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Speech: QANTAS Sale Act

Speeches in Parliament
Lee Rhiannon 17 Jul 2014

The Greens are firmly committed to keeping Qantas Australian owned. We argue the case because we need a national carrier. It is vital that so many of these jobs remain in Australia. With that comes a very high skill base that we must not lose. Then there are the economic and security benefits. The bill before us does not achieve that. In fact, the bill would undermine it and Qantas could in no way be called Australian if this bill were allowed to pass in its current form.

We have major problems with this bill. If passed, it would result in undermining safety standards, there would be massive job losses and a foreign takeover would be on the cards. The coalition's plan, long touted in boardrooms and also the cabinet room, to offshore Qantas, along with the jobs of thousands of Qantas workers, should end and it should end today.

However, what I understand Labor are bringing forward is concerning. I heard a very strong speech from Senator Cameron. I certainly acknowledge the work that he has done with Qantas workers over the years, in terms of protecting jobs and ensuring better conditions, but, when you look at the deal that Labor have done with the coalition on the issue of foreign ownership, it would take Qantas one step closer to greater foreign ownership, opening it up to one individual, one foreign airline or one foreign government owned airline to have much greater control over Qantas. Under Labor's amendments, there would still be 55 per cent Australian ownership. That is a very dangerous weakening and it is disappointing that the deal has been done with the coalition. I very much hope that Labor senators will listen closely to the debate, because it could be otherwise. If Labor work with Greens, Senator Xenophon and the other crossbenchers, we could ensure greater protection for Qantas and could get it back onto more solid footing.

I also want to pay credit to the Qantas workforce and their unions for organising, lobbying and protesting, not just for their jobs but for the retention of Qantas as the national carrier. They are on the front line. They can see the value of this airline across the board—how integral it has been to Australian society for so long, and that should be retained. I have had the opportunity to meet with Qantas workers on a number of occasions—workers from call centres, maintenance workers and workers in other parts of the aircraft industry, as well as pilots, and they have certainly set out a very clear case about how damaging the government's plans would be if they were allowed to open this airline up to foreign ownership.

When you get into this issue, one of the favourite terms that you will hear from the government, the coalition, senior management and particularly the CEO, Alan Joyce, is 'a level playing field'—that is their starting point—but what we have here does not create a level playing field. Qantas would be left competing against overseas airlines that are backed to the hilt by their own governments. This is the extraordinary contradiction here. This government wants to open it up so that foreign airlines that are owned by foreign governments can buy a part of our airline. That shoots down this whole idea of a level playing field.

Qantas's view of a level playing field means the right to be fully owned by a foreign government owned airline. That is how it would play out. The single most effective measure for levelling the playing field upwards would be for the government to assist Qantas. This is something we have raised throughout this year as this debate has intensified. Having more government assistance for Qantas would ensure there was a much fairer way for Qantas to be managed. The Australian government backing Qantas would, in our view, stop the inevitable break-up of the airline as well as underpin its viability, protect jobs and support tourism. In the 21st century, a national airline needs to have a much closer relationship with its government.

I will come to some very interesting experiences, particularly with regard to New Zealand and how they have handled this. I mentioned the CEO, Alan Joyce, earlier. When you come to debate these issues, you cannot leave him out of any discussion. The Qantas CEO played a dominant role in the highly orchestrated debate about the future of our national airline that played out in the media and parliamentary inquiries earlier this year. Let's remember how Mr Joyce went from mourning the possible demise of Qantas and the huge number of jobs that would have to go to describing the airline as 'extremely healthy'. Those were his words. He really has done a disservice—we should be working together to ensure the viability of Qantas as the national carrier.

Now I come to part 3 of the Qantas Sale Act. If it was repealed, the most likely outcome would be the wholesale takeover of Qantas by one or more foreign government owned airlines. That would then bring a stream of job losses. When Mr Joyce has been questioned about this, he has refused to rule out further offshoring and casualisation of the workforce if part 3A goes ahead. This is very important: he has always refused to answer this when we have questioned him. He is very good with language but not very good at being exact, up-front and answering questions properly. Certainly he has added to the Greens concerns.

We had two inquiries into Qantas. One of the committees was presented with concerning evidence relating to poor financial and strategic decisions made by Qantas management, particularly in relation to Jetstar Asia. Qantas workers should not have to pay the price for poor management decisions, but that is effectively what is playing out here. There have been poor management decisions and the government is now coming forward for its own ideological reasons but also because it is judging that this is how it has to respond to determine the future of Qantas. But it will be the workers of Qantas who will be hit if this bill goes forward in its current form.

There is scope for Qantas to be viable and kept Australian without the airline being broken up and offshored. I want to share some of the comments that came to us from Professor Frank Stilwell and also the Transport Workers Union. In this debate we need to remember that we could have done this in a different way, and the amendments we will be considering later will go some way towards correcting the problems that we now have before us. Professor Frank Stilwell has said that:

The current QANTAS crisis is clearly attributable to the senior management and board who have caused the present crisis by a range of inappropriate policies. These policy failures have included narrowing the customer base by abandoning key overseas destinations … unwisely establishing loss-making Asian Jetstar airlines; reducing confidence in service standards by outsourcing much of the aircraft maintenance …

They are some of the issues that Professor Stillwell has identified. The submission from the Transport Workers Union points out that, of the 10 tough conditions for Qantas, it is interesting to note that all of its competitors share seven. Sustained high fuel prices and ability to implement a good fuel hedging strategy applies to all airlines, not just Qantas. Economic volatility applies to all airlines, not just Qantas. Capacity growth outstripping demand applies to all airlines, not just Qantas. Slow demand growth associated with the resources slowdown applies to all airlines, not just Qantas. That, I think, is very informative in terms of highlighting how deceptive and misleading so much of the statements that have come from senior Qantas management have been and why we should not be relying on them when we are looking at how we go forward with this bill that is now before us.

