Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

My question is to the Minister representing the Minister for Infrastructure and Transport, Senator Carr. Qantas CEO Alan Joyce in his evidence to the Senate Rural Affairs and Transport Legislation Committee on 4 November said that he had the delegated authority to unilaterally ground the entire Qantas fleet without first seeking board authorisation. Further, Mr Joyce told the committee that it was his decision, that he had 'complete operational discretion to ground the entire fleet'. Given the enormous disruption the grounding caused both here and overseas, does the government concede that the Qantas Sale Act needs to be amended to require that such a grounding, unless it is for genuine safety reasons, should require both board approval and reasonable prior notice to the government of the day?

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

I thank Senator Xenophon for his question and I note the courtesy he has given in providing notice on these matters. The senator has sought to engage in a constructive way with the government on matters of quite important public policy. In regard to this particular issue, I note the comments that Mr Joyce made in response to questions at the rural affairs committee where he did indicate that he had complete operational discretion and he indicated he had that in the context of some safety issues, which was shown in regard to the grounding of the airline and in regard to the volcanic ash incident. He also indicated, though, that he did in fact consult the board in regard to the decision to close the airline and the action that Qantas was taking in regard to the lockout of its employees.

The government has expressed its disappointment with the actions of Qantas management and of course has indicated that in regard to the dispute the government had to act decisively to have the industrial action that was underway ceased immediately—action undertaken on both sides in regard to the dispute. That was a decision that the government took in support of the 98,000 passengers who were left stranded by Qantas's quite extraordinary actions in proposing to lock out its employees and the more than half a million people working across the tourism industry in this country.

In relation to the CEO's association with the board, that is clearly a matter for Qantas itself. Of course this has to be seen in the context of Australian company law. Going to the question specifically of your suggestion in regard to proposed legislative changes to the Qantas act, the government— (Time expired)

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I am waiting with bated breath to get the answer, Mr President, but once I receive that answer I do have a supplementary question: does the government concede that under the current provisions of the Qantas Sale Act there is nothing to prevent Qantas international from shutting down any or all of its international sectors and replacing those services with a subsidiary airline?

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

In terms of the changes you are seeking to the Qantas act, the government are looking forward to the Senate committee's report that you and other senators are engaged in. So we look forward with some interest to those questions. Insofar as the act is concerned, Qantas's main operational base and headquarters must remain in Australia; total foreign ownership must not exceed 49 per cent; the name 'Qantas' must be preserved for the company's scheduled international passenger services; the company must be incorporated in Australia; at least two-thirds of the board of Qantas must be Australian citizens; and the chairman of the board must be an Australian citizen. I am advised that the Minister for Infrastructure and Transport and the department continue to monitor Qantas's business strategy and associated proposals to ensure that Qantas's operations continue to meet the requirements of the Qantas Sale Act. Again, I point to the fact that the Senate inquiry— (Time expired)

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Qantas has justified 1,000 job cuts and moves to set up overseas offshoots in part by the claim that Qantas international lost $216 million last financial year. However, Qantas international is not listed in its annual report as a separate operating segment subject to the auditing standards of its other operating segments. Does the government believe this is unsatisfactory?

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

I am advised that Qantas, like all companies, must comply with all the relevant laws and regulations, including those relating to financial reporting and disclosure. Complying with the accounting standards and other requirements, including the requirements for the Australian Stock Exchange, and presenting its accounts in accordance with those financial regulations is of course a matter for Qantas.