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Wednesday, 13 November 1974
Page: 2311

Senator WRIEDT (Tasmania) (Minister for Agriculture) - I move:

That the Bill be now read a second time.

I seek leave to have the second reading speech incorporated.

The DEPUTY PRESIDENT (Senator Webster)- Is leave granted? There being no objection, leave is granted. (The document read as follows)-

This Bill seeks the approval of Parliament to borrowings by Australia not exceeding the equivalent of $US19m ($A14.5m) to assist the Australian National Airlines Commission (TAA) in financing the purchase of its fifth and sixth Boeing 727 jet aircraft, spare parts and related equipment at an estimated cost of approximately $US24.5m ($A 18.72m). The fifth aircraft is due to be delivered this month and the sixth in April 1974.

This is the eleventh occasion on which Parliament has been asked to approve overseas borrowings on behalf of TAA. The last occasion was the Loans (Australian National Airlines Commission) Act 1972 which approved borrowings of up to $US34m for the purchase of the first 4 Boeing 727 aircraft. On some previous occasions when legislation has been introduced for borrowings to assist in the purchase of new aircraft by TAA the loan agreements have already been signed, but have usually been conditional on appropriate legislative authority being given later. On this occasion, borrowing arrangements for the purchase of the aircraft have not been finalised at this stage. These borrowings on behalf of TAA are specialised financing arrangements related to the particular requirements of the airline for the purchase of aircraft overseas and are in a different category from other borrowings by Australia overseas. Normally, a central element in the financing arrangements is the participation in them by the Export-Import Bank of the United States, which specialises in providing credit on terms tailored to assist in financing the purchase of such items of capital equipment as Boeing 727 aircraft. On this occasion, however, Export-Import Bank Finance is not available as firm orders for these aircraft were placed before it was decided recently to revert to making use of overseas sources of finance for the purchase of capital equipment by Australian Government transport authorities. Accordingly, in the first instance, offers will be sought for these funds from overseas sources with established connections with the Australian Government.

Other arrangements for the loans will be similar to those approved by Parliament for previous loans for Qantas and TAA in recent years. In particular, the Australian Government will be the borrower in the first place, and the proceeds will be made available to TAA on terms and conditions to be determined by the Treasurer pursuant to clause 7 of the Bill. These terms and conditions will be identical with those under which Australia itself borrows the money. The airline will be required to meet all charges under the loan agreements. Consequently, the Australian Government will, as usual, assume the function of an intermediary in these arrangements. The detailed terms and conditions of each of the loans to be arranged will be subject to approval by the Loan Council. The amount to be borrowed is included in the Australian Government's loan program for 1974-75 approved by the Loan Council in June 1974. 1 commend the Bill to honourable senators.

Debate (on motion by Senator Withers) adjourned.

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