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
THURSDAY, 27 FEBRUARY 2014
SUBJECT/S: Qantas announcement; Cadbury; Senator Nash; Commission of Audit’s rejection of the PM’s signature policy.
BILL SHORTEN, LEADER OF THE OPPOSITION: Today is truly devastating news for 5000 hard-working, professional, skilled Qantas staff and their families. It’s also a very sad day for Australia. There are few things more synonymous with calling Australia home than Qantas airways. This is the worst day for aviation people since the collapse of Ansett. That the Abbott Government has done nothing to try and fight for Australian jobs at Qantas, like they failed to do anything for Australian jobs in other closures announced, is truly alarming.
It’s unforgivable not to fight for the jobs of Australian workers – Qantas workers, in this case. Since Qantas announced its downgrade on December the 6th, the Abbott Government has been sending up a furious series of thought bubbles with no visible outcomes. So now Qantas today has had to make these very tough decisions, yet the Abbott Government has known there’s been a challenge for Qantas since December the 6th and they’ve done nothing.
I might now ask my colleague, our Shadow Spokesperson for aviation, Transport and Infrastructure and Tourism to talk further about today’s announcement.
ANTHONY ALBANESE, SHADOW MINISTER FOR INFRASTRUCTURE AND TRANSPORT, SHADOW MINISTER FOR TOURISM: Thank you Bill. Today’s announcement is indeed devastating for those 5000 workers and their families. Particularly today, also devastation will be felt by many of those families in my electorate of Grayndler, where many workers in the sector are based.
Standard & Poor’s announced the downgrade of Qantas on December 6th. Since then, what we have seen, in the press, day after day, is speculation about Government action. Speculation that has led to further speculation, and further speculation upon that. What we haven’t seen is Government action. What that has done is feed the insecurity that those workers at Qantas and most significantly as well, isn’t just the direct employees, but the flow-on effect because of the importance of the aviation and tourism sector.
The failure of the Government to act up to this point, whilst at the same time they’ve been prepared to give hints to indicate support, to say the Government would be heading in a particular direction, is in my view irresponsible and characteristic of a government that had a plan to get into government, but not a plan to actually govern.
REPORTER: Mr Shorten, Nick Xenophon just said that the first of the 5000 jobs that should go is Alan Joyce’s. Should it?
SHORTEN: First of all, we’ve got 5000 people whose jobs are being announced. Today is a day for the Abbott Government to show some leadership. Everyone has known that Qantas is confronting tough issues since last December – early last December, three months ago. Where is the Abbott Government’s plan for Qantas jobs? They’ve been sending out more messages and more signs, they’ve been sending out smoke signals, they’ve been flying kites. Now is the time, and indeed three months ago was the time, for the Abbott Government to say what is their plan for a national aviation carrier. Is their only plan for the future of Australian aviation to sell it offshore?
So while I understand Nick Xenophon’s frustration with management, I would say to Senator Xenaphon: you can have your arguments with the management, but there’s an issue here for the Abbott Government. They control aviation policy. They’ve been sending all sorts of messages that if Qantas makes what the Abbott Government calls hard decisions, then they would come in behind them – and they’ve been saying this pretty clearly, they’re considering a debt guarantee – is it the case now that Qantas has made these very hard decisions, will the Abbott Government now back up what they’d been hinting and promising the market, consumers, the aviation public? Or will they just play political games and focus solely on the Sale Act? I hope not.
REPORTER: Are you asking the Government to run the airline?
SHORTEN: No, but what I recognise is that eight of top – let’s look at the world in which Qantas competes - eight of the top 10 airlines in the world are owned by governments. So when the Abbott Government says that Qantas has got to make hard decisions, I can’t think of anything much harder than 5000 people losing their jobs. When they say that Qantas has got to get its house in order, what will the Abbott Government do now? Will they keep playing with the red herring, which is really a proposition which says either you have majority Australian ownership or you have a foreign government buy our airline.
The issues here are that the Abbott Government has teased Qantas and the public by saying ‘we’ll look at a debt guarantee.’ It’s now time for them to make sure we’ve still got an Australian icon, and an Australian brand.
REPORTER: Mr Albanese, can I ask for you to enunciate why you think Australia needs a national airline, and secondly, given that there is talk about this debt guarantee, why should taxpayers offer in effect that debt guarantee when Qantas is doing unsustainable things like trying to keep 65 per cent of the domestic market?
