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(generated from captions) and it was 8pm on the Monday. It It was not on the day - No

point turning up at work if the airline

airline isn't flying But airline isn't flying But people

were being paid. All the way, including the employees including the employees taking

the action, between that time

of the airline grounding and

the lockout taking place, we didn't

didn't issue them with instructions,

instructions, as we could have,

that the lockout occurred that the lockout occurred from when the airline was

grounded. So in this instance you

you don't think there would you don't think there would

have been impediment to you rolling out exactly the

give 72 hours notice as the

unions were. There wouldn't have

have been any difference in the

plan. That's interesting. In

your opening statement you

mention 90% of maintenance is

in Australia, 92% of your staff

are based here. The Act doesn't prevent you from going

much lower, you could go right

down to 50% and a bit if you

chose to? Absolutely, chose to? Absolutely, but we are the only airline that are the only airline that does heavy maintenance here. None

of our competitors do. We're

the only airline that has that

level, as far as I snow around the world, that's of employees based on its home

country, so we are very

committed to Australia, have

been very committed to Australia and have a huge

investment in this country. My reading of the act is it could go lower could go lower than that if you

made decisions to offshore your

maintenance? I have to say we

have made that commitment and

we spent a fortune on heavy maintenance facilities, we've

spent a fortune on - we're the

only company many the country that actually has an apprentice program for making a commitment for the future of this in Australia. I would

would probably ask you,

Senator, at maybe having a look

at other airlines and saying

should they be making the same

commitment to Australia that

Qantas is because it always

seems Qantas is at the thin end

of wedge on this one getting the criticism for what it's doing when it's doing the doing when it's doing the right thing for Australia when other

airlines aren't Do you propose

to keep your maintenance staff

and activity at those levels at

90% indefinitely are aren't there there any proposals to wind it back? There haven't back? There haven't any

proposals to vary but over time there have been. There hasn't

been a decision to where to do the A380 or the 787

maintenance. I can't speak maintenance. I can't speak for

the next 20 or 30 years I don't know. What about the next

5? There's no plans for us to


do anything else except do anything else except with the maintenance in don't know where that number

will vary because there may be

circumstances out of my control that may make it different. We

had a huge commitment doing heavy naint doing heavy naint innocence

here and that commit element continue But you're not

committed for the big long haul jets you're purchasing and the

process for bringing into the fleet for the maint fleet for the maint maintenance to remain in Australia? We have new technology coming in all the

time and part of the technology

is maintenance exchange. Same

maintenance you did on it is

different to what we do today.

It's very different. It is

something and what we need to

adapt to and change to is we're

doing less maintenance on the aircraft because of the newer

technology. We do have an issue

of setting up hangars of setting up hangars and setting up infrastructure for

small fleets like we have of the A380 that are uneconomical.

That will bankrupt Qantas if it

continues to do that. Same for

the 787s, it doesn't need heavy maintenance for maintenance for the first 12 years, it's different checks

that are needed but the

maintenance is very different and

and the new technology is having an impact on the

maintenance that we need to do.

It is going to have an impact on the maintenance for what we

have here in Australia and

maintenance has disappeared because new technology doesn't

need it. In 5 years time need it. In 5 years time when those two long haul aircraft

are fully embedded in the fleet we would expect that figure we would expect that figure to

be significantly lower than

90%. You're telling us not for

industrial reasons but for industrial and technology reasons? We've always been

for us to do the A380 or the 787 maintenance in Australia because it take aslong time for

them to occur but there's very

low levels of maintenance that's needed on these aircraft. These are important questions but Doi have other senators who haven't had the

opportunity. Can I go to them . Mr Joyce, you've . Mr Joyce, you've consistently said, I think said, I think the transcript

will reflect this, we, in

respect to the decision made on

at least two occasions you've corrected that and said I. Was there more than

ground the airline or did you

- No, I keep - I sometimes use

we because I work with a team but it was my decision. And there was there was no consultation with

anybody else so the fact that

you've said we repeatedly for

an hour in answer to direct

questions about this is

wrong? I've said I made the

decision very clearly on multiple occasions and I said that I

that I did consult with the board to get their endorsement and that and that endorsement was given unanimously by the board to I

it. The decision was

mine. Thank you, I just the transcript with interest. Alan's executive team was not told until midday. Just curious about the Just curious about the we, that's all. It's maybe my

phraseology, I use we a lot

because I like to involve the

team but on this occasion to be absolutely clear I made the decision. That's explained. Senator Cameron. Thanks, chair. Mr

Joyce, can I just firstly indicate so many questions, so

little time, I'll certainly be arguing I know I'm a bit frustrated, I know Senator

Xenephon is a bit Xenephon is a bit frustrated. Certainly we would be arguing

to bring you back because

there's so many issues that

have been raised by your

responses and I would certainly

like a chance to have a look like a chance to have a look at

hansard to actually focus hansard to actually focus my questions just alerting you that will just alerting you that will be an argument I will be

an argument I will be putting

up. Mr Johnson, you actually

look familiar. I'm sure we've come across each other maybe in

the past, did you work for

Freehills? No, sir. Did you do any work for Rio Tinto? No,

sir. You've done none of that?

