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Thursday, 15 October 1964

Mr FAIRBAIRN (Farrer) (Minister for National Development) . - Before I deal with the gravamen of the letter written by the Prime Minister (Sir Robert Menzies), I will answer some of the charges made by the Leader of the Opposition (Mr. Calwell). First of all, he has said that by making regulations under the Air Navigation Act we have shown a contempt for the Parliament and that that has been a gross offence against the authority of the Parliament. I do not know whether he realises the legal position. The position is that we have an Air Navigation Act and, under that act, we are empowered to make regulations concerning air navigation.

If we had brought in new legislation, it would have been exactly the same as the measure that is on the statute book at present, and the new act would have given us exactly the same power to make regulations for intrastate, interstate and international aviation as we have now. What on earth is the point of coming to the Parliament with legislation which is already on the statute book and under which we now believe that we have authority to make further regulations? I honestly cannot follow the reasoning of the Leader of the Opposition in asking us to pass new legislation identical with the act that is already on the statute book.

Mr Whitlam - What about the Prime Minister's promise of a debate?

Mr FAIRBAIRN - Secondly - I do not know whether this is what the Deputy Leader of the Opposition just mentioned; I could not hear him plainly - the Leader of the Opposition said that we promised to act only after consultation with State transport authorities. Was that what the Deputy Leader of the Opposition mentioned?

Mr Whitlam - No. I said that the contempt of the Parliament lay in the fact that although the Prime Minister promised, in tabling the letter, to permit a debate on the proposals, they were embodied in regulations before a debate was held.

Mr FAIRBAIRN - That all depends on the timing. Now we are having a debate. The Leader of the Opposition said that we had broken, flagrantly and absolutely, the promise which had been given that we would consult with the State transport authorities. That is completely incorrect. I do not know where he has been; but I was in Sydney last week and I cut this article out of a Sydney newspaper. It even has a photograph of Senator Henty alongside it. It says -

The Minister for Civil Aviation, Senator Henty, moved today to implement the Federal Government's new control over intra-state aviation.

He conferred this morning with the N.S.W. Attorney-General, Mr. Downing, on the Government's proposals.

Mr Devine - On what date?

Mr FAIRBAIRN - I have not the date, but it was last week. Yet, the Leader of the Opposition said with great rhetoric that our promises lie broken and dishonoured. He should look into these matters. Not only did Senator Henty have discussions with Mr. Downing who at the time was not only Attorney-General but also Acting Minister for Transport, but the Director-General of Civil Aviation tried to see Mr. Coleman, the New South Wales Commissioner for Motor Transport. The Director-General left a message that he was anxious to see Mr. Coleman. Mr. Coleman was away, so he was unable to do so. There has been no lack of approach on our part.

Now let me get on to the matter that is before the House, namely the Prime Minister's letter. I am glad to see that the Opposition agrees with the Government in our belief that we now have power to regulate intrastate as well as interstate airline opera- 1 tions. Much has been said about this matter by legal authorities. I am no lawyer. I think there are very few honorable members who can say definitely whether or not we have this power. Obviously this question will be determined finally - I think the sooner the better - by the High Court. All I can say is that Commonwealth legal authorities, on reading the decision of the High Court in the case of Airlines of New South Wales Pty Ltd. v. the State of New South Wales, believed that the Commonwealth had this1 authority. So, acting on that belief, we brought in these regulations.

Perhaps there are some people who ask: Even if we have this power, should we exercise it? I believe that very few honorable members would say that if we have the power we should not exercise it. Certainly members of the Opposition do not say that. We know their attitude from the report of the Constitutional Review Committee. Not only the members of the Opposition but all the members of the Government parties who were on that Committee were unanimous in sayingthat the Commonwealth should exercise authority over intrastate aviation.

It is of interest to note that that Committee was a high-level committee. It was not just a backbench committee. The Leader of the Opposition and the Deputy Leader of the Opposition (Mr. Whitlam) were members of it, as was the previous member for New England, who lives right in the middle of the East-West Airlines Ltd. territory and might have been inclined to say that the States should have control of intrastate aviation. But the members of that Committee were unanimous on that matter. We know that the Labour Party, according to its Federal platform, is in favour of Commonwealth regulation of intrastate civil aviation as well as interstate civil aviation. The biggest air charter operator in Australia has saidthat he is in favour of it and believes that it is essential. Let me read this report of what he sa id - " We are convinced that the Federal Minister for Civil Aviation (Senator Henty) and the DirectorGeneral of Civil Aviation are not moved by a desire to protect Ansett-A.N.A., but they are out to ensure the healthy growth of an expanding aviation industry," Mr. Cavill said. " The acquisition of powers over intra-State services by the Commonwealth was an essential adjunct to the continued healthy growth of aviation in Australia," he said.

The individual States could not properly control civil aviation because they had no experience, no personnel and could not offer the necessary liaison to the industry at all times to ensure licensing growth and protection of the industry.

Commonwealth control would do more to protect civil aviation in Australia from monopoly tendencies.

