Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Hansard source

Senator Xenophon is telling me that Qantas is the national carrier. I agree with him—it is. It is definitely the national carrier. I never thought it was not.

The bill also requires that two people, one with at least five years of professional flight operations experience and one with at least five years of aircraft engineering experience, be appointed as members of the Qantas board of directors. Once more, you are going into a company and starting to nominate whom you want on their board. Where do we stop? Do we start doing that for every company? Do we have a roam through companies on the stock exchange and then through private organisations and start telling them what qualifications they need on their boards? Do we now know better than they do what qualifications they need on their board? That judgment is made by a group of people called the shareholders. If they do not like who is on your board, they stop buying your shares and your share price will tank. The competencies required to run a company are best assessed by the people who own it—and the people who own it are the shareholders.

Presently, the Qantas Sale Act 1992 provides that a court may, on the application of the minister, restrain Qantas from engaging in particular conduct. The amendments would extend this power to any group of 100 shareholders who, collectively, own at least five per cent of the shares in Qantas. Once more, we are getting into a very interesting place—a place where five per cent can act as a majority. If five per cent can act as a majority, you have some serious issues. I do not know how democracy would work if we applied that concept here, but it would be an interesting chamber if five per cent could start forcing us to legislate a particular way. I suppose the Greens do have a crack at doing that, but it does not stand logical scrutiny for five per cent to be able to determine the actions of a company. For the sake of the five per cent, you neglect the rights of 95 per cent. That just does not pass muster.

This bill unfortunately, I think, has more problems with it than the last one. Why? Because it starts grabbing hold of concepts which, if you extend them logically, do not make sense. Once you have said this is right for one company, you cannot argue the case that it is not right for others. Qantas might be the national carrier, but what do we say about the national retailer or the national miner? Do we go to Ramsay Health Care and start talking about them as the national private healthcare provider? Where does it stop?

This idea sounds good until you read the bill. Once you read it, you realise that it is going to cause more problems than it is going to solve—vastly more. Ultimately, the consequence will be that you will put a company that you want to remain as the national carrier in a position where it is at a financial disadvantage. If that financial disadvantage remains over a period of time, Qantas might decide to remove itself from markets. By so doing, it would become a weaker organisation overall. That would reduce its capacity to finance its fixed capital, fixed capital which is locked in, which was present prior to this bill going through. After this bill goes through, the cash flow which underpins that fixed capital will be inherently different. That has the potential to end up causing major problems throughout the organisation. The result would be that Qantas would either have to retire capital—capital assets which would have been pushed past the tipping point of economic viability—remove itself from routes or start going backwards, making a loss. None of those alternatives are good for Qantas. None of them support Qantas remaining as the national carrier.

Unfortunately we see this sort of thing in other places—a typical one being water policy, where you are going into areas and removing productive capital in such a way that it no longer supports the existing local economy. If you go to a town and buy the water back, meaning the rice mill no longer gets sufficient throughput, it is not just the farmer that leaves; ultimately, the rice mill closes down and the structure of the town falls apart. If, after the construction of capital, you start to damage the cash flow which underpinned that capital investment, the capital will stop contributing to the business—it actually starts leaching from the business and starts being an encumbrance on the future viability of the company. It is clumsy and inefficient and ultimately it costs everybody. The coalition will not be supporting this.