No. Just must be the Freehill's

look. It's worked for Senator Abetz, under Abetz, under my understanding. I've had the

for 17 years. Mr Joyce, I had a

look at one of your corporate

glossies recently and it spoke

about the visions and values of

Qantas. It raised the number of what it said were visions what it said were visions and

value safety being number one

and we've gone through that

approach interminable y I

think. The other one was transparency and honesty and the third one focus and the fourth was

collaboration and team work and

there's another couple which I

don't think are really that

important for my line important for my line of

questioning. But given that you

were not transparent and in my

view not honest with the

Government in terms with what

you were intending to do, you were intending to do, I

might just go through a number

of issues. Industrial action

was being undertaken, that's

the argument that industrial action was being

undertaken in the lead up period to the decision period to the decision to ground the ground the fleet. Is that a question. Industrial action was being undertaken that's your

argument We had industrial

action which was causing us huge problems. And there was

threaten ing industrial

action? There was threats - on

the Friday of the AGM there was industrial action as you're

industrial action as well? There wasn't any

impending but there impending but there was rhetoric about a possible industrial action going forward but the decision but the decision was made the action but the decision was made on the action that had already takeen place. takeen place. Zb no No, let me finish. You've gone through

that. There was the probability of further industrial action? Absolutely. Absolutely. Yes probability of further industrial

industrial action. You argued that the industrial action that the industrial action had

taken place so far and the industrial action that industrial action that was threatened threatened or impending was a

danger to the ongoing viability of Qantas, is that correct? Yes. Qantas is a significant part of the Australian economy, is that correct? Yes. Many, many

businesses rely on Qantas not

only to ferry goods and

services but, you know,

executives and workers around

the country, is that correct? Yes. And the correct? Yes. And the grounding

of - or the threat and the grounding of Qantas certainly

would have a significant

effect, not just on individuals but

but are widespread area of but are widespread area of the population? As population? As the industrial

action was having in the build up to our action and as the

industrial action would have

had, for it to occur the next

year, actually it would have

been a lot worse because what

we were seeing is so we were seeing is so many people impacted in all parts of

the quunt community. We seeing large elements of the business not travelling with

Qantas. As we said we were

seeing Qantas bleeding by $15

million a week. We had all million a week. We had all of

those problems. So it was to happen and it was going to

happen - or as somebody said,

we're going to be slow baked

over a year so this was going

to get worse for us and it was

going to be in a position where it was not sustainable. Let's

talk about the public for a

minute and not just Qantas,

that's what I'm interested that's what I'm interested in. You've said plenty about

Qantas. So with this impending industrial action you've

considered that it would - it

was threaten ed so some people

rely on Qantas for their health

care, they have to get from

remote areas and Qantas flies

to major hospitals in terms of their health, don't they? Yes,

they do. So some people would

have their health endangered by

the industrial correct? I think that was the

real dilemma for us, I have to

say, Senator, because with the

talk of 72 hours, this dispute - I'll come back to that, I'm

just asking a simple question,

that some people would have had

their health affected, is that correct? Yes, it's the same

issue for the industrial action

that was taking place with the unions. We were in the unions. We were in the position that that was occurring for

months and the plans for people travelling were being disrupted

by the union action quite more

considerably than the action we

were talking about. The welfare

of the population and of the population and parts of the population were under

threat by this pending and ongoing industrial action. We

had that, I think, across the board. Caused significant damage to the Australian

economy? Well up to I think you know, Senator, know, Senator, that Fair Work Australia actually said that up

in until then there wasn't

sufficient damage done to the

Australian economy because what was taking place was a slow

bake over a long period of time and eventually would have

gotten there but hasn't gotten there at that stage. So, what

you've just outline ed to me you've just outline ed to me in response to questions is the

outline of section 424 of the

Act. You have just now satisfied every aspect satisfied every aspect of section 424 relations act in terms of the

issues that the full bench would need to consider would need to consider to terminate terminate industrial action. No, we didn't, because

- I'll ask you them all again

and if you were to change your evidence then that's OK but

then change it but you then change it but you have just outlined and satisfied

every aspect of section 424. As I

I said, up to that point in

time, Senator, I said we measure because - and that's

what Fair Work Australia - it's

not me that you have to listen

to on this one because Fair

Work Australia when they made a

ruling at the weekend said it

wouldn't have reached the threshold and it was very clear

it didn't reach the threshold.

It was the grounding of the

fleet that reached the

threshold. Event Kewell - eventually it would have gotten

there but you wouldn't have a

Qantas left if in a year's time if this action had continued

and we had died a Australia. You've gone through all of that It's very care. The

pay rises, Mr Joyce. There's no statement. The threatening, the threatening of the industrial action - I don't know what's

happening. I'm trying to ask a

question. I'm asking that question. I'm asking that the threatening of that industrial

action, sure you've poured over section

Johnson has given you advice,

did you get advice from

Freehills on 424? We get advice as every big company would from

a range of legal - Did you get advice from Freehills. We kid

and Blakes. So you got and Blakes. So you got advice

from the union busting company

Freehills. That's OK, I thought you would

you would have. We get advice

from a range of companies. I'm

sorry. Go on. No, Just tell me if you if you got advise from

freehills. We get advice from a range of companies, and our own

internal advice and there's

nothing wrong with that. nothing wrong with that. You get the best legal understand what's in the

