be a fair percentage of the profits representing those reserves?

While the Minister was unavoidably, absent from the chamber I dealt with, subparagraphs (iv) and (v). of paragraph (b). I. ask him to say what principle will be applied in considering the factors that are delineated in those sub-paragraphs, as well as the- other factors dealt with in that part of my speech which he heard.

Senator TOOHEY:
South Australia

-. - I feel that I must, briefly at least, rise to protest at the provision in the bill relating to loans made by the Commonwealth to the commission, at interest rates less- than current commercial rates. This matter goes beyond party- politics. The stage has now been reached where this chamber must consider whether it will bring to bear the. degree of responsibility that it should accept with regard to the wording of bills of this character. Let me ask the Minister what I consider to be a perfectly valid question-. If he were seeking a loan and some person in the money market told him that he could have £5,000 at- current interest rates, would the Minister entertain for one moment acceptance of the loan on those terms without’ knowing what, was meant by current interest rates, or even what the person offering the loan considered were current commercial interest rates? I suggest that, this provision outrages every principle associated with the proper drafting of bills. No matter what answer the Minister may have to my question, he cannot dispel or destroy the objections that have been taken to this measure by the Leader of the Opposition, Senator McKenna, and his deputy,. Senator Kennelly. This is not a matt en in which we; on. this: side of the chamber alone- should take an interest. Honorable senators, opposite should ask themselves whether, in view of the illustrations given by me and by my leader and deputy leader, we should pass a bill that sets out interest rates in such a loose way as to be impossible to define. I suggested, by way of interjection, that if the Minister is not prepared to alter the clause to provide in a more direct and understandable way the interest terms that will be applied to loans, he leaves himself open to the charge that the bill has been left deliberately vague for some purpose that may perhaps be questionable. Unless the Minister can give a very much better reason for retaining that wording in the bill than has been suggested up to date, the Government will have to accept the fact that we view these proceedings with the gravest suspicion and feel that there is something sinister in the very vagueness of the proposal.

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– I regret that Senator Toohey should have suggested that there was something sinister in what we were proposing to do under this bill. In view of what I said this afternoon about the Government’s attachment to a two-airline policy, I would have thought that I had made it completely clear that nothing we propose to do under any legislation will have the effect of damaging Trans-Australia Airlines or detracting from its viable and efficient operation as an airline service.

Senator Kennelly and, I think, Senator McKenna, implied that what I said in my second-reading speech could mean only that the Minister for Civil Aviation would insist that T.A.A. pay a dividend of 10 per cent. That is not a fair representation or interpretation - it is not even a reasonable interpretation - of what I said. I said that an organization such as Ansett Transport Industries Limited must, in present circumstances and in to-day’s economic climate, after making a reasonable allocation for reserves, pay a dividend of the order of 10 per cent.

Senator McKenna:

– After taxation.

Senator PALTRIDGE:

– After taxation. Proceeding from that point, it cannot be assumed by any manner of means that a 10 per cent, dividend would be required or expected from the commission. Indeed, the legislation goes to some pains to indicate that in determining what dividend shall be paid certain factors shall be taken into account vis-a-vis Ansett Transport Industries Limited as a group, and having regard to the particular circumstances that apply to the airline industry and to the commission in particular. I think it was Senator Kennelly who claimed that the use of the word “ reasonable “ was capable of a most sinister interpretation.

Senator Kennelly:

– I did not use that word.

Senator PALTRIDGE:

– Senator Kennelly may not have used that word. The principle is not new. It has been in the shipping legislation for some few years. Section 18(1.) of the Australian Coastal Shipping Commission Act provides -

Subject to its obligations under the last preceding section, the Commission shall pursue a policy directed towards securing revenue sufficient to meet all its expenditure properly chargeable to revenue, and to permit the payment to the Commonwealth of a reasonable return on the capital of the Commission.

That legislation was introduced by me when I was Minister for Shipping and Transport. It was administered by me for a couple of years. I have never heard any suggestion of complaint from the Australian Coastal Shipping Commission during the time I was responsible for administering the act, or since, to the effect that that provision was used in any way that could be regarded as other than reasonable and in accordance with commercial practice. In the legislation now under discussion, because of the particular circumstances applying to this industry and to this single entity, we go rather further and state what particular factors should be taken into account in assessing what might be a reasonably commercial dividend. 1 indicate to the Senate that they are only factors. There is no specific arithmetical number or value that can be applied to any one of those factors or to all of them in toto. They are factors to be taken into consideration. When being taken into consideration they will be assessed, separately and together, reasonably - certainly not in a manner which would impose upon T.A.A. some financial burden it could not bear or which would have the effect or reducing the efficiency of the airline as a commercial entity. Indeed, this is no more than a provision which has the effect of saying to Trans-Australia Airlines, “ You are a commercial entity operating in competition with a private enterprise group, lt is required of you that the dividend you return shall be commercially reasonable in every respect - not excessive, but only reasonable.” 1 go further and point out to the Senate that a Minister making this determination exposes himself and his determination te the world. Having made the determination and having advised the Australian National Airlines Commission that its dividend in the ensuing year shall be at a certain rate, he may be questioned about it in this place. Moreover, it will be referred to in the commission’s report, which will be submitted to the Parliament under the terms of the Air Navigation Act. In those circumstances, surely any attempt by any Minister to do anything that was in any way unreasonable would be subjected to a most searching examination and, if necessary, most scathing criticism!

Senator McKenna:

– Is there any provision in the bill for the determination to be made public at the time it is made?

Senator PALTRIDGE:

– The position is this: The first determination is to be made one month before the commencement of the financial year. It will be taken up within the next few weeks in the report of the commission which will be submitted to this Parliament, even if the Opposition is not sufficiently alert to inquire of the Minister at the appropriate time what the determination is. I cannot imagine my good friend, Senator Kennelly, not being sufficiently alert at the appropriate time to inquire of me or my successor what the dividend will be.

Senator McKenna:

– Your successor may not be so amenable or may not accept the responsibility of notifying the Parliament.

Senator PALTRIDGE:

– I am quite satisfied that the provision as it is now framed gives adequate opportunity to any honorable senator or any other member of the Parliament to obtain the necessary information.

Senator Toohey:

– That is not our opinion.

Senator PALTRIDGE:

– That is my opinion, and I am expressing it here. ! do not go elsewhere to have my opinions formed for me. I think Senator McKenna asked one or two other questions.

Senator McKenna:

– I asked about the air transport undertakings and about getting access to the accounts of the particular company involved.

Senator PALTRIDGE:

– I think the honorable senator will be quite satisfied that in respect of Ansett Transport Industries Limited we have adequate access.

Senator Kennelly:

– What about the others?

Senator PALTRIDGE:

– As it happens, all the other organizations which engage in public transport are subsidized companies. Under the terms of the subsidy guarantee, their accounts are open for inspection by officers of my department. Every operator in Australia is so placed.

Senator McKenna:

– Will the assessment be made against all operators in Australia, or only the trunk-line operators?

Senator PALTRIDGE:

– I answer that question by saying that an examination will be made over a wide field and that the accounts of both trunk operators and feeder operators will be considered in making the assessment. They will be weighed. I should say now - I speak offhand - that greater weight would be given to the accounts of the trunk operators than to those of the feeder operators. There has been a lot of discussion about the commercial rate. I feel that the real point has been lost sight of.

Senator Kennelly:

– Excuse me, but you said earlier that the commercial rate was the bank rate.

Senator PALTRIDGE:

– If you read the “ Hansard “ report, I think you will find that I said it could be the bank rate. 1 think the honorable senator has lost sight of this point, which is very pertinent: The commercial rate to which reference is made in the bill is obviously the commercial rate that is applicable to a particular transaction. It cannot be said that the commercial rate might vary from 5 per cent, to 15 per cent. The commercial rate we are discussing is the rate applicable to the type of transaction now under consideration. Surely that is obvious.

Senator Kennelly:

– That means that the commercial rate in respect of Ansett Transport Industries Limited will be 9 per cent, for seven years.

Senator PALTRIDGE:

– Indeed, it does not.

Senator Kennelly:

– That is the rate Ansett is advertising.

Senator PALTRIDGE:

– Judged by any standard, the rate that is paid by Ansett on his unsecured or unregistered notes, or whatever he calls them, is not a commercial .rate. That is a rate which is offered for a long, unsecured loan. A commercial rate is a rate properly made against approved security. In Ansett’s case, that rate is not 9 per cent. If I am looking for a commercial rate in Ansett’s case, I look at “the rate of interest he is paying to the Commonwealth Bank, which is 51 per cent., to the rate of 5i per cent, he is paying to the Australian Mutual Provident “Society, or to the rate of Si per cent, he is paying to the Bank of America in the case of an Electra loan. They are commercial rates. It cannot be held that a rate .of interest paid on an unsecured or unregistered deposit is in any sense of the .term a commercial rate. I repeat: The commercial .rate in this case is the rate applicable to the type of transaction under consideration. That, of course, will vary from time to time and according to differing -circumstances.

It has been suggested that this necessarily will lead to an increase of fares. I suggest, Mr. Temporary Chairman, that that will not necessarily be so. There are various factors ;in this industry which I believe can have the effect of increasing revenue. One of those factors - I have referred to it ion a number of occasions to-day - is the growth of traffic. That growth will enable us to increase the load factor, which is now fixed at 68 per cent. An increase in the load factor of something like 1 per .cent, would increase the dividend rate by substantial proportions. Those are the .kinds of things towards which we are looking :and towards which, as ordinary commercial people, we would be expected by this Parliament to look in order to meet the requirements of this provision. I suggest, Sir, that what is provided in <the clause is ;entirely reasonable.

