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Wednesday, 3 April 1957

Mr CREAN (Melbourne Ports) . - The honorable member for Melbourne (Mr. Calwell) indicated that the Opposition did not intend to oppose the bill, for two kinds of reason - one of which might be called a technical reason and the other of which might be called a financial reason. I do not pretend to have the expert knowledge of aircraft that is possessed by the honorable member for Farrer (Mr. Fairbairn). I know the difference between a Viscount and a DC3 when I get in one of them, but, other than that, I know very little about the technicalities of aircraft.

The Opposition has relied upon the word of the Government on this occasion, although it does not always do so. In this case, we have been assured that, for technical reasons and after a thorough examination of the facts, the advisers of Qantas came to the conclusion that the Boeing aircraft was the most suitable aircraft for the company's purposes. They claim, I understand, that this type of aircraft has been used in the United States of America for military transport purposes for a number of years and, therefore, that it has undergone thorough tests, the results of which indicate that it would be suitable for the purpose envisaged by Qantas. In the absence of an opposing view, the Opposition accepted that decision, but I hope that the Minister for Immigration (Mr. Townley), who is at the table now, will urge the Government to consider the arguments presented by the honorable member for Farrer.

I do not know whether he has produced any facts of which the Government and its advisers were not aware previously, but if there is anything new in his approach to the matter, I suggest that the Government, in all fairness, ought to consider it. There seemed to me to be great merit in his analysis of the situation. If the British aircraft were superior, there would be a technical reason and a financial reason in favour of choosing it. It would be a better aircraft and, as it would come from a sterling area, no dollar payments would be involved.

Basically, this is a financial problem. We of the Opposition have decided not to oppose this loan, although, traditionally, we are opposed to loans from the International Bank, because we say that the Government has made but little effort to deal with the serious dollar problem with which the country is faced. We are not earning enough dollars with our exports to pay for the things that we are required to import from America. In this case, however, we have an undertaking that Qantas will earn dollars with these American aircraft and that the profits that it makes will be used to repay the loan. Therefore, this loan is different from the other dollar loans that have been raised by the Government, because it provides, as it were, for its own liquidation in a comparatively short time from dollar earnings.

There is a matter on which I should like some information from the Government. We know that 17,700,000 dollars of the total sum will be borrowed, not from the International Bank, but from private investors in the United States. Appended to the bill are extensive schedules, in which there is set out, amongst other things, the agreement that has been concluded between the Commonwealth of Australia and the American company, Morgan Stanley and Company, which has been engaged to float the loan of 17,700,000 dollars. Article II of the agreement reads as follows: -

Morgan Stanley and Co. is acting as the Commonwealth's agent in this transaction and will be compensated by the Commonwealth. Morgan Stanley and Co. out of such compensation will pay expenses and fees and disbursements of Davis Polk Wardwell Sunderland & Kiendl and Blake & Riggall for their services to you with reference to the subject matter of this Agreement.

The Government ought to give the House some indication of the costs that will be involved in the services that will be rendered. directly, by Morgan Stanley and Company, in underwriting and generally looking after the loan, and indirectly, by the two other firms in legal matters. Recently, the Government floated a loan in Canada, which, we were told, was filled almost as soon as it was opened, but for, apparently, a very small amount of work, the underwriters received a fee which amounted to 500,000 dollars. I merely ask the Government to indicate, on this occasion, the amount of the compensation to be paid to Morgan Stanley and Company for its services, which, of course, will be paid in dollars, and deducted from the total amount of the bonds. I suggest that it is incumbent on the Government to divulge, as soon as it can, what the services have cost, because I think the bonds have been floated and that all we are asked to do now is to give legislative approval to a transaction that has already taken place. If the Minister for Immigration, who is at the table, has not the information now, I suggest that he obtain it and let us have it, so that this side of the House will at least know what these services have cost or are to cost.

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