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Delay in QANTAS sell-off raises budget doubts



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Senator Jim Short Deputy Leader of the Opposition in the Senate

DELAY IN QANTAS SELL-OFF RAISES BUDGET DOUBTS

The huge irresponsible deficit forecast for the Keating Government's 1992-93 Budget is in danger of blowing out even further because the timetable for the Qantas privatisation sale has fallen way behind schedule.

The slippage in the timetable is the direct result of the Prime Minister's weak and confused leadership, which has resulted in several major flip- flops in the Government's aviation policy in the last year.

The Qantas sale, which is supposed to raise at least $1.2 billion this financial year, is also in doubt because the Government has closed off options which might have made the international carrier more attractive to overseas investors.

Senator Bob McMullan, the Parliamentary Secretary to the Treasurer, revealed in the Senate last week that the date for submission of binding offers has now been put back to December 9 — several weeks later than

expected.

The Minister for Finance, Mr Willis, is now hot-footing it off to New York to try to drum up international interest in the Qantas float.

The Qantas Sale Bill, introduced into Parliament two weeks ago, will limit overall foreign equity in Qantas to 35%, with any single foreign investment in the airline limited to 25%.

Senator McMullan also revealed for the first time th at the legislation will prevent the possibility of a 100% trade sale of Qantas to a foreign airline with the condition that the equity is sold down to the permitted 35% within a given timeframe.

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C O M M O N W E A L T H PA R LIA M EN TA R Y LIBRARY fvllCAH

This is contrary to the advice provided by Treasury officials in Senate Estimates hearings as recently as 22 September 1992.

This prohibition will make an early sale of Qantas more difficult.

The Qantas sale is crucial to the Keating Government's assets sales program this year. Representing at least $1.2 billion of a total $1.6 billion the Government hopes to receive from the assets sell-off, failure of the Qantas float would be a major setback and would put a further huge hole in the Budget.

With an underlying Budget deficit of approximately $20 billion forecast for this financial year — after allowing for the usual Keating-Dawkins "creative accounting" — failure to conclude the Qantas deal this year will be another nail in this discredited Government's coffin.

Canberra 16 November 1992

Contact: Rod Woolley 277 3119 (w), 288 9355 (h)