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Thursday, 15 October 1964

Senator CANT (Western Australia) . - Senator McKellar started by saying that the Government had taken the correct action on this occasion. He said that if the Deputy Leader of the Australian Country Party in New South Wales and one other Country Party member had voted with the New South Wales Government in support of the legislation that has been passed through the lower House in that State, it would be because the Deputy Leader came from Tamworth and had to hold his seat in Parliament. Earlier, Senator McKellar said the New South Wales Government was the villain of the piece. The honorable senator said the New South Wales Government was creating all the trouble. Then he said that, in order to save his seat, the Deputy Leader of the County Party had to vote with the New South Wales Government. Where do we get with such a statement? In any case, if honorable senators study the replies of the State Premiers to the letter written by the Prime Minister (Sir Robert Menzies), they will find that the coalition that exists between the Liberal Party and the Country Party in this Parliament and other Parliaments throughout Australia is hopelessly split asunder by this action of the Commonwealth Government.

Senator McKellarwent on to ask, in the light of the expenditure by the Commonwealth Government on civil aviation, who could say that the Commonwealth Government should not have control. One could perhaps go along with a statement of that nature if that principle were applied by the Commonwealth Government to other industries in which money is invested. Does the Commonwealth Government intend to take over the universities of Australia because it is providing the bulk of money in that field? Does it intend to take over housing in Australia because it provides the bulk of the money for housing? Of course it does not. Yet the main part of the letter that was forwarded by the Prime Minister to the various Premiers concentrated upon the amount of money that the Commonwealth Government was spending on civil aviation. I am not critical of the amount of money that has been spent by the Department of Civil Aviation on air facilities throughout Australia; I think the Department has done a very good job in that respect, particularly in my own State of Western Australia. But that does not give the Commonwealth Government a licence to enter into the dispute in New South Wales in the manner in which it has. 1 want to make my position perfectly clear. I would give the Commonwealth Government power over civil aviation even if I had to beg, borrow or steal it. I believe that the Commonwealth Government is the only Government that can act in the interests of the whole of the people of Australia in this respect. I repeat that I believe that such power should bc resident in the Commonwealth. I do not object to tha attempt of the Commonwealth Government to take control over interstate and intrastate aviation. What I object to is the method that has been adopted by this Government to move into this field. The Government's action immediately becomes suspect when, as soon as the New South Government attempts to implement a system of rationalisation of intrastate air services in that State - that is the system to which this Government is committed in respect of interstate air services - it shows that it cannot move in quickly enough. The Commonwealth has intruded in the interests of an airline which has been fostered and nurtured by it in every possible way.

During my remarks I shall be critical of Ansett Transport Industries Ltd., but I want it to be clearly understood that I offer no criticism of any individual in the organisation. I believe that this Government- has been caught in a hole because of its expressed policy to maintain a two airline system in Australia. Ansett is no fool; he is a very shrewd businessman. Anybody who has watched his movements in recent years would be aware of that. He knows that this Government is committed to a two airline system, and he is exploiting that situation as much as he possibly can. By being able to exploit the situation he is able to maintain a stranglehold on the activities of this Government in respect of civil aviation. That is the position which the Common? wealth Government has put itself in as a result of its expressed policy.

The movement by the Commonwealth into New South Wales is not in the interests of the whole of the people of Australia but for the purpose of protecting an asset which is a subsidiary of Ansett Transport Industries Ltd. Therefore, that move cannot be supported. If there is any truth in the assertion that the Commonwealth Government spends a great deal of money on civil aviation - that is not a new development; it is something which has been going on for very many years - why does the Commonwealth Government wait until one of its favoured boys is being threatened by a rationalisation scheme in New South Wales before it moves into the intrastate sphere? 1 do not wish to go into the history of the regulations; Senator McKenna has already done that. Let me mention the facts. In New South Wales there are two domestic airlines, one of which operates 70 per cent, of the air services and the other of which operates 30 per cent. The State Government has attempted to divide the routes more evenly. I suspect that the Minister for Civil Aviation has some interest in the subsidies that are paid to these two airlines. In 1963-64 the Ansett subsidiary attracted a subsidy of £29,500 and East-West Airlines a subsidy of £27,400. It is known that Ansett has tried to move in on East-West Airlines on previous occasions by legal means but has failed to do so. Having failed, the Commonwealth Government has come to his assistance.

Why is Trans-Australia Airlines not allowed to move into some of the intrastate operations? That airline operates on the west coast of Tasmania. As we all know, Tasmania is a small State with a small population, and the smallest part of its population is on the west coast.

Senator Wright - It is not confined to the west coast.

