THE HON BILL SHORTEN MP
LEADER OF THE OPPOSITION
MEMBER FOR MARIBYRNONG
THE HON ANTHONY ALBANESE MP
Shadow Minister for Infrastructure and Transport
Shadow Minister for Tourism
MONDAY, 3 MARCH 2014
SUBJECT/S: Abbott Government’s inaction on Qantas’ future.
BILL SHORTEN, LEADER OF THE OPPOSITION: Good afternoon everyone. Another day and the Abbott Government still hasn't worked out what to do about the future of Qantas. It is clear that the Cabinet of the Abbott Government is hopelessly divided about the future of Qantas in Australia. We see every day for the last three months, kite flying of ideas, backgrounding of propositions, the plan to provide a standby facility is on and then it’s off again.
The policy paralysis of the Abbott Government on the future of tens of thousands of Qantas jobs has to stop today. Mr Abbott has been giving lectures to Qantas and their workforce, saying that Qantas needed to get its house in order. Mr Abbott, 5000 people have been told they're going to lose their jobs. Qantas is doing what it has to do. Mr Abbott, when will you get your house in order, stop giving lectures to everyone else and start governing for the future of Australian aviation and our national carrier?
The Abbott Government needs to understand that Labor will work with the Government to come up with a sustainable long-term future for Australian aviation, for Qantas and for thousands of jobs, and for the flying public. But what we need is for the Abbott Government to stop fighting itself and start fighting for Australian jobs at Qantas.
I might ask our Shadow Spokesperson to talk about what's at stake if the Abbott Government fails to secure the future of Qantas today.
ANTHONY ALBANESE, Shadow Minister for Infrastructure and Transport: Thanks Bill. It is unequivocally in the national interest for Australia to continue to have a national airline. That is what is at stake here. That's recognised in a number of ways. One, it's recognised by the way that international aviation occurs, through air services agreements or bilateral from nation to another nation. Those agreements are based upon majority ownership of the airline in the nation in question doing the agreement. Hence why Qantas and Virgin International can fly to the United States, and Delta and United can fly to Australia, but Singapore can't.
The whole basis of international aviation is a recognition by countries that it is in their respective national interests to have a national airline, and governments negotiate on that basis. What's more, for an island continent without land transport borders, that is perhaps more important for Australia than any nation on earth, with the possible exception of our neighbours in New Zealand, where the government showed, of course, a preparedness to act to protect the survival of the national airline.
There are other reasons as well. There's a reason why nation states recognise aviation plays a role in national security. It plays a role in terms of our skills base - engineering, pilots, the people who run our aeronautical systems all have a relationship between the civil and the military systems. Thirdly, when Australia is, or Australians are in need of assistance, being able to pick up the phone to a national carrier and ask for the rescue of Australians from Beirut, or Cairo, or Bangkok, or anywhere elsewhere Australians need help - having that national carrier is absolutely vital.
This is unequivocally in the national economic interest. But also we're talking about not just the direct jobs of Qantas, but we're also talking about the indirect jobs through the tourism sector as well as the role that Qantas plays in the freight and logistics sector. This is a vital driver of our national economy. We can't drive things or people across land borders.
Unless Australia has a national airline, all those issues are put in danger, so it's an issue for the workforce, but it's also an issue for our nation. Now if the Abbott Government and those people within it think that it doesn't matter whether Australia has a national airline, they should say so. They should say so, because if that is the case, then it doesn't matter whether there is a flying kangaroo in our skies in Australia or around the world, if that is the case.
REPORTER: Do you have an objection, Warren Truss said last week and I think the Prime Minister said this morning, if Qantas, if you did lift the foreign ownership restrictions and Qantas did become majority foreign owned, it could then restructure itself like Virgin has, so Qantas International effectively remains an Australian airline. Would that then not guarantee all those issues you've just raised with us today?
ALBANESE: Warren Truss needs to get a briefing from someone who knows something about aviation. Because what they'll tell him is that a National Party leader giving a signal that it's OK to bust up Qantas is quite extraordinary. Part of the obligations in the Qantas Sale Act are for regional services and the regional network. They're one of the so-called ‘balls and chain’ that is around Qantas. Does Warren Truss support that? If you split up Qantas and you have the national arm, the international arm, Qantas Link, Frequent Flyer services, Jetstar, if you break up the company what you will end up with is a very different airline and a very different service.