The TEMPORARY CHAIRMAN:

–

Order! The Minister’s time has expired.

Sitting suspended from 5.46 to 8 p.m.

Senator KENNELLY:
Victoria

.- The Minister, in a reply that he gave either to me or to Senator McKenna, said that the provisions of this bill would not be retrospective. .If the Australian National Airlines Commission has borrowed money from the Commonwealth at, say, 4 per cent, interest, and an amount is still outstanding when this bill becomes law, will an additional 2 per cent, be payable on that money to increase the rate of interest to 6 per cent.?

Senator McKENNA:
Leader of the Opposition · Tasmania

– I remind the Minister that earlier I asked him some questions regarding the attitude of the Government to “ reasonable “ reserves. I do not think that he has yet replied to them. 1 also referred to the five sub-paragraphs in paragraph ‘(b) of proposed section 32 (2.) I should like him to indicate which of those provisions he considers will operate favorably to Trans-Australia Airlines and which will operate .detrimentally to it in the sense that At will be compelled to earn more money to comply with the Government’s directions.

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– The answer to Senator Kennelly’s question is that the legislation will not be retrospective, in that it will not apply to existing loans. There are loans outstanding at the moment, specifically for the purchase of Electra aircraft. This provision will have no relevance at all to those .outstanding loans.

Senator McKenna:

– Or to the interest on them? Will that be disregarded?

Senator PALTRIDGE:

– Yes. I think that the Leader of the Opposition (Senator McKenna) himself .stated the manner in which the five factors in proposed section 32 (2.) (b) will operate. The first two will most likely operate against or to the disadvantage of Trans-Australia Airlines, although the -second one will do so to a less marked degree than might be imagined on first sight. The remaining three will, I should think, operate to the advantage of T.A.A.

On the subject of reserves, I am sure that Senator McKenna realized fully when he posed that question to me that it is one which it is almost impossible to answer in definitive terms now, having regard to the fact that T.A.A. is a government organization and therefore is in a different category in many respects from commercial organizations. For example, I refer to the division of the act which relates to the finances of the Australian National Airlines Commission and particularly to its capital. The act states that the capital of the commission shall consist of the amounts advanced by the Treasurer before the commencement of the relevant section, and so on. In view of the fact that that capital is so closely and restrict’ively confined, consideration of reserves and of provision for reserves is something which, I am sure the honorable senator must agree, cannot be embarked upon in a debate other than at a time when a review of the finances of the commission is being made. I tell him frankly that J would not hazard a guess as to what would be a fair percentage, or a fair amount, to .allocate to reserves, short of a close analysis of -the finances of the commission at an appropriate or relevant date.

Clause agreed to.

Clause ‘5 (Insurance).

Senator McKENNA:
Leader of the Opposition · Tasmania

– I refer the Minister to sub-section (6.) of proposed section 37a, which provides that -

Subject to this section, the Commission shall keep invested in securities of the Commonwealth the whole of the amount from time to time standing to the credit of the prescribed account.

The prescribed account under the proposed section is one to which all amounts that represent insurance premiums which otherwise would be payable to insurance companies are to be credited. There are various provisions as to what shall be credited and debited to the account. I point out that the Government in November last addressed itself to insurance companies and superannuation funds and intimated that it would compel them to deposit 30 per cent, of their annually available funds in government securities. The Government abandoned that element >of compulsion a few months later and settled far .a system of incentives, and the reverse, to induce such companies and funds to invest a minimum of 30 per cent, of their funds in governmental or semigovernmental securities.

In this case, Trans-Australia Airlines is putting aside into this account about £338,000 per annum. It had a credit in June, I960, of approximately £500,000. It made no profit from that business. It made a loss on its self-insurance in that year, but the last figures that are available show a credit of approximately £500,000. In view of the fact that over a period T..A.A. will be compelled to put the whole of that money into Commonwealth securities, I ask the Minister whether the Government has considered giving the organization the benefit of the taxation concessions that are available to insurance companies under the legislation which was passed earlier this year. I recognize that those concessions favoured insurance companies. The Minister may remember that the .companies were required to carve up ‘their accounts so as to show the various elements in their business, such as superannuation, general insurance business and the rest. Although T.A.A. cannot be .said to be engaged in the insurance business, it is carrying its own insurance. It has a completely separate insurance fund, and I submit that its position in that respect is analogous to the position of an insurance company. Having regard to the element of compulsion in respect of investments by T.A.A., which does not apply to any other concern in Australia, has the Government considered giving the airline a taxation remission, on the lines of that .granted earlier this year to insurance companies, in respect of income arising from the investment of that insurance fund? It would be about £2,500 a year. I suggest that .that should be done, in view of the element of compulsion. If the Government has not considered this matter, will it do so with a view to enabling T.A.A. to get the benefit of a concession that is extended generally to insurance companies and superannuation funds?

Senator PALTRIDGE:
Minister .for Civil Aviation · Western Australia · LP

– This question’ was ‘examined very closely by the Government when the legislation was being considered The .honorable senator has referred to the tax commitment of Trans-Australia Airlines. I think he will understand that a characteristic of airline operations in Australia to-day is that, because of the depreciation reservation which must be made, no airline company - neither T.A.A. nor Ansett-A.NA. - is liable to pay income tax. It might be seven, eight, nine or ten years before T.A.A. pays income tax. Therefore, the suggestion that a taxation concession be granted in respect of investment income is not relevant at this stage.

I think the Leader of the Opposition (Senator McKenna) put the position very clearly when he said that internal accounting such as this in T.A.A. or in any similar company could not be compared with the insurance operations of an insurance company as a whole. The types of business are completely different. An insurance company collects premiums and invests the whole of the proceeds for the purposes of paying bonuses and the like. What T.A.A. does is designed to provide cash to cover a catastrophe or any similar circumstance. It is not insurance in the widest sense of the word. If a loss were incurred because of the need to pay out as the result of an accident, T.A.A. would reap a commensurate taxation benefit, but beyond that no provision is made.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I thank the Minister for that explanation. I am amazed to hear that T.A.A. is not subject to income tax payments and that it is not expected that such payments will be made in the foreseeable future. The balance sheet for 1959-60 - the latest one available - shows a reserve for income tax of £172,238. I cannot believe that that reserve would have been made if there were no expectation of income tax having to be paid. Perhaps the dividend of 5 per cent, paid to the Government is regarded as interest on capital? Is that the explanation?

Senator Paltridge:

– No.

Senator McKENNA:

– Then I simply do not understand what the Minister said. On the face of it, if a net profit running into some hundreds of thousands of pounds is made and is passed over to the Government in the form of a dividend, there is a taxation element in that. Would the Minister clarify that point?

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

.- The taxation provision is designed to cover, and would cover, capital profits.

Senator McKenna:

– The entry is, “ Reserve for income tax “.

Senator PALTRIDGE:

– I am sorry. Tax on capital profits has been paid in the past from year to year. The reserve for income tax shown in the accounts for 1959-60, amounting to about £178,000, is only a prudent and not over-large provision, having regard to the fact that within seven or eight years the commission may well have to make very large income tax payments. At present it enjoys a taxation remission because of the large depreciation reservations that are permitted. When they cut out, the commission will walk straight into trouble with taxation.

Senator McKenna:

– Is not the depreciation charge made before you determine the profit of £300,000?

Senator PALTRIDGE:

– It is indeed.

Senator McKenna:

– Surely that profit is taxable. If it is a net profit arrived at after allowing for depreciation, why is it not taxable?

Senator PALTRIDGE:

– The allowance made by the Commissioner for Taxation is 25 per cent, and the commission depreciates over a much longer period.

Clause agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 936

AIR NAVIGATION BILL 1961

Second Reading

Debate resumed from 28th September (vide page 728), on motion by Senator Paltridge -

That the bill be now read a second time.

Senator KENNELLY:
Victoria

.- The purpose of this bill is to ratify a decision made by the International Civil Aviation Organization in Chicago on 19th and 21st June of this year. It was decided that the council of the organization be enlarged from 21 to 27 members. The total membership of the organization rose from 50 in 1945 to 86 in 1960. The Minister for Civil

Aviation (Senator Paltridge) stated in his second-reading speech that the reason for the increase is that a large number of countries have become independent in recent years and civil aviation is, to them, as important as is it to us.

The Minister said that the Australian delegation to the session of the organization in June supported the decision to increase the membership of the council. It is to be hoped, therefore, that the agreement will be ratified by this Parliament. The Parliament did ratify the decision of the convention in 1947, and in 1960 Parliament enacted the Air Navigation Act which set out the text of the Chicago convention. Australia has been a member of this organization since its inception.

The Opposition supports the bill.

Question resolved in the affirmative.

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

page 937

QUESTION

ESTIMATES PAPERS 1961-62

In committee: Consideration resumed from 28th September (vide page 777).

Proposed expenditure - Department of Social Services, £6,227,000 - noted.

Department of Social Services - Capital Works and Services

Proposed expenditure, £218,000.

