Interim report Rural and Regional Affairs and Transport References Committee - The Senate - APO

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The Senate

Rural and Regional Affairs and
Transport References Committee

Future of Australia’s aviation sector, in the
context of COVID-19 and conditions post
pandemic

Interim report

                                     March 2021
© Commonwealth of Australia

ISBN 978-1-76093-209-1

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivs
4.0 International License.

The details of this licence are available on the Creative Commons website:
https://creativecommons.org/licenses/by-nc-nd/4.0/.

Printed by the Senate Printing Unit, Department of the Senate, Parliament House, Canberra.
Members

Chair
Senator Glenn Sterle                                        ALP, WA

Deputy Chair
Senator Susan McDonald                                   NATS, QLD

Members
Senator Nita Green                                         ALP, QLD
Senator Alex Gallacher                                      ALP, SA
Senator Peter Whish-Wilson                                  AG, TAS
Senator Gerard Rennick                                      LP, QLD

Participating Members
Senator Tony Sheldon                                      ALP, NSW

Secretariat
Gerry McInally, Committee Secretary
Paula Waring, Principal Research
Officer Joshua Wrest, Senior Research
Officer Kaitlin Murphy, Senior Research
Officer Michael Fisher, Research Officer
Jason See, Administrative Officer

PO Box 6100                                      Telephone: (02) 6277 3511
Parliament House                                 Fax:          (02) 6277 5811
CANBERRA ACT 2600                                Email: rrat.sen@aph.gov.au

                                           iii
Contents

Members ............................................................................................................................................. iii
List of Recommendations ............................................................................................................... vii

Chapter 1—Background ..................................................................................................................... 1

Chapter 2—Government support for aviation during COVID-19............................................. 9

Chapter 3—The impact of the COVID-19 pandemic on the aviation workforce .................. 27

Chapter 4—Initial committee view on the aviation support package .................................... 61

Government members - additional comments ............................................................................ 65

                                                                           v
List of Recommendations

Recommendation 1
3.156 The committee recommends that JobKeeper, or wage subsidies modelled off
      JobKeeper, be continued by the Australian Government to support aviation
      workers and organisations at the cessation of the JobKeeper scheme in
      March 2021. This support should be tailored to the economic conditions and
      government restrictions, including international border restrictions.

Recommendation 2
3.157 The committee recommends that Australian workers who pay tax and are
      employed by companies wholly owned by foreign sovereign entities, and
      Australian local government-owned entities should be eligible to apply for
      any wage subsidies or other Australian Government support programs for
      the aviation industry after the cessation of JobKeeper.

Recommendation 3
3.158 The committee recommends that the Australian Government consider
      making any further support to the aviation sector conditional on companies
      agreeing to:
      not further weaken the job security of employees;
      maintain existing regional services; and
      implement moratoriums on the payment of dividends, executive bonuses
        and executive pay increases.

                                       vii
Chapter 1
                                         Background

Referral of inquiry
1.1     On 9 November 2020, the following matters were referred to the Senate Rural
        and Regional Affairs and Transport References Committee (the committee) for
        inquiry and report by 31 March 2021:
              The future of Australia’s aviation sector, in the context of COVID-19 and
              conditions post-pandemic, having particular regard to:
              (a) the importance of Australia’s aviation sector in supporting the
                  economic and social wellbeing of all Australians;
              (b) the immediate and long-term impacts of the COVID-19 pandemic
                  response on all aspects of the Australian aviation sector;
              (c) the immediate and long-term impacts of the COVID-19 pandemic
                  response on all sectors that rely on aviation (e.g. tourism);
              (d) the adequacy of government industry support and procurement and
                  programs for the social and economic well-being of workers for all
                  sections of the aviation industry to survive the downturn caused by
                  the pandemic;
              (e) the immediate and long-term employment landscape within
                  Australia’s aviation sector;
              (f) what policy and practical measures would be required to assist the
                  industry to recover in the medium term; and
              (g) any related matters.
1.2     Following a resolution of the committee on 3 February 2021, and in accordance
        with the motion agreed by the Senate on 18 February 2021,1 the reporting date
        for the inquiry was extended to 13 May 2021.

Conduct of the inquiry
1.3     The committee advertised the inquiry on its website and invited submissions
        from a range of relevant stakeholders, including government agencies,
        industry, community groups and individuals. Details regarding the inquiry
        and associated documents are available on the committee's webpage.
1.4     To date, the committee has received 32 submissions. This included 31 public
        and name withheld submissions which are published on the committee's
        website.
1.5     In addition, the committee held public hearings on:
         28 and 29 January 2021 in Brisbane;
         10 February 2021 in Sydney; and

1   Journals of the Senate, No. 88, 18 February 2021, p. 3112.

                                                      1
2

        3 and 4 March 2021 in Canberra.

