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Tuesday, 22 May 1973
Page: 2387

Mr FAIRBAIRN (Farrer) - The Opposition opposes this Bill. I move:

That all words after 'That' be omitted with a view to inserting the following words in place thereof: This House declines to give the Bill a second reading because it does not give effect to the statement of intention of the previous Government but would be used as a vehicle to implement the whole of the socialistic policy of the present Government.'.

I believe that the Minister for Civil Aviation (Mr Charles Jones) in his second reading speech attempted to mislead the House, as I will proceed to show. In his second reading speech he quoted from a speech made on 24 October 1972 by Sir Reginald Swartz, who was representing in the House of Representatives Senator Cotton, then Minister for Civil Aviation. Sir Reginald said:

It is the intention of this Government, therefore, to introduce in the first sittings of the new Parliament a Bill amending the Australian National Airlines Act so that there is no question about TransAustralia Airlines having the powers enabling it to engage in activities closely related to airline operation and to give effect to the Government's decisions.

I stress that what was said by Sir Reginald Swartz, representing Senator Cotton, was 'in activities closely related to airline operation'.

The Minister for Transport and Minister for Civil Aviation went on to say that the additional powers that the previous Government was contemplating giving to TransAustralia Airlines were, firstly, in aviation engineering work for outside organisations; secondly, in Commonwealth contracts; thirdly, in the establishment and operation of hotels and other kinds of accommodation; fourthly, in the establishment and operation of road transport services; fifthly, iri the acquisition of shareholdings; sixthly, in the field of aerial work and charter operations; and, seventhly, in operations in Papua New Guinea after independence. The Minister then went on to make this quite extraordinary statement:

The amendment of the Australian National Airlines Act to widen TAA's powers is one matter concerning which this Government is in complete agreement with the previous Government. It therefore has no hesitation in bringing forward this Bill, which is designed to give TAA the additional powers mentioned so that it will be in a fair and equitable position compared with Ansett Transport Industries Ltd in respect of its operations under the 2-airline policy.

Having made that broad, sweeping and, I believe, quite inaccurate statement, he then went on to say that he need not go any further into the Bill in detail. He left it to us to study the Bill and to find out for ourselves that it was quite inaccurate to say that he was simply picking up the proposals of the previous Government.

Let me remind the House that the Minister carefully avoided stressing any reference to the references by Senator Cotton and Sir Reginald Swartz to 'activities closely related to airline operation', and 'for the convenience of its passengers' in mentioning road transport and hotels. The fact is that the Bill goes far beyond anything contemplated by the previous Government. In brief, the Bill would convert TAA into a transport and hotel commission and proposes that TAA would achieve its objectives by unfair and unequal competition.

Let me detail the advantages this Bill seeks to give to TAA. Firstly, if it sees fit, the Government may make available unlimited funds on whatever terms it considers appropriate, and TAA will be immune from numerous charges, rates and State and municipal taxes to which its competitors in many fields of commerce are subjected. It was a fundamental part of the previous Government's administration of the 2-airline policy that the 2 airlines should, as far as practicable, have comparable cost structures in order to be able to compete on equal terms. This required, for example, that the government airline should be subjected to normal Commonwealth and State tax laws, that its borrowings should be at commercial rates and that it should have a dividend target and be expected to operate profitably. In addition, the Commonwealth, in the airlines agreements, understood that it would not exercise any of its powers under or by virtue of an Act to discriminate against the private enterprise airline.

The Australian National Airlines Bill 1973 indicates a determination to ignore these principles and to provide a completely new system of competition which is different from that contemplated by the previous Government when it agreed to extend TAA's competence to engage in activities incidental to its airline operations. For example, the Bill implements completely the Labor Party platform which provides that the Commonwealth shall 'compete actively with private enterprise in interstate transport by sea, air or road*. The Bill also is stamped with the clear intention that 'actively' means with the full resources of the Commonwealth and without even elementary protections to ensure that the competition will be fair.

Let me give the House some examples of this. I mention, firstly, clause 13 of the Bill which relates to borrowings by TAA. It states that the Treasurer may lend to TAA out of moneys appropriated by Parliament any amount which the Minister certifies is in his opinion necessary for the exercise of TAA's powers - I stress the following words - at such rates and on such conditions as he determines. This would permit loans to TransAustralia Airlines interest-free or at noncommercial interest rates which it could then use to establish companies, acquire shares on the Stock Exchange and enter into partnerships with other organisations. In each of these situations, TAA would be competing with other private enterprise organisations, and therefore a minimum safeguard must be the requirement that advances to TAA for these purposes shall bear interest at a rate not less than the rate prevailing in the commercial market place.

