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2013-2014
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
QANTAS SALE AMENDMENT BILL 2014
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Infrastructure and Regional Development
the Hon Warren Truss MP)
QANTAS SALE AMENDMENT BILL 2014
OUTLINE
The purpose of the Bill is to amend the Qantas Sale Act 1992 (`the Act') to remove the
foreign ownership and other restrictions that apply to Qantas but do not apply to other airlines
based in Australia.
Section 7 of Part 3 of the Act, as it currently stands, imposes restrictions on the foreign
ownership of Qantas. These require that:
total foreign ownership of Qantas is not to exceed 49 per cent;
ownership by a single foreign investor is not to exceed 25 per cent; and
aggregate ownership by foreign airlines is not to exceed 35 per cent.
In addition, the Act imposes other restrictions on Qantas' operations, including restrictions on
the makeup of the board of directors, the use of the name Qantas, the location of the head
office, place of incorporation, and the location of facilities that support its international
operations.
Sections 8 to 13 of Part 3 of the Act provide compliance and enforcement measures in relation
to these restrictions.
The Bill repeals Part 3 of the Act and thus removes the foreign ownership and other
restrictions applying specifically to Qantas.
The Bill also amends the Air Navigation Act 1920 to allow Qantas to be included in the
definition of an Australian international airline, meaning that Qantas will be subject to the
same regulatory framework, including foreign ownership limits, as other `Australian
international airlines'.
Qantas' international operations will remain subject to designation criteria in order to access
negotiated air traffic rights under Australia's international air service agreements. Australian
airlines seeking designation are required to demonstrate that:
they are substantially owned and effectively controlled by Australian nationals;
at least two-thirds of the Board members must be Australian citizens;
the Chairperson of the Board must be an Australian citizen;
the airline's head office must be in Australia; and
the airline's operational base must be in Australia.
Qantas will also remain subject to a number of other legislative requirements including the
Fair Work Act 2009, the Corporations Act 2001 and civil aviation safety regulations.
Financial impact statement
The Bill will have no financial impact.
Regulation impact statement
A detail-stage regulation impact statement has not been completed. An exemption has been
granted by the Prime Minister.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Qantas Sale Amendment Bill 2014
This Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act
2011.
Overview of the Bill
The Bill presents commercial opportunities for Qantas by removing foreign ownership and
other restrictions on its business. These opportunities are to be exercised within the current
regulatory environment applicable to other Australian airlines.
The Bill removes provisions under the Qantas Sale Act 1992 (QSA) that require certain
restrictions to be included in Qantas' articles of association to limit foreign ownership and
impose other related restrictions, as well as compliance and enforcement measures to ensure
Qantas abides by these requirements.
Specifically, the Bill removes Part 3 of the QSA which includes sections 7 to 13 of the Act.
Section 7 requires Qantas' articles of association to include a number of mandatory
requirements (`mandatory articles'). The requirements include limits on the issue and
ownership of Qantas shares (including limits on total foreign ownership and sub-limits on
ownership by a single foreign investor and aggregate ownership by foreign airlines) and other
restrictions on the makeup of the board of directors, the use of the name Qantas, the location
of the head office, place of incorporation and principal place of business. The Bill will also
remove sections 8 to 13 of the QSA, which contain compliance and enforcement measures in
relation to restrictions to the mandatory articles.
The Bill also amends the Air Navigation Act 1920 (ANA) to ensure the regulatory framework
applicable to other Australian airlines also applies to Qantas. The QSA imposes restrictions
on foreign ownership specific to Qantas. The ANA limits foreign ownership for all other
Australian international airlines to 49 per cent. With the removal of Part 3 of the QSA and
inclusion of Qantas under the ANA, the Bill will align Qantas' ownership restrictions with all
other Australian airlines.
Human rights implications
The amendments proposed by this Bill to the QSA and ANA do not engage any of the
applicable rights or freedoms. The Bill simply ensures Qantas is subject to the same
regulatory framework as other Australian airlines.
The Bill will give Qantas greater flexibility in its business structures. These opportunities
will be consistent with the opportunities available to other Australian airlines, and the Bill
will not impact Australia's broader workplace relations regulatory framework. The Bill will
therefore not impact on human rights relating to employment under articles 6(1), 7 and 8(1)(a)
of the International Covenant on Economic, Social and Cultural Rights.
Conclusion
This Bill is compatible with human rights as it does not raise any human rights issues.
Minister for Infrastructure and Regional Development, the Hon Warren Truss MP
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NOTES ON CLAUSES
Clause 1: Short Title
1. This clause is a formal provision specifying the short title of the Bill.
Clause 2: Commencement
2. This clause sets out the commencement dates of the Bill. Sections 1 and 2 of the Bill
would commence on the day on which the Bill receives Royal Assent. Sections 3 to 10
would commence on a day to be fixed by Proclamation. If the provision(s) do not
commence within the period of 6 months, they would commence on the first day after that
period.
Clause 3: Schedules
3. This clause sets out that there are two schedules to the Bill. The first schedule outlines the
amendments to the Act. The second schedule outlines the consequential amendments to
the Air Navigation Act 1920 (`the ANA').
SCHEDULE 1 -
Item 1 -
4. This clause repeals Part 3 of the Act, which requires Qantas include a range of restrictions
in its articles of association. The mandatory articles limit foreign ownership of Qantas
shares and impose other restrictions on Qantas' business. By repealing the Part, Qantas
will no longer be subject to the restrictions.
SCHEDULE 2 -
Item 1 -
5. This clause amends the definition of `Australian international airline' in the ANA to
remove the specific exclusion of Qantas. This ensures that Qantas can fall within the
definition of `Australian international airline' and be subject to the same foreign
ownership restrictions as other Australian international airlines, thereby creating a
consistent regulatory framework for all Australian international airlines.
Item 2 -
6. This clause removes the specific reference to Qantas from the definition of a foreign
airline. Qantas no longer needs a specific exclusion from this definition as it can be
considered as an `Australian international airline' for the purposes of the ANA.
Item 3 -
7. This clause removes the specific definition of Qantas as it is redundant.
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Item 4 -
8. This clause amends subsection 2(1) of the Act to remove references to Part 3 of the Act as
this Part will be repealed.
Item 5 -
9. This clause removes the definition of `mandatory article' from subsection 3(1) of the Act.
This definition is only used in Part 3 of the Act so, with repeal of Part 3, the definition is
redundant.
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