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Tuesday, 9 May 1961

Mr TOWNLEY (Denison) (Minister for Defence) . - by leave - As honorable members know, the Minister for Civil Aviation, Senator Paltridge, had discussions in Australia from the 27th February to the 3rd March, 1961, with Mr. J. K. McAlpine, the Minister in charge of Civil Aviation, New Zealand, on the general question of civil aviation relations between Australia and New Zealand. In those discussions the future of Tasman Empire Airways Limited was considered, and Mr. McAlpine and Senator Paltridge were able to reach agreement upon arrangements which they jointly recommended for adoption by their respective Governments. Those recommendations have now been approved by both Governments.

Under the arrangements the Australian Government has agreed to sell its half share in Tasman Empire Airways Limited to the New Zealand Government for £A.1,014,250, or £NZ.811,400. The purchase price represents the par value of the 811,400 £NZ.l shares which Australia held in T.E.A.L. The sale will have effect from the 1st April, 1961, although payment need not be completed until March, 1965. The agreement does not envisage the sale of T.E.A.L. to " any outside interest ", and this Government understands that the New

Zealand Government has rejected the offer by Ansett Transport Industries to purchase T.E.A.L. As part of the new civil aviation arrangements between the two countries, Australia and New Zealand will also conclude an Air Services Agreement which will give Australia's international airline, Qantas, rights to fly to ar.d through Auckland, Wellington and Christchurch. The New Zealand Government-owned T.E.A.L. will be given rights to fly to and through Sydney, Melbourne, Brisbane and Norfolk Island. The Air Services Agreement will be supplemented by a commercial arrangement between Qantas and T.E.A.L. designed to safe-guard T.E.A.L. 's financial position while permitting competitive operations between T.E.A.L. and Qantas across the Tasman. In this regard it has been agreed that T.E.A.L. may carry more than half the traffic on the Tasman.

As I mentioned earlier, the arrangements agreed upon between the Australian and New Zealand Governments do not envisage the sale of T.E.A.L. to " any outside interest " and I should inform the House that it is part of these arrangements that if, at any time after the sale of its share in Tasman Empire Airways Limited to the New Zealand Government, the New Zealand Government decides to dispose of any part of its holdings in T.E.A.L., then the Australian Government would have the option of withdrawing from or renegotiating the arrangements now approved by both Governments.

Tasman Empire Airways has operated air services on the Tasman for 21 years. Originally the airline was owned jointly by the Australian, New Zealand and the United Kingdom Governments, but in 1954 these arrangements were changed and the Australian and New Zealand Governments became joint owners of the airline, each with a 50 per cent, interest. With the rapid and impressive development of international aviation and the introduction of jetpowered aircraft on the world's air routes, it was becoming increasingly clear that continuation of our 21 -year-old joint ownership of T.E.A.L. was no longer appropriate. The two Governments therefore agreed that in the circumstances the New Zealand Government should assume complete ownership of its own international airline and that the traditional co-operative arrangements in civil aviation between Australia and New Zealand should take on another form. This will be by means of co-operative commercial arrangements between Qantas, owned by the Australian Government, and T.E.A.L., owned by the New Zealand Government. In the same way as Qantas has gained benefits from close association with other Commonwealth airlines, particularly in its early development, so we have agreed to assist T.E.A.L. in a similar way while fully protecting the rights of Qantas.

As I have mentioned, the operation of Tasman services for many years was a matter in which the United Kingdom Government, through its partial ownership of T.E.A.L., had a financial interest. The Australian and New Zealand Governments realize that in due course United Kingdom services at present operated to Australia by B.O.A.C. under co-operative arrangements with Qantas will extend into the Pacific area and the new arrangements between Australia and New Zealand recognize this likely development. As to the question of whether other foreign airlines may, in the future, operate on the Tasman, as far as the Australian Government is concerned, this will depend on air service agreements between Australia and other governments involved. Of course, complementary arrangements by such governments' with New Zealand would also be required. I should emphasize, however, that there is nothing in the new arrangements between Australia and New Zealand which limits the freedom of the Australian Government, or that of the New Zealand Government, to negotiate such air service agreements.

The Australian Government believes that the new arrangements between Australia and New Zealand will be of great benefit to both Qantas and T.E.A.L. The travelling public will also have the benefit of competitive choice between the services of the governmentowned international airlines of both countries which will now operate across the Tasman in close co-operation. The new arrangements are expected to result in an overall expansion of air services between Australia and New Zealand.

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