Qantas ownership relaxed
The government announces its intention to allow greater foreign investment in Qantas, raising the possibility the airline may split into domestic and international carriers.PT2M16S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-34188 620 349 March 4, 2014
Transport Minister Warren Truss has admitted to Coalition MPs that the government does not have a ''plan B'' if its attempt to repeal part of the Qantas Sale Act fails to pass the Senate.
In a meeting of the Coalition Party room on Tuesday, veteran Queensland Senator Ron Boswell asked Mr Truss what the government's plan was if the legislation – which Labor, the Greens and the Palmer United Party have already vowed to oppose – was blocked in the Senate.
Deputy Prime Minister Warren Truss says there is no 'plan B' if Qantas Sale Act fails to get through Senate. Photo: Andrew Meares
Mr Truss reportedly then told his National Party colleague ''there is no plan B''.
After the meeting, Senator Boswell told Fairfax Media he was happy with the answer he had received, though other Coalition MPs expressed surprise at the comment.
''We can put it up and point out that if you block it you will cost jobs,'' he said.
''We can't expect these people [Qantas] to compete with other airlines that are government backed.''
Qantas called on the federal government to take immediate action to assist the flagging airline, including via a debt guarantee.
As Prime Minister Tony Abbott declared on Tuesday that his government was determined to "liberate Qantas from the shackles of the Qantas Sale Act", the airline stepped up criticism of what it called an uneven playing field that allowed Virgin Australian unlimited access to foreign capital.
''We have consistently said that removal of foreign ownership provisions that apply uniquely to Qantas is an important longer term objective to create a fair and free aviation market in Australia,'' the airline said in a statement.
''However, it is clear that such a move would have limited chance of passing through the Senate.
''If this proposal by the government to change the Qantas Sale Act is not passed, we would expect the government and the Parliament to consider alternative measures to balance the unlevel playing field in Australian aviation.''
The Abbott government resolved on Monday night that it would move to repeal part three of the Qantas Sale Act, which limits foreign airline ownership of Qantas to 35 per cent and a single foreign shareholder to 25 per cent.
The Act also governs where airplane maintenance takes place and the changes would allow some maintenance jobs to go overseas, a move heavily criticised by the union movement.
The changes, if passed, would effectively allow up to 100 per cent foreign ownership of the airline's domestic business but would ensure the 49 per cent ownership cap on the airline's international arm remains in place if Qantas is to remain an Australian carrier.
Mr Abbott brushed aside suggestions the airline could still be handed a debt guarantee – an idea government has gone cold on – and stepped up pressure on Labor and the Greens to pass the proposed changes to the Act to ensure Qantas had a ''strong, long-term future as one of the world's great airlines''.
''The interesting thing is that the Labor Party's answer here appears to be a subsidy. We want to give Qantas its freedom; they want to give Qantas a subsidy. We want to give Qantas a hand up; they want to give Qantas a hand out. Basically, the Labor Party is reverting to cheque book government,'' he said.
Treasurer Joe Hockey confirmed the government's opposition to a debt guarantee had hardened in recent weeks.
''We are not writing out blank cheques,'' he told ABC radio. ''There are a lot of companies in Australia that would love to have a multibillion-dollar unsecured loan from the federal government.
''We are not doing that for an individual company. We are not going to guarantee billions of dollars of debt as every small business in Australia would probably want as well.''
Mr Hockey criticised Qantas for claiming yesterday that the carbon price was not a major factor in its financial woes.
''If a $106 million carbon tax bill is immaterial, well, that is certainly not going to help with the justification for a multibillion-dollar loan facility,'' he said.
Palmer United Party leader and Fairfax MP Clive Palmer, whose party may gain the balance of power in the Senate after July 1, released a statement on Tuesday saying his party would oppose the government's proposed changes.
Mr Palmer said his party was ''committed to protecting and defending the rights of Australians to have a national carrier owned by Australians''.
''We can't just sell off assets when we're in trouble and Australia needs to keep soveriegn assets for Australian people,'' he said.
''It is a worldwide brand and the government has a moral obligation to make sure we keep it in Australian hands.''
He blamed the Qantas management and board for the airline's problems.
Opposition leader Bill Shorten said the government had been "flying kits" about the future of the airline for three months while the airline had announced last week 5000 jobs would go.
''How do you negotiate with a government who says there's my way or the highway? They've only got one plan which is to allegedly free Qantas, how on earth do you free an airline by selling it off overseas, by sacking people,'' he said.
But shadow treasurer Chris Bowen said Labor was prepared to work with the government on scrapping restrictions such as rules preventing foreign airlines from buying more than 35 per cent of Qantas or any one foreign person owning more than 25 per cent, but said removing the Qantas Sale Act altogether ''goes too far''.
''We're not going to allow the important 51-49 per cent threshold [on foreign ownership] to go,'' Mr Bowen told ABC radio. ''Qantas' status as the national carrier is very important. It is a different case, a special case.
''This is policy on the run. Qantas have the right to be very angry with the government today. This is a government that doesn't know how to do business with business – sending mixed signals, backgrounding, thought bubbles, speculation, leaks.''