03 March 2014



SUBJECT/S: Qantas; Pensions

LAURA JAYES: Welcome back to AM Agenda. Joining me today on my panel; Liberal MP Kelly O’Dwyer and Shadow Assistant Communications Minister Michelle Rowland. First to you, Michelle. Just on Qantas: why should the Government be providing a debt guarantee?

MICHELLE ROWLAND, SHADOW MINISTER FOR CITIZENSHIP AND MULTICULTURALISM; SHADOW ASSISTANT MINISTER FOR COMMUNICATIONS: I think that’s one of the options that should be on the table and as we heard earlier this is something that’s being discussed at Cabinet. It’s disturbing for a start that it’s taking this long to even think about a plan, let alone a coherent one. We’re getting different messages from Mr Abbott. But I think at the end of this we need to remember this is about thousands of jobs. It’s about the flow on effects that come from those jobs as well, and I think we need to make a decision, or at least this Government needs to make a decision, about do we want a national carrier, and what form will that take? A national carrier that keeps jobs in Australia is certainly one that Labor supports.

JAYES: Kelly O’Dwyer, there does seem to be a bit of divergence on messaging here. A week ago we’re hearing from Joe Hockey that it seemed like he was ready to throw Qantas a lifeline with the debt guarantee and on the weekend Tony Abbott’s all but ruled it out. Is there a bit of a journey to this decision?

KELLY O’DWYER: I don’t think there’s been a divergence of message and if I can just pick up on what Michelle said, I’m very pleased to hear that the Labor Party supports us keeping jobs in Australia and that they support jobs. If they’re very real about that what they will do is allow us to get on with abolishing the carbon tax which has put a huge impost on Qantas: $106 million is a tax. We know it’s going to be $106 million or more which is cumulatively around about the figure that they announced as their loss just recently so…

JAYES: The carbon tax isn’t the biggest issue here for Qantas.

O’DWYER: Well it’s a significant problem in making them less competitive. That’s been acknowledged by Qantas. It’s also particularly been acknowledged by Virgin boss as well, John Borghetti, because he’s come out and said that it’s having a significant impact on making them less competitive. So if they’re serious about jobs what they’ll do is not waste any more time, they’ll accept the mandate that we were given at the election and they will help us get rid of the carbon tax which was what we were elected to do.

JAYES: Michelle, it is true that John Borghetti did sight on Friday when he released the half year profits for Virgin that the carbon tax was an issue and he urged the Labor Opposition to not stand in the way of repeal. Is Labor going to heed that message?

ROWLAND: Well I think John Borghetti’s free to say whatever he likes in the context of his role and explaining the financials of his company. But Kelly talks about moving aside and letting them carry out their mandate. I could go into a lot about carrying out a mandate which is what Labor had to do in its first term in office. But also I just hear time and time again, you turn on the TV and you hear Liberal MPs, firstly they’ve got the talking points from a year ago: ‘get rid of the carbon tax’, and then they start blaming the workers. I was on one of these shows the other day and I was up against one of Kelly’s colleagues, he starts blaming the workers: “Workers should get out of the way, unions get out of the way. Workers get out of the way.”

O’DWYER: [inaudible] getting rid of the carbon tax.

ROWLAND: Listen, listen. Because I think at the end of it we need to make sure that we remember one thing and that is this government is in government now. You can’t go round blaming, you cannot go round blaming everything –

O’DWYER: You blocked it in the Senate.

ROWLAND: You cannot go around blaming everything, everything, on the price of carbon. Because the reality is this government has no plan. You were in Opposition with no plan, and then you got elected and there’s no plan.

JAYES:  Okay let’s get to one of the other options that is on the table, that is changing the Sale Act. Chris Bowen this morning made it very clear that there is a red line for Labor and that is that 49 per cent. But what are you willing to tinker with within that margin?

ROWLAND: I think Chris also said we’re very ready to see what proposals the Government wants to come up with within those ambits of the Sale Act.  And the other thing you need to bear in mind, and Anthony Albanese went through this in quite good detail a few days ago – there’s a reason why there’s limits on how much foreign ownership there can be in an airline and it’s because of the international agreements we have on aviation between countries. It’s the reason why you can’t get, for example, some airlines flying directly from Australia to the US. So we need to bear that in mind as well, but we’re very ready to look at what proposals the government comes up with. It would be nice if they had one instead of a couple.

JAYES: Kelly, what is the Government going to come up with today and would you urge Cabinet to do this quite quickly? We have known about Qantas’s problems for some time, there has been a bit of flying as kites as Labor might describe it over the last couple of weeks so when can we see an answer?

