Thursday, 6 March 2014
Qantas Sale Amendment Bill 2014; Second Reading
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Part 3 of the Qantas Sale Act, which the government proposes to repeal, requires Qantas to include a range of outdated restrictions in its articles of association.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.
Leave is not granted. The opposition did not choose to inform the government of this proposal. We are prepared to bring the debate on at the earliest possible opportunity, but if the opposition intended that there would be a full-scale debate they should have done us the courtesy of discussing that with us. The shadow minister has asked me to defer debate on other bills. I have been cooperative with him and have agreed to delay debate so that he could prepare himself for it. This was a very limited debate and, for that reason, leave is not granted.
That so much of the standing and sessional orders be suspended as would prevent the member for Watson moving immediately that so much of standing and sessional orders be suspended as would prevent the debate on the Qantas Sale Amendment Bill 2014 proceeding immediately.
This debate should happen now. There should not be a delay in—
I second the motion. The fact is that Qantas approached the government for assistance more than three months ago. In November and December government ministers, including the Treasurer and the transport minister, clearly indicated that there would be support for a debt guarantee. Qantas management, the Qantas workforce and Qantas shareholders relied on that. Then, due to an internal battle within the government between the Prime Minister and the Treasurer, on Monday night there was a decision by the cabinet to reject what they, up until then, implied they would support.
Yesterday, there were meetings between Qantas management and its workforce about the loss of 5,000 jobs. Yesterday, the Leader of the Opposition asked the Prime Minister what action had been prepared by the government to provide assistance to those Qantas workers. There was nothing. What we got from the Prime Minister was just more politics. In terms of why this debate should be begun today—
Madam Speaker, to assist the House, you might wish to exercise your discretion. The government are going to support the suspension of standing orders because we are quite happy to debate the Qantas Sale Act, so I am happy to give leave for the suspension motion to be moved and passed. So we do not actually need to debate the suspension of standing orders. We have always, since the beginning, been of the same view. I am happy to withdraw the gag, not have the division and allow the member for Grayndler to finish his speech, and then to have the motion put, debate it and pass it.
In the circumstances, we will call the division off. I accept that the Leader of the House has said that the government will accept the suspension motion and that the debate on the bill will proceed. If the member wishes to use the rest of his time, I give the call to the member for Grayndler.
I do indeed. The fact is that this government does not have legislation this week. We have had, in this chamber, the longest ever address-in-reply debate in the history of the parliament, since Federation. We will have gone through two Governor-Generals before it is finished!
That is why they are prepared to bring on this debate. We have seen a shambles. We asked leave so the debate could begin. Leave was knocked off. We then moved to a suspension. They gagged the mover of the suspension. The Manager of Opposition Business—
It would almost have been completed and given to the Governor-General by now. That is a fact. That is the disrespect from this bloke because he cannot run the parliament. (Time expired)
Opposition members interjecting—
to debate the Qantas Sale Amendment Bill 2014. The only reason we would not have debated it this morning is that, usually, the opposition want to go through their party processes and bills sit on the table for a week to allow them to do that. The government has gone through its party processes. We support the Qantas Sale Amendment Bill 2014. We are very happy to pass it, and we will pass it this morning.
This is one of the most extraordinary own goals that I have seen in 21 years in politics. The opposition is facilitating the government passing—in fact, demanding that it pass—its agenda, and we will. We will pass it this morning. The Qantas Sale Amendment Bill will then be in the Senate, and the Senate can debate it. Quite frankly, if Labor want to stand in the way of putting Qantas on the same footing as Virgin, that will hang around their necks, and every job that is lost at Qantas will be the opposition's fault.
The poor old Leader of the Opposition, who is a wholly owned subsidiary of the union movement, is displaying all the reasons why he should not be Prime Minister of Australia: he is a weak Leader of the Opposition, he is a wholly owned subsidiary and he is a small person when it comes to leadership. We are very happy to pass this motion to debate the Qantas Sale Amendment Bill, to pass it today and to have it in the Senate by lunchtime.
Question agreed to.
I am pleased to be able to make a contribution to this debate. I do note that those opposite have indicated that, whilst they are prepared to have a debate, they are not prepared to have a proper debate. They intend to move a gag motion on this bill to put it through the House—even though, of course, it has no prospect of passing the Senate. Let us look at how we got here. In November and in December—
Government members interjecting—
I am asked why. Well, the Leader of the National Party, the Deputy Prime Minister and former shadow minister for transport, very clearly indicated why: because there was not support of the Australian people for this. He said that in December. And why is there not support of the Australian people? It is because it is not in the national interest and not in the interests of Australian employment for this to be carried.
We had a process in 2009 that led to an aviation white paper. We had a green paper and then a full discussion with the transport and tourism sector—an open process of consultation. In December 2009, it recommended that Qantas should stay in majority Australian hands but that we should consider repealing the sections of the act that require a 35 per cent and 25 per cent rule—the limited restrictions on a single owner who is not Australian and also on ownership by other airlines of Qantas. We did that in a practical way. We were prepared to consider that.
What did those opposite do? On day one, the shadow transport minister and the shadow Treasurer, who are now the two key people for the passage of this legislation, rejected it, and they rejected it on the basis that it was not in the national interest. The shadow Treasurer outlined very, very clearly that it was his view that any diminution of the restrictions on foreign ownership was not in the national interest because the obligations of Qantas as an Australian company would mean that that was diminished, and he rejected the 35 per cent/25 per cent amendments. The shadow transport minister of the time did the same thing, particularly pointing towards the role that Qantas plays in regional Australia. So that was the position of the opposition back then.
As to the then government's position, we had, after that proper consultative process, fully put forward the view that we were prepared to make that minor change to the position but were not prepared to go further. Here is what the shadow transport minister said:
The Government’s decision to allow a single foreign investor to own 49 percent of Qantas would deliver effective control to a foreign investor, including possibly a competitor airline. Lost of effective Australian control could leave Australia without an airline primarily committed to our interests. What safeguards will be put in place for the Australian flying public, particularly those in regional areas?
What else did they go on to say? The shadow Treasurer said this:
Well this is something I have previously been on the record about. Very concerned about any dilution of Australian control of Qantas. Qantas has, over the years, tried to increase foreign investment in the airline. We have been very concerned for a number of reasons. First and foremost, Qantas is an Australian icon and Qantas undertakes significant tasks in the national interest and there have been numerous examples where Qantas—an Australian-owned airline and an airline that relies heavily on government regulation has undertaken tasks in the national interest. Our experience has been that when companies have majority foreign ownership or majority foreign control—not necessarily the same thing—but when they have majority foreign control, then it actually has an impact on the social responsibilities of those companies here in Australia. So, in short, we’ll see where we’re going.
These were not newly elected members of parliament. The shadow transport minister had been the transport minister, with responsibility for aviation and regulation in this country, prior to the 2007 election. The shadow Treasurer, now the Treasurer, was a senior member of the Howard government as well. They had thought through those issues. They had thought them through in a way which then determined the position of the coalition on the very day that the white paper was released. That was a very public process. They were on the record about that.
Then the coalition came to office in September last year. Prior to that, of course, Qantas had had difficulties. As to some of the decisions of the Qantas management, I maintain the view that I had at the time: that the grounding of Qantas by the management damaged the Qantas brand and was an error of judgement on the part of that management.
But I have worked constructively with Qantas. I have also worked constructively with Virgin and the other airlines that are based in Australia. Virgin, of course, have successfully expanded—and I supported their actions in expanding—their operations through the effective takeover of Skywest and Tiger. There is no doubt that, had the takeover of Tiger not been approved, it simply would have disappeared from the Australian aviation landscape.
Last year I provided, as the minister for transport, a letter which indicated that Qantas had a special relationship with the Australian people and a special role in terms of the national economic interest. That letter of comfort, which was requested—worked out in consultation with the appropriate bureaucracies in government—was successful. It was successful in ensuring that Qantas maintained its credit rating.
