House debates

Thursday, 6 March 2014


Qantas Sale Amendment Bill 2014; Second Reading

10:57 am

Photo of Bob BaldwinBob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for Industry) Share this | Hansard source

I rise to speak on the Qantas Sale Amendment Bill 2014 and this very important issue facing our nation. Whilst this may be referred to as the repealing of the Qantas act, it is actually a bill designed to save jobs in Australia. I am very concerned that the Labor opposition make much song and dance about saving Australian jobs but want to keep shackles on a company that restrict it from growing jobs. Obviously, because they have never been in business, they do not understand the requirements for capital and investment. I have seen no greater proof of their inability to understand business and balancing books than the position they left us in after six years on the Treasury benches. We have a Leader of the Opposition who is more about headlines than heavy lifting, who is not prepared to look at doing what is necessary to keep those jobs in Australia. This is evident in the comments made by the Leader of the Opposition on 3 March at a press conference:

Under Tony Abbott, Qantas will be Australian no more. Under Tony Abbott we will see thousands of jobs go overseas; cabin crew, flight attendants, maintenance workers, the majority of the board of director positions, the head office, even the chairman.

That is false.

To be able to operate in Australia and have the benefits of being an Australian based airline, there are requirements under the Air Navigation Act, which apply to Virgin and to Qantas's subsidiary Jetstar, and those requirements are that: it must be substantially owned and effectively controlled by Australian nationals; at least two-thirds of the board members must be Australian citizens; the chair of the board must be an Australian citizen; the head office must be in Australia; and the airline's operational base must be in Australia. These are critical facts. And those are facts, not just rhetoric.

The argument is being skewed by the opposition in certain directions, based on misleading. I will go to a statement from 3 March by the former transport minister Anthony Albanese, who is now the opposition's spokesperson on transport and who, one would have thought, would have had a solid and detailed understanding of the aviation industry. He said in a 7.30 interview:

There's a reason why around the world national governments have carriers that they support, either directly through government ownership—

and here is the point—

and eight out of 10 are majority government-owned of the world's top 10 airlines …

Much has been made during election campaigns about the importance of the ABC's fact checker and how correct it is. So I would like to quote the response from the ABC fact checker, which says:

The verdict: None of the top 10 rankings of airlines based on passenger traffic, capacity, financial results, fleet size, employee numbers and customer feedback consistently include a majority of government-owned airlines. Mr Albanese is wrong.

That is the ABC:

Mr Albanese is wrong.

If I think back to 95 years ago—of course, I was not born then but I have read the history from 95 years ago—I wonder: what would Fysh and McGinness, the founders of Qantas, be thinking today? These were the two people who started with enterprise and ambition, and built Queensland and Northern Territory Aerial Services. Times have changed. In fact, in 1992, when the Labor government privatised Qantas, it set up restrictions which were valid at the time. A decade on, it was the then Labor transport spokesman, Martin Ferguson, who said, in 2002:

Labor is on the record as having an open mind on the relaxing of the 49% foreign ownership cap on Qantas as we recognise that without significant capital investment the airline is putting at risk its future international and domestic competitiveness.

Now, here we are, 12 years on from that point, and it is time again to have another major rethink.

I have some history with the airline industry. My very good friend Gerry McGowan asked me, when I lost my seat in parliament in 1998, to come on board and help with the establishment of Impulse Airlines. I know how tough it is to attract capital into an airline. I know how difficult it is to grow market share—been there, done that, bought the T-shirt. Impulse Airlines, for those who have forgotten, is now Jetstar. So I saw the growth of that airline from the very beginning, and the market conditions today are vastly different. If you think about what is required to create jobs in Australia, you need only look at Virgin. It came into the marketplace at the same time as Impulse and has grown to be an airline that employs nearly 10,000 people, most based in Australia. It has created lots of jobs, lots of economic benefit, and, most importantly, choice for consumers.

What we do not need to do, as a government, or, indeed, as legislators looking to act in the national interest—and I love it when the Leader of the Opposition keeps talking about the national interest—is to put barriers in place or maintain barriers which stop jobs being created and grown. The national interest is to get the government out of the way and let enterprise create the opportunity for sustainable jobs.

