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Tuesday, 17 September 1974
Page: 1116

Senator James McClelland (NEW SOUTH WALES) - I direct a question to the Minister representing the Minister for Housing and Construction. Has the Minister seen Press reports of a recent television interview in which the Managing Director of the Mainline Corporation, Mr Baker, claimed that Government Ministers, including the Prime Minister, the Treasurer and the Minister for Aboriginal Affairs actively promoted the demise of that company? Is that a fair assertion? Did, in fact, the Government cold-bloodedly determine that Mainline should not survive? Did the Government actually assist in bringing Mainline down? Were the former employees of the Mainline Corporation left out on a limb or were steps taken to protect their interests?

Senator CAVANAGH -I have seen the allegations. I think that to reply to this question possibly it is necessary for me to speak on 2 lines. Firstly, I should speak on behalf of the Minister for Housing and Construction, whom I represent in the Senate, upon what he may have thought on the question and upon what he and the Government did, and secondly, as I have been mentioned in the question, I should speak upon what my actions were in the particular activities. I say at the outset that it is very unfair to say what has been said about the activities at the governmental level, the activities of the Ministers who have been mentioned and their officials who worked around the clock in an attempt to' prop up the Mainline Corporation when its possible collapse was made known. I am dealing now with the construction side of the Corporation's operations. There was also the development side of its activities.

The Deputy Prime Minister and the Minister for Housing and Construction, as well as the Prime Minister, have had long discussions on this question. At one stage it was hoped that a proposition that had been put to them could be developed in order to prop up the company. This was when a management committee was formed to back up the company which needed substantial cash for the purpose of carrying on. I think that the proposal was that the managing company would put in some cash and the Government was to inject 2 lots of cash. This money would be used to pay the debts owing to subcontractors and also to meet the losses of the managing company in continuing with the business. Of course, this involved an open-ended cheque which was too much for the Government which, not knowing the company's commitments, could never agree to the proposal. But the extent of the desire of the Government to assist the company and its employees resulted in the Prime Minister making a statement that the Government was prepared to assist the company to the extent of some $7m to pay the subcontractors to whom money was owing.

At no stage would I say that it was possible to get the facts from the receiver who apparently could not get the facts himself. The company is in so big a mess that it has not been possible to ascertain the extent of its liabilities at the present time. The company was engaged in some construction at an interest rate between 1 Vi per cent and 2 per cent and was obtaining money for development work and building construction. The development work flopped and the company lost as a consequence. Those are the activities of the Government, which has done everything possible to assist this company. I do not know from where Mr Baker got the information. I cannot recall ever making a statement on my attitude to the company. My personal feelingand I have discussed it with several- is that at no time would I favour the Australian Government's money going into Mainline for the purpose of high rise development for the Australian Mutual Provident Society and other insurance companies especially at a time when we cannot meet our housing commitments because of the shortage of building materials and manpower for housing construction, they being utilised to build office space which will remain vacant for a number of years.

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