Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

Family First is concerned about the planned private equity takeover of Qantas. Family First has revealed that Australians would lose more than $1 billion in tax revenue as a result of the takeover by Airline Partners Australia. The huge debt structure that would be created by the takeover means that Qantas would be likely to avoid paying annual income tax. The Qantas takeover could cost Australians $200 million in lost income tax each year for at least five years because the private equity group’s borrowings would be so high that Qantas would have no taxable income. It is worth noting that last financial year Qantas paid $190 million in income tax. Last year, Family First revealed the tax rort where the Qantas takeover partners also stand to gain at least $450 million in capital gains tax exemptions that ordinary Aussies are not entitled to. These tax rorts are not in the public interest.

Qantas is currently a low-debt company which is financially strong. As a result of the bid, Qantas will take on an $8 billion debt and the debt-to-equity ratio will change significantly from the present ratio of 25 to 75 to 75 to 25. So Qantas will be financially weakened because of the private equity takeover. And for what benefit? The takeover bid group, Airline Partners Australia, say they are committed to a $10 billion program of investment over five years. But this is nothing more than supporting the current Qantas investment program.

Australians have been supporting Qantas for years by protecting it from competition in the profitable US-Australia route. Singapore Airlines and Emirates would love to get permission to fly between Australia and the United States, but Australians have been happy to protect a company that showed loyalty to Australians.

Family First believes there is more to running a business than just making a profit. Companies like Qantas have an obligation to the communities they serve—especially when Australians have shown such loyalty to Qantas. Family First is alarmed at what would happen to Australian jobs to help pay for such a debt-driven takeover. Qantas CEO Geoff Dixon has refused to guarantee that Australian jobs would be safe. Family First believes the takeover is not in the national interest. Qantas would take on a huge debt for no real benefit to Australians.

But Family First was particularly concerned to read that the government has admitted there is a loophole in the Qantas Sale Act which means the legislation which protects the Australianness of Qantas does not apply to Qantas subsidiaries like Jetstar. The Qantas Sale Act says the head office should be in Australia and that Australia should be the main centre for maintenance, catering and administration. It says that two-thirds of the directors should be Australian and that the company should be majority Australian owned. The Treasurer has subsequently confirmed that Jetstar is not subject to the Qantas Sale Act but, despite this, it appears the government will do nothing about it. That is not good enough.

Family First believes it is a huge concern that there is nothing to prevent Jetstar being sold off to overseas buyers, and jobs and operations being sent offshore, if the Qantas takeover succeeds. Securing Australian jobs for workers and their families is Family First’s top priority. Qantas has made huge profits through its budget carrier Jetstar and plans to further drive down costs, particularly labour costs, to reap even bigger returns. It does not take much imagination to see Jetstar sending jobs and operations offshore where labour costs are cheaper.

Michael Ryan, a pioneer of low-cost air travel with Ryanair, was recently asked his thoughts about Qantas and Jetstar and told the Bulletin:

I would imagine that what they are trying to do is put as many of Qantas’ routes into Jetstar [as possible].

Qantas workers and their families are very concerned at this possibility. Cutting costs to the bone might deliver huge profits, but they should not be at the expense of Australian workers and their families.

The Australian and International Pilots Association today took the matter to the Federal Court, arguing that the legislation should apply to Qantas subsidiaries and calling for clarification. However, we should not leave it to the courts to clear up this situation. Family First believes this is an important matter that members of the Australian parliament, as elected representatives, must clarify. That is why Family First will be introducing a bill to amend the Qantas Sale Act, to ensure subsidiaries like Jetstar are included in the protections that apply to Qantas.

There are media reports that some government MPs share Family First’s concern that there is nothing to prevent Jetstar being sold off and jobs and operations being sent offshore. Will these government MPs act to protect workers and their families from their jobs disappearing overseas? Will they support Family First’s proposed commonsense bill to give workers and their families a fair go, or will they abandon workers and their families?

Qantas has reaped huge profits by transferring its routes to the much leaner Jetstar. Jetstar’s international operations have grown quickly and it now flies to Cambodia, Hong Kong, Indonesia, Japan, Malaysia and eight other countries. Most of the 70 new planes Qantas has ordered will go straight into Jetstar, which will move further into Asian markets and is reportedly considering flying to Europe and the United States mainland.

There is sufficient cause to be alarmed. Late last year there was a cloud over 460 heavy-maintenance jobs at Melbourne airport. Last March, 480 heavy-maintenance jobs were lost in Sydney when Qantas shut that operation. Family First wonders what will happen to Jetstar workers and their families who do not have the protection of the Qantas Sale Act.

Securing Australian jobs for workers and their families is Family First’s top priority. That is why Family First will tomorrow introduce legislation to amend the Qantas Sale Act and ensure the restrictions that apply to Qantas, including rules about keeping maintenance, training and administration in Australia, also apply to Jetstar and other Qantas subsidiaries.