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Monday, 16 November 1964

Senator HENTY (Tasmania) (Minister for Civil Aviation) .- The first thing that I can say with a great deal of certainty is that the speech which we have just heard has not come from the lips of a future Labour Treasurer. I have heard some ineffective economic theses, and this is really as ineffective as any I have heard. The point that the honorable senator missed is that our dollar reserves are on short term loans at 4 per cent, interest. They have to be used. Is anyone going to ask Qantas Empire Airways Limited to repay this money on a short term basis? Of course not. Qantas wants time in which to earn the dollars to repay its loans. It is earning dollars, because it is the greatest international airline in the world. It has been built up by this Government.

Senator Murphyreferred to the establishment of an aircraft industry in Australia. He spoke about the aircraft industry in Sweden. Australia has an overseas airline, which is earning money. What Swedish overseas airline compares with Qantas? The honorable senator also referred to our overseas reserves of £860 million. This record amount is due largely to our exports.

Senator Murphy - To selling Australian industries overseas.

Senator HENTY - The amount of our overseas reserves is due to the export of Australian products.

Senator Murphy - What nonsense.

Senator HENTY - Of course it is. The reason why we have overseas reserves is that in a significant year of drought, when our exports of primary products disappear, we shall have to use overseas reserves in order to exist, not to buy on a long term basis aircraft with which we can earn dollars and repay loans as we go.

Senator Anderson - That is normal business procedure.

Senator HENTY - It is normal business transaction. Senator Murphy referred to the rate of interest. We are getting this loan at 5 per cent, interest, and it runs for seven years. During that time we will be able to earn dollars. We will be able to pay off the loan and Qantas will own the aircraft. It is going to have a great fleet of Boeing 707 aircraft. Senator Murphy commenced his speech by referring to the fact that we are also borrowing on behalf of Trans-Australia Airlines. He said, I think, that we would love to sell T.A.A., and we are always very uncomfortable about the fact that we have to live with it. Senator Ormonde is interjecting. He was not present at the time. If he had been here, he would have had quite a laugh at Senator Murphy's remarks. The fact is that this Government has a policy which really upsets the Opposition. This policy, which is applauded by the people of this nation, is for two competitive, airlines, one government owned and one owned by private enterprise. This gives the greatest service at the lowest price of any system in the world. Nobody can say that this is not good business. This is what the people of Australia like. We are borrowing 30 million dollars for a special purpose. T.A.A. and Qantas, from their earnings over seven years, will pay back the loan, as they have always paid back loans. This is no new policy. This is how the great fleet pf Boeing 707!s has been built up. This is how the assets of Qantas have been built up- by borrowing money, purchasing with it magnificent, modern aircraft, using them to make money out of the transport of passengers all over the world, and applying the money to pay back the loans.

The honorable senator talks about the indignity that Australia has to undergo to sign on behalf of the two trading organisations. We are accepting the normal terms which have always been extended to any borrower - it does not matter what it is - which goes into the international market in New York. We are borrowing for a particular purpose. The honorable senator says that we should use loans raised in Australia. He ought to talk first to State Premiers. The Australian Loan Council, which consists of the six State Premiers and Commonwealth representatives, endeavours to raise the maximum amount of loan money for expenditure by the States on their development. The honorable senator wants some of that money, because only a certain amount can be raised in Australia, to be taken from the States and given to Qantas and T.A.A. to spend.

Senator Ormonde - What about new money?

Senator HENTY - We borrow every bit of new money that we can get for the Loan Council every year. The honorable senator need not worry about that. The States and the Commonwealth borrow all the money that they can get for Government purposes. The honorable senator suggests that we should not give to the States some of the money they want for development, schools, roads and many other things. The States always want more money. He wants to take from the States money that Qantas and T.A.A. can borrow elsewhere, paying it back to the lenders with money they get from international air travellers. This is good business. This is how this enormous industry of Qantas has been built up. Its assets are owned completely by the Australian people and amount, I think, to about £50 million. The airline is owned completely by the people and this is how it has been built up by this Government into a magnificent service.

The honorable senator talks about the indignity of borrowing money overseas. What an indignity it would be if we were to say to State Premiers: "You cannot have money for hospitals, schools, for this and for that, because we are going to give it to Qantas ". They would say, " But Qantas can borrow it elsewhere ", and we would reply: " Oh, it is undignified to borrow it elsewhere. We must not do that. We must take it from the States." The honorable senator has been talking complete nonsense. I have never heard such rubbish.

The purposes of the loan, set out clearly in the Bill, are to enable additional aircraft to be purchased for the use of Qantas and T.A.A. in further developing the magnificent international and domestic air services that we have. No-one can suggest that we should borrow this money on the already short loan market in Australia. We could not do that without robbing somebody else. Nobody would suggest that we should take this money from our international reserves, which might be needed at any moment, as we have seen in past years when there have been unfavorable seasons. Nobody would suggest that we should obtain from these sources money on long term to purchase aircraft which can earn money to repay loans on the due date as they have always been repaid.

Amendment negatived.

Original question resolved in the affirmative.

Bill read a second time.

In Committee.

The Bill.

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