In November, Virgin, because of the pressures that had been placed on it in terms of capacity, needed an injection of capital. It received that injection of capital of around $380 million from partner airlines Etihad, Air New Zealand and Singapore Airlines. All three of those airlines are government backed. So effectively you had a transfer of support from the governments of New Zealand, Singapore and the United Arab Emirates for Virgin. Why did that occur? It is in the commercial interests of those airlines to provide that support to Virgin, which, of course, is primarily a domestic carrier. They have an interest, as shareholders in Virgin, in Virgin's success, but they also have an indirect interest because they benefit in terms of the codeshare operations that occur with Virgin as a domestic carrier and feeding in passengers through those three international government backed airlines.
That was the first thing that changed, in November. In December, Qantas received a downgrade in its credit rating to junk status. They are the two events that changed the political landscape in terms of whether government should go further in providing support for Qantas. Every indication was made by the Treasurer that that support would be forthcoming. The Treasurer outlined four principles which that would be based upon. He said this. This is the first principle:
… has the Parliament and the Government imposed restrictions on that … business that are not imposed on other businesses in the same industry?
And he said:
The answer in relation to Qantas is yes.
Secondly, is that business fundamental to the economy, is it providing an essential service to the economy, such that if it were to have significant issues that inhibited its day to day operations, it would have a detrimental impact on the economy?
The Treasurer said:
In the case of Qantas, the answer is yes.
He went on to say:
The third factor that needs to be considered is; are other Governments actively supporting other players in that industry?
There he said:
The answer in relation to Qantas is yes. These are crucial tests we apply.
And he said:
The fourth hugely important test is, is the enterprise trying to fix up its own balance sheet? Quite obviously Qantas is trying to do it.
There is nothing equivocal about the statement of the Treasurer on 13 February—nothing equivocal at all.
And there was a response to that. There was a response by Qantas management. There was a response, of course, in the impact on the Qantas workforce, where 5,000 people will lose their jobs. And there was a response by Qantas shareholders which saw the share price rise by more than 10 per cent. That was the response.
The Treasurer was arguing, as late as Monday night, in the cabinet room for that proposition. What did the opposition do? We indicated very clearly from day one and consistently that we would be constructive. We indicated where the line would be drawn. The line is very clearly drawn in terms of majority Australian ownership. We indicated and continue to indicate to the government that we are prepared to consider supporting other options—other than that—for the very reasons outlined so eloquently by people such as the Treasurer and the transport minister in the past.
This legislation being brought before this chamber is legislation not only that we oppose but that those opposite, in their heart of hearts—people such as the Treasurer—also have not been arguing for. Indeed, they have rejected in the past any dilution. Even the 35-25 per cent rules, a relatively minor change, were rejected.
So what did they come up with on Monday night, where we know—because the Prime Minister indicated it in his press conference—that every single member of cabinet made a contribution? I have sat around a cabinet room. Every member only makes a contribution where there is a lot of conflict, where there is real conflict about a way forward. That is not surprising given the contradictions that are there from those opposite. The fact is the Minister for Infrastructure and Regional Development said just now in his second reading speech:
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.
The problem for this bloke is he was the transport minister in this century. He was the transport minister; he was responsible for these regulations.
The other problem is that we know what Qantas wanted because Qantas stated it, the Treasurer stated it and the transport minister stated it: they wanted a debt guarantee. You have had every red herring thrown up in this debate, including the red herring of the carbon price, even though we know that both Qantas and Virgin actually asked to be included in the carbon pricing scheme. We know from the statements that were leaked from the cabinet meeting on Monday night—the cabinet is leaking and they have not been there that long—that they had a discussion in the cabinet room about the Qantas statement on Monday that carbon pricing was not the real issue here, that it was not what they were talking about. We know the Treasurer read out the Qantas statement at the cabinet meeting on Monday. So they read it out, leaked it and clearly they then had discussions with Qantas about that view.
Why is the inconsistency there? I go back to Joe Hockey's four criteria that it is worthwhile in terms of support for the national carrier. In terms of support for the national carrier, we know that there is a position whereby the three government backed airlines have made the injection into Virgin. We know also that when we talk about aviation we are not talking about an area where the free market operates. It is not actually the way it works. Aviation is regulated by the Chicago Convention on International Civil Aviation. Agreements are made between nation-states. The agreements are made government to government. This is not an area whereby you have the private sector going off, having negotiations and coming up with agreements without government regulation. The air services agreements are not between Qantas, Virgin and United—they have their own arrangements; the air services agreements are between the Australian government and the US government, the Australian government and the Japanese government, the Australian government and the Chinese government. They are based upon the principle of where the airlines are based, the majority ownership of that country in order to access those traffic rights between countries.
Let us have a look at the Skytrax ranking of the top airlines around the world. Skytrax is the world airline awards. Emirates is 91 per cent owned by the UAE government and comes in at No.1; Qatar Airways, 50 per cent owned by the Qatari government, comes in at No. 2; and Singapore Airlines, 54.5 per cent owned by the Singaporean government, comes in at No. 3. When you look around the world including at the future giants of aviation, there are at least three but there are many more. The three very big carriers from China are getting bigger every day. They are supported by government.
What we had here was a request from the national carrier for government support, an indication by the government that that would be forthcoming. Then at the last minute that was withdrawn and legislation was put forward which has no prospect of passing this Senate or the future Senate. So I say to government again, as I have said since December, we are prepared to be constructive. We clearly indicated that from 2009 we have had a position on the 25 per cent and 35 per cent rules and we would be prepared to have constructive discussions about that or any other support that would be available.
Why is that the case? What has this come down to? At the end of the day, this is not about the people who sit in this place. At the end of the day, this is about two things. The first issue is the national interest, where national governments around the world recognise that aviation is worthy of support. The second issue is that it is about the workforce, those 5,000 people who are losing their jobs at Qantas. We asked the Prime Minister yesterday what response there was from the government for those 5,000 workers. Did we get a commitment about retraining, about income support, about counselling or about any of a range of options that should be there when you have people who, in many cases, will have worked for decades for the company known as the flying kangaroo? No, we did not. We just got more politics. This is completely unacceptable.
Look at what the consequences of this legislation. The consequences of passing this legislation is that what you would have is a break-up of Qantas. That is what the legislation is designed to do—to separate out the company so that you will have Qantas international separated from Qantas domestic and Qantas domestic completely freed up in terms of foreign ownership. So you are freeing up to foreign capital the profitable section of the airline—and you are saying that the international arm will be able to continue as it is as a separate entity with different owners.
Qantas is very different in terms of its corporate structure from Virgin. Virgin have the big owners—the three government-backed airlines and of course Virgin international through Richard Branson. Qantas's ownership structure is very different. If you split the company and you have a profitable arm with up to 100 per cent foreign ownership, why should there be that cross-relationship in terms of shareholder interests with Qantas international? And yet the national interest and the whole of Qantas's interest is often served particularly by routes in regional Australia being protected, because whilst they may not be delivering a positive return in the short term, they deliver that in the longer term. That is what the Treasurer was talking about and the transport minister when they spoke about the national interest.
What we know is that when this has occurred, such as in Air Canada, the potential for a hostile takeover essentially and a breaking up of the company would be very much there. Why is that the case? In terms of the ownership provisions that are there providing some defence of the national interest being protected, at the moment the Qantas share price is hovering just above a dollar. We know that the value of assets that Qantas has—the Frequent Flyer program, key terminals, Jetstar—is certainly many times more than the total share value. So the consequences in terms of a break-up—and I think the Treasurer gets this, which is why he took a different position, to be fair to him—and the potential for a break-up of this company with consequences for the national interest are ones that we take very seriously indeed.
