Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Thursday, 24 May 1973
Page: 2629

Mr FAIRBAIRN (Farrer) - I have much pleasure in supporting the amendment which has been moved by my colleague the honourable member for Gippsland (Mr

Nixon). At the outset I thank the Minister for Transport (Mr Jones) for the way in which he has been prepared to look at the amendments proposed by my colleague and agreed to them where he felt they were reasonable. I think the Minister has set a very good example to his other ministerial colleagues. I only hope they also will operate along those lines. I am grateful that the Government is prepared to look at reasonable amendments and amend the Bill accordingly. The question that is before us is really the nub of the whole matter: Should Trans-Australia Airlines use its superannuation funds in its business? It is the only commercial enterprise of the Commonwealth which does so. We are told that there are more than 30 Commonwealth instrumentalities which do not use staff superannuation.

When my Party was in Government only a short time ago we proposed that these moneys should be paid over to Consolidated Revenue. An amount of $25m was made available in the 1972 Budget. This money was to be paid to TAA so that it would not have to use its superannuation funds. Those funds have built up and have given TAA a definite advantage over any other company, be it in the transport or the hotel field. Most private companies do not use their staff superannuation funds; they invest them in something which is gilt-edged. In fact, I am not certain that a private company is entitled to use superannuation funds in its business. Legally, I do not think it would be able to do so. The superannuation funds do not belong to the company, in actual fact they are owned by the employees. If anything were to happen to a private company which made it bankrupt the superannuation funds would become a first charge because they are owned by the employees. I do not believe that TAA should be allowed to make use of its superannuation funds which are increasing at a rate of between $2m and $3m annually. The funds provide TAA with an unfair advantage.

I am glad to learn that the Minister for Civil Aviation (Mr Charles Jones) has agreed, and I think correctly, that TAA will increase the interest that it pays for the use of those superannuation funds in future. It has been paying an interest rate of 5i per cent. I understand it will now rise to 7 per cent. I believe it was true to say that TAA was receiving an advantage estimated at $500,000 per annum at the previous rate. But the main concession is not the interest rate that is paid by TAA; it is simply that these funds are available for capital expansion programs. This does tend to give TAA an unfair advantage. This matter must be viewed in the light of the fact that the whole program that was agreed to last year by TAA and by Ansett and by the Government included a provision that these superannuation funds would be transferred to the Commonwealth. I have recently looked at the records of the proceedings at that time. I am perfectly certain in my mind that that was part of the agreement which was reached. The agreement had some pluses and some minuses. I think the attitude of the then Government was that a spoonful of sugar made the medicine go down. Well, we gave TAA the sugar and it took it, but it has not taken the medicine. Perhaps I could use another metaphor. The trap was baited, the cheese taken, but the trap was not sprung.

TAA now has many new advantages but it has not had the disadvantages. It has the advantage of operating in hotels, motels and road transport - that is, activities which are closely related to airline operation. TAA is now able to engage in aviation engineering works for outside organisations, Commonwealth contracts, acquisition of shareholdings, aerial work and charter work and will be able to operate in Papua New Guinea after independence. It seems to me that TAA undertook to accept those advantages in a whole package, and part of that package was the transfer of the superannuation fund. It took the plums and left what it did not want. It was the intention of the previous Government that those superannuation funds be transferred to Commonwealth revenue. In fact that was indicated at the time of the last Budget. Therefore, I support the amendment moved by my colleague.

Mr CHARLESJONES (Newcastle)- Minister for Civil Aviation) (4.55) - The honeymoon is temporarily suspended. The Government cannot accept the Opposition's amendment. I have in front of me the correspondence between Sir Frederick Scherger, Sir Donald Anderson and Senator Cotton. Nowhere in that correspondence does it appear that the TransAustralia Airlines' superannuation funds are in any way involved. In fact, in the debate that ensued last year on these matters, if I remember rightly, Sir Reginald Swartz, who then represented the Minister for Civil Aviation in the House of Representatives, made the statement that the funds were not involved as part of the agreement. It might be argued that this was one of the conditions of the agreement. Ansett Transport Industries Ltd tried for years to get the former Government to force TAA to invest its funds in the Commonwealth employees superannuation fund. I am pleased to say that until October of last year the former Government did nothing about it, left the position as it was and ignored the protestations of Sir Reginald Ansett and the other members of the ATI management. So far as 1 am concerned the matter was not and is not part of the deal between TAA, ATI and the former Government. It is a matter about which Ansett Transport Industries Ltd has been protesting for some considerable, time.