legislation and how to use it

and there's nothing wrong with that. I'm only a humble former

union official and a senator

and I have had over time and I have had over time had

cause to read the Act. I have

over time had cause to be

involved in industrial disputes

and I would have to say to that the evidence you've just

given here would satisfy every

section of 424 if you

to the industrial arbitrary, if you had gone you had gone to Fair Work Australia and said we are Australia and said we are about to ground the airline because

of this impending industrial

action and CASA is saying it's

unsafe to fly, forward bookings are collapsing, the economy is in trouble, the health and

welfare of the population's in

trouble, it will cause trouble, it will cause

significant damage, you satisfy every one of the elements that

the full bench has to deal with

on 424. You go there, you argue on 424. You go there, you argue

your point, and you can do that

without either threatening without either threatening - you can do that without

actually - you can threaten to

do it, it's your right to do

it, the lockout and the grounding but you can go grounding but you can go there

and you can argue all of

aspects of section 424, satisfy

424 without actually grounding the

the fleet and having 70,000 Australians and overseas

visitors stranded around the

country. Couldn't you? Well no,

that's not the case, Senator.

And it's very clearly from what Fair Work Australia said Fair Work Australia said after

they made the ruling to

determinate each of the - each

of the actions of the union and the company, they said the company, they said we hadn't reached that threshold. That was That was their ruling. So Fair

Work Australia - They said the action that action that got us to a stage

- That got us to the stage, but that's different, I'm not

asking you about the

action. And clearly we did not,

we hadn't got to the stage of

the national interest, clearly

we hadn't got to the stage that you're talking about, we hadn't

gotten to the stage where CASA

was grounding the airline, we

were a long way away from that. None of those things, that you've said were actually there. That's without you going

and arguing these points and actually seeing that the action

is impending, that the action

is a threat and the action will

result in Qantas having to

ground - do you accept that ground - do you accept that the

commission - see you said the

commissioner said the action up

to now I mean I don't suppose

wearing a red tie is a threat

to the economy. But, you know,

like the pilots were doing. I

don't suppose some of the

intermittent actions were

getting you to that point. getting you to that point. I

think that's the point the full

bench made. But once you say we

cannot continue with what you

describe as a death of 1,000

cuts, once you get to that

position and say we are now

making a decision to close the

airline down, that is impending

industrial action from Qantas. industrial action from Qantas.

That's impending industrial action from Qantas that meets every test

agree with that, Senator, and

we had the position where that

was not what we believed, was not what we believed, that

was not what we could get to.

If we could have gotten to there, again it's a hypothetical. No, it's not

hypothetical, it's a practical possibility. Because if we could have gotten to could have gotten to there don't you think that's what don't you think that's what we would have done. That would have been a lot easier for

everybody and that would have

been an option we would have

taken. It wasn't an option for

us because we didn't believe that was

that was the case and it's

clearly from what we see that that wasn't the that wasn't the case. Can I

say, Senator, once we'd made

the decision, I keep coming

back to it, and if it became

public that we were going to do a lockout and taking our

we had to ground the airline

because that was the safety

case that I had. So once I got

to that stage where we had to that stage where we had made that decision as a consequence

ocht union action we're going

to do the lockout, this wasn't

an alternative to sit down with

anybody and talk it through. Because that safety case said

we had a risk and we had to

ground. All other options then that safety case. Let's talk

about the safety case for a

minute. In the safety case that

was argued, I understand that

one of the arguments in the

before the full bench was that

the pilots would be distracted

because of the industrial

action, is that correct? It's one of

one of the potential risks one of the potential risks that

were there and it's the potential of distraction

causing us unknown consequences

as a consequence of that. And

saying that as I mentioned

- Let's just - There's plenty of studies. I'm happy to hear

your answers but I've got really really limited time and I'm

just trying to get to some idea

what was behind this crazy thinking of Qantas to 70,000 people around the world.

If you just bear with bhe - me

for a minute. You're a bit like

Richard Nixon at the moment, you're just talking your way,

trying to talk your way out it. Don't do it please, let me

ask the questions. But Senator,

I'd ask you with deep respect

to allow me to answer the

questions. This is starting to appear - you're a bit

carthy trial, you know. Let me

answer the questions the answer the questions the other

way because I believe that I have the right and - The boot's

on the other foot then, isn't

it? I'm going to help, good

comeback, I'll give you that.

Senator Cameron, do you have

further questions for Mr Joyce. I've get back to this issue of the

pilots. I do have to go to

Senator Eggleston and Senator Xenephon. On the pilots

you say the pilots would be distracted, the pilots would be

distracted. Surely your pilots are highly are highly trained professionals. Yes. Your pilots

are the envy of the airlines

around the world and they are

in hot demand. An experienced

Qantas pilot comes up they can

actually get jobs almost anywhere in the world, that's

the case, the case, isn't it? Absolutely. So

it? Absolutely. So pilots currently work with all sorts of distractions. Pilots of distractions. Pilots might have a falling out wife, have a falling out with their wife, pilots might even have

financial problems, pilots

might have all the problems that ordinary people have,

these are distractions, aren't

they? The training - the they? The training - the

training that your pilots get

would make them professional enough to put any of those

distractions aside and get that

plane up, fly it and get it down, wouldn't it? I have down, wouldn't it? I have to say, Senator, let's talk about

Qantas and its reputation.

