This article is more than 6 years old

This article is more than 6 years old

The Abbott government has backed away from plans to remove the 49% foreign ownership cap on Qantas after accepting the move would not survive the Senate.



The government instead adopted Labor’s call for a minimalist proposal to remove two other existing limits on Qantas: the 35% cap on the level of ownership by a single foreign airline and the 25% cap on a single foreign owner.

In March the government paved the way for a political standoff over the future of the national carrier by deciding to remove part three of the Qantas Sale Act, which included the ownership caps. Part three also required two-thirds of Qantas directors to be Australian citizens and maintenance and catering for international flights to be primarily done in Australia.

The scale of the change was opposed by Labor, Greens and the Palmer United party (PUP), which had the power to vote down the bill.

The treasurer, Joe Hockey, confirmed on Wednesday the government would water down its planned changes after accepting they would not secure adequate upper house support.

“I think it is important that we try to get Qantas onto the same playing field as its competitors,” Hockey told the ABC.

“Again, the Senate chose not to back our legislation in this case but an alternative was proposed by the Labor party and we’re prepared to accept that to give some stability to the rules governing the ownership of Qantas.”

The opposition leader, Bill Shorten, said Qantas should remain majority Australian-owned and he was pleased with the government’s concession.

“The Abbott government voted to send thousands of Australian jobs overseas in the House of Representatives and this is an admission that they got this wrong,” Shorten said. “Labor will always fight to keep Qantas jobs in Australia and stop them from going overseas.”

Shorten said the "sensible measures" agreed between the government and Labor would allow Qantas to raise "quite a degree of foreign equity while still keeping Aussie jobs here".

A Qantas spokeswoman welcomed the deal but said the company would like the parliament to go further in removing restrictions, including the overall 49% foreign ownership limit.

"It's positive that there’s general agreement that Qantas is disadvantaged by the Sale Act and that change is needed," she said."While removing all restrictions that apply only to Qantas remains our preference for levelling the playing field, changing the 25% and 35% limits would represent an improvement on the status quo."

The lower house passed the government’s original bill in March, after a parliamentary debate that included opposition warnings of a break-up of the national carrier and ministers arguing against governing “by nostalgia and sentiment”.

The government wants to pass changes to the Qantas Sale Act this week before parliament rises for the winter break.

The deputy prime minister, Warren Truss, said the government still believed the best way to assist Qantas in its present financial difficulties was to ensure the airline was subject to the same investment and operational rules as its competitors including Virgin.

The amended bill would "go some way to easing restrictive ownership provisions" but was the only outcome that the Senate would pass "at this time", Truss said.