Mar 5, 2014

Transcript of press conference – Parliament House, Canberra

Subject: Qantas 

ALBANESE: Good afternoon. In Question Time today we have seen the Abbott Government show once again that it does not have a plan to deal with the challenges facing Qantas. This is on a day where the first of the 5000 Qantas employees who will lose their employment know what has happened to them. In terms of these workers, the Labor Party is concerned for their welfare. The government needs to have a plan for them as well as for the nation, today when Bill Shorten as Leader of the Opposition asked about those workers and what the government plan was, what he got was just platitudes and more politics from Mr Abbott. What we have seen from the Government since December is just all politics and no action. They show us every day that they had a plan to get into government but they don’t have a plan to govern. They have three word slogans but they don’t have proper, thought-out strategies. Today we saw it again.

Labor wants to see a proper discussion about how to assist Qantas as a majority Australian-owned airline prosper into the future to secure jobs here in Australia. There are two issues at stake: Australian jobs and a second issue of the national interest. Today of course Mr Truss and Mr Hockey attempting to justify why in 2009 after the Labor Government brought out an Aviation White Paper they opposed the proposal that was in that paper to lift the 25 percent and 35 percent restrictions on Qantas while maintaining Qantas as a majority Australian owned airline. What they didn’t do in their response today, and what Mr Hockey didn’t do after Question time where he attempted to clean it up is state why the reasons that both Mr Hockey and Mr Truss outlined Australian ownership provisions were important have changed. There was no explanation for that whatsoever.

Labor has lodged a Senate Inquiry motion this afternoon from Senator Sterle. That is an opportunity for there to be input into what the options are. It asks for the committee to consider what initiatives can be taken by government to ensure Qantas remains a strong national carrier supporting aviation jobs in Australian including (a) a debt guarantee, (b) an equity stake and (c) other forms of support consistent with wider policy settings. It also asks for proper consideration of what the issues are for Qantas in terms of the benefits to national security, skills, marketing, tourism, emergency assistance and other measures. Labor will be seeking support from the cross benches for that inquiry in the Senate when it is voted upon tomorrow and we’re having constructive discussions with the cross benches about securing support for this inquiry. We are of course yet to see any legislation from the government. One could imagine that there will be a legislative inquiry as well if that legislation ever appears. But at this stage the opposition not only hasn’t seen it, hasn’t been approached at all about any proposition from the government.

REPORTER: Do you personally think there’s a case to make for the government to take an equity stake in the airline and secondly would you support the senior management of Qantas including Mr Joyce being called to the Senate inquiry?

ALBANESE: On the first matter, in terms of a stake one of the things that I have said and I’ve said this before is that that was an option I certainly think in terms of the discussions that I had with Treasury informally there is one option would be and I discussed this with members of the government as well that rather than give a debt guarantee an option would be for an equity injection which would of course produce a return to the government. I’ve said before that Qantas share prices at the moment represent value if you look at the position that Qantas is in. With regard to Mr Joyce I think that the Senate should feel free to ask him to attend.  Far be it for me to tell a senator how they should run a Senate inquiry. But I’d be very surprised if people aren’t asked to give evidence before that inquiry.

REPORTER: So you are effectively advocating the renationalisation of the airline?

ALBANESE: No I’m not.

REPORTER: It’s a partial renationalisation.

ALBANESE: I’m not advocating that and I’m not going to be verballed two minutes after I’ve given an answer. I didn’t say that at all. This inquiry – there will be options on the table in terms of securing support for Qantas, that have within them a  majority Australian ownership. One of the things we did was be constructive and say to the government: If you come up with a range of options we are prepared to be constructive about it. What we are not prepared to negotiate on is the issue of majority Australian ownership. Let’s be very clear: It is up to the government to actually advocate a position and to bring forward legislation. We do not have a majority on the floor of the House of Representatives. It’s up to the government to govern. We will respond and we’ve been constructive.  I would have thought the fact that we have consistently flagged from months what our position is has been helpful. There was a period where our positions had convergence because as people here know you were all briefed by government senior ministers that there was going to be support for the debt guarantee and that they had gone so far down the track that they’d even done due diligence on it.

REPORTER: Is one of the compromises that Labor may agree to is changing the 25-35 rule? Would you be open to discussions with the government on that?

ALBANESE: We have said that we would consider it. We had an Aviation White Paper that was released in December 2009 that advocated that change be considered and on the day it was released Warren Truss and Joe Hockey opposed it. And in opposing it they gave reasons about the national interest. Mr Truss emphasised the impacts on regional services. Mr Hockey said that once you removed or diluted any of the foreign investment provisions that are there in the Qantas Sale Act it would undermine the national interest because a non-majority owned airline – and we weren’t even proposing changing the majority ownership at that time – even those small changes they argued at the time would mean that Qantas would no longer serve the national interest.

REPORTER: Putting aside that history would changing that little part of the act actually have a significant difference to Qantas do you think today?

ALBANESE: It would be up to Qantas to respond to that. But the fact is that I believe that that in itself isn’t what Qantas have emphasised. Qantas have emphasised the form of a debt guarantee. What essentially Qantas are looking for when all the noise leaves the scene, Qantas want to be able to borrow at a lower rate today than they can under junk status that their credit rating was downgraded to in December. Qantas are very pragmatic about how that can be achieved. It can be achieved essentially by – what a debt guarantee does is say that the government will stand behind the airline. There are other possible ways in which that could be done as well in terms of a small equity injection. I did this in the letter of comfort that I provided which was successful in ensuring that Qantas maintained its credit rating. That letter basically indicated that according to the former Labor government our view was that Qantas was too significant a company to simply be allowed to fail.

