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Thursday, 15 October 1964

Senator McCLELLAND (New South Wales) . - Mr. President, before the sitting was suspended, I was relating my remarks to the importance of these intrastate operations to the main trunk routes, and to the profitability as far as the main trunk routes are concerned of these intrastate operations. I was referring the Senate to what the former member for New England, Mr. Drummond, said on this subject on 24th October 1961 in another place. At the risk of being repetitive, and for the purpose of sequence, 1 repeat what Mr. Drummond said on that occasion -

So far as my knowledge carries me - and I think ii is correct - Trans-Australia Airlines has no power to acquire subsidiary airlines, while Ansett-A.N.A. has been swallowing up smaller airlines at very considerable speed. Without naming them all, I mention the Mandated airlines and Butler Air Transport Ltd. now known as Airlines of New South Wales Proprietary Limited. They are both subsidiaries of Ansett-A.N.A. When I returned from Europe in May 1960, I was informed by a Sydney businessman that Ansett-A.N.A. had no less than five canvassers out in the territory of East- West Airlines Ltd. with a view to swallowing that delectable prize, top.

J remind honorable senators on the Government side that these were the remarks of the former Country Party member for New England. Mr. Drummond went on to say -

In the last week that was available to mc on my return, 1 took the opportunity to say -

If all the subsidiary lines are cut out, then the lifestream that flows into T.A.A. and enables its growth is also cut. That is a most dangerous situation, and it is a bad situation when it threatens to destroy an independent private company which, so far as I know, is the only decentralised airline in Australia. lt is an airline that has its head-quarters and workshops, and its main employees all in a town far removed from the danger of attack on our coast during war.

The honorable member for New England at the time added -

It is as plain as a pikestaff to me, with some knowledge of business, that if the present trend continues unchecked, T.A.A., in which the nation has a very big stake, will be at the mercy, very largely, of a private combination against which, at present, it is not operating on just terms to itself.

He said -

I have not altered my opinion in the slightest since then. 1 suggest to the Senate that there can be no doubt at all that the motive for the Government's action on this occasion is to protect the vast and wealthy empire of Ansett Transport Industries Ltd. It is indeed significant that in the days immediately preceding the announcement that these regulations would be issued, Mr. Ansett himself was in Canberra, on the admission of the Minister for Civil Aviation himself in this chamber last Tuesday, conferring with Ministers of the Crown. Indeed, from a statement made by Senator Marriott, it would appear that Mr. Ansett was in Canberra on the very day when these things were being considered.

Senator Henty - Who said I said he .was conferring with Ministers?

Senator MCCLELLAND - I understood it from your reply.

Senator Henty - You may have understood that, but 1 did not say it.

Senator MCCLELLAND - On 13th October, Senator Marriott asked a question of the Minister for Civil Aviation, as follows -

I address a further question to the Minister for Civil Aviation. Is it not a fact that on the clay on which Mr. r. m. Ansett visited Parliament House and discussions were proceeding in regard to licences for intrastate air services a top executive of Trans-Australia Airlines also was in Parliament House?

Senator Hentyreplied ;

I think the honorable senator has supplied his own answer.

I suggest to the Senate that the inference to be drawn from those remarks is that discussions were proceeding between certain Ministers and Mr. Ansett.

Senator Henty - You can draw your own conclusion; that was not said.

Senator MCCLELLAND - In any event, there can be no doubt that Mr. Ansett was here. I think it is a fair inference to draw that Mr. Ansett would have known what was being contemplated at that time. I am sure that had the Chairman of Directors of East-West Airlines been told about this matter at that time we certainly would have been so informed.

This brings me to a statement made by the present Leader of the Government in the Senate (Senator Paltridge) who was the former Minister for Civil Aviation. In some explanatory notes prepared in connection with a debate that took place in this chamber in October 1961, and when setting out details in those explanatory notes of the proposed take over at that time of East-West Airlines by Ansett-A.N.A., the Minister had this to say -

The next development occurred in March of 1960 when the New' South Wales Government announced its intention to make a review of airline operations in that State. According to Press reports, this review followed representations by East-West Airlines to the Government of New South Wales.

