Labor has offered the government an olive branch on changes to laws dealing with the ownership of Qantas.
A non-government dominated Senate inquiry report into Qantas jobs has rejected a plan by Prime Minister Tony Abbott to allow the airline to take on majority foreign ownership.
But the Labor-drafted section of the report recommended the Qantas Sale Act be amended to enable foreign airlines to hold more than 35 per cent of Qantas shares in total or a single foreign investor to hold more than 25 per cent.
The report said these sub-limits “serve no useful purpose” but the ban on foreign interests owning more than 49 per cent of Qantas was still important.
The Labor senators also called on the government to offer the airline a debt guarantee.
“It would back them up and give them a better credit rating. It would allow them to become more competitive on their international routes,” Labor Senator Alex Gallacher told parliament on Thursday.
Qantas posted a six-month loss of $252 million in February, announcing it would shed 5000 staff, cut some routes and put some aircraft purchases on hold in a bid to save $2 billion.
But the airline says without changes to the law, or a debt guarantee, its operations were at risk due to stiff global competition and higher costs.
The coalition minority on the committee said the laws should be changed to allow majority foreign ownership of Qantas.
“This will harmonise the regulatory framework that all Australian airlines operate in and allow Qantas to compete on an even footing,” the Liberal senators said.
They rejected suggestions from unions that enabling Qantas to take on more foreign capital would inevitably lead to jobs being sent offshore.
It was a practical reality that airlines operating in Australia kept a significant proportion of their workforce onshore.
And, in any case, if Qantas is to remain an international Australian airline and abide by the Air Navigation Act it would need to have its operational base and head office in Australia and be substantially owned by Australians.
Liberal Senator Sean Edwards told parliament the inquiry was a “circus” staged to allow unions to have a crack at the airline.
“The loss of 5000 jobs is tragic but we don’t want to see the demise of the airline,” he said.
Labor senators accepted union arguments that allowing majority foreign ownership of Qantas would send jobs in maintenance, administration, catering and pilot positions offshore.
The Greens rejected the Labor compromise, but called for a wider range of options to be considered including a government stake in the airline.