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Thursday, 13 April 1972
Page: 1106

Senator RAE (Tasmania) - Consideration has been given by the Government to the terms of the original motion and to the amendments sought to it by Senator Murphy. I have conferred with the Minister for Civil Aviation (Senator Cotion), who has already spoken during this debate, about the proposed amendments and he has indicated to me that it is the Government's attitude that there is merit in some of the amendments proposed by Senator Murphy but that the Government is not persuaded that the remainder warrant an alteration to the original terms of the motion and therefore does not propose to support them. It boils down to this: The changes that Senator Byrne has indicated will be made by Senator Gair at a later stage will be supported by the Government. They include the addition to paragraph 1 (a) of the motion of the words Ansett Transport Industries' so that the ascertainment will be of the degree of nonAustralian ownership, whether direct or indirect, of the issued share capital of not only Thomas Nationwide Transport but also Ansett Transport Industries. The Government will also support the proposal to include paragraph 7 of Senator Murphy's circulated amendment.

The PRESIDENT - Order! Is the honourable senator speaking on behalf of the Government?

Senator RAE - I have been authorised to do so, Sir.

The PRESIDENT - I just wanted to make that clear.

Senator RAE - I indicated that the Minister for Civil Aviation had already spoken in the debate and was therefore not in a position to speak again., I also indicated that after a conference with, him I had been authorised to say what was the Government's attitude.

The PRESIDENT - I was concerned about the use of the word 'authorised'.

Senator Cotton - I asked Senator Rae to speak, Mr President, because I cannot speak again in the debate.

The PRESIDENT - I am just trying to clear up the position for the benefit of honourable senators.

Senator RAE - I thank Senator Cotton for the interjection in which he confirmed that I was so authorised. As I have said support will be forthcoming also for the inclusion of Senator Murphy's seventh proposition, which reads:

The foregoing provisions of this resolution shall have effect notwithstanding anything to the contrary contained in the Standing Orders or in any previous resolution of the Senate.

Having indicated that, I wish to make my own comments - I emphasise that they will be my own comments - in relation to this matter. The demarcation line has been drawn. From now on I speak wholly and solely for myself. First of all, I wish to express my general support for action to be taken in accordance with the general terms of the proposal. I think that there is general but not unanimous agreement within this chamber on this. There are 2 important aspects to this proposal. One is the particular interest that has been shown in this attempted takeover. Various speakers have put forward the reasons why they believe it would or would not be in the national interest and why they believe It warrants investigation. I do not propose to canvass those matters again. I think they have been canvassed sufficiently already. Although I do not necessarily agree with everything said by either Senator Gair or any other speaker, I think enough has been said at the moment about the proposed takeover.

The other aspect which concerns me is the manner in which this market operation has taken place. I tried to ascertain from Senator Murphy what he meant by 'the manner of the proposed takeover' in paragraph (d) of his amendments. He seemed to indicate that he was wondering about what might happen to the structure of Thomas Nationwide Transport in the event of the takeover proceeding and of some changes eventually coming about as a result of the takeover. I was not able to elicit from him any real meaning to be given to those words which went beyond the types of matters which would be investigated in any event under the other paragraphs of the reference.

Senator Murphy - May I indicate that paragraph (a) is dealing really with the non-Australian interest. There might even be some concern as to what is happening right now with regard to the Australian interests or what is a prospect of happening. That is one element which is not dealt with.

Senator RAE - I do not understand how that comes within Senator Murphy's proposal as to the manner of the proposed takeover. That is why, by way of interjection, I tried to obtain some elucidation from him. Perhaps I can talk about 'manner' in a different sense or not limit myself to the sense in which Senator Murphy mentioned it. I would understand 'manner of takeover' to mean the market operations and the general transactions which are involved as a necessary part of what will result in a takeover. I find some considerable cause for public disquiet in relation to a number of those things. I make no concluded judgments whatsoever. But if one looks at what appears from the Press reports to have taken place one finds that a number of steps taken in relation to this matter would warrant an investigation by an investigatory, body, if one were available in Australia to make such an investigation.

Senator Murphy - I thought that there was one.

Senator RAE - Just a moment. In the public interest it may well be that such an investigation should be conducted in public. There are some bodies such as the Commissioner of Corporate Affairs in one State or the Companies Registrar in another State, or an inspector under the Companies Acts in the States, which could conduct such an investigation under State legislation, but at the moment there is no Commonwealth body which is able to conduct that inquiry. Senator Murphy interjected a moment ago that he thought that there was such a body. I assume he was referring to the Senate Select Committee on Securities and Exchange. I would mention to him that he has expressed an interest on a number of occasions in that Committee reporting at the earliest possible date. In a statement to the Senate in

December last the Commitee indicated that in its view matters were still continuing that warranted some investigation but that in the interests of producing a report at the earliest possible time it did not intend to conduct any further inquiry into any new matter unless specifically directed to do so by the Senate, which would involve the consideration that any such further investigation would inevitably delay the production of a report by the Committee.

Senator Murphy - We would not want to do anything which would have that result.