Senator CANT - That is the only intrastate service that it operates in Tasmania, lt services the more densely populated areas of Launceston and Hobart in competition with Ansett-A.N.A. At one time T.A.A. had a monopoly in Queensland, but Ansett-A.N.A. was allowed to move in and to get a share of the traffic. But when T.A.A. wanted to move into Western Australia and South Australia, it was prevented from doing so by ministerial action. We are told that that was because the Commonwealth Government was paying a subsidy and it did not want to subsidise two airlines. Perhaps that is in accord with common business practice. Nevertheless, T.A.A. has been prevented from moving into any State other than Queensland and Tasmania to operate an intrastate service. Ansett-A.N.A. has a monopoly in Western Australia, having bought 75 per cent, of the shareholdings of MacRobertson Miller Airlines Ltd., that being the first airline to operate in Australia. Ansett-A.N.A. has a monopoly in South Australia as a result of its purchase of Airlines of South Australia Pty. Ltd. Now Ansett-A.N.A. is seeking to retain, not a monopoly, but a 70 per cent, interest in the intrastate services in New South Wales. Only a short while ago Ansett-A.N.A. was given the right to fly on the Darwin route, in competition with T.A.A. So this favoured treatment continues to be meted out to Ansett. Is it any wonder that, when a move of this nature is made to prevent the New South Wales Government from reallocating air services in that State, there should be public dismay and disquiet and criticism from the various State Governments? In 1963-64 Ansett-A.N.A. and its subsidiary airlines attracted from the Commonwealth Government subsidies totalling £298,439. That is the sum the taxpayers paid to Ansett-A.N.A. and its subsidiaries in the Ansett organisation and it is approximately the amount of taxation that is paid by Ansett Transport Industries. The amount that Ansett pays in taxation he gets back in subsidies.

Of the four replies received to the Prime Minister's letter to the State Premiers, I wish to quote only the reply received from Mr. Bolte, the Victorian Premier. I think it expresses the opinions of the four State Premiers, although the Queensland Premier may not have expressed himself as forcefully as did Mr. Bolte. Nevertheless, he wants to know a little more about the Commonwealth Government's intentions before he will agree to any movement by the Commonwealth towards control of intrastate air services in Queensland. It has been reported in the Press that the Premier of Western Australia, Mr. Brand, is opposed to the Commonwealth's move, but he has not replied to the Prime Minister's letter; nor has Sir Thomas Playford, the Premier of South Australia. Mr. Bolte said -

A complete uniform and integrated system of control of air navigation, by means of uniform Commonwealth and States legislation, has operated for some years. No factor has arisen to suggest the possibility of any disruption of this desirable state of affairs, so far. as the future is concerned.

The Victorian Government does not assent to the suggestion that the Commonwealth possesses constitutional authority for all or any of the new proposals and we reserve the whole of the State's rights to challenge any action which we consider beyond the authority of the Constitution.

I find it difficult to understand why, for no readily apparent reason, you should wish to dislocate the existing integrated system of control of inter and intrastate air navigation.

I wish now to quote from a report which appeared in the Melbourne " Herald " this afternoon. It stales, under the heading Three States Fight Air Control Plan "-

Moves were ma-de by three States today to fight the Federal Government's action in taking control of air services within the States.

Victoria's Attorney-General, Mr. Rylah, flew to Sydney today to see the New South Wales Attorney-General, Mr. Downing.

We do not know what the result of the discussions will be, but it is apparent that although Victoria does not have an extensive intrastate air service, its Liberal Premier is very concerned at the actions of the Commonwealth Government. Mr. Bolte used the expression, " for no apparent reason ", but a reason is apparent to honorable senators on this side of the chamber. We say that the reason is the continual fostering of Ansett Transport Industries by this Government.

In his letter to the State Premiers the Prime Minister said that there would not be any movement without consultation. I ask: What consultation has been held? If there has not been any consultation, when will it be held? In his letter the Prime Minister said - 1 wish to make it clear that in regard to intrastate air transport co-ordination, the Commonwealth would propose to act only after consultation with the State transport authorities.

If no such consultation has yet occurred, when will it occur? As the States will need to co-ordinate other forms of transport with air transport, they are entitled to know what are the final intentions of the Commonwealth Government. If consultations with the Slates are not held, it means that the Prime Minister is not acting in good faith anc/ in accordance with the terms of his letter.

The Commonwealth Government pays subsidies to the airlines. The amount of subsidy paid to MacRobertson Miller Airlines Ltd. in 1963-64 was about £128,000. Some time ago this airline company purchased a Friendship aircraft for use on the Perth to Darwin run. The people of Western Australia were promised that the company would shortly purchase a second Friendship aircraft. In the meantime, MacRobertson Miller Airlines Ltd. has become a subsidiary of Ansett Transport Industries Ltd., which has obtained a controlling interest in its shares. MacRobertson Miller Airlines has purchased a Friendship aircraft from Ansett-A.N.A. and must ensure that it complies with the require ments of the Department of Civil Aviation. I spoke to the engineers working on the aircraft and they advised mc that it will cost more to place it in proper order, as required by the Department of Civil Aviation, than it would cost to purchase a new aircraft. The profits of the company will be reduced accordingly, which means that payment of a greater subsidy will be necessary. The result is that Ansett has been able to unload an aircraft, which is unfit for use on his interstate air services, on to one of his subsidiaries and thus to attract a greater subsidy from the Commonwealth Government. lt may be smart business, but it is not the type of business that should be subsidised by the Commonwealth Government. It is the type of transaction that can take place with any of the subsidiary companies of Ansett Transport Industries Ltd. 1 rose only to express my opposition, not to the ultimate objective of the Commonwealth Government to take control of interstate and intrastate air services, but to the nature and timing of the Government's gazettal of regulations to perform that act. In 1958 the Joint Committee on Constitutional Review recommended that a referendum should be held to achieve the Government's present objective, but the recommendation was not acted upon by the Government. However, immediately one of the airline companies in the Ansett organisation became involved, action could not be taken quickly enough. I shall vote to disallow the regulations.

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