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Tuesday, 18 September 2001
Page: 27250


Senator MARK BISHOP (2:39 PM) — My question is directed to Senator Ian Macdonald, representing the Minister for Transport and Regional Services. I note that the minister has confirmed that on 14 August this year Minister Anderson received a copy of a letter from the chair of the Air New Zealand board, Mr Jim Farmer, to Prime Minister Howard which outlined the financial troubles confronting Ansett. Can the minister confirm that that letter referred to a pending crisis that could see the `failure of one or more parts of the group'? On what basis then did the minister state three weeks later, on 6 September, that he did not believe that Ansett would be forced into liquidation and that he did not believe that any jobs were at risk?


Senator IAN MACDONALD (Minister for Regional Services, Territories and Local Government) —Unless something has happened in the last 40 minutes, I do not think Ansett is in liquidation at the moment, Senator Bishop. But you talk about the letter of 14 August. On that date the acting chairman of Air New Zealand wrote to the Prime Minister and warned the government that the Air New Zealand group was in a difficult financial position. The acting chairman has quoted quite selectively from his letter. He left out the key paragraphs of what has been released, which put forward his solutions to the group's financial problems. The letter concluded:

An early recapitalisation of the group, with assistance from Singapore International Airlines, remains the preferred position adopted unanimously by the group's directors.

Dr Farmer did not ask for government assistance. He asked us to support the Singapore Airlines proposal to increase the Singapore Airlines holding in the Air New Zealand group. Of course, Air New Zealand, a foreign company, wholly owns Ansett Airlines. Singapore Airlines, a foreign company as well, is owned principally by the Singapore government. By that time, Mr Anderson had already agreed that it was unlikely that the Qantas plan would be triggered and that the New Zealand government would move posthaste to provide Air New Zealand with a decision.

So what I am emphasising is that, at the time of that letter, the Australian government were already doing everything that Dr Farmer had asked us to do. The Australian government did not in any way stall the decision, as apparently Dr Farmer has claimed. This is a foreign company; it is a company based in New Zealand. We were asked to do a number of things, supporting an application to the relevant authorities in New Zealand. At the time we were asked, we had already been doing that for some time.


Senator MARK BISHOP —I ask the minister to table the letter from which he has just quoted. Madam President, I have a supplementary question. Having received a stark warning from the Air New Zealand board on 14 August of this year, why did the government sit on its hands and do nothing, leaving Ansett workers and suppliers, the workers and suppliers of its subsidiaries, Ansett passengers, the tourism industry and regional Australia totally exposed to the collapse which took place on 14 September?


Senator IAN MACDONALD (Minister for Regional Services, Territories and Local Government) —Again, I can only urge Senator Bishop to listen to the answers I gave in relation to the first part of the question. The extent of the Air New Zealand difficulties and the lack of information given to the Australian government was also a situation that the New Zealand government had to deal with. The Labour Prime Minister of New Zealand, Helen Clark, has said that no-one, including Air New Zealand, had any idea of how gross the recapitalisation problem was. Without information that is not available to the New Zealand government—apparently even to the board of Air New Zealand—it makes it very difficult for the Australian government to be in the loop and to know this information. Those who had direct responsibility did not have that information.


Senator Cook —Madam President, I wonder if you would ask the minister to table the letter from which he has quoted in his answer to Senator Bishop. Would he table that letter for the sake of the chamber?


The PRESIDENT —I can ask the minister to table it; it is a matter for him.

Honourable senators interjecting


The PRESIDENT —Order! The minister has not tabled the letter. He does not have to table the letter and I cannot direct him to table the letter. And I am sure you are aware of that.


Senator Cook —I understood you put a question to the minister, and I understood the minister made no response.


The PRESIDENT —You are wrong.