Qantas had its plea for a debt guarantee rejected, and we’re beginning to find out why.
The AFR says two investment banks, accounting firm PwC, Treasury and the Department of Infrastructure and accounting told the government it wasn’t necessary.
Qantas, based on the report, also shot itself in the foot after it issued a statement rejecting claims made by the Treasurer that it had been severely impacted by a $106 million carbon tax bill.
Joe Hockey, according to the report by Philip Coorey, read this statement out on Monday night at a party meeting, saying if $106 million doesn’t worry them — the airline probably isn’t in that much trouble.
Keep in mind that politically, it’s not that simple. One reason Qantas may have rebuffed the claim is that if it wants the Sale Act changed, it needs Labor and The Greens to pass it through The Senate.
If it confirmed it had been impacted by a large bill, due to the law introduced under former prime minister Julie Gillard, Labor would be far less likely to consider voting the new legislation through.
On the other hand, rejecting claims by the Treasurer was a big risk. There’s been speculation he was Qantas’ biggest supporter in Cabinet, with reports suggesting the Qantas situation was leading to a rift between him and the prime minister.
Theoretically, changing the Qantas Sale Act is good. But unless Labor and The Greens change their minds, its purely symbolic.
Now that this measure has been announced, Abbott will be relying on public perception to get the legislation through.
His measure means the international arm of Qantas will never be majority foreign-owned, and that if Qantas domestic continues to flounder, the ball was in someone else’s court.
There’s more here.
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