We're always going to take a

conservative view on things. conservative view on things. We

have done when we grounded have done when we grounded the

A380s last year, we did when the vol - volcanic ash

occurred. We're not going to

risk the safety and lives of individuals by individuals by making decisions

that do not take that as our top priority. I had my AOC

holder who was responsible holder who was responsible for reviewing the Qantas operation,

my chief pilot, my chief engineer all doing a risk

assessment on this and they

came up with that came up with that conclusion

and it's plenty of studies, plenty of studies that you plenty of studies that you can

ask CASA about that you can ask

the ATSB, I've one here as the ATSB, I've one here as an

example which is a study which

shows dangerous distractions

and examination of accidents

and incidents involved pilot distractions in Australia

between '97 and 2004 by between '97 and 2004 by the

ATSB. I just wonder if your $2

million salary increase was a bit of

bit of a distraction for the

pilots as well. I just don't

know. I'm just asking you. What we're talking about is,

Senator, again, I think you

asked me a question, I'm answering the fairness let me answer that

question. So we did know that

this was going to be a big

issue. We did know that this

was going to be something that was going to be something that could could have caused us a problem

and we're going to take and we're going to take a conservative view and I conservative view and I have

absolutely no regrets in us taking a conservative taking a conservative view because that is the best thing

for people's safety and for people's safety and there's

plenty of studies and plenty of

distractions of people not

taking this seriously. We had

to take it seriously. OK, so I

still want to run through again these issues that with you. So industrial action was being engaged in, was being engaged in, industrial action was threatened impending or probable.

with the decision that you had

made to ground the fleet to

endanger the life, the personal

safety or health of the welfare

of the population. Your decision would cause

significant damage to the

Australian economy or Australian economy or an important part of it, that's

correct, isn't it? As I correct, isn't it? As I said,

Senator, to you be very clear, we

we did not believe that requirements and I requirements and I think Fair

Work Australia made that clear

that we weren't there but once we made the decision of the

lockout, which was impending

action, which we made that decision, because of our safety

case we had to make the

decision straight away to decision straight away to

ground the airline. We could

not sit back and negotiate with

anybody and give people the

time to say well what would

this mean and go through a

process of a day or two. We had

to immediately ground the

airline. That's the safety

case. That was the only

alternative that I had and

there was no other way around

that. Did you share detail of your analysis detail of your analysis with

any of the government ministers responsible? We did say responsible? We did say to the government minister s - I've made my statement about what I

said to both sides of politics

and I'd rather not go into details about what I

details about what I said to individual ministers at different times. Mr Joyce, you were prepared under questioning

from Senator Abetz to actually

talk about how a minister's

tone was in relation so

it's a bit rich for you to say

you're not prepared to answer a

simple question like did you

take the take the details of your analysis of what you claim were

a problem with section 424, did

you take it to any minister? On

that, sorry, on that particular question I'm happy to answer.

We didn't because we had, we

had - once we started getting

into dialogue, Senator, into dialogue, Senator, about us taking the lockout action

and that has the potential of being out there, position where we had to ground the the airline. That's the safety

case I had, that was the

position I was in, that was the only alternative that only alternative that we had. So your had. So your decision was

deliberately to provoke what

you believe was an unassailable

outcome, an unquestionable

outcome of a termation of the bargaining bargaining period? Absolutely

not. Our decision was a reaction to the reaction to the action that the

unions had taken and it was the only alternative I went through

it before, Senator, very alternatives for me to

capitulate, there was the

continuing with the death of

1,000 cuts for the airline

bleed to death over a long

period of time and for period of time and for that I was event schully getting to

the national interest threshold

but it probably would have taken aeer with the action taken aeer with the action that

was taking place or for me to

take the only alternative, only take the only alternative, only

viable alternative I had under Fair Work Australia which was to do a lockout and ground the

airline. That's the airline. That's the decision process we went through. That's how we made that decision. Well

it sounds a bit bizarre to me that that you got the type of legal advice of Freehills and Mr

Johnson were giving you this

type of legal advice. It just

goes against everything I

read into the act, I must say.

But that's a But that's a decision you made.

I'm getting wound up, I've got

so many questions, I haven't

even started. I think, Mr

Joyce, can I ask you the last question will you be prepared to come back on this topic? I'm

available to the committee, available to the committee, if

we can, I'd like any question we can, I'd like any question you have on notice to questions on notice. Just let

me say I don't want to engage

in a debate with you but I'm

just saying to you I don't think some of the questions

I've got to raise with you can

be raised on notice. I want to have a look at the hansard but

I think there's lots inconsistencies in your

approach here. I want to get

some further advice on some of

the answers you've given and

I'd like you to sit down face

to face with the committee

because this is one of the

biggest calls that has been made by corporate Australia to made by corporate Australia to

actually destroy parts of economy to get your way and I'm

saying that you must come back and you should give and you should give a commitment now that you will come come back and face questioning. I've questioning. I've come here today, I'm the

come here today to come here today to actually sit

down and talk about this act.

I've made myself available now

for what, over 3 hours, I've given these given these guys complete access. I'm note running access. I'm note running away

from this. I'm absolutely here

talking about the decision I have made, decision, why I feel passionate

about the decision I've made,

why I feel like I had to

protect Qantas for the long

term, why had I had to do this

decision because I had abtutly no alternative. And why you ambushed the Australian

public. We did not ambush public. We did not ambush the Australian public. We were Australian public. We were in a position where we position where we had no

alternative and this is what

we're faced with. We had months

of action by the unions which

led us to this position and I'm

happy to defend that and talk about

about that under any forum

anywhere. That's good because I

think you've got a lot explaining to do as why you

make a rogue employer. make a rogue employer. You have made yourself available.