Then the government says, 'But don't worry, because for the potential buyers the FIRB provisions will ensure that there can't be a takeover that isn't in the Australian national interest.' Which are the airlines that will potentially invest? Are there any of them that are not government backed? The two obvious places are from China and the UAE. That is the strength of global aviation at the moment. Singapore, of course, is also very strong, but they are in partnership with Virgin. So the government is going down this road but saying, 'Don't worry, cause we'll stop it—there is another process.' But, of course, FIRB make recommendations to the Treasurer, so it will end up back with him.
No. In terms of our position, we unequivocally stand for Australian jobs. Qantas has the safest record of airlines around the world—it is known for it. Are we really saying that there is no relationship between that safety record and the skills of those Australians who maintain the aircraft and those engineers who work for Qantas, that there is no difference between where that work takes place?
Someone said to me yesterday that this is about sentiment; it is not. This is about cold, hard analysis of Australia's economic interests. But it is also about who we are as Australians. I make no apology for acknowledging the fact that the flying kangaroo is a source of national pride. It is a source of national pride which brings jobs to Australia, because every time people see the flying kangaroo, wherever in the world, it is an ad for Australian tourism. Qantas, of course, play a critical role in Australian tourism through programs like G'DAY USA, G'day China now—those programs that have received support. Qantas back our national teams—the Wallabies, the Australian cricket team. They do all of that because they are an Australian company. If you remove that, there is a difference between the flying kangaroo and replacing that with an emblem of another country. It is about Australian jobs; it is about the national interest. The government needs to rethink its position, get out of the trenches and actually start acting like a government that is prepared to govern rather than just act like an opposition.
I rise particularly today as the member for Cook, which represents the Sutherland shire—as does the member for Hughes in part. There are two things about my community that I think are very relevant to this debate. The first one is that in the shire we are a very self-reliant community. People work hard, they have started businesses, they have established family businesses that continue to this day employing hundreds if not thousands of people, and they have always understood that the hard work and the investment that they put in is where their reward comes from and where their future comes from. They have always understood that business can be tough, that markets can be tough, and the way they have always responded to this has not been to seek a handout but to put the work in and to apply themselves to the challenges before them, and this has created an incredibly strong community. This great strength that exists within our community, from an economic and small-business perspective in particular, translates into a strong social community as well—one of self-reliance, but also one of generosity to those around them. The other thing about my community is that it is arguable that it has the largest number of Qantas employees of any other electorate represented in this place. It is that resilience and self-reliance that I know my community will draw upon as they go through what I know is a very difficult time—and this is a difficult time for my community and for the many, many people in my electorate who are affected by what is happening with Qantas.
This has been happening for some time; this is not a new issue. There will be many newcomers to this debate today, I suspect, but in my community this has been a long-term debate. They have, for some period of time, watched as the commercial and international conditions that sit around how Qantas performs and is able to perform have changed. They have seen that change for them. They have seen the change in the market share, which the Treasurer spoke about in this place yesterday. They have seen these changes, and that has been an issue of concern for them for some time.
It is important that we understand and acknowledge in this debate, as I am sure those in my community would like to, that Qantas has played, and, indeed, continues to play, a central role in Australia's national life and in our economic life as well. It has served, and continues to serve, our country; all of its employees have served our country extremely well. In good times and bad, Qantas has always been a great Australian airline. And since 1992 it has been a great Australian company. Its traditions and its success are things I think all Australians should feel very proud of. It has set standards. It is innovative. It has been able to connect Australia with the world, and connect Australians with each other across this vast continent. It is an extraordinary story, an extraordinary Australian story, and I want that story to continue. I do not want it to come to the shuddering halt that would be the product of the way that those opposite would seek to see its future. I want to see a future for Qantas—for the people who work for Qantas, for the people who have always supported Qantas and for the future of our aviation industry—and a role for those many Australians who would like to play a part in that future in the years ahead.
I am a passionate advocate of Qantas, but I am a realist as well. I know that a government that is serious cannot govern by nostalgia and sentiment. It cannot govern by emotion. It must govern by the hard realities of the challenges that we face. Qantas is facing a difficult and challenging international aviation market. There is no doubt about that, and the shadow minister is right to point out that it has principally been government owned and supported carriers that have been the dominant force within the international aviation market for a long time. It is not a new phenomenon. Those who remember what happened with Ansett and other things many years ago will remember that as well. The commercial issues that go around these challenging issues in the aviation industry understand that. It is not new. And so the question for us today is: how do we make Qantas stronger? How do we equip it to be able to combat the challenges that it faces in the future and to succeed—as it always has succeeded?
I and my colleagues on this side of the House have faith in Qantas's ability, and particularly the ability of the people in Qantas, the people who have always worked within Qantas. I have faith that in whatever aspect of their operations, they have the passion for and commitment to this business to make it succeed in the future. And to allow them to do that, we have to remove the constraints that are placed upon it. We cannot just pretend that the environment they are facing is some sort of myth. It is not; it is real. What Qantas needs is the ability to be able to work with equity partners that can play the role in the future that it needs them to play. We cannot keep those potential partners locked behind closed doors, as the Qantas Sale Act 1992 does. It prevents them from being able to engage in Qantas's future and to provide the support for that future. And by continuing to lock them out, we deny the opportunities that the Qantas employees will need to be part of a very successful Qantas in the future.
Qantas has the job of running this airline, not the government. That was decided by this place in 1992. Those opposite seem to be wanting to govern retrospectively now. They want to take us back to 1992. In fact, they want to take us back to before 1992. They want to say that the equity partner—default equity partner even—in Qantas should be the taxpayer. But we decided that back in 1992. So unless those opposite are suggesting that we should buy back Qantas—as they did, in large part, in New Zealand—and for the government to now be the controlling interest in Qantas, as the member for Gorton seems to think that somehow we still are, then they should put that view. And I think that is exactly what the shadow minister was doing today. He is suggesting, and those opposite are suggesting, that the equity partner that Qantas needs is the Australian taxpayer. Not only do we not agree with that position, but this parliament also did not agree with that position in 1992 when it decided—when Labor in government decided—to sell Qantas. And when you make that decision and you go forward and you decide that Qantas is going to be on a private path and not a government-run airline like so many others are, then you have to commit to a success as a private business into the future, and you have to give it the options and the opportunities that it needs to be successful in that environment. That means passing the measures in the Qantas Sale Amendment Bill, which is before parliament today, to enable Qantas to attract the equity partners it will need in its long-term future. We have decided that will not be the government. Those opposite voted for that back in 1992—unless they are now saying that they are going to recant. Having made that decision, we now need to lift those restrictions to enable Qantas to have a future, which will mean Australian jobs within Qantas in the future.
The other thing you have to do is to remove other restrictions that impede its ability to be profitable. The carbon tax bill for Qantas was $106 million—$106 million! The opposition sneezes that this is some trivial consequence for Qantas. Are they suggesting we should invest $106 million in Qantas? That is what the opposition seems to be suggesting. The opposition could do that effectively by getting rid of the carbon tax. There is $106 million support for Qantas today—year-on-year—$106 million and more because the amount will become greater under the previous government's carbon tax. There is some direct support, if you like, but delivered in a way that this government delivers support—by freeing up businesses in this country so that they are able to properly run their businesses. It is no different for Qantas than it is for the many thousands of Australian small businesses—I acknowledge the Minister for Small Business, Mr Billson, is here at the table—and the many small businesses in my community of the shire because they are doing the same thing. They do not come knocking on my door asking for a debt guarantee. They come to ask me to get regulation out of their way, which helps them to employ people and allows them to succeed. That is the spirit in small businesses in my electorate, as I know it is in small businesses around the country.
We have to let Qantas and its management take responsibility for future decisions, give them the things they need, the options they need to be able to put forward their plans for the company. The Qantas board runs the company. Boards, like governments, will be responsible, and managements will be responsible for the decisions they take and the impact they have on their shareholders and on their employees. That is the way we run the economy in this country and that is the way we should run the economy in this country. If those opposite are somehow suggesting something different, they should be very clear about that.
