Australian Greens' Dissenting Report
Views on the Bill
The Australian Greens believe this inquiry into the Qantas Sale
Amendment Bill 2014 was useful from the perspective of collecting evidence from
Qantas' management and the unions representing Qantas workers regarding the
potential impacts on jobs if the proposed legislation is passed.
The Australian Greens believe that the overriding factor when
determining whether or not to support the proposed legislation should be its
direct impact on jobs.
The Australian Greens agree that there are a number of problems facing
Qantas, but these problems are more complex than simply a lack of foreign
ownership. A much more comprehensive response, beyond simple deregulation,
is required from government.
The Australian Greens believe that Qantas senior management has serious
questions to answer around certain financial and strategic decisions. The
by senior management to amend the Qantas Sale Act 1992 should not be
simply implemented by the Australian parliament.
We reject some of the commentary from some committee members that the
financial and strategic direction of Qantas is a "matter for
shareholders" and the Qantas board. Qantas' history, contemporary
significance as a national carrier, size
in terms of domestic employment (it employs 33,000 local workers) and the fact
it has been proactively requesting federal government support mean that these
issues are of pertinence to this inquiry and to the parliament more generally.
Views on the problems facing Qantas
A number of submissions highlighted issues in the domestic aviation
market and pointed to potential poor decisions made by Qantas' management,
which could have contributed to its current financial situation.
The submission by Colonial Airways points out that Qantas holds 65 per
cent of the domestic aviation market.
The submission argues that "Qantas' losses also rose and compounded
dramatically here due to the inconceivable and poorly timed withdrawal and
handoff of lucrative international routes and national markets."
The submission quotes aviation consultant Mr Oliver Lamb, who said that
"Qantas had made an error by slashing international services from
Brisbane, Melbourne, Perth and Adelaide in the past two years, allowing foreign
to capture its market share" and "Qantas has spent a lot of money on
ventures in Asia, and Jetstar, at the expense of its international
Colonial Airways summarises these comments as "the crux of the very
reason Qantas has moved backwards."
These sentiments are supported by the submission from the Australian
Licensed Aircraft Engineers Association (ALAEA).
In its submission ALAEA suggests that Qantas' management has made
a number of strategic errors. They argue that this is possible "as the
Qantas Board does not contain any person who has worked or been promoted from
an operational aviation profession (Pilot, Engineer, Flight Attendant, Baggage
handler, customer services, etc)."
The ALAEA submission lists a number of potential areas where poor
management decisions have led to financial losses, and like Colonial Airways,
includes Jetstar Asia as a prominent factor.
The Australian Services Union (ASU) submission supports the view that
a lack of financial capital isn’t the main issue facing Qantas:
Advocates of the proposed reforms often argue that Qantas is
disadvantaged by the restrictions on foreign ownership. They contend that
Qantas has difficulties raising capital. We dispute this argument. As one of
the world’s most successful airlines, Qantas has never had any trouble raising
capital when required. Qantas is presently below the foreign ownership
threshold of 49%. It has only come close to the exceeding the threshold on one
occasion (the [Airlines Partners Australia] private equity bid). This indicates
that sufficient local capital is available.
As noted in the committee's majority report, "Qantas indicated that
the repeal of Part 3 of the Qantas Sale Act would provide it with greater
workforce flexibility, telling the committee that the Qantas Sale Act as
currently drafted denied Qantas the ability that Virgin has to undertake a
large part of its operations (such as heavy maintenance and call centre work)
Submissions from the ASU and the Australian Council of Trade Unions
(ACTU) argued that Qantas already has implemented an offshoring strategy and
would take further steps to offshore more jobs if given the opportunity, for
example by repealing Part 3 of the Qantas Sale Act.
The fact that Qantas still retains the flexibility for up to a further
10 per cent foreign ownership, under current rules, suggests the issue is more
complex than "more foreign investment."
The current situation, along with evidence presented to the committee,
suggests that the most likely situation if Part 3 of the Qantas Sale Act is
repealed is a more comprehensive takeover of Qantas by either an individual
foreign government owned airline or a conglomerate of foreign government owned
It is almost inevitable that if such a situation were to occur, a stream
of Australian job losses would follow, as the new owners would have essentially
no incentive to retain jobs in Australia.
"A level playing field"
An issue repeated a number of times by Qantas senior management, as well
as by government Senators, was the need for "a level playing field".
In its submission Qantas stated that:
A decision has now been taken by this government to ask the
parliament to amend the Qantas Sale Act. We support this as a means to level
the playing field; as we state in our submission, Qantas is prevented by the
act from competing on equal terms to those of our competitors.
As pointed out in the majority report, The Qantas Engineers' Alliance
argued that no "level playing field" exists in the aviation market,
which is distorted by "massive government intervention and ownership."
The ACTU submission went further and stated that the concept of a level
playing field was essentially "illusory" due to government
Given the above, it is important to point out that by creating a
"level playing field" Qantas is essentially arguing for the right to
be bought and owned by foreign government owned airlines in the same way Virgin
While that may be a priority for Qantas management, there is strong
evidence that this is not in the interests of the Australian public to have
Australia's national carrier and largest domestic airline by market share
bought and run in the interests of foreign governments.
Evidence presented to the committee by a number of witnesses and
submissions make a compelling case that poor management decisions have impacted
on Qantas' current financial situation.
Evidence presented to the committee makes it clear that if Part 3 of the
Qantas Sale Act was repealed, the most likely outcome would be an effective
takeover of the airline by one, or a group of, foreign government owned
airlines. If that was to occur, it would very likely lead to an exodus of jobs
and investment in this country.
In terms of a level playing field, it seems somewhat disingenuous to
as Qantas and government senators have, that in the context of an aviation industry
dominated by government-run airlines that
operate in the interests of domestic tourism and wider economics needs, the
only appropriate response for the Australian government is to fully deregulate
the domestic industry and set up Qantas for a full foreign takeover.
That the bill not be passed.
That the Senate seriously considers any options presented to the Senate Rural
and Regional and Transport Affairs Committee inquiry into Qantas into how the
government can provide assistance to Qantas that will protect jobs, wages and
conditions of Qantas' workers, that will provide international and domestic
services to the Australian public, and that are in the national interest.
|Senator Lee Rhiannon
Senator for New South Wales
Senator for Tasmania
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