Senator the Hon Mathias Cormann
Minister for Finance
Date: Tuesday, 4 March 2014
MATHIAS CORMANN: Last night the Australian Government made a very important decision to help Qantas secure Australian jobs now and into the future. Right now the Qantas Sale Act is imposing restrictions on Qantas which are not imposed on their competitors, which makes it harder for Qantas to compete in what is a very competitive market. Removing Part 3 of the Qantas Sale Act will help level the playing field, will help Qantas compete on a more level playing field with other players in the market.
Beyond that of course there is still the opportunity for the Parliament, there is still the opportunity for the Australian Labor Party to help take burdens off Qantas and off other players and businesses in the aviation industry by supporting our legislation to scrap the carbon tax.
The carbon tax filibuster in the Senate has been going on for too long. There is a real opportunity for Bill Shorten and Labor if they genuinely care about jobs in Australia, about stronger growth in Australia to support our plans to scrap the carbon tax. Scrapping the carbon tax will bring down the cost of doing business which will help create jobs sustainably into the future.
Happy to take questions.
JOURNALIST: The Government’s been saying it hopes Labor gets on board with these changes but Qantas itself has said its disappointing the action you’ve taken, that’s hardly a ringing endorsement?
MATHIAS CORMANN: Qantas was asking the Government to play favourites. Qantas is engaged in a competitive battle with Virgin. May I add that the competition between Qantas and Virgin is delivering benefits for people across Australia. It is driving improvements in service delivery. It is helping to bring prices down. Of course we do recognise that Qantas is facing restrictions through the Qantas Sale Act which are making it harder for them to compete which is why the best thing the Australian Parliament can do is to unshackle Qantas, to free Qantas to engage in that competition on a level playing field. That is what the Australian Government is putting forward.
JOURNALIST: Qantas has argued though that essentially Virgin has had a head start on that foreign capital so could you have looked at some sort of temporary leg up in terms of loan guarantee, a couple of years only to even things up in the true sense?
MATHIAS CORMANN: That is why it is so important for the Parliament to support our proposal to remove Part 3 of the Qantas Sale Act as quickly as possible. We are committed to level the playing field. We are committed to ensure that Australians can benefit from two strong airlines competing with each other, delivering improvements in services at the lowest possible cost. That is what a strong, robust competition delivers in the public interest.
JOURNALIST: Is the Coalition essentially forcing Qantas through this repeal of the legislation, or part of the legislation, to split in two; to split its international arms with its domestic operations?
MATHIAS CORMANN: Business decisions, commercial decisions are a matter for Qantas. What the Australian Government is focussed on is to ensure that there is a level playing field in the aviation industry, that Qantas is able to compete on a fair basis with other players in the market.
JOURNALIST: Well, would you accept that those changes that you’re making to the legislation would force Qantas into that position to keep its status as a national carrier?
MATHIAS CORMANN: That is ultimately a matter for Qantas. Right now Virgin …interrupted
JOURNALIST: Ultimately a matter for Qantas but is that an outcome that you’d prefer to see happen?
MATHIAS CORMANN: You can ask the question in as many different ways, as often as you want. That is a matter for Qantas. The same as Virgin Australia has to make commercial decisions, Qantas has to make commercial decisions in the context of the regulatory framework that they are operating in. Might I just add here, I was listening last night to Bill Shorten lament how this would send jobs overseas. I would encourage Bill Shorten to have a very close look at the interview that Paul Keating did with Kerry O’Brien a couple of weeks ago. When Bob Hawke and Paul Keating set out to reduce tariffs there were people like Bill Shorten lamenting that this would send jobs overseas and of course it strengthened the economy, it created new jobs in Australia and of course it was a policy at the time which was supported by the Coalition. Bill Shorten is going for the lazy, populist attack instead of reflecting on what is in the best medium to long term interest of Australia.
JOURNALIST: Most analysts would say the biggest problem in terms of losing money for Qantas and Virgin are these capacity wars that this has benefitted the consumer but hurt them too much. Is the Government at any stage had discussions with Qantas about that strategy and winding it back and perhaps giving more assistance if that does happen?
MATHIAS CORMANN: The Australian Government is not the Board of Qantas. Judgements about commercial strategy, judgements on how best to compete in the Australian market and indeed in the international market are judgements for the Qantas Board and the Qantas management to make. We are not going to second guess the judgements that Qantas make. What we have decided last night is to ensure as much as possible that there is a level playing field for Qantas to compete on. Ultimately competition delivers benefits for the travelling public across Australia through better services and lower costs.
JOURNALIST: I’m not saying did you dictate what to do, but these would have been presumably in depth discussions how best to help Qantas. There would have been a lot of things gone into, was that strategy discussed between the Government and ...
MATHIAS CORMANN: And the best way to help Qantas after a lengthy discussion in Cabinet yesterday, in our judgement, the best way to help Qantas is to remove the restrictions that are currently hampering their capacity to freely compete in the aviation market. Beyond that we’ve made it very clear that the Labor Party could help Qantas and Virgin and others and businesses right across Australia by taking the burden of the carbon tax off their shoulders.
JOURNALIST: You’ve said we’re not having anything to do with the Qantas business model or decisions, Joe Hockey said they needed to get their house in order. That must have been some sort of direction and within the house in order is that to do with that strategy, that 65% market share that they’re so set on.
MATHIAS CORMANN: And indeed, the Treasurer and I are saying the exact same thing. It is a matter for Qantas to get their house in order. It is a matter for Qantas to make these judgements. The Australian Government is about setting the conditions, setting the framework, making sure that Qantas has the opportunity to compete on a level playing field because that is the best way to help Qantas secure Australian jobs now and into the future by making sure that they are as competitive as possible.
JOURNALIST: But what does get the ‘house in order’ mean then?
MATHIAS CORMANN: Again these are the sorts of judgements that Qantas has made for many years before...interrupted
JOURNALIST: No but this is what you’re telling Qantas to do...
MATHIAS CORMANN: ... and that Qantas will continue to make...interrupted
JOURNALIST: ...but this is what you’re telling Qantas to do...
MATHIAS CORMANN: ... and it is a matter for Qantas to decide.