Senator RAE - I thank Senator Murphy for making that clear. I do believe that there are matters of public concern as to the conduct of the capital markets in Australia - the conduct of general stock market practice - which may very well warrant investigation. I think we should make it clear as to whether it is intended that this Committee ought to include those matters in its investigation because by leaving in the terms of reference such things as 'matters incidental thereto' it may well be that the Committee will have the power to examine them. I think the Senate should indicate whether it intends the Committee to look into the market operations side as well as into the public interest side. I am not saying that there is not a public interest aspect in market operations because there is. But the debate so far has been associated with the general public interest rather than being directed in any way to the question of market operation. I think the Committee would be advantaged by having some indication from the Senate on what it requires of the Committee in this respect. I think that if the Senate requires a quick investigation and a report within 28 days, obviously the Committee will not have enough time to conduct fully both types of inquiry. In fact, I would have some considerable doubt whether it would have time to conduct the first type of inquiry, namely, that which is clearly stated within the proposed terms of reference.

Senator Gair - The proposed amendment mentions 'matters incidental thereto'.

Senator RAE - Yes, I know. I mentioned that and say I think we should make it clear to the Committee whether under 'matters incidental thereto' we, as a Senate, intend the Committee to investigate the market operation side.

Senator Wright - The main subject matter of inquiry is the proposed takeover of Ansett by TNT. I suggest that includes for consideration the aspect to which the honourable senator is referring.

Senator RAE - Senator Wright has expressed his view that this matter should be raised. I believe it is important that this whole matter should be clarified during this debate. I do not raise it because I wish to create difficulties for anybody in the consideration of this question. Let me mention some of the things I have in mind that this Committee could investigate. I very deliberately omit a number of matters which I regard to be of importance. If Ae Committee concerned itself with all of these matters the inquiry could take some time. It could investigate the circumstances surrounding the $6m share placement by TNT which was an integral part of the first part of this undertaking. Should the investigation by this Committee of the takeover to which we are referring include the initial steps? I refer to the purchase by TNT of 23i per cent of the issued share capital of ATI? It may be that that placement which was part of the means by which the original purchase was able to take place is a matter which would come within the Committee's terms of reference; it may be outside them. Again, I think this needs to be specifically spelled out.

Senator Gair - It is more than incidental thereto, is it not?

Senator RAE - I would think that it is, but I think that this sort of thing needs to be spelled out for the. benefit of the Committee since it has to do a job within 28 days. That is a short period in which to do it, especially when the investigation of each one of these matters could require a considerable amount of time. If the matter to which I have referred is to be investigated by the Committee, let that be made clear. Another matter that I wonder about from the point of view of stock market practice is the reports of the private briefings of limited numbers of shareholders by the directors of TNT. Again, is that a matter into which the Committee should make inquiries and make comment? Another matter concerns the circumstances surrounding, and the nature of, the public statements made by the directors of both companies which apparently were intended to affect the market value of the shares of each of those companies and which were, made publicly to the Press and not to the stock exchanges. Those are matters of very considerable importance in relation to the manner - I use my meaning of the word manner' - in which this takeover has been effected and the defence to the takeover has been effected. Are they intended to be included? Are the actions which were taken in possible market support of the shares of both of those companies intended to be included in the matters incidental to the terms of reference of the Committee?

Suggestions have been made in the Press - I do nothing more than simply refer to what has been said in the Press - that there has been, or was likely to be, market support engaged in by those assisting and those participating in either trying to take over or trying to defend the takeover. Are they matters which are intended to be included in the terms of reference? If they are not, then I think the Senate's view in relation to those matters should be made reasonably clear to the Committee. I have mentioned only a few of a very considerable number of matters which conceivably could be of concern to the Senate and which could be investigated by the, Committee if lt took a liberal view of its terms of reference in relation to matters incidental to the general question of the takeover.

Will the Committee be concerned to find out in detail the. financial structure of TNT not only as at present but also in the future? Is this important as to exactly how the takeover is to be financed? In view of our 2-airline policy and in view of the extent to which the Government is involved already in the support of Ansett Transport Industries, it may be that if the future structure of that company and TNT is to be something which is supported by, shall I say, paper issue, only rather than hard cash we may find ourselves in a situation where the Government has to come to the rescue. I do not think I need dwell upon the problems that arose for Australia as a result of the crash of Mineral Securities Ltd which some may believe resulted from an over-extension on short term credit. Is that one of the matters which is to be investigated by this Committee? In other words, is the Committee to find out - if so, in what depth - in what manner the financing of the takeover eventually will be supported? I mention these things only because I think it is important that they be clarified. I am not urging in any way that Senator Gair's motion should be altered; although I think it would be helpful if he and the members of his Party gave some consideration to these matters and, simply by way of indication to the Senate, clarified his meaning and the way in which he believes the Committee should procee.d to carry out its inquiry. A very great number of points could be raised in relation to this matter. I think probably most of them are better not raised at this stage. For that reason I do not propose to say anything further except to raise, as I have, just a few of the more outstanding possible other lines of inquiry in which the Committee could be involved unless it receives some reasonably clear indication from the Senate that it is not required so to do.

Senator Murphy - Mr Acting Deputy President, I seek leave to speak again very shortly on this matter.

The ACTING DEPUTY PRESIDENT (Senator Cant) - Is leave granted?

Senator Cotton - Leave is granted. Perhaps I shall seize the opportunity to do the same, but I shall do so only very briefly.

The ACTING DEPUTY PRESIDENT - There being no objection, leave is granted.

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