As you can appreciate there are

a host of ques. We've got a host of ques. We've got so many ques on

too we want to get to so too we want to get to so thank

you for that, Mr Joyce because

the committee will have a

private meeting and we will invite you back and we invite you back and we thank

you for acknowledging you for acknowledging that you

will come back. Hello, you are watching ABC News 24, I'm Andrew Geoghegan. You have been

watching a Senate hearing into

the Qantas dispute and you've

executive of Qantas Alan Joyce

who has been sitting before

that panel this morning and we're expecting to hear from Virgin Airlines soon as well as

the major unions some time this afternoon. Just to reiterate

there of what al-January an Joyce had to say. He's saying

the proposal to amend the Qantas sale act which in Qantas sale act which in part

would be designed to prevent

the use of foreign crews on

domestic flights he's saying

such action would lead to a break up of the break up of the company and he

says that forward bookings

collapsed dramatically in

October. In fact October. In fact they were down 40% on previous years. That's in

in the east coast market. That prompted part of their action

and he was saying the only viable action under the Fair

Work Australia act was the lockout in response to union

threats to escalate their

action. Well, I'm joined by

Qantas former head of Qantas former head of safety and the and the managing director with

aviation law Ron Bart in the

studio. Thanks for coming

in. Thanks. You've just been

listening there Doug Cameron about the issue of safety, the

safety, the reason why Qantas took that dramatic action took that dramatic action of grounding the airline. Alan

Joyce saying primary reason was because of safety, because of

the risk to safety. Is that a convenient excuse or was there a a real threat, do you

think? Look, the issue of human

factors and aviation safety is a very real issue. CASA is

which is the safety regulator for Australia has important that they've recently

implemented a new scheme of

requiring airlines and air

operator certificate holders throughout

throughout Australia throughout Australia to ensure

that they adequately train all

their operational staff in

human factors so that the fact

that there are industrial disputes and there are

pressures on pilots, this is

very real but there have

very real but there have been instances in the past where

human factors, indeed human

factors relating factors relating to industrial

issues have been be a causal factor in some

serious fatal accidents. So

it's not a trivial issue by any

means. I might add you have a background being with the Civil Aviation Safety Authority so

you're aware of these

particular issues and concerns

and you do have an example, you

say, of where industrial action

in England caused a significant issue, an

issue, an accident causing the

death of a number of

people? Sure, look. There's

many instances where human There was one particular

incident in England in stsmed

ssmed taynes where a British ssmed taynes where a British BA

crashed shortly after take off.

Like with a lot of aviation

accidents it's not necessarily one particular item which

one particular item which causes an accident, it's

usually a lot of causal factors

but one of the causal fact nrs

that particular instance is the

pilot in command suffered a

heart attack but was in the

centre of a very, very

and ugly industrial issue between the pilots federation or the pilots federation or the pilots association at the time and unfortunately it resulted in

118 fatalities. But

118 fatalities. But look, CASA has already indicated by

writing to Qantas that they're

monitor ing the situation very

carefully and very closely.

CASA hasn't got due restriction

and they're not interested from and they're not interested from

a point of view of their areas

of responsibility, their

statutory responsibilities in

respect to industrial matters or or commercial matters for that matter. But so long as

matter. But so long as they

don't impin dge or impact on

the safety of the airline. Can I also ask you about core issues, of course, at this

dispute is Qantas' thoughts

that it has to remain

competitive on its

international routes it will

need to em employ a work force

based overseas, a cheaper work

force. As far

force. As far as you're

concerned is that a concerned is that a legitimate concern mentioned to me that we're now

seeing the star alliance likely to come back into Australia via

the hook up between Virgin, course you have also Air New Zealand and Etihad? Look, the

situation in Australia

irrespective of whatever

decisions either imposed or negotiated over

negotiated over the next 3

weeks, the situation fwh

Australia is never going to be

the same again. I guess you can

put this all down to the start

of it was, I guess, when deregulated the domestic aviation industry in Australia

in 1990 shortly after in 1990 shortly after that the

privatisation of Qantas. privatisation of Qantas. The Government obviously didn't

want to be part of it, want to be part of it, the two

airline policy had been in Australia and

Australia and that led to a high degree of stability for

almost 40 years. Well as soon

as you deregulate the industry and the Government's divested

themselves of airline interests

it opens themselves to market

forces. Now the market forces,

there's a variety of way in which you

the bottom line is you have to

be cost effective to be able to

compete. The advent or the

proliferation of low-cost

carriers has really been a

changing - a major event that

has changed the landscape of aviation not only in Australia but throughout the but throughout the world. So

you certainly buy the Qantas

line that if it's to remain competitive internationally it

will mean the loss of onshore? Look, what it means onshore? Look, what it means is they've got to they've got to become

competitive in both the domestic and international

market. Now there's various

different strategies you can different strategies you can do

that but Qantas is in terms of its international

operations on the Asian market.

