CONNELL: Tony Smith, something else Alan Joyce has said, as of Wednesday, not so much that the Carbon Tax was a significant factor in the Company’s prospects, or struggles I’d suppose you’d day. When it was introduced, neither Qantas or Virgin fought it very hard. Presumably like many business, they passed it onto their customers. We’re talking in the order of $7 to $9 per ticket, not significant. It seems since the capacity wars, they’ve decided to absorb it instead, Can the blame the Government on something that was a strategic business decision?
SMITH: Well, the point that’s being made is their Carbon Tax bill was $106 million. And if you look at Alan Joyce’s comments yesterday, he’s saying even if there was a debt guarantee, the benefit would be in the tens of millions of dollars. Now, we’ve had a three or four hour debate down there in the House of Representatives; the issues are very clear. Labor will just say no but for the sake of good policy and for the sake of Qantas, they need to stop and think, stop and think before the debates happens in the Senate. I mean Tom, as I looked around that chamber in the series of divisions, it was very obvious that the Labor Party of today is not the Labor Party of the early 1990s. This Labor Party here in Canberra wouldn’t privatise Qantas. They’ve got their foot on the accelerator and the gear in reverse, and that’s the situation that Qantas faces. And if you want to protect jobs and Qantas, give them a level playing field.
JONES: I’ll get back to the level playing field. Your frontbench of today is not the frontbench it was of two years ago before the election, because both Warren Truss and Joe Hockey were saying don’t get rid of the Qantas Sale Act restrictions because Qantas will be broken up and it won’t be in the national interest, jobs will go offshore and a foreign government will come in and buy it. We don’t think that’s in the national interest. They were right then; they are wrong now.
CONNELL: I’d like to go to the part of the Government being reluctant to go guarantor, essentially expose the taxpayers to some sort of risk. It obviously goes into the wider argument about the Age of Entitlement and so on. What about something a bit tangential; the novated lease tax break? How does that fit into this? This is a tax break that according to the Government during the lead-up to the election was vital to a lot of car dealerships being able to stay in business, at a cost of $1.4 billion to the taxpayer. Why should that still exist?
SMITH: Well for the reasons we outlined at the time. I mean that was…
CONNELL: A lot of those reasons were to prop up those car dealerships. Now they’re only profitable because of this tax break, then maybe that should be removed?
SMITH: What Labor did during the election, I mean Labor’s conceded it after the election, was they took a sudden decision, as they did with employee share schemes about five years ago, that snap-froze the industry, I mean that’s what they did. But what we’re looking at here with Qantas, I mean Stephen can have a quote war, I can bring up David Epstein’s piece yesterday, a former chief of staff to a former Labor prime minister and a former senior executive at Qantas. Everyone’s examined this thoroughly. Qantas has rightly said that the Act that was bought in when they were privatised is holding them back, and it’s clear as anything they need that fixed and they need the Carbon Tax abolished. $106 million in just the last reporting period and that is holding them back significantly. Now Labor’s saying no to both, they’re saying no today. For the sake of Qantas, they better sleep on it and think about saying yes to Qantas.
CONNELL: Stephen Jones…
JONES: It’s holding them back from two things: breaking the Company up and sending jobs offshore. Forgive me if I think it’s not in the national interest if we let those two things occur.
SMITH: Have you flown Virgin?
JONES: Yes I have actually. I think it’s an excellent airline… backed by three airlines.
SMITH: Oh and do they get their catering from Iceland, do they?
JONES: No no, they get their catering from Australia and from other places as well. This Act mandates keeping the headquarters, catering, certain maintenance functions, reservation functions here in Australia. I happen to think it’s worthwhile going in to bat for Aussie jobs.
CONNELL: The jobs that it would make sense to possibly shift would be more so, I believe, the maintenance jobs. But just going to one of Labor’s solutions, or at least what they want to do, this Senate committee or inquiry with The Greens, Does it strike you as odd that a group of parliamentarians, or senators, are going to get in a CEO and chairman, albeit ones that are under some stringent criticism, and get them to outline what exactly what’s happening? Have suggestions for them how to run their business? I’ve never seen a Senate committee in full unison by the way; I mean it could be a bit of a horse designed by committee. What will come out of this? Are you going to give a blueprint for Qantas for how to run their business?