We also need to consider the position of the Labor response here. It is not surprising that the government would bring forward a bill that really is about selling off Qantas. That should be the endgame. But many people, particularly workers from the industry, whom I have met on a number of occasions, expect something different. I believe most people would expect something different. If you listen to the words that have come from the former minister responsible for Qantas and the current opposition spokesperson, Mr Albanese and Senator Cameron, you would think it is otherwise, but we need to look at the detail of what is in their proposal. Their proposal before us today in amendment would undermine Qantas as a publicly owned national carrier. It would really open Qantas up to greater foreign ownership, taking it one step further down the road of total foreign ownership.

It is timely to remember that it is Labor that has driven the very undermining of Qantas. From 1947 to 1993 Qantas was fully government owned, and that time is when Qantas developed that fantastic international record of top safety standards. With a fully unionised workforce, the workers had secure, reasonably paid jobs. But then you hit the 1990s, and things start to change. This was under former Prime Minister Bob Hawke. He announced his intention to sell off 49 per cent of the airline. This is what you have seen since the 1990s: Labor driving down Qantas operations in this country. It was in 1993 that the Labor government put $1.35 billion into Qantas just one month before it sold 25 per cent of the airline to British Airways for $665 million. Qantas at the time held 40 per cent market share of international travel to and from Australia. The remaining 75 per cent of the airline was sold in a public float in 1995. Remember: this is all when Labor was in power. The total sale price for the airline was just $2.1 billion.

That really did cause a lot of disquiet at the time. This was in the period of the 1990s when Labor was starting to move forward on quite an extensive privatisation agenda. There was some interesting analysis. I want to share some comments from economics professor John Quiggin writing in The Canberra Times on 10 July 1995. He said:

If the government believes its own prospectus, it should certainly not be selling.

According to Quiggin, the share offer was so underpriced it amounted to a giveaway of public assets. Three years after privatisation Qantas shares were worth 49 per cent more than the government sold them for, giving shareholders an increase of 160 per cent return on their investment. And what happened after privatisation? Qantas management went after its workforce, outsourcing and competitively tendering every aspect of the business. And what was the result then? Working conditions were undermined.

So, again, I do pay credit. I know that, when Senator Cameron was out there as a union official, he was working for this not to happen. But it was the Labor government that opened up Qantas to foreign ownership and has taken step after step to increase that foreign ownership. If they do this deal with the coalition today, it is one further step down that track.

The privatisation of government airlines has gone hand in hand with the deregulation of the industry. This was justified by the argument that free competition would lower prices and give customers more choice. Now, to some extent we see that is true, but we always need to get the balance right and that is what the Greens are saying. We are not against competition. We want customers to have a good choice, but we also need to ensure that safety standards are maintained, that working conditions are maintained and that this industry does not come to live off a casualised workforce.

The outcome of Labor's amendments, to get into the detail, is that they would allow overseas government-owned airlines—such as Emirates, Singapore Airlines and China Southern Airlines—to own up to 40 per cent of Qantas. Our Senate inquiry heard evidence of the domination of government-owned and government-backed airlines in the aviation market. Seven out of 10 of the largest carriers by market share in our region are partially or wholly government owned. I made this point earlier and I will make it again, because I think it is one of the huge ironies of this: at a time when the Australian government is really trying to back out fast from any association with Qantas, what they are opening up is for government-owned foreign airlines to take Qantas over.

Yes, the Greens do want a level playing field. I spoke about the huge contradictions in the so-called level playing field that the government and the senior Qantas management talk about. We want the real level playing field and we can do that by ensuring that government assistance is available to Qantas as well, potentially in the form of an ownership stake or a debt guarantee. These are the things that we should have explored. We just put them on the table and said that these should be there for consideration. Such options would allow the government to financially assist Qantas in the short term, as well as impose some conditions on the airline to ensure it is acting in the best interests of its workers and the Australian public.

The repeal of the Qantas Sale Act would lead to the inevitable break-up of the airline and will also lead to large-scale job losses in Australia. That really is inevitable. It will also lead to the diminution of Australia's aviation industry, which is an industry that we should be looking to build up. We have built up expertise over the years and that should be consolidated. But if this bill goes through, in its current form or with Labor's amendments, that will be at risk.

The Greens have particular concerns that Qantas is likely to be snapped up by another airline, as I have said. But it could be otherwise, and I did just want to share what happened in New Zealand. The government could act as the New Zealand government did. The New Zealand government backed its national airline by taking a large stake in it. It is worth looking at some of the dollar figures here: interestingly, earlier this year Air New Zealand posted a record first-half net profit of NZ$140 million, which was up 40 per cent on the same period a year earlier.

This could be a win-win outcome. If the government took a more active role in Qantas, we believe that it would be the single most effective way of levelling the playing field upwards. That is what we should be working on, by making Qantas more equal with its predominantly government-backed competitors. That would put our national carrier on the runway to a bright, viable and prosperous future. We should be considering ways to ensure that Qantas remains a strong national carrier that is supporting aviation jobs in Australia. That is what we should be considering before us today.

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