Senator TOOHEY:
South Australia

– I refer to Division No. 901 - Commonwealth Rehabilitation Service. I take it that this item covers not only the rehabilitation of people suffering from some physical defects, but also the provision of surgical appliances which I believe the Department of Social Services does provide, under certain conditions, for people undergoing a process of rehabilitation. 1 wish to direct attention to what I consider to be a serious deficiency in the rehabilitation service, not so much as it applies to a person who is entitled to some form of rehabilitation assistance under the existing Social Services Act, but as it applies to people who have gone through the process of rehabilitation, but who still suffer from the after effects of their disability, even after they have been placed in industry and have achieved an earning capacity.

I have in mind a person I know in South Australia. His case is not an isolated one. He is working in a normal occupation on a salary that is by no means a high one. From time to time, because of a severe physical disability, he has to buy what are known as calipers to assist him in walking. This person is suffering the permanent after effects of poliomyelitis. I understand that the Department of Social Services has its own surgical appliances and surgical limb section and that to a limited extent it does assist people who go through the process of rehabilitation. The point I desire to make is that the Government, through its social services legislation, should make some effort to help people suffering from severe physical disabilities. It should make some provision to remove from them the financial burden associated with the replacement of artificial aids and surgical appliances.

Some of these appliances cost up to £50 or £60, and for a person receiving the basic wage, or perhaps a little above the basic wage, that constitutes a very serious financial liability. In many cases it overshadows the home of the person concerned and causes suffering to his wife and children. If left to himself he has no means of remedying this situation. People in circumstances such as this have come to me and asked whether there is any government agency which can assist them. I have had to tell them that unfortunately no provision exists in the Social Services Act nor in any other act in the field of social welfare, which will remove from them the financial burden of finding the money required for the replacement of artificial aids for walking or surgical appliances such as calipers, surgical boots and other things which cost so much.

These matters are not covered by insurance because no insurance company has any provision for the payment of a reasonable premium to assist people in this category. The result is that they are left friendless and without an opportunity to obtain financial assistance to help them replace an artificial aid or surgical appliance which is necessary if they are to continue in some useful occupation. I do not think that would cost the Government much - perhaps a few thousand pounds each year - if some agency already exists in the artificial limb or surgical appliance field- If there is no such workshop’ or field’ of endeavour, it would not cost the Government much ra all to do something along that line to remove the great financial burden* that is associated with cases of the character 1 have mentioned.

Because these people are not many in number and their voices are not heard so much in complaint, despite the disabilities they suffer, sometimes we Rave a tendency to forget about them; but when they bring their troubles to us, it brings home to ms very forcibly the disabilities under which some people labour and how little it would cost the Government to do something in this field’. I hope that the Minister in charge of these estimates will convey this request to the Minister for Social Services (Mr. Roberton) and give it appropriate sympathetic consideration.

A member of Parliament is placed in a very difficult position when people in these unfortunate circumstances come to him and he has to tell them that the onus; is on them completely because no provision is made to solve their problems. Quite frankly; for financial! reasons they just cannot? solve their own’ problems; If a breadwinner, who is suffering from the after effects of poliomyelitis, has- to purchase a surgical appliance, that very purchase means that his wife and family may have to go without- some of the most necessary things of life. I know that the Government does many things in the field of social services and that the scope of social1 services’ has been extended over the years. I am aware that a large proportion of the national’ expenditure goes into social welfare. Despite that, I believe that we. should turn our thoughts to these matters whenever we can; and especially at a time such as this when- we are discussing the estimates of the various departments. That is the time for us to pin-point these needs in the hope that,, although the Government, will not or cannot do anything immediately, at least it will keep in mind’ the plight of a group of unfortunate people in out midst,, who are. not many in number, but. are. suffering from tremendous disabilities.

Senator Dame ANNABELLE RANKIN (Queensland) [8.32]. - I should like to ask three questions First, I refer to Division No; 360 - Central; Administration - subdivision 2 - Administrative Expenses - item 03, “ Publicity - Pamphlets and films, £4,000 “. I notice that last year the appropriation was £15,500 and the expenditure was £12,158; but this year the appropriation, is only £4,000. That is a considerable drop in the appropriation. I believe that publicity by pamphlets and films is of tremendous value. I understand that some particularly good pamphlets and films have been produced.

Senator Sandford:

– To which proposed expenditure is the honorable senator referring?

Senator Dame ANNABELLE RANKIN:

– To- Division No. 360, on page 74.

The TEMPORARY CHAIRMAN:

– The proposed expenditure for the general services of the Department of Social Services has- already been noted. However, I realize that I put the question rather quickly. Perhaps I took it for granted that honorable senators did not wish to speak: to Division Nos. 360’ and 364. In the circumstances, I shall call; on. the proposed expenditure again and the honorable senator may proceed. The discussion may then cover both the ordinary services of the department and its capital, works and services provisions.

Department of Social Services

Proposed! expenditure, £6i227,000.

I should like also to ask the Minister a question about the last item under subdivision 3 - Other Services - item 07, “ United Nations fellowship in Social Welfare - Contribution towards fares, £715 “. This provision is new; it has not been mentioned before. Does the provision mean that we are to send a specially trained social worker to a particular conference? If not, for what purpose is the provision made?

Senator TOOHEY:
South Australia

– Mr. Temporary Chairman, I appreciate your fairness in permitting the committee to go back and consider these two divisions which I do not think were adequately dealt with. I think the proceedings moved a bit quickly at the resumption of this debate.

The TEMPORARY CHAIRMAN:

– I realize that I put the question rather quickly, perhaps without giving honorable senators a chance to find the relevant provisions in the Estimates.

Senator TOOHEY:

– I appreciate your permitting the committee to return to these provisions because I hold quite strong views on one point in connexion with social services publicity. I have said previously in this chamber that, although the Department of Social Services publishes from time to time some very fine booklets and pamphlets which are beautifully illustrated, the conditions of entitlement to pensions are not publicized widely enough. I think I can say without fear of contradiction that not 10 per cent, of the people who are entitled to the special pension which is payable to an age pensioner who has no income other than the pension and who lost a son in either World War I. or World War II., are aware of their entitlement. Indeed, the number of people who are entitled to that special pension and are not aware of it is absolutely amazing. I suppose the department might say that if these benefits are available, the people who are entitled to them ought to know about them; but this is not an easy matter for an aged person. Many aged people even fear making a simple application for the age pension and cannot follow the intricacies of the Social Services Act. Whilst I give the department full marks for some of the beautifully illustrated booklets that it has produced from time to time, I suggest that the appropriation for publicity shows that the wording of the act in respect of entitlement must be too obscure and difficult for the ordinary pensioner to understand. I have found out just how little is known about the entitlement to ‘the special benefits provided under the Social Services Act. My experience has taught me that it is impossible to estimate the amount of money that is lost by people each year in the pensions field because of lack of knowledge of their entitlement. How many honorable senators have not had a member of the public come to them and say, “ I do not think I am entitled to any sort of a pension because I have more than £1,000 in the bank”? I think every honorable senator has been in that position, not just on one occasion but on dozens of occasions, if they do their job as I think they all do. Regardless of how easy it is to escape responsibility by saying that people ought to know these things, and if they do not know them that is their own fault, the fact still remains that hundreds of thousands of pounds remains in the coffers of the Government each year because of the ignorance of people of their entitlement to pensions, in the field not only of social service payments but also of repatriation benefits. Any one taking a callous attitude might say, “Look how much money the Government saves “, but my understanding is that the legislation is designed to provide benefits for the people. Upon complying with certain conditions, an applicant may receive a part pension, a full pension, a supplementary payment, or a special pension, as in the case to which I have referred, namely a person of pensionable age who lost a son in World War I. or World War II. As these entitlements exist, no avenue which would enable people to have sufficient knowledge to avail themselves, not of any charity, not of snide acceptance of something to which they are not entitled, but of the full benefits of the legislation, should be left unexplored. At present, there is insufficient publicity on entitlements under social services legislation. I do not think that it is possible for the Department of Social Services to circularize every person and provide information about qualification for pension benefits. I know that some members of another place have gone to the trouble of putting a letter into every home in their electorates, giving information as to entitlements, and the response received showed very clearly that the Government escapes the payment of many hundreds of thousands of pounds to people who are entitled to benefits.

It is my opinion that the Commonwealth should provide information centres separate and apart from ordinary social services centres, to which people could go with queries about anything in the social service field. There they could be advised by somebody who was prepared to take a personal interest in their particular problems. In rebuttal of that suggestion, it might be said that already there is adequate provision at the various social service centres throughout Australia, but I know that senators on both sides of the chamber will agree that the average person seems to have some sort of fear of going to the social service centre to ascertain his entitlement:. There seems to be some sort of repression that leads him to believe that the people at those centres will not extend sympathetic consideration. That is not true, of course.

Whatever criticism I may level from time to time about the limitations of social services, I hold a very sincere belief that the acts of the Commonwealth are administered almost exclusively by very decent people who have much human understanding. But that does not dispel from the mind of the average pensioner the fear that when he goes to social services centres he will be grilled. This fear places some sort of restraint upon him. In many instances, aged persons become confused and do not know quite what to do. I am not talking in language that nobody in this Senate understands. I know that instances such as I am citing occur every day in the life of a senator or of any member of the Parliament.

