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Thursday, 10 May 2012
Page: 3085


Senator JOYCE (QueenslandLeader of The Nationals in the Senate) (11:25): Quite obviously we still want Qantas to call Australia home and we want the airline to remain an Australian entity, and it will. But we cannot take the position where we start telling organisations how they must operate overseas. If Woolworths go overseas and open up a shop in Ho Chi Minh city, we cannot start insisting that the people at the checkout get paid Australian wages, otherwise it is not going to stay in business for very long. The reality is that we want Qantas to succeed, and to succeed it has to operate under the terms and conditions that keep the dignity of what it is to be Australian but deal with the commercial realities of exactly where they are. If you impose all these conditions on Qantas the result will be to put it out of business, not keep it in business.

Obviously issues will come to light—I think Senator Xenophon may have mentioned this before—and there are issues aplenty in aviation. I think the next one will be Etihad's involvement in trying to grab hold of Virgin and shell it out and turn it into basically an overseas airline. These questions are afoot all the time and we are going to have to try to work out how we deal with them. You cannot manipulate by legislation the actions of a company that is dealing in an extremely tough commercial environment.

It was great listening to Senator Sterle—he seems to have left the chamber now. In the rambling diatribe that we will call a speech, he did go to one interesting area: job security.

Senator Edwards: Job security and profitability.

Senator JOYCE: Yes, job security and profitability. Correct me if I am wrong, but this is the same party that is going to bring in the carbon tax. Is that correct? You may ask how this is relevant to the airline industry. I will tell you exactly how it is relevant. The carbon tax is going to go on airlines that operate domestically but not on the ones coming into Australia. So, they are creating a tariff against their own workers. They are part of a process to drive their own workers out of a job. Why would they do that?

It seems the Labor Party thinks there are two types of planes. There are evil, nasty, naughty Australian planes with evil, nasty, naughty Australian workers in them. Then there are righteous planes, the ones that come in from overseas. They become righteous as they pass over water towards us. But they are evil if they are owned in Australia and go in the other direction.

We now have a situation where if you go to Fiji you will not pay the carbon tax, but God help you if you go to Cairns. It is completely immoral to go to Cairns, so you must pay the carbon tax. If you go to Fiji or go surfing in Bali it is okay. But if you go to Margaret River in Senator Sterle's state to go surfing you pay the carbon tax. And they talk about job security!

At one stage Paul Howes of the AWU told us that if the carbon tax cost one job he would stand up against it. Brave Paul Howes! Anyway, brave Paul Howes is nowhere to be seen these days. We have not heard much lately from brave Paul Howes about the carbon tax. Brave Paul Howes has become invisible Paul Howes. He is probably writing another book. He is the only man I now who has written more books than he has read. He will be out there writing a book about how influential he is. It will be great bedtime reading. Circulation might not be so good, but he will be out there writing. I would love to see him stand up and do something for the workers he represents.

The ACTING DEPUTY PRESIDENT ( Senator Fawcett ): Senator Joyce, I draw your attention to the requirement to be relevant to the bill.

Senator JOYCE: But it is a good speech, don't you think? This bill has 'call Australia home' in its title, and we want to make sure that we maintain Qantas in Australia. We all have similar beliefs. But to keep Qantas here we have to make sure we give it the capacity to compete. If you are going to jam a tax on the fuel, it will not be able to compete. If you are going to jam a tax on basically everything it does—a new carbon tax on every bit of power that it consumes—then Australia will not be home for Qantas. Nowhere will be home for Qantas, because it will go broke. This is a mad, manic economic policy from the Australian Labor Party. That is basically what is going to happen.

Senator Sterle talked about us competing with China. He does not want Australia to be like China, and neither do I. I want the Chinese to be like the Chinese and I want Australians to be like Australians. We are all very happy with our identity, but the Labor Party will take us down to the lowest common denominator if it continues to put on excessive overheads so business cannot compete. The most obvious overhead at the moment is the carbon tax. If we really wanted to keep Australia home to Qantas, we would be making sure that we removed unnecessary overheads and did not impinge on the business's capacity to compete in overseas environments. Where do we stop? If we start with Qantas, the next time BHP opens a mine in Africa or Indonesia are we going to insist that the workers at the mine get paid Australian wages? It would be a very noble gesture, but it would not work. It would be impossible. So how can we do it to Qantas or Jetstar? It is just not going to work. Yes, there are rights and obligations but we do have protections via access arrangements for major routes in Australia, and this is a mechanism by which we can support Australian jobs and conditions of employment in Australia.

We do want to make sure we do whatever is in our power to not put a burden on the company and send it out the back door. Rather than prosecute the company, we want to encourage it to, of its own volition, make sure it stays a vibrant Australian organisation. It is doing that the moment because it is still making a profit, which is good to see, while other airlines are going broke. Other airlines are heading out the back door, and we want to make sure that that does not happen to our airline so in the future we can still turn up at the airport and see the big red-tailed plane with the white kangaroo on it and say it is a representation of our nation—and long may that be the case. We have shown in the past a capacity to ensure Qantas remains an Australian company. That was part of the Qantas Sale Act, and it remains the case. But you either grow or disappear. If Qantas is growing in other markets, ultimately that is good for us—it is good for the bottom line of the company and it ultimately keeps the company on the books and in the air. It is obvious that to do that it has to deal with the commercial realities of the places it operates in.

