Doorstop – Qantas

Senator the Hon. Mathias Cormann
Acting Prime Minister
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia

The Hon. Scott Morrison MP
Federal Member for Cook

The Hon. Craig Laundy MP
Minister for Small and Family Business,
the Workplace and Deregulation
Federal Member for Reid






Company tax cuts, Deputy Prime Minister, Immigration

MATHIAS CORMANN: It is great to be here with my good friend and valued colleague the Treasurer, Scott Morrison, the Chief Executive Officer of Qantas Alan Joyce and my friend and colleague, the Minister for Small and Family Business, Craig Laundy. What a fantastic Australian story Qantas is. Qantas started as a small business with three employees back in 1922 and today they are a global brand. They are a big, iconic Australian business competing globally in a fiercely competitive industry, employing 30,000 Australians. Now, it is only a few years ago Qantas was under pressure in the wake of the GFC. Qantas was making losses and it is a real credit to Alan Joyce, his management team and everyone at Qantas that they have been able to turn that situation around. That they have been able to turn Qantas back from a loss making enterprise, to a profit making enterprise. Because what does that mean? Qantas being more profitable means they can invest in business expansion, it means they can hire more Australians, it means they can pay them better wages, it means that the returns for shareholders including those Australians saving for their retirement or self-funded retirees who have shares in Qantas through their superannuation get a benefit. It also means that the 3,000 small and medium sized businesses providing goods and services to Qantas have a better opportunity to do more business and in turn, hire more Australians and pay them better wages. Now, we need businesses like Qantas, who compete in a fiercely competitive global industry, to have the best possible opportunity to succeed in the future, to be more profitable in the future, so they can hire more Australians, so that more Australians who want to join Qantas in the future have the opportunity to pursue a career with Qantas. Now, we cannot be holding businesses like Qantas back, by forcing them to pay higher taxes on their profits here in Australia than their competitors have to pay in other parts of the world. Because in the end, if businesses like Qantas, and there are many of them around Australia, which provide opportunity to Australians, to pursue a career, to have a good, well-paid, secure job, if businesses like Qantas cannot compete because of higher taxes here than in other parts of the world, it means fewer jobs, it means less investment into future growth, it means lower wages, it means lower return to shareholders, it means less money for self-funded retirees, and it means less opportunity for small and medium-sized businesses that are providing their goods and services to Qantas and businesses of this sort of size around Australia. That is why the Senate must pass our business tax cuts, reducing the Australian business tax rate to 25 per cent for all businesses, in full. We want businesses around Australia to be able to hire more Australians and pay them better wages. We want them to invest in their future success and we want them to deliver benefits to all Australian families. That is what this is all about. So, when Bill Shorten stands in the way of a more competitive business tax rate, what he is really standing in the way of, is more jobs, higher wages and better returns on the investments of self-funded retirees. Scott.

TREASURER: Thanks very much, Mathias. I might just wait for this to quiet down. That may not happen, so I'll just speak up. It's great to be here with the Acting Prime Minister. Day three; doing a great job. And it's great to be here with Alan Joyce, and I commend Alan for his strong leadership of Qantas, not just recently, but over a long period of time, and particularly results they were able to announce not just for their shareholders but for their employees in particular as well. For Craig Laundy to be here as well, it's great to be here as part of this crew. I'm very much here as Treasurer today, but I'm particularly here as a member in southern Sydney. Thanks for wearing the Sharkies' tie, Mathias, on such an occasion. Qantas' result yesterday is fantastic for the thousands of people who live in my part of Sydney, who work for Qantas. Qantas has had a tough go of things over the last while, as Mathias has said, and they have been able to invest through these challenges. They have been able to pay their staff above what others have received across the economy in recent times, and they're going to continue investing. That's what we heard yesterday. Qantas will continue to invest. But for all Australians, all Australians to benefit from a growing economy, we need our businesses to keep investing. That's why it is our plan to lower the tax burden on all businesses in this country. If Mathias and I insist that businesses pay us more, then they can't pay their workers more. If Mathias and I, as a Government, with the Prime Minister, insist on businesses paying us more, they can't invest more in new equipment, in new markets, in new products, in greater growth. It's a very straightforward argument. As a Government, we're committed to ensuring that businesses invest so businesses grow, so workers benefit. That's what's working, and that's what continues to need to work. Let me make one other point about Qantas. Qantas isn't an island. Qantas is the product of the success of the hundreds, if not thousands, Alan isn't it true, of the small businesses that are in Qantas' supply chain? The little bit of butter that you see on your plate when you're on the plane, or all of the other things that go into making this work. We're at the headquarters of the Spirit of Australia with Qantas, and this just doesn't happen by accident. It happens because of thousands and thousands and thousands of small businesses that play into this great successful airline. Now, if we're going to make Qantas pay more tax to the Australian Government, if we're going to insist that they pay us more, then how do you think that helps all of those small businesses when it comes to Qantas investing more in what those small businesses do for Qantas? I mean, this is a very straightforward argument. If you support more business, if you support higher wages, if you support high growth, more jobs, you'll support the Government's enterprise tax plan. Thanks Mathias. 

