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Tuesday, 22 May 1973
Page: 2411

Mr CHARLES JONES (Newcastle) (Minister for Transport and Minister for Civil Aviation) - During the second-reading debate many statements were made which were, in effect, attempts at drawing red herrings across the trail. Honourable members spoke of diamond mines and similar operations suggesting what could happen if one of the parties to the 2-airline agreement discovered a diamond mine. They suggested that Trans-Australia Airlines could set up a chain of hotels and motels, establish tourist resorts and take over almost every transport organisation in Australia today. From the way they spoke one could imagine that TAA could go even further. But that is not the true position. Had I had the opportunity of closing the secondreading debate I would have replied to some of those statements, and it would have been at a time earlier than midnight tonight.

Mr Nixon - You gagged the debate.

Mr CHARLES JONES - That is right; the Government gagged the debate. Had it not done so the debate would have continued until probably the time for adjournment of the House. The Government was not prepared to allow that situation to develop. What the Government is trying to achieve by this Bill is the right for TAA to operate on equal terms with its competitor, Ansett Transport Industries Ltd. The Government is trying to carry out the terms of the letter which was written to Sir Frederick Scherger by the former Minister for Civil Aviation, Senator

Cotton, in which he agreed with a number of points which were put to him by Sir Frederick Scherger, the Chairman of the Australian National Airlines Commission. The letter deals with aviation, Commonwealth contracts, tourist accommodation, road transport services, subsidiaries, aerial work, charter operations, investment of moneys not immediately required, operations in Papua New Guinea after independence and amendments to the general financial arrangements.

The honourable member for Farrer (Mr Fairbairn), who is Opposition spokesman on this matter, dealt with the question of road transport. It is agreed that the Bill is written in the broadest terms so that there will be no ambiguity about what TAA can or cannot do in the field of transport. The Government wants TAA to be able to do what its competitor is able to do, namely, to operate tourer buses and road transport in association with its airline activities. Ansett Transport Industries operates in a much broader field than that. 1 do not have in mind that TAA will take over any furniture-carrying organisation, as has been done by ATI. The Government is not setting out to achieve that objective. However this clause, as it is now worded, will allow TAA to operate and do all things which are necessary with respect to tourer buses and activities of that type. To show where the Government stood I made a brief statement on the foreshadowed amendment during the second-reading debate. This was to enable members of the Opposition to know what the Government was aiming to do. The amendment moved by the honourable member for Gippsland (Mr Nixon) more than covers the position because it would mean that TAA would not be able to extend its activities. By an amendment which the Government will move later TAA will be required to break up its accounts into 2 sections, one covering aviation operations or its airline operations and the other its other operations. Ansett Transport Industries is required to do this by an amendment to the legislation moved by the previous Government when it was in office.

The Government is trying to achieve what we believe was the agreement entered into between the previous Government, TAA and ATI. As its part of the bargain ATI has an open-ended agreement for an extension of the 2-airline agreement. All the Government is trying to do is to give TAA what it was promised. It might be of interest to honourable members if I were to incorporate in Hansard a copy of the letters from Sir Frederick Scherger to Sir Donald Anderson, the Director-General of Civil Aviation, and the reply by Senator Cotton, the then Minister for Civil Aviation. I am prepared to incorporate copies of those letters in Hansard.

The DEPUTY CHAIRMAN (Dr Jenkins)Is the Minister seeking leave to have them incorporated?


The DEPUTY CHAIRMAN- Is leave granted? There being no objection, leave is granted. (The documents read as follows)

13 October 1972

Sir DonaldAnderson, C.B.E.,

Director-General of Civil Aviation,

Aviation House, 188 Queen Street,

Melbourne 3000.

Dear Sir Donald,

Your letter of 13 October advised that the Minister had requested that the Commission advise the specific assurances required to enable it to accept the proposed Airlines Agreements, so that the Commission's proposals could be submitted to the Government for consideration.

As advised in my earlier letter, the Commission believes that to be capable of effective competition within the Government's policy, it is necessary for the Australian National Airlines Act 1945-72 to be amended so as to remove legal doubt as to the powers of the Commission to engage in activities closely related to airline operation, and to have normal commercial powers to invest moneys not immediately required. The Commission believes the extension of its powers to be an integral part of the Government's revised policy and the necessary legislative amendments should be introduced at the same time as the Airlines Agreements are extended.

Accordingly, the legislative amendments necessary to enable the Commission to accept the proposed Agreements and the timing thereof have been set out in detail in the attachment.

I would appreciate you forwarding these advices to the Minister for consideration by the Government.

My earlier letter dated 11 October set out certain amendments required to the proposed Airlines Agreements, which are under consideration by your Department.

As soon as a reply is received on these two matters, the Commission, as requested, should be able to advise promptly as to whether the extended Airlines Agreement is acceptable.

Yours sincerely,




The Commission would wish to have an assurance from the Government that concurrently with the legislation to approve the proposed 1952-1972 Airlines Agreement, and to amend the Australian National Airlines Act 1945-1970, the following amendments to the last named Act will also be introduced:

1.   Aviation - Engineering Work

Amend Section 19 to specifically empower TAA to engage in aviation engineering work for outside organisations.

2.   Commonwealth Contracts

Amend Section 19 to specifically empower TAA to engage in any operation or work required by the Commonwealth or any instrumentality of the Commonwealth.

