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Wednesday, 20 September 1972
Page: 1054

Senator WRIGHT (Tasmania) (Minister for Works) - This evening in the debate on the Income Tax Bill Senator Turnbull raised a question, with, regard to the purchase by the Government of 6 DC3 aircraft from a company called Jetair Australia Ltd. The honourable senator took the occasion to suggest, that there was some sinister quality about the price of those aircraft and the occasion of their purchase. I rise as the Minister representing the Minister for Foreign Affairs to state to the Senate what the transaction was. Before the. purchase of the Jetair aircraft in January 1971 there had been a requirement by Nepal and Laos for Australia, if she would be good enough, to provide aid in the form of civilian aircraft. Senator Turnbull ought to understand that this requirement by Nepal and Laos was for civilian aircraft. He seemed to have a complete topsyturvy notion on that point.

It was on 5th November 1969 that Nepal accepted the offer of. 1 think, 2 aircraft. It was on 2.1st November 1969 that the Department of Foreign Affairs arranged to purchase 2 aircraft from the Royal Australian Air Force. It was in February 1970 that the Laotian request was confirmed. And in March 1970 ministerial approval was given for the Department of Foreign Affairs to acquire from the Air Force 3 additional aircraft. So early in 1970 the Department of Foreign Affairs, having acquired 5 aircraft from the Air Force, was proposing to refurbish them and to deliver them to Nepal and Laos. The period from the beginning to the end of .1970 was occupied in considering the cost of refurbishing those aircraft ready for delivery. Of course, it was not merely refurbishing them; it was converting military Air Force aircraft to civilian requirements, to a condition that would entitle the aircraft to a certificate of airworthiness on civilian standards. Therefore, the cost of conversion was a material item.

Two of those aircraft were purchased as between the departments at the figure of $15,000; the other 3 were, purchased at a figure of $10,000 each. So the total purchase price for the 5 aircraft from the Air Force was $60,000. By December 1970 the Department of Foreign Affairs had been informed that the cost of converting four of those Service aircraft to civilian requiements for passenger purposes was $280,000, and the cost to convert the fifth for freight purposes was $35,000. This meant a total conversion cost of $315,000. And when the conversion had been completed, the Department would have to pay an additional $50,000 for the cost of delivery. Thus in December the Department of Foreign Affairs had acquired 5 aircraft from the Royal Australian Air Force, not, as Senator Turnbull guessed this afternoon, then in a condition for delivery but in the condition in which they had been delivered by the Air Force and the Department was confronted with an estimate of the costs of conversion and delivery which, when added to purchase price, would involve the Department in delivering the 5 aircraft to Nepal and Laos at a cost of $425,000. That was the position in December 1970.

Then the coincidence with intrigues this tortuous, insinuating mind of the senator to whom I am offering the explanation occurred in the form of the very sinister gesture in business affairs of 2 prominent advertisements by a company called Jetair Australia Ltd, one in the 'Australian' of Saturday 5th December, the other in the Sydney Morning Herald' of 5th December. These advertisements prominently displayed to the world that Jetair Australia Ltd had for sale 6 of the best

Douglas DC3 aircraft and that the company was making an extraordinary offer for immediate sale. All other commercial representations were included in the advertisements, calling the. aircraft to the attention of any persons among the public who required DC aircraft to become interested in these aircraft offered by Jetair. On 17th December 2 senior officers of the Department of Foreign Affairs and 4 officers of the Department of Supply who were versed in the expertise of electronics and aircraft performance inspected the Jetair fleet. On 22nd December a memorandum was put to the Department of Foreign Affairs over the signature of a senior officer that the aircraft in the Jetair fleet required minor interior repairs. Some patching on leading edges to tailplanes was required. Jetair asked $60,000 per plane - that is a total of $360,000 - but during the discussions with the officers suggested that for sale of the 6 it would take $300,000. The officers at that stage suggested that $250,000 might be considered.

At that stage no Minister had been consulted either by the Department or the vendor. The Department had the appropriation which provided for this aid. The fatuity of the honourable senator who, with sinister insinuation, suggested that a Minister in charge of the Department of Foreign Affairs, with an authorised appropriation and having arranged diplomatically the need for the aid, should go to Cabinet to authorise a transaction of this relatively miniscule significance indicates the honourable senator's complete vacuity or tortuousness of thinking. So the officers left the inspection of the Jetair fleet, with the vendor suggesting $300,000 and the Department suggesting $250,000. A recommendation was put to the head of the Department on 22nd December: 'Offer $275,000'. Such is the sinister nature of this transaction that on 31st December 1970 the Assistant Secretary of the Department put a memorandum before the Secretary without routing it, as he ordinarily would, through Mr Shann who was away. I mention the name of Mr Shann. Perhaps I should not have mentioned any individual officers, but we in this centre of affairs know the integrity and the perspicacity of Mr Shann, as we do that of the Secretary of the Department.

