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Wednesday, 24 August 1994
Page: 213


Senator GIBSON —My question is directed to the Minister representing the Minister for Transport. Could the minister explain how an organisation such as ANL has lost up to $290 million in value in the last 12 months? Does the virtual destruction of this shipping line simply demonstrate that governments cannot and should not run businesses? Does it also provide another example of why this Labor government cannot be trusted with taxpayers' money?


Senator COLLINS —I do not think that at this point any such assumption as the one that has just been made in that question can be made. The fact is—and the Senate has been advised of this over the last few years and, I might also add, has been in receipt of the audited accounts—that the financial results of ANL have not been good. That piece of information has been available not only to me but to every other senator in this chamber. It is a fact as evidenced by the losses that have been accurately published in the press. Those losses have been properly reflected in the company's audited annual accounts that are public documents—accounts, I might add, that are audited by the Commonwealth Auditor-General.

  I do not suppose that Senator Gibson reads the trade papers but, as well as that public information in the company's accounts disclosing those losses, there has been widespread publicity in the maritime trade papers over a period of years now about the difficult performance of ANL. What should be pointed out to Senator Gibson and what he should be aware of is that when the government inherited this company in 1982 and Mr Morris became the minister—this is also a matter on the public record—the company was then in a hopeless financial position. It was hundreds of millions of dollars on the wrong side of the ledger. In addition, it had a fleet of 33 decrepit ships.

  Over a period of a decade the government installed a new board, which drastically restructured the company, and downsized and re-equipped its fleet from the 33 ships that existed in 1982. In 1982 the company was hopelessly bankrupt. As I advised the Senate, not just yesterday but on many previous occasions, in shipping terms there was not a recession internationally but a depression in the 1990s in world shipping. Because of the downturn in trade, shipping, as I advised the Senate at the time, was one of the industries that copped the downturn first. In the core trades in which ANL has been operating—that is, the European trade and the North East Asian and South East Asian trades—the competition has been fierce. The margins have not just simply been low but there have been no margins in terms of the freight rates that are being offered because of the significant surplus of shipping internationally.

  Despite the restructuring of the company that this government engaged upon—we wanted to see a future for both it and its employees, as distinct from what the opposition wanted—that period in the 1990s was in fact an internationally depressed time for the entire international shipping industry, and those losses continued.

  As I advised the Senate yesterday, those losses have escalated sharply in the last 12 months. Indeed, $18 million of the projected $25 million loss for this financial year has occurred in the last six months. I refer Senator Gibson to the audited annual reports of the company, reports that are available and are public documents and which, over the last few years, have disclosed the poor operating performance of the company.


Senator GIBSON —Mr President, I ask a supplementary question. I had a look at the annual reports. One of the key points I want to make is that when we look at the annual report for last year, we see the balance sheet for 30 June 1993 shows a net asset value of $158 million. Just over 12 months later, press reports about the Salomon/Price Waterhouse report are saying it has a net value of minus $75 million to minus $120 million. How come there is this enormous difference in less than 12 months?


Senator COLLINS —I made the point a few moments ago when I opened my answer by saying that we cannot at this time accept those assumptions as being the outcomes that will be achieved. The government has announced the appointment of a new board and a radical restructuring of the company over the next six months to attempt to help the employees of this company—people that Senator Gibson has no concern for, and never has had. There will be an opportunity given for this company—and there is no question that it will be a smaller operation than it is now—to continue to survive in some form. I point out to Senator Gibson—and an examination of those reports will disclose this—that the company's poor operating performance has been correctly disclosed in its annual reports over those years; and those reports have been audited by the Commonwealth Auditor-General.