The Abbott government’s plan to help Qantas by repealing section 3 of the Qantas Sale Act was dealt a blow this week, with Independent Senator Nick Xenophon saying that he would join with Labor and the Greens to stop the legislation passing through the Senate.
The government – which rejected a request by the national carrier for a debt guarantee – has said that Qantas should be allowed to access investment through foreign ownership deals, allowing it to operate on a level playing field with Virgin.
Any changes involving part ownership are based upon a restructuring plan that will divide Qantas into international and domestic divisions.
Those changes would mean foreign investors – including government-owned airlines – would be able to take a majority stake in the domestic arm, but foreign ownership of the international arm would stay capped at 49 per cent, ensuring the airline remains an Australian carrier with related landing rights.
The Abbott government has conceded that any decision to repeal elements of the Qantas Sale Act is liable to send maintenance jobs offshore.
Meanwhile, Nick Xenophon has called for a judicial inquiry into the airline’s financial management, and said that such an inquiry should underpin any decision to amend the Qantas Sales Act.
“This is a red herring, the real problem here is the failed strategy pursued by Qantas management,” Xenophon told reporters in Canberra this week.
Xenophon made the call for an inquiry following Qantas’ announcement that it would shed 5,000 jobs, having reported a $252 million half-yearly loss.
“Alan Joyce and the Qantas Board have brought one of the world’s great airlines and a national icon to its knees,” said Xenophon, who is adamant that only a judicial inquiry, “with sufficient forensic account resources”, would reveal the underlying causes of Qantas’ economic troubles and determine whether changes to the Qantas Sale Act were needed.
“Their botched strategy of pouring hundreds of millions of dollars into Jetstar’s Asian operations seems to be the real cause of the demise, and Australians shouldn’t believe Mr Joyce’s lame excuses.”
Senator Xenophon has also questioned whether current Australian accounting and corporate governance rules needed to be changed.
“Right now, the consolidated accounts of Qantas Group, with over 129 entities trading under it, don’t need to pinpoint how well or how badly each division is doing….the public deserves to know how the various parts of the group are performing.”
Labor has said it is ready to team up with Xenophon and the Greens to launch a Senate inquiry into Qantas’ financial dealings. Opposition transport spokesman Anthony Albanese is reported to have prepared the terms of reference for such an inquiry.
On Thursday the House of Representatives cleared a bill lifting the 49 per cent foreign ownership limit in the Qantas Sale Act by 83 votes to 53, after a debate in which Bill Shorten called Coalition MPs “cheese eating surrender monkeys of Australian jobs”.
The bill has no chance of being passed through the Senate if Labor, the Greens and independents such as Xenophon hold their line.