Purpose of this report
1.6    It should be noted that this interim report is focussed on the immediate impact
       of COVID-19 on the aviation workforce. It sets out the committee's early
       findings on the adequacy of government support for aviation workers
       responsible for maintaining the viability of the aviation sector through the
       pandemic.
1.7    While this report outlines some of the major issues faced by the aviation sector
       as a result of COVID-19, it is not intended to provide an exhaustive
       examination of the many issues raised with the committee in written
       submissions, correspondence and hearings. The committee will report on these
       issues in greater detail in its final report.

Acknowledgments
1.8    The committee thanks all organisations and individuals who contributed to the
       inquiry by preparing written submissions and appearing before the committee
       at public hearings to give evidence.

References to Hansard
1.9    In this report, references to Committee Hansard are to proof transcripts. Page
       numbers may vary between proof and official transcripts.

Structure of the report
1.10 This interim report is divided into three chapters. Chapter 1 provides an
     overview of the committee's conduct as well as a brief background of
     Australia's aviation sector.
1.11 Chapter 2 outlines the Australian Government's support for aviation during
     COVID-19. In particular, it examines JobKeeper and relevant issues, such as
     eligibility criteria and the impact these have had on the aviation workforce.
1.12 Chapter 3 discusses the impact of the COVID-19 pandemic on the aviation and
     tourism sectors, in terms of job losses, stand downs and the resultant loss of
     skills. It also outlines the need for ongoing support to sustain Australia's
     aviation sector and ensure it is ready to lead economic recovery once travel
     restrictions are lifted.

An overview of Australian aviation
1.13 The following section2 provides an overview of Australia's aviation sector,
     including the importance of Australian aviation as well as discussing the
     impacts of COVID-19.

2   The following section is based on information contained in Department of Infrastructure,
    Transport, Regional Development and Communications, Submission 20; Department of
3

Importance of Australian aviation
1.14 The aviation sector makes a major contribution to Australia's economy, as well
     directly and indirectly supporting the employment of thousands of
     Australians. Submitters emphasised the role of aviation as 'a vital linchpin to
     the health of the Australian economy'.3 For example, in 2018 the aviation sector
     directly contributed around $20 billion to the economy, or 1 per cent of gross
     domestic product (GDP).4
1.15 In particular, the aviation sector is integral to freight supply chains. Air freight
     comprises a small proportion of Australia’s international freight task by mass
     (0.1 per cent) but represents around 20 per cent of trade by value. In 2019, the
     air and space transport industry directly contributed around $10 billion to the
     economy, or 0.5 per cent of GDP.5 Furthermore, total Australian international
     air freight recently surpassed 1 million tonnes annually.6
1.16 In its Skills Forecast published in 2019, the Aviation Industry Reference
     Committee, of the overarching Australian Industry and Skills Committee,
     revealed prior to COVID-19 Australia's aviation industry employed more than
     93 000 people across five main subsectors.7 These are domestic commercial
     aviation, international commercial aviation, general aviation, air-freight
     transport and aviation support infrastructure.8
1.17 In addition, Mr James Goodwin, Chief Executive, Australian Airports
     Association, estimated that Australia's airports maintained the jobs of more
     than 200 000 Australians.
1.18 Furthermore, EY analysis for the Business Council of Australia estimated that
     international aviation supports around 515 000 jobs:
        248 000 jobs associated with education services for international students;

    Infrastructure, Transport, Regional Development and Communications, The Future of Australia's
    Aviation Sector: Flying to Recovery, Issues Paper 2020, August 2020; Australian Competition and
    Consumer Commission, Airline competition in Australia, September 2020.
3   Mr Scott McDine, Head of ITF Sydney, International Transport Workers' Federation, Proof
    Committee Hansard, 3 March 2021, p. 2.
4   Department of Infrastructure, Transport, Regional Development and Communications, The Future
    of Australia's Aviation Sector: Flying to Recovery, Issues Paper 2020, August 2020, p. 4.
5   Department of Infrastructure, Transport, Regional Development and Communications, Submission
    20, p. 2.
6   Department of Infrastructure, Transport, Regional Development and Communications, Submission
    20, p. 2.
7   Mr James Goodwin, Chief Executive, Australian Airports Association, Proof Committee Hansard,
    29 January 2021, p. 15.
8   Australian Industry and Skills Committee, Aviation, 30 October 2020, https://nationalindustry
    insights.aisc.net.au/industries/transport/aviation (accessed 9 February 2021).
4