ALAN JOYCE: Well, can I first of all welcome the Acting Prime Minister, the Treasurer and the Minister for Small and Family Businesses here. I know our hangars can be a bit noisy, so apologies for that, but the airline operates 24 hours a day, seven days a week, 365 days a year and nothing stops that. We just announced the best results in Qantas' 98-year history. The company is performing really well and the company is investing for the future. The company, in the last two years, employed 2,000 more people. We have a pay policy that is 3 per cent for our staff well above inflation and well above what other companies in the private and public sector are doing. And we have given $220 million in bonuses to our employees over the last two years. We are also investing for the future. We ordered a new aircraft yesterday. We are looking at Project Sunrise, an aircraft that can get from Sydney to London non-stop and Sydney to New York. That all is happening because we are performing well and the economy is performing well. And we are dependent on the Australian economy. We carry big business, small business, we carry the general public, in leisure, premium leisure, and price-sensitive leisure. And if this economy is to suffer because our tax situation is not competitive and the corporate tax (inaudible), which I think it will, that investment is drained out of Australia to North America, to Europe and to other places. That will mean Australia will do less well, that will mean that Qantas will do less well and that will mean we cannot sustain that employment growth, that wage growth, we cannot sustain that investment in our people and in training. So, this is a very important debate, it is a very important discussion. We believe and we support the Government in their approach on this. We want it to happen as fast as possible, because decisions are being made today about future investments for the next years and decades ahead. And if we do not fix this, it will have an impact and it will have an impact in the medium to long term as well as the short term. So, it is great that the Government is here, supporting this initiative. We would like to see it happening. It will be great for small businesses because it will also be good for big businesses. And as the Treasurer said, we have a lot of small businesses dependent on Qantas. We are the third-largest purchaser of Australian wines after Coles and Woolworths and we use them. We are one of the biggest suppliers and purchasers of Australian produce. We are one of the biggest employers in the country. We are actually responsible for 1 per cent of Australian GDP. So, for us, a successful Australia means a successful Qantas, and it means we can guarantee the employment of our 30,000 people. So, thank you to the Government for this initiative. We hope the Senate gets on and passes this legislation and makes it happen. It is urgent and it needs to happen soon. Thank you.

CRAIG LAUNDY: Thank you, Alan. It is great to be here today with the Acting Prime Minister and my good mate, the Treasurer, as well. But, Alan, specifically to you and your management team, on behalf of the small and family businesses, the thousands and thousands of them that'll you have in your supply chains, a heartfelt congratulations to you on, firstly, your result, but, secondly, to have the courage to stand up and to explain to those that have no understanding, because they've never actually run a business themselves, of how business actually works. Big business does not exist in a vacuum. It is part of the broader economy, and the supply chains that Alan has spoken about reach the length and the breadth, when it comes to Qantas, of this country. I was hearing earlier a story about a plane spray-painting business in Townsville that Alan and his team have taken a long-term contract, a small and family business in Townsville, that will be painting planes for Qantas. These are the real-life stories that happen day to day on the front lines of the Australian economy, and if you look after business, irrespective of size, they will get on and interact with each other. And the three things that are guaranteed, they will continue to back themselves if we back them, they will continue to re-invest in their business, and employment will come for the ride. That's why I urge the crossbench in the Senate to not stop at legislating tax cuts at small and medium-sized businesses. They must go the whole hog. Because if small and family businesses are to continue to prosper, it is essential that business across the board lives off those benefits. Thank you.

MATHIAS CORMANN: Now, if I may ask you to take questions on business tax cuts first and once we have dealt with that we will let Alan go and we will take questions on any other matters that you might have. Happy to take questions. 

QUESTION: Is it appropriate for the Nationals... interrupted 

MATHIAS CORMANN: As I have said can we take questions on business tax cuts first and any other questions later?

QUESTION: What do you say to those people who think companies like Qantas or other big businesses should pay more tax as opposed to less tax?

