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Thursday, 15 October 1964


Mr CALWELL (Melbourne) (Leader of the Opposition) . - I move -

That the following words be added to the motion: - " and, whilst agreeing that the Commonwealth should regulate all air navigation within Australian territory, deplores the Government's misuse of its new legislation in giving preferential treatment to Ansett Transport Industries Ltd. in intrastate aviation".

The motion will be seconded by the Deputy Leader of the Opposition (Mr. Whitlam). The course that the Opposition is taking in this House and in another place is designed to register in the strongest possible terms our protest against the manner in which the Government has shown its contempt for the Parliament, broken undertakings to the Premiers, ignored public opinion, overridden considerations of the public interest, dealt in a completely cavalier way with fundamental constitutional issues, and, through an unfortunate co-mixture of arrogance, duplicity and incompetence, generated a completely unnecessary crisis in civil aviation in this country. I shall substantiate each of these charges in detail, but the question which must be asked is: What motivated the Government in taking the actions which have reduced it to this sorry situation? Our answer is that this is simply the latest, the least justifiable and the most indefensible illustration of its determination to prop up, to protect and develop the empire of Reginald Miles Ansett.

At the outset, let me clear the ground for this debate. The question under debate is not whether the Commonwealth should or should not control intrastate aviation; the question is whether any government has the right to act in the arrogant and ill-considered way that this Government has done in order to achieve its objective to help its great and powerful friend. The principle involved is not the principle of Commonwealth authority over civil aviation. That principle, to us, is unchallenged and unchalleageable. What is involved is something else. It is the integrity of the Commonwealth Government itself because of its attempt to abuse its power. It is not a constitutional question of State rights; it is a question of fair play and fair, honest dealing between the Commonwealth and the States and between this Government and a small airline which Mr. Ansett wants to destroy.

The stand of the Labour Party on this matter is quite clear, and can be stated quite simply. We support the principle of complete Commonwealth authority over civil aviation. We have always adopted this attitude, and . we do not propose to abandon it now. We shall see in due course where the Country Party stands in this regard because it has one attitude in the New South Wales State Parliament and another attitude in this Parliament. Some of its members will be obliged to stand up and be counted on this issue when the debate is completed. We will stand them up because we will call for the necessary division.


Mr Roberton - You are wasting your breath.


Mr CALWELL - I might be with some people, but they are the people who ought not to be here, anyhow. How they ever got here is no credit to the intelligence of the electors whom they are supposed to represent. Whilst I say we support the principle of complete Commonwealth authority over civil aviation, at the same time we reject and condemn the way in which the Government has acted in the exercise of that authority. We do not believe that the Government is sincere in its newfound interest in Commonwealth powers. Therefore, we suspect its motives, we deplore its methods, and we mistrust its intentions. We just can not believe that the Liberal Party or the Menzies Government has suddenly become converted to the desirability and urgency of Commonwealth control of aviation. It is obvious to us that this is no Tarsene conversion. We cannot find anything in the existing situation to justify or explain the Government's newfound sense of urgency. Therefore, we are bound to believe that it is impelled by the belief that if it does not act now a commercial advantage sought by Ansett-A.N.A. might be imperilled. If we are right in our belief, then the Government is guilty of a gross offence against the authority of Parliament, . and Ministers are recreant to their oath to see that justice is impartially administered.

The inescapable fact is that the Government's mishandling of the matter has created a crisis over an issue which could and should have been resolved to the satisfaction of all parties long ago. Why, we must ask, is there all this frenzied activity over a matter which has a political history that can be traced back to at least 1937? It was in 1937 that the present Prime Minister (Sir Robert Menzies), then Attorney-General in the Lyons Government, sponsored a referendum to give the Commonwealth full control over civil aviation. The referendum was defeated although a majority of the people voted for it. It was not carried in a majority of the States. The Federal Labour Party supported it. I myself spoke for it, and voted for it. Unfortunately, the Lang Labour Party, some sections of the Australian Labour Party, and some sections of the trade union movement opposed the referendum. I admit it; I regret it. We made an attempt in 1944 to secure control over aviation. At that time, the Liberal Party campaigned against it, as did the Country Party, although both had supported the proposition in 1937. Some members of those parties said - I do not think quite honestly - that if power over civil aviation had been separated from the other 13 powers they might have voted for it. But the truth is that they did not.