Now the Asian market is

to become deregulated and have

open sky policies and there's a need

need for Qantas to have an

absolute presence in that Asian market. It's the largest market or it's about to become the

largest market, it's certainly the largest

the largest - fastest growing market and if you're not within

that Asian market then you're

not going to be in internationally. Is it an option to break the company up,

to hive off its international

arm? Look, my areas of expertise

expertise is not in the

commercial aspects. My

in aviation safety and

regulation but in terms of how

companies are going to do it,

so long as they maintain a safe

so long as they maintain a safe operation, imperative because airlines to a

a large extent are very home

homogenous in that they are are buying the lowest prices in

some instances or if the airline's got something airline's got something extra

to offer. Obviously Qantas

brand and Qantas brand name is something that Qantas has

something that Qantas has

traded on for a long time traded on for a long time and

very successfully. So it's

obviously imperative that Qantas maintains that

reputation, the competition in

Australia with Virgin now and with their alliances with Etihad and Air New Zealand and Singapore Airlines,

guess, for the first time has

been a genuine alternative in terms of

terms of frequent-flyer and

loyalty schemes from when Ansett collapsed in 2000. Thanks very much coming in. Thanks, coming in. Thanks, Andrew. Well

as the hearing continues Qantas

says one of its international says one of its international planes will be forced to land

after an engine needed to be

shut down. The flight took off

from Singapore bound for London

this morning when one of its 4 engines suffered problems. The

airline expects the plane to

airline expects the plane to

land safely in due

within the next hour. The top

stories - Qantas CEO Alan Joyce has been grilled by senators at

an inquiry hearing in Canberra.

Less than a Less than a week ago Alan Joyce grounded the airline grounded the airline in response to ongoing industrial

action. He's told the action. He's told the Senate inquiry the decision inquiry the decision was

entirely his. The senators are

also examining laws to stop the

airline moving offshore. Three

airline moving offshore. Three unions involved in the industrial dispute will appear

before the committee. The

before the committee. The Greek Prime Minister has admitted Prime Minister has admitted he

made a mistake in calling for a

referendum on bailout deal. The planned referendum angered European

leaders and sent markets into a tail

tail spin. George Papandreou

now says he wants parliamentary

consensus and for the

Opposition to back the bailout

package. EU leaders say Greece

must adopt tough austerity measures in order to

measures in order to get the

$180 billion package through. Three former Pakistani

cricketers and their agent have

been jailed for their role in been jailed for their role in a

spot fixing scam last year. The four conspired to bowl 3 no balls during the

Lords last year. Former captain Salman Butt and his agent

received the harshest sentences

of around 2.5 years. And

of around 2.5 years. And

5-time Olympic medallist 5-time Olympic medallist Ian Thorpe will return to the pool

tonight. He'll contest the 100

metre medley in the World Cup

meet in Singapore. He admits to

be more nervous than usual. Turning to today's other top story, Greece's Prime Minister George reportedly agreed to step down.

Reuters is reporting he

Reuters is reporting he struck

a deal to hand power to a negotiated

negotiated coalition government in exchange for support to win

a confidence vote. Mr

Papandreou had earlier said he

was prepared to abandon his controversial plan for a

referendum on the Eurozone bailout deal. A referendum was never necessary. It was in my

mind always a folly. Elections

are the only fair way to ensure

are the only fair way to ensure that the will of the people is heard but elections can only take place after the take place after the conditions

which are previous mentioned

are met. We cannot hold

elections right now. What we need to do is provide a wide framework of parliamentary support for the support for the October

agreement and to make sure the

Greek State receives a 6th tranche of the aid package.

Once these conditions have been met elections must be held at

the earliest possible convenience. Well for more on

the ongoing Greek political and

economic drama we're joined by

Dr Sam wily, an associate

Professor and principle fellow

at the Melbourne Business

School. Thanks for joining

us. Hello, Andrew. What's your

take on the drama in Greece at the moment? Obviously we've had

twists and turns as far as the Greek PM is

Greek PM is concerned, now as we've just mentioned it appears

as if he's ready to step down

in exchange for some coalition

agreement to this package. Has

that brought any more certainty

to what is going on there at

the moment? You know, I think a coalition substitute for having a referendum. They really need to get

get buy in by the Greek people and the referendum could have done

done that. The referendum was fraught fraught with danger. It could have caused an immediate run on

the banks and could have led to

the exiting of Greece from the

Eurozone and even po Eurozone and even po tenially

from the European union but

they do need to have a national

consensus that they are going

to do the things that are

necessary to get their way out of this situation in terms of the economy and that takes a the economy and that takes a lot of buying and lot of buying and the referendum could potentially have

have delivered that. It seems that that was a domestic political consideration on the

part of the Prime Minister,

Papandreou but a coalition government, that actually could

be quite a good solution as

well and that represents a buy in from both sides of politics. If If it's the case that

Papandreou socialist party and

government is going to form a coalition with democratic party, the

conservatives, then that is a

lot of political buy in and

that would definitely be a good

step forward. The onus on the Greek people is huge, isn't it?

