Feb 28, 2014

Transcript of doorstop interview, Sydney Airport

Subject: Qantas 

ALBANESE: Well thanks for joining us. After Mr Abbott’s extraordinary backflip on providing a form of debt guarantee to Qantas, I want to make it clear to Australians exactly what the implications of Mr Abbott’s backflip are.

The major implication is for Australian jobs.

Mr Abbott wants to open the door for Qantas to cease to be an Australian-based airline with a board here, with the majority of jobs placed here, with the flying kangaroo as its emblem.

He has found a new Australian export – Australian jobs.

The implications of Mr Abbott having had his Treasurer and other senior ministers including the Transport Minister hint for the last three months that they would provide a guarantee for Qantas, only to see that rug pulled out from underneath them just yesterday, are dire indeed.

Mr Abbott wants to replace the flying kangaroo with the flying panda or the flying camel. If you remove the provisions in the Qantas Sale Act for Qantas to remain an Australian airline, the likely result of that is effectively a takeover from a foreign- based airline which is backed by a government other than Australia’s.

Now, I‘m not against foreign investment. I’m for foreign investment. But every nation in the world understands how important it is to have a national carrier.

That’s why in the form of Etihad, Singapore, Ari New Zealand – Qantas’s competitors internationally – they are all backed by their respective governments.

What we see yet again is that Tony Abbott had a plan to get into government but he doesn’t have a plan to govern.

No matter how big the issue, Mr Abbott shows how small his vision for Australia is. Here we have him playing politics with an issue where the Opposition have made clear since the downgrade on December the 6th of Qantas’s credit rating, that we would not play politics with this issue and we would respond constructively to any proposition by the government to ensure that Australian jobs here at Qantas were able to be protected.

It’s important because we’re not just talking about direct jobs. We’re talking about the jobs in the tourism sector as well as the freight and logistics sector – the jobs that rely upon aviation.

Other countries recognise the importance of their national carrier whether it be the protectionist regime that the United States has in defence of their carriers, whether it be the regime in Europe, whether it be the directly owned airlines. Eight out of the world’s top ten airlines of course are owned by governments.

Here, as an island continent with no land borders, aviation is more important for Australia than just about any country on the planet with the possible exception of New Zealand, where the New Zealand government have acted in their national interest.

This is about jobs. Mr Abbott will bear responsibility for what happens from this point on having teased the markets, having teased Qantas, having indicated in briefing after briefing what the conditions were for government action and support including the four criteria that Mr Hockey as the Treasurer put forward and said all of those had been passed.

Qantas is not just any other company. It’s an important company for Australia’s national interests and it’s important that the government not take a position of teasing out the issues, pretending that there was going to be some form of support and, when it came to crunch time, walked away from that yesterday because they’d prefer to engage in politics and political game-playing at the expense of the job security of Australians. Happy to take questions.

REPORTER: Is this the Labor gauntlet – no amendments to the Qantas Sale Act?

ALBANESE: We’ve said very clearly that the issues that are bottom line are that Qantas has to remain an Australian airline. If you don’t have majority Australian ownership, then what you will have is the possibility that a raider will break up the company, given that its total share value is less than the assets which Qantas holds with implications for regional Australia.

One of the issues that’s there in the Qantas Sale Act is a guarantee that Qantas will service regional Australia. If you remove that provision and get rid of the Qantas Sale Act then that goes.

The provision that says the majority of its activity in terms of jobs and maintenance must be here in Australia, that would go with those jobs going overseas. The board – that would go overseas.

Either that or you would have a takeover of a government backed airline from overseas.

The flying kangaroo, every time it is seen around the world, is an ad for Australia. It says come to Australia. It says that Australians are the best in the world when it comes to aviation safety in terms of Qantas’s exemplary record historically over such a long period of time – something that we can be proud of.

When we hear the song I Still Call Australia Home, one of the things that people think about is Qantas and its connections with this country. If we simply remove the flying kangaroo and replace it with a flying panda or a flying camel then we will not be acting in Australia‘s national interest. That is why this is a particular case and circumstances are there that warrant government action as the government indicated it would do.