The bill proposed by Senator Xenophon seeks to amend the Qantas Sale Act 1992 and impose tougher requirements on Qantas and Jetstar operations. The bill would change the make-up of the Qantas board and give minority shareholders greater rights, and require Qantas to undertake the majority of its heavy maintenance and flight operations and training in Australia. I just do not think you can do that to an organisation. It is for the stewardship of the organisation to try as best as it can to make sure it stays profitable. We have seen an incredible deterioration in the relationship between the management of Qantas and the workers, and we are happy to see that that situation now seems to be resolving itself. We want to make sure that continues. It is not in any person's interests to have planes parked at the airport with no-one flying in them—it is not in the interests of the airline, because of course if it is not flying it is going broke, and it is not in the interests of the workers, because if they are not working they are going broke.

The restructure was strongly opposed by the Transport Workers Union and the Australian and International Pilots Association. It was also opposed by the Australian Licensed Aircraft Engineers Association, the Australian Council of Trade Unions, Senator Xenophon, the Greens, the Australian Labor Party—particularly Senator Glenn Sterle—and Bob Katter. All of these parties claimed that the restructure breached the intent of the Qantas Sale Act but acknowledged that the restructure most likely did not breach the legislation in its present form. That is basically the issue before us at the moment. The Qantas Sale Act, which is what this legislation goes to, was introduced when Qantas was privatised to ensure that Qantas remained in Australian hands. It required that no more than 49 per cent of the issued share capital of Qantas Airways may be owned by foreign persons. That remains the case. It also said that Qantas must maintain its principal centre of operations and its headquarters in Australia. I am not suggesting for one moment that we have not had people who have pursued us to change that, but we have not changed it. We have made sure that Qantas is maintained as an Australian organisation. It also said that the name 'Qantas' must be preserved for the company's schedule of international passenger services.

We will not be supporting Senator Xenophon's bill because it would require the majority of Qantas's heavy maintenance, flight operations and training facilities to be located in Australia, and additionally these requirements would be extended to Qantas subsidiaries and associated entities. Once more, if it is all right to do it to Qantas, why not do it to Woolworths, why not do it to BHP, why not do it to any other organisation—why not do it to private organisations when they decide to go overseas?

Senator Xenophon: This is our national carrier.

Senator JOYCE: Senator Xenophon is telling me that Qantas is the national carrier. I agree with him—it is. It is definitely the national carrier. I never thought it was not.

The bill also requires that two people, one with at least five years of professional flight operations experience and one with at least five years of aircraft engineering experience, be appointed as members of the Qantas board of directors. Once more, you are going into a company and starting to nominate whom you want on their board. Where do we stop? Do we start doing that for every company? Do we have a roam through companies on the stock exchange and then through private organisations and start telling them what qualifications they need on their boards? Do we now know better than they do what qualifications they need on their board? That judgment is made by a group of people called the shareholders. If they do not like who is on your board, they stop buying your shares and your share price will tank. The competencies required to run a company are best assessed by the people who own it—and the people who own it are the shareholders.

Presently, the Qantas Sale Act 1992 provides that a court may, on the application of the minister, restrain Qantas from engaging in particular conduct. The amendments would extend this power to any group of 100 shareholders who, collectively, own at least five per cent of the shares in Qantas. Once more, we are getting into a very interesting place—a place where five per cent can act as a majority. If five per cent can act as a majority, you have some serious issues. I do not know how democracy would work if we applied that concept here, but it would be an interesting chamber if five per cent could start forcing us to legislate a particular way. I suppose the Greens do have a crack at doing that, but it does not stand logical scrutiny for five per cent to be able to determine the actions of a company. For the sake of the five per cent, you neglect the rights of 95 per cent. That just does not pass muster.

This bill unfortunately, I think, has more problems with it than the last one. Why? Because it starts grabbing hold of concepts which, if you extend them logically, do not make sense. Once you have said this is right for one company, you cannot argue the case that it is not right for others. Qantas might be the national carrier, but what do we say about the national retailer or the national miner? Do we go to Ramsay Health Care and start talking about them as the national private healthcare provider? Where does it stop?

This idea sounds good until you read the bill. Once you read it, you realise that it is going to cause more problems than it is going to solve—vastly more. Ultimately, the consequence will be that you will put a company that you want to remain as the national carrier in a position where it is at a financial disadvantage. If that financial disadvantage remains over a period of time, Qantas might decide to remove itself from markets. By so doing, it would become a weaker organisation overall. That would reduce its capacity to finance its fixed capital, fixed capital which is locked in, which was present prior to this bill going through. After this bill goes through, the cash flow which underpins that fixed capital will be inherently different. That has the potential to end up causing major problems throughout the organisation. The result would be that Qantas would either have to retire capital—capital assets which would have been pushed past the tipping point of economic viability—remove itself from routes or start going backwards, making a loss. None of those alternatives are good for Qantas. None of them support Qantas remaining as the national carrier.

Unfortunately we see this sort of thing in other places—a typical one being water policy, where you are going into areas and removing productive capital in such a way that it no longer supports the existing local economy. If you go to a town and buy the water back, meaning the rice mill no longer gets sufficient throughput, it is not just the farmer that leaves; ultimately, the rice mill closes down and the structure of the town falls apart. If, after the construction of capital, you start to damage the cash flow which underpinned that capital investment, the capital will stop contributing to the business—it actually starts leaching from the business and starts being an encumbrance on the future viability of the company. It is clumsy and inefficient and ultimately it costs everybody. The coalition will not be supporting this.