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Tuesday, 30 September 1958

Mr MAKIN (Bonython) .- It is astounding to hear honorable gentlemen on the Government side of the House profess to be devotees of the principle of free enterprise, because the legislation we are now considering is certainly a denial of that principle. I feel that the honorable member for St. George (Mr. Graham) certainly did nothing to clarify the ideas on the Government side regarding the affairs of this country's airlines and the application of the principle of free enterprise to the operations of the airlines. Not as a result of the greatest stretch of imagination could it be said that the major private airline in Australia - Ansett-A.N.A. - desires to be faced with the competition inherent in free enterprise. The fact is that any privately owned organization which is likely to be a competitor with this particular company will ultimately be absorbed by Ansett-A.N.A.

The principle of rationalization of airline services which motivates this legislation is also a denial of the principle of free enterprise, and the antithesis of free competition. Rationalization is designed, according to the Government, to conserve aircraft and to avoid uneconomic duplication of services. So honorable gentlemen opposite cannot claim to be the supporters of free enterprise as they have sought to do to-night. 1 suppose we have not had a more important item of legislation before us than the present measure other than, possibly, the banking legislation, which was before us earlier in the session. The present legislation certainly claims the earnest attention of every member of this House who seeks to serve the interests of this country and wants to see efficiency in the vital field of air communications. The Government's proposal is to purchase eight Lockheed Electra aircraft, manufactured by the American Lockheed company, six 800- series Viscounts and eighteen Fokker Friendships, on behalf of the government airlines, T.A.A. and Qantas, and the private airline Ansett-A.N.A. This will involve about £18,000,000 of the taxpayers' money.

I find also that T.A.A. is to be required to accept two Electra aircraft. Two of them are to go to Ansett-A.N.A. and five will be acquired by the Qantas organization, but as Qantas will be able to take any surplus aircraft capacity from T.E.A.L., the Qantas organization may be satisfied with four Electras. I should like to have an explanation from the Minister concerning the position of T.A.A. and the other airlines in relation to these orders. We remember that Mr. Ansett of Ansett-A.N.A. was the first to suggest that Electra aircraft should be used for Australian domestic airlines. The T.A.A. experts believed that the Caravelle aircraft were better machines for their purposes. The Minister indicated in Perth that he was unwilling to agree to the proposals that had been made by both Mr. Ansett and the T.A.A. organization. Then Mr. Ansett, hustling man as he is, went post-haste to Perth with a view to straightening up the Minister. He wanted to know why the Minister had rejected the suggestion that his organization should purchase Electras. Something transpired, but the Minister did not make a public statement about the nature of the consultations or the results of them.

To-night, however, we have the legislation which, in 'itself, is the answer to the query about the Minister's decision in Perth. Virtually what was desired by Mr. Ansett is now contained in this legislation, and I shall explain how it will all work out. The Minister has indicated that certain consultations have taken place with the airlines concerning their obligations. That statement is in the Minister's secondreading speech. I should like to know whether an equal opportunity was given for T.A.A. to accept or reject the Lockheed Electras in place of the Caravelles which it wanted originally. I feel that there has been no consultation concerning the willingness or unwillingness of T.A.A. to accept those aircraft. This is the first time in the history of T.A.A. that that organization has been required to accept an aircraft which was not recommended by its experts.

Two Electras desired by Mr. Ansett of Ansett-A.N.A. will be among the first delivered. Ansett-A.N.A. will have an opportunity to get in first with these aircraft. The Electras for T.A.A. will possibly be made available a good many months later and, therefore, Mr. Ansett will be given an opportunity to forestall T.A.A. with these faster aircraft. I have no doubt that when the aircraft are available for T.A.A.. ultimately it will be proposed that those two Electras should* be added to the Ansett-A.N.A. fleet. Thus, Mr. Ansett will secure the four Electras which he wanted originally and which the Minister was unwilling to give him. Time will tell, but I believe that what I have predicted will take place. T.A.A. will then be told that it can purchase the Caravelles it wanted or any other aircraft that suits its purpose. Those orders will be twelve to eighteen months behind the aircraft that are to be introduced by Ansett-A.N.A. The result of this will be well understood.

We could have advanced the British aircraft industry and kept the business in the sterling area by placing our orders there, but instead of doing so we have diverted our attention to the American aircraft industry. We must remember that attention must be given also to replacement and maintenance, and that will call for much more financial aid than has been provided in this legislation. The expenditure envisaged here will not be the last. Here we find that an amount of 3,000,000 dollars is to be secured from the Morgan banking authorities of New York and that another amount of 13,000,000 dollars is to be secured for the needs of Qantas. I think that the securing of that finance will place a serious strain upon the dollar credits which are available to this country and which are needed for other commitments.