I suggest that the department provide information centres, separate and apart from the places where it administers its usual business. These should be advertised as providing an exclusive service to advise people of pension entitlements. If this were done, it would go a long way towards bridging a gap that exists now, despite publicity issued from time to time by the Department of Social Services, and would assist those persons who, sometimes because of age, sometimes because of the lack of somebody with a bit of knowledge on their side, fail to obtain their entitlements and, as a consequence, are being unfairly treated.

Senator WEDGWOOD:
Victoria

– 1 refer to the proposed grant of £13,920 for the housekeeper service. I believe that this service would benefit greatly from increased expenditure by the Commonwealth Government. The amount provided has remained stationary for many years. Spread as it is over six States, the amount that each State receives, whilst welcome, makes no very great contribution to the housekeeper service in that State. In my own State, Victoria, I understand, 111 municipalities are now participating in home help or housekeeper schemes. As I said a few nights ago, this is a field in which the expenditure of more money could give greater benefits to people who are in need and would at the same time save the Commonwealth a considerable amount of money in respect of expensive building programmes and social service benefits.

There is no doubt in the mind of any person who has any knowledge of the housekeeper service as to its benefit, not only to the aged, but also to mothers who, whilst in hospital and on returning from hospital, have no other way of having their families looked after. I should like to see a considerable amount of money devoted to the housekeeper service, because I believe that it is one of the very best activities in which the Commonwealth Government could engage.

Senator Sir WALTER COOPER (Queensland) [8.47]. - I refer to Division 364 - Other Services - Building of homes for the aged - Assistance to approved organizations. This assistance has been a great benefit to very many aged persons during the years that it has been available. An amount of £2,000,000 is proposed for allocation this year. I ask the Minister: What is the total amount that has been made available for aged persons’ homes, and how many such homes have been built during the period that the relevant legislation has been in operation?

Senator BRANSON:
Western Australia

– Mr. Temporary Chairman, as I was called out of the chamber for a short period, will you inform me whether I am right in understanding that the committee is now discussing Divisions Nos. 360 and 364, the proposed votes for which have already been noted?

The TEMPORARY CHAIRMAN:

– We are actually discussing Divisions Nos. 901 and 905, but I am allowing discussion of Divisions Nos. 360 and 364, consideration of which was concluded very speedily.

Senator BRANSON:

– I refer to Division No. 360 - Administrative Expenses - Publicity - pamphlets and films. I ask the Minister why it has been considered necessary to cut the appropriation from £15,500 last year to £4,000 this year. The actual expenditure last year was £12,158.

Senator SPOONER:
New South WalesVicePresident of the Executive Council and Minister for National Development · LP

– Let me deal first with Senator Toohey’s questions relating to appliances. It must be remembered that this is a rehabilitation scheme coming basically within the four corners of the Social Services Act. Those who are entitled to appliances are beneficiaries under the act. Senator Toohey will probably remember that this rehabilitation scheme was evolved with the idea of taking people off the sickness benefit by training them in some way and restoring them as effective members of society. Although the scheme is basically for beneficiaries under the Social Services Act, it has been widened somewhat over the years by permitting other people to take advan- tage of the expert services available on payment of charges for the work that is done for them. Persons in receipt of the sickness benefit or an invalid pension who enter a rehabilitation centre are provided with these appliances free of charge during the period that they receive treatment. The appliances are, generally speaking, of a type that will last for many years. Those people who are beneficiaries under the Social Services Act receive their appliances free of charge, but those who pay for the rehabilitation service pay for their appliances. I think I am correct in saying that to a major degree the appliances are made at workshops of the Repatriation Department.

Senator Dittmer:

– The department has its own organization in most States.

Senator SPOONER:

– Some proportion of the appliances is made at the repatriation workshops. The category to which Senator Toohey referred is not a large one. If the persons concerned are beneficiaries under the Social Services Act, they receive their appliances free of charge. If they are persons who have been sent to the rehabilitation centre by their employers following, say, an accident and they are paying for the services that they receive, they would purchase their appliances during their period of treatment. When we are dealing with the Social Services Act it is pretty difficult to deal with these people who are not beneficiaries under the act. A good deal of thought would have to be given to the matter before extending social service benefits to somebody who was not eligible under the act.

On the subject of publicity, which was referred to by Senator Toohey, Senator Dame Annabelle Rankin and Senator Branson, the department goes a long way in its endeavours to meet the situation. It not only issues the information sheets with which I think everybody is familiar but it also takes pains to ensure that supplies of the sheets are available at all post offices, where people collect their social service payments or where they go to transact business. The brochures are made available also at all immigration centres and at all offices of the Department of Labour and National Service. Supplies are sent to trade unions and to the personnel offices of commercial and industrial firms. They are sent also to charitable organizations and to social workers. There is a fairly large scale distribution of publicity to ensure that everybody who is eligible for social service benefits will receive notice of those benefits. From my own experience I would say that the department’s objective is to have a wide publicity of the benefits available. I doubt whether much more can be done effectively than is now being done. However, that does not mean that the door is closed to any suggestions.

Senator Dame Annabelle Rankin made “Some comment about the appropriation this year being smaller than in previous years. It may be interesting to have a break-up of the appropriation. Reprinting of leaflets accounts for £1,300. The sum of £1,000 is set aside for the making of films. The sum of £1,700 - I think this is the explanation that the honorable senator requires - is a carry-over from last year for the cost of printing the booklet about social services about which some complimentary remarks were made. Only £1,700 is sought this year for the booklet. The major expenditure on the booklet was incurred last year. Because the major expenditure on the booklet was incurred under last year’s Budget, this year’s expenditure has fallen.

With regard to the housekeeper service, it must be remembered that it is in effect a supplementary service. The amount that the Commonwealth spends on the service is not as great as the amount that is spent by the States. The States are interested in this matter to a far greater extent than the Commonwealth. The amount provided by the Commonwealth is supplementary to the State provisions. The amount provided for New South Wales was £5,900; for Victoria, £4,100; for Queensland, £2,100; for Western Australia, £1,000; and for Tasmania, £500. The Commonwealth has not attempted to go into this service to any appreciable extent. It has been content to leave it as a State activity.

The final matter raised was in relation to the United Nations. The provision in this item is to meet contributions towards the fares of recipients of United Nations awards of social welfare scholarships. The 1961-62 provision is a contribution for the return fare of a fellow from the University of Queensland, who will return from the United States, and for the fare of a departmental officer going overseas. This item covers the cost of permitting certain people to take advantage of United Nations training or study groups.

I doubt very much whether I can give Senator Sir Walter Cooper the figures that he sought in relation to homes for the aged. I have with me a description of the purposes of the Aged Persons Homes Act, with which I think all of us are familiar. The department’s annual report sets out the grants to different types of eligible organizations that were approved up to 30th June, 1961. Approval has been given for 616 grants to organizations. Of that number, 343 are classed as grants to religious organizations. Grants totalling £5,700,000, to provide accommodation for 6,237 persons, were approved for those organizations. There have been 252 grants totalling £3,800,000 approved for charitable or benevolent institutions, to provide accommodation for 3,897 persons. A total of £228,000 was approved for four grants to ex-servicemen’s organizations, to accommodate 221 persons. An additional sum of £284,000 was approved for 17 grants to organizations approved by the Governor-General to provide accommodation for 266 persons.

Senator SANDFORD:
Victoria

.- I refer to Division No. 364, in particular the proposed appropriation for payments under Commonwealth Employees’ Compensation Act. Last year the appropriation was £8,150 and the amount expended was £7,947. This year we are asked to appropriate £4,000. Can the Minister indicate why this year’s appropriation’ is to be only half that of last year?

Senator BUTTFIELD (South Australia’ [9.2]. - I should like to enter a plea for migrants who have been in Australia for less than twenty years and who now are retired or out of work but who are not qualified for pensions. I believe that when migrants are naturalized they are told that they now have all the privileges of an Australian citizen. I know that Australians have to reside continuously in Australia for twenty years before becoming eligible for the pension. That is a different point; but really I see no reason why the act could not be amended to make provision for Australians who have resided here for less than that period.

I ask the Minister for National Development whether consideration cannot be given to altering this qualification. It acts harshly upon migrants who came to Australia about fifteen years ago as displaced persons at the age of 45 or 50 years, who have contributed to revenue since their arrival, but who still do not qualify for a pension. I understand it is estimated that this adjustment will cost approximately £2,000,000. Probably the Government would find that it would cost less than that, because many of those people would continue to work. I again ask the Minister to reconsider this difficult problem.

Senator TOOHEY:
South Australia

– Mr. Temporary Chairman, I should like to refer again to the subject of publicity. I appreciate the reply that was given to me a little while ago by the Minister for National Development. When I spoke earlier I said that I was aware that the department did certain things. The Minister agreed with me and he displayed one or two brilliantly illustrated booklets issued by the department. But I believe that those booklets do not convey the information that people desire to have. Although a tremendous amount of information is available, the fact that pension entitlement has become very complicated since the introduction of the merged means test has been overlooked. People need to be supplied with more than a limited amount of information published in a booklet which leaves them to read between the lines in order to ascertain what they want to know.

