Tuesday, 4 March 2014
Questions without Notice
My question is to the Leader of the Government in the Senate and the Minister for Employment, Senator Eric Abetz. I refer to the government's decision last night to agree to Qantas' request to unshackle it by repealing part 3 of the Qantas Sale Act. What benefits will this have for Australian consumers and workers? Why is it important for this parliament to pass any legislation that boosts Australia's productivity and creates more jobs?
I can inform Senator Bushby that the government is working to give Qantas the freedom to remain a strong and competitive airline that flies more Australians and employs more Australians.
Australians want a strong and competitive Qantas. The existing Qantas Sale Act places restrictions on Qantas that advantages its competitors and disadvantages Qantas. As soon as possible, legislation will be introduced to remove these restrictions. Removing these disadvantages is the best way to ensure Qantas can secure Australian jobs now and into the future.
These reforms will not only give Qantas the best chance of continued growth but they will also give Qantas workers the best chance of job security. A viable airline makes for viable jobs. What is good for Qantas will also be good for its workers.
If Labor is genuinely concerned about job losses, it should support the government's decision to unshackle Qantas. As Martin Ferguson said some 12 years ago, 'Labor is on the record as having an open mind on the relaxing of the 49 per cent foreign ownership cap on Qantas, and we recognise that without significant capital investment the airline is putting at risk its future.' Regrettably, based on comments to date, Labor would have the Australian public believe that simply throwing money at an airline will be the panacea to its every ill. We want to give Qantas a hand up, but Labor wants to give it a taxpayer-funded handout.
Twenty years ago, former finance minister Ralph Willis rightly said that the Commonwealth cannot countenance the possibility of it still being potentially liable for a $1 billion Qantas debt. Today, Labor, want a $3 billion— (Time expired)
Mr President, I ask a supplementary question. Can the minister advise the Senate of other steps the government is taking to boost Australia's productivity and to create more jobs? And what obstacles are there to implementing those measures?
I thank Senator Bushby for his concern about jobs. The fundamental job of government is to ensure that our economy is as strong as possible, and that means getting the fundamentals right. That means getting taxes down—
As shown by those interjections, Mr President, regrettably, Labor is recklessly and wilfully blocking legislation that will create jobs. Sitting before this Senate now is legislation to repeal the carbon tax, the removal of which would be, according to Virgin Australia CEO, John Borghetti:
The best assistance the government and opposition can provide …
The best thing parliament can do for airline jobs, manufacturing jobs, agricultural jobs and resource jobs right now is to axe the carbon tax. But this Greens-Labor opposition pays lip service to jobs and refuses to respect the wishes of the Australian people. It is time for Labor to get the message: Australians voted for a change of government— (Time expired)
Mr President, I ask a further supplementary question. Could the minister please elaborate on any further policies that form part of the government's economic reform agenda and on why it is important for this Senate to not obstruct the passage of legislation?
We have already introduced vital legislation to repeal the carbon tax, to repeal the mining tax and to restore the Australian Building and Construction Commission, all of which form part of the government's economic agenda. Restoring the Australian Building and Construction Commission will result in a $6,000 million economic welfare gain and an increase in productivity in that sector by 10 per cent. Repealing the mining tax will deliver billions of dollars worth of savings to the budget over the forward estimates.
The opposition parties have a choice. The ball is in their court. They can continue to be resentful of the choice of the Australian people on 7 September or they can actually help in the restoration of the economy. Stop blocking the repeal of the carbon tax, stop blocking the repeal of the mining tax, stop blocking the restoration of the ABCC and do not even countenance blocking the government's legislation to give Qantas— (Time expired)
My question is to the Minister representing the Treasurer, Senator Sinodinos. I refer the minister to the four criteria the Treasurer outlined on 13 February regarding government support for Qantas. Didn't the Treasurer confirm on that day that Qantas had met all criteria? I ask you, Minister Sinodinos, what changed between 13 February and the cabinet meeting last night?
I thank the honourable member for his question and indeed for the interest he shows in transport matters. Before I get to the question, can I also take the opportunity to mark the fact that today is International Women's Day. We had a function in that regard this morning, and I think it is appropriate that we do that. I congratulate both the Leader of the Opposition and the Prime Minister for the speeches they made on that topic this morning.
On the question of Qantas, the Treasurer did lay down four criteria, but the first preference of Qantas had been to remove, as my colleagues have described it, the shackles of the Qantas Sale Act and give them a capacity to lower their cost of capital by being able to bring in more capital, including from overseas.