MATHIAS CORMANN: Well, all companies, all businesses in Australia, should and do pay tax on their profits. Qantas pays tax on their profits. But Qantas has gone through a period of substantial losses and now the management team here and the team at Qantas has been able to turn that around. Once the losses are paid off at Qantas, I am very certain and I am sure Alan will be able to confirm this, will pay tax on profits. But the problem is this - if we force businesses like Qantas, and businesses all around Australia who are involved in global competition, to be less competitive because taxes in Australia are higher than what they are in other parts of the world, then that puts pressure on our whole economy. It puts pressure on Qantas. It puts pressure on the job security of Qantas employees. It reduces the opportunity of Australians in the future to join Qantas. It puts pressure on small and medium-sized businesses, providing services to Qantas. It puts pressure on self-funded retirees, who all of a sudden get lower returns on their investments through superannuation, from their shares in Qantas. So, Qantas, being in the best possible position to compete internationally in what is a fiercely competitive global industry, is not only good for Qantas and its employees, it's good for those Australians who want to join Qantas in the future, as Qantas is able to hire more people and offer better wages. It's also good for small-and medium-sized business, for the reasons I've explained. It's good for self-funded retirees, because they get higher returns on their shares through their superannuation. And, I mean, big businesses like Qantas, who started as small businesses, are not living in a vacuum, as Craig was saying. They're part of an ecosystem. And if we want families around Australia to have the best possible opportunity to succeed, to get ahead, we need the businesses that employ them to be able to be more successful and more profitable. Because, look, in the end, Bill Shorten may talk about jobs and higher wages, but my message to Bill Shorten and the Labor Party is that jobs and higher wages don't grow on trees. They're created by successful, profitable businesses. And if we make it harder for business to be successful and profitable, there will be fewer jobs and lower wages. Longer unemployment queues, lower wages. If we want more jobs and higher wages, and the best possible opportunity for families to get ahead - and we do - then we need to ensure that all of the businesses around Australia have the best possible opportunity to be successful, to be profitable, so that they can hire more people, pay them better wages, deliver better returns to shareholders, including through superannuation, and deliver better opportunity for the small- and medium-sized businesses that provide services to them. 

So, no other questions from the media on business tax cuts? In which case, thank you.

QUESTION: It is appropriate that the Nationals be dealing with the sexual harassment claim against Barnaby Joyce internally?

MATHIAS CORMANN: Any allegation of sexual harassment is a very serious allegation. I understand that a formal complaint has been made and that that complaint is being investigated. At this point, that is really all that I have to say about it.

QUESTION: Has Barnaby Joyce’s moral authority been eroded so much now that it does not matter whether he survives a leadership challenge or not?

MATHIAS CORMANN: Again, the leader of the National Party is the Deputy Prime Minister in a Coalition Government, and the leader of the National Party is determined by the National Party. Now, there are issues that are being considered at the moment. The National Party has received a formal complaint in relation to certain matters. Any allegation of sexual harassment is very serious. Barnaby Joyce has denied the allegation, but it is being investigated and subject to the outcomes of that investigation, the appropriate steps would follow.

QUESTION: Why is no one in your Party willing to stick up for Barnaby Joyce? When John Barilaro called on Malcolm Turnbull to resign, Barnaby Joyce leapt to Malcolm Turnbull’s defence. Why is no one doing in your Party doing that for him today?  

MATHIAS CORMANN: Some very serious allegations have been made. There has been a formal complaint. It is appropriate that in relation to serious allegations of this nature that they are properly investigated and given that there is an investigation underway, I do not really believe it is appropriate for me to make any further comments.

QUESTION: He is on leave at the moment. Should he come back from leave whilst this matter is unresolved?

MATHIAS CORMANN: Again, some very serious allegations have been made. All allegations of sexual harassment are very serious. It is important that we establish the facts. A formal complaint has been made. There is an investigation underway and that investigation should be allowed to take its course. I do not really have anything further to add at this point.

QUESTION: Should he be allowed to come back to his role as leader of the National Party and as Deputy Prime Minister, while that investigation is still underway?

MATHIAS CORMANN: I think you are getting ahead of yourself. Some very serious allegations have been made. It is important and appropriate that those allegations are being investigated and further steps will depend on the outcomes of that investigation.

QUESTION: He is still Nationals leader. Do you support him as Nationals leader?

MATHIAS CORMANN: The leadership of the National Party is a matter for the National Party.

QUESTION: Does he have your support as Nationals leader?

MATHIAS CORMANN: The leadership of the National Party is a matter for the National Party.