O’DWYER: Well clearly this matter is going to be discussed in Cabinet today. What we’ve said all along is that we are going to look at all of the options…

JAYES: Except for a government debt guarantee, is that off the table?

O’DWYER: We’ve said particularly that we are very focused on the Qantas Sale Act which is imposing conditions on Qantas that are not imposed on any other airline. That’s not to say that we don’t support a national carrier, we do, we do support a national carrier in this country. It’s important for our country to have a national carrier. But, what we are saying is it’s not right real world anymore to impose the same conditions that were imposed on Qantas decades ago.

JAYES: So are you saying that by proposing changes to the Qantas Sale Act, that is only a medium to long-term solution. Government can’t offer anything short-term?

O’DWYER: Well one of the issues for Qantas is actually access to capital. That is their biggest issue and that’s what they have been saying now for some time. One of the biggest ways that they can get access to capital and one of the best ways is to have investors being able to invest in Qantas and the people who are most likely to invest in Qantas are foreign investors. Foreign investment is not a dirty word. Foreign investment is actually very good. It will help us grow our economy, not only with our airline, but potentially with all sorts of other areas. We’ve seen the impact with agricultural investment, on business development. I think it’s quite bizarre that the Labor Party  are going stand in the way of this.

JAYES: I’ll quickly let you respond to that Michelle, but I want to move on to pensions as well. There’s a report out today that perhaps pensioners that own their own expensive homes could be cut off from welfare or could receive less welfare. Is that a move that you would support?

ROWLAND: Well I think firstly: sure, the Liberal Party, the government, supports foreign investment, except when it’s to do with GrainCorp and investment coming from the US. So I don’t know what they stand for in that area, but I’ll put that to one side.

In terms of having the family home included in some sort of asset test, that’s not something that the Opposition supports. I think it’s very important to remember two things. Firstly, Australia is ageing. We are getting older, we are living longer. It’s important to make sure that we have people supported in our communities. Pensions are one way, but I also as I go around my community, one of the biggest concerns is not only residential aged care but also in-home aged care. So they are huge issues. The second point is, Tony Abbott straight before the election said, “pensions wouldn’t be touched.” But time and again in parliament last week he failed to guarantee…

JAYES: But, Labor already had moves in place to increase the pension age to 67, there’s now talk that could go to 70, would Labor continue to support that incremental increase?

ROWLAND: Well we would look at whatever government proposals were put on the table, but I will make this point. The biggest single increase in the pension in its history came in under Labor. The aged care pension came under Labor. I’ve heard the news this morning about the government putting an increase on the pension this week. That’s actually an inbuilt indexation measure. That’s going to happen anyway. The sun goes up, and the pension goes up on indexation day! So to hear these people try to take credit for that is absolutely laughable.

JAYES: Kelly, your response and is this something that is actively considered and is supported by the Business Council and Paul Howes as well has flagged his support for it, so you have some support in unusual quarters perhaps?

O’DWYER: Well look, Labor is going to run a desperate fear campaign on anything they can in order to distract from the fact that they are blocking the carbon tax repeal in the Senate. I mean they’re very keen to distract everybody with this nonsense. It’s fair to say that we are increasing the pension on the 20th of March. It’s going up by CPI. That’s an increase in the pension, that’s not a decrease.

JAYES: Wasn’t that increase under Labor?

O’DWYER:  No, no, no, the increase does happen. It’s built in. It’s something that we support. It’s actually something that is part of our government policy as well. So it’s going up for aged pensioners on the 20th of March. That’s something that the government supports. That’s something that we’ve spoken about and in terms of assets and in terms of home, they’re going to mount a fear campaign on all sorts of things. It’s very typical for the opposition to do that in the lead up to the Budget and I think we have to take it with a grain of salt.

JAYES: And just finally, on Qantas, when do you expect that we will see an announcement, sometime this week, because there needs to be a legislative change here?

O’DWYER: Well look it depends very much on what the opposition is prepared to do, unfortunately they’ve been terribly obstructionist. We’ve seen that with the carbon tax and I suspect we’ll see that with Qantas as well. So they can’t say that Rome is burning, when they’re not prepared to put out the fire.

JAYES: Michelle, just finally your thoughts?

ROWLAND: Can I go back to the age pension just for one second though?

JAYES: Sure.

ROWLAND: I think it’s very important to recognise that there is a lot of concern in the community about raising the retirement age. As I travel around my community, this is a high cause of concern and I don’t think any commentators or any politicians from any sides should be under any illusions otherwise.

JAYES: Michelle Rowland, Kelly O’Dwyer thanks for joining me on AM Agenda.