This is going to be with them

for years in terms of these

for years in terms of these austerity measures and what

they have to pay off? They're

in an immensely difficult

situation and there's situation and there's no easy

way forward here. I mean that's

what defines their situation is

that they are looking at if

they stay in the Eurozone and

has been laid out, that was

laid out on October 27, the new

austerity and liberalisation

program, then they are facing program, then they are facing a decade of slow growth. They've decade of slow growth. They've

experienced between 14 and 16%

depending on who you listen to,

14 and 16% shrinkage in their economy already, they're

looking at a bit more shrinkage

and thep a long period of slow growth. They're looking at economy where a lot of assets

are going to be sold out of the

State sector into a big privatisation privatisation program, there's going to be going to be heavy liberalisation of the labour

market and other market s market and other market s and number of other liberalisation

measures, all of which is very difficult

difficult but the alternative

here, Andrew, is that they go out of the Eurozone and that

would precipitate as soon as the Greek and the financial markets believed Greece was going to go

out of the Eurozone that would precipitate an precipitate an immediate

banking crisis and immediate,

very deep and difficult

economic and political crisis for Greece. Would it not also

- So, you know, there's no - I

was going to say if that came

to it would their return to the

drachma be a dressing in the

long run because it would allow

them to be somewhat them to be somewhat more

competitive? You know, it's

very much the second best solution. The that they live through this, it

will - as we were saying just a

moment ago, it will take 10 or

12 years for them to come back

economically but if they live through this program especially if they liberalise

their economy, if they get rid

of all the vested interest and if they deal with the if they deal with the problems of not of not being able to collect tax because of corruption in the system, if they get rid of

those things out of their

country they are genuinely

better off. If they liberalise

their economy, they will be genuinely better off, not

everyone will be better off but

on the whole will be a lot better off. So

that's the best outcome. The

worst outcome for them really

is that they exit the Eurozone, they face they face the potential of

exiting all of Europe and that they no longer have that

reforming pressure on them

because as painful as this

austerity and reform program that is being pressed upon them by Germany and France

particular, as painful as that

is, in the long run that will be good for Greece, that

liberalisation program will be

good for Greece pressure goes off then they are going to become the poor man going to become the poor man of

Europe, basically. I understand

the notion that the thing to the notion that the thing to do is to suck up the pain of

leaving the euro and leaving the euro and going back

to the drachma and disengaging from the Eurozone but from the Eurozone but that will

take all pressure for reform in

Greece away and ultimately that will

will be a very destructive

thing for their country, I

think. Just let's look at the potential knock on effects potential knock on effects for

the rest of Europe, of course,

if it did come to default from Greece and it

exited the Eurozone of course

we have so many other foreign

banks in Europe invested in

Greek deted what are

effects particularly for the

likes of France and Italy,

Italy of course already seem to be on the precipice? There

would be default there would be

a big hit. There would be loan

losses for European banks, the biggest suffering would be by

the French banks who would debt to the tune of $55 billion so that would require a recapitalisation of their banks by the French Government by the French Government and

the same would be true for other governments. have to recapitalise their banks. The program that was banks. The program that was

announced on October 27

involves 110 billion euro

recapitalisation of the banks

in any case. There's a lot of

non-government debt, there's about twice as much non-government debt in Greece

much of which is owned foreign banks. Not all of that

would default. If Greece went

out of the out of the Eurozone and those companies paying off the

drachma and companies owed that in euros that would default and

that would require recapitalisation of those

banchs as well. Ultimately the problem in

problem in Europe is a

political problem and it's Angela Merkel's political

problem of getting the German

public to underwrite these

other countries. That's - I other countries. That's - I

mean if the German public said

to Angela Merkel we're happy

with underwriting the debt of

Portugal and Spain and Italy

and Ireland, then the problem

would go away straight away. The

The bond markets would feel

good, the yields on Italian debt would go down, the crisis

would pass. Mind you that would

take the pressure off the Italian Government to Italian Government to reform

its finances as well. its finances as well. But the

real - the real underlying problem here is that the German to have to pick up the tab here don't want to pick up the tab

and, you know, if Greece was to

exit the Eurozone then that might

might actually make it ease ier. That would make it easier

for Angela Merkel to make that sell.

sell. She could point to Greece

and say there's a country who

wouldn't play the game and now

they're out. So I'm asking you

to underwrite all the rest of

the countries knowing that if they don't play the game they

will be out. OK, we're have to leave it there from the Melbourne Business School, thanks for joining thanks for joining us. Thanks, Andrew. The Opposition Leader Tony Abbott is in Melbourne this this morning. He spoke to this morning. He spoke to the media earlier and we can bring

that to you now? OK, well look,

it's great to be here at

Timber Mate. I want to thank them for making us so them for making us so welcome.

This is a unique business. The

Timber Mate product is a unique wood filler, wood filler, it's environmentally friendly, it's sold all around the world but it is under threat it is under threat because of the carbon tax. The carbon tax

is the latest burden on a

business like this. Errol's

electricity bill is about

$100,000 a year, that's going

to go up $10,000 a year to go up $10,000 a year just

for starters, just on the Government's own figures, this

is an additional cost that this business just doesn't need business just doesn't need and if we if we keep piling cost on cost

on businesses like either close down or they go

overseas and that means less

production, it means fewer jobs

here in Australia. It's never a

good time to introduce a bad

tax but but given the

international economic turmoil,

given the difficulties in so

many of our great trading partners, the partners, the last thing partners, the last thing we

need now is this toxic tax. So

I say to the Government, I say

to the local member in particular Mike Simon, if you

are serious about employment in

outer metropolitan Melbourne,

say no to this toxic tax. It is

a threat to jobs, it is a threat to families' standard of living, it's a threat to the economic future of Australia economic future of Australia