Qantas is a tremendous, wonderful, national airline. The good news is we have other national airlines today and Virgin is one of those. Protections already exist within the various legislation which governs aviation arrangements, which continue to apply equally not only to Qantas but also to any other national carriers that will be acting consistently with our international aviation agreements. The Navigation Act applies to other airlines including Virgin and Qantas' subsidiary Jetstar. Qantas international would stay majority Australian owned. As for their domestic operations, they are subject to review by the Foreign Investment Review Board—no changes there. Our international air service agreements impose ownership and control restrictions to ensure only Australian international airlines can access our traffic rights and under those restrictions, Australian international airlines must be substantially owned and effectively controlled by Australian nationals. At least two-thirds of the board members must be Australian citizens. The chairperson of the board must be an Australian citizen. The airline's head office must be in Australia. The airline's operation base must be in Australia. The government has no plans to change these criteria, which will continue to apply in Qantas' international operations—not to mention the Fair Work Act, the Corporations Act, immigration laws, for which I am responsible, and other regulations which affect every other Australian business. There are safeguards and there are protections regarding those operations.
Those opposite seem to be arguing that a foreign equity provider and shareholder in Qantas domestic is somehow going to run Australian domestic operations in another country. Apparently they are going to run a domestic aviation service in Australia by flying around some other country, which is absurd. As the minister for transport has argued very well in this place in recent days, Virgin is employing Australians in Australia. Australians are on those planes every day, moving millions of people around every single week. That is the future I want for Qantas as well because that has been Qantas' past, it is its present and it will be its future—so long as this place and the other place decide to put a vote of confidence in Australian business and in Australian employees. Qantas is a great airline. As a former managing director of Tourism Australia, I know from first-hand experience that Qantas has given unparalleled support to the Australian tourism industry. Sadly, under the previous government that went array and it will be for those who were responsible to explain that one day. Qantas always stumped up when it was in my field of operations. That will continue.
It will be a good future for Qantas. It will not be the same as its past. That is true for all businesses, as the Minister for Small Business would know. We cannot somehow wish away the circumstances that all businesses face today and pretend somehow we can be nostalgic and sentimental about these difficult decisions. For Qantas to go forward, this government and this parliament must get out of its way and free it up to find the partners in the future that it so richly deserves, its employees so richly deserve and await it. The only thing standing in between that is the Leader of the Opposition and his cohorts in the Senate. For my electors, I hope, the Leader of the Opposition will have a change of heart and will decide to support Qantas by supporting this bill.
We have seen an extraordinary passage of events in the parliament this morning, where the government clearly do not have the confidence of their own convictions. What we have seen this morning is the minister responsible for this piece of legislation come into the House, read the bill and then have the opportunity to have that bill debated in full—the opposition granted the government the opportunity to have that bill debated in full. The government then tried to move a gag motion on a debate on their own bill. They tried to gag debate on their own piece of legislation. What this shows is that they do not have confidence in their legislation. They do not have confidence in their ability to manage this debate. It shows that the government are struggling to convert their seductive three-word slogans into serious policy, legislation and a legislative agenda to bring before the House.
It is actually a reflection of the haphazard decision-making process that has typified this whole matter. We have seen question time after question time being concentrated on the future of Qantas. There has not been a question time this year where the future of Qantas has not been debated. You would think, given all of that, they would be prepared to come into the House and defend the legislation which we argue is not in the national interest. That has not been the case.
The government has had many positions on this, as we have seen from the comments by the minister himself. He has obviously had a range of different positions on this matter over the last five years. In 2009, the then shadow minister had a position which was once in the interests of regional Australia, once in the interests of jobs and once in interests of the future of Qantas. At that point in time he had this to say:
The Government’s decision to allow a single foreign investor to own 49 percent of Qantas would deliver effective control to a foreign investor, including possibly a competitor airline. Lost of effective Australian control could leave Australia without an airline primarily committed to our interests.
What safeguards will be put in place for the Australian flying public, particularly those in regional areas?
That is a very good question: what safeguards will be put in place for the Australian flying public, particularly those in regional areas? We see nothing in the Qantas Sale Amendment Bill 2014 which would protect the interests of those who are in regional Australia and relying on the services of Qantas—the interests that the minister once protected, once stood for but is now selling out as he stands here and moves this legislation before the House today.
Of course, he is not alone. In 2009 the Treasurer, who has shown a great interest in this particular debate, had this to say when he was asked about the 25-35 rule for Qantas:
… this is something I have previously been on the record about. Very concerned about any dilution of Australian control of Qantas … We have been very concerned for a number of reasons … Our experience has been that when companies have majority foreign ownership or majority foreign control … then it actually has an impact on the social responsibilities of those companies here in Australia.
That is what the Treasurer said in 2009. It is what he thought in 2009 and we would argue that he was spot-on. We would argue that both the Treasurer and the minister were spot-on in 2009 when they made those observations about the future of Qantas.
This has been a chaotic debate, and the way that this has been handled over the last month is nothing short of a disgrace. We have seen a cabinet minister backgrounding the media on what they intended to do. We have seen the Treasurer himself sending smoke signals about the possibility of a debt guarantee. Then we saw the Prime Minister himself on one day send signals about what they were intending to do, on the next day saying almost the exact opposite. So you can imagine what people in boardrooms around the country are thinking as they focus on this debate. They are very concerned, and they are right to be concerned, about the government's lack of consistency when it comes to handling issues like this.
In question time a few days ago we heard the Prime Minister pose the question: why should we do for one company what we are not prepared to do for another? What should we do for one company that we are not prepared to do for another? He said that in relation to government support for Qantas. You can only imagine the discussion that has gone on around the Qantas boardroom in the last 24 hours, trying to synchronise these two comments. You can only imagine the discussion that is going on around the Qantas boardroom. They would be saying to themselves: 'If only Qantas were a company that transported wheat and not people, then we would have a chance of government support. If only we were a company that transported wheat and not people, then we might have the support of the National Party on this issue.' We know that they went to the wall over the sale of GrainCorp. They went to the wall and they were the ones in the cabinet room and backgrounding the media saying it would be a national travesty if we allowed a foreign company to come in and take over GrainCorp because it would not be in the national interest.
In the boardrooms of Qantas today and around the executive hallways of Qantas they must be saying: 'If only we were a real transport company, transporting wheat and not people. Then we would have a chance of some government support.' You can imagine them saying: 'If only we were a real tourist business, then we would have a chance of government support. If only we were in the business of making chocolate instead of transporting people around the country and around the world to their holiday destinations, then we would have a chance of government support.' We know the government is willing to support a business that is in the tourism industry. 'Unfortunately, as a national airline, we're not in the tourism industry. We only transport people around the world and around the country to go on holidays. We're not making Freddo frogs or chocolate bars and therefore we're not going to get the sort of government support that Cadbury has been able to enjoy.'
You can imagine the conversations that are going on around their boardrooms today: government inconsistency; saying one thing before an election, doing another; setting out clear principles and then contradicting them; sending up smoke signals that we are willing to support Qantas, willing to give them a debt guarantee, only to have an unholy barney in the cabinet room with one cabinet minister backgrounding against another minister to undermine a position that would have been in Qantas's interest. We have seen an absolute shambles and absolute chaos. That is the background to the bill that has come before the House today.
We have heard the Prime Minister, the Treasurer and the transport minister stand in this place today and ask: why should the government come in and support Qantas when they are in direct competition with Virgin? Why should we do this? Why should we do one thing for Qantas? Why should the government come in and support Qantas and at the same time not be supporting Virgin?
I have the highest regard for Virgin and the CEO of Virgin. I think he has done a fantastic job bringing that company, that airline, from nowhere to having a significant presence in this country. As a member of this place who, from time to time, has to travel for work, I make sure that I spend some of that time on a Virgin aircraft. I think they are a fine airline. I think they are doing a fine job. But the argument does not stack up, because if you look at the corporate ownership, if you look at the structure of the airline, you will see that Virgin, like the majority of airlines around the world, enjoys the backing of one, if not more, government. In Virgin's case, it enjoys the backing of three governments. So the difference between Virgin and Qantas is that Virgin enjoys the support of three governments and Qantas does not enjoy the support of any, so the argument of a level-playing field simply does not add up. It is just another of the inconsistencies that the government has stacked up in this debate.
