Transcript of Interview, Morning Doors, Parliament House



05 March 2014

Qantas Sale Act changes, Second Sydney airport, Anti-Islam party in Australia, Kevin Rudd in Moscow to ease tensions in Ukraine

Warren Truss: Well, claims by the Labor Party that the sale of Qantas to overseas interests would result in there being mass sackings of Australian workers is simply rubbish. The current plan by Qantas to reduce its workforce by 5000 is happening while the airline is 60 per cent Australian-owned. It's a decision that's being made to help make the company more competitive and better able to meet the challenges of the day.

And can I compliment the trade unions and the workers for the way in which they're constructively consulting with Qantas about how it can best plan its future, and their willingness to do that around the table and in a peaceful and constructive way I think augurs well for those discussions and the opportunity for Qantas to achieve elements of its plan for its future.

Whatever happens, all Australian-designated airlines, all those who want to operate international routes and take advantage of Australia's landing rights and our air agreements with other countries, must be 51 per cent Australian-owned. That applies to Virgin, it would apply to Qantas in the future and, for that matter, other airlines that seek to exercise Australia's carrying rights. So not only do they have to be 51 per cent Australian-owned, they've got to have a board that's more than two-thirds Australian, has an Australian chairman, Australian head office. They've certainly got to be identified very much with Australia, and that's laid down in our criteria for airlines that are going to be designated as Australian. That would apply to Qantas also after the passage of the legislation that we've proposed to bring into Parliament hopefully later this week.

The reality is that Qantas is an Australian airline that boasts about its Australianism. It's an Australian icon. Australians believe that this is a part of our history, that it's a part of being Australian, and Qantas promotes that fact. It's its major selling point around the world and to Australians. Now, whoever owns Qantas is going to want to take advantage of this iconic brand—its reputation for safety, its reputation for quality, but also the fact that it is really Australian. So no one is going to move its head office out of Australia. No one's going to reduce its Australianism and the number of employees that it has in this country, to sure up the fact that it's Australian.

Now, if you want to look at the domestic—the operation of a domestic airline, it simply is ridiculous to suggest that a new owner, from wherever they might come, would fly in crew from Beijing or Singapore or the Middle East to operate services between Melbourne and Adelaide or Brisbane and Sydney. If you're going to operate a domestic airline, your staff have to be based in Australia. That includes your cabin crew and your pilots and includes your ground crew and everyone else that services the airline.

The idea that if there was to be a higher level of foreign ownership, that workers would be moved in from other parts of the world, also doesn't take into account the obvious fact that we have migration laws, we have workplace laws, we have corporation laws, all of which would continue to apply to any company that's operating services in this country.

So if, in fact, there is to be a change in the ownership of the domestic arm of Qantas in the future, I don't believe it will make any difference as to the number of Australian employed by this company. It doesn't mean that, from time to time, there won't be job losses or job gains in Qantas. That's happened now, as it does in other airlines, but the unique Australian-ness of this airline is its great attribute, and any future owner is unlikely to want to in any way diminish that particular quality of Qantas.

Question: But unions don't seem to be very happy with Qantas asking its workers to take a pay freeze or not have the pay rises that they negotiated. Do you think that those talks will continue to be constructive?

Warren Truss: Well, the union has so far made the commentary which suggests to them that they're taking a constructive approach into those discussions, and I welcome that.

Question: Mr Shorten this morning said it was [indistinct] Australia was smart enough to have a national carrier. Is this a matter of intelligence?

Warren Truss: Well, Australia will have national carriers because people will be wanting to operate routes internationally out of Australia, and you have to be a designated national carrier if you want to exercise Australia's landing rights around the world. So Virgin is a national carrier, Jetstar is a national carrier, and I'm sure Qantas will be a national carrier as long as it ever wants to operate international routes.

Question: There's a roadblock in the Senate with this, Labor and the Greens and the crossbenchers agree(*) in this Senate and the next Senate to block any changes there. Why is it that the Government doesn't have a plan B on this?

