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Wednesday, 18 September 1985
Page: 653

Senator GRIMES (Minister for Community Services)(10.22) —I move:

That the Bill be now read a second time.

I seek leave to incorporate the second reading speech in Hansard.

Leave granted.

The speech read as follows-

The purpose of this Bill is to authorize the Treasurer, on behalf of the Commonwealth, to guarantee borrowings raised by Qantas Airways Limited to finance the purchase of a Boeing 747-300 Extended Upper Deck aircraft.

Acquisition of this aircraft by Qantas will bring to four the number of B747-300 aircraft in Qantas' fleet and will bring Qantas' total fleet in March 1986 when the aircraft is delivered to twenty eight. Qantas' decision to purchase an additional B747-300 aircraft was a result of market growth, and the Company's need to participate fully in that growth. The fourth aircraft will join the Company's existing three 747-300 aircraft on the Sydney to London route, and will enable Qantas to operate a daily B747-300 service on the Kangaroo Route to maximise the marketing impact of the new aircraft type. A number of the Company's competitors already operate, or are planning to introduce, this type of aircraft on the Kangaroo Route, and the fourth aircraft will also allow Qantas the option of introducing upgraded services on other routes.

The Extended Upper Deck aircraft has proved very popular with passengers, particular with business travellers. Like the Company's existing Extended Upper Deck aircraft, the new aircraft will also be powered by the latest generation of fuel efficient Rolls Royce engines. In addition, satisfactory offsets arrangements have been concluded by the Government with both the air frame and engine manufacturers, and these arrangements will provide benefits by way of manufacturing activity and technology transfer to Australia's aircraft manufacturing industry.

The provision of a guarantee for Qantas' payment of, and payment of interest on, amounts borrowed for this new aircraft and related spare parts and equipment will be limited by the Bill to $US115m or its equivalent in other currencies.

The provision of the guarantee does not involve the Government in any cash outlay, but does create a contingent liability for the Commonwealth.

The terms and conditions of Qantas' proposed borrowings for the new aircraft are to be subject to the Treasurer's approval. The Bill also provides for proper security to be given to the Commonwealth over such property as the Treasurer deems satisfactory, and Qantas is to undertake to maintain adequate insurance of the items under the Loan Guarantee, and to protect the security of the Commonwealth against the sale or mortgage of the aircraft.

I commend the Bill.

Debate (on motion by Senator Messner) adjourned.