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Parliament House, Canberra: transcript of doorstop interview: Ansett.

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John Anderson Deputy Prime Minister Minister for Transport and Regional Services

Tony Abbott Minister for Employment, Workplace Relations and Small Business

Doorstop Parliament House Canberra ACT

18th September 2001


John Anderson I just wanted to update you on a few issues. You’ll all understand that I’m very concerned - as are many of our members and senators - about regional services. There were 34 routes that were served exclusively by Ansett or its subsidiaries. We now have services back in virtually all of those, bar six which we’re still working on and two where at this stage, we’ve not been able to find a full solution. Of the six, a couple are serviced by airports that are reasonably close and within reasonable driving distance.

I just want to say a couple of things about it. There’s been a very big effort put in by my office and the department and by Qantas and by Virgin and various other players, to get those services up and running again. And we’re now working on what we’re calling a rapid route recovery program - we have been for several days - under which we will seek to facilitate the very rapid emergence of new players as the administrative process unfolds in relation to the broader Ansett group.

A couple of other things I think are important. The first is to re-emphasise that we will lift cabotage where necessary on international flights. That is already happening, but I just want to re-emphasise it again because we have had questions about it and we want people to be aware that we can and will do that, and are in fact - already are - there are Cathay Pacific flights picking up domestic passengers now. Qantas has extended for a further week its offer of free seats where they’re unoccupied for stranded passengers and we have extended our overnight assistance for people who are stranded as well - 120 nights.

The new administrator, as you’d be aware, from Arthur Andersen is Mark Mentha. We’ve been in touch with him, we’ll be talking to him again after the creditors’ meeting today. Those are the issues that I just wanted to broadly bring you across at this point in time.


The rapid route recovery program getting airlines into those regional routes, does that involve any Government assistance?

John Anderson We are prepared to look at that, yes. We’re devising a way forward that means that if you like there’s a best outcome for people who need the services at least cost to the taxpayer. I just want to say that we are working on the best way forward. Part of the problem of course, is that until the liquidators, sorry the administrator’s, able to progress things a little further, you’ve got a significant number of the planes that service regional Australia tied up. Now as soon as they can be freed up for whether it’s wet leasing or for purchase, the better.

The levy on tickets?

John Anderson What about it?

Has Cabinet agreed to it?

John Anderson Well the approach that the Government has agreed is fairest under the circumstances.

How much will that be?

John Anderson Look, we’ll be making final details of that available as we work through exactly what’s going to be required. I should say it’s without prejudice to our pursuit of the Air New Zealand group and their responsibilities as we see it to Ansett.

Do you think it’s going to be adequate to cover the cost of the entitlements?

John Anderson Yes.

Have the unions damaged the recovery process or the possible recovery process?

Tony Abbott Look I’m not going to make any comment on the course of the administration, but what I do want to say is that this Government is going to stand behind workers in trouble. We are going to stand shoulder to shoulder with those Ansett workers and we are guaranteeing that if Air New Zealand and Ansett can’t pay their statutory entitlements, we the Government will ensure that they do get paid. And what we mean when we say statutory entitlements is any unpaid wages, any unpaid annual leave, any unpaid long service leave and we will pay up to eight weeks redundancy. Now we estimate on the basis of the figures that we’ve been given


by the administrator that we’re looking at a sum well in excess of $300 million that the Government is prepared to stand behind. This is unprecedented. It is more than any previous government has ever done for employees in a situation like this, but we’re not going to let workers down in their hour of need.

How much of a step back is I though, this change of administrator at this late stage?

John Anderson Look I think the very important point to be made here was done by consent and Pricewaterhouse have indicated that they will smooth the transition. In other words it won’t be wasted work.

Mr Anderson do you believe that Pricewaterhouse had a conflict of interest?

John Anderson Well the court plainly did, so I don’t think it is appropriate for me to comment beyond that.

Mr Anderson you say you’re negotiating with other players to try and get planes back on regional routes. Are you negotiating independently of the administrator or working in concert with them?

John Anderson Working in concert all the way through, but of course the direct responsibility at this stage of the administrators - you know they are separate to us - we’re working with Qantas - and I want to thank Qantas staff in particular. Many of them are working unbelievable hours at present to try and put services back. In some cases those services are not all that we would like. And that’s why I say we are working, we actually have been working, I have to say for several days now on a rapid route recovery program. But, you know, it’s not really going to put that fully in place until we can get some of those aircraft freed up.

Has the $120 a night allowance been extended?

John Anderson Well in extenuating circumstances Centrelink will hear the case.


Well, a further three days at this point in time.

Six days in total?

Yes, and if real emergencies arise then Centrelink will listen compassionately to the case.

How long does the ticket levy have to stay on for?


John Anderson Well that depends. We’re still finalising numbers at the moment. Of course one of the things that would obviously have a very significant impact on that were if we were to establish as early as possible what responsibilities the Air New Zealand parent group will be obliged to shoulder.

How concerned are you that Air New Zealand might go into administration today?