Senator Georges - Table the papers so we can have a good look at them.

Senator WRIGHT - If an allegation is made in this place it is my duty to respond to it. Subsequent procedures will take their proper course.

Senator Keeffe - If Senator Georges asked the Minister to table the papers he should.

Senator WRIGHT - It is getting too strong for honourable senators opposite. The idiocy of the allegation and the insinuation is beginning to appear. On 31st December a responsible officer, through the Secretary of the Department, put a submission that the 6 DC3 aircraft of Jetair should be purchased for $275,000. So sinister is this matter that on the same day the Secretary of the Department put a written submission before the Minister to this effect: 'We have 5 aircraft in Service configuration from the RAAF and if we go on with their conversion it will cost us $425,000 to get 5 aircraft of that nature to Nepal and Laos. We have the opportunity of purchasing the additional 6 DC3 aircraft at $275,000, the value of which was supported by inspection by responsible officers of the Department of Supply. What should we do?' The Secretary said: If we go on with the conversion of the RAAF aircraft, firstly, we will not get the work completed until the latter half of 1971; secondly, the cost of conversion has risen so that the total involvement will be $425,000 for 5 aircraft; and thirdly, we are under pressure, on advice from our ambassadors abroad, to expedite the delivery of these goodwill aid aircraft to Nepal and Laos'. This submission of 31st December, so far from patronising so-called friends by the name of Barton of any Minister, referred to a Mr Gordon Barton, in error, as the vendor.

Senator Georges - Who did that?

Senator WRIGHT - The Department, in its submission, conveyed the erroneous understanding that the Department thought the vendor was Mr Gordon Barton of Ipec Austrafia Ltd. That submission of 31st December went before the Minister on 1st January - within a day - and the Minister, having underlined various parts of the submission, wrote against it: 'Approved W.M. 1.1.71.' There is no need to produce this submission to Senator Turnbull. His friends have enabled him to see it somehow, as he declared this afternoon in the Senate. Ministerial approval was given on 1st January for the purchase of 6 DC3 aircraft from Jetair. One of the considerations that the Secretary drew to the attention of the Minister was: 'We may, by reason of this purchase, have aircraft surplus to our requirements but even if we do and wholly write off the purchase of the 5 RAAF aircraft for which the interdepartmental account debited Foreign Affairs for $60,000 we will still be in front'. I pass to honourable senators a tabulation of figures that might enable these agile critics to understand the position.

Being in that situation and having heard one month previously that the Khmer Republic needed military aircraft - not, as Senator Turnbull ludicrously said this afternoon, civilian aircraft - the Department dispatched a cable to see whether the Khmer Republic had requirements, under the goodwill mission aid of Australia to South East Asia in the particular circumstances of January 1970, for 6 aircraft. Honourable senators if they just think, can imagine the excitement in the Khmer Republic if there were forthcoming as a gift from Australia 6 aircraft. Within a month or two after the sounding out of the generals and the Government of the Khmer Republic, the information came to Australia that the Khmer Republic would be delighted to have the assistance of the Service aircraft. Therefore the net result will appear from the figures that 1 have circulated. Although some honourable senators may be afraid to read them I hope that other honourable senators will understand, if they look at the transactions a little, that the first leg of the transaction involving the RAAF aircraft would have cost us in December $425,000 to deliver to our South East Asian friends. However, by not going on with the expensive reconversion which would not be necessary if we bought the 6 DC civilian aircraft from Jetair, we were able to save $290,000 in conversion costs and $15,000 in delivery costs. So the actual cost of delivery of the 5 Service aircraft to the Khmer Republic was $120,000 as against $425,000 if the ignorant critics of this transaction had pressed us to go on with an unbusinesslike transaction.