REPORTER: What about changes that Labor drafted to the Sale Act?

ALBANESE: We didn’t.

REPORTER: None at all?

ALBANESE: We didn’t.

REPORTER: Did you ever support, or say that the 49 per cent rule should be lifted?

ALBANESE: Never. Not once, ever. I produced an Aviation White Paper. We had speeches at the National Press Club. So I’m not sure whether Mr Abbott was verballing Mr Epstein but let’s be very clear. I have never, in private, in public, in a meeting, anywhere advocated anything other than a majority Australian owned airline. If people go back I’ve given lots of press conferences about this. You would be surprised if I had done that I am sure Latika.

REPORTER: What about Mr Epstein’s article today. He says that your policy is going down the Argentinian road. Isn’t that embarrassing? He’s a former adviser.

ALBANESE: Mr Epstein obviously has some gripes regarding himself and Qantas. What happened between him and QANTAS I am not sure frankly.

REPORTER: He making criticisms of your approach.

ALBANESE: That’s up to them to sort out. My argument is not with Mr Epstein. Former Labor staff who go on to well-paid employment in the private sector are free to say whatever they like, whenever they like. I am free to reject them. Mr Epstein is wrong. Labor’s policy is right. Labor’s policy is consistent. Labor’s policy is in the national interest and it’s about Australian jobs. That is our priority. That also has been Labor’s policy in the entire time that I have been either the transport minister or the transport spokesman and I have worked constructi9vely to that end.

REPORTER: Alan Joyce said today that the debt guarantee would be worth tens of millions of dollars. That’s not insignificant but it’s not exactly a silver bullet to solve all the airline’s problems. So is it only about the debt guarantee? Do you think that the debt guarantee really is a silver bullet for that airline?

ALBANESE: What Alan Joyce has said clearly is that that would provide essentially a major solution to the challenge which Qantas us facing which is because of capacity issues, because of the downgrading in terms of its credit rating. That is putting pressure on its strategy moving forwarded. Now the solution to that I believe is far more preferable than the government’s solution which says let’s just get rid of all of the Qantas Sale Act and let’s get rid of Australian jobs.

Mr Truss said this morning on the doors that this wouldn’t lead to a less Australian airline and it wouldn’t lead to the loss of any jobs. Well I am afraid that the Prime Minister when he gave the announcement in the blue room of the cabinet decision said very clearly that it would lead to a loss of jobs. That’s what the government’s policy is designed to do. It’s designed to allow Qantas to lower its costs by moving jobs offshore. That‘s the best-case scenario under the government’s proposition.

The worst case scenario of course is much more dire than that, which is of course also the government’s proposition is the break-up of the company and allowing the most profitable bits of the company to be allowed with zero percent Australian ownership but leaving the areas which are most under challenge from competition in Australian ownership but with a different company structure than exists today.

REPORTER: The airline is losing $250 million every six months at the current rate. That’s its loss. How much of a difference to that would the debt guarantee make?

ALBANESE: I’m not Alan Joyce and I suggest you ask that question of Alan Joyce. I suggest you ask him.

REPORTER: You said at the top of the press conference that Joe Hockey hadn’t explained why he had changed his position,. But hasn’t he said that Qantas is going down the tubes, utilising market share, it’s losing money. Shouldn’t that also force a rethink in Labor.

ALBANESE: What he did not do is he didn’t address the national interest concerns that he raised then. The national interest concerns that he raised then were very clear – that if you remove majority Australian ownership or even weaken it in any way, what you will have is a company that no longer serves the national interest. And he went through very explicitly in December 2009 what these national interest concerns were. They are just as valid today as they were in 2009. They’re not dependent, of course, upon Qantas’ market share. The nature of whether it’s majority Australian owned or not – that’s what he didn’t address today. He didn’t address it today because he’s being totally inconsistent – not just between today and 2009. He’s being totally inconsistent with today and last week and last month and last December in particular. When he put out the four criteria for government support for Qantas that wasn’t with a different market share. That was with precisely the same conditions that are there today that existed just a few weeks ago.

REPORTER: Do you accept the government’s assurances that it didn’t pressure Qantas into releasing that statement blaming the carbon tax for some of its problems.

ALBANESE: What I find extraordinary, and the government has got to answer, why is it that Joe Hockey read out the Qantas media release in the cabinet room – the release saying that carbon price wasn’t the real issue behind this issue of the future direction of Qantas and government policy. Why is it that that occurred in the cabinet room? Why is it that Mr Abbott couldn’t say about discussions that have taken place between his office, himself and Qantas management?

REPORTER: When was the last time that you spoke to Qantas management? Is Labor now under pressure from Qantas to go along with the government plan here? 


REPORTER: When was the last time you spoke with Qantas management?

ALBANESE: I spoke with them today.

REORTER: What was the message there from them?

ALBANESE: I had a very pleasant conversation and one of the things that I do in pleasant conversations is keep them private. That’s why I am able to do it?

REPORTER: Did they tell you to support the repeal of the Act though?

ALBANESE: They know out position full well.

REPORTER: And that was with Alan Joyce, that conversation today?

ALBANESE:  I got asked a specific question about Qantas management. I have answered it, that’s as good as you get. It’s not up to me to outline private conversations that I have with people in the business community. Can I say this. They weren’t the only airline that I spoke to today. I also spoke to  the Australian Automobile Association. I spoke to lots of people. Why did I speak to lots of people today? Because this mob over here that sit in the ministerial wing aren’t acting like a government. That’s why I am in a position as a shadow minister to talk like an adult to people about real solutions, not about political slogans. Thanks very much.