ALBANESE: Couple of things – firstly, in terms of international aviation and the way that it is organised is through air service agreements between nation states. So in order to fly into and out of Australia, you need an agreement between government to government. Those agreements are based upon Australian carriers being majority Australian owned. That’s defined very clearly in the Air Navigation Act, it’s also very clear in the agreements that have been signed by Australia with other governments. That’s why Virgin has split its company so that the international arm is still majority-Australian owned, but the domestic arms are where you’ve had the foreign capital injection.
REPORTER: Can’t Qantas do that?
ALBANESE: That injection - they can’t because of the Qantas Sale Act - that injection of the capital that occurred in November was from three government-backed airlines: Singapore, Etihad in the UAE, and Air New Zealand. But of course, returned to with government injection a few years ago. The fact is there is a reason why nation states have airlines, whether they be big countries or small countries like Royal Brunei Airlines, that’s because it is an important part of the national interest. It plays a role in national security, it plays a role also every time the flying kangaroo is seen, anywhere in the world, that is an ad for Australian tourism. Not just an ad for Qantas, that is an ad that says ‘come to Australia’. So it’s important in terms of those issues.
It’s important also, can I say, as Transport Minister when we needed to help assist Australians in trouble in Cairo, in Beirut and in Bangkok, Qantas was there, a phone call away. And that is why in terms of a whole range of reasons in terms of national interest the Qantas Sale Act also has not just majority Australian owned, it has very clear statements about the need for regional access and regional service provision.
If you have a foreign owned airline, they will have no interest necessarily in flying to a regional destination that mightn’t be profitable in their first 12 months, but which has in terms of building up support for the tourism sector or for just travel from that regional destination. There are a range of provisions in the Qantas Sale Act that are important. There’s a reason why nation states want an airline based in their country, and for an island continent that has no land borders, it is more important for Australia than any other country because we rely upon aviation or shipping as the only other way that we can move freight and people.
REPORTER: So would Labor support that restructure to have a Qantas international office?
ALBANESE: No, we support majority Australian owned, both in terms of the Qantas Sale Act provision. We have said with regard to some of the other provisions, the Aviation White Paper, there’s a 35-25 rule. We said in the Aviation White Paper, recommended that that be considered. At the time there wasn’t support for that in the Parliament, for those measures. But in terms of the Australian provisions, the whole reason why you want to defend an Australian airline is that it remain Australian.
REPORTER: Mr Albanese you put forward a very convincing case there for a national airline. Do you accept that that also is the case that Qantas and many other people argue is one of the reasons why Qantas can’t compete and therefor you’re putting forward an argument for effectively having to subsidise this airline on a longer term basis?
ALBANESE: No, that’s not right. Qantas has been very effective at competing indeed, in terms of - if you look over a period of time, we had a very competitive domestic aviation sector here in Australia. It’s an open sector, it is the most open sectors in the world. You can’t, for example, operate in a similar way in the United States, or within Europe in the way that our domestic aviation sector operates. So it’s an open and competitive sector, and Qantas have been able to continue in that.
REPORTER: But they’ve just lost 5000 jobs today, so isn’t that sort of a statement on how that’s going?
ALBANESE: They have indeed, and that is a tragedy. But what you have also had is two, as Mr Joyce said in his press conference, there are two events that have occurred recently. One is the capital raising of Virgin with the three other airlines contributing in November. The second is the downgrade in December. That is why since then, since then, December 6th, is the key date. Since then, the Government should have acted.
REPORTER: Virgin is unregulated. Shouldn’t they be free to capital raise however they like, and doesn’t that again highlight the disparity between the operating conditions of Qantas and its rivals?
ALBANESE: I’m not – Virgin of course are able to do that. But in terms of a Government response, the fact is governments around the world have responded in terms of aviation. The New Zealand government responded in a particular way with Air New Zealand. Governments around the world have responded, in the United States they respond by having a much more protective regime in terms of their domestic structure. In Europe, they’ve responded in terms of the European system is quite protective in terms of European airlines as well. Governments needs to have an appropriate response. This government knows that it has to respond, they’ve said they’re going to respond. They’ve briefed you and everyone in this room, day after day, that they’re going to respond and nothing has happened up to this point.
REPORTER: Alan Joyce said that they had approached the government two years ago to get some action, and that is why they had to take action now and cut 5000 jobs.
ALBANESE: He didn’t say that at all. He did not say that, I heard his press conference, he said nothing like that I’m afraid. What he said was that there are ongoing policy discussions with – I would have met with, as a Minister, Alan Joyce and John Bourghetti on a very regular basis as well as Mr Hyde from Rex, I met him in Australia and in Singapore, where he’s based. I met John Sharp regularly, I met all of the airlines, there are ongoing policy issues. This became an issue very clearly, the two events that have been identified, have occurred since the change of government. Prior to the change of change of government I provided a letter of comfort which was given to the press, not by me, at some stage toward the end of last year. But I provided the letter of comfort to them in August, and that - and that point - satisfied the markets, there wasn’t a downgrade on our watch.
