Senator the Hon Mathias Cormann
Minister for Finance
Date: Tuesday, 4 March 2014
DAVID LIPSON: Back to Qantas and joining me here in the Canberra studio is the Finance Minister Senator Mathias Cormann. Thanks very much for your time.
MATHIAS CORMANN: Good to be here.
DAVID LIPSON: Labor, the Greens and the Clive Palmer United Party all say that they will block your changes to the Sales Act in the Senate. You’ve set up a political fight, there’s no doubt about that, but is there a political solution in sight?
MATHIAS CORMANN: We think that Labor, the Greens and the Palmer United Party are wrong. We will make the case and we will seek to persuade the Senate and the Australian people that we’ve made a judgement based on what is right. The truth is the best way to secure Australian jobs, jobs with Qantas now and into the future, is to ensure that businesses like Qantas can be as competitive as possible. The best way to ensure that Qantas can be as competitive as possible is to ensure they can operate on a level playing field. Now Qantas is a private business. They are in strong competition with Virgin. That competition delivers benefits for the travelling public in the form of better services and lower airfares. That is in the public interest. It is not the job of government to interfere in a competitive market by picking one side and using taxpayers’ resources to help one business compete with another.
DAVID LIPSON: You may well be able to win that argument, you may well be able to hurt Labor with that argument but in the meantime that playing field remains not level so what does Qantas do?
MATHIAS CORMANN: As a government our responsibility is to make judgements and to make decisions based on what we think is right. The right thing to do in the set of circumstances that we find ourselves in is to free Qantas from the shackles of the Qantas Sale Act, to let them compete on the exact same level playing field as Virgin and other players in the aviation... interrupted
DAVID LIPSON: Isn’t your role of government also though to actually put forward legislation that will go through the Parliament and will achieve results that you want?
MATHIAS CORMANN: We are putting forward legislation that we think the Parliament should pass. We will make the case as to why it should pass and let’s see what happens. Of course beyond freeing Qantas from the shackles of the Qantas Sale Act the other thing that we’re proposing and the other thing that the Labor Party can help address today, is to remove the burdens of the carbon tax from Qantas. More than $100 million in carbon tax payments due by Qantas this year. More next year, more than $160 million. There are things that Labor can do today to help Qantas be the strong and competitive business that we all want it to be.
DAVID LIPSON: Qantas itself though last night said that the carbon tax wasn’t a big issue in the current time.
MATHIAS CORMANN: I’d be amazed if there was any business out there that wasn’t in favour of paying less tax.
DAVID LIPSON: But Qantas’ own statement is pointing to the carbon tax and saying that’s not their concern. Everyone would like to pay less tax but by that argument maybe we should scrap the GST or scrap any tax.
MATHIAS CORMANN: The carbon tax is of course a tax that pushes up the cost of doing business, which makes Australia less competitive internationally without doing anything to help reduce greenhouse gas emissions. It is a bad tax, which is bad for the competitiveness of businesses like Qantas. I’d be amazed if thinking about this carefully, Qantas wouldn’t like to pay $106 million less in tax this year if there wasn’t a carbon tax. More than $160 million less in tax next year.
DAVID LIPSON: Okay, well back on the Sales Act because that is the number one thing that you’ve put forward. If it’s not passed Qantas says that it expects the Government and the Parliament to consider alternative measures to balance that playing field in Australian aviation so what is the plan B for the Government?
MATHIAS CORMANN: We think the Parliament should pass our legislation to remove part 3 of the Qantas Sale Act. That is making sure that Qantas can compete appropriately on a level playing field with Virgin and any other players in the aviation market.
DAVID LIPSON: But is it true that the government feels or at least the Transport Minister feels that there is no plan B as has been reported today?
MATHIAS CORMANN: We have a very clear plan to ensure Qantas can compete on a level playing field... interrupted
DAVID LIPSON: Plan A but what about Plan B?
MATHIAS CORMANN: ...and to remove a significant cost burden imposed on Qantas and other businesses in the form of the carbon tax. This is really a matter for Labor to start making some judgements. I listened to Bill Shorten’s press conference last night when he was lamenting how this was going to send Australian jobs overseas. I strongly urge Bill Shorten to watch Paul Keating’s interview with Kerry O’Brien. Compelling viewing. When Bob Hawke and Paul Keating set out to reduce tariffs there were people like Bill Shorten today, mostly union people, who complained that this would send Australian jobs overseas, when what it did was strengthen the economy and facilitate the creation of more new jobs. Which is why the Coalition supported that very sensible and very important economic reform at the time. Bill Shorten, Anthony Albanese and the Labor Party today they are going for lazy populism instead of reflecting on what is genuinely in the long term interest of Australia. That is what we urge Bill Shorten, Anthony Albanese and the Labor Party to do. Think very carefully about what is in the medium to long term interests of Australia and then make your judgement on how you will deal with the legislation when it comes to the Senate.
DAVID LIPSON: So you’re happy for some jobs to go off overseas if it’s in the longer term interest of Qantas?
MATHIAS CORMANN: You can’t look at Qantas in isolation. We have two strong airlines. We have Virgin, which is building a business in Australia as they are competing with Qantas. We have Virgin, which is creating jobs and through their competition with Qantas are forcing improvements in services to the travelling public, which are having an impact through that competition on airfares and so on. Why would it be appropriate for the Government to use tax payer resources to help one business compete with another business when that competition is actually delivering benefits for people across Australia right now? What we should do though and what is very important we do is to ensure that a business like Qantas is able to compete on a level playing field with a business like Virgin. That they are free to compete on the same basis and that is why we are proposing to remove those restrictions which are currently part of the Qantas Sale Act.
DAVID LIPSON: Finance Minister, Senator Mathias Cormann, we’ll have to leave it there. Thanks for your time.
MATHIAS CORMANN: Always good to be here.