Let me illustrate my point. In the booklet which the Minister displayed to honorable senators a moment or two ago there is a reference to entitlement to the benefits of the pensioner medical service. The reference simply states that in certain circumstances pensioners are entitled to medical service but that it is subject to a means test. Such a statement does not convey much to the ordinary man in the street who does not know that, if he is a single pensioner or a widower, he cannot avail himself of the pensioner medical service if he earns more than £104 a year. In the case of a married couple, of course, the relevant figure is £208. It may be argued that if more detailed information were published in the booklet it would constitute an invitation to pensioners to limit their earnings. Some of the shrewd ones do that already. The only pensioners who are not able to adjust their earnings so they may become entitled to the benefits of the pensioner medical service are those who do not understand the provisions of the act.

I suggest that, although the department goes to the trouble of placing these booklets in post offices, benevolent institutions and other places, and although other information is made available in leaflet form, the need of these people is not met. In my opinion, the situation could be met adequately if at every social service centre in Australia an information service was provided. I suggest that the most effective way in which to advertise that information service would be to use the medium of television. People who had a pension problem could be told that they could receive sympathetic advice from the information centre. I believe that when people became aware of that service thousands of them would avail themselves of the opportunity to ascertain whether they were entitled to a particular benefit.

Let us assume that the provision of such a service cost another £50,000 a year. I do not think it would be too much to ask for. I do not think the Directors of Social Services in the States would be astonished at the result, because they know that the present media of publicity are not reaching the pensioners. But I believe the Minister for Social Services (Mr. Roberton) would be astounded at the beneficial results which would flow from the establishment of such centres and would be more than pleased with the improved public relations. I feel quite strongly about this matter, Mr. Temporary Chairman. I am not suggesting that the method I have advanced is the best one; possibly other means of publicity would be more practicable. But I believe that something along these lines is needed and that until some such service is provided people will continue to be treated unjustly because they are not getting something to which they are entitled under the legislation passed by this Parliament. We ought to do something more practical in this field and let people know where they stand.

Senator COLE:
Leader of the Australian Democratic Labour Party · Tasmania

– Like Senator Toohey, I also refer to the pensioner medical service. I should like to know when it is proposed to increase the permissible income which pensioners may have without their entitlement to benefit under the scheme being affected. At the present time, the maximum is £208 per annum.

Senator Toohey:

– The amount has not been changed for years.

Senator COLE:

– In practice it has been changed and I think that the change should be incorporated in the laws of the Commonwealth. I have spoken frequently on this subject, having seen something of the dire hardship that exists because of this limitation of income. I speak mostly of superannuated people in Tasmania. In many cases railways workers took out their eight units of superannuation which entitled them to £208 per annum on retirement. One such person of whom I know thought that he would help himself and his wife, who is much younger, by taking out more units than that, with the result that his superannuation was £214 per annum. The £6 that he received above the permissible maximum amount of £208 prevented him from entitlement to benefits under the pensioner medical service. I may say that that man suffered a very severe illness involving an operation which cost him about £400.

The value of the superannuation units recently was increased, so that people who took out eight units, which entitled them to superannuation of £20^ per annum in previous years, now find that those eight units are worth about £220 per annum. Of course, they had no option but to take the superannuation units. I know that the Department of Social Services has treated such people well and is still giving them medical cards although the superannuation they receive exceeds the stipulated maximum of £208. Therefore, the law has been changed to a certain extent, the limit of in come being £220 or £222 in those cases. Incidentally, that amount of pension exceeds the pension of £214 per annum received by a person whose case I have brought to the notice of the Minister for Social Services (Mr. Roberton) on previous occasions. It is time that the Government took action in this matter. As I have said, the maximum amount has in fact been increased, not by law but out of goodwill. I believe that it should be raised to a much higher figure. I also believe that medical services should be free to all pensioners.

Senator SPOONER:
Vice-President of the Executive Council and Minister for National Development · New South Wales · LP

.- Replying first to Senator Cole’s request, I inform him that the matter he has raised is largely one of policy. It is hardly practicable for me to do more than say that I shall note the views expressed by him. Representing other Ministers, as I do, it is not easy to have readily available answers on questions of policy. I hold the view that the pensioner medical service is one of the really great steps forward that we have taken in the field of social services in recent years. The pensioner medical service has been of infinitely greater benefit to social service beneficiaries, in my view, than have many of the pension increases. I say no more than that I shall note the honorable senator’s views.

I can say very little more to Senator Toohey in addition to the remarks that I have already made. As the honorable senator was speaking I was reading some of the social service pamphlets, and I can only say that they are written in simple terms.

Senator Toohey:

– Those you have there are out of date now.

Senator SPOONER:

– That may be so. There may be later copies, or new editions may be in the course of printing, but in any event they are not bad. They are in fairly simple terms. I should think that the Department of Social Services would take careful note of the suggestions made by the honorable senator, because its objectives are the same as his, in that the department also wishes to have the benefits widely known.

I can say nothing in reply to Senator Buttfield. The matter she has raised also is one of policy. The twenty-year residential qualification has been in-built in the Australian social service system for many years. That qualification has applied and still applies to all Australians. Even a person who is Australian born is subject to the twenty-year residential qualification. It would be taking a big step to alter it.

I inform Senator Sandford that the item to which he referred relates to the payment of compensation for officers of the Department of Social Services who have been injured while on duty. The reason that the amount has fallen is that the department has been more fortunate in that respect this year.

Proposed expenditure noted.

Proposed expenditure - War and Repatriation Services - Department of Social Services, £17,000 - noted.

Department of Civil Aviation

Proposed expenditure, £13,233,000.

Senator O’FLAHERTY:
South Australia

– The Minister for Civil Aviation (Senator Paltridge) no doubt remembers that some time ago provision was made for the establishment of bars or refreshment rooms at airport terminals. I ask him whether those facilities have in fact been provided and, if so, whether the Department of Civil Aviation either is operating them or intends to do so.

Senator BRANSON:
Western Australia

.- I refer to Division No. 261, Administrative Expenses - item 08, “ Incidental and other expenditure, £33,500”. That is approximately £10,000 less than the expenditure last year. Will the Minister give the reason for the reduction? Then I turn to Division No. 262 - item 03, Search and rescue services. The appropriation for this purpose last year was £64,000, of which £61,722 was spent. The appropriation sought for this year is £25,000. I realize that that is only an estimate, but I should like the Minister to explain why the appropriation sought this year is so much lower than the expenditure last year.

Then I come to Division No. 262 - item 06, Local government services. The expenditure under this item last year was about £29,000, and this year the proposed appropriation is £42,000. What is the reason for the increase? The last matter in respect of which I seek information is Division No. 263 - item 08, Aviation research. There was no appropriation last year and the proposed appropriation this year is £4,000. Can the Minister tell me what form this research will take, what fields it will cover and where the work will be done?

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– Since the passage of the legislation relating to business concessions at airports the activities of the department in that sphere have been extended. The cocktail lounge at the Perth airport has been in operation now for some years. That was made possible by the action of the Western Australian Government, in 1957, in passing legislation to permit the provision of this amenity at the Perth airport. Since then, a new cocktail bar has been opened at the Sydney international airport. It is operated by Australian Airport Services Limited.

Senator O’Flaherty:

– Is that a government concern?

Senator PALTRIDGE:

– No, it is a private concern which won the concession at tender. It has spent in excess of £30,000 on fitting out the lounge. I have seen the lounge. I think any one who has seen it will agree that it is very nicely fitted out and very well conducted. The next cocktail bar that will be opened will be at the Melbourne international airport. It will be opened, I think, in the next week or two. The successful tenderer for this was Federal Hotels. I propose to look at this amenity as soon as I get an opportunity to do so.

Senator Branson:

asked, first, about Division No. 261, Administrative expenses - item 08, Incidental and other expenditure. He asked why the estimate for this year is about £10,000 less than the expenditure last year. I have a table showing, in respect of various items, the provision for this year and the expenditure last year.

With the concurrence of honorable senators, I shall incorporate the table in “ Hansard”. It is as follows: -

Senator Branson referred next to Division No. 262 ; item 03, Search and rescue services. Expenditure under this head last year was about ?61,000 and the estimate for this year is ?25,000 - a reduction of about ?36,000. The estimate allows for the cancellation of the service provided by the Royal Australian Air Force at Darwin, and for search flying by private aircraft, requisitioning of airline company aircraft for which payments will be effected by the department, search and rescue exercises, droppable equipment, &c. The reduction has been made possible by virtue of the fact that within the last two years, rather than have the Air Force conduct this service, the Department of Civil Aviation has, within its own organization and by co-opting the civil airlines, managed to provide what is in fact an equally efficient service at a considerably lower cost to the taxpayers. When I say that, I mean no offence to my good friend on my right, the Minister for Air (Senator Wade). This is one of those economies which can be effected from time to time and which the Department of Civil Aviation is ever alert to effect when opportunity offers.

Senator Branson referred also to Division No. 262 ; item 06, Local government services. The proposed vote for this year is about ?12,000 greater than the expenditure last year. The proposed appropriation provides for additional payments of rates to local authorities resulting from an increase in leases of sites and buildings under the Airports (Business Concessions) Act. Collections from leases are a credit to this revenue. Senator Branson asked also for information about Division No. 263 - item 08, Aviation research. The proposed appropriation shown for that item is ?4,000, and for the next item - item 09 - which relates to incidental and other expenditure, the proposed appropriation is ?70,000. Unfortunately, there has been a misprint. The sum of ?70,000 relates to aviation research and the sum of ?40,000 relates to incidental and other expenditure. The provision in respect of aviation research, which is ?70,000, is a new provision. It covers the following projects previously included under item 09, Incidental and other expenditure: Provision of civil aviation facilities at aeronautical research laboratories, on which ?59,000 will be spent; applied electronic research, which will cost ?3,000; aviation medicine, ?6,000; other projects such as airport investigation and research, ?1,000; and flight testing of aircraft to establish performance and handling characteristics, ?1,000.