Let me come nearer to the present day. In 1959, the Joint Committeee on Constitutional Review appointed unanimously by the Parliament on the motion of the Government, recommended that the Commonwealth should possess full powers over civil aviation, both interstate and intrastate. The Liberal Party and the Country Party were fully and ably represented on that Committee, and on this issue there was no dissentient voice. But despite his promise to consider the report with - and I quote his words - " a loving care ", despite the undertaking of the Australian Labour Party that it would give complete support to any referendum designed to implement all or any of the report's recommendations, the Prime Minister did nothing. He still has done nothing, five years after the report's presentation. Yet, after five years of inactivity, after five years' refusal to act on a well thought out proposal, for which Labour's promised support guaranteed acceptance by the people at a referendum, the Government now bursts into activity, riding roughshod alike over its own avowed principles and the combined protests of the State Premiers. lt is true that the constitutional aspects of this question appeared in a new light after a judgment handed down by the High Court in February of this year. In the case of Airlines of New South Wales versus the State of New South Wales, the court made it clear that in its view the Commonwealth already possessed, within the existing framework of the Constitution, sufficient powers to regulate all aviation activity within Australia. It is on the basis of that opinion that the Government decided to make its new regulation on aviation control.

This, broadly, is the constitutional story up to now. The Government now finds itself in possession of powers which, till February last, it thought it did not have. But when the Government decided to use its new found powers it began to behave in an extraordinary fashion. It is that conduct - its conduct over the past few weeks and days - that the Opposition seeks to condemn.

The first that the public, or the Parliament, knew of the Government's intention to act was through some remarks of Sir Thomas Playford, the Premier of South Australia. In the course of a television talk Sir Thomas revealed, for reasons of his own, that the Prime Minister had written to the Premiers announcing the Government's intention of amending the Air Navigation Regulations to give the Commonwealth control over intrastate operations.

The Parliament, of course, was never consulted about this proposal and was never told about it. The information, as I have shown, just leaked out. The letter was written on 6th August while the Parliament was in recess. But when Sir Thomas Playford's premature revelation forced the Prime Minister to make a statement in the House on 20th August, he promised to allow debate on the proposals. The House was given a firm undertaking that it would be given an opportunity to debate the proposals and its underlying principles. Nothing- of the sort happened. All we can now debate is a fait accompli.

It is in this fashion that the Prime Minister honours his undertakings on this really important constitutional question. It is in this way that he shows his respect for the Parliamentary institution. But that is not the only promise broken by the Prime Minister and the Government. In his letter to the Premiers the Prime Minister stated categorically -

I wish to make it clear that in regard to intrastate air transport co-ordination, the Commonwealth would propose to act only after consultation with the State transport authorities.

This promise, like the rest, has been broken flagrantly and absolutely. I invite the House to draw the only possible conclusion - that there was never the slightest intention on the part of the Government to consult with the Premiers, the Parliament, the State transport authorities or anybody else.

The Government decided to act even before it received the Premiers' replies to the Prime Minister's letter. Two Premiers have not yet replied in writing, and of the four replies received only two had been received at the time the Government made its new regulation. The Executive Council proclaimed the regulation on 2nd October. Yet on that day, only the Premiers of Victoria and Queensland had replied to the Prime Minister's letter. The replies from New South Wales and Tasmania were not received until the following week, by which time the regulation had already been gazetted. Sir Thomas Playford still has not replied, though I suppose the Government will learn his views through the columns of the Adelaide " Advertiser ".

But what becomes of the Prime Minister's undertaking that there would be consultation with the State transport authorities?

It also lies broken and dishonoured. Yet the Premiers arc unanimously opposed to the Menzies proposal.

The Country Party Premier of Queensland, Mr. Nicklin, said his Government was "perturbed" and sought "further details before making any final commitment ". That request has, of course, been ignored. What else could Mr. Nicklin expect? The Liberal Premier of Victoria, Mr. Bolte, said -

The action of the Commonwealth is wholly inexplicable so fat as this State is concerned.

And then Mr. Bolte raised the vital question. He said -

I find 'it difficult to understand' why, for no readily apparent reason, you should wish to dislocate the existing integrated system of control of inter- and intrastate air navigation.

The Prime Minister's Liberal friend, on whose behalf he intervened with such striking results in last weekend's by-election in Victoria, is suspicious; he cannot understand the Prime Minister's motives. Is it then surprising that the general public is also suspicious and unconvinced?

One other incident is sufficient to illustrate the haste with which the Government acted. On Thursday, 1st October, the Senate was due to debate the estimates for the Department of Civil Aviation. With virtually no warning the debate was postponed, because the Minister - for Civil Aviation was consulting with his colleagues on the framing of the regulation which was proclaimed the following morning. It may or may not be significant that among the visitors to Parliament House on the preceding days was none other than Mr. R. M. Ansett.


