The prime minister said it was a “very troubling day” and he grieved with workers facing an uncertain future, but moved to dampen expectations the government would offer a debt guarantee.
“The difficulty is this: what we do for one business, in fairness, we have to make available to all businesses,” Abbott told parliament on Thursday.
The government attempted to refocus the debate on changes to the Qantas Sale Act – which restricts foreign ownership of the airline – after Qantas posted its figures for the last six months of 2013. Qantas shares closed down 9% at $1.16.
The government would face difficulty getting Senate approval to remove the 49% foreign ownership cap, but Labor has not ruled out discussions about amendments to other thresholds outlined in the act.
Qantas unveiled job losses and route changes as it reaffirmed its argument it was competing at a disadvantage to Virgin, which is majority-owned by three foreign government-backed airlines.
The chief executive, Alan Joyce, said Qantas could compete “in any fair fight” and he would continue discussions with the government about levelling the playing field.
Australia’s national carrier cited a “deterioration in business performance and operating environment” for the need to reduce full-time-equivalent positions by 5,000, including 1,000 job cuts flagged in early December. More than 50 aircraft would be deferred or sold as part of a $2bn package of cost savings by 2016-17.
Joyce said he regretted the need for the job losses and they were no reflection on the performance of hard-working Qantas employees.
But the Transport Workers’ Union national secretary, Tony Sheldon, raised the prospect of strike action unless the government worked with the airline to find ways to avoid the job losses. “But if [the treasurer] Joe Hockey’s not prepared to do that, then it’s industrial action that the workforce should be considering,” Sheldon said.
In question time, the opposition sought to extract concrete details from the government about its plans to support Qantas. Abbott said the government was seeking to abolish the carbon tax, as it was costing Qantas more than $100m each year, and cut red tape.
“We will create a million new jobs within five years; we will create 2 million new jobs within a decade,” he said, reaffirming his election pledge.
“The challenge of government is not to guarantee every single existing job; the challenge of government is to ensure that there are new and better jobs available to the workers of Australia when they want them and when they need them.”
Asked about speculation on a standby debt facility, Abbott said the government had been in regular discussions with Qantas and would do what it could “consistent with responsible economic management”. The prime minister raised fairness as an objection to the proposal, saying: “Why should the government do for one what it is not prepared to do for all?”
He said amending the Qantas Sale Act would ensure the airline could “compete on a level playing field”.
“We want to ensure that Qantas is not competing against its rivals with a ball and chain around its leg. That’s what we are trying to ensure,” Abbott said.
The deputy prime minister, Warren Truss, defended his comments, in an interview with Fairfax Media, that Qantas wages and cost structures placed the company at a significant disadvantage to its competitors, including Asian and Middle Eastern carriers with pay rates that were “very much lower”.
Labor’s transport spokesman, Anthony Albanese, asked whether there was “any occasion in which workers lose their jobs in which this government doesn’t blame those very workers themselves”.
Truss said he was not blaming workers, or arguing for wage cuts.
The unions say they would prefer support in the form of a debt guarantee for Qantas, rather than changes to foreign ownership laws. But Virgin has argued a debt guarantee would give Qantas a “leg-up” worth at least $100m a year and would amount to “picking winners”.
The opposition leader, Bill Shorten, accused the government of acting too slowly to spell out a clear plan to assist Qantas, leaving the workers “in a state of insecurity”.
Shorten said he would be interested in discussing a proposal to guarantee the company’s debt. He indicated he would also be open to talks about raising the limit of 25% a single foreign investor was allowed to invest in the company.
Albanese said raising the 25% cap was included in the former Labor government’s aviation white paper, but noted that the total current level of foreign ownership was not “pushing up against the barrier” of 49%.
“It’s not the issue and today Mr Joyce made it clear what his priorities were,” Albanese said.
Joyce played down the prospect of imminent changes to the Qantas Sale Act, noting opposition from Labor and the Greens, which retain a combined majority in the Senate. Joyce noted the Palmer United party, which will have a powerful role in the new Senate from July, had also rejected the idea, indicating no changes to the act were realistic in the short term.
The independent senator Nick Xenophon called for an inquiry into Qantas’s finances, saying the government should not hand over any assistance if the current management remained in place.
“Alan Joyce should be ashamed of himself announcing thousands of job losses when the job that should be going is his,” Xenophon said.
The deputy leader of the Greens, Adam Bandt, warned against relaxing foreign ownership rules, saying “money and jobs could be on the next 747 flight to Singapore or Kuala Lumpur”.
On 13 February, Hockey raised expectations of government assistance for Qantas, when he said the airline met four “crucial tests” for government involvement in individual enterprises.
These tests were whether that business was subject to government-imposed restrictions that did not apply to competitors; whether the business was fundamental to the economy; whether other governments were actively supporting other players; and whether the company was trying to fix its own balance sheet.
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