REPORTER: On the 35-25 per cent rules, how far would Labor be prepared to go to allow a greater ownership on those restrictions, would you go all the way up to 49 per cent for example for a single airline?
ALBANESE: Well, we’re not the Government. We’re not the Government. So we’ll wait for a proposition from the Government in terms of those issues. At the moment, the foreign ownership question, at the moment it’s on 39, I think is the figure at the moment. This whole issue is a distraction from a Government that is looking for other reasons to not act. Just like we have continually workers being blamed every time there are job losses.
REPORTER: Mr Joyce said today in his press conference that he thinks it could take months or possibly years to get the Qantas Sale Act amended. It doesn’t sound like he’s actually holding out much hope for that change happening. He wants some new term action -
ALBANESE: It’s not a priority. It’s not a priority -
REPORTER: Do you think, based on what you heard him say, that that means just to focus the debate here the Government has to act immediately to offer a debt guarantee to Qantas?
SHORTEN: Your question is spot on. The Government wants everyone to think that the Sale Act is the key issue. We’ve had them since early December, Joe Hockey acting like some sort of second-rate Shakespearean actor ‘what should I do, woe is me.’ The truth of the matter is they’ve know, the Abbott Government has known since the 6th of December, we’ve got to do something. They don’t want to do anything to fight for these jobs. Qantas management have been very explicit – the debate about the Sales Act is not the issue they’re dealing with now.
The issue is now that Joe Hockey’s laid out a challenge to Qantas, you know, you’ve got some legislation, remember you’ve got four criteria, there was some legislation, does legislation exist? Yes it does. Is Qantas getting it’s house in order? That’s effectively what it was doing, they were the conditions. This is very hard news for 5,000 people, but hard decisions have been made. New claims have been cancelled, routes have been changed, were seeing jobs lost in the back office, we’re seeing line maintenance being changed; the Government has run out of excuses. Is it now time for Tony Abbott and Joe Hockey to make a decision, do they want to save Qantas or do they just want to play politics?
JOURNALIST: So what would you do?
SHORTEN: Well I believe that we should keep the majority Australian test, we’ve made that every clear as Anthony has expounded at some length. We’ve made it very clear I think in our presentation this morning I think, that other than the requirement, and there’s a requirement in the sale act in section seven, we think that it is important that a company has its head office in Australia. We think that it’s important that its board is in Australia -
JOURNALIST: You’ve said, you’ve told us what you would keep, but what would you change?
SHORTEN: But - sorry, I’m just answering - but I’m just going through what we say when we talk about what we think is important. We think that it is important the majority of maintenance work is done in Australia. But if the Government was to propose providing a line of standby credit, a credit guarantee, then we would look with some interest at that Government proposition.
What we would say to Joe Hockey is don’t forget what happens when you don’t act in aviation, you see thousands of jobs lost. There are still a lot more people working at Qantas, Labor hasn’t given up on fighting for them. If the Government is sufficiently negligent that all they want to do is have a debate about should the Chinese government be allowed to buy our airline, should someone in the Middle East be allowed to buy our airline, that is a betrayal of the remaining Qantas jobs and it means that the hard decisions being made now are for nothing.
JOURNALIST: How many more Qantas jobs would be lost if the Sales Act were removed and those restrictions were lifted?
SHORTEN: I’ll get Anthony to answer this in detail, but I’ll just give you an initial observation. If they removed the Sales Act, first of all we have got one of our large companies in the ASX who if the main investment decisions were being made overseas, we will see an inevitable drift as always is the case, from that economic activity in Australia overseas. But when we talk about the jobs, a foreign investor, if it’s the government of China, or one of the Chinese owned airlines, buy or apply to have a majority stake, that will have to go through the Foreign Investment Review Board.
This is why the Government is playing a con job on Australians saying that’s the key issue. If the government didn’t have the ticker to allow the American’s to buy a share of GrainCorp, well Qantas is GrainCorp on steroids and they are going to panic at making a decision. So let’s talk straight here, this is a matter of national aviation policy, tens of thousands of jobs. It is time for the Abbott Government, they’ve teased every one, they’ve teased the media, they’ve teased the markets, they’ve teased customers, they’ve teased the, well in fact they’ve done worse to Qantas workers, they’ve left them in a state of insecurity. It’s now time to be upfront, are you going to help or are you just going to engage in politics?