Mr Hayden - Where? In this Parliament?


Mr CALWELL - Yes, in this Parliament. Of course, he is a frequent visitor. A lot of people like to see their great and powerful friend when he has something to ask for. The timetable of events shows quite clearly that the Government had no intention of honouring its undertaking to the Premiers, any more than it intended to honour its undertaking to this Parliament. Therefore, it was never intended that Mr. Bolte should receive an answer to his question, namely: Why did the Government wish to take what he regarded as a wholly inexplicable action?

How then can we explain the Government's sudden about-turn? How can we explain the newfound interest in Federal authority on the part of a Government composed of parties which claim to be the champion of States rights; a Government, led by a Prime Minister who only a month ago said that the desire for more centralised authority was based on MarxistLeninist principles?

How can we explain the haste, the secrecy, the arrogance, the deception that surrounds this murky business? How can we explain the broken promises, the refusal to meet the legitimate requests of the Premiers for further explanations and further information? How can we explain what the Victorian Premier calls the inexplicable?

I suggest all these things can be explained only with reference to the long and tangled story of the attempts by Ansett- A.N.A. to take over East-West Airlines in New South Wales, and the determination of the New South Wales Government to prevent the destruction of this airline. This battle began at least as far back as April 1960 when Ansett-AN.A. made a takeover bid for East-West Airlines.

In the following year, allegations were made by the Directors of East-West Airlines that the then Minister for Civil Aviation, Senator Paltridge, was putting pressure on them to accept a takeover bid from Ansett. The Minister denied the allegations on 24th October 1961. That evening, Mr. Drummond, the former honorable member for New England, defended the directors of East-West Airlines in this House. Speaking of an interview at which he had been present Mr. Drummond said -

I can say definitely that the Minister-

Meaning Senator Paltridge- said to the representatives of the company that they would have to get together with Ansett.

The whole force of Mr. Drummond's repudiation of the Minister's denial can be appreciated only by those who know the former member for New England as the very epitome of integrity and honour.

The Minister later admitted the correctness of Mr. Drummond's account - he had no other choice - but claimed that what he meant by "getting together with Ansett" was that the two companies should do their utmost by collaborating on common operational problems to reduce costs. In fact, that was not a just interpretation of what he meant. He meant that East-West Airlines should sell out to Reg Ansett, and that was the impression of the then honorable member for New England. He said it in this Parliament, and no member of the Government challenged him.


Mr Whitlam - And Davis Hughes said it too.


Mr CALWELL - Of course, Mr. Davis Hughes, M.L.A., said it at the same time, either in the New South Wales Parliament or somewhere in New South Wales. Let me get back to Ansett airlines - to Mr. R. M. Ansett who pays the election expenses of the gentlemen opposite. The Minister made a very damaging admission. East-West Airlines was at that time, and still is, cooperating with Trans-Australia Airlines. T.A.A.. provides East-West with some booking facilities and maintenance arrangements at low charge in return for the benefit of EastWest's on-carriage, as the term is used. The; on-carriage is an important and immensely; profitable concern since it enables the airlines to earn extra revenue without incurring extra cost. This is why T.A.A.'s virtual exclusion from intrastate routes has given Ansett Transport Industries Ltd., with its subsidiary lines, an enormous advantage. This is the reason why Ansett wishes to buy East-West Airlines - to deprive T.A.A. of the benefits of the on-carriage. In urging the directors of East-West Airlines to get together with Ansett, the Minister for Civil Aviation was simply saying that the benefits of the arrangement should be transferred from T.A.A. to Ansett-A.N.A. No other interpretation gives any logic to his words.

At the time of the original takeover bid by Ansett, the New South Wales Government, in an attempt to prevent monopoly control of intrastate routes, decided to reallocate the routes to give East-West Airlines 49 per cent, of the traffic. This was challenged in the courts by the Ansett controlled Airlines of New South Wales and it was not until this year that the final appeal by Ansett was rejected by the Privy Council. Following this decision, the New South Wales Government announced that the first reallocation of the routes would take place on 12th October. It was this announcement that goaded this Government into its unwonted activity.

The only possible interpretation that can be placed on the Government's action is that it is determined, at all costs, to prevent any attempt to break Ansett's stranglehold on intrastate airlines, a stranglehold that should never have been allowed to be created; a stranglehold that is against the public interest and should, therefore, be destroyed. The Government that is moving at the pace of a snail in preparing its anti-monopoly legislation is always ready to defend and extend the restrictive practices of Ansett. The Government's action is completely inconsistent with its professed principles. But it is entirely consistent with its past record of favoritism to Ansett at the expense of T.A.A.