It is passing strange that, when this government takes action to create a level playing field, all the opposition can argue about is whether four criteria were met, when, with respect to the overriding criterion, the Treasurer had made the point that there may be interim steps if it is not possible to remove those restrictions. But the cabinet made a decision that those restrictions should be removed. That is their first preference. If the other side of the house cooperates, that can happen, just as the other side of the house should cooperate in allowing this government to meet its election commitments around the carbon tax, the mining tax—and we go through the list.
Mr President, I ask a supplementary question. Can the minister confirm that the government engaged the services of one of the big four accountancy firms as part of a due diligence process relating to a possible debt guarantee for Qantas, and can the minister also confirm that a debt guarantee for Qantas was under active consideration by the government as late as yesterday?
Honourable senators interjecting—
The Treasurer indicated yesterday that Qantas are in a fundamentally sound position and, in order to level the playing field, unshackling them is the very best option. So there is no point arguing about process. A decision has been made; we want to take the airline industry forward. One regulatory framework covering the industry as a whole is in the interests of all Australians.
Opposition senators interjecting—
Remember a level playing field—you have competitors in a particular space. We are taking some of the shackles off Qantas, allowing them to better compete against their rivals. If you were true to your word, the logic of your position would be that you would renationalise Qantas; but Ralph Willis belled the cat 20 years ago when he said it was better to put public capital into health, education and welfare than into airlines. That is why Qantas and TAA were sold 20 years ago.
My question is to the Minister for Defence, representing the Minister for Infrastructure and Regional Development, Senator Johnston. Will the minister update the Senate on how the repeal of part 3 of the Qantas Sale Act will continue to preserve Australian jobs while strengthening the competitiveness of Qantas?
I thank the senator for his question and acknowledge, as a South Australian senator, his particular interest in the domestic airline industry. May I answer the question by saying, firstly, that Qantas is a great airline; Qantas is a great Australian airline. It is going through tough times, as are its workers, their families and those who are associated with Qantas contractually. It is a very difficult time for them, as we have observed with the losses that they have incurred in the first half of this financial year.
But the airline plays and will continue to play a key role in servicing many of our cities and regional towns. It also is an important national icon for Australia internationally. The government must do what it can to ensure that Qantas is able to operate in an environment that allows it to compete with other domestic and international carriers and to provide for Qantas's growth and stability into the future.
The Air Navigation Act of our country ensures that Australian international airlines have to be majority Australian owned. Our air services agreements ensure that international airlines are chaired by Australians; at least two-thirds of the board members must be Australians; the head office of such an airline must be in Australia; the operational base must be in Australia; and the airline must be substantially owned and effectively controlled by Australians.
At the moment, Qantas cannot compete against its competitors in a highly competitive market because of the Qantas Sale Act. We seek to fix that and level the playing field for this great Australian airline. We want to see them succeed. We want to support them. There are people here in this chamber who do not. (Time expired)
Some of us will remember Labor's former resources minister and former tourism minister, Mr Martin Ferguson. He is a person for whom I have some great respect. He supports the changes, you will be surprised to know, to the Qantas Sale Act. He said on 28 February this year:
If we need some more foreign investment in Qantas subject to—
all of the normal requirements of the Navigation Act or
changes to the Qantas Act, then so be it …
It's about what's required to maintain Qantas.
Way back in 2002 and 2004, as shadow minister, he said, 'Labor is on the record as having an open mind on the relaxing of the 49 per cent foreign ownership cap on Qantas, as we recognise that without sufficient capital investment the airline is putting at risk its future international and domestic competitiveness.' There it is, from Martin Ferguson. Why can't others see that?
Mr President, I ask a further supplementary question. Will the minister inform the Senate on further impediments that are impacting Qantas and the airline's profitability? How does the government's proposed changes to the Qantas Sale Act allow Qantas to compete fairly with others in the market and provide an opportunity for Qantas to expand and grow with confidence?
I thank Senator Edwards for his supplementary question. There is one very important impediment to preserving Australian jobs in the aviation industry in this country. We all know what that is. It is the carbon tax and its repeal. This is a highly competitive industry. Let us just take the regional airline Rex. Rex is paying $1.3 million in the first half of this financial year for the carbon tax. It is absolutely dead money and a millstone around its neck. Virgin is paying $27 million in the first half of this year for the carbon tax. Qantas is paying $106 million for the carbon tax for the year.
The point is that someone needs to get off the hose so these airlines can compete properly. I ask the Labor Party to consider their position. (Time expired)