The people are not buying it, because they know the consequences of this legislation which is before the House today. Because it is not just about the ownership, as important as that is; the Qantas Sale Act also has important protections about jobs. It has protections in it about where the headquarters will be. It has protections in it about the provision of certain functions within this country—maintenance functions, catering functions, reservations functions—to ensure that this iconic Australian business employs Australians, and it does that. The people of Australia are not going to be conned. They are seeing over 5,000 jobs going from this company. Just yesterday, they saw over 1,500 workers at Mascot headquarters being told that they are going to lose their jobs.
As the Prime Minister stands here and says, 'We're going to do nothing to help this airline and this industry,' those people will be going back to their homes and their electorates, saying: 'I am losing my job. It was a good job. It was a well-paid job in a great company. I am losing my job, and the government is doing absolutely nothing to assist me or my family.' This is important: over 35,000 Australians earn a living working for Qantas—good jobs, highly skilled jobs, the jobs of the future and jobs that we should be supporting. We should be doing everything we can as a government and, on this side of the House, as an opposition to ensure that we support those workers, that company and that industry.
It is an important industry. I made light earlier in my contribution: if only Qantas were producing chocolate and not providing airline services then maybe they would get tourism support. But tourism is a critical industry in this country. It employs over half a million Australians. It is a $1 billion sector and it has been identified as one of the five supergrowth sectors that are going to backfill the economic hole in terms of employment and GDP as the mining boom comes off. So it is important to our future. It deserves our support and our attention, and those of us on this side of the House who are committed to ensuring that we have a vibrant company, a vibrant industry, are willing to work constructively with the government to ensure that Qantas remains a vibrant, Australian owned company, employing Australians and providing services throughout regional Australia and to the rest of the world. It is absolutely critical.
We understand that the airline industry not only in Australia but around the world is going through a tremendous shake-up. There are not many airline businesses in the world that are actually making money at the moment—very few in fact; you could count on one hand the number of airline companies in the world that are actually making money at the moment—so in this respect Qantas and Virgin are with the pack, not outside it.
But the people of Australia understand this. If this bill goes through the House with the government support then there will be one consequence and it will be on the heads of those opposite. There will be jobs lost. There will be jobs sent overseas. It will be inevitable that Qantas in two, three or four years time will be a company which is either owned directly or indirectly by a government of another country or the sovereign wealth fund of another country, and that will be a complete shame. We on this side of the House do not believe you can save jobs by sending them offshore. This legislation should be rejected.
What a load of gobbledegook we heard from the member for Throsby! First of all he is saying that the government is doing nothing yet here we are this morning putting legislation through the House to assist and help Qantas. He says we are doing nothing but here we are, trying to get rid of the insidious carbon tax—which would help Qantas's bottom line by $100 million—yet the member opposite is saying that we are sitting on our hands doing nothing. The problem in this debate and the problem at the moment is not the government; it is the opposition and its friends the Greens, who are trying to stop us at every turn from doing what is right for this nation. This bill before us today, the Qantas Sale Amendment Bill 2014, is the right thing for our nation.
Getting rid of the Qantas Sale Act is in the national interest. Qantas thinks it is a good idea, Virgin thinks it is a good idea and the government thinks it is a good idea. The only people who do not are those opposite, and it is about time that they changed their minds. It is about time that they understood that we now live in a global world and that means that our economy has to be open to capital, it means that our economy must be open to competition and it means that every decision the government takes to do with an industry has to have an eye to what is occurring in the rest of the world. The Abbott government understands that, and that is why it is clearly and methodically, with time, considering its options, issue by issue, and coming up with the right decisions for our nation.
It is very interesting to see that those opposite, while trying to stop us at every turn, are not being supported by people outside of this House who used to be on their side. We had an example yesterday in an extremely well-written opinion piece. David Epstein, a former adviser to the Prime Minister and someone with knowledge of Qantas, wrote a telling article saying that those opposite should get out of the way and support the government on this. Not only did he say that; he also said that it is time that the Labor Party modernised its thinking and realised that it is operating in the 21st century. I would say to those opposite: take the time to read that article, because it was a well-written piece and you could then come on board and help and support the government to undertake the important reforms that this nation needs to ensure that it grows its economy and grows our workforce in the next five to 20 years.
The Abbott government is going to be a reformist government. What we need to see, as we saw through the 1980s and the early 1990s, is bipartisan support. It was very indicative yesterday to see that there have been moments when the Labor Party have thought about it. We found out that the former minister for transport did have drafted legislation which would get rid of the Qantas Sale Act. He actually had it in his drawer. What I would like to know is: if you could have the legislation drafted, if you can get it into your drawer, why can't you then say, 'Okay, yes, we will support it in the parliament'? Let us be clear about this: Qantas wants us to undertake this course of action, Virgin wants us to undertake this course of action and the rest of the aviation sector wants us to undertake this course of action. So why couldn't the former minister for transport, who now sits on the other side—a little bit wounded from the process that occurred in the battle for the ALP leadership after the election, but he is still there—just bring out that legislation that he had drafted and say, 'Yes, actually we support this because we were thinking of doing the same thing'? That would be a principled position if they took that. I am sure that we on this side would be willing enough to admit that they were taking a principled position. But instead they are playing cheap, populist politics. Sadly, my view is that it is going to lead to a long term in opposition if they continue down this path, because the Australian people understand what is in the long-term national interest.
It was interesting to see, earlier on in this debate, that the Leader of the Opposition said we should look to other G20 countries to define what Australia should do. It is an interesting point, because if we look we can see that, since 1987, Japan, Canada, Britain, Italy, France, Germany, Mexico and South Korea have divested themselves of their state-owned airlines
Of the G20 countries, only Russia, India, Indonesia, Saudi Arabia, South Africa, Argentina and China maintain any majority holding in airlines. I note with interest that, in that article, David Epstein actually suggested that maybe the Leader of the Opposition should go over to Argentina so that he could get a bit of a lesson on what not to do, how not to run the economy and how to understand that, if you head down these populist paths that the Labor Party seem hell-bent on, you actually harm your economy.
The time has come for us to not only declare that Australia is open for business but also get government out of the way. That is what we want to do—and we want to do it in all sectors. We want to do it in the aviation sector, because we understand how important the aviation sector is to this nation. We want to ensure that the growth that has occurred in this sector continues. If you look at the recent growth, according to the World Bank, in the past four years passengers carried both domestically and internationally by carriers registered in Australia increased from 50 million to 65 million. That is impressive growth, but we have to make sure it is sustainable and that the capital is there for our aviation industry to sustain and continue this growth—and that is what this bill is all about.
I find it bemusing that the Labor Party still seems to be stuck in this mentality that the only way that we can help industry is if government directs and dictates where that industry should go and what decisions it should take. That is not what government is about. Government is about getting out of the way and letting boards and shareholders decide the course that companies and industries should take. That is what this government wants to do. That is why we want to change the Qantas Sale Act.
One of the things which struck me when I looked at this issue in January and wrote an opinion piece saying that the Qantas Sale Act should go was that, when the Qantas Sale Act was put in place, a fifth of the 50 sections had to be given exemptions from the Corporations Act. That shows that, when you have a modern aviation sector, there is something wrong with that act. It is acting as a regulatory straitjacket upon the company. That is why we need to make the changes to the Qantas Sale Act that we are proposing.
We on this side want to see the flying kangaroo fly. We want to see aviation jobs flourish. We want to make sure that Qantas continues to be a profitable airline. We as a government understand that Qantas is mature enough to stand on its own two feet. It does not need government shackling it in the pretence of trying to help it—because that actually has the opposite effect. The more the government has shackled and regulated Qantas, the worse the result has been.
