Qantas to remain Australian-owned
Qantas has welcomed a decision to raise foreign investments caps on the airline, but says it still wants to see the restrictions removed completely.
In changes that Treasurer Joe Hockey expects to pass parliament today, the federal government will lift restrictions under the Qantas Sale Act that prevent a foreign investor from owning more than 25 per cent of the company and cap combined ownership by foreign airlines at 35 per cent.
However, it has been forced to give up on plans to allow unlimited foreign investment in the airline, instead accepting a Labor proposal to increase the caps for foreign investment to 49 per cent.
Qantas said today the compromise was “an improvement”, but it would like the government to go further and abolish foreign ownership restrictions.
“It’s positive that there’s general agreement that Qantas is disadvantaged by the Sale Act and that change is needed,” the airline said in a statement.
“While removing all restrictions that apply only to Qantas remains our preference for levelling the playing field, changing the 25 and 35 per cent limits would represent an improvement on the status quo.”
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Hockey said it was clear the federal government could not succeed with its original plan.
“An alternative was proposed by the Labor Party and we’re prepared to accept that to give some stability to the rules governing the ownership of Qantas,” he told ABC radio. “I’m confident that will pass today.”
Reform of the ownership restrictions was sparked by Qantas, which last year complained the existing caps disadvantaged the airline in its fight against rival Virgin Australia, which is majority owned by three foreign airlines: Air New Zealand, Etihad and Singapore Airlines.
Labor transport spokesman Anthony Albanese said the changes would hopefully pass the Senate by the end of the day.
“Labor’s amendments are designed to make sure that Qantas still calls Australia home,” Albanese told reporters.
Labor’s position had been consistent since 2009, he said.
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“You don’t protect an iconic Australian company by sending it offshore and that’s what the government’s proposals were designed to do.”
Under the changes, there will be no off-shoring of maintenance and catering and two-thirds of the board will remain in Australia, he said.
Independent senator Nick Xenophon said Qantas workers would judge Labor harshly for bringing the airline a step closer to foreign control.
“The concern is Qantas can be much more easily broken up,” he said.
Liberal Democratic senator David Leyonhjelm said the percentage of foreign ownership should be up to Qantas itself.
“Letting more foreigners own it can only help it,” he said. Senator Leyonhjelm said he’d support the changes but believes they don’t go far enough.
Shareholders should not be prevented from selling their shares to the highest bidder.
The airline is not owned by the government and was at a disadvantage to its overseas competitors, he said.
Family First senator Bob Day echoed that view.
“Qantas know how to run their business. They should be allowed to run it the best they can,” he said.
