Wednesday, 7 February 2007
Economics Committee; Reference
by leave—I move the motion as amended, in the terms circulated in the chamber:
- That the Senate notes that Qantas:
- plays a unique role in the Australian economy and in Australian society;
- provides an essential service to regional Australia and is a major employer; and
- is the backbone of the Australian tourism industry.
- That the following matters be referred to the Economics Committee for inquiry and report by 20 March 2007:
- the proposed takeover of Qantas by the consortium Airline Partners Australia, including:
- the impact on air services to regional Australia and the tourism industry,
- the implications for Qantas’ 38 000 employees and its customers and frequent flyers,
- the implications of the proposed executive remuneration,
- the track record of the potential new owners,
- the competition implications of the sale,
- the potential taxation implications,
- the level of debt Qantas will be asked to carry, and
- the implications for air safety;
- conditions that the Government should require for a sale;
- the need to improve and clarify the regulatory environment covering commercial arrangements which affect the national interest to allay community concerns and provide investment certainty; and
- any other related matters.
I want to speak very briefly to the terms of reference for the inquiry, the parameters of the inquiry and the reasons for it. Last year, the national government was considering selling its shares in the great Snowy Hydro scheme but backed out in the face of community and legal concerns at the time. Now, the nation and this parliament are considering the sale of Qantas—the flying kangaroo. This time it is an $11.1 billion buy-out by a consortium, Airline Partners Australia, from the private equity sector, and it is backed in large part by foreign money, as you will know. Tens of thousands of Australians work for Qantas—in fact, 38,000. Just about every Australian, all but a very small handful these days, has flown with Qantas. For all people in regional Australia, Qantas provides an important link to the rest of the country.
Our parliament has a responsibility to thoroughly investigate the terms of the takeover and to be satisfied that it is indeed in the national interest. The way to thoroughly investigate that is to have a Senate inquiry so that all players can come before that inquiry. That would include members of the public, the business sector, people in the airline industry, the staff of Qantas, of course the unions and the tourism industry—all players. They would have the opportunity to come before the Senate and put a point of view.
The Greens have several concerns about the sale and we are indeed opposed to it as it stands. These concerns are reflected in the terms of reference. A Senate inquiry would allow all of these matters to be aired and discussed in public—certainly in a much more public manner than the Foreign Investment Review Board investigation which APA has now subjected itself to. That investigation is essentially a secret inquiry. What I am proposing is an open, public inquiry. I do not think the two should be held one after the other. They should be held together because time is running out. If the Foreign Investment Review Board decision is positive and the Treasurer endorses that, there will be a very small amount of time potentially before this Qantas takeover takes effect. APA, the consortium bidding for Qantas, was not required to submit its takeover to the Foreign Investment Review Board, but, as I said, it did so. We are concerned that air services to regional Australia could be under threat and that regional services may require protection in the form of conditions put upon the sale. The competition concerns surrounding Macquarie Bank being a major partner in APA and the owner of Sydney airport need to be thoroughly analysed and investigated.
And then there is the worrying track record of the potential owners—specifically, the US giant Texas Pacific Group. A word on that: this is a Texas based private investment firm with an interesting track record. In 2004, Texas Pacific attempted to buy Portland General Electric, the state of Oregon’s largest power company. Oregon’s law required that any utility sale resulted in a net benefit to customers. Texas Pacific assured people that no specific jobs were threatened, it was no slash-and-burn corporate takeover and they had no plans to sell it off in the near future. They would support the idea of keeping it in local hands.
Despite these reassurances, Texas Pacific refused to reveal the details of its plans to the public but released the plans to several of the parties that would decide on the deal. The details were leaked and, according to Oregon paper the Willamette Week, they revealed that Texas Pacific’s plans for Portland GE directly contradicted their public statements. The documents showed that Texas Pacific planned wholesale lay-offs and dramatic cuts in maintenance to increase earnings. And the planned exit strategy made it highly unlikely that they were not going to act in that fashion.
So we do need an inquiry. We need to know what the plans really are. I do not think we are going to be able to take the word of APA. And, anyway, it is not giving any assurance about employees or employee conditions. That is, to me, a direct public assurance, if you like, that there will be lay-offs at Qantas, and that there will be changes and the loss of the rights and the terms and conditions of current Qantas workers.
So we have a Foreign Investment Review Board investigation—fine. Let that go ahead. Whatever government or financial agency investigates Texas Pacific or APA, it is not going to be a public investigation and on the public record. Let APA come before senators so that the obvious questions can be put to them. Let Macquarie Bank do the same. And, indeed, let us have the board of Qantas before a Senate inquiry so that publicly they can explain the ramifications of this sale and what safeguards there are for Australia, for domestic travel, for international travel, for tourism, for air safety, for the 38,000 employees and a host of other matters that will no doubt arise in the short life of this inquiry.
Let me say again to people who may be concerned in here—and I am hoping that, in particular, the National Party will support this inquiry; I have read that they will do so—that this is an inquiry that is extremely important for rural and regional Australia. But let me also say this: to hold off until after the Foreign Investment Review Board has made a decision and then the Treasurer makes a decision is to give the Senate inadequate time to really feed into the process of the public knowing about the fate of Qantas.
It is our responsibility to act on this now, to move expeditiously, to have the inquiry rapidly put into place, to have the information put before the public so that the public—not least those 38,000 employees of Qantas—can have a say in the fate of this great iconic Australian company, this flag-bearer for Australia right around the world. I commend this inquiry to the Senate and I certainly hope that we will see a vote to allow it to come into being later in the proceedings tonight.