REPORTER: What about a compromise though on the 25 percent and 35 per cent (inaudible)

ALBANESE: That we’ve said very clearly we’d be willing to discuss. That was a recommendation in the Aviation White Paper. At that time there wasn’t support for it across the Parliament so in terms of those issues we are prepared to look at those issues constructively. But you don’t defend the national interest by giving it up.

And that’s essentially what Mr Abbott is asking the Parliament to do. He knows that’s not the right way. He knows full well because he’s had discussions with the company and also advice of his departments I am sure.

He knows full well that the immediate issue is not the Qantas Sale Act. The current level of foreign ownership of Qantas is 39 percent.  It’s allowed up to 49 per cent. So there’s already scope there for increased foreign investment up to the 49 percent level. If that was the issue then you’d expect that that level wouldn’t be at 39 per cent. It would be at 49 percent butting up against that restriction.

REPORTER: What about the issue of the level playing field. Obviously Virgin has announced a loss this morning as well as John Borghetti has basically said if the government gives money to Qantas, he’ll be knocking on the door as well. Is that fair?

ALBANESE: Let’s have a look at what the issues are. There are two key dates. One, on December 6 you had the downgrade of Qantas’s credit rating. The second is that in November there was a capital injection from three airlines that are government-backed – Singapore, Etihad (backed by the UAE government) and Air New Zealand, backed and owned by the New Zealand Government. Virgin is a well-run company and an excellent airline and Mr Borghetti has done an extraordinary job of transforming Virgin into a much more significant player in the domestic and international aviation market and he deserves absolute credit for that. But there’s a distinction here. You have three government-backed airlines that have been prepared to back Virgin. What Qantas are asking for isn’t any taxpayers’ money. What they are asking for is support in the form of a debt facility that they would pay interest on to the government, therefore there being no input in terms of cash input from the Australian taxpayer.

They are not asking for a handout. What they’re asking for is government support in the form of backing that will reduce the cost for them borrowing and acting as a privately run company.

There’s been a lot of misinformation. But I tell you what, the Treasurer understands this issue because he put it on the record time after time, both on the record but also in the briefings that have taken place from senior ministers to just about everyone in the gallery and more significantly through the people in the media such as yourself. The markets know that they were informed that this (assistance) was going to come. So if the markets have borne that in mind and you’ve seen an increase in the share price of Qantas based upon that information and then that is withdrawn, then that of course will have a much more significant impact. So the circumstances here are gross irresponsibility. Mr Abbott, whether it was a thought bubble yesterday in Question Time or not, needs to reconsider his position and the implications for Australian jobs if he maintains this position. Australians understand that Qantas is an iconic company. It’s a brand that is synonymous with Australia and our national interest. Simply to say we will give up the flying kangaroo and replace it with the flying panda or the flying camel is not in Australia’s national interest.

REPORTER: John Borghetti has said that the best assistance the aviation industry can get is getting rid of the carbon tax. What do you say about that?

ALBANESE: You might like to think about it yourself. Wouldn’t you like to pay no tax next year? I think the smile tells me that the answer is yes. The fact is though that Labor has said we want to move to an emissions trading scheme. We want to move to a floating price. We believe that there needs to be action on climate change. It is the government that is being intransigent about its position with regard to climate change because it won’t outline what will occur. What the government wants to do is for taxpayers like your good self to pay through the pay-as-you-go taxation system and to then subsidise the big polluters. That’s what its plan is – to replace a system whereby the polluters pay according to market values – and any market oriented government would understand that that is appropriate in terms of an emissions trading scheme – that the market operates, the polluters pay and therefore the costs of carbon pollution are taken into account. What the government wants to do is to move to a system whereby average mums and dads pay their taxation every week so they can then give money to the big polluters. That’s not a sensible system. We support an emissions trading scheme. We said that at the election. We’ve been consistent about the need to act on climate change.

It is indeed the Liberal and National parties that have been all over the shop on this. Mr Abbott’s key mentor John Howard (apart from BA Santamaria of course) made it very clear that he supported an emission trading scheme when he was prime minister.