The pressure on Costello heats up

In an atmosphere of increasing disquiet and concern regarding the sale of Qantas, Federal Treasurer, Peter Costello has come under increased pressure from Government backbenchers who want to impose strict conditions on the sale of Qantas to APA.

It appears that five Liberal and National MPs utilised the Coalition’s joint party room meeting in Canberra yesterday to raise concerns about the impact of the takeover on the airline’s 38,000 employees, also telling the meeting they were worried about the amount of debt Qantas would take on under the planned $11 billion private equity buyout, saying it would expose Australia’s main airline to greater financial risks.

MPs who spoke about the Qantas sale included the Sydney Liberal MP and former Tourism Minister, Bruce Baird, who has been a very strong and vocal supporter of Qantas in the past, saying he was worried that if the takeover went ahead the new owners would put more pressure on the company to cut costs by relocating jobs overseas, adding, “It is critical to have guarantees against sending jobs offshore and it is hard to get guarantees of actual job numbers being preserved, but the issue is in terms of where they deliberately decide to shift jobs offshore, including jobs of flight attendants, back room accounting functions and particularly maintenance of jobs.”

Victorian Liberal MP Sophie Mirabella also voiced her concerns regarding the sale and it is understood she suggested the Government should reconsider its policies of restricting competition against Qantas on international aviation routes unless the new owners accepted stringent conditions to protect local jobs and air services.

Queensland Nationals Senator Barnaby Joyce, Western Australian Liberal Senator Ross Lightfoot and Sydney Liberal MP Bronwyn Bishop all spoke, expressing their concerns about the sale, with Mr Costello telling the party room meeting that the sale would be closely examined by the Foreign Investment Review Board and later telling Parliament that in addition to scrutinising the proposed buyout under foreign investment law, the Government would ensure that the Qantas Sale Act was “strictly enforced”.

The Qantas Sale Act, which was the vehicle for the former Labor Government’s privatisation of the airline, imposes requirements on Qantas including majority Australian ownership, Australian incorporation, keeping its head office and main operations centre in Australia and having Australians make up two thirds of its directors.

Mr Costello said “I want to make it absolutely clear that all of those conditions will be enforced strictly and in full”.

Senior executives from the consortium bidding for Qantas, Airline Partners Australia, were also meeting Federal MPs in Canberra yesterday to explain their takeover proposal, with airline unions bringing a delegation of around 15 Qantas employees to Canberra today to lobby for conditions to be imposed on the takeover, with the Transport Workers Union and other airline unions having prepared a list of sale conditions including:

** No reduction in employment in Australia in Qantas airline functions or any related Qantas company as a result of deliberate management strategies.

** No reduction in pay or employment entitlements.

** No reduction in regional airline employment as a result of changes to regional networks.

** No loss of air services to regional destinations currently served by Qantas or its subsidiaries

Report by The Mole