Secondly, we come to the use of TAA staff superannuation funds. Since its inception, TAA has used its superannuation provisions in the business. These provisions or funds now total about $29m and are increasing at the rate of several million dollars a year. Access to these provisions has constituted an increasingly unfair advantage. There is every indication that the present Government proposes to repudiate action set in train by the previous Government to withdraw these funds. Because of their magnitude and the fact that TAA is to be authorised to compete with private enterprise undertakings in many new fields, it is vital to record the recent history of these funds. The former Treasurer, the honourable member for Bruce (Mr Snedden) announced in his Budget Speech of 15 August 1972 an appropriation of $25m. This was to assist TAA to introduce new accounting arrangements for superannuation. He said that there would be an offsetting receipt of $21m from the Australian Airlines Commission. That is, the funds would be held in trust by the Commonwealth Superannuation Board on behalf of the Commission's employees. Senator Cotton, as former Minister for Civil Aviation, reaffirmed this in his civil aviation policy speech to the Senate on 29 August 1972. The use of superannuation funds in the business is quite contrary to normal practice for a commercial enterprise of the Commonwealth. We proposed changes which would have meant that TAA's superannuation arrangements would have been similar to those adopted by over 30 other Commonwealth instrumentalities. At present, TAA gets an advantage of at least $500,000 a year from the use of its superannuation funds.

Let me deal now with TAAs liability to pay rates, taxes and charges. The original Australian National Airlines Act of 1945 expressly exempted TAA from income tax. This was amended by the Menzies Government in 1952 to require TAA to pay all Commonwealth rates, taxes and charges and such other rates, taxes or charges as the minister specified. As it is believed that past ministers have not required TAA to pay some State taxes such as stamp duty and payroll tax, .the Commission is already in a unfair competitive position. The new section 37 appears to extend greatly TAA's immunity from tax. Unless prescribed, presumably by regulations, TAA will not be subject to taxation under any laws of a State or a Territory. Thus it will avoid stamp duty and will be exempt from municipal rates, the road transport ton-mile tax and the very substantial liquor licence payable by its competitors.

What other advantages will TAA obtain from this Bill? The provisions of the Bill propose to vest TAA with wide powers to engage in intrastate transport; that is, air and land, aerial services - that is, general aviation - hotels and other establishments or enterprises providing accommodation, recreation and entertainment or other services or facilities as incidental to the primary functions of the Commission as set out in section 19 (1) (a). Each of the proposed new sections relating to the vesting of TAA with these functions includes a remarkable further proposed subsection which invokes placitum (XX) of section 51 of the Constitution. That relates to the corporation power. It is invoked on a basis which is clearly intended to give TAA the widest possible powers to operate hotels, accommodation services, etc., permissible under the Constitution. If this were not the intention, there is no reason to include these additional provisions. In each case it would fully meet the intention of the previous Government if TAA were permitted to engage in each of these fields, only to the extent that it was clearly incidental to the operation of airline services.

The previous Government agreed to support references from State parliaments on the matter of air transport and to adopt those references by appropriate legislative action. The proposed amendment to section 19a and proposed new section 19b purports to do this and to that extent are clearly unobjectionable from the point of view of State governments since positive initiative is required by State governments before their rights can be affected. State rights are further protected by provisions inserted by the previous Government in section 19a, which required the consent in writing of the Premier of a State to the establishment and operation of intrastate airline services and also permitted the Premier to revoke this consent. Having inserted these provisions, that would have been sufficient but a new and remarkable section 19c is to be inserted. It has the clear and blatant intent of making a reference of powers by State governments totally unnecessary and also, if it withstands legal challenge, will make it quite unnecessary for the Commonwealth to hold a transport referendum as contemplated by the Labor Party.

Proposed section 19c not only invokes the Commonwealth's incidental powers but in paragraph (b) of sub-section (2) also purports to vest TAA with unlimited powers to engage in intrastate transport both on air and land. It states:

.   . to the extent that those powers are capable of being conferred on the Commission in the exercise of the power of the Parliament to make laws under paragraph (xx.) of section 51 of the Constitution.