I must commend all on our side—and, in particular, the Prime Minister—for the stance that has been taken by them. It would have been very easy for us to do what the opposition has done and just take the populist approach. But then we would have had more companies lining up for government assistance—and, when the budget is where it is, we cannot afford that. The mess that we have been left to clean up is of such a high level that we cannot afford to be doing that. We need to let the private sector grow the economy so that we can start paying down the debt, fixing the budget and ensuring that we have an economy which is sustainable into the future. We do not want to be like Argentina.
As David Epstein pointed out, maybe the Leader of the Opposition needs to have a look at what government trying to get involved with industry and trying to dictate what industry should do leads to. It does not lead to the creation of jobs. It does not lead to the creation of sustainable industries. It does not lead to industries growing so that they can employ people so that those people can ensure that their families have a sustainable living. That is what we want to do—and we are acting. We are not a do-nothing government. We are far from that; we are the opposite to that. We are acting.
We have two key pieces of legislation before this House which will significantly help Qantas and those workers that Qantas employ. The first is this bill before us today on the Qantas Sale Act. The second is the bill which is in the Senate to repeal the carbon tax. It is time that the Labor Party and the Greens woke up to themselves. Their unholy alliance is not doing the right thing by this nation. But this government, the Abbott government, is determined to do the right thing, and that is why we have this bill here before the House. (Time expired)
It is a good thing that the government has agreed, after some trepidation this morning, to have this debate now because this is an important debate and the opposition thinks it should be had now, not in a fortnight. That is a good thing because the government has had plenty of time to work out a position on the future of one of Australia's most important companies. It is an important company because of the 30,000 people it employs. It is an important company because of its role in tourism and promoting Australia. It is an important company in terms of its role in productivity and moving people around this country.
Of course, in December we saw the status of investment in our national carrier downgraded by Standard & Poor's to junk status. That is a significant event. Since then, we have seen thought bubbles, speculation, backgrounding and leaking from the government about how this would be dealt with. We were told by the Treasurer a couple of weeks ago that there were four criteria for government intervention to assist Qantas, and they have been ticked one by one.
There was a very clear press conference from the Treasurer making clear to Qantas, and everybody else as well, his position as the Treasurer of the nation. So Qantas, believing that to be the case but knowing there were still tough decisions to be made, then embarked on the difficult restructuring process, which they have announced, and the loss of 5,000 jobs. The only problem is that the Treasurer either changed his position or had it changed for him. We do not know exactly what changed the Treasurer's mind—perhaps one day we will—but we know it changed. Therefore, I am fearful that Qantas may need to go even further than they have already announced.
We are now told that the only issue facing Qantas is access to capital and that that can be fixed in one fell swoop by the wholesale removal of part 3 of the Qantas Sale Act. So we have this legislation brought into the House today. I fear that we have more policy on the run. I read from the explanatory memorandum:
A detail-stage regulation impact statement has not been completed. An exception has been granted by the Prime Minister.
So we have a major piece of legislation before the House and no detail-stage regulation impact statement despite this government's rhetoric about being calm and methodical—we just heard it again from the member for Wannon. We have had months of speculation about what could be done. We have been told that we have had detailed due diligence about a debt guarantee. We have the Treasurer using changed language: it has gone from a debt guarantee to unsecured loans. There are all sorts of vagaries about what has gone on in the government's consideration, and this is the result.
This is a very significant change of position from the government. We have just had the member for Wannon lecturing the House on the need for a free-market approach, but that is not the approach the government told us they would be taking just a few months ago. On 5 December the Deputy Prime Minister said:
If the Labor Party is interested in looking at changes to the Qantas Sale Act well then they should talk to us—
and then we might be able to come to some kind of arrangement. But he said it is 'not even a subject that can be talked about'. It could not even be discussed, he said, 'because it would simply be a waste of time and political energy when it is obvious that I think the majority of the Australian people, and certainly the majority of the people elected to the parliament at the present time, especially in the Senate, do not favour that course of action'. So the parliament is meant to take in good faith the government's actions when the Deputy Prime Minister of Australia told the parliament and the people just a few months ago that this would be a complete waste of time, and we are meant to not be cynical.
Then, of course, we have the position of the Treasurer, who was at the dispatch box two days ago beating his chest in the typical huffing and puffing fashion that he excels in. He lectured the Labor Party about our position and pointed out some things Labor ministers said in 1992 when his position in 2009 was very clearly against amendments to the Qantas Sale Act that would not even have got rid of all the restrictions. This is the error that the member for Wannon just repeated in the House by alleging erroneously and—dare I say it—mischievously that the previous government had a secret plan to abolish the foreign ownership restrictions for Qantas. It was not secret and it was not to abolish them. It was public and it was to relax them. Removing the restrictions of 25 per cent and 35 per cent of ownership in Qantas was in the aviation white paper. The Labor government thought that that was an idea worth pursuing, and it lasted a day before the then shadow Treasurer shot it down and said, 'No way; the Liberal Party won't go along with any change to foreign ownership rules for Qantas.' He told us that Qantas had important social obligations. Not only would the then opposition Liberal Party not go along with getting rid of the 51-49 rule, but they would not even countenance getting rid of the 25 and 35 per cent rules. And, again, we are meant to not be cynical.
We are now told by the government that foreign investment is so important and that access to capital is so important. There is one person in this House who has knocked a foreign investment application in the last 12 months, and it is not me; it is not member for Lilley; it is the member for North Sydney, the Treasurer. He had an investor in an Australian company, GrainCorp, ready to go and ready to invest in agribusiness—a business which has so much growth potential in Australia—and he said no because he was bullied by the National Party. He is the only one who has rejected foreign investment in Australia in recent times. So he is not in a position to lecture us about the importance of foreign investment.
If removing the Qantas Sale Act is the panacea, the thing that is so necessary for the future of Qantas, then the government has some explaining to do—not just about this change of position but about what comes next. Unlike ADM and GrainCorp, there is no investor in the wings that we are aware of. There is nobody saying, 'If these foreign investment restrictions were lifted, we would invest in Qantas immediately.' There is nobody saying: 'We'll be the white knight. We'll come in, invest in Qantas and save the jobs.' Such an investor just does not exist. The government is yet to explain how, even if one did, and the Qantas Sale Act amendments passed this House and the other place today, that would be the immediate assistance to Qantas which Qantas have said they need.
If there were a change in the ownership of Qantas, Qantas would be broken up. The government themselves accept that that would be the inevitable consequence of the passage of this bill. The government are not seeking to amend the Air Navigation Act in a way that would stop the breakup of Qantas. I would argue that the inevitable result of the passage of this act and an increase in foreign investment in Qantas over and above 49 per cent would be the breaking up of Qantas into separate companies—domestic, international, Jetstar and frequent flyer. That is the only foreseeable result. That would be a major change which would not only need Foreign Investment Review Board approval, which is a long process, but also require new licences to be issued, a change to Qantas which would take years to implement. It would not be implemented immediately.
There is another important point. Honourable members have pointed out, correctly, that the conditions in the Qantas Sale Act accompanied the privatisation of Qantas in 1992. Honourable members opposite have correctly pointed out that this was an initiative of the Keating government. It is one that we recognise, acknowledge and are proud of. But there was a covenant with the Australian people. There was an agreement with the Australian people about the conditions of the Qantas Sale Act—that we would remove this significant government asset into private hands with restrictions placed on it. It is, of course, the role of a parliament to amend, and what one government makes another government can unmake. That is true. But this should not be done lightly when there has been a covenant entered into with the Australian people about an important asset like Qantas, which was in government ownership for so long, and which both sides of parliament agreed should be removed from government ownership.