           129 000 jobs associated with freight transport;
           75 000 jobs associated with international holiday makers;
           32 000 jobs associated domestic leisure travel; and
           31 000 jobs associated with business travel.9
1.19 In addition to aviation's contribution to the economy in terms of employment
     and contribution to GDP, it also acts as a multiplicative factor in the
     productivity of many other Australian sectors, facilitating business,
     employment, education, tourism and connectivity. For example, Mr Scott
     McDine, Head of ITF Sydney, International Transport Workers' Federation,
     informed the committee that '[w]e rely on aviation to support our valuable
     education and tourism industries, and to support primary producer
     products'.10
1.20 Similarly, Ms Teri O'Toole, Federal Secretary, Flight Attendants Association of
     Australia, stated that:
              Obviously we're a pretty broad country and we need to be able to get
              around it and we do need the infrastructure of aviation. It's not just
              tourism; absolutely everything relies on it, whether it's freight, whether it's
              cargo, whether it's getting from the western states to the east coast.11
1.21 Submitters highlighted the following benefits delivered by the aviation sector:
           access to global markets;
           exploitation of geographical comparative advantages;
           promoting economies of scale; and
           increased investment opportunities.12
1.22 The Australian Council of Trade Unions (ACTU) submitted that these benefits
     'would likely add up to tens of billions of dollars per year'.13
1.23 Aviation also provides a critical connection between Australian communities
     and the world, with international aviation being vital to Australia’s tourism
     sector. In 2019-20, tourism directly contributed around $50 billion to
     Australia’s GDP (2.5 per cent of GDP) and around 620 000 jobs (4.8 per cent of
     the workforce).14

9    Department of Infrastructure, Transport, Regional Development and Communications, Submission
     20, pp. 3-4.
10   Mr Scott McDine, Head of ITF Sydney, International Transport Workers' Federation, Proof
     Committee Hansard, 3 March 2021, p. 1.
11   Ms Teri O'Toole, Federal Secretary, Flight Attendants Association of Australia, Proof Committee
     Hansard, 3 March 2021, p. 55.
12   Australian Council of Trade Unions, Submission 13, pp. 3-5.
13   Australian Council of Trade Unions, Submission 13, p. 4.
14   Department of Infrastructure, Transport, Regional Development and Communications, Submission
     20, p. 2.
5

1.24 Moreover, the aviation sector serves as a crucial enabler and provides vital
     support to the agriculture, manufacturing and mining sectors:
         some agricultural exports are highly dependent on aviation, with almost
          80 per cent of seafood (by value) exported by air;
         revenue from goods manufactured in Australia and exported by air is
          approximately $42 billion, or 11.7 per cent of manufacturing exports; and
         Australians regularly fly from major population centres to remote mine sites
          for work, and thousands more fly-in fly-out workers serve the oil and gas
          industry.15
1.25 Some remote communities are long distances from major regional centres or
     capital cities, making regular road transport time consuming and expensive. A
     number of submitters noted as a result of the vast size of the continent that
     Australians are heavily reliant on aviation to travel domestically. 16
1.26 Domestic aviation plays an important role servicing the needs of regional and
     remote communities across Australia by providing access to key services,
     including transport and freight, search and rescue operations, law enforcement
     and business and recreational travel. By way of example, the total number of
     passenger movements through regional airports increased from around
     9 million in 1985 to around 26 million in 2019.17 In addition, Mrs Peta
     Rutherford, Chief Executive Officer, Rural Doctors Association of Australia,
     emphasised that the continued viability of regional and rural airports is
     essential to the provision of, and access to, healthcare.18
1.27 Without these services the social and economic existence of regional and
     remote communities and many regional industries are at risk.
1.28 The ACTU also highlighted a number of 'immensely valuable economic
     benefits' provided to regional areas as a result of aviation.19 These included:
         reducing the tyranny of distance;
         lowering the costs of doing business;
         increasing competition in regional markets due to greater access to
          alternative suppliers;
         enhanced innovation due to access to a wider range of skilled workers;