As the present Government has argued for a wide interpretation of the corporation power, it is a gross deception not to have invited Parliament's attention to the fact that provisions were included in the Bill which seek to make vast inroads into existing areas of State sovereignty without the approval of State governments. For example, by virtue of this section, a reference of power is not necessary before TAA engages in purely intrastate air and road services, and it can do so without the permission of the Premier. This makes a mockery of the safeguards of State interests inserted in section 19a by the previous Government. Furthermore,. TAA apparently can engage in such road and air activities with complete immunity from road taxes, licence fees and other charges payable by its competitors. It must be suspected that an intention of this provision is to test, for other purposes unconnected with TAA but under the cloak of TAA's respectability established during the previous administration, the scope of the corporation power of the Commonwealth. Trans Australia Airlines will also have the right to operate bus services in Papua New Guinea, even though it has never been invited to do so.

Under proposed new section 19j, TAA may do all things necessary or convenient to be done in connection with or as incidental to the performance of its functions. This provision is wide enough, even if it is not presently contemplated, to permit TAA to acquire shares in Ansett Transport Industries up to $250,000, without ministerial approval and to any extent with the Minister's approval but without further reference to Parliament. This is contained in clause 9, amending section 21 (2). Under this clause TAA clearly can obtain control by the purchase of shares of any or, for that matter, all major road transport operators and any hotel or accommodation chain which provides accommodation for air or road passengers -that is all hotels and motels. Such a provision clearly goes far beyond anything contemplated by the previous Government. What I am saying is that while the Government has the power in this House to introduce most or all of these measures giving TAA the advantage of unfair and unequalgain the Minister should not have attempted to make out that it is merely picking up the previous Government's proposals.

The whole nub of the argument is this: Do the Minister and the chairman of TAA seek the powers that are given to them in this Bill? The Minister says: 'No'. In answer to a recent question on this matter which appears in Hansard the Minister said:

All that we want is TAA to have a sufficient number of hotels as part of its business to assist it in the tourist expansion program which it is undertaking.

He went on later to say:

AH that is proposed is what my predecessor Senator Cotton promised TAA, that is, that it would be permitted to operate hotels.

The Minister concluded his answer by saying:

So all that I am doing is implementing a Liberal Party promise.

Sir FrederickScherger, as Chairman of TAA, says that he has no intention of turning TAA into a nationalising vehicle for all forms of transport. So if these men mean what they say -and one accepts that they do -they have no need to seek the additional powers sought in this Bill which could allow some future Labor government to go very much further than these 2 gentlemen propose going. In this case the Government should have no difficulty in agreeing to the proposed amendments which will be brought up in this House by my colleague the honourable member for Gippsland (Mr Nixon) and in the Senate and which will ensure that a future government will not go further than previous governments had proposed.

Alternatively the present Government could give us a firm commitment by giving forthright answers to a number of questions. I hope that the Minister will give us these answers because they are important not only here but also when this Bill is discussed in the Senate as it will be in the near future. Firstly, does the Minister agree that TAA should be subject to the same taxation charges as its competitors? Secondly, does the Government intend to allow Ansett Transport Industries to have equal access to government business? Thirdly, what limits are being set on TAA to prevent it from obtaining a monopoly in the hotel field or to prevent unfair competition? Fourthly, will TAA be required to maintain a commercial dividend rate? Fifthly, will the staff superannuation funds be used at all or will they be used at less than the commercial interest rate? Sixthly, will TAA be able to operate internationally, for example in Papua New Guinea after independence, and if so will TAA be immune from taxation in Papua New Guinea under this Bill and did the Papua New Guinea Government agree to this? Seventhly, will TAA separate its accounts into airline or non-airline activities as ATI is now forced to do? Eighthly, will the Treasurer give an assurance that rates on money borrowed by TAA will be comparable to market interest rates? Ninthly, does the Minister propose to allow TAA to operate interstate road transport of goods and passengers without the authority of the States? Tenthly, is it proposed that TAA will engage in aircraft crop dusting or charter services in competition with the hundreds of light aircraft operators? Lastly, what is meant by 'recreation and entertainment' which this Bill allows TAA to engage in

One could speak at great length on this matter. However, there are a number of people from this side of the House in particular -I believe that some 10 honourable members want to speak on this Bill -and we have been told that the debate has been limited to 3 hours. In view of this I will not speak any longer. Not only do 10 members from this side wish to speak but also we have a good many amendments which we would like to move. However, obviously the Opposition will have no chance of moving all of these amendments and considering and discussing them fully, so we feel that we must oppose the Bill. I believe that this Bill should be resisted by all non-socialists with all the strength at their commend.

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