QUESTION: Just on another matter, Tony Abbott is out again today criticising the two of you, Treasurer and Acting Prime Minister. Have you lost tolerance or respect for Tony Abbott?

MATHIAS CORMANN: Look, Tony Abbott is a former Prime Minister. He is the Member for Warringah. He is entitled to his views. He expresses his views on a range of matters from time to time. We are entitled to our views and the Government is entitled to pursue what we believe is in Australia's national interest and that is really all there is to it.

QUESTION: But he is getting personal now. He is taking credit for the two of your being in the position that you are now, the Treasurer as well.

MATHIAS CORMANN: I really do not have anything else to add. Tony Abbott is entitled to his views and we are entitled to ours.

TREASURER: Let me talk about the issue here. We absolutely agree that Australia's cities in particular need to address the infrastructure challenges that the country has. That's why, as a Government, I mean, just yesterday there was a significant announcement made here in Sydney about another key road link in Western Sydney as part of our Western Sydney Roads Package. That's why we're putting $75 billion into infrastructure around the country. It is not only boosting investment in our economy, but it's dealing with the congestion. We know that whether you're sitting to the north of Brisbane trying to get to work every day, or you're sitting in traffic jams in Melbourne, or here in Sydney, that those infrastructure challenges need to be addressed. There's no disagreement about the need to support better infrastructure in our cities. That's what the Turnbull Government's City Deals are all about. It's about investing in our infrastructure, working with state governments to deal with the bottlenecks and the infrastructure challenges that the country has. Now, we have a plan for that. We're implementing that plan. We're looking to alleviate that, and we're able to do that because we're running a budget and we're running an economic policy which is growing the economy. You cannot have world-class health services, a Pharmaceutical Benefits Scheme, a reliable pension system, investment in economic infrastructure if you are not growing your economy. That's why we're standing here today, because we're doing the things that grow our economy to alleviate and address the issues that Australians want us to address.

QUESTION: Treasurer, would you be happier if Barnaby Joyce did not come back from leave?

TREASURER: The only Joyce I'm talking about today is Alan Joyce, and Alan Joyce has just taken this company through one of the most difficult periods we've seen a company go through, and delivering results that are benefitting the employees, who actually mostly in my electorate, they know the benefit of a company getting on and doing things. That is what I'm focused on.

QUESTION: Why won’t you offer your support to Barnaby Joyce?

TREASURER: As the Acting Prime Minister has said, it's a matter for the National Party. I don't think we can be clearer about that, guys. That's a matter for the National Party and we'll leave it to them.

QUESTION: Barnaby Joyce came to the Prime Minister’s defence. Why won’t your Party come to his defence?

TREASURER: I think we've covered that, as has the Acting Prime Minister.

MATHIAS CORMANN: Are there any further questions on any other matters?

QUESTION: Treasurer I have a question. Tony Abbott has said you would not be in Government if it was not for him. What are your thoughts on that?

TREASURER: Tony Abbott led us back to government in 2013. We were part of that team that made that happen and we all made out contributions. I was pleased to serve in his government as Immigration Minister, I was pleased to be the one who basically implemented and came up with, with Jim Molan, the plan and implement it, to stop the boats. I know quite a lot about immigration issues, and we have been running a very strong policy in that area. I stand by the things that I've said. Particularly what I've said today, which is as a Government we're addressing the infrastructure needs in our cities in a way that no government has before. We have a strong plan, we're putting it on the ground. We're working really closely with the New South Wales Government here to deliver that infrastructure. We've got $2.6 billion sitting in a money pile in Victoria that's there, money to spend on infrastructure in Victoria. I would really like them to get on with it.

QUESTION: When is enough, though with Tony Abbott? He is distracting from the issues that you want to talk about on a day like today as well when the Prime Minister is overseas.

TREASURER: Well, I'm not distracted.

MATHIAS CORMANN: None of us are distracted. You know, as I have said earlier, Tony Abbott is entitled to his views. He is entitled to express them. We are just getting on with business.

QUESTION: Acting Prime Minister, a staff member in the Prime Minister’s office has blown a lid on another affair in New South Wales politics. Without asking you specifics about that incident, are you concerned about the way that we are headed down this path and do you think it is because of the Prime Minister’s ban on sexual relations between staffers?

MATHIAS CORMANN: Well, I do not understand the link that you are trying to make there at all. I mean, in relation to the staff member involved, I understand that she is under a fair amount of personal stress and is on leave. I do not really propose to add any further comments to that.

Thank you.


Senator the Hon Mathias Cormann, Minister for Finance, Perth