John Anderson Look I don’t think it’s giving away any secrets to say that their position is very tenuous. All the global aviation players have been under pressure for quite some time. What has happened in the US is likely to very significantly influence flying patterns and a great deal of Air New Zealand’s business is east to the United States and west to Australia. In that context can I make the general comment that all of us feel extreme anger and frustration at where the Air New Zealand board and management have left us. And in terms of who knew what and when, we still don’t know, there are still audits going on as we speak, trying to get to the bottom of this mess. But having said that, we’re not in the business of bashing our Kiwi friends, we wouldn’t appreciate it if a company went over here and the Brits and the Americans were taking it out on Australians because of the behaviour of the board and management of one company. And the other thing that I’d want to say is that I think that we’d all respect that there are many good and honest people who work for Air New Zealand. We wouldn’t want to minimise their chances of a livelihood either.

Helen Clarke says that the travelling public needs Air New Zealand, do you agree with that?

John Anderson Well from a New Zealand perspective, you would understand her position on that. Look it’s a competitor in the market place. As I say I can’t see any reason why Aussies would want to knock Kiwi jobs out of the ring. We might be very angry and very frustrated with what’s happened to the management of this outfit, but I don’t know that we’d want to prejudice any further the future of people who work for that company.

Mr Anderson you spoke earlier of two regional routes where you couldn’t find people to cover them. Is there a chance the RAAF will be called in at least to service them in the short term?

John Anderson If that’s really necessary we’ll look at it. One is coping quite well because people are going to another centre not so far away, I am advised. But we’re ringing around, we’re checking, we’re trying to keep in touch with all of them as much as possible. A bit of hairy-chested chest pumping going on from the states at the moment - well some of them might be prepared to come in with us and back it with some cash if we need it, to make sure that their regional routes are properly serviced. That’s really an issue for when we get to the point of establishing new players. And the other thing I can say to you, whilst - I’d want to emphasise that the administrator has to work these things through - there have been a significant number of people and groupings register an interest in picking up those regional routes, which I think both will for the future, I really do - I don’t accept this line that properly financed and efficient regional operators would not be profitable - I don’t accept that at all. And I think that - I accept that people are being inconvenienced - we’re doing everything we can to overcome


that inconvenience. I think we’ll get a strong regional network back up and running in as short a time as we can.

Mr Abbott, what are your plans for the employee entitlement scheme …(inaudible)?

Tony Abbott We’ve indicated that we will extend the general scheme to mirror in broad terms, the kind of protection that we’re now offering to Ansett employees.


Tony Abbott No, no, we’ve indicated that we will pick up 100 per cent of employee entitlements as guaranteed by the expanded scheme.

How soon can we see the legislation?

Tony Abbott Well it’s not necessary to have legislation to put in place protection of employee entitlements. What is necessary is legislation to put on a ticketing levy to protect Ansett employees’ entitlements and to change the priority in the event of insolvency - to try to ensure that more employees get their entitlements from their….

Funding …indaudible

Tony Abbott Well the general scheme will continue to be funded by taxpayers as at present.

When will legislation to change corporation law…(inaudible)?

Tony Abbott As soon as possible. I can’t give you any definite days for that. But, look, as soon as possible and we would like to get the ticketing levy into the Parliament this week and to move quickly with the rest of the legislation.

Why are you changing the Corporations Law now when you said you couldn’t do it back in 1999?

Tony Abbott Well, situations change.

But what changes? You said it would cost businesses money if you did that then, why wouldn’t it cost businesses now?

Tony Abbott Look I need to make this point very clear. If we are going to protect employee entitlements, there is going to be a cost. We cannot protect things that are currently unprotected without a cost. But if as a community we believe it’s necessary to protect employee entitlements we


should be prepared to pay the cost and we believe that the arrangements that the Government is putting in place in respect to the ticketing levy and in respect to the change in priority is the least intrusive, least counterproductive way of trying to protect employment entitlements.

What will be the maximum paid out under your scheme?

Tony Abbott Well the maximum payout will depend upon people’s entitlements. If people have for argument’s sake, 12 weeks annual leave, they’ll get paid that.

The Prime Minister did refer to a cap in his press conference on Friday. He said that …(inaudible) … So are you saying that entitlements apart from redundancy will be fully covered by this?

Tony Abbott No, no - let me get this straight - we are not putting any cap on Ansett employees’ entitlements except for redundancy, because that is something which has happened. In terms of the general scheme, we may have to put some caps on, because we don’t want people to, dare I say it, load up entitlements in anticipation of them being picked up by the taxpayer. But certainly we’re talking about a much wider range of protections than has been available previously under our scheme and we the Commonwealth will pick 100 per cent ….

Ansett workers out the front ….

Tony Abbott I am going out now to talk to Ansett workers because they deserve to know what the Government is doing to protect their entitlements. I have to tell you that I haven’t been promised the opportunity to speak. I think it would be most unfortunate if a Government minister with responsibility wasn’t given an opportunity to speak, but the union officials who are organising the rally haven’t guaranteed that I will have that chance, but I’m going to go there now …