The cost price of the 6 DC3 aircraft bought from Jetair was $275,000. After the refurbishing, painting and making the aircraft ready for delivery - they had just been through an overhaul that would give them a reputable air worthiness of 10 years and therefore there was no cost of reconversion and very insignificant costs in relation to refurbishing - the cost, as delivered, was $360,000. Therefore, by delivering the 6 DC3 aircraft from Jetair at a cost of $360,000 and the 5 Service aircraft at a cost of $120,000 we would get 11 aircraft to 3 friendly South East Asian countries for a total of $480,000. Yet, if Senator Turnbull and his allies were to run this country they would not have taken the opportunity to buy the publicly advertised air fleet of Jetair at a price vouched for by responsible officials of the Department of Supply without any reference to the Minister. If Senator Turnbull, in his perversity and ignorance, had been running the transaction, instead of getting 11 aircraft delivered to 3 friendly countries for $480,000 he would have pushed on with the expensive reconversion of 5 Service aircraft and had them delivered for $425,000.

Without any initiative or stimulation from any Minister and without any Minister having any communication, written or verbal, with any executive of Jetair, the departmental officers took the opportunity of following up the public offer published in the 'Sydney Morning Herald' and the Australian* for the whole world to see on 5th December and bought the additional 6 aircraft and enabled us to deliver 11 aircraft to friends at $480,000 instead of 5 at the excessive cost of $425,000. As the additional 6 aircraft cost us in fulfilment of our delivery of aid an extra $55,000 we can see that the Secretary of the Department was well justified in saying in his submission to the Minister on 31st December that lt would be better to buy these aircraft even if we had to write off entirely the Service aircraft which we had purchased at a cost of $60,000.

Senator Young - Do not push your point too much. Senator Turnbull is getting embarrassed.

Senator WRIGHT - Once these figures are put to honourable senators the whole thing will fall into place. There is no smell in it. You will never report the facts fully and expose the nonsense of an insinuation that could come only from sinister, sinuous minds.

The Minister having approved the purchase on 1st January - and as I said before we had assured ourselves by offering at that stage to the Khmer Republic the 6 aircraft we then had available - the Khmer Republic was delighted to accept it. The Department of Foreign Affairs passed the transaction in a routine manner to the Department of Supply to complete the documents and to assure the Minister that the disposal of the 6 DC3 aircraft from Australia had the concurrence of the Department of Civil Aviation which is represented by my colleague the Minister for Civil Aviation (Senator Cotton). The Department of Supply then formulated a contract. So sinister was the transaction that on 14th February the Minister stated the whole position in the form of a long Press release. A few snivelling penmen then started to construct their ideas of the transaction and that was sufficient guide for Senator Georges and Senator Turnbull to maintain their vapouring level of thought from then till now with insinuations. It is rather pitiable. If Senator Turnbull had wished to be informed of this transaction he had only to call at my office or at the office of the Minister for Foreign Affairs (Mr N. H. Bowen).

Senator TURNBULL (TASMANIA) - I asked questions but you would not answer. You still have not given me the dates. I have asked you for the dates.

Senator WRIGHT - What dates do you want?

Senator TURNBULL (TASMANIA) - The date on which you were first offered these planes or the date on which you suggested to those countries that this form of aid was available.

Senator WRIGHT - I gave them to the honourable senator. However, to enable him to understand, I will repeat them. Nepal accepted the offer made on 5th November 1969.

Senator TURNBULL (TASMANIA) - I see, 3 years before.

Senator WRIGHT - The honourable senator should do his arithmetic. A schoolboy would know that the 5th November 1969 is about 12 or 14 months before

December and January 1970-71. The next date is, Laotian request, 19th February 1970, and then the Khmer arrangement was made between January and February 1971. And now we come to the question of the dates of delivery of the aircraft.

Senator Milliner - Will you table the papers?

Senator WRIGHT - Let me present my case in my own way. If the honourable senator wants papers tabled there is a method of requiring it. He can come to my office and see the papers at any time. The delivery dates of these aircraft was July, August and September of 1971. I would have thought that anybody who had the purpose of explaining public transactions on a proper basis would take care to analyse the facts and, having analysed the facts, would perceive that the departmental officers having read a public advertisement for the sale of these DC3 aircraft ought to be commended for bringing to the attention of their Minister a transaction that would enable 11 aircraft to be delivered to 3 friendly countries at a price only $55,000 in excess of the cost confronting the Department in December 1970 for the delivery of 5 aircraft. If those facts find no acceptance in the Senate then, to me, business facts are given no relevance in the consideration of honourable senators.

Senator O'Byrne - Mr President, would I be in order in moving that the papers that have been referred to by the Minister be tabled? Could I ask the Minister if he will table the papers?

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