15   Department of Infrastructure, Transport, Regional Development and Communications, Submission
     20, p. 2.
16   See, for example, Mr Scott McDine, Head of ITF Sydney, International Transport Workers'
     Federation, Proof Committee Hansard, 3 March 2021, p. 1.
17   Department of Infrastructure, Transport, Regional Development and Communications, Submission
     20, p. 2.
18   Mrs Peta Rutherford, Chief Executive Officer, Rural Doctors Association of Australia, Proof
     Committee Hansard, 4 March 2021, p. 45.
19   Australian Council of Trade Unions, Submission 13, p. 5.
6

         improved ability to deal with temporary shortages of workers or of goods;
         increased investment opportunities catalysed by familiarity with the
          potential place of investment, potential clients and collaborators; and
         allowing for more efficient interaction between different levels of
          government.20
1.29 In addition to noting the critical importance of the aviation sector generally,
     Mr Andrew Jaggers, Deputy Secretary, Commercial and Government Services,
     Department of Finance, argued that '[i]t will also play a significant role in the
     economic recovery from COVID'.21

Impacts of COVID-19 on Australia's aviation sector
1.30 COVID-19 and associated travel restrictions have had a significant impact on
     the aviation sector. In response to the pandemic, Australian governments
     implemented health measures including quarantines, interstate and
     international border closures, limits on non-essential travel and stay at home
     orders. These measures, along with uncertainty for consumers, saw an
     unprecedented decline in air travel.22
1.31 Reduced demand saw domestic flights in April 2020 fall by around 97 per cent
     from pre-COVID levels, while international flights into Australia largely
     ceased due to a ban on arrivals of non-Australian citizens.23 The Department of
     Infrastructure, Transport, Regional Development and Communications
     informed the committee that:
         the number of domestic passengers carried on regular public transport
          (RPT) flights declined by around 84 per cent between October 2019 and
          October 2020;
         total domestic RPT load factors declined from almost 85 per cent in October
          2019 to below 70 per cent in October 2020; and
         passenger movements at regional airports declined by around 66 per cent
          between October 2019 and October 2020.24
1.32 In a report commissioned by the International Transport Workers' Federation,
     the McKell Institute found that, worldwide, by mid-April 2020 an estimated
     12 400 aircraft had been placed into storage and passenger revenues for 2020

20   Australian Council of Trade Unions, Submission 13, p. 5.
21   Mr Andrew Jaggers, Deputy Secretary, Commercial and Government Services, Department of
     Finance, Proof Committee Hansard, 4 March 2021, p. 12.
22   Department of Infrastructure, Transport, Regional Development and Communications, Submission
     20, p. 5.
23   Department of Infrastructure, Transport, Regional Development and Communications, Submission
     20, p. 5.
24   Department of Infrastructure, Transport, Regional Development and Communications, Submission
     20, p. 5.
7

        were forecast to be down $314 billion on the previous year, a drop of 48 per
        cent compared to around 16 per cent during the Global Financial Crisis.25
1.33 In addition, COVID-19 has had a significant impact on the operations of major
     airlines, which are the aviation sector's key employers. This includes the
     following:
         The Qantas Group (Qantas) announced in March 2020 a 90 per cent
          reduction to international capacity and 60 per cent to domestic capacity,
          with around 150 aircraft being grounded.26 It also announced that 20 000
          employees would be stood down until at least May 2020. Qantas reduced
          domestic operations to 5 per cent of capacity during April and had only
          recovered to 15 per cent of capacity through June 2020.
         In August 2020, Qantas announced a $2.7 billion statutory loss for financial
          year 2020, following a 91 per cent drop in underlying profit before tax,
          $1.4 billion in write-downs and $642 million in restructuring and
          redundancy costs.27 It explained that the stand down of 20 000 employees
          would continue, and that 4 000 of at least 6 000 redundancies were expected
          to be finalised by end-September 2020. Qantas also announced it would
          outsource its ground handling operations, resulting in 2500 employees
          across 10 airports, some of whom has worked for Qantas for over a decade,
          losing their livelihoods.
         Virgin Australia (Virgin) announced in March 2020 a 90 per cent reduction
          to domestic capacity, with 125 aircraft grounded. It announced that 80 per
          cent of its workforce would be temporarily stood down.28 Virgin also
          entered voluntary administration in April 2020, with an aim to restructure
          and refinance the airline. It announced in June 2020 that Bain Capital had
          entered into an agreement with the administrator, Deloitte, to become the
          new owner of the airline.
         Rex Airlines made announcements in March 2020 that it would reduce its
          capacity by 45 per cent and subsequently suspend services entirely.29
          However, after the federal and state governments provided assistance