We have made clear our threshold issues. We have made clear our views about what can and cannot be dealt with in this process. Now that the legislation is before the House, we can engage further in that conversation. We have made clear—just as when we proposed, in government, removing the 25 per cent and 35 per cent thresholds—that we are open to that conversation and we are prepared to be constructive in opposition, unlike the then shadow Treasurer, now Treasurer. He was not constructive in 2009. He did not say, 'Let's look at this.' He did not say, 'Qantas is being starved of capital so let's all work together as a parliament.' No, he waited 24 hours before shooting the idea down, meaning it would never pass the parliament and could not be progressed through the parliament. We are not taking that approach. Now that the legislation is before the House we will take a more constructive approach.
It is also important that this parliament, both this House and the other place, work very carefully and, dare I say it, methodically through the issues. I welcome the fact that the other place has decided to engage in a Senate inquiry which will report quite quickly—by the end of this month, as I understand it. That is an appropriate thing for the Senate to do. We will engage very constructively in this process because this issue should not be about political point scoring. It should not be about what the Deputy Prime Minister told us in December would be a complete 'waste of time and political energy'. It should be about working together to get a good future for Qantas.
We are up for that. We are prepared to do that. We acknowledge that we have a Prime Minister who is determined to play politics on this and so many other issues. Of course, in this House, politics will be played. But there is an overriding national responsibility on this House to work these issues through and to have a constructive engagement on them. The future of Qantas is far too important to Australia for us not to—not only for the 30,000 Australians who work for Qantas but for the millions of Australians who value Qantas's contribution to our economy. As far as we are concerned, in this House, we will do what it takes, as the government should do, to ensure that that contribution continues for many years to come.
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, you are not prepared to do the heavy lifting; you are all about a headline. If you are prepared to do the heavy lifting, you will actually vote to support getting rid of the carbon tax. If you were prepared to do the heavy lifting, you would vote in support to get rid of this. No, you are a rank opportunist, Leader of the Opposition.
The opposition do not support the exporting of thousands of Australian jobs—never have, never will. Labor members of parliament were elected to this parliament to stand up for Australian jobs, not to stamp their passports and wave them overseas. This debate about the Qantas Sale Act has been a most dishonest, rankly opportunist debate by the government. They have no ideas about the future of Australian aviation. They have no ideas about Australian jobs. They have no view about the future of this great country. They would use words dripping from their mouths: they 'support freedom for Qantas'. It is the freedom for Qantas to transfer jobs overseas. It is the freedom for Qantas to offshore its maintenance work overseas. No wonder the member for Paterson scurries away from the table; he doesn't like the sound of truth! It is freedom for foreign governments to buy our airline.
Another valuable contribution from the member for Paterson! When they talk about freedom in this House, it is not freedom for thousands of people to work at Qantas; it is the freedom of the unemployment queue, which is the only freedom that these people opposite have been inflicting on Australian jobs. It is a dishonest debate by the government to say that this is freedom for Qantas. It is the freedom for foreign governments to buy Australia's national carrier.
We hear this nonsense about a level playing field. What a load of rubbish. A level playing field for Qantas? It is a level playing field for Australia's national carrier to be purchased by either the government in China or governments in the Middle East. There is no level playing field in global aviation. And, if the members opposite knew anything about aviation in the world, they would understand that eight of the top 10 airlines in the world have foreign government shares in their businesses. The only plan that those opposite have for aviation is to sell it overseas, to get rid of the jobs and to shrug their shoulders and say: 'Running a government's too hard. Standing up for Australian governments is too hard.'
This has been a very poorly conceived debate by those in government. It is a poorly conceived debate because it fails the test of standing up for Australian jobs. It is a poorly conceived debate because the government's process to arrive at this rushed piece of legislation has been nothing short of shambolic and chaotic. Furthermore, it is a poorly conceived debate because the solution they are offering of changing the Qantas Sale Act is in fact no answer at all to the challenges that Qantas face in the next two years.
When I say it is a poorly conceived debate about jobs, my explanation is this. There are thousands of jobs at Qantas which, if the business is sold offshore, will be done offshore. Unlike those opposite, who did nothing when Ansett collapsed, I was there and I saw what happened. I can assure you that the idea that you break up a company into an international and a domestic arm will lead to a net reduction in jobs. We have got that sort of 'wombolic' Deputy Prime Minister stuttering around on the doors saying: 'There'll be no reduction. There'll be no reduction in terms of jobs in Australia.' What planet does that chap live on? It is not planet Earth and it is not the real world, where people are going to lose their jobs.
We see them talk about jobs and say: 'We need to set the place free. We need to set Qantas free.' Everyone knows, any observer of aviation knows, what will happen once you split Qantas into an international arm and a domestic arm. These very clever, card sharp personalities opposite say: 'Well, we'll just let foreign governments buy the domestic business because that's where the money is. And, of course, why wouldn't you let income be transferred overseas? Why didn't we think of that?' But then what they say is: 'The international arm? Oh, that will still be Australian.' Everyone knows except those opposite. I suspect they know but do not have the moral courage to say what they know. They know that if the international arm is on its own without the domestic arm it will struggle. We will be back here debating the demise of the international arm of Qantas if we let these circus acrobats opposite with their backflips and changes and churns on aviation policy have their way.
When we look at jobs, they have never fought for an Aussie job ever since they got into government. People in my electorate, airplane people, people who work at the airport, people who work at Qantas, good people, taxpayers, people who pay the school fees for their kids, people who have worked hard as professionals their whole lives cannot believe the betrayal of those people opposite. They say they just do not get it. But I say to these Qantas staff, of course, why would they get it? I said because they had no fight on Holden, they had no fight on Toyota and they have had no fight for the car components industry. We have not seen them near Alcoa and Point Henry. We have not seen them at Yennora rolling mill. We have not seen them that at Gove, with Rio Tinto and the decimation of that community. We did not see them contact anyone who worked at Forge. These people opposite are the cheese-eating, surrender monkeys of Australian jobs, to borrow from an American politician. Their only manufacturing policy is to buy a white flag made in another country and run it up the mast. Now they are committing acts of vandalism on Qantas.
They are not fit to be the government when you look at what they have done. But have a look at the process they have gone through. We have had smoke signals. Not smokin' Joe Hockey; we've had smoke signal Joe Hockey and the smoke signals contradict each other. Last November, last December, we got the Hockey waltz—maybe we will, like the old square dance where we put our foot in the middle and maybe we take the foot out. We may give them a debt guarantee; we may not—poor old Treasurer Hockey, rolled by his Prime Minister. You can just see Joe Hockey as a sort of latter-day B-grade Shakespearean character, 'Will I guarantee or won't I guarantee, what should I do?' In fact, what they have done is lead Qantas up the garden path, lead the Qantas workforce up the garden path. They had lead Australia up the garden path for three months. Now what they do is they say: 'Oh no, we won't do anything. We'll just invent this spurious nonsense that somehow shipping jobs overseas is going to save jobs in Australia.' If we want to talk about mixed signals, at least Joe Hockey was just confused. Then of course you have got the chief womble of the National Party, Warren Truss, and what he said—
Government members interjecting—
Wombles are nice.
Mr Keenan interjecting—
I withdraw that. Thanks, Michael, good point. What I was trying to say and what I should have said, with no disrespect intended to Warren Truss or wombles, is that he said that it would not lead to a reduction in jobs. The truth of this matter is it will. They know it; we know it. The good news is Australians have worked it out. The Prime Minister told us—he expressed his usual crocodile tears of regret. The Prime Minister said, 'I regret that jobs have gone.' Really? If you really regret it, what are you going to do about it? Absolutely nothing, the big zero, the big nothing.
But let us have a look at the process that they have gone through. We have had the mixed signals. We have had the dithering of the National Party where in 2009 Warren Truss, says, 'We wouldn't want to have majority ownership.' Then of course, they do their backflip when they get into power. It is one thing before they get elected and another altogether different beast when they get into government. Then you have had the coercion squad from the coalition come out on Monday night after Qantas said that carbon was not a major issue. It defies belief that somehow Qantas's junior employee just said something.