Have a look at what international examples are, such as Air Canada. There are only two potential ways in which Qantas can be bought. One is by a foreign airline taking a stake and essentially buying Qantas. The second is essentially a break-up, a break-up completely. Either way will result in less service for Australian customers and those people who are most vulnerable to be hit first by such a consequence will be those people in regional communities. And that was recognised. You don't have to believe just me. Have a look at what Warren Truss was saying two weeks ago. Now he's contradicting that.
REPORTER: Will no airline mean no service? If Qantas can't continue to operate, it can't provide services?
ALBANESE: What we a saw in Canada was exactly that, a loss of service to some communities. What we would see is if you don't have obligations – and there are obligations on the national carrier – they were outlined pretty effectively by Joe Hockey, I might say, as the Treasurer, not long ago. He said there were four criteria and he said, "are these being met?" And to each question that he put he said "yes it is." He can't have been more explicit in sending that signal to the market. The market responded by increasing the share price, and then they pulled the rug out from Qantas and its employees last Thursday.
REPORTER: You're talking about wanting the Government to hurry up and make a decision. Why won't you tell them today what you'll accept and what you won't? Will you support a break up? It doesn’t sound like you will, and will you support foreign ownership? It doesn’t sound like you will Is your only option now the debt guarantee?
ALBANESE: There are a range of options available to the Government to support Qantas. We have said very clearly is that we support, the whole reason why we support Qantas maintaining itself as an Australian national carrier, as an Australian airline, is gone if you get rid of the foreign ownership restrictions.
REPORTER: Is there any room at all for any change to the Qantas Sale Act or is your position you won't you look at any changes to that Act?
ALBANESE: We've said to very clearly we’re prepared to be constructive. For example, I've put in the Aviation White Paper the 35/25 rule, we were open to discussion on that. At the time there wasn't support in the Parliament for that change, but we're open to that.
REPORTER: Specifically in terms of Qantas’ status as an Australian carrier, the Prime Minister seemed to be saying earlier that the Air Navigation Act gave some comfort in that regard, and also that FIRB would have a role as well and that those two things should satisfy people. What's your response to that?
ALBANESE: A couple of things. FIRB or course have examined the changes up to now that have occurred in Virgin which is now majority-owned by Government-backed airlines in Singapore, New Zealand and the UAE. That is what has occurred there. With regard to the Air Navigation Act, that is exactly what – the only way that it could occur is for a breakup in the company and a separation.
If you have a breakup of the company, it won't be because Qantas has a lot more history in this country and lot more developed structure than Virgin's structure. You won't just see two divisions, you'll see a break up to the more profitable sections of the company being maintained and the least profitable sections being gotten rid of. Common sense tells you that. There are restrictions on Qantas, Joe Hockey outlined why they made a case. Those restrictions made a case for government support, he said that. What the Government needs to explain is why they put that on the front page of every newspaper in the country, gave shareholders that comfort, and then removed that comfort.
REPORTER: Apart from the 35/25, what other points of negotiation are there with the Government?
ALBANESE: In terms of the Australian provisions, that are in the national interest – that would be our test. So it's in the national interest for Qantas to continue to serve regional Australia. It's in the national interest for maintenance and for jobs to be maintained here in Australia. It's the national interest test here that we're interested in.
REPORTER: Mr Abbott say you can't give something to one company if you don’t give it to every particular company. Well in this sector, Mr Albanese, would you support the notion, say if there was a debt guarantee for Qantas, that the same thing be to afforded to Rex?
ALBANESE: I refer you to Mr Hockey's comments on that. He outlined very eloquently, I think, I must say, I won't always say that, but in this case he did very eloquently, what the distinctions were between Qantas and the other the companies. Rex, in terms of as an airline in recent years, in terms per capex of the size of company, at one stage was rated amongst the most profitable airlines in the world.
REPORTER: One of the scenarios might be in the long term a Chinese investment in Qantas, do you think that that is a reasonable long-term alliance for Qantas to strike, would you have any concerns about it?
SHORTEN: Can we go back to why this is the debacle it is today. Early December, Qantas alert the new government, the Abbott Government, there's a problem. December the 6th, massive profit downgrade. Markets on alert. For three months, for three months, the Abbott Government has dithered, it has been in a state of paraylsis. What we've seen is the remarkable set of circumstances where the Treasurer has flown a kite, clearly, informally to lots of people saying if “well if we can create a enough of a special case to ring fence the treatment of Qantas, I'm up for a credit facility or a debt guarantee”. What has happened though in the last few days is clearly Qantas and a lot of other people who have relied on the Treasurer's musings have had their fingers burnt. But what has happened even more significantly than the dithering and paraylsis of the Government, is that the Abbott Government has lectured Qantas and said to Qantas “get your house in order”.