and we just don't need it. I'm

going to ask Helen croger to

say a few words, then I know

Errol wants to say a few words

about the business, there's one

other subject I want to make a

few comments on and then we'll

take some questions. So

over to you. Thanks, Tony. over to you. Thanks, Tony. Can

I just say that Errol and his

wife Zia who's here personify small business men and women and what they are all

Incredibly creative, hard

working, innovative but

responsible for the lives of

many families and whilst Errol has 18 people here full time it

actually is 40 families that he

covers and ensures their

welfair fare. There are by this business when by this business when the carbon tax

carbon tax is imposed upon

them, it start carbon

has never chosen to come here, he avoids small businesses, he avoids small businesses, he

knows how much they will be

hurt and yet he's missing in action I challenge action I challenge Mike Simon

to come here and see the effect of this carbon tax. Thank of this carbon tax. Thank you

very much, thank you Mr Abbott

for being here today. I feel very strongly about this carbon

tax as you've seen here today. We

We manufacture a 100%

Australian made, we're a 100%

owned product. It's unique in

the world, it's got no volatile or organic substances in or organic substances in it. It's a unique product used

around the world, 16 around the world so we're

building this business up building this business up all comes into effect where in the world

world am I going to recover my

costs. There's no way I will costs. There's no way I will

get cost recoveries, there's no way in the world anybody's

going to come to my aid. I can't put a turbine on top of

my roof and bring down my

electricity costs. All I can do

is make a product that's is make a product that's basically environmentally

friendly. I have a thing about

the environment, I agree we

need to look after our future

but if I cannot recover any

costs I'm going to have no

option but to go overseas and

manufacture overseas. I don't want to go the most faithful staff in the world, people who have been

working with me for 17, working with me for 17, 14,

15er yas. They will tell you what

what a fantastic organisation this this is. I don't want to lose them, they're all mature

people, I don't want to them to

go on the street and look for

jobs. Go to America see why the

unemployment is high. There's

no jobs for unskilled people

and these are people who have been with me forever, been with me forever, they're

part of my life. But appeal to the Government don't bring in

this carbon tax, let's just do

something else but you're going to ruin our industry. I'm spending lots of time spending lots of time overseas developing my product. People

love us, people love our product, they love the Australians but please, whatever you do, just don't

force us to go overseas, thank

you. I just want to you. I just want to say

because it obviously has an impact on how Australia governed, that it's high time that the Labor that the Labor Party stopped

the navel gazing and got on

with governing. You have with governing. You have a

government which is government which is focussing

on itself and not focussing on

governing, not focussing on the

Australian people who deserve

to have the intention of the

government. Right now we have a

government which is par liezed

while the faceless men try to while the faceless men try to

work out who should be the next leader of the Labor Party. Well

it's not good enough, they

should just bring this all to a

head and they should then get

on with governing but think matter who their leader is,

it's the policies that are

causing our nation difficulty

and it doesn't matter who and it doesn't matter who leads

the Labor Party, it's the Labor Party, it's the

policies they have to change. policies they have to change. OK, are there questions? There's growing

support for the maximum $1 bet

on poker machines, how do you

stand on that? Well the only

proposal we have from the Government is for mandatory

precommitment and the

make about precommitment is

it's a dumb way to tackle it's a dumb way to tackle Guam - problem gambling.. Would you support a $1 maximum. We

haven't seen any proposal from

the government and the point I

should make is the only reason

we've got any proposal from the government is because government is because it's been

forced into this position by an independent member of

parliament. The Labor Party is not advancing it because they think it's in the national

interest but because think

think it's in the political interest of the Prime Minister who needs the Independent support to stay in the lodge. Tony Windsor among

others said the concept of the

$1 maximum bet, are you interested in interested in the idea of it? These Independents are the people upon whom the people upon whom the government crucially depends, the crucially depends, the government only exists because

it's been propped up by Independents. they're serious when the government actually puts

forward a proposal. If they're

serious about this they should

make the government change the

current proposal to put up something

did would you support it? As I

said, the only proposal we have

from the government is for mandatory precommitment, that's a bad idea,

a bad idea, but it's a bad idea

that they are only trying to that they are only trying to fois upon Australia because the

Prime Minister needed to do it

to stay in her job. Today we had the advocating beefing up resources

at the IMF, did you mislead

people yesterday when you said

the UK Government was against the Gillard Government proposal

to put more into the IMF? Australia

IMF? Australia fully supports

the IMF, what we question is

the merits of Australia being

involved in what is effectively

a European bailout Europe is

the world's largest economy and it's important for Europe it's important for Europe to

get its house in order. At the

moment the risk is that the

Australian taxpayer will end up

contributing another $5 billion to the to the IMF so that Greeks

continue to retire at continue to retire at 50. Now I

think the Australian people

will have a lot of questions

about the wisdom of that. Were you intending to mislead

yesterday when you said the UK

yesterday when you said the UK was against the idea, against

the Australian idea? We had Joe

Hockey quote in the Hockey quote in the Parliament

yesterday the direct words of

the chancellor of the parliament yesterday Warren

Truss said large mining

companies aren't giving enough

back to communities. Was he in

effect speaking in support of

the Government's mining

tax? The mining tax is a threat

to investment and jobs. There's

no doubt at all about the fact

that Australia is in a very competitive international

environment and the higher our

domestic costs are the domestic costs are the harder it is to it is to attract investment,

the hard it i