What people really believe, and take note of it members of the government, is that Qantas dared to step off the script of this bullying government and they said carbon was not the major issue. Then of course they put the pressure back on. I am sure there was no pressure! If you believe that, there is a big bridge at the mouth of the Yarra that I would like to sell you. Even a crocodile would not swallow some of the stuff we heard yesterday in question time about lack of pressure on Qantas to backflip and change. Now they have got Qantas to say they do not want a debt guarantee. These people are engaged in more pressure than I think we have seen in a long time from either side of politics when they form a government. Of course, not only has the process been absolutely appalling, not only is there no test of what is good for Australian jobs from that mob opposite; but then they come up with the Qantas Sale Act. Ladies and gentlemen, people listening to this debate not here in the parliament, the coalition's basic case is 'Let's sell the business overseas—
Mr Nikolic interjecting—
Let us have a look at how this brain snap will work that the government has come up with. First of all, the new business will need an air-operating certificate. How long will that take? It will take about a year. The two businesses, the new international and new domestic businesses, will need to divide up. They will need to work out who owns what planes—not an impossible question to work out but not without a lot of legal and contractual work. They will need to work out how they demerge the two businesses. Whilst I acknowledge that some of the cost centres in Qantas could be clearly demarcated to go international business and some of the cost centres can be clearly demarcated to go into the domestic business, I believe that upwards of 80 per cent of the cost structure of Qantas is shared. What Qantas does not understand is how on earth is the government, simply through a legislative instrument, going to deal with the business case of demerging the two airlines? Qantas does not have two years of the government's time to try to work out its future. It does not have hundreds of millions of dollars to implement the latest brain fade from the Abbott government, as it cannot fight for Australian jobs.
Then you have got to look at the buyers. Who is actually going to buy this airline? The cashed-up buyers in global aviation are China South—
Why do you not listen, Member, and you might learn something—China Southern Airlines and China Eastern Airlines. I am going through details that member did not hear in his party room because I know his ministers have not even thought about this stuff. You have China Southern or China Eastern, or you have Qatar or one of the Middle Eastern airways. We have seen how strong and courageous this government is when you get a foreign buyer!
If they can't trust Uncle Sam to buy GrainCorp, what are they going to do with the Chinese government buying Qantas, what are they going to do with Middle Eastern countries buying Qantas? I know that they will lead us up the garden path for two years. More jobs will go and there will be more brand damage to Qantas. I know secretly, in the light of the practical difficulties of this demerger, those people want us to vote against the Qantas Sale Act because they know they have no plan. They know that this is in the too-hard basket. They know that the aviation carrier of Australia is too difficult. What a cynical bunch they are opposite. What a bunch of cynics because they know—they have actually said it. Indeed, the Deputy Prime Minister—in fact, I do regret my earlier remarks, because he is right on this one—said it's not going to pass.
He called it 'a waste of energy', as the member Grayndler reminds me. It is 'a waste of energy'. How on earth are we doing this issue? They know that it is going to take Qantas two years, if the sale act got through, to be able to get foreign capital. They know. These people are the great chokers of foreign investment. They will choke in fear. If they couldn't do GrainCorp, they are not going to do 'GrainCorp on steroids', Qantas. We know it and you know it. We know that the Nats will panic, we know Palmer will panic the Nats, we know the Nats will panic Tony and we know that Tony will roll Joe—in fact, we do know that Tony can roll Joe, because we have seen it this week. We know that nothing will happen. What a magnificent waste of time this government is. What a terrible waste of time you people are. You are going to kill Australian jobs. You don't know the people who work in heavy maintenance. We know them. I know what happens when you offshore those jobs—they never come back. I know the families of Ansett, the pilots who had to move their families elsewhere in the world.
You talk a lot about loving this country. You are very quick to talk about patriotism, but when it comes to a tough issue, a subtle issue, an issue which involves steering through and which does not involve you standing in a parade and taking a salute—and that is important—but when it comes to the tough issues of jobs, you go missing. Not only do they have no case on jobs and they have never tried to defend it on jobs, not only do we all know this process has been an ugly messy process of which the government can take no pride, not only do we know that the Qantas Sale Act is a mirage because of the time it will take—Qantas has looked at the sale act—
Mr Nikolic interjecting—
Listen, why don't you listen and learn something other than the coercion you are getting? What they know is they looked at this option—
Mr Nikolic interjecting—
Please, members of parliament, this is a very important point: Qantas looked at the demerger option and they decided that was not the option which they wanted to go with nor could go with in the time they needed to make the changes. But, of course, just because the Liberal Party say they know business gives them the arrogance to pretend they know more about breaking up a company and selling it. We would not be so arrogant. The other thing that concerns me about this, which we have heard nothing about from the patriots opposite, is that I remember that Qantas was the only civilian airline who would fly in to Somalia. I know that when it came to Bali and when it came to Beirut, Qantas is the organisation who helps in our times of national emergency.
Mr Nikolic interjecting—
The Defence Act section 67 makes it terribly clear—that because Qantas is our national carrier, the government of Australia can stand up for our national interest. This is not good enough and we will not stand by and see you trash an Australian icon—not on our watch.
I am pleased to speak briefly on this Qantas Sale Amendment Bill 2014, which before the House. I am delighted that the Labor Party facilitated this debate by moving a suspension of standing orders to bring it on. The government was very pleased to support it. It was an unusual move, that is certain, but it does mean that the government can pass this bill today. The pressure will then be on the opposition to determine their position in the Senate—and the rest of the Senate, of course, the Greens and the crossbenchers. The pressure will be on Labor to decide whether they want to put Qantas on the same playing field as Virgin or whether they want to continue to allow Virgin to have an advantage over Qantas. I hope that they will come to a sensible position and I intend to give them the opportunity to consider that over the next week's break from the parliament.
I have listened to the Leader of the Opposition's speech, which was obviously designed to hang on to his leadership—it was directed to the people behind him rather than to the people outside this building. As I have said many times, Labor should stop standing up for the unions and start standing up for the workers. Start standing up for the workers. Unfortunately, while Labor allows itself to be shackled to the union movement, it is a very heavy anvil that they are dragging around. It means that they are making all their decisions based on the factionalism of the Labor Party, what the unions tells them—in this case, Tony Sheldon and the Qantas unions. Unfortunately, it is very bad for the workers but is actually particularly bad for the Labor Party. It is bad for the Labor Party to allow itself to simply be the union party. It is bad for the Leader of the Opposition to allow himself to be a wholly-owned subsidiary of the union movement.
I know that Mr Albanese, the member for Grayndler, achieved over 18,000 votes from the Labor members and the caucus. The Leader of the Opposition, the member for Maribyrnong, achieved over 12,000 votes. That was 18,000 to 12,000. Somehow the member for Grayndler was defeated. He was the people's choice.
Mr Deputy Speaker, my point of order is on the standing orders requiring people to be relevant to the debate. It has become clear that the government is not willing to defend its position. I would not be surprised if they even try to shut down this debate, because they are not willing to defend their position. They are embarrassed about the position they have taken. He should be brought back to the bill.
I know I did not have the call because the microphones were not on. Perhaps the Manager of Opposition Business might pick up on that—when the microphones are on you have got the call—rather than taking those ludicrous points of order, as he did yesterday against Madam Speaker.
The point is I am explaining why the Leader of the Opposition has adopted this ludicrous position on the Qantas Sale Act. He has adopted it because he is the factions' choice and not the people's choice. That is why he has adopted it and that is why it is relevant to the debate. He got 12,200 votes; the member for Grayndler got 18,200 votes.
An opposition member interjecting—
The member for Port Adelaide knows it. That is why he is leaving in embarrassment, because he was the member for Grayndler's campaign manager.
With those few words, I move:
That the question be now put.
The question is that the question be now put.
The question is that the bill be now read a second time.
The House divided. [11:41]
Question agreed to.
Bill read a second time.
Is leave granted for the third reading to be moved immediately?
Leave not granted.