The TEMPORARY CHAIRMAN:

– This document has been reprinted and the figures to which the Minister referred have been placed in the proper places.

Senator COOKE:
Western Australia

– I refer to Division No. 262, item 01, Aerodromes, and also to item 03, Search and Rescue Services. I shall deal first with item 01. Can the Minister tell the committee what is happening in relation to the improvement of aerodromes in the north-west of Australia and the extension of facilities for pasengers at those aerodromes? Recently the Minister and I had a very pleasant trip through that area, and the Minister admitted that the facilities we”* insufficient, particularly the facilities for passengers. He said that, in view of the delays to services that occurred, there was room for a great improvement of the aerodromes in the area. I cannot see any provision in the Estimates to carry out such works. The air services in the north-west of Western Australia provide a vital link for these people between their homes and more thickly populated centres. Cocktail bars are provided at airports in the more populous areas -

Senator O’Flaherty:

– You do not want them in the outback, do you?

Senator COOKE:

– I do not want them out there, but I want amenities and facilities considerably better than are provided at present. I want to see something done in conformity with the promises the Minister and I made to the people in the isolated districts who rely almost entirely on air services. One area to which I am referring extends from Wittenoom Gorge north, and another is Carnarvon north.

I should like also to ask the Minister whether there could be more co-ordination between the services in these areas. I know, and the Minister knows, that the late running of planes fa sometimes beyond the control of the air operators, but nevertheless great inconvenience is sometimes caused to people who are proposing to travel by air. These people do not live in places where they can get a taxi and drive to an aerodrome. They cannot always be contacted by telephone and told that the aircraft has been delayed. I think that some provision should be made whereby it is imperative and not left to the discretion of the officers concerned, to inform intending passengers of delays caused by the late running of planes. I know that one person who was severely ill had to wait for more than sixteen hours at an aerodrome where the facilities were very poor. He was waiting to be transported to Perth. I am not saying that the delay to the aircraft could have been avoided, but I contend that the passengers should have been warned of the altered schedule.

I ask the Minister to give the Senate a full report of what the department proposes to do to improve facilities for people who have to wait at these aerodromes. The provision of cocktail lounges in easy-living areas is very commendable, but better facilities than are now provided are needed in these northern areas. If an air service is not able to advise people of the late running of planes, a government agency should accept the responsibility to see that people are informed. That onus should be placed on government employees in those areas north of the 26th parallel in Western Australia. No doubt the Minister will have a good story to tell about this.

Senator SIR WALTER COOPER:
Queensland

– I should like the Minister for Civil Aviation to give me some information about Division No. 263, item 05, dealing with subsidies to air services. I notice that the £500,000 to be appropriated this year is the same as the amount appropriated last year. I should like to know the routes on which the companies that qualify for the subsidy operate and the basis on which the subsidy is paid.

Senator CANT:
Western Australia

– I wish to discuss one of the subjects raised by Senator Cooke. Earlier this year I attended the opening of a very fine lounge at the airport at Broome. I thank the Minister for giving me the opportunity to be there. I think the Department of Civil Aviation is to be commended upon the facilities provided at Broome, Derby and Wyndham, which are situated in the tropics in an area which may be called a high rainfall and a dry area. The reason for that description is that a very high rainfall occurs within a short period and for the rest of the year conditions are dry.

Very frequently airports in this area are out of commission because they do not possess all-weather runways. On one occasion the Wyndham airport was out of commission, the Ord River was in flood, the Ivanhoe airstrip was out of commission and an injured worker at the research station on the Ord River needed to be transported to Wyndham for medical attention. Last year I asked the Minister to provide facilities for night landing at the Wyndham airport, which is down in a basin and it not a good airport for aircraft to land on other than in daylight hours. I understood the Minister to say last year that the necessary warning lights would be placed on the hills surrounding the airport. I should like the Minister to tell me whether that programme of work has been carried out, and I should also like him to tell me when it will be possible for the department to construct all-weather runways at the various north-west airports.

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– I shall deal first with the query raised by Senator Sir Walter Cooper in respect of the subsidy payments of £500,000. This subsidy is paid to air operators which provide services of a developmental character in the isolated parts of Australia, and to those operators who provide services to rural areas regarded as being of an essential character. These developmental services are provided by such airlines as Connellan Airways Limited in the Northern Territory, and, of course, MacRobertson Miller Airlines along the coast and in the Kimberleys of Western Australia. Other airlines which provide these feeder services and which receive subsidies are TransAustralia Airlines - for its services in the Channel country and the Gulf country of Queensland - and East-West Airlines Limited and Airlines of New South Wales Proprietary Limited - for the rural services they provide in New South Wales.

The payment is for developmental services. In each case it is worked out on a basis which is appropriate to the particular operation, having regard to the very peculiar difficulties that each of those airlines encounters in the provision of these services to the most isolated parts of Australia. For other services to rural areas or country areas, which are not regarded as developmental services, provision is made for the payment of a subsidy on the basis of a percentage of the value of the equipment used. Over a number of years £500,000 has been allocated amongst those various types of operators. That has ensured the provision of air services to areas of this vast country which, in many cases, would be without communications if there were no air services.

Senator Cooke reminded me of a trip that we made together through the northwest and Kimberleys areas of Western Australia a couple of years ago. I regret that apparently he has not been back to those areas since then. Had he been back, I am sure that he would acknowledge that a very real improvement has been effected in the airport facilities in that part of the continent.

Senator Cant referred to the terminal building at Broome which was opened very recently. A new terminal building has been provided at Derby. The Wyndham terminal building is in good condition. A small but new terminal building has been provided at Onslow. In that respect the airports are well-equipped. I do not think any complaints could be made about the facilities for passengers. It is true that in the more isolated places, such as Hall’s Creek and Fitzroy, the passenger terminals are bough sheds, but the passengers who arrive at those terminals for onward transport generally arrive as the ‘plane lands, having seen it from within the town and got some one to drive them out to the terminal. Usually only one or two people embark at those very isolated airports.

Senator Cant referred to the condition of the runways. Considerable work has been done at some of the airports. I believe it is fair to say that the remaining airports that require treatment are Wyndham and Carnarvon. Wyndham presents a particular problem. I was there with the Director-General of Civil Aviation and technical officers earlier this year and we had the opportunity to examine the runways on the spot. They present something of a problem for the technical officers. We have not failed to spend money on them in the past; nor has there been any failure to maintain properly the runways at Wyndham. However, the soil is of such a character that, probably because of the incidence of the wet season, subsidences occur suddenly and unexpectedly. The matter will be investigated again during this wet season. I do not expect - indeed I am sure - that a great deal of the ultimate work will not be done this year. It will probably be included in the Estimates for next year.

At Carnarvon there is a unique problem. The surface of the runways at Carnarvon is quite sound; but after a sudden downpour of rain, which is a characteristic of that part of the coast, it becomes slippery. The surface remains sound, but while it is wet it is slippery. I understand that scientific people have been taken there by my department to try to find a way of mitigating that condition until such time as funds are available to surface the runways completely. I hope that what I have said has indicated to both Senator Cooke and Senator Cant that this part of the country, which depends so much on air services, is not being overlooked by the Department of Civil Aviation.

I noted particularly what Senator Cooke said about the provision of cocktail bars at the bigger airports. I know that a balance has to be maintained among the various expenditures. One of the favorable aspects of a concession at a big airport is that it produces revenue which enables the department, in the long term, to spend money on the more outback places.

Senator HANNAFORD:
South Australia

– I direct the attention of the Minister for Civil Aviation to Division No. 263 - Development of Civil Aviation - Item 06, “ Aerodromes - Development grant, £350,000 “. The estimated expenditure this year is £350,000, compared with last year’s expenditure of £246,149. I ask the Minister what the policy of the Government is in regard to the development of the light aeroplane airstrips which abound throughout Australia. I understand that every encouragement is given to local government authorities to take over those airstrips. They serve a very useful purpose. I have seen them in operation in various parts of South Australia. The Royal Flying Doctor Service, in particular, depends upon them, and they are also used by people who operate light aircraft in some of the remote parts of our country districts. I ask the Minister whether any of that £350,000 is being devoted to assisting local government authorities to maintain or develop some of those light areoplane airstrips.

I refer now to an aerodrome in the southeast of South Australia at a place called Millicent. That aerodrome was in service for a number of years; but, as far as I know, at present it is not used. It is still available. I do not know whether the local government authority has taken it over or whether it is on the list of aerodromes under the control of the Department of Civil Aviation. The Minister may be able to inform me of the position of that aerodrome. I think we all realize the vital importance of these small airstrips.

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– Senator Cooke and Senator Cant, who asked me about airports in the north-west of Western Australia, will be interested to know that this year £35,000 is being made available for the strengthening and sealing of some portions of the runways and shoulders at Wyndham, and £8,600 will be spent at Derby on the provision of an improved water supply for the airport.

