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Thursday, 25 August 1994
Page: 383

Senator COLLINS (Minister for Primary Industries and Energy) —by leave—I wish to provide the Senate with some additional information to an answer that I gave in question time today. Senator Alston contended during question time today that a statement that I had given in the Senate today conflicted with a statement made by Mr Brereton. I have examined what Mr Brereton said in the House of Representatives. Not only is there no contradiction but it confirms and strengthens what I said to the Senate.

  I will not accuse Senator Alston of deliberately misleading the Senate because I know what the truth is. The truth is that Senator Alston, as usual, is lazy. I am indebted to Senator Alston for actually sending me the copy that his breathless staff brought into the chamber. He should have bothered to read the paragraph before and a few paragraphs after it, instead of getting up like a parrot and reading the paragraph that his adviser had underlined for him quoting what Mr Brereton had said.

  What I told the Senate, and I repeat it, was that in the past year the developments in the international shipping trades, changes in trade patterns, intense competition and surplus capacity, all of which were accurately referred to in yesterdays editorial in the Sydney Morning Herald, particularly the Russian and Chinese fleets after hard currency—I referred to it in the Senate the other day not as a low margin but no margin shipping—have made it very difficult not just for ANL over the last two or three years but for other shipping companies as well. I said that the rapid deterioration in the performance of ANL over the past year was due to those factors. I went on to say, `The company's poor performance has come about from deteriorating results in the company's presence in the Europe and north east Asia liner shipping trades. For example'—and Senator Alston referred to it—`$18 million of the projected $25 million loss in shipping for 1993-94 came over the last six months. Not only is that accurate but what Mr Brereton said in the House of Representatives supports and strengthens it.

  What I said to the Senate was that the performance has been bad over the last year and that $18 million had been lost in the last six months. What I was referring to was the deteriorating condition of the company's losses, their bottom line. Some people in the company have contended—and I can understand why they have done it; they want to put the best face on it they can—that the reason for that deterioration was that there was a loss in the company's goodwill caused by the government's announcement of the sale and the government's announcement of the due diligence process.

  Mr Brereton was responding directly to that contention from the honourable member for Hume in the House of Representatives and correctly said that that was not the reason for the company's losses. In other words, Mr Brereton was responding to the fact that the company's position has deteriorated over the last 12 months and particularly over the last six months but it was not due to a deterioration in the company's goodwill. I support Mr Brereton in that contention.

  Senator Alston should at least bother to read the whole speech or perhaps even half a dozen paragraphs each side of the marked paragraph that he just reiterated like a parrot. He would see that what Mr Brereton said totally supports and confirms what I said in the Senate. As I said before, I can understand why people in the company would want to put that view, but I agree with Mr Brereton. It has not been due, sadly, to any loss in the goodwill of the company—in other words, their customers not dealing with them any more because the government has announced a trade sale and a due diligence process. It has unfortunately been due to the very conditions that I pointed out; in other words, conditions, as I told the Senate, beyond the company's control.

  Let us turn to what Mr Brereton said to confirm that. Senator Alston should have read this; it is in the previous paragraph. One of the difficulties, of course, is that the line which Senator Alston's staffer has drawn around the direct quote actually obscures the line that includes the word `goodwill'. I will read from my copy because it is blocked out in Senator Alston's copy.

Senator Alston —No, it's not.

Senator COLLINS —I can barely read it. There is a line that goes straight through the word. This is what Mr Brereton said, in response to an assertion in a letter leaked to the Australian Financial Review that it was the failing goodwill of the company which had caused the deterioration. He rebutted that, correctly, and said:

. . . the honourable member quoted the board.

He was referring to the honourable member for Hume. Mr Brereton continued:

He spoke of the letter leaked to the Australian Financial Review of 30 May 1994, saying that the value of ANL's goodwill was going downhill.

Senator Alston should note that he did not mention a deterioration in the losses of the company.

Senator Alston —What?

Senator COLLINS —Senator Alston should give himself a bit of credit. The goodwill of the company is only part of the company's trading performance. In fact, in most of the companies with which I am personally familiar, it is a very small part of the company's performance. What Mr Brereton then went on to say, correctly, was this:

Nothing has been helping the value of ANL's goodwill—

and Senator Alston should note that word—

but no-one can claim that there has been any real deterioration in the last six months while the government did what had to be done, and that was conduct the due diligence so we had outside expert advice as to the affairs of ANL.

I ask Senator Alston not to be so lazy in future. He should not just parrot a paragraph that has been handed to him in the chamber by one of his staffers who has not read the context of the debate carefully enough. I reiterate what I told the Senate, and it is absolutely consistent with what Mr Brereton said in the House of Representatives: that over the last year there has been a rapid deterioration in the performance of the company—that has been demonstrated in the books of the company—and that $18 million of the projected $25 million losses has come in the last six months. That is correct. But, in the view of the minister—and I support his contention—it has not been due to a reduction in the value of the goodwill, that is, the traditional customers of ANL staying away from it and not dealing with it. I say to Senator Alston that that is what goodwill is. Perhaps Senator Baume can explain it to him. It is not as a result of the government's due diligence process.

  What some members of the board were trying to say was, `It's not our fault, it's the government's fault in announcing that they're going to sell us, in announcing a due diligence process, that has caused this deterioration.' I reiterate, and Mr Brereton has contended it in the House of Representatives—Senator Alston should look at the next page of the speech; he should read the whole speech—that, as a result of the depredations that have been made on this trade, the company's performance has deteriorated significantly, and $18 million of the losses have occurred in the last six months. But there has not been any real deterioration in the company's goodwill. It cannot use that as an excuse for the losses. It has been caused by a structural problem.

Senator Michael Baume —You are wrong.

Senator COLLINS —Senator Baume has not even read the speech, so he should stay out of the debate. Mr Brereton's statement in the House and my statement in the Senate are totally consistent. Next time, Senator Alston should do the Senate the courtesy of doing what he normally does not do. He should do a bit of homework. It is his laziness that has caused this problem. I do not accuse him of deliberately misleading the Senate on that account. He should just read the speech.