Bruce Baird (Cook, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. Would the Treasurer update the House on the process for scrutinising Airline Partners Australia Ltd’s takeover bid for 100 per cent of Qantas Airways Ltd? Would the government protect majority Australian ownership?

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the honourable member for Cook for his question. I acknowledge the fact that he represents a large number of Qantas employees and has a very great interest in the aviation and the tourism markets. I can inform the House that yesterday Airline Partners Australia lodged a notification under the Foreign Acquisitions and Takeovers Act, which will now trigger the provisions of that act and allow a scrutiny of the takeover bid that it has lodged for Qantas Airways Ltd. The act allows the government to scrutinise any bid which would result in an Australian company becoming foreign owned or a foreign owned company changing the identity of the foreign owner. The act prescribes a time limit for such a decision to be made and provides the possibility, if the bid is against the national interest, for it to be disallowed if it fits either of those categories.

In addition to the Foreign Acquisitions and Takeovers Act, the Qantas Sale Act, which the Labor Party put in place when it privatised Qantas, will also be strictly enforced by this government. That means that foreign ownership of Qantas is restricted to 49 per cent. At the moment, the foreign ownership in Qantas is around 46 per cent. Foreign airline ownership of Qantas cannot go above 35 per cent. Qantas will be required to keep its head office in Australia. Qantas will be required to have its principal operation centre in Australia and Australians will have to make up two-thirds of the directors of Qantas. In addition, the presiding director at Qantas board meetings must be an Australian and the incorporation of Qantas cannot move outside of Australia. I want to make it absolutely clear that all of those conditions will be enforced strictly and in full.

The Foreign Acquisitions and Takeovers Act allows screening where a foreign corporation acquires 15 per cent or more or 40 per cent in aggregate of the shares or control of an Australian corporation. I welcome the fact that Airline Partners have notified. It was always the government’s view that they were obliged to and should do so. This will allow strict screening. This government will not allow majority foreign ownership of Qantas. We will insist that any bid which is put to the shareholders maintains this company in majority Australian control and majority Australian ownership. The matters will be carefully screened by the Foreign Investment Review Board and a decision will be made in accordance with the act.