I do not think there is any disagreement in the House with the statement that if the Commonwealthhas the power to make these regulations it should make them and should exorcise control. Who is against the Commonwealth exercising this power? The only people who oppose our exercising this power are the States. This is pretty difficult to understand, because after all we know that, ever since Wilbur and Orville Wright first flew in 1908, the States have had complete control over intrastate aviation. But what Lave they done? Practically nothing. All aviation today is in effect controlled by the Commonwealth Government. Asthe Prime Minister pointed out in his letter, we have a tremendous expenditure on aviation. We now have over £60 million invested in facilities for international and domestic air services. The Commonwealth now spends £12.5 million per annum on the maintenance of the aviation network. This includes £4.3 million for the intrastate network. Today intrastate service operators are entirely dependent on Commonwealth financial support for their essential operations in marginally profitable routes. In 1963-64, the Commonwealth subsidised developmental and essential rural services in the States to the extent of £440,000. Last year, its contribution to the development and maintenance of municipally-owned aerodromes was £470,000.

There is no doubt that the Commonwealth is the authority that contributes to the development of aviation. By comparison, the States last year spent, I believe, just over £100,000. If anything needs to be done in the States, the State Governments immediately say: " This is a national matter. The Commonwealth Government should do it ". As I have said, the States have had the power all along. Those who scream the most are perhaps the ones that have done the least to help in any single way. Look at Victoria, for instance. Victoria had a regulation which required intrastate operators in that State to obtain a licence from both the State and the Commonwealth. The present State Government, the Bolte Government, in 1956 abolished the requirement for a State licence and said that only a Commonwealth licence was needed. Yet Mr. Bolte comes out now and says in his letter-

I must, on behalf of the Victorian Govern ment, raise the strongest objection to what can only be described as another attempt by the Commonwealth Government to extend Commonwealth power to a degree where it intrudes into the exercise of the constitutional powers of the States.

To me, this creates a really absurd situation. I think we ought to grow up. If the Commonwealth must pay for the intrastate services, surely it should have the power to organise them. It reminds me of an occurrence in my electorate on one occasion. The State Government had suggested closing a railway line. Few people were using it; it carried only four passengers a week. But immediately the State Government decided to close it there was an outcry and everyone said: "We must keep our railway line open ". We have this situation now with the

States. They have not exercised their powers, but the moment the Commonwealth moves to take the powers over the States say that this is an intrusion into their sovereign rights, as if the States were really sovereign. I am sure the Deputy Leader of the Opposition will agree with me that today the so-called sovereign rights of the States are so small that the loss of the power to control intrastate aviation would not take much more away from them.

I come to a consideration of whether it is of advantage for the intrastate services to be reallocated by the Department of Civil Aviation or whether we should accept the Borthwick plan. I mention again that a Commonwealth government reallocation will be done in conjunction with the- State transport authorities. It is not being done unilaterally by the Commonwealth Government. I believe very sincerely that the Department of Civil Aviation should, and if it can it certainly must, go ahead and reallocate or reorganise the intrastate airlines in New South Wales. Let me give a few examples. I have here a map of the present situation. The lines operated by Airlines of New South Wales are shown in red and those operated by East-West Airlines are shown in blue. It looks almost like a spider's web. For example, Airlines of New South Wales goes to Coffs Harbour and then flies directly over Grafton, which is served, by East-West Airlines, on to Casino, then across three more lines operated by EastWest Airlines and finishes at Oakey in Queensland. This is happening all over the State. Aircraft operated by Airlines of New South Wales fly to Bathurst, then over Orange, which is an East-West Airlines port, and on to Parkes. Again, East-West Airlines operate to Temora and West Wyalong, while Airlines of New South Wales operate to Narrandera and Griffith just beyond them.

Mr Whitlam - The Borthwick plan cured all that.

Mr FAIRBAIRN - Far from it, although I agree that under that plan the airlines do not cross as many of the routes of other airlines as they did previously. All that the Borthwick plan set out to do - this is what Borthwick was told to do - was to reduce Ansett's percentage to 51 and to increase East-West Airlines percentage to 49. He was not told that he had to organise the State network system sp that two viable and profitable airlines were operating. This is what the Department of Civil Aviation would do. Perhaps I should mention one of the most ludicrous situations of all. This shows why it is essential for the Department of Civil Aviation to look into the set up and to have complete power and authority to bring the two airlines together and to make a rational reorganisation.

When a new aerodrome was opened at Albury about 10 months ago the Depart* ment of Civil Aviation sought people who were eager to operate a service there. After considerable thought, it decided that TransAustralia Airlines should be granted this licence. I agree with this entirely, because T.A.A. had been operating a service from Sydney , to Canberra and Corowa and then on to Melbourne. Corowa was cut out and Albury substituted. But at the same time the State licensing authorities, for some unknown reason, said: "We will allocate a licence for this route". They allocated a licence to East-West Airlines. The result is that a Friendship run by T.A.A. leaves Albury and flies to Canberra and Sydney and, on some occasions, within a couple of hours a DC3 run by East-West Airlines leaves Albury for Sydney. Naturally, when it leaves it is almost empty. In fact, all that East-West Airlines has been doing for many months is to fly empty seats from Albury. 1 think its monthly average has been about three passengers a day. It is quite obvious to anyone who has the least thought about this matter that there is no need for EastWest Airlines to maintain that service. It is of practically no assistance to the local residents and must have cost the company at least a five figure sum in the past 10 months. This sum is either paid by the Commonwealth by way of subsidy or else it is paid by the shareholders of the company:

Mr Sinclair - The company runs a Fokker there on Fridays.

