Senator the Hon Mathias Cormann
Minister for Finance
Date: Tuesday, 4 March 2014
GREG JENNETT: Now Qantas is demanding immediate action or an alternative if the Parliament can’t deliver on the Sale Act changes but the Finance Minister, Mathias Cormann has told us the Government has done what Qantas wanted.
Minister this is looking like a stand-off at the moment. Did the Government enter into its decision at Cabinet last night in the knowledge that this is likely to be where it ends up?
MATHIAS CORMANN: We made a judgement on the basis of what we think is right. Clearly there are some serious issues for Qantas right now because of the restrictions that are imposed upon them in the Qantas Sale Act. Right now Qantas is not able to compete freely in what is a very competitive market because of restrictions imposed on them that are not faced by their competitors. So the judgement that the Cabinet made last night was that removing those restrictions was the best way to help secure Australian jobs now and into the future.
GREG JENNETT: But did you make any assessment, your own due diligence process if you like, of the politics of this if it was bogged down in stalemate what would be the impact on Qantas of a prolonged stalemate?
MATHIAS CORMANN: Our job was to make a judgement in the public interest. Our judgement is not to second guess commercial decisions by Qantas. We are not the Board of Qantas. We are not the management of Qantas. Our judgement was focussed on making the right call. Right now what we recognise is that Qantas is facing some challenges as a result of the restrictions in the Qantas Sale Act and the best decision we could make was to remove those restrictions so that Qantas was free to compete and to deliver the best possible value to its customers.
GREG JENNETT: Does the Government have a plan B?
MATHIAS CORMANN: Our plan is to help ensure that we have a level playing field in the aviation industry. Right now there is strong competition between Qantas and between Virgin in particular. That has delivered significant benefits for the travelling public. It has delivered improvements in service delivery, it’s delivered lower airfares, these are all good things in the public interest.
GREG JENNETT: It’s clear that Qantas has one eye on the politics because they say in their statement we need quote ‘immediate action’ and if the government’s proposal does not pass through the Parliament we need to consider alternative measures. So how do you respond to that if something else is required can something else be offered?
MATHIAS CORMANN: We have put immediate action on the table. We are proposing to immediately remove those restrictions that are in the Qantas Sale Act, which are making it harder for Qantas to compete. We are proposing to remove those immediately. We are also proposing to scrap the carbon tax, something that the Labor Party could support today, which would significantly reduce the cost of doing business for Qantas and of course for all other businesses across Australia, which would help build a stronger economy and help create jobs. So there is a lot of things that we can do right now to help Qantas today.
GREG JENNETT: Although it was discussed, it was on the table and it was rejected, what is the status of debt guarantees? Does the Government say they are completely dead for all time as an option?
MATHIAS CORMANN: We don’t think it is appropriate for the Government to intervene in a competitive market essentially picking one business ahead of another to help one business compete against another, using taxpayer resources. That is not the way we think governments should operate. The job of government is to provide the conditions for everyone to have the best possible opportunity to be successful and strong competition between two strong airlines in Qantas and Virgin is in the public interest, because it improves service delivery and drives down costs.
GREG JENNETT: If this repeal was passed did the Government do any assessment of the market interest? How a carve up and a sale of Qantas might look and who might be globally interested in taking a bigger stake?
MATHIAS CORMANN: Once the legislation passes to repeal Part 3 of the Qantas Sale Act it will be up to Qantas to decide on how they want to change things moving forward. It is up to Qantas to make these sorts of judgements. We would have provided to them the opportunity to compete freely on the same basis as any other player in the market.
GREG JENNETT: And do you accept that under that scenario jobs, particularly maintenance jobs, would or could go offshore?
MATHIAS CORMANN: I listened to Bill Shorten last night lament that this was sending Australian jobs offshore. I would suggest to Bill Shorten to watch the very compelling interview Kerry O’Brien did with Paul Keating. Because when Bob Hawke and Paul Keating set out to reduce tariffs, there were Bill Shortens then that lamented that this would send Australian jobs overseas mostly from the union movement. Guess what, they stuck to their guns, they made decisions on what was right for the economy, right for jobs, they strengthened the economy and helped create more new jobs in Australia through decisions they made. Instead of going for lazy populism Bill Shorten should reflect on what is in Australia’s medium to long term national interest.
GREG JENNETT: Alright Mathias Cormann, that’s an argument for the Government to prosecute, we’ll leave it there. Thank you.
MATHIAS CORMANN: Good to talk to you.