House debates

Thursday, 6 March 2014


Qantas Sale Amendment Bill 2014; Second Reading

9:01 am

Photo of Warren TrussWarren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Hansard source

I move:

That this bill be now read a second time.

This bill is a key part of the government's commitment to ensuring a strong Australian-based aviation industry in, and for, this country.

That means providing an environment for aviation businesses in Australia to manage their own affairs on an equal footing.

Good government is not about playing favourites or being a banker for major companies when times are tough.

It's about providing the environment for them to succeed free of unreasonable government impediments.

That is what this bill about. Helping the Australian aviation industry to grow in an environment that is safe, fair, competitive and productive.

The purpose of the bill is to remove the regulatory handcuffs that apply to Qantas but to no other Australian-based airline—including in relation to accessing foreign capital.

As the House will be well aware, last week Qantas announced a loss of $252 million for the first half of the 2013-14 financial year.

The company has taken difficult decisions to return the airline to profitability—most distressingly for all in this place the shedding of 4,000 jobs on top of the 1,000 job losses Qantas announced in December.

The government recognises that the best possible way it can assist Qantas is by removing the regulatory imbalance in Australia's aviation industry—in effect, to free Qantas from the regulations that hold it back and which are a remnant of the previous century.

Currently, there is one set of rules for Qantas and another set of rules for other Australian-based airlines.

Part 3 of the Qantas Sale Act, which the government proposes to repeal, requires Qantas to include a range of outdated restrictions in its articles of association.

Under part 3 of the act, foreign ownership is limited to 49 per cent, a single investor cannot own more than 25 per cent and foreign airlines are limited to aggregate ownership of 35 per cent.

In contrast, under the Air Navigation Act, foreign persons can own up to 49 per cent of other Australian international airlines, with no restriction on foreign ownership for Australian domestic airlines, subject to consideration by the Foreign Investment Review Board.

In order to provide a 'level playing field' and balance the regulatory rules for all Australian airlines, this bill seeks to repeal part 3 of the QSA.

This will free Qantas from the restrictions it and, indeed, its competitors in Virgin Australia and Rex, agree belong to a bygone era.

The bill also makes amendments to definitions in the Air Navigation Act to ensure that Qantas is subject to the provisions regarding foreign ownership, thereby creating a consistent regulatory framework for all Australian international airlines.

Australia's air services agreements with other countries require an airline seeking to exercise Australia's air traffic rights to be designated by government.

This means they must satisfy a range of requirements, including:

        The government does not propose to change these criteria.

        I, again, note that Qantas's main domestic competitors, Virgin Australia and Regional Express, support changes to the act, expressing their desire to compete with Qantas on a fair and equal footing.

        In summary, this legislation means that Qantas will no longer operate at a competitive disadvantage and that government regulation will no longer stand in the way of Qantas's efforts to return to profitability.

        I commend the bill to the House.


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