Mr FAIRBAIRN - There have been at least three different schedules in the past 10 months so I am afraid I cannot keep up with it and I am afraid that none of the local people can. either. This is probably one of the reasons why the company is losing money. 1988 Civil Aviation. [REPRESENTATIVES.] Civil Aviation.

Mr Whitlam - Has Senator Henty given licence to East-West Airlines to operate the service between Sydney and Albury?

Mr FAIRBAIRN - I am sorry, I cannot answer that offhand. The Commonwealth certainly should have the power to make a sensible reallocation of the airlines. It could make a reallocation which would mean that the Commonwealth would have to pay less in subsidies and would result in two viable airlines operating in New South Wales. After all, this is our policy and this is what we have done. Look at what we have done for East-West Airlines. There is no doubt whatever that if it were not for what we have done the company would not be operating today. We have paid considerable subsidies. I think in the past six years we have paid £147,355 in subsidies. In four of the last six years, losses would have been incurred had the company not received subsidies. But we have not only paid subsidies. We have assisted East-West Airlines Ltd. also by spending £331,000 on the development of the Tamworth aerodrome alone, and another £881,000 on other airports and facilities used by this airline. We have also spent £90,000 per annum on the maintenance of airports in the area served by the company, and it contributes only £15,000 per annum towards this maintenance work. We have assisted East-West Airlines also in obtaining 50 per cent. of the fleet that it now uses. Through Trans-Australia Airlines, we made available a Friendship aircraft, originally on lease, and then allowed the private airline to purchase it on very reasonable terms. We obtained a DC3 aircraft from the Royal Australian Air Force and made that available. We arranged for East-West Airlines to purchase another DC3 on very reasonable terms. So no one can say that we have not assisted East-West Airlines and that we do not intend to continue to do so. However, the argument that is going on at present makes it look as if East-West Airlines is biting the band that fed it.

Mr Cope - But your implication is that you have spent nothing on the aerodromes used by the Ansett organisation.

Mr FAIRBAIRN - We have assisted the Ansett organisation. We have assisted Trans-Australia Airlines, too. We pay it a subsidy of, I think, about £133,000 per annum, and we pay the Ansett organisation a subsidy to operate non-profitable services to country centres. The cause of all the present trouble is the fact that, for some unknown reason, the Australian Labour Party has become bitterly and to a fantastic degree opposed to Ansett and the Ansett organisation. The New South Wales Government's action has been taken only to damage the Ansett organisation. Labour's attitude on this issue is completely paranoiac. The fact is that the present services operated by both East-West Airlines Ltd. and Airlines of New South Wales Pty. Ltd. in New South Wales have been worked up by both organisations. They started with nothing and built up their services. Ansett has expanded his services and built up his organisation.

Mr Clark - Butler Air Transport Ltd. was bought out by Ansett.

Mr FAIRBAIRN - Yes. Airlines of

New South Wales Pty. Ltd. originally was started by Butler as Butler Air Transport Ltd., and was bought, first by Australian National Airways, then by Ansett, who has built it up in the years since. Both Airlines of New South Wales and East-West Airlines have built up their organisations and given good service on the particular routes over which they operate. There is no reason for a sudden arbitrary decision to take the plum - the Sydney to Dubboservice - from the Ansett organisation and hand it on a platter to East-West Airlines.

Mr Clark - Ansett robbed Butler of the service.

Mr FAIRBAIRN - He purhased it from Butler.

Mr Clyde Cameron - He swamped a meeting of the shareholders of Butler Air Transport Ltd.

Mr FAIRBAIRN - There is no point in arguing about this. We all know what happened. Ansett Transport Industries Ltd. purchased the majority shareholding in Butler Air Transport. When Ansett bought the Butler organisation, he purchased all its assets, and he has continued to operate first class services to Dubbo, Wagga and all the other places formerly served by the Butler organisation. But we now find the

Labour Government in New South Wales adopting the idea that Airlines of New South Wales should just be robbed of a fine service that it has built up and operated with great success. One might just as well say that, because Myer Emporium Ltd. has developed into a big organisation and made a good profit in its last financial year, half of that organisation ought to be chopped off and given to Buckley and Nunn Ltd. That would be just as sensible a proposition. Just because both these retail firms are privately owned and have been built up over a long period, there is no reason why one of them should be robbed in favour of the other,

Mr Uren - Is it not true that the Government of which the Minister is a member represents monopoly and is always on the side of the big man and never on the side of the battler?

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