The full list of special favours received and benefits conferred by this Government is long, but let us look at it briefly. In 1957, when Ansett acquired Australian National Airways Pty. Ltd., the Government transferred the 1952 benefits to Ansett and provided additional benefits by way of guaranteed loans and strengthening of the rationalising provisions. In 1957 when T.A.A. refused to agree to a fare increase sought by Ansett, the Government imposed an aviation kerosene tax which fell most heavily on T.A.A. because at that time it was almost the sole operator of turbine jet aircraft. The cost to T.A.A. in the following year was £300,000. T.A.A. had to increase fares. When the question of jet re-equipment came up, T.A.A. wanted to purchase the Caravelle plane and Ansett wanted to purchase the Electra. The Minister for Civil Aviation at that time stated that both airlines should standardise on Viscounts. Following an interview between Mr. Ansett and the Prime Minister the Cabinet reversed that decision and both companies were told that they could get Electras. Because he had placed orders much earlier than T.A.A., Mr. Ansett operated his Electras for some months before T.A.A. This caused T.A.A. a loss of £400,000.

In 1958 the Government passed the Airlines Equipment Act which provided guarantees for Ansett of up to £15 million at low rates of interest. Under the cross charter the Government compelled T.A.A. to exchange three Viscounts for two DC6B's although the Viscounts, in fair competition between Melbourne and Perth proved to be far more popular with the public than the DC6B. The Government forced this cross charter by threatening to refuse T.A.A. permission to buy an additional Electra to match Ansett's fleet. The Government has consistently denied T.A.A. the right to operate intrastate services although Ansett enjoys this benefit through a host of subsidiary airlines. The Government intimidated the board of T.A.A. who wished to appeal against the co-ordinator's decision to allow Ansett access to Darwin. In 1961, prior to the elections late that year, the Government passed the Airlines Agreement Act to incorporate the matters requested by. Ansett in his open letter and now the Government is intervening by the use of its regulatory powers to prevent the New South Wales Government from carrying out a re-allocation of routes as between East-West Airlines and Airlines of New South Wales.

Let me make my Party's attitude to Mr. Ansett quite clear. We do not condemn him because he is a capitalist, nor, being a capitalist, because he obeys the first law of capitalism which is automatic aggrandisement. He must obey the impulse towards monopoly or, possibly, be himself destroyed. We dislike his methods and his devious manoeuvres; and we denounce his cupidity and his avarice. We are not afraid of the exercise of Ansett influence so much as we are that of Ansett affluence. I wonder, and so do others, how much money of the Shell Co. of Aust. Ltd. is involved in Ansett's. It was the Shell Co. which, acting on behalf of all oil companies, forced down the price of Moonie oil a year or so ago. Most importantly, we condemn a Government which sees as its first responsibility a responsibility towards Ansett rather than to the interests of the public at large. It is not so much that we resent this Oliver Twist of aviation; but we fail to see why the Government should always play Dame Bountiful. We can only agree with the words of a very distinguished lawyer who said last year that Mr. Ansett sometimes seemed the beneficiary of a new principle summed up in the words of George Orwell: All people are equal, but some are more equal than others. That, in any case, is how the Melbourne "Age" of 26th July 1963 quotes a gentleman named Billy M. Snedden.


Mr Daly - The Attorney-General.


Mr CALWELL - At that time he was not the Attorney-General but he was a lawyer appearing in a case against Mr. Ansett when Mr. Ansett had arranged with the Victorian Government to shift a dam from a site which spoilt his view. I thought the present Attorney-General summed up very well the position in regard to the Government's friend, Mr. Ansett.

The high-handed action of the Government cannot be condoned. It is the action of a government which has lost all sense of perspective and all sense of direction. We are entitled to seek the Government's motives for acting in this way. We cannot find them in the so-called philosophy of the Government parties. Everything that they profess to stand for tends the other way. We cannot find the Government's motives for acting in this way in any new, urgent situation that might justify desperate measures. We can find them only in the Government's determination to provide further advantages for Ansett-A.N.A.

The Government's methods are as reprehensible as its motives are suspect. The privileges of Parliament, the views of the States, the promises of the Prime Minister and even the forms of common decency have all been thrown aside. From the point of view of the Labour Party, not the least tragic aspect of this inglorious episode is the fact that the Government's arrogance and blundering endanger the very cause which it now claims to advance, namely the genuine case for Commonwealth regulation of air navigation. The spectacle of a government exercising its power in this way casts the gravest doubts upon its capacity to exercise any power at any time in any way.







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