The honourable member for Farrer (Mr Fairbairn) said that he is pleased to learn that I have taken action to force TAA to increase its interest rates on the use of superannuation funds. One of the first things I did after being appointed was to hold meetings with the various commissions and boards for which I am responsible, that is, those of TAA, Qantas Airways Ltd, Commonwealth Railways and the Australian National Line. This was one of the things I discussed with Sir Frederick Scherger. I indicated to him then that I thought it was ridiculous that the TAA superannuation fund was being credited with only 5i per cent interest, that TAA was charging itself only 5i per cent. I said I thought that that rate should be increased to a more reasonable and more practical interest rate. I understand that that action has been taken. That was my attitude. The former Government's attitude was to let TAA go along on 5± per cent. 1. considered that that was unreasonable, and think ATT had some reason to protest about it. But let us have a look at the practical position. The honourable member for Farrer said that insurance funds should be invested in gilt-edged securities. Who could be more gilt-edged than the Australian Parliament? We are responsible for the debts of the Australian National Airlines Commission.

Mr Fairbairn - I said this in respect of private companies.

Mr CHARLES JONES - Perfectly true, but TAA is not a private company. The Australian taxpayer is the shareholder in TAA, so the position is that there, could not be a better gilt-edged security for investment than one which has the backing of the Australian Government. I see it on that basis. Now that TAA is being levied a reasonable rate of interest which is comparable with outside interest rates, I do not think there is any real complaint. It is perfectly true that TAA has an advantage in that it has that amount of money that is available for investment for use within the business but it is paying just as much for it as if it were invested in some gilt-edged security or placed in the Commonwealth employees superannuation fund. I might interrupt myself to say that it is not the employees' funds that TAA is playing with; it is its own investment. Its employees' funds are adequately taken care of and are invested. This is TAA's own contribution to the funds that it is using. The fact that the employees' superannuation is totally protected by this means of financing, in my opinion, does not mean that there is an advantage to anyone in particular.

If the Opposition persists with this amendment it will mean that TAA will be at a very distinct disadvantage compared with its competitor. All through the discussions we have had on this Bill we have endeavoured to give TAA and ATI equal trading rights. This is a case where equal trading rights will not apply, because on my information it will cost TAA about an additional $600,000. Already TAA's contributions to superannuation are more generous and widespread than those of its competitor. I do not want to quote a figure because I cannot give a factual figure, but I can say that it costs TAA about $1.2m more for superannuation than it costs Ansett Transport Industries. So already TAA is carrying that additional burden or cost in excess of that carried by its competitor. We are not complaining about that. The Government is prepared to accept that situation.

Personally I would like to see the employees of ATI in an identical position with that of employees of TAA. TAA and ATI are 2 instrumentalities, one private and one Government-operated. In line with the terms that we are trying to work out in this Bill the employees should be in receipt of identical wages and conditions. In most respects they are in receipt of identical wages and conditions, but TAA employees receive an annual superannuation contribution that is about $1.2m in excess of what ATI pays its employees. This is something that ATI can probably have a look at. Sir Reginald Ansett can have a look at improving the conditions of his own employees so that they enjoy conditions at least comparable with those afforded by TAA. If Sir Reginald or the board of ATI is not prepared to do that, it is a matter which the unions should be having a look at to make sure that these 2 airline operators operate on identical conditions not only from a governmental point of view but from the point of view of wages and conditions.

These are important things which should be taken into consideration when the Opposition persists with this amendment. I do not think it is fair and reasonable, and I emphasise the major point that for 27 years the present system has prevailed, and now at this late hour Ansett Transport Industries is pressing the claim that what has been put forward by the Opposition is part of the Agreement. I tabled letters in the House yesterday to show what had transpired and so the true position would be on record. I have been able to show that the present position should be allowed to remain as is, having in mind the very distinct disadvantage that TAA suffers at the present time, which I am not complaining about - and I emphasise that point - in competition with ATT. I ask the Opposition to accept my assurances that the interest rates which are paid into the superannuation funds will be similar to those I mentioned earlier when I said that the Treasurer would charge interest on moneys lent to TAA at rates comparable with the interest rates paid by a first-class borrower. As far as I am concerned the same rates will apply to the superannuation fund. The superannuation fund will be credited with a payment by way of interest from the general funds of TAA, if you can separate the funds, which you cannot. But if it has to be a book entry, that is what we are prepared to do. The operational funds of TAA will be charged a more or less commercial rate of interest and interest will be added to the superannuation funds. I think it is a fair and reasonable proposition that still allows TAA the right to use these funds in the operation of its business. If the funds are tied up in the Commonwealth superannuation fund TAA will have no access to them. I understand that some of the superannuation funds of TAA's competitor are invested in various insurance companies which run superannuation funds. It can borrow against those funds, whereas TAA would have to go through the normal Government borrowing and lending procedures to get money from the Treasury. I come back to the point that its competitor has not only a $1.2m advantage but also the advantage of being able to borrow against the superannuation policies it has with private insurance companies.

Suggest corrections