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Qantas Sale Amendment Bill 2014

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2013-2014

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

 

QANTAS SALE AMENDMENT BILL 2014

 

 

 

 

 

 

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Infrastructure and Regional Development

the Hon Warren Truss MP)

 

 

QANTAS SALE AMENDMENT BILL 2014

 

OUTLINE

 

The purpose of the Bill is to amend the Qantas Sale Act 1992 (‘the Act’) to remove the foreign ownership and other restrictions that apply to Qantas but do not apply to other airlines based in Australia.

 

Section 7 of Part 3 of the Act, as it currently stands, imposes restrictions on the foreign ownership of Qantas.  These require that:

·          total foreign ownership of Qantas is not to exceed 49 per cent;

·          ownership by a single foreign investor is not to exceed 25 per cent; and

·          aggregate ownership by foreign airlines is not to exceed 35 per cent.

 

In addition, the Act imposes other restrictions on Qantas’ operations, including restrictions on the makeup of the board of directors, the use of the name Qantas, the location of the head office, place of incorporation, and the location of facilities that support its international operations.

 

Sections 8 to 13 of Part 3 of the Act provide compliance and enforcement measures in relation to these restrictions. 

 

The Bill repeals Part 3 of the Act and thus removes the foreign ownership and other restrictions applying specifically to Qantas.



The Bill also amends the Air Navigation Act 1920 to allow Qantas to be included in the definition of an Australian international airline, meaning that Qantas will be subject to the same regulatory framework, including foreign ownership limits, as other ‘Australian international airlines’.     

 

Qantas’ international operations will remain subject to designation criteria in order to access negotiated air traffic rights under Australia’s international air service agreements.  Australian airlines seeking designation are required to demonstrate that:

·          they are substantially owned and effectively controlled by Australian nationals;

·          at least two-thirds of the Board members must be Australian citizens;

·          the Chairperson of the Board must be an Australian citizen;

·          the airline's head office must be in Australia; and

·          the airline's operational base must be in Australia.

 

Qantas will also remain subject to a number of other legislative requirements including the Fair Work Act 2009 , the Corporations Act 2001 and civil aviation safety regulations.

 

Financial impact statement

 

The Bill will have no financial impact.   

 

Regulation impact statement

 

A detail-stage regulation impact statement has not been completed.  An exemption has been granted by the Prime Minister. 



Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Qantas Sale Amendment Bill 2014

This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Overview of the Bill

The Bill presents commercial opportunities for Qantas by removing foreign ownership and other restrictions on its business.  These opportunities are to be exercised within the current regulatory environment applicable to other Australian airlines.

The Bill removes provisions under the Qantas Sale Act 1992 (QSA) that require certain restrictions to be included in Qantas’ articles of association to limit foreign ownership and  impose other related restrictions, as well as compliance and enforcement measures to ensure Qantas abides by these requirements.

Specifically, the Bill removes Part 3 of the QSA which includes sections 7 to 13 of the Act.  Section 7 requires Qantas’ articles of association to include a number of mandatory requirements (‘mandatory articles’).  The requirements include limits on the issue and ownership of Qantas shares (including limits on total foreign ownership and sub-limits on ownership by a single foreign investor and aggregate ownership by foreign airlines) and other restrictions on the makeup of the board of directors, the use of the name Qantas, the location of the head office, place of incorporation and principal place of business.  The Bill will also remove sections 8 to 13 of the QSA, which contain compliance and enforcement measures in relation to restrictions to the mandatory articles.

The Bill also amends the Air Navigation Act 1920 (ANA) to ensure the regulatory framework applicable to other Australian airlines also applies to Qantas.  The QSA imposes restrictions on foreign ownership specific to Qantas.  The ANA limits foreign ownership for all other Australian international airlines to 49 per cent. With the removal of Part 3 of the QSA and inclusion of Qantas under the ANA, the Bill will align Qantas’ ownership restrictions with all other Australian airlines.

Human rights implications

The amendments proposed by this Bill to the QSA and ANA do not engage any of the applicable rights or freedoms.  The Bill simply ensures Qantas is subject to the same regulatory framework as other Australian airlines.

The Bill will give Qantas greater flexibility in its business structures.  These opportunities will be consistent with the opportunities available to other Australian airlines, and the Bill will not impact Australia’s broader workplace relations regulatory framework.  The Bill will therefore not impact on human rights relating to employment under articles 6(1), 7 and 8(1)(a) of the International Covenant on Economic, Social and Cultural Rights.  

Conclusion

This Bill is compatible with human rights as it does not raise any human rights issues.

 

Minister for Infrastructure and Regional Development, the Hon Warren Truss MP

 

NOTES ON CLAUSES

 

Clause 1: Short Title

 

1.       This clause is a formal provision specifying the short title of the Bill.

 

Clause 2: Commencement

 

2.       This clause sets out the commencement dates of the Bill.  Sections 1 and 2 of the Bill would commence on the day on which the Bill receives Royal Assent.  Sections 3 to 10 would commence on a day to be fixed by Proclamation.  If the provision(s) do not commence within the period of 6 months, they would commence on the first day after that period. 

 

Clause 3: Schedules

 

3.       This clause sets out that there are two schedules to the Bill.  The first schedule outlines the amendments to the Act.  The second schedule outlines the consequential amendments to the Air Navigation Act 1920 (‘the ANA’). 

 

SCHEDULE 1 -

 

Item 1 -

 

4.       This clause repeals Part 3 of the Act, which requires Qantas include a range of restrictions in its articles of association.  The mandatory articles limit foreign ownership of Qantas shares and impose other restrictions on Qantas’ business.  By repealing the Part, Qantas will no longer be subject to the restrictions.

 

SCHEDULE 2 -



Item 1 -

 

5.       This clause amends the definition of ‘Australian international airline’ in the ANA to remove the specific exclusion of Qantas.  This ensures that Qantas can fall within the definition of ‘Australian international airline’ and be subject to the same foreign ownership restrictions as other Australian international airlines, thereby creating a consistent regulatory framework for all Australian international airlines.  

 

Item 2 -

 

6.       This clause removes the specific reference to Qantas from the definition of a foreign airline.  Qantas no longer needs a specific exclusion from this definition as it can be considered as an ‘Australian international airline’ for the purposes of the ANA.    

 

Item 3 -

 

7.       This clause removes the specific definition of Qantas as it is redundant.



 

Item 4 -

 

8.       This clause amends subsection 2(1) of the Act to remove references to Part 3 of the Act as this Part will be repealed.

 

Item 5 -

 

9.       This clause removes the definition of ‘mandatory article’ from subsection 3(1) of the Act.  This definition is only used in Part 3 of the Act so, with repeal of Part 3, the definition is redundant.