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Tuesday, 17 October 1972
Page: 1559


Senator YOUNG - Is the Minister repre senting the Minister for Foreign Affairs aware of recent debate about the cost to Jetair Australia Ltd of the 6 DC3 aircraft purchased by the Government? Can he state the facts?


Senator WRIGHT - It is within my knowledge that, during the public debate referred to, a statement was made as to the cost to the company of the 6 DC3 aircraft purchased by the Government. As that fact was part of the discussion by the inspecting officers on 17th and 18th December and was contrary to the statement in those discussions, I requested the officers of the Department of Foreign Affairs to contact the management of Jetair Australia Ltd on Friday. Alexander Barton has addressed to me a letter dated 16th October stating--


Senator Douglas McClelland (NEW SOUTH WALES) - Is he related to Gordon Barton?


Senator WRIGHT - I would not know but Alexander Barton is an executive of Jetair and Gordon Barton is an executive ofIPEC and both have a history of association with airways. I am referring to a letter that came to me this morning from Alexander Barton to the effect that the total cost to the company of the 6 Jetair aircraft purchased by the Government for $275,000 was $579,325. Mr Barton went on to state:

I note that it has been stated that the book value of the 6 aircraft was $100,000. As you can see from the above table, this is totally incorrect. The 6 DC3s were not owned by Jetair Australia Ltd but another company in the Jetair group and in fact were leased to Jetair. The book value of the 6 DC3 aircraft, as stated in the above table, which figures were extracted from the audited figures of the company concerned.

I have further noted that the valuation of the spare parts included in the sale was approximately $18,000. This agrees closely with the price paid for them.

I might add that I have been disturbed at the incorrect statements made under Parliamentary privilege regarding the financial position of Jetair. These statements are totally untrue. The establishment costs of the airline which were anticipated to be substantial, were properly provided for, prior to the commencement of operations, and Jetair is, and always was, in a sound financial position. When it became apparent that the full objectives of the company could not be attained, and because the limited operations that it was authorised to undertake were unlikely to become profitable, the Board decided to cease operations.

In my opinion, the Board acted responsibly towards its Shareholders, the public, and its staff and took the only course that was open to it and you may care to report this view to the Parliament should the matter be raised again.

If I am in order, Mr President, I table that letter and, for the convenience of honourable senators, I ask for it to be incorporated in Hansard.


The PRESIDENT - Is leave granted? There being no objection, leave is granted. (The document read as follows) - 16th October 1972.

The Hon. R. C. Wright, Minister for Works, Parliament House, Canberra, A.C.T. 2600.

My Dear Minister:

As requested by officers of the Foreign Affairs department, I am setting out below the costs to the Jetair group of each of the 6 DC3 aircraft. The table shows cost of the particular aircraft, the cost of rebuilding, including all the work necessary to put each plane into service (this work was carried out by Hawker de Havilland Aust. Pty Ltd, and East-West Airlines Pty Ltd), and the total cost:

 

I note that it has been stated that the book value of the 6 aircraft was$ 100,000. As you can see from the above table, this is totally incorrect. The 6 DC3's were not owned by Jetair Australia Ltd but another company in the Jetair group and in fact were leased to Jetair. The book value of the 6 DC3 aircraft, as stated in the above table, which figures were extracted from the audited figures of the company concerned.

I have further noted that the valuation of the spare parts included in the sale was approximately $18,000. This agrees closely with the price paid for them.

I might add that I have been disturbed at the incorrect statements made under Parliamentary privilege regarding the financial position of Jetair. These statements are totally untrue. The establishment costs of the airline which were anticipated to be substantial, were properly provided for, prior to the commencement of operations, and Jetair is, and always was, in a sound financial position. When it became apparent that the full objectives of the company could not be attained, and because the limited operations that it was authorised to undertake were unlikely to become profitable, the Board decided to cease operations.

In my opinion, the Board acted responsibly towards its Shareholders, the public, and its staff and took the only course that was open to it and you may care to report this view to the Parliament should the matter be raised again.

Yours sincerely, ALEXANDER BARTON

AB:PD







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