The matter raised by Senator Hannaford is important. The vote to which he referred covers the allocation made for local ownership. The local ownership policy pursued by the Government over the past three years has been extremely successful. Senator Hannaford asked whether I could provide the information in some detail. I can do so, but it is in the form of a very helpful pamphlet, and I suggest that he might have a look at it and obtain the details. I regret that I am not able to provide the vital statistics on this particular aspect of policy, but I can tell the honorable senator that the figures are most impressive. In Queensland and New South Wales, many local authorities are now the proud possessors of their own airports and are making a very good job of them. I believe that this has given them an increased sense of pride and community.

Senator Hannaford referred particularly to Millicent, which is an airport developed under the local ownership plan by the Commonwealth and local authority in partnership. It is covered by the maintenance provisions of the plan. I know that at present it is not being used, or is being little used, because of operational difficulties or exigencies of the airline that traverses that part of the country. But the airport is there and it is used by a number of local people operating light aircraft. When the commercial service resumes operation, it will be of great benefit to that district.

The provision of lighter aerodromes - authorized landing grounds, as we refer to them - poses a somewhat different problem. Some of these, of course, are required by individual persons or firms for their own benefit and for the promotion of their own businesses. I am sure that the honorable senator will agree that it is not the function of the Department of Civil Aviation, nor of the Government itself, directly to promote commercialism to the extent of providing airports for the expansion of private businesses, but many authorized landing grounds which have a community value are supported by the Department of Civil Aviation.

Senator COOKE:
Western Australia

– I thank the Minister for the information that he has given to the committee as a result of my questions. I now wish to raise two other matters. I refer to Division No. 261 - Administrative - Salaries and Payments in the Nature of Salary - Temporary and Casual Employees. I note that the proposed appropriation for this purpose is a little less than 50 per cent, of the proposed appropriation for salaries of permanent employees. The proposed appropriations are £1,961,000 and £4,761,000 respectively. Most transport agencies require a certain degree of knowledge and efficiency of their casual employees. Although these could not be described as skilled or trained personnel, they absorb a good deal of knowledge about the service in which they are engaged, and they perform an important function in transport.

Will the Minister consider an increase of this ratio between permanent employees and casual employees, with a view to enabling casual employees and temporary employees to become permanent? It is not an economy to employ casual and temporary employees. As a matter of fact, the usual trend in industrial awards is for these people to be paid a premium because of the temporary or casual nature of their employment. There is absolutely no benefit to any department in the continuous employment of employees of this type. The employees are required. Why not give them the privilege of permanence, with the opportunity of providing, by means of superannuation or otherwise, for their retirement. They are persons who, although not skilled, are, as a result of their association with the industry, efficient and good servants. This is one department wherein an adjustment such as I have advocated would be of benefit to all concerned. If this matter has not already been given consideration, I ask that it be considered in the coming assessment of staff.

I want to refer again to another matter that I mentioned when I was last on my feet. The Minister said that facilities for people waiting at aerodromes were reasonable, in view of the department’s difficulty in providing better facilities. I ask the Minister whether it is competent for the department to instruct persons in charge of aerodromes, and airlines providing services, to advise passengers when there is a delay of more than two or three hours. This advice should be conveyed by means of telegraph or telephone or in some other way. The intending passengers should be advised, when an aircraft is late, of the time at which it is likely to depart. In the metropolitan area, one is sometimes required to spend two or three hours at an airport. Recently in Perth we had a delay of 24 hours. I have known delays to be as lengthy in the north-west. People coming from stations have very poor quarters, providing no services at all, in which to wait. In some cases it has been necessary to obtain hotel accommodation in town for sick persons. I do not think it is unreasonable for the Minister to make it incumbent on persons responsible to ensure that, in cases of inordinate delay, passengers shall be notified at the earliest possible moment of the estimated time of departure.

Senator CANT (Western Australia’ [9.59]. - I refer again to Division No. 262 - Maintenance and Operation of Civil Aviation Facilities. I thank the Minister, as I am sure residents of Wyndham and people at Kununarra would wish to thank him, for the information supplied in regard to the Wyndham runway.

Senator Paltridge:

– -Kununarra, incidentally, is not our runway. It belongs to the State.

Senator CANT:

– But the Kununarra people will use the Wyndham runway. I am well acquainted with the difficulties that confront the Minister and his department in respect of the Carnarvon runway. I think that the Carnarvon runway is badly sited, because it is flooded every time the Gascoyne River breaks its banks. The runway is situated in an old river bed. Has the Minister given any consideration to using in the construction of the runway at Carnarvon materials that are used by the Main Roads Department of Western Australia? Over a number of years, the Main Roads Department has found that the local materials are unsuited to road construction. Considerable research has been undertaken in an effort to obtain a mixture of soils and sands suitable for road (surfaces. A mixture of clay and sand forms the base upon which the bitumen sealing is placed. Has the Minister or his department conferred with the Main Roads Department on this matter with a view to obtaining a good surface for the Carnarvon runway until such time as the department can see its way clear to provide an all-weather runway, preferably at a site other than the present site of the aerodrome?

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– I will reply, first, to Senator Cooke, who referred to the employment of temporary staff. There are 3,326 permanent employees and 1,657 temporary employees. Having regard to the nature of the work that is done by those employees, the department does not regard the number of temporary employees as disproportionate.

Senator Cooke:

– Temporary employees number 50 per cent, of the permanent employees.

Senator PALTRIDGE:

– Yes, but one must have regard to the nature of much of the work that is done. A good deal of it is done by people who choose transient employment rather than permanent employment. Also, many of the tradesmen employed see advantages in not accepting permanent employment. I refer particularly to maintenance staff and employees in similar capacities. Senator Cooke will be aware that under certain conditions temporary employees are permitted to contribute to the superannuation fund after a period of three years. I am informed that that privilege is available to many temporary employees who have remained with the department for longer than three years. In addition, the department constantly transfers to the permanent staff employees who show any inclination to remain with the department and seek permanent status. No attempt is made to discourage them in this regard. On the contrary, every attempt is made to encourage them to join the permanent staff.

As for the other matter raised by Senator Cooke, I regret that I did not reply to him when I was last on my feet. However, I noted what he said. I agree that incidents such as the one that occurred at Perth the other night highlight the necessity for matters of this kind to be kept constantly in mind.

Senator Cooke:

– We have had good service at Perth. I have no complaints in that regard, but I was referring more specifically to the north.

Senator PALTRIDGE:

– I have noted Senator Cooke’s comments. I appreciate the importance of the matter that he raised.

Senator Cant referred to the aerodrome at Carnarvon and its probable unsuitability. I was reminded of the unfortunate experience at Carnarvon during the recent floods, when the aerodrome levee was breached by flood waters.

Senator Cant:

– That happened in 1950 also.

Senator PALTRIDGE:

– Yes, it happened in 1950 and again at the end of 1960. The site of the aerodrome at Carnarvon is regarded as the best available in the area. As the honorable senator knows, the aerodrome is on the banks of the river. The officers of the department constructed a levee which in almost every circumstance of floods was sufficient to keep the flood waters out and to keep the aerodrome intact.

Senator Hannaford:

– What is the name of the river?

Senator PALTRIDGE:

– The Gascoyne. Senator Cant will remember that when the last flooding took place there was in the town a committee looking after the evacuation of the people. My officers were made to leave the town, despite the fact that they had made it clear that if they were permitted to remain, knowing where the flood waters may first breach the levee, they would be able to seal the levee and to hold the aerodrome intact. To the people in charge of the evacuation my officers suggested that one of their number should take his wife and the wives and children of the other officers away from the town, leaving the two remaining officers to look after the aerodrome. Unfortunately, that proposal did not find favour with the evacuation authorities. All officers of the department were moved from the aerodrome and the levee broke at the point where my officers expected it to break. The net result was that the Department of Civil Aviation had to spend about £20,000 to restore the aerodrome. That expenditure could have been avoided. The situation did not make the responsible Minister very happy. However, I hope that Senator Cant will obtain some comfort, as I do, from the fact that I have now made arrangements with the authorities concerned in Western Australia to ensure that in similar circumstances in the future such a state of affairs will not be permitted to occur again.

The nature of the soil of the aerodrome and the problems of compaction are not unknown to my staff there. I think I am right in saying that the staff has co-operated with the Main Roads Department in the past and has availed itself of the know-how of that department and of some of the soils used by it. That soil is brought, I think, from about 40 miles away.

Proposed expenditure noted.

Proposed expenditure - Department of Civil Aviation, Capital Works and Services, £4,936,000- noted.

Department of Shipping and Transport

Proposed expenditure, £3,622,000.

Senator KENDALL:
Queensland

– I wish to refer to ship construction under Division No. 373. At this time of the year it is customary for Senator Laught, my colleague from South Australia, and I to ask the Minister for Civil Aviation whether any progress has been made towards the building of our own ships for work in the Antarctic. We charter Swedish vessels for this purpose. Up to the present time we have spent nearly £750,000 to charter ships. That money could have been used to build suitable vessels in Australia. In the event of war or any other form of trouble in Europe and Swedish vessels not being able to come out here our bases in the Antarctic would be cut off, because we have no suitable vessels in Australia, nor have we the trained crews to man such vessels.

There is an incidental aspect of this matter. Vessels of the kind and size we need for this work could well be built at Walker’* small shipyard at Maryborough, in Queensland. That provides me with an added incentive to continue to ask what progress has been made in this matter.

