Buying a stake in Qantas is one option, Anthony Albanese says. Photo: Rob Homer
Treasurer Joe Hockey says the country needs to accept that keeping Qantas in ”regulatory handcuffs”, which limit foreign ownership in the national flag carrier, will come at a high cost to taxpayers.
A day after he called for a debate about the restrictions, Mr Hockey said the nation needed to be prepared to ”pay a price” if it wanted to retain foreign-ownership limits on Australian companies for the national interest.
”If Australia wants to place regulatory handcuffs on Qantas, then we need to accept that that will come at the cost of taxpayers. Frankly, it’s not something that I am willingly prepared to do – I don’t like the idea of putting taxpayer’s money or taxpayer’s support behind Qantas,” he told reporters today.
”But if it is the view of the Australian people that we should have a national carrier that carries our flag then that does come at a cost.”
Prime Minister Tony Abbott entered the debate on Thursday, telling reporters in Canberra that he wanted Qantas to “remain an Australian icon”.
“I’m happy to look at a range of measures to help ensure that happens,” Mr Abbott said, adding that he was not being “prescriptive” about any particular change.
Qantas, which is fully owned by private investors, claims it is severely hamstrung by foreign ownership restrictions that do not apply to its arch rival. Virgin is now majority owned by three state-owned airlines – Singapore Airlines, Air New Zealand and Etihad.
The federal opposition has backed suggestions that the government take up a small stake in Qantas to shore up the national carrier’s position in the face of growing competition from state-backed airlines.
But Labor remains opposed to scrapping the Qantas Sale Act, which caps foreign investment at 49 per cent, total ownership by foreign airlines at 35 per cent, and a single foreign investor to 25 per cent.
Shares in Qantas rose as much as 5 per cent this morning after Mr Hockey raised on Wednesday the prospect of scrapping rules that restrict foreign investment in the national carrier. The airline’s were trading up 2.5 cents at $ 1.205 shortly after midday.
Joyce says law change ‘not realistically achievable’
Qantas chief executive Alan Joyce reiterated in an email to its 30,000-strong workforce today that it was ”not realistically achievable in the current Parliament” to change the Qantas Sale Act.
”The process would be prolonged, during which time Virgin Australia would be free to continue its anti-competitive strategy aimed at crippling Qantas. We simply do not have the time,” he said.
”There are a range of policy measures that the government could consider in order to provide a more level playing field for the aviation sector in Australia.”
Qantas wants the government to intervene to halt Virgin’s $ 350 million capital raising, which will result in its three major airline shareholders raising their combined stake to as much as 68 per cent.
Labor opposes changes to Qantas Sale Act
Labor leader Bill Shorten said the party did not want to see a majority foreign ownership of Qantas.
”I and Labor believe that Qantas should stay in Australian hands,” he said.
Mr Shorten said that Australia needed a national carrier, as it was an important part of Australia’s national security and independence.
”I would say to the Treasurer, these are important matters. They’re also market-sensitive matters,” he told reporters on Thursday.
The Opposition Leader said that the ”thought bubbles” of opposition needed to be replaced with ”more disciplined contributions” from the Coalition government.
The opposition’s shadow transport spokesman, Anthony Albanese, said there were options for the government to make it clear to markets that the Australian government would not ”sit back” and allow Qantas to disappear.
”We are prepared to work constructively with the government,” he told ABC TV today.
Mr Albanese said one option was for a government entity to buy a small stake in Qantas, which would ”make clear to the markets … that the Australian government regard Qantas as not just any other company”.
”The whole point is that Australia needs a national airline that is majority Australian owned,” he said, adding that the policy implications from walking away from the act were significant.
Mr Albanese cited the important role the Qantas played in assisting Australians returning home when they were caught up in hostile environments in other countries.
”When it comes to our national airline, then it is important that the government act and act constructively.
We are prepared to work both with Qantas and Virgin as we were in government.”
Pilots agree a level playing field needed
The pilots union welcomed the Treasurer’s call for a debate about the restrictions on foreign ownership in Qantas but emphasised that any changes to the law needed to be ”focused solely on improving” its operations in Australia.
Australian and International Pilots Association president Nathan Safe said Qantas was undoubtedly at a disadvantage to Virgin, which was ”free to attract foreign capital streams”.
But Mr Safe said the government needed to ensure Qantas management could not funnel any extra foreign investment into overseas ventures.
“It would be a huge policy mistake for the government to allow Qantas to attract foreign investment to compete in Australia, only to then see that investment disappear out of the country,” he said.
”That would be a disaster for Australian aviation.”
Qantas has invested hundreds of millions of dollars in helping its budget offshoot, Jetstar, set up joint venture operations in Japan, Vietnam, Singapore and Hong Kong.
“If Qantas management is calling for the QSA to be reviewed so the airline can more ably compete against Virgin in Australia, then the government must ensure that any additional foreign revenue streams attracted are directed into Australia,” he said.
“This current Qantas management has a track record of speculative investments across the Asia-Pacific.”