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1st NovembNr 126
JR'W SOUTH JILES INTRA-STTU ARLINES
Statement y the rii me Minister, the Rt. 1on. R. G. Menzies
I have written to iMr. Heffron, the Premier of New
South Jales, suggesting to him that having regard to the
important details that have to be rorked out bet. reen the
Commonwealth and New South ; ales in relation to the country air
routes in that State, there should be a deferment of operative
decisions until after the Federal Election. There are two very
good reasons for this.
The first is that, as has been pointed out by Mr.
Borthwick, who made a special enquiry on behalf of the New
South iales Government, the-e are practical difficulties
associated with the p-tting into operation of the plan
recommended by him e. g. fare anomalies, provision of
additional aircraft capacity, payment of appropriate
Commonwealth subsidies, redundancy of staff, etc. Mr. Borthwick
pointed out that ' concurrence and assistance" of the
Commonwealth would be necessary to carry out effectively any
plan adopted by the New South ! ales Government. The
Commonwealth aviation advisers, in the very limited time they
have had, feel that the proposed reallocation of air services in
New South . ales could result in some cases in fare increases, in
the substitution of DC3 aircraft for Fokker Friendships on some
routes, in some possible redundancy in some classes of airline
staff, in requests for increases in subsidy, and quite posibly,
though perhaps temporarily, a curtailment or cessation of
services to certain rural centres in New South Jales. These
are all important matters which I have quite frankly told Mr.
-effron deserve discussion between us before licences are
actually issued. I have no reason to doubt that Mr. Heffron
will see the force of these views.
Second, I always try to adhere to what I believe to
be the sound constitutional rule of practice that, when a
Parliament is dissolved, major decisions should not thereafter
be made by the Government until after the elections. This is a
sound principle, for the arrangements made by the out-going
Government, after the dissolution of Parliament, might, in the
event of the defeat of that Government, prove to be completely
unsatisfactory to the new Government. As nobody can reasonably
say that the matters which arise for discussion between New
South Jales and the Commonwealth in relation to these airlines
are not important and don't give rise to any elements of policy,
I am hoping that Mr. Heffron will agree to my suggestion of
deferment. The problems that have arisen are much more likely
to be solved by sensible and detailed discussion between the
aviation authorities and the airline operators than by public
hostilities. Having said this I want to say something about the
position of the two country airlines in New South -ales. I
understand that it is said in some quarters that the existence
of East-Jest Airlines is threatened. It is certainly not
threatened by my Government. . ie want to have the New South
Tales intra-State airlines system maintained on a sound and
efficient basis with East-West airlines playing its part in a
sound and efficient system. . e believe that the prevailing
interest in this matter of air services is the interest of
country people themselves. le are anxious that that interest
should be studied and given the greatest possible consideration.
a 2,
The East-Jest Company, which has an honourable record of service
to a number of country districts can be assured that the
Commonwealth Government is in no way trying to render it
ineffective or precarious. On the contrary, re would like to
see it continue in a healthy state just as we vant the pecple
in the country areas served by Airlines of New South 4ales to
continue to have an effective service.
h y Government has in fact and under the present
Minister for Civil Aviation demonstrated its good faith in these
matters. It introduced the system of suOsidy from uhich both
last-Jest Airlines and Airlines of New South jales have
substantially benefitted. It assisted East-lest Airlines to
secure the bulk of the fleet of aircraft which it now employs.
Spaking generally for the moment, and not just in
relation to New South ales, the fact is that the Commonwealth
has throughout these years given great practical assistance in
order to make it possibe for country areas to have the effeptive
and much needed air services which are now in existence, not
least in the more remote areas. Services have been established,
for instance, in lestern Australia, the Northern Territory,
. estern Queensland, to Lord Howe island and the Sass Strait
Islands. The services in these pl. ces Lnd elsewThere are
supported in direct fashion by subsidy payments totalling
œ 500,000 annually. But, over and above that, there have been
many millions of pounds spent in providing airports in country
areas, providing other airways facilities, extending generous
financial help to the owners of country airports, and assisting
in appropriate cases the introduction of turbine-powered aircraft
such as the Fokker Friendship.
Jhatever comes or goes in the present argument in New
South ales, Ye have no intention to abandon subsidy arrangements
for either airline. All that we have said, and very properly, 7s
that there should be no assumption that additional routes would
automatically carry fixed entitlements to additional subsidy.
The question of subsidy must always be most carefully consideied
for it involves the application of public funds. However we are
not contemplating any proposal that the Cornmonwoalth should, in
respect of these two airlines, pay in total less subsidy than in
the past. To lend point to this, I now state that the short
period of deferment which I have suggested to Mr. Heffron, would
not hurt anybody because the Commonwealth would, in the meantime,
accept a liability to pay subsidy to each airline at the current
1960/ 61 rates. I hope that these reasonable proposals will be acceptAd
There is no profit in public disputes on such matters but there
is great importance to be attached to the proper interests of all
those citizens who are now served by each of the two airlines.
CAUN S ,! AI
1st November, 1961.