Qantas Take Note of Answers

I rise to take note of answers by Senator Sinodinos and Senator Johnston regarding the aviation industry in Australia and the Australian government’s response. A lot of the focus today has been on Qantas, and that is understandable. Qantas has gone from, in the same period last year, a before-tax profit of $140 million to, this year, a loss of $252 million. Nearly half that—$106 million—was due to the carbon tax. Members opposite are very loudly saying, ‘Ah, but Qantas are saying that is not important.’ If you look carefully you will see that Qantas said, ‘What is important to us is levelling the playing field against the competition, because removing the carbon tax benefits all the airlines.’ So they did not actually say that the carbon tax was not important. They said that it was not their top priority because they wanted to level the playing field against their competition.

A clearer picture of the impacts of the carbon tax probably comes from Virgin and John Borghetti. Last year they had a before-tax profit of some $25 million. It has decreased now to almost $50 million. Of that, $27 million—over half—is because of the carbon tax. John Borghetti said that the best thing that the government and the opposition could do for airlines is remove the carbon tax. If the ALP and the Greens are really concerned about jobs and the future of the aviation industry, they should get out of the way and let the coalition implement its election promise to scrap the carbon tax.

The aviation industry more broadly is struggling. You have to ask why. It has not come about just in the last few months since the coalition formed government. In fact, the chief financial officer of Rex said that:

The entire aviation industry is financially haemorrhaging right now and approaching collapse.

Indeed, we saw Brindabella Airlines go into receivership in December last year with some $37 million of debt and 140 direct jobs lost, which means for its 12 aircraft there will be a whole raft of flow-on jobs in the maintenance and support sectors lost. That is because the ALP did not actually deliver with their white paper a strategic direction or an effective reform for the regulatory environment that the aviation sector works under. It is those things—in conjunction with things such as the carbon tax—that are helping to create the environment that is making it so difficult for the aviation sector here to get ahead.

That is why I welcome the coalition’s promise of reforming the CASA board. We see that the coalition will be increasing the size of board to bring skills of aviation engineering and operations onto that board. We also see reform of the regulatory sector, which is undergoing an inquiry right now.

But this is not only about the aviation sector. The opposition are making lots of comments about loss of jobs in the auto sector. If we look at the time frame for Ford, Holden and Toyota, it was not the coalition at the helm when the conditions were set for those job losses. In fact, Mike Devereux, the then general manager of Holden, said that one of the biggest issues is when global companies like GM start talking about sovereign risk in countries like Australia. The decisions the former government made to introduce things such as the carbon tax as well as reverse policy on programs that the car industry was relying on have resulted in that sovereign risk.

But, more importantly, particularly to the people of South Australia, Labor’s approach has impacted on things such as mining. In August 2012, BHP decided to halt their Olympic Dam development despite the fact that, as recently as this year, Andrew McKenzie, their CEO, was reported in the media as showing the graphs demonstrating that copper supply will start decreasing by about 2016 and that demand will increase—so that the whole copper-uranium mine at Olympic Dam had huge potential. Why did it not go ahead? It was because one of the most expensive parts of copper extraction is electricity. That mine has a 100-year life, according to DMITRE. So in 2050, just when BHP could be expected to start to recoup some of their upfront investment, the carbon tax that the ALP brought in was going to go up to $350 a tonne. Clearly if electricity is your highest cost then the carbon tax is going to make that unviable.

As the people of South Australia approach an election on 15 March, they need to have a good look at what the ALP do. They need to make the decision that they will not have four more years of the ALP at a state level because they have seen a very clear example of what the ALP at the federal level have done to jobs in this country through job-destroying taxes such as the carbon tax—not to mention their refusal to get out of the way and let us implement our election commitment now. (Time expired)