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Thursday, 12 November 1959

Mr DEPUTY SPEAKER - Order! The honorable member's time has expired.

Mr.McMAHON (Lowe - Minister for

I have followed correctly the arguments of the Opposition, particularly of the Deputy Leader of the Opposition (Mr. Calwell), they can be summarized in this way: The Opposition says that Trans-Australia Airlines has not been given a fair go in competition with Ansett-A.N.A., and that there "was no need to increase air fares and freights and that T.A.A., or the Australian National Airlines Commission, did not seek the fare increase. I think that is a perfect crystallization of what has been stated by the Opposition. Now let us look at the facts. First, let us consider the question whether T.A.A. has been given a fair go, and whether, in terms of fleets, it is at a disadvantage as compared with its great competitor, Ansett-A.N.A. The policy of the Menzies Government has been cleaT ever since it came to office in 1949. That policy is of fair competition as between the two major airlines - one Commonwealthowned and the other owned by private enterprise. I think the evidence is sufficient to indicate that that policy has been consistently and successfully followed since we have been the Government. But has there been a competitive advantage granted in recent months to Ansett-A.N.A.? I do not think we need to go one step further than look at the advertisements published by T.A.A. on its own behalf. My colleague, the Minister for Defence (Mr. Townley), has already spoken on this subject and I can add nothing to what he said other than to highlight some of the points that he made.

The first point I make is that on its own claim T.A.A. now states that without doubt jet flight is the best and that only with T.A.A. can you be sure of flying in jetpowered aircraft to all State capitals. That is a vital part of T.AA.'s advertising. T.A.A. says that jet flight is the fastest and smoothest way to fly and that only with T.A.A. can you be sure of jet flight whenever you fly interstate. Only T.A.A. operates 100 jet flights daily - more than twice the number provided by any other airline. On its own statement, T.A.A. probably has a competitive advantage with regard to pure jet flight. That being so, how can the opposition hope to sustain an argument that in recent months a competitive advantage has been given to Ansett- A.N.A.? It is true that for a very short time the number of passengers carried by Ansett-A.N.A. increased, but there was a very good reason for that. Ansett-A.N.A. was able to obtain two Electras at an early stage. Electras being a little novel, passengers flowed to that airline and for a time it did have some advantage. The advantage was only with respect to two aircraft of its total fleet and it was only a temporary advantage. With a continued improvement of the aircraft in T.A.A.'s fleet, it can be expected that the traditional percentage of passengers carried by T.A.A. will be restored, and in fact one finds that its competitive position is now extremely healthy.

So I do not think that honorable members opposite ever really thought AnsettA.N.A. had a competitive advantage; and the argument of the Deputy Leader of the Opposition turns out to be completely false. The Government has honoured its election pledge to see that there is fair competition as far as is practicable between these two major airlines.

The second part of the Opposition's argument is that there was no need for an increase in air fares and freights and that T.A.A. did not want it. I have had cause in recent months to complain quite bitterly about the fact that the Opposition does not care about the facts of life. The facts of life are quite simple to state. Under the 1957 civil aviation agreement a formula is set out for determining the procedure that must be followed before air fares and freights are increased. On this occasion that formula was followed. There was joint consultation between T.A.A. and AnsettA.N.A. The two companies produced figures from their balance-sheets and independently made recommendations to the Minister for Civil Aviation as to what increases should be made. In other words, there were joint consultations and several recommendations as to what the increases in air fares should be.

If we take T.A.A.'s estimates we find that its costs have increased by £674,000. The increase in fares will recoup it only £630,000. There you have the facts of life. The formula as set out in the act was followed. Costs have risen and, of course, unless both companies were to become bankrupt or to receive increased subsidies from the Government, there was only one possibility and that was to increase freights and fares. T.A.A. took the sensible course. The increase will ensure that T.A.A. has sufficient money available to permit it to progress. It will also ensure that its profit and loss accounts are more than balanced. The Deputy Leader of the Opposition made the extraordinary statement that if T.A.A. had been permitted to purchase an Electra it would have turned a loss into a profit. Again I point out to the honorable gentleman that he should get his facts straight first, because on the recent balance sheet of T.A.A. its profit is shown for 1958-59 at £243,000. There is no loss at all. T.A.A. made a profit, and we hope that it will make a greater profit in the current year. If there was a profit last year, and remembering that the profit for the year 1957-58 was only £308,000, how could the Deputy Leader of the Opposition claim that if it had had one extra Electra, T.A.A.'s profits would have increased by £400,000 in the year. In fifteen years of operation such a gross profit has not been made. Consequently, the argument turns out to be complete nonsense and is contrary not only to historical fact but also to the possibilities based on profit and loss accounts.

I believe I have answered the arguments put forward by the Opposition. I want to state positively that it is the Government's policy to sustain fair competition in the air; and that is being done. Secondly, no real advantage was given to Ansett-A.N.A. There is one other comment I should make. If you look at the profit and loss accounts of those two companies you will find that the ratio of profits to turnover is something of the order of 2\ per cent, to 3 per cent. That is not big and for any one to make the statement that the profits of those companies look big is ridiculous and quite inconsistent with normal commercial returns.

I wish to make only one other comment. We on this side of the House have a great liking for the honorable gentleman from Melbourne, but we must ask him this question: What does he hope to gain by consistently and continually attacking AnsettA.N.A.? The company is doing well. So, too, is T.A.A. We respect both companies, but the Opposition should realize - and I hope that the speaker to follow me will have the courage to say this - that it is not right-

Mr DEPUTY SPEAKER -Order! The Minister's time has expired.

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