ADM/GrainCorp v Qantas

I thought Nikki Savva made a good point this morning by saying that Labor raising the issue of ADM/GrainCorp in the context of Qantas is as embarrassing to Labor as it is to the Coalition.

What are Shorten and Albo saying? The government made a mistake by not allowing the American firm ADM take over Graincorp, but Labor will resist any change to the Qantas Sale Act because Qantas might be taken over by a foreign company?  Que?  How can these two propositions sit side by side?

I did think the Treasurer made a mistake by knocking back ADM’s proposal, but at least the proposal could be made and there were processes for dealing with it.

In the case of Qantas, the Sale Act prevents airline companies holding any more than 35 per cent of the share capital in total.  Let’s face it, an offshore investor would only be interested in investing in Qantas if there is the possibility of control.  But all the standard processes (FIRB, Treasurer making call) would be in place in the event of a bid from an offshore company.

As for the complications of landing rights, gateway access, all these sorts of details can be worked through.  Virgin had to split itself to technically deal with these issues and that could equally happen with Qantas.

If Labor wants to defend the union racket which is supported by the Qantas Sale Act, I would be shutting up on ADM.

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6 Responses to ADM/GrainCorp v Qantas

  1. If Labor wants to defend the union racket which is supported by the Qantas Sale Act, I would be shutting up on ADM.

    Ah, but you are assuming thought actually took place before mouths were opened.

    This is not the case in the media bubble, where there is no past, and no future – just the eternal present.

    So no one can actually remember ADM, because that took place a few months ago – or, in meeja terms, the late Jurassic era.

    This new Liberal government’s ability to remember things that happened recently has certainly showed up the idiocy and mediocrity which abounds in the press gallery. Ahistorical, illiterate and totally incapable of reflection, independent ideas or critical thinking.

    I would like to blame iPods, but probably can’t.

  2. Leigh Lowe

    In the case of Qantas, the Sale Act prevents airline companies holding any more than 35 per cent of the share capital in total. Let’s face it, an offshore investor would only be interested in investing in Qantas if there is the possibility of control.

    Depending upon the spread of other shareholdings, 35% might be sufficient to exercise control over QAN.
    But who wants control over what is effectively an AWU, ALAEA and AIPA whipping boy?
    It is the union employment protectionism of the Act that needs to go to free Qantas from the treacle it is in.

  3. Tel

    Let’s face it, an offshore investor would only be interested in investing in Qantas if there is the possibility of control.

    Implying that Qantas would get somewhere if only the management were replaced, or in other words it’s all Joyce’s fault.

  4. Tel

    The point is that GrainCorp is already profitable and stable, in an industry that isn’t likely to be too badly disrupted in the near future. So if all you do is buy an asset, park your money and sit on it, you can do OK. Maybe even there’s room for squeezing a little more profit out of it by raising supply chain prices in places where farmers have few other choices.

    Then again, if all the foreign owners want to do is park their money and sit on an asset, they are doing nothing useful for Australia.

    Qantas on the other hand is not profitable, and foreigners already have the opportunity to park their money in Qantas but they have demonstrated a notable lack of interest in doing that. Implying that we are looking at a completely different situation.

  5. Nato

    I’ve been looking for a succinct way to put this, myself. So thanks, I’ll be using this post in conversation.

  6. will

    Then again, if all the foreign owners want to do is park their money and sit on an asset, they are doing nothing useful for Australia.

    Did you even think before posting that?

    So freeing up capital to be used elsewhere in the economy is ‘doing nothing useful’?

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