JONES: It’s an inquiry into a piece of legislation and that is what the Senate is doing just about every week of the year, so there’s nothing extraordinary about that. It’s obviously the CEO who is coming to front on behalf of the Company. Can I say, a CEO asking for changes in the law or certain concessions here and there should be expected to be able to front a parliamentary committee and explain their case. Nothing extraordinary about that, it happens just about every week of the year. Smithy and I have sat on many committees doing exactly that.
CONNELL: There is talk from certainly The Greens and Nick Xenophon that they want a forensic examination of Qantas. Is that going to be the path that Labor wants to go down, to really lay everything on the table, look at the operations, make recommendations for the Company and the Board?
JONES: Nick Xenophon and The Greens don’t sit in our Party Room, they don’t send directions to us. We’ll make our own minds up on how we conduct ourselves. This is an inquiry into the impacts of this legislation…
CONNELL: So you don’t want…
JONES: …that is what we are supporting, that is what we are investigating.
CONNELL: …your aim and what you’re going to seek in the terms of reference that when the committee meet is not to lay out, not have the books opened up, not to cross-exaqmine Alan joyce or Leigh Clifford?
JONES: I’m not saying the books and the accounts of Qantas aren’t relevant but what I am saying Tom is that there should be a full and proper investigation about what the consequences of these amendments to the Sale Act to Qantas and its employees.
SMITH: What Tom is getting at is, I mean, yes there are bills inquiries and yes, we’ve sat on them and we’re always pleasant to each other. But Tom’s point is there’s the prospect of this being used to have an investigation into Qantas, into a private company. Now, look, this is not government owned. And I’m personally…
JONES: There’s a proposition before the House that we are required to make significant decisions about the future of…
SMITH: That’s about the legislation but it’s not about senators saying ‘right, we want to audit the Company” and all the rest of it. I mean, they can go and by a share, they would be a shareholder, or if they want to be on the Board, let them do it.
CONNELL: Tony Smith, we did hear from the Prime Minister and the Treasurer late last year that they want a discussion about what to do with Qantas, about this foreign ownership. We didn’t hear, did we, a really strong case from them before the real woes started in the last week or so, and we had indications from the Treasurer that a loan guarantee was up there. Has this case been mad emphatically enough and for long enough that fi they want really long-term, heart-felt community support, isn’t it up to them to have perhaps something more in depth? Perhaps this sort of inquiry is going to get this…
SMITH: No, I think you’ve had three months of deep consideration on the issues. I think what that shows is the Treasurer and the Prime Minister looked at this very, very carefully. And as the Prime Minister said last week, if we’re not prepared to provide something to other companies in similar situations, we shouldn’t be prepared to provide it in this case. And personally, I very strongly think that’s the right approach, Otherwise, where does it end? I’m amusingly on the unity ticket with David Epstein on this, who was Kevin Rudd’s chief of staff.
CONNELL: Alright, we’re going to leave Qantas there, if we can, because as you said, where does it end? And we don’t want to talk about Qantas for the entire show or week. Profit shifting. Now there’s a bit more bipartisan support here. I want to delve into why you think it’s happening, when we talk about these complex things such as transfer pricing but the headline article today about Apple paying 50 cents in the thousand dollars, whose fault is this? The US is getting dragged kicking and screaming, it seems, to any sort of changes.
JONES: WellI think this is absolutely immoral behaviour, what Apple is doing. They’re hitting us at both ends. They’re ripping us off with overcharging us for things like iTunes downloads; Australia pays one of the highest rates in the world for the same product of any other country. So they’re ripping us off on the way in and they’re ripping us off on the way out. I think it’s absolutely immoral. They can’t say this is…
CONNELL: What about the US as well?
JONES: You can’t say this is specifically about Australia because they’re not paying tax anywhere. Here is a company which is conspiring to ensure it pays tax nowhere in the world. That’s immoral.
CONNELL: Tony Smith, Joe Hockey has been pretty strong about this topic in raising it at the G20. Does he have to say to the US you’ve got to shift on this?
SMITH: Well he rightly put it up there in lights at the finances ministers’ meeting…
JONES: And squibbed it.
SMITH: No, come on, there’s a G20 leaders’ meeting in November, it is up there on the top of the agenda…
CONNELL: The agreement though, I believe, was to talk about it more; not the strongest agreement as yet.
SMITH: Yeah but look, this is a jurisdictional problem, quite obviously, and that’s why you need a world solution, as best you can. And it is a highly complex area that’s affecting every country. But if you don’t get support basically across the board, it’s very hard to fix. Now, we’re taking a strong stand on it. You’ve had the finance ministers’ meeting, you’ve got the G20 leaders’ meeting. What I thought was interesting in that article, although Apple haven’t said anything, was some of the quotes that Joe must’ve got from some authorities in the US. So it’s a live issue for all economies and it is in many respects, the number one tax problem.