The Minister went on to say - 1 should make these points -

The first point he made was -

If East-West Airlines did make these approaches to the New South Wales Government they failed to tell me as the responsible Civil Aviation Minister that they intended to do so, which I think was a serious omission in the light of my financial and policy responsibilities for rural air services in New South Wales.

The bringing down, or the contemplated bringing down a fortnight ago, of these regulations vitally affected rural air services in New South Wales.

Senator Henty -- Why?

Senator MCCLELLAND - If the Minister has not been listening to this debate-

Senator Henty - The rural air services are still running.

Senator MCCLELLAND - Your former leader has suggested that as a result of political activities that are going on because these regulations have been brought down, air services could be disrupted in the rural areas of New South Wales. I suggest that this was a matter of very great importance to rural air services in New South Wales, and that it was only fair, if one operator knew about what was intended at the time, that the other should have been appraised of it also.

I have already cited the major business connections of Mr. Ansett. Those that I have mentioned do not cover all the activities with which he is connected, but they are the major ones. It is obvious that he is a man of substance, and I suggest that he is a man of influence. On anyone's standard, he is certainly a man of affluence. He could well be described as a man who is involved in big business. Because this Government administers the affairs of this nation in the interests of big business, and not in the interests of the ordinary men and women in the community, I suggest it is fair to assume that the decision of the Government to bring down these regulations was taken, if not at the request of Mr. R. M. Ansett, then certainly in concert with him.

In conclusion, I ask: Is it any wonder that the people of New South Wales are concerned about this matter? Is it any wonder that East-West Airlines is concerned about it? Is it any wonder that every State Premier has expressed consternation? One must remember how Mr. Ansett acquired an interest in Butler Air Transport Ltd. To refresh the recollection of honorable senators, I refer to an article that appeared in the " Bulletin " - which certainly could not be described as a Labour Journal - on 7th September 1963. In a very long article, at page 17 of that issue of the "Bulletin" the following statement was made in connection with Ansett's acquisition of Butler Air Transport -

Then, in the public eye, he became a new giant crushing Butler Air Transport, another "little" line.

Butler Air Transport Ltd., with former N.S.W. Governor Sir John Northcott as chairman at the finish, was founded in 1934, and with a subsidiary, Queensland Airlines, covered a wide area in N.S.W., Vic, S.A. and Qld.

A.N.A. fostered Butler so long as the junior line kept off the interstate routes. But Butler bought two jet-prop Viscounts, despite a warning by D.C.A. that it would not be allowed to use them intra-State. Unable to shift the D.C.A. on this, Butler began to use planes between Sydney and Melbourne.

A.N.A. could not suppress this. It did not have a big enough holding to control Butler which did not allow one vote to each share, but had a sliding scale which diminished A.N.A.'s influence. Butler also issued 100,000 £1 shares to employees. These were issued at ls. with quarterly calls of Id., but carried the same rights as fully paid £t shares.

A.N.A. was still in litigation over this when it sold out. A.T.I, took over the battle for control, to kick Butler off interstate services. In this Ansett was supported by the Federal Government - which had been implementing a Two Airlines policy with A.N.A. and T.A.A. since 1952, under the Civil Aviation Agreement Act.

The most spectacular part of the Ansett attack was to fly hundreds of supporters from Melbourne to carry the vote at meetings in the Buller hangar at Mascot. The sight of Ansett moving his troops' hands, up and down, according to his signalled orders, has yet to be matched in high finance tragicomedy.

In the wash-up of this complicated struggle, A.T.I, got control, paying double market price to Butler shareholders. C. A. Butler himself took a top job with A.T.I, but then left, with compensation.

Ansett refers to the Butler struggle as " the sternest of my life ". He knows that he came out of it badly in the public eye, but can't see what else could have been done, in view of his purchase of A.N.A., the Federal Government's policy, and his own need to " protect his flank " against Butler as an interstate operator.

As Butler Air Transport failed, so do I suggest that Ansett would like to see EastWest airlines fail. It is beyond doubt that this

Government is assisting this man of substance to preserve, if not to expand, his wealthy and vast empire. I suggest that by the regulations the Government has introduced, it has shown that it is functioning in the interests of one man and one company, against the interests of the people of New South Wales and the people of Australia generally, and against the interests of the only decentralised airline in Australia. For these reasons I say that the regulation should be disallowed by the Senate.

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