Furthermore, I 'feel that we have failed to give to the British aircraft industry support which we should have given to it. The Government is to guarantee or underwrite loan accommodation for the purchase of aircraft by Ansett-A.N.A. It is remarkable that we have not an opportunity of knowing the details of the financial position of this organization. We are unable to assess the ability of these people to meet their obligations. I feel that, at least, we should have had as much information about Ansett-A.N.A. as we possess about our own organization, T.A.A.

I have in my hand a brochure which has been published by T.A.A. and which provides a clear picture, of the ability of T.A.A. to add to its fleet of aircraft and meet the essential commitments involved in such action.

Mr Curtin - Did A.N.A. not repudiate once?

Mr MAKIN - That is very true. "I believe that A.N.A. was unable to pay certain landing charges. These charges have now been included in the general loan that has been accepted by A.N.A. as a part of its obligation.

Mr Failes - That is not repudiation.

Mr MAKIN - No. But the company has not fulfilled its obligation, all the same. Surely we require some further information about an organization which, in the past, has been unable to meet its commitments as mentioned by the honorable member for Kingsford-Smith. The honorable member for Lawson (Mr. Failes) does not deny this.

In regard to the present proposal, I feel that the Government has done all that it can to arrest the progress of T.A.A. Some months ago there was an effort to cause further .embarrassment by placing a duty of 6d. per gallon upon the kerosene fuel used by the Viscount aircraft of T.A.A. Furthermore, it was required that certain airmail business should be transferred to Ansett-A.N.A. In this legislation we find that T.A.A. is to be required to limit its aircraft to handling only half the demand for passenger or freight services. How can there be free enterprise or true competition under those conditions?

If a service can be conducted more efficiently by a government organization, surely that organization has the right to enjoy the opportunity of affording the Australian .nation the best service that it is capable of giving. I feel that to support the operations of Ansett-A.N.A. in this way is to deny the nation the , opportunity of having the most efficient service possible.

According to the 'balance-sheet of T.A.A., 5 per cent, of its profit is paid to the Government in return for the financial accommodation afforded by the Government. The most recent amount paid to the Treasury in this connexion was the substantial sum of £218,500 - almost a quarter of a million pounds. That figure represents 5 per cent, on a capital of £4,370,000. Another £50,000 was transferred to the general reserve and £14,202 was carried forward to the profit and loss appropriation account, a total of £282,702, which is an indication of the favorable position of the government . airline known as T.A.A.

I feel that this airline has afforded the

Australian public a 'more efficient service than rUle private airline. Only I had the advantage of recognizing how extremely careful are T.A.A. personnel in checking the airworthiness of their aircraft. After I had left Adelaide airport in a T.A.A. aircraft, 'the pilot felt -that some check 'should be made upon a part of the mechanism of the plane and he returned for that check to be made. We were soon airborne again and I commend the pilot and the organization of T.A.A. upon .the care in ensuring the .airworthiness of .the aircraft and the safety of the passengers that it carried. That is the kind of service provided by an organization whose first consideration is not the profit motive, but a desire to give the best service with the maximum of efficiency and safety.

I feel, therefore, that we are justified in asking the -Minister for a fuller explanation of this legislation and the reasons why it was thought necessary to bring it down at this time. As the Deputy Leader of the Opposition (Mr. Calwell) has said, the history of private airlines in this country does not lead to a belief that the people are best served by that kind of enterprise. While I have no objection to private enterprise being given an opportunity to justify itself in this field, I do not believe it is desirable that an organization working on behalf of the people of Australia should have its progress arrested by being compelled to share the business available to it with another organization which, we feel, is not so competent and cannot render as good a service.

I believe that it is desirable to have all our air services under the one supervision. If this were done, fewer kinds of aircraft would need to be employed, and considerable savings could be effected thereby in maintenance costs and in the provision of spare parts and replacements. In addition, the people would be assured that they were receiving the best possible service at the least- possible expense. It seems to me very strange that the government airline, T.A.A., has to secure the agreement of Ansett-A.N.A. before it can make changes in its passenger fares .or freight rates. .If true competition were allowed to operate, there would be no such condition, and each airline would individually endeavour to give the .best service at the lowest .cost. The . result of the .present situation is that we may be paying more for . fares and freight rates than we really should pay, because we have to maintain two separate organizations.

For these reasons, I suggest to honorable members that we are justified in asking the Government to 'establish on an even firmer basis the organization of T.A.A. that already has proved itself -so efficient, and to enable it to obtain the machines that it -requires to bring its services up to date.

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

Mr.-FAILES '(Lawson) E9<45].- I support this Airlines Equipment Bill and the associated bills.

Mr Curtin - Why?

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