Warren Truss: Well, this is the best plan. This is the option that Qantas favoured. They want to be given a level playing field with other airlines in Australia. So we will always support the best option, and this is the best option.

Question: Is there another option on the table though? Is there an alternative if this falls through?

Warren Truss: Well, various people have been talking about various other options, but this is the best option and this is the one the Government will support.

Question: Does that include a government debt guarantee?

Warren Truss: Well, I've heard people talking about government debt guarantees. I've heard Qantas say that they would like debt guarantees and they would like various forms of financial backing. As we indicated earlier, we've had the opportunity to have a due diligence look at Qantas's financial records. We are satisfied that the company is not in imminent dangerous of failure. It has several billion—around $2 billion worth of cash. It's got a valuable frequent flyers program. It's got its brand name, its aircraft and its assets, and so it has the capacity to continue trading as far into the future as anyone can assess.

Question: So but…

Warren Truss: What it does have, along with Virgin, is some bleeding as a result of the capacity war that's been going on in Australia now for a year or two. Both Qantas and Virgin have been putting more capacity on the route. They've been upgrading the quality of their product. They've been buying new aircraft, et cetera. Now, all of that has been costing money, more money than they've been able to recover from passengers. So it's been a great time to be flying for Australians, but it hasn't been a good time to be running airlines.

Question: What sort of advice has the Government received regarding this debt guarantee? Your view [indistinct].

Warren Truss: Sorry?

Question: What departments or what advice has the Government received about this debt guarantee?

Warren Truss: Well, we sought the opportunity to do some due diligence work in relation to Qantas's financial records. We've done that and the advice that we have received is that Qantas has substantial financial resources, that it is a very capable company and, with good management, has good prospects.

Question: And that's something you can rule out that as a result of those inquiries that there is no debt guarantee that will be given to Qantas?

Warren Truss: We have indicated that what we propose to do is to deliver a level playing field for Qantas so that it can trade competitively with other airlines and that we have no plans to give any kind of debt guarantee or credit facility.

Question: Mr Truss, is there no plan B? How committed are you to plan A [indistinct]?

Warren Truss: Well, we believe that it is good policy and that it will be to the benefit of Qantas to be able to trade on a level playing field. So it's good policy and, therefore, good governments should support good policy. And that's the reason why we'll be implementing, we'll be bringing the legislation into the parliament. We believe that the legislation is the best option, that it can make a real difference for Qantas. It's what they've asked for and we want to deliver that to them.

Question: Were you at the meeting last night regarding Western Sydney and Badgerys Creek with Liberal MPs?

Warren Truss: Well, as you're probably aware, I was doing a bit of media last night.

Question: That's fair enough. But look, in regards to Badgerys Creek, are we any closer to an announcement on that particular site, whether or not that would be the preferred site for Sydney's second airport?

Warren Truss: Well, we've indicated that we will be making a decision about a site for another airport in Sydney in our first term. We remain on schedule to do that and everyday we advance into that term, we are a day closer.

Question: There are reports of a far right anti-Islam political party being set up along the philosophy lines of Geert Wilders. Do you have any concerns about I guess radicalisation from the far right political side in Australia?

Warren Truss: Well, I haven't seen those reports, but I think all Australians want our politics to be moderate. We want people to adopt a peaceful approach to delivering political objectives and building a better country. Extremism often leads to strife. While people are entitled to their views in this country, we really do expect all Australians to respect the views of others and to promote their views peacefully.

Question: Kevin Rudd's apparently in Moscow this week trying to ease tensions with Ukraine. What do you think his prospects are?

Warren Truss: Well, I was somewhat surprised by the report. I suppose he has good intent. The threats in Ukraine obviously are a concern to everyone. We don't want these issues to be resolved any way other than around the table.

Question: Do you think it's a bit ambitious from him?

Warren Truss: Well, I don't think Kevin Rudd's ever been short of ambition. Alright. Thank you very much.