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Tuesday, 3 February 2009
Page: 168

Senator Bob Brown asked the Minister representing the Minister for Infrastructure, Transport, Regional Development and Local Government, upon notice, on 10 November 2008:

(1)   What are the details of the cross-border financing arrangement liability of $US728 million for the Australian Advanced Air Traffic System listed in the Airservices Australia annual report since 2002-03.

(2)   Why was this cross-border financing arrangement entered into.

(3)   Did Airservices Australia enter into this agreement to exploit a loophole in the American tax system.

(4)   What are the ‘exceptional, extreme and highly unlikely circumstances’ that ‘expert external advisers’ have said would result in Airservices Australia paying money under the guarantees and indemnities it has entered.

(5)   Who are the ‘expert external advisers’ who provided this advice.

(6)   Have any payments been made to date to satisfy these guarantees and indemnities; if so, how much and for what reason.

(7)   What is the liability according to the current exchange rate.

Senator Conroy (Minister for Broadband, Communications and the Digital Economy) —The Minister for Infrastructure, Transport, Regional Development and Local Government has provided the following answer to the honourable senator’s question:

(1)   There is no liability. Airservices Australia has advised that it has counterparty exposures to a range of entities in the course of its financial management activities; where material, these exposures are disclosed in Airservices’ publicly available financial statements.

(2)   The transaction was undertaken in the course of Airservices’ financial management activities to better support the efficient management of the business.

(3)   No, the transactions are reported to the US tax authorities.

(4)   The circumstances would be the complete and simultaneous failure of the companies concerned without Airservices having exercised its rights to restructure the lease transactions.

(5)   Commonwealth Bank of Australia, Blake Dawson (lawyers) and Peter Gallagher (consultant).

(6)   Airservices has not made any payments.

(7)   There is no liability.