JOURNALIST: How many more jobs would be lost?
SHORTEN: Well I don’t want to find out the risk of losing more high skilled, productive jobs and let me just say to all the families of all the pilots and flight attendants, the engineers, the people who work at the gates, the baggage handlers, the caterers, the cleaners: we think that what you do is important. We don’t think that it is your fault that job losses have occurred. We do want to see management do a better job, but what we also want to say to you is that Labor will work with the Abbott Government to give them the bipartisan support to keep and fight for your jobs and keep Australia’s number one tourism infrastructure security icon in Australia.
JOURNALIST: In you look at interest with the debt guarantee or an assistance package what do you think the Government could be doing in terms of putting conditions on the assistance, should there be jobs conditions or other conditions put on?
ALBANESE: Well look, we’ve said our job isn’t to be the Government. We though, as a constructive Opposition, I don’t think that we could have done any more than whether it’s Bill, myself, Chris Bowen, as the Shadow Treasury spokesperson, all of us have said we’ll be constructive, act. We’ve talked with the Government, Qantas have been walking through the doors time after time.
I don’t know, if this was, you know, Tony Abbott’s still acting like an Opposition Leader today, if this was him he’d be out there opposing everything, opposing everything with more insecurity for Qantas workers as well as for the Qantas companies. That would have been his response. We are different, we haven’t acted that way, we’ve been constructive, we’ve put forward the bottom line is the whole point of having an Australian airline is that it remains here. It’s not the flying kangaroo if there’s a flag of another country of the wing, rather than the kangaroo.
JOURNALIST: Why isn’t this good money after bad, and don’t you accept at all that the parlous state of the airline is due to ban management, bad investments?
SHORTEN: We’re not talking about, and Qantas aren’t talking about, a grant. What they’re talking about is a facility for which they would pay a fee, so in terms of the impact on the budget that is one of the reasons why it’s quite inexplicable that you’ve had three months of speculation and thought bubbles. I think Warren Truss only discovered this week the Air Navigation Act and those provisions that were there, it was the first time that he’s sort of mentioned it, I’ve been talking about that for months, you know, they haven’t paid attention to this, they haven’t paid attention to detail, they’re too busy playing politics with everything rather than acting like a Government.
JOURNALIST: Can you save the airline if the management’s no good?
SHORTEN: I certainly am not uncritical of the Qantas management and people will recall my response to the grounding of the airline. I regarded that as a mistake then and I regard that as a mistake now. It damaged Qantas’ brand. But in terms of the repercussions if the Government just sits back and continues to do worse than doing nothing is what they have done. They have speculated about doing something and then failed to follow through.
JOURNALIST: There have been calls this morning for a judicial review in to Qantas, with claims the company has exaggerated some of the losses and that it’s propping up Jetstar, what’s your response to that? Also, do you acknowledge that if the Government does provide a debt guarantee to Qantas other companies will be lining up for exactly the same thing? If the Government came to you specifically and said would you examine a 25 per cent cap limit on individual foreign owners would you be prepared to look at that?
SHORTEN: I’ll get Anthony to go to a couple of the detailed points in what you say, but there’s an issue here which somehow that providing some support to Qantas in the way a debt guarantee would make Australian unusual in the world. Ladies and gentlemen, the rest of the world has government intervention in their airlines. We would be the bunnies if we just waved goodbye to an Australian icon, and if we believe that there’s a level playing field and somehow the rest of the world investing in their airlines and governments aren’t, that would be a terrible mistake.
In terms of the debate about management as Anthony said, a number of us were highly critical of Qantas’ decision to ground the airline and we went out on a limb, and indeed, I think the Abbott Government praised them for doing it, when I think history’s shown that that was probably an excessive reaction. In terms though of debating the management, it’s not the role of Governments to get in and manage and micro-manage companies.
What is the role though is to recognise what is in the long term national interest. We believe that Australia is smart enough and capable enough to have majority Australian ownership and to have a successful vibrant industry, that there is a light at the end of the tunnel. In terms of the 25 per cent, if the Government says that’s the issue that they need support on we would be happy to listen to it. I might ask Anthony to supplement.