3.   Tourist Accommodation and Road Transport Services

Amend Section 19 by adding a new sub-section specifically empowering TAA for the convenience of its passengers to establish and operate or assist in the establishment of hotels or other types of accommodation and road transport services and to perform all activities incidental thereto or in connection therewith.

4.   Subsidiaries

Amend Section 19 to give TAA a specific power to acquire subsidiaries or shareholdings in companies or establish and operate subsidiaries for the purposes of the Australian National Airlines Act.

5.   Aerial Work and Charter Operations

Amend Sections 19 and 19a to give TAA a specific power to engage in aerial work and charter operations.

6.   Investment of Moneys not immediately required

Amend Section 34(2) of the Act by adding at the end of the sub-section the words 'or in any other manner approved by the Treasurer'.

7.   Operations in Papua New Guinea after Independence

To permit the implementation of announced Government policy to amend Section 19 of the Act to empower TAA to operate within Papua New Guinea after independence, if requested to do so.

The Commission would wish to be further assured that if the Commission so requests, Section 19a of the Act will be appropriately amended to empower TAA to establish, maintain and operate intrastate air service operations in any State where the State Government has enacted legislation referring sufficient power to the Commonwealth to enable it to do so.

Parliament House,

Canberra, A.C.T. 2600 17 October 1972

Dear Sir Frederick,

I refer to your letter of 11 October 1972 in which you advise that the Commission considers that it could not agree to accept the proposed Agreement extending the Two Airline Policy unless it had an assurance setting out in some detail amendments to the Australian National Airlines Act to extend its powers in incidental activities and investment.

At my direction the Director-General requested you on 13 October 1972 to state specifically the further assurance which the Commission seeks.

You replied to the Director-General on 13 October 1972 and he has brought that letter to my attention.

As I previously informed you, it will be very difficult for the additional amendments to the Act to be dealt with before the present Parliament ends, but it has been the intention of the Government to introduce any legislation necessary to give effect to its presently stated policies on TAA's operations as soon as possible. 1 thought 1 had made this position quite clear to you in previous correspondence.

However, in the light of the reservations expressed by your Commission 1 now confirm that as far as this Government is concerned, the Commission has a firm assurance that, in the first sittings of a new Parliament a Bill amending the Australian National Airlines Act will be introduced so as to give TAA the powers requested in your letter to Sir Donald Anderson dated 13 October 1972 and that, in presenting the proposed Airlines Agreement Bill 1972 I will make a statement to that effect.

In the light of this further assurance I look forward to your early confirmation that the Commission will sign the Two Airline Agreement subject to satisfactory settlement of the 2 clauses on which you still have some reservation and which were mentioned in your letter of II October 1972. The Director-General has pursued discussion with the Commission and the Company on possible drafting amendments to these clauses.

Yours sincerely,


Air Chief Marshal Sir Frederick Scherger, K.B.E., CB., D.S.O., A.F.C.,


Australian National Airlines Commission, P.O. Box 2806aa, G.P.O., Melbourne, Victoria 3001.

Mr CHARLES JONES - 1 thank the Committee. At this stage I should like to put on record a copy of a letter which I received today from Sir Frederick Scherger but I do not know whether I have time to quote it fully. In this letter to me Sir Frederick confirmed that the agreement - the Bill that we are debating here today - is in conformity with what he understood the agreement between himself and Ansett Transport Industries provided through the legislation of the then Government in October of last year. People have said that this is not what was proposed, but here is the man who was one of the central figures in it. Here is the man who refused to sign the agreement in the initial stages until such time as was written into the Bill those things which we are putting forward to the Parliament today in the form of the amendments that this Bill provides for.

An article in today's 'Australian' states:

Sir PeterAbeles said last night be could see nothing sinister in the Federal Government plans to widen the powers of TAA.

The statement by Sir Peter, a director of Ansett Transport Industries and chief executive of TNT, a major shareholder in the company, is in direct conflict with the attitude of the Ansett organisation.

If I might say so, the largest shareholder in ATI is in conflict with what Opposition members have been saying here today, and the red herrings that they have been attempting to draw across the Bill. As I said in my second reading speech, I took it that this would be a formal Bill and one on which there would be very little debate because I considered that all I was doing was to put into operation those things which the former Government had promised TAA. The drafting of this Bill was carried out in consultation with Sir Frederick Scherger. What has gone into this Bill has been with his knowledge and approval his interpretation of what was promised to TAA.

We are setting out to try to word the various amendments which we are proposing in the Bill in such a way as to allow TAA to enter into the operation of tourer buses and to carry goods and passengers if need be in relation to its airline activities. Ansett can do this; why cannot TAA do the same? We believe that the amendment proposed by the honourable member for Gippsland (Mr Nixon) will place restrictions on TAA. We do not want that to happen. We want TAA to have the opportunity of doing the things which ATI are doing. To prove our sincerity I gave the Opposition notice of the amendment which I propose to move at a later stage which will place the restraint on TAA whereby it cannot become this great monstrous transport operator or the operator of chains and chains of hotels. I do not want to be the Minister of the biggest string of pubs in Australia. What I want to be is the Minister in charge of the airline operating and competing with its competitor on fair and equal terms. That is all we are asking for.

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