You see, some of the people on the other side have never moved on from their union movement days where it was: 'Protect the union movement always, and sacrifice everyone else on the way through. As long as I am okay, burn anyone else.' We saw that with Craig Thomson and the HSU. He was taking care of himself—regularly, by the sound of it! So it was: 'Take care of myself; burn the rest.' What we are seeing now is headlines, not heavy lifting. We are not seeing any engagement with or any listening to Qantas on what it requires to achieve growth, and opportunity and sustainability as to jobs.

I was just having a look, and over the last five years Qantas share prices have plummeted—by 80 per cent in five years. Yet they have had enormous market share. They have had issues that they have had to deal with. They have had increased competition. That competition is not going to go away. In fact, that competition is going to increase and increase and increase. I congratulate Virgin for the actions that they have taken to grow consumer choice in the marketplace. I think it is healthy. The consumer benefits and the market benefits when you have people competing head-to-head for that market share.

The airlines are bound by the same restrictions under the Air Navigation Act. It applies to Jetstar, to Virgin and to Qantas, so there is a level playing field there. But you should not have Qantas's hands tied behind its back so it cannot compete. Otherwise, it is a race to the bottom. By the words, the rhetoric and the actions of members opposite, they would rather keep the shackles on Qantas, bring it to its knees, and see the airline destroyed and, more than likely, ultimately go belly up, rather than embrace change.

Yet this is the Labor Party that, in 1992, embraced change by privatising Qantas. This is the Labor Party whose opposition spokesperson on transport, Martin Ferguson, in 2002 was prepared to embrace change. He could see that if he did not take the shackles off it was going to cost jobs. A lot of things get said about Martin Ferguson, but I have never seen a person more dedicated to maintaining job opportunities in Australia than Martin Ferguson. That is why he was so well respected on our side of the parliament, because it was about jobs.

What we see now from a Labor opposition is headlines, not heavy lifting. We see that they are prepared to burn fellow Australians without delivering any result. I say to those opposite: if you truly understood the issue and you wanted to keep those jobs—Alan Joyce has already announced that 5,000 jobs will go, to try and get his books back into line—you should be doing everything you can to create greater competition, to give them the opportunity to compete on an equal footing, rather than keep the shackles on them.

I have gone through the Qantas Sale Act. In fact, over a decade ago I was on the record and at various meetings talking about the need to abolish the Qantas Sale Act. There is no reason that we do not allow foreign investment into this airline. In fact, in my discussions with the former CEO, Geoff Dixon, years ago, and the new CEO, Alan Joyce, they talked about the ability to attract foreign investment and the greater linkages and cooperation they will have through codesharing to provide more benefits to the consumer. It is, after all, all about consumer choice.

I am not going to labour the point on this debate other than to requote some of the statistics that our Treasurer put out yesterday. In 2003, Qantas's domestic market share was 74 per cent. Five years on, it had dropped to 51 per cent, and today, another five years on, it is 44 per cent. So they have gone from 74 per cent to 44 per cent in just over a decade. At an international level, their market share in 2003 was 33 per cent; in 2008 it was 26 per cent; and today it is 17 per cent. They have been continually losing market share.

It is true that allowing foreign investment does not immediately lift your market share, but it allows cash and capital to come into the business so that new fleets can be organised through cash injections and through increasing your capital holding, without burdening through debt arrangements. That is what the consumers want. Consumers want fresh aircraft, modern aircraft and modern services. What we need to do for a variety of reasons is take the monkey off the back of this business.

When I hear the Leader of the Opposition and all of the other speakers who are yet to speak on the need to sustain those jobs in Australia, I will remind them of the carbon tax that Qantas paid, a $106 million carbon tax; Virgin's carbon tax; and Rex's carbon tax. All of these are taxes on jobs and opportunity, and destroy and undermine an industry. I note that the Leader of the Opposition has come in, and I put to him the question: are you prepared to do the heavy lifting, or are you just after another headline?


No comments