ALBANESE: Can I just say that that was in the recommendations of the Aviation White Paper. The only Aviation White Paper that’s ever been commissioned by the Government, was received by from memory I think at the end of 2009. We made it clear at that time, and I make this point, of foreign ownership was the issue, the issue, the Qantas Sales Act, then foreign share ownership today wouldn’t be 39 it would be 49, it would be pushing up against the barrier. It’s not the issue today, and today I think Mr Joyce made it clear what his priorities were and in terms of, I would find it remarkable if a Government Minister, I don’t think that private conversations that we have, but I would find it remarkable if a Government Minister said that Qantas were walking through their door and saying the biggest issue we have, what we need action on today is the Qantas Sales Act. It’s not the case. It’s not the case.
SHORTEN: Ladies and gentleman, perhaps just three more questions.
JOURNALIST: What about buying a stake, what do you think about that buying a stake in Qantas going cheaper about eight per cent lower than yesterday?
SHORTEN: Well I think that if they, if the Government were to start talking about the debt guarantee that would possibly be the most productive avenue of discussion. I don’t seriously expect the Abbott Government to talk to us about that, we just wish the Abbott Government -
JOURNALIST: What do you think of that?
SHORTEN: Well I’m not going to hypothecate about something which I don’t think - I don’t think the Abbott Government is fair dinkum about Qantas. I think all they want to do, here’s the three tricks, they’ll say its carbon, when in fact Qantas has made clear it’s not carbon. They’ll blame the workers at some point, they just can’t help themselves. They’re like pets returning to their dinner, they just can’t help themselves. You could have a sporting bet, they will blame the pilots, or the conditions rah, rah, rah, you know the script from Abbott-land. And the third thing they might do is blame us and they’ll say that, and I fact you can almost guarantee that, so that’s their recipe, they’ll say ‘oh well we should just let anyone buy our airline.’
We know that if sovereign governments from other parts of the world fronted up and the foreign investment review board to buy Qantas, you know, the collective Abbott Government would have a collective fit, you know, they’d panic. So let’s not, let’s understand what they will say and say to the Abbott Government we know what you’re going to say and instead we get on with the real issues.
JOURNALIST: Should Tony Abbott now explain what role Alistair Furnival, Senator Nash’s former chief of staff played in securing $16 million dollars for Cadbury?
SHORTEN: I think it was unbelievable to see pictures and images last night of Tony Abbott and Eric Abetz, the two senior leaders of the Abbott Government, heroically standing up for this tourism infrastructure at Cadbury, and then one person across – there is the Minister Nash’s disgraced chief of staff, sitting there. The Government said ‘when we found out about these conflicts of interest we got rid of him’, no, well actually what they’ve said is they’ve given conflicting views.
I think it is incredible that you’ve got a senior food industry lobbyist sitting there at Cadbury, and yet we’ve seen the car industry gone, we see Alcoa in Point Henry going, we see absolutely nothing emerging about Qantas. There are more questions for this Government to answer about the role of the lobbyist, the Government decision making on Cadbury. And when we talk about Minister Nash, this is a ludicrous situation now. What we had is that Tony Abbott, Prime Minister of Australia, said that her chief of staff had to go because he had been dilatory, he hadn’t lived up to the spirit of the Ministerial Code of Conduct and the conflicts of interest. Yet we have Minister Nash saying the only reason why he went was to stop it being a media issue. Ladies and gentleman, Minister Nash has given one reason why the chief of staff went, the Prime Minister of Australia has given another, they both can’t be right, and the Prime Minister has to tell us who is telling the truth.
ALBANESE: Can I just add something on the Cadbury issue, I was the Regional Development Minister in charge of the Tasmanian jobs plan. We had three groups that had been established by my predecessor Simon Crean. One based upon the north west, one in the north east, and one in the south. What they did were made up of industry people, about future jobs growth and jobs that could be encouraged.
You’ve seen the Abbott Government re-announce some of those plans, there was a $100 million package. There were submissions received from right around Tasmania. There wasn’t any lobbying or any submission received and no approach to me, as a Minister, at all, from Cadbury. Not one. So you had this whole state government and federal government involved in this, not one proposal. A whole lot of proposals about a whole range of things with varying merits, but nothing.
SHORTEN: Last question.
REPORTER: It appears the Audit Commission is unfavourably disposed towards the Government’s paid parental leave scheme. Do you think Mr Abbott should re-think it, in context of the budget?
SHORTEN: The revelation that the Abbott Government’s Commission of Cuts has given the thumbs down to Tony Abbott’s gold-plated paid parental leave scheme is hugely embarrassing to the Abbott Government. The Abbott Government, and the Prime Minister in particular, now needs to come clean. Is he going to go with the Commission’s recommendations, and break his promise? Or will he stick to a scheme which everyone in the world except Tony Abbott knows is a dud?
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