Apr 22, 2020







SUBJECTS: Coronavirus; Virgin Australia; support for Australian aviation industry during COVID-19; JobKeeper subsidy; economic implications of COVID-19.


TOM ELLIOTT, HOST: Mr Albanese, good afternoon.


ANTHONY ALBANESE, LEADER OF THE AUSTRALIAN LABOR PARTY: How are you going, Tom? Geoff must be beside himself at the level of Federal debt that is coming up.


ELLIOTT: Well, let’s just say that he feels that a firm hand is needed on such things. Anyway, that is coming up after 4PM. Now, Virgin, if you were the Prime Minister right now, would you bail out Virgin?


ALBANESE: I would have intervened. I wouldn’t have allowed it to get to the point of voluntary administration because Virgin finds itself in this situation because of the Government policy. It is the right policy to have shut down the country in the way that it has been and to put restrictions on people flying around either for business or recreation. That is what has directly resulted in this. So, we have a market that simply isn’t operating at the moment due to Government policy and therefore the Government has a responsibility, I believe, to do more than just sit back and watch this unfold.


ELLIOTT: Okay. But I mean, on that logic, just about every business which has been shut down by the Coronavirus, from cinema chains to bars and pubs and restaurants, they could all equally ask for a Federal Government hand-out because it is the Federal Government laws which have forced them to shut their doors.


ALBANESE: No, well aviation has a particular role in terms of national interest. If you look around the world, whether it is Singapore, Malaysian Airlines, Cathay, Etihad, Qatar, Emirates, most of the European airlines, they all have something in common which is that they are either owned or partially owned by governments. That is just a fact. In the United States they are held up by Chapter 11, if it was left to market forces, then none of them would be able to operate effectively. So, we recognise that here in Australia, we’ve developed an effective two-airline system with the two full-service airlines, Qantas and Virgin with the budget off-shoots that are there in in Jetstar and Tiger. And it is a structure that serves us well. And one of the things that we should be determined to do coming out of the current predicament is to make sure that there aren’t structural changes in the economy. And that’s the key to us emerging stronger. Indeed, the Government has, of course, intervened and is propping up business by essentially paying the wages of 6 million Australians through the wage subsidy. So, here there is very much a national interest in making sure that two airlines can survive.


ELLIOTT: Well, I mean, you know, obviously the JobKeeper wage subsidy was open to Virgin as it would be the Qantas as well. But as understand, the big issue with Virgin was that it had far too much to debt, you know, aircraft leases and other debts totaling $5 billion. In fact, Terry McCrane has written in the Herald Sun that it was going to collapse anyway, the Coronavirus just hastened that collapse.


ALBANESE: Well, I don’t think that is right. Certainly, it’s the case that there have been some decisions which Virgin have made including with Western Australian airlines when they took over many of the aircrafts that were there and haven’t used them. They overestimated the capacity that would be needed. And there are a range of aircrafts that are leased that have bled the money. That’s true. But what I’m concerned about here isn’t the past management decisions. I’m concerned about the 16,000 employees of Virgin Australia. I’m concerned about the hundreds of thousands of Australians who depend upon tourism for their living. And indeed, the millions of Australians who want an aviation sector that is affordable, that is competitive, that can enable them to travel around like we never have before.


ELLIOTT: Now, I get that. But if it’s all about transport and infrastructure, you know, car dealers would be sticking up their hands and saying, ‘Well, we’re doing it tough. We’d like a bail out as well.’ Bus companies would be doing the same thing. There will end up being a lot of companies who go cap in hand to the Federal Government, won’t there?


ALBANESE: Well, there is something particular about aviation. If you have a look at the aviation sectors around the world, there is a national interest in ensuring that each nation state has a viable aviation sector. And government intervention in aviation is not unusual. It’s the norm. In Australia, we have the most free market aviation system in the world. There is none which are as competitive as the one that we have. And what Virgin were asking for isn’t a cash handout. They were asking for either a line of credit, or what I was suggesting was something that has happened in the past, I mean, if you look at transport systems, at the moment, the Federal Government have a $9 billion equity injection into the Inland Rail Line being built between, it doesn’t go to any port, literally inland rail, 9 billion, equity injection. No one seems to have blinked an eyelid about that. And what Virgin were asking for and what would have ensured that voluntary administration could have been avoided was relatively modest compared with that equity injection that would have ensured that down the track that equity injection could then be sold, and more revenue got back for that. So, it wasn’t a handout.


ELLIOTT: I hear what you are saying. The US government did the same thing 12 years ago. They bought a stake in General Motors and ultimately sold it and actually made a profit. Just moving on from that. We’ve had a number of calls from people, you mentioned the JobKeeper before, who have said that because of their casual status and because they’ve moved from job to job, we had one bloke who was an academic who lectures here and lectures there, that they don’t qualify. Do you think that the people who do qualify for the JobKeeper subsidy, should the number of people who are able to get it be expanded?


ALBANESE: Yes. We moved an amendment indeed in the Parliament last week that it should be able to apply for using the Workplace Relations, the legislation, which defines casuals effectively as people who could have anticipated work. So, academics, for example, people in the university sector, are a large number of these who work for a range of employers, but effectively there’s consistent work. And similarly, people in the arts and entertainment industry in particular, there would be I’m sure people who work at your radio station, who work in other parts of the entertainment industry. And that plays a really important role. And those people have missed out. There’s 1.1 million Australians who have missed out. Not because of their own circumstance, but because the way that JobKeeper has been structured. It looks at the structure of the employer, not the needs of the employee. And there needed to be, in my view, some flexibility in terms of looking at the needs of the employee.


ELLIOTT: Okay, just on a more general question here. The Government keeps going on about how they are sort of hibernating economy and how hopefully it will spring back into life like a bear emerging from its cave in the Northern Hemisphere in spring now. I mean, obviously, the Labor Party, you’re very close to the trade union movement. Do you honestly believe that, you know, businesses that employ hundreds of thousands, if not millions of workers, will in a few months time just spring back into existence?


ALBANESE: No. I don’t think that that’s the way we will emerge from this crisis. I think it will be a gradual process. But that is why it is important. And we were very supportive and indeed we called for the wage subsidy system to keep that relationship in place between employers and employees. But I don’t think there’ll be a snap-back as Scott Morrison has said, almost instantaneously, people wake up one morning and then it will be back to what it was this time last year, or even better. I do think there’ll be a gradual process, just as there will be a gradual opening up of the economy based upon the advice of health experts.


ELLIOTT: And again, from a broad perspective, I mean, Federal and state governments are acquiring for themselves enormous power over our lives. Do you think they’ll hand that power back when eventually the crises passes?


ALBANESE: Well, I think that people will demand that power be given back. One of the things we’ve seen here is that the Australian people deserve incredible credit for the fact that they have been prepared to, in the interests of their family, their friends, their community, and everyone, people they don’t know, they’ve given up some of these civil liberties. But they’ve given it up for a specific purpose for a limited period of time. And I wouldn’t want to see the sort of constraints that are there on people’s activity being extended for one day longer than they have to be. It is necessary at the moment. It is a sacrifice and it’s very difficult for many people, particularly the elderly. The idea that a grandmother or grandfather can’t hug their grandkids is really, really tough. And let’s hope that it is as short a period as possible that those restrictions are put in place.


ELLIOTT: Anthony Albanese, I appreciate your time.