5000 people have now lost their jobs. Qantas is demonstrating that it's determined to put its “house into order”. When will the Abbott Government put their own house into order? I see that the Abbott Government and the Prime Minister in response to direction questioning from myself says, “well if you do something for one, we've got to be consistent. It's about a level playing field”. Mr Abbott, there is no level playing field in global aviation. Eight of the 10 top airlines in the world are owned by foreign governments. The Abbott plan: one, it’s is too slow; two, it’s too late; and three, his plan is to make it easier for a foreign government to buy our aviation, our national carrier.
If Mr Abbott does not believe that we should be a national carrier which is majority Australian owned, that's what he needs to say. And in the meantime, there is a cloud over the job security of thousands of more Qantas people. Aviation cannot stand still to work on the Abbott Government's on again, off again policy approach. We've all seen what happened with the collapse of Ansett.
There are real jobs at stake, there are real regional services at stake, there's the real future of Australian aviation. And the Abbott Government today must come up with a plan. It's not as if they haven't had three and a half months. If they still think like an Opposition, then maybe they should just say they prefer to be the Opposition. Now is the time for action and jobs, not for Abbott Government musings and backgrounding against each other.
REPORTER: Tony Abbott today spelt out that he could save, I think, Virgin $42 million and $100 million for Qantas by repealing the carbon tax. And he pointed to John Borghetti naming the carbon tax on Friday. That would be helpful for the airlines wouldn’t it?
SHORTEN: The real issue though is Mr Abbott wants to make it about pilots being paid too much money or flight attendants’ rosters. Or he wants to make it about carbon. The real issue here is a much more immediate and deeper challenge for Qantas. We're debating about do we want to have a national carrier in Australia? The Abbott Government's only proposition after three months is to shrug their shoulders and say “we don't know”.
People in Australia know that aviation policy of the Abbott Government is kite flying. Flying kites about will we or won't we do something. We need to have a policy which is about jobs in the future of aviation. The Abbott Government has never seen a red herring that they don't try and put in path of the issues. Today, they've run out of time. What about the tens of thousands of people who work for Qantas, who went to work today wanting to know “is the Abbott Government fair dinkum about us or not?” And the hundreds of thousands of passengers that Qantas will fly in the next couple days.
REPORTER: There’s a call for a Senate inquiry to look into Qantas's books? Would you support that or do you rule it out?
SHORTEN: I think the first thing we need to do is for the Abbott Government – we're not going to let the Abbott Government off the hook. Qantas has said that they're going to shed 5000 jobs. This is a disaster for those people involved. This is a tough decision. We've seen the share price hit turbulence during the course of the Abbott Government's handling of these issues. Ladies and gentlemen, the issue today is will the Abbott Government, having told Qantas to get their house in order, will the Abbott Government get its own house in order? Will they start fighting for the jobs of Australians or will they just start fighting each other?
REPORTER: Wouldn't an inquiry allow you to probe how they could get their house in order?
SHORTEN: We'll look at what the Senate can and can't do about these matters, but again – the Abbott Government is in charge. Joe Hockey is the Treasurer. Labor didn't ask Joe Hockey to invent four conditions to satisfy, to then justify a credit facility, a standby facility. We didn't ask the Abbott Government to spend three months working through these issues. The Abbott Government’s created a bigger problem than the one Qantas had in early December. It's up to them to lead.
REPORTER: Talking about concerns for regional routes, should there be a restructure of Qantas, is Qantas bound by the Sale Act to service those routes, or is it something it just does anyway?
ALBANESE: No, there’s in there an obligation, in terms of – there’s a reference to regional, there's a reference to maintenance in the Qantas Sale Act. The Qantas Sale Act was put together, as Joe Hockey said, with constraints there in terms of that it continue to serve as the national airline, there's obligations upon it as the national carrier.
REPORTER: The Greens are pushing for a Senate inquiry into events on Manus Island. Will you support that inquiry if it goes before Senate?
SHORTEN: We are considering our position on that, we will come back to you today.
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