Senator O’FLAHERTY:
South Australia

– I refer to the proposed appropriation of £150,000 for the promotion of road safety practices. I am not at all sure that the expenditure of this money is not a waste. It seems that the Commonwealth is to pay £50,000 to the States to enable them to employ administrative officers on road safety work. In addition, the Commonwealth is to spend £100,000 on publicity. I have seen some of the publicity that has been provided by the Commonwealth, but I do not think it is of any use. For the life of me, I cannot see how that publicity will affect the speed-hog who drives on our roads. That kind of person does not take any notice of the publicity that appears in the press or on posts on the side of the roads.

I ask the Minister how it is proposed to get at these speed-hogs in order to protect other people. I do not think we can protect the speed-hogs, but we may be able to protect other people. These people who speed are quite unpredictable; they slide out of a line of traffic at enormous speed and endanger others who are travelling ahead of and alongside them. Yet it is proposed to spend £100,000 this year on erecting placards and on publicity through such media as television. As I said earlier, I am inclined to believe that this expenditure is a waste of money. I ask the Minister whether it is possible for the proposed expenditure of this money to be reconsidered.

I turn now to the proposed contribution to the maintenance of the Eyre and Barkly highways. It is proposed that in this financial year £46,000 shall be allocated for this purpose. The information contained in the brochure supplied by the Minister discloses that this item covers an annual contribution of £25,000 towards the maintenance of the Eyre highway between Penong in South Australia and Norseman in Western Australia. This highway extends over a distance of 723 miles. If we divide £25,000 by 723 we arrive at an allocation of £35 a mile. Probably this allocation supplements other moneys that are provided by the States. The expenditure of this sum of money would be just sufficient to macadamize one chain of road in every mile or, if the road has been already macadamized, it would enable about one and a half chains in every mile to be sealed. I have worked out that it would take 53 years to macadamize the road or to provide some form of sealing.

I ask the Minister to ascertain whether it is possible to obtain more than £35 a mile to improve the highway. There are many parts of the Eyre Highway that are in such a condition that any one who tries to drive a motor car on them after rain finds that the car turns round and looks at him.

Senator Sir WALTER COOPER (Queensland) [10.21]. - I invite the Minister’s attention to Division No. 368, Other Services, item 02, which relates to shipping services to Papua and New Guinea. I notice that the amount to be provided this year has been reduced by a quarter, or from £100,000, as it was last year, to £75,000. I realize a subsidy is paid to Burns Philp & Company Limited which operates two ships between the Australian mainland and New Guinea. Is the reduction in the proposed expenditure due to the fact that the ships will carry less freight, or to a reduction in the amount of subsidy? I also refer to Division No. 372, under the heading of administrative expenses. Item 09 relates to Overseas Telecommunications Commission - Payments towards cost of coastal radio service. This year, the amount to be provided is £280,000, whereas last year the amount expended was £347,382. Does that mean that it is expected that less use will be made this year of the telecommunication services?

Senator TOOHEY:
South Australia

– I refer to the proposed expenditure on the promotion of road safety practices. I think we are tackling this problem at the wrong end. It is my humble opinion that the holocaust on our roads to-day is in large part due to the fact that the roads are carrying a type of vehicular traffic for which they were not designed. Those of use who can remember travelling over the Hume Highway before the advent of the great transport trains which now use it day by day, will recall that the highway then had almost a billiard table surface and that it was possible to drive for long distances without encountering any of the hazards that are met with now. That is a part of the price that we in Australia have to pay for the lionizing of private enterprise.

Our roads problem is being aggravated by the fact that people are using the roads for the carriage of huge quantities of goods in great transports. This form of transport destroys the roads, and the operators of it make little or no contribution to their reconstruction. Whether we care to admit it or not, there is no possible doubt that many of the fatal accidents and other accidents in which people are maimed or injured are due to the fact that these large transports are involved. 1 want to make it perfectly clear that I am not reflecting on the ability of the people who drive the transports because I think that in the main they are very capable drivers. What I am suggesting is that because of the way in which our roads are constructed, the gravest possible danger is being created for everybody who uses them.

These great overland trains - that is what they are - are using roads that were surveyed and constructed some twenty or 30 years ago for traffic of a vastly different character. I suggest that the matter is so important that road safety authorities in both the State and Federal spheres should face up to this basic factor in the toll of the road. As we know, the arterial roads between the capital cities of Australia sometimes have a width of no more than 20 feet of bitumen. In many instances the bitumen is undermined by the weight of the traffic travelling over it and thus becames a serious hazard in wet weather. So long as circumstances such as those continue to exist we shall continue to see the road toll grow.

Safety campaigns involving the use of advertisements on television screens, in the form of posters, and so on, could play a part in improving the situation, but until we build roads that will carry huge vehicles safely and also permit the safe movement of other types of motorized traffic, we shall continue to see the road toll increase each year. I suggest that the only alternative to such campaigns is to negotiate an agreement with the States, if that can be done, in respect of the heavy forms of transport that I have mentioned, because at present our roads are not suitable for them. In other countries where people are more enlightened in these matters there are highways designed specifically for heavy transport. I understand that where such conditions exist road travel is much safer than it is in Australia. I should Like to know the Minister’s views on this matter.

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– Senator Kendall has spoken of the possibility of building in Australia a ship for Antarctic exploratory work. Some progress has been made in this respect since we discussed the matter during the Estimates debate last year. I am informed that designs have been prepared for the Department of External Affairs, the client department, and that those designs are now being considered by the department which, of course, necessarily will initiate any action which is to be taken.

Senator O’Flaherty has referred to the road safety vote. The honorable senator addressed himself particularly to accidents which arose from speeding. Expressing a personal view, may I say that I could not agree more with him. If the origins of road accidents were to be traced, I am sure it would be found that most accidents were directly related to speed. May I refer to action which recently has been taken in my State. The Government there has introduced a new code of speeds, and a remarkable transformation has resulted. As Senator O’Flaherty well knows, traffic control is a matter for the States. There is no doubt that where a policy aimed at the elimination of speeding is rigorously pursued the benefits can be seen by way of a fall in the rate of accidents.

Senator Toohey addressed himself to the construction of roads and their use by heavy vehicles. He said that our roads were not built to carry the types of vehicle and the heavy loads which in many instances they are now called upon to carry. I think that that is correct. The honorable senator asked for my views on the subject. I certainly do not want to brush him aside. I have views on the matter and have expressed them at road safety conferences many times. Nevertheless, this is a matter for the States. The types of roads that are constructed and the traffic codes that are adopted are matters for them. Over the years considerable pro gress has been made by the States towards the adoption of a uniform traffic code. I am not suggesting for one moment that that in any way solves the problem that Senator Toohey has raised, but it gives us encouragement to hope that the co-operation which the States have displayed in attempting to develop a uniform traffic code may extend to other practices and have a very beneficial effect on road safety generally.

Consideration interrupted.

The TEMPORARY CHAIRMAN (Senator Wood:

– Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -

That the Temporary Chairman do now leave the Chair and report to the Senate.

Question resolved in the negative.

Consideration resumed.

Senator PALTRIDGE:

– The Eyre Highway grant is a maintenance grant and is intended only as a maintenance grant. It is not a construction grant, although it has been a great help to the two governments concerned, so much so that some months ago Sir Thomas Playford and Mr. Brand were able to announce, as I understood the announcement, that they had decided to bitumenize and seal their respective portions of the highway over a period of years.

Senator O’Flaherty:

– That is only because the elections are coming on.

Senator PALTRIDGE:

– I think it was rather more remote from the election date.

Senator Branson:

– Mr. Brand has already had 20 miles of his portion done.

Senator PALTRIDGE:

– I know that considerable progress has been made on the sealing of the road out from Norseman. Senator Branson, who uses this road probably more than any one in Australia, knows what is happening. He has just commented to me that the road has been developed for 20 miles out of Norseman. I do not know what has been done on the South Australian side of the border.

Senator Sir Walter Cooper referred to the Papua and New Guinea shipping subsidy and asked why it was reduced this year.

The arrangement is that the shipping service shall be subsidized at the rate of £100,000 a year. The current arrangement, however, expires in December of this year and, as a result, only £75,000 is provided in respect of the reduced period. The matter will be reviewed, no doubt, before the arrangement expires.

Reference was made to Division No. 372, Administrative Expenses - item 09, Overseas Telecommunications Commission - Payments towards cost of coastal radio service. As the provision under this item is to offset the operational deficiency being incurred by the commission in maintaining a constant communication with shipping, payment to the commission is normally made in advance. During 1960-61 advance payments to the commission were greater than previously and are to be adjusted during this financial year. The effect of these payments is reflected in the lower provision required for the current financial year.

Progress reported.

page 955

TARIFF BOARD

Reports on Items.

Senator HENTY:
LP

– I lay on the table of the Senate reports by deputy chairmen of the Tariff Board on the following subjects: -

Paper cones.

Polyethylene

page 955

REGULATIONS AND ORDINANCES COMMITTEE

Senator WOOD:
QUEENSLAND

– As Chairman, I bring up and lay on the table of the Senate the seventeenth report of the Regulations and Ordinances Committee.

Ordered to be printed.

Senate adjourned at 10.37 p.m.

Cite as: Australia, Senate, Debates, 5 October 1961, viewed 22 October 2017, <http://historichansard.net/senate/1961/19611005_senate_23_s20/>.

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