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Wednesday, 10 October 1984
Page: 1520


Senator MESSNER(10.13) —The Air Navigation (Charges) Amendment Bill, the Air Navigation Amendment Bill (No. 2) and the Qantas Airways Limited ( Loan Guarantee) Bill touch on the reorganisation of various issues in connection with air navigation and in particular the overseas operator, Qantas Airways Ltd, and its forward purchase program of aircraft. I shall deal with two or three of these matters in the course of my remarks. Firstly, I turn to the Air Navigation (Charges) Amendment Bill 1984.


Senator Button —A very good Bill, too.


Senator MESSNER —It is not so good that it cannot do with some amendment to improve it even further. We will be moving some amendments later. The point at issue is that apparently the Government sees as necessary the payment of charges which might be outstanding and unpaid against an airline prior to the payment of secured creditors or other creditors who may be seeking to obtain repayment during the recovery process.

Various provisions are incorporated in the Bill. There is a power to impose a statutory lien after 28 days of outstanding debt; there is a power to deregister aircraft after six months of the statutory lien and there is a further power to seize or sell the aircraft after nine months of the lien being in force. This, of course, is subject to review by the Administrative Appeals Tribunal Act. The point is that the Government will receive priority over ordinary creditors and secured creditors in these circumstances. We in opposition feel that the Government is being a little too zealous in this matter and consequently feel that other creditors should have first claim since the charges which are raised in these circumstances are in the nature of ordinary commercial dealings and are not, I think, in the same category as ordinary crown debts.

The next matter I would like to refer to is the question of the introduction of separate airport and airways charges which were announced on 26 August by the Minister for Aviation (Mr Beazley). This will enable charges to reflect more closely the use of major airport and airway facilities in the various phases of a flight. This will be a precursor to the establishment of the so-called national airports authority. The third element is the alterations to the penalty provisions to bring them more into line with commercially accepted practices and to implement new measures of a machinery nature. I note that the penalty rate will be as high as 1.5 per cent a month in this situation. The Opposition proposes to move an amendment whereby that is reduced to one per cent. It is felt on this side of the chamber that the rate of 1.5 per cent is generally too high in comparison with other interest rates that are applicable today and that, consequently, our amendment is thoroughly justified. I will also be moving an amendment during the Committee stage to clause 5 of the Bill in order to adjust the position which I referred to earlier; that is, to propose that the debts that are owing to the Commonwealth in respect of charges, including navigation charges, will remain behind the debts owing to secured creditors and other creditors of an airline in that situation.

The second Bill, the Qantas Airways Limited (Loan Guarantee) Bill relates to Qantas's forward acquisition program and provides for the purchase of two Boeing 767 200 aircraft due in July of 1985, four Boeing 767 200 aircraft due in March of 1986 and three Boeing 747 300 stretched upper deck aircraft whose date of delivery is not known to me. This is the single largest order of aircraft in Australian aviation history. Qantas intends to raise loans for only two Boeing 767s, whereas the remaining four Boeing 767s are to be financed from Qantas's internally generated funds. I understand that it is intended that the three Boeing 747 stretched upper deck aircraft will be acquired through lease financing. The Minister in his second reading speech did point out that to a very considerable degree that Qantas's new aircraft will be financed through anticipated earnings and profits. That is to be commended. We do hope that this is a continuing trend in these circumstances. That will be enhanced and assisted , of course, by the sale of some six present 747 200 aircraft.

From a practical standpoint for Qantas the idea behind this is that the 767 extended range aircraft is intended eventually to replace the 747 200 aircraft. The seating capacity is approximately half that of the 747s and, therefore, is more likely to be suited to lightly trafficked routes. The 767s are more suited to the smaller gateway airports that have been opened in Australia recently and to other international airports. It is intended that the Boeing 767s will operate initially to Wellington in New Zealand and later services will be instituted between Melbourne and Fiji, Sydney, Melbourne and Noumea and generally to other ports in New Zealand. Eventually the service will be extended to selected routes in Australia and South East Asia. The Commonwealth's liability is not a direct cash cost, of course. The provision of guarantees for the borrowings of Qantas in these circumstances will not involve the Government in any cash outlay. But, of course, it creates a contingent liability for the Commonwealth in the event of the default of Qantas in these circumstances. We support that Bill.

The third Bill is the Air Navigation Amendment Bill (No. 2) 1964. This Bill seeks to broaden the Government's power to cancel and suspend the international airline licences issued to foreign carriers operating in Australia. At present this power is limited to actual breaches of the Act and/or regulations. The Government has not thoroughly justified its case in this area. We are not exactly certain in what circumstances the Government would see it necessary to exercise the power that it has been clothed with by this legislation. But it does seem that it has in mind retaliatory action in the event of Australian airlines being affected by the actions of other governments overseas. Certainly we can see some need for that but the power appears to extend further than that. If the Minister is able to provide us with more information as to the circumstances in which the Government sees this power being exercised I feel that the Senate's understanding of exactly what the Government has in mind would be improved.

The power is very wide. It provides that the Government may cancel and suspend those licences where, in the opinion of the Minister, it is necessary or desirable to do so for the purpose of preserving or promoting fair competition in international air transport services. I do not think we have to be too imaginative to envisage situations where those criteria could be applied in practically any situation. Consequently, I think the Opposition is quite justified in seeking further information on that matter. However, we do support that Bill.

In summary, the Opposition is proposing to move amendments during the Committee stage of the legislation with regard to the priority of debts and airways charges and also seeking to reduce the penalty rate from 1.5 per cent to a more realistic level of one per cent. Bearing in mind those qualifications, we will be supporting the legislation.