Senator IAN MACDONALD (Minister for Regional Services, Territories and Local Government) (4:42 PM) —I table two revised explanatory memoranda relating to the bills and move:

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

AIR PASSENGER TICKET LEVY (IMPOSITION) BILL 2001

The grounding of Ansett on 14 September was a sad day, both for Australia and the Australian aviation industry. Ansett is a proud name in our aviation history, and its employees are dedicated and hard working.

As the number of passengers in need of immediate assistance to complete their travel falls away, communities in regional Australia and Ansett employees are our top priority. This Bill is part of a package of two bills that the Government has introduced to establish an Air Passenger Ticket Levy is about those employees.

The Australian Government is still working hard with the administrators to get Ansett back into the skies again, and, if we are successful, many of the employees that are suffering from an uncertain future will be able to return to the industry that they have served before.

However, no matter how hard we work to deliver the best outcome, we must also plan for the worst.

We have encouraged Ansett employees to register their interest with our entitlement scheme hotline and, the Government and the administrators will, of course, be seeking funding of the outstanding employment entitlements from the assets of the Air New Zealand Group.

The Government is also drawing up legislation to provide for employees to be placed ahead of secured creditors when companies become insolvent.

The Australian Securities and Investments Commission (ASIC) has commenced a formal investigation into the collapse of Ansett, focussing on possible breaches of directors' duties under the Corporations Act. This will include investigating compliance with the insolvent trading provisions of the Act and Air New Zealand's potential liability under those provisions.

In addition, it is more than likely that the assets of the Ansett group of companies will be sufficient when realised to meet the outstanding employment entitlements. If the administrator has no choice but to wind up the company, Ansett employees will have needs that must be met quickly, and early payment of entitlements that are rightfully theirs will help them through this difficult period as the industry readjusts.

In order to ensure that Ansett employees' entitlements for wages, annual and long service leave and pay in lieu of notice are met in full, the Government will establish a Special Employees' Entitlements Scheme for Ansett group employees (SEESA). SEESA will ensure that Ansett employees get paid all their unpaid wages and unpaid leave, and their pay in lieu of notice. SEESA will also meet their redundancy entitlements up to the community standard of 8 weeks.

The levy will be administered by the Department of Transport and Regional Services, and funds raised through the levy will reimburse the agency for payments in connection with the scheme. It will also meet the costs of the arrangement and the Government's costs in administering the levy.

The levy will be imposed on each ticket used to board a flight starting its journey at an Australian airport. Only the first flight taken by the passenger holding the ticket will attract the levy so, for example the levy will not be applied to the return flight.

The levy, which will apply to electronic as well as the more traditional paper ticketing, will be set at ten dollars, and will be collected on behalf of the Commonwealth by airlines. The cost of the scheme to the airlines will be absorbed by them.

We have begun discussions with airline operators on the best system for administering the levy at the lowest cost for both airlines and the Government.

Following these discussions the Government has proposed a number of amendments to the Bills. The amendments are designed to address a number of implementation issues that have been raised by the airline operators.

In particular, the airlines advise that all other levies and taxes they collect are collected when a ticket is sold. They suggest that implementation of the levy on 1 October 2001 would be facilitated if the basis on which the levy is imposed were changed so that the levy would be:

· due to be paid by the purchaser at the time the ticket is sold; and

· due to be collected by the ticketing airline at the same time.

If a ticket were cancelled, the levy would be refunded or transferred in the form of a credit. If the ticket were non-refundable and the flight not taken, the levy would also be able refundable. However, if for any reason the value of the ticket was reduced or partially refunded, the levy would remain payable.

The principal difference between what is currently proposed in the Bill and the amendment described above is that the levy will be imposed on tickets sold (and not cancelled) not tickets used.

It was also clear from these discussions that the ticketing systems of some airlines would mean that they would be unable to collect the levy as proposed.

Therefore, one of the amendments would allow me to enter into alternative collection arrangements where it was necessary.

The levy will be applied to every ticket purchased on or after 1 October 2001 and will continue until it has met the cost of payments made to former employees of Ansett Australia under SEESA and related administration.

In the event that the levy generates a surplus before it is ended, the Government will distribute that surplus in accordance with a scheme it will prescribe by regulation. I want to make it clear that it is not the Government's intention to distribute that surplus to the benefit of the airlines that collected the levy, nor will it be used as a windfall for the Government.

Aside from the detail of the package, there are two broader issues that I want to address here.

The size of the potential losses from any permanent grounding of Ansett is staggering. It has the potential to be one of the biggest corporate collapses in Australian financial history. In the event of such a collapse, the budget is simply not able to bear the cost of the unpaid entitlements of Ansett employees. The package authorises payments of up to five hundred million dollars to meet the costs associated with the SEESA.

It is not fair that we tax the whole of the community to support this need - but it is appropriate to impose a tax on airline users.

Similar approaches have been used in other cases of industry restructuring such as the stevedoring industry, and to address industry specific problems, including aircraft noise abatement measures and the increased cost of monitoring for foot and mouth disease.

As with the imposition of other, similar levies to deal with other specific circumstances, we do not believe that this will affect the recovery of regional air services after the grounding of Ansett. However, we will monitor the effect of the levy on regional Australia to ensure that this is the case.

It is also important to note that the package does not impose a levy on passengers who take possession of their ticket outside Australia. This is a problem that affects Australia, and we will deal with it here. The exemption means that the levy will not place any great impediment on one of our most important export industries.

The question of who is to blame for the grounding of Ansett is a question for another time. The Government has already made its thoughts clear on this subject, and it is now a matter for the administrators and the courts.

In the meantime, Ansett employees have a right to their entitlements, and, if these are needed to help them through these uncertain times. This package will allow the Government to meet their needs in a timely way.

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AIR PASSENGER TICKET LEVY (COLLECTION) BILL 2001

I refer to the statements made in the Air Passenger Ticket Levy (Imposition) Bill 2001 speech.

Debate (on motion by Senator Denman) adjourned.

Ordered that the resumption of the debate be made an order of the day for a later hour.