QANTAS SALE AMENDMENT BILL 2014

SECOND READING SPEECH

This Bill is a key part of the Government's commitment to
ensuring a strong Australian-based aviation industry in, and
for, this country.
That means providing an environment for aviation businesses
in Australia to manage their own affairs on an equal footing.
Good government is not about playing favourites or being a
banker for major companies when times are tough.
It's about providing the environment for them to succeed free
of unreasonable government impediments.
That is what this Bill about. Helping the Australian aviation
industry to grow in an environment that is safe, fair,
competitive and productive.
The purpose of the Bill is to remove the regulatory handcuffs
that apply to Qantas but to no other Australian-based airline-
including in relation to accessing foreign capital.
As the House will be well aware, last week Qantas announced
a loss of $252 million for the first half of the 2013-14 financial
year.
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The company has taken difficult decisions to lturn the airline
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to profitability- most distressingly for all in thi place the
shedding of 4,000 jobs on top of the 1,000 jo losses Qantas
announced in December.
The Government recognises that the best posisible way it can
assist Qantas is by removing the regulatory in .
Australia's aviation industry ... in effect, to free! Qantas from
the regulations that hold it back and which a remnant of
the previous Century. I
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Currently, there are one set of rules for Qantat and another
set of rules for other Australian-based airlines.
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Part 3 of the Qantas Sale Act, which the gave' nment proposes
to repeal, requires Qantas to include a range f outdated
restrictions in its articles of association.
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Under Part 3 of the Act, foreign ownership is It ited to 49 per
cent, a single investor cannot own more than 5 per cent and
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foreign airlines are limited to aggregate of 35 per
cent.
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In contrast, under the Air Navigation Act, persons can
own up to 49 per cent of other Australian inter ational airlines,
with no restriction on foreign ownership for Au tralian
domestic airlines, subject to consideration by the Foreign
Investment Review Board.
In order to provide a "level playing field" and balance the
regulatory rules for all Australian airlines, this Bill seeks to
repeal Part 3 of the QSA.
This will free Qantas from the restrictions it and, indeed, its
competitors in Virgin Australia and Rex, agree belong to a
bygone era.
The Bill also makes amendments to definitions in the Air
Navigation Act to ensure that Qantas is subject to the
provisions regarding foreign ownership, thereby, creating a
consistent regulatory framework for all Australian international
airlines.
Australia's air services agreements with other countries
require an airline seeking to exercise Australia's air traffic
rights to be designated by Government.
This means they must satisfy a range of requirements,
including:
Substantial ownership and effective control by Australian
nationals;
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Two-thirds of the Board members must ~ Australian
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citizens, as must be the Chairperson; anp
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The airline's head office and operational base must also
be in Australia.
The Government does not propose to change these criteria.
I, again, note that Qantas' main domestic comlpetitors, Virgin
Australia and Regional Express support changes to the Act,
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expressing their desire to compete with Qantar' on a fair and
equal footing.
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In summary, this legislation means that Qanta will no longer
operate at a competitive disadvantage and th t Government
regulation will no longer stand in the way of Q. ntas' efforts to
return to profitability.
I commend the Bill to the House.