Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Tuesday, 23 August 1994
Page: 10

Senator ALSTON —My question is directed to the Minister for Primary Industries and Energy—who is, as usual, distracted—as the minister representing the Minister for Transport. I refer to yesterday's announcement that ANL is effectively bankrupt. When did the government first receive the Salomon Bros/Price Waterhouse study? How long has the government known of this disastrous affair? When the government confirmed as recently as the May budget this year its reported intention to sell a substantial part of ANL, did it do so on the basis that ANL then had a positive net worth; if so, what was it and how could ANL have possibly deteriorated so rapidly since that time?

Senator COLLINS —I will tell Senator Alston. The company's performance in recent years could have been regarded without question as mediocre. That is not exactly a state secret, although it seems to have escaped Senator Alston. I have to say in respect of that mediocre performance by ANL that the performance of most shipping companies internationally was also mediocre. I might add that that was stated in the Senate if not a dozen times, at least half a dozen times, in question time over the last couple of years.

  Most major shipping companies involved in international trade over the past couple of years have been having a very tough time because of increasing competition, declining freight rates and a significant over capacity of shipping. ANL undertook a program of reconstruction over this period of time, including extensive retonnaging of the fleet, with a view to being well placed for the anticipated recovery in international trade.

  The company has been a victim of developments in international shipping trades over which it had limited control—changes in trade patterns, intense competition, and at the same time declining freight rates and surplus capacity. In the past year these developments have produced a rapid deterioration in ANL's performance in international trades and, importantly and regrettably, with no foreseeable prospect for improvement in those international trades. In these circumstances it became imperative that the government take decisive and responsible action, and that is exactly what we have done.

  The company's poor performance over the last six months has come in the main from deteriorating results in the company's presence in the Europe and north and east Asia liner shipping trades. For example, in response to Senator Alston's specific question, $18 million of the projected $25 million loss in shipping for 1993-94 occurred in the last six months.

Senator ALSTON —Mr President, I ask a supplementary question. Do I understand the minister to say that the government has known that ANL has been a basket case for the last six months? If that is right, on what possible basis did the government propose to sell? Presumably, one only sells an asset that is worth something and one expects to get something in exchange. Is it not the fact that the original decision to privatise ANL was made back in 1991 when Senator Collins was the responsible minister, at least nominally? He remained nominally the responsible minister until late last year. What is the fact? Was he aware of the true state of affairs during that period or, once again, did he not bother to read the fine print?

Senator COLLINS —The fine print and what would be of more interest to Senator Alston, the coarse print, is all on the public record. He will find a lot of it in Hansard.

  Senator Cook interjecting

Senator COLLINS —The facts are—and Senator Cook by interjection has just noted it; Senator Alston obviously has not noted it and I know that he has come in very late to this debate—that the performance of the company, regrettably, has been mediocre. I know that Senator Alston does not read the Daily Commercial News, but that fact has been on the front page of the major trade paper for the last three or four years. As the Senate has been advised more than once, that mediocre performance was being matched—

Senator Alston —Mr President, I rise on a point of order. What we are getting now is a regurgitation of the first answer about disastrous performances. The questions were on what possible basis the government proposed to sell it in May, three months ago, and when it first got this so-called `bad news'. They are the questions. It is a pretty simple matter to ask the minister to answer those questions.

Senator Cook —Mr President, on the point of order: the question is, of course, being answered by the minister. If Senator Alston would sit in his place, put his hands on his desk and look forward, he would hear the answer in due course. It ought to be recognised that the basis of the question—

Senator Alston —What is your point of order?

Senator Cook —I am speaking to the point of order. It ought to be recognised that the basis of the question from Senator Alston is erroneous and false. It is no wonder that he cannot get an answer to something that is erroneous and false.

The PRESIDENT —There is no point of order.

Senator COLLINS —Mr President, the facts are—and they are all on the public record—that the government, having taken a decision to sell the company, initiated, as Senator Cook said by interjection, a scoping study leading to a full diligence process in the company. The full nature of the company's losses were revealed during that process. As I have just said to Senator Alston, $18 million of those losses occurred in the last six months. (Time expired)