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Wednesday, 24 August 1994
Page: 228

Senator PARER (3.06 p.m.) —I wish to discuss exactly the same matter. In my question to Senator Collins I asked: what was the criteria in the determination of the appointment of Messrs Wran and Turnbull to the ANL board? He did not give me an answer to that question. All we know is that those two people are mates. They are the mates of Minister Brereton, they are the mates of the Prime Minister (Mr Keating) and they are the mates of ex-Senator Richardson. What other criteria were used in the appointment of these people?

  We heard from the minister representing the Minister for Transport that these two gentlemen, the mates, are to receive a total of $271,925 between them for six months part-time work. The government must believe that they are indeed men of exceptional ability to pay them so much.

  Turnbull and Partners' recent involvement—I referred to this earlier—with another transport company, Australia Air, suggests that its advice might not be so valuable. On 29 March 1993, the International Air Services Commission awarded Australia Air sole rights to fly from Australia to China. Qantas had abandoned the route many years earlier and Australia Air was the sole applicant for capacity on the routes.

  Under the terms of the agreement with China, the capacity allocation permitted the airline to fly the equivalent of one 747 between Melbourne, Sydney, Guangzhou and Beijing. The IASC required Australia Air to provide evidence to its satisfaction of funding of $55 million in a combination of equity and second tier capital. It could commence utilising the capacity after satisfying the funding conditions by 29 March 1994.

  The company conducted initial discussions with a number of potential investors and a United States investment bank. After those negotiations fell through, on advice—which the company now regrets—it approached and signed a commitment letter with Turnbull and Partners and County Natwest for public fund-raising for that airline. The company successfully applied to the IASC for an extension until 11 July 1994 due to the time-lags involved in organising the float.

  The float organised by Turnbull and Partners collapsed acrimoniously in June and Mr Turnbull at one stage attempted to place the airline in receivership. The IASC has now revoked the airline's right to fly that route. I am sure Australia Air now regrets bringing in Mr Turnbull and Mr Wran to advise on the company's affairs and to put together the finances which subsequently failed. It is hoped that Minister Brereton, Prime Minister Keating and this government have not made the same mistake.