25   McKell Institute, Australian Aviation and COVID-19: Analysis of support and impact, January 2021,
     p. 4.
26   Qantas Group, Qantas group update on coronavirus response, 17 March 2020.
27   Qantas Group, Qantas Group FY20 financial results—navigating exceptional conditions, 20 August
     2020.
28   Virgin Australia, Virgin Australia Group makes further capacity reductions in response to COVID-19, 25
     March 2020.
29   Rex Airlines, 'Rex announces reductions to network', Media Release, 19 March 2020; Rex Airlines,
     'Rex to cease all passenger air services with the exception of Queensland', Media Release,
     23 March 2020.
8

           measures, Rex Airlines announced in April 2020 that it would run two to
           three return flights per week to all destinations on its network.30
1.34 It is expected that the aviation industry’s recovery will be much slower than
     the downturn, due to the ongoing risk of domestic border closures, the
     staggered reopening of international travel routes and the impacts of a broader
     economic downturn. Even once restrictions are fully lifted, overall demand for
     air travel is expected to be depressed by low consumer and business
     confidence.31
1.35 Notably, in January 2021, Professor Brendan Murphy, Secretary of the
     Department of Health, predicted international travel won't resume until 2022. 32
     Meanwhile, the latest International Air Transport Association forecast expects
     global passenger traffic to return to 2019 levels in 2024 at the earliest, with
     domestic markets recovering faster than international services.33

30   Australian Competition and Consumer Commission, Airline competition in Australia, September
     2020, p. 4.
31   McKell Institute Victoria, Australian Aviation after COVID-19. The urgent need for an Australian
     aviation plan, June 2020, pp. 11-12.
32   Mr Tom McIlroy, 'Travel restart unlikely in 2021: Health boss', Australian Financial Review,
     18 January 2021, https://www.afr.com/politics/federal/travel-restart-unlikely-in-2021-health-boss-
     20210118-p56uyu (accessed 15 February 2021).
33   International Air Transport Association, Outlook for Air Transport and the Airline Industry,
     24 November 2020, p. 11; International Air Transport Association, 2020 End-year report,
     24 November 2020, pp. 3-4.
Chapter 2
         Government support for aviation during
                       COVID-19

Overview
2.1    Particular industries have borne the brunt of the public health measures
       implemented to contain COVID-19, with aviation amongst the first to feel the
       full economic impact of the lockdown. As noted in Chapter 1, border closures,
       limits on non-essential travel and stay at home orders have caused an
       unprecedented decline in air travel. In response, the Australian Government
       implemented a range of measures to assist the aviation sector, including
       temporary programs to subsidise the cost of operating a minimum domestic
       aviation network.
2.2    This chapter explores measures put in place by the Australian Government to
       support the aviation sector in response to COVID-19. In particular, it
       concentrates on evidence received by the committee in relation to JobKeeper,
       including eligibility criteria and the impact of these on the aviation workforce.

Overview of financial support for aviation in response to COVID-19
2.3    The Australian Government's COVID-19 economic response encompassed a
       number of measures to support sectors particularly impacted by COVID-19
       and associated travel restrictions.
2.4    On 28 March 2020, two new grant programs were announced as part of the
       Australian Government's $1 billion COVID-19 Relief and Recovery Fund: the
       Regional Airlines Funding Assistance program and the Regional Airline
       Networks Support (RANS) program:1
        Between April and December 2020, $100 million was made available to
         deliver last-resort cash flow assistance to regional airlines that provide
         essential services to regional and remote locations through the Regional
         Airlines Funding Assistance program.2
        The committee understands that of the $70.6 million that has been paid out
         through the Regional Airlines Funding Assistance program, $53.9 million

1   The Hon Michael McCormack MP, Deputy Prime Minister, 'Additional new support for critical
    regional aviation services through COVID-19', Media Release, 28 March 2020.
2   Department of Infrastructure, Transport, Regional Development and Communications, Submission
    20, p. 14.

                                                9
10

          was paid to Rex Airlines,3 despite its offering a relatively small share of
          daily seats to regional ports pre-COVID-19, compared to the Qantas Group
          (Qantas) and Virgin Australia (Virgin), both of whom were ineligible for the
          program.
         The committee heard that Rex Airlines received more than 76 per cent of the
          total funding allocated under the Regional Airlines Funding Assistance
          program, which provided last-resort cash flow assistance, despite Rex
          Airlines recording in its 2020 Annual Report an increase in revenue, and an
          underlying profit, excluding the $53.9 million received through the
          program.4
         The RANS program is providing support to ensure minimum air
          connectivity to over 110 airports in regional and remote Australia from
          March 2020 to 28 March 2021.5
2.5     On 17 March 2020, the Australian Government announced relief measures for
        the Qantas, Virgin and regional airlines affected by COVID-19 (the Australian
        Airline Financial Relief Package). Overall, the Australian Airline Financial
        Relief Package provided $715 million in direct and indirect support to airlines,
        through fee-waivers, changes to operations charges and some limited direct
        financial assistance to 31 December 2020.6 The Department of Infrastructure