JONES: Can I make this observation, Tom? Joe Hockey has walked tough… has talked tough and walked soft on this one. One of their first acts when they came into government was to repeal a piece of legislation which was directed at this, so not being entirely consistent on this particular matter. More needs to be done, you have our full support on this, but you can’t say something and then walk the other way…
CONNELL: 20 seconds, Tony Smith.
SMITH: I’ll be more efficient than my Senate colleagues, okay. That is a misrepresentation. It was a piece of legislation that would have had detrimental effects…
CONNELL: We’ll look forward to Joe Hockey being very strong on that in the upcoming leaders’ meeting, as you say, or Tony Abbott being very strong at the leaders’ meeting, I should say. Stay with us on Lunchtime Agenda, back with more after the break.
CONNELL: Welcome back to Lunchtime Agenda. With me today, we have our political panel: Liberal MP Tony Smith and Labor frontbencher Stephen Jones. We might go the Climate Change Authority report. It didn’t get a lot of attention last week. It indicated that it wanted to increase the target, the emissions reduction target, from five to 15 per cent. Stephen Jones, Labor wants to be on the right side of history here, that’s what they’ve being saying in terms of a price on carbon. Is there a problem though, and there is a herd of credentials, that they did water down the overall policy towards the end of your term. We’ve got Hazelwood on fire at the moment, still chucking out brown coal emissions. Does that really hurt your creditability, Labor’s, on this?
JONES: No, look, politics is the art of the possible mate. You’ve been around this building a while, you know about the enormous battles we had on our hands reaching a sensible policy to address the bipartisan…
CONNELL: So in an ideal world, you still would have decommissioned those dirty coal-fired power plants?
JONES: We looked at all of that, you know the history of those, we looked at all of that. In an ideal world, you do what you can get through. There is no doubt there are problems with those brown coal-fired plants down in Victoria. Greg Hunt agrees with that. I agree with that. He’s been on the record talking about the importance of addressing that.
CONNELL: When it comes to the symbolism as well, I was interested in some comments from Chris Bowen on SKY News yesterday. He said when it comes to the Carbon Tax, the impact ion Qantas, the realistic part about it is that the Senate is going to repeal it anyway on 1 July. On July 1 would be when the current Government can repeal it anyway if Labor agrees. So is he just saying that “yes, this is a token stance”?
JONES: No, look, it’s important that you stand for something, mate. We went to the last election that we would agree to a repeal of the Carbon Tax as long as it’s replaced with a sensible, market-based solution. Lowest price of abatement, lowest cost to consumers, lowest cost to the economy. We still stand by that, we haven’t changed our mind with the lapse of six months, that is still what we believe in. If we’d had done a backflip on that, you’d be sitting in that chair today saying “what does Labor stand for?”.
SMITH: He wouldn’t; he’d be saying that you’d respected the mandate that the Government got…
JONES: You’ve got a mandate and I’ve got a mandate, mate. I’m sticking by mine.
SMITH: Well let me throw one at you. After the 2007 election, you had a mandate to repeal WorkChoices.
SMITH: That was the central issue of that campaign, just as the Carbon Tax was the central issue of this campaign.
CONNELL: When does it become the central, versus a secondary, because arguably climate change was a pretty big part of 2007 as well, possibly the second-biggest issue. So do you get one issue a campaign? Is it incumbent upon the leader to do what Tony Abbott has done and make it: “this is what this is a referendum on”?
SMITH: I think of all the issues in the last parliament, we couldn’t have been clearer on our view of the Carbon Tax, we couldn’t have been. My point I was about to make: in 2007 and 2008, when Stephen came into the Parliament, he made the point along with all of his colleagues that we had to respect the mandate the new government had got. And we did, we did. We introduced WorkChoices, we lost government. Clearly it was the central issue of that campaign. And, I mean…
JONES: So to follow that argument through to its logical consequence, whoever wins the election, everyone else ought not turn up because… you just do whatever the government of the day says. I haven’t vacated the things I believe in and my colleagues haven’t either.
SMITH: When you’re in government, you want us to respect your mandate…
JONES: I think the mandate theory leads you down a dead end; it doesn’t take you very far.
CONNELL: But if you do say that you’ve got one central mandate, what was the election about, you could argue that, I suppose, for and draw parallels between WorkChoices and the Carbon Tax, but where does that leave, let’s say, a secondary issue, as I said perhaps the environment in 07, perhaps the Mining Tax now. Does that mean that all players can be obstinate on the Mining Tax?
SMITH: Well I didn’t say it was the sole issue; I said it was obviously up there in lights. I mean, if you, Tom, were on one of the other talk shows, and they said: “right, you covered the 2010 election, “as you did, “what were the big issues?”, you’d run off Carbon Tax, Mining Tax, and a couple of others.
JONES: What about the mandate to put your legislation before the Parliament, I don’t argue with that. We have a mandate to say: “well, we agree with this and we don’t agree with that” and that’s what I’ll do as the person who stood on my platform…
CONNELL: What about the headline out of this Climate Change Authority report, advising the emissions target should go from five to 15 per cent? Is that something that’s gained much traction within any joint Party Room sittings, is that something anyone’s mentioning?
SMITH: I don’t think it’s even been mentioned. I mean, the emissions reduction target of both the parties have been pretty clear.
CONNELL: Stephen Jones, you’re not keen for any shift? Is Labor not taking much notice of this report either?
JONES: I think the difference between Labor and the Coalition is we’ve always been mindful of. and accepting of. the advice of the scientists.
CONNELL: Right, for a bit on that though, is this 15 per cent target gaining much traction though? Can we expect the Labor…
JONES: To be honest, the report’s been out for a week now. We haven’t delved through it. I’ll be surprised though, I’ve got to say Tom. There’s a significant shift in our policy. Politics is the art of the possible. It’s been hard enough getting to where we are now today. They are arguing against everything we’ve done and trying to pull it apart. It’s going to be very hard trying to keep what we’ve got, let alone extend it.
CONNELL: Alright, I might move on to what I grant is a slightly delicate subject, so we’ll all be careful. But Tony Burke’s comments on the Speaker, now he said he is obviously guided by various principles which everybody is. But he was asked about how he believes the Speaker is conducting things, how the 44th Parliament is going. He said that he wouldn’t comment on that, but as a general rule, he says that referees should not be involved in sledging on the field. Stephen Jones, dangerous territory? Something you agree with?
JONES: Hard to disagree with the principle when put like that. I’ve always had a pretty fair dealing with this and all previous speakers. But sometimes I look at some of the rulings and I must say I raise my eyebrows and say from where I’ve sat, that wasn’t how I saw the things unfolding. I guess when we watch the cricket, we do the same thing.
CONNELL: I’m certainly guilty of that one; some of those DRS reviews…
JONES: Unfortunately you don’t get a DRS review in the Parliament.
CONNELL: No you don’t. But when it comes to this, I mean, do Labor just have short memories? When’s the last time an opposition came out and said “gee, the speaker’s gone”…
SMITH: I’ll let Stephen keep talking.
JONES: Here’s what I do recall. When we were in government and when either Anna Burke or Harry Jenkins were the speaker, it wasn’t unusual for somebody from our side to get turfed if they did the wrong thing. Now, sure it’s only been six months, but I don’t recall someone being ditched from their side of the Parliament. Maybe I just haven’t been there long enough yet?
CONNELL: Tony Smith?
SMITH: Look, the Speaker is doing a fantastic job. I mean, what Tony Burke is…
CONNELL: It’s certainly a difficult job, isn’t it?
SMITH: It really is a very difficult job and you’re never going to please the whole Parliament, but she’s very accomplished, very across the detail. What you’re seeing with Tony Burke, from our side as we sit there in Question Time, is his sensitivity about his role. I mean, at Question Time it’s two halves. You’ve got Tony Burke, and then Anthony Albanese working out when he’s going to come to his rescue, and he…
CONNELL: Tony Burke has thrown some verbal grenades of his own over the years. Short memory?
JONES: We and the Speaker; I’ve heard the Speaker herself say this, we have a very robust parliament, there is no doubt about that. This is not a place for wilting wall flowers. The Speaker herself was as good as the best of them when she wasn’t sitting in the big chair
CONNELL: So she’s ready to…
JONES: Here’s what I will say. I think it is important for democracy and for the Government, in particular, is not only the Speaker impartial but is seen to be impartial. I think that’s incredibly important.
CONNELL: The Speaker is ready to fulfil her very difficult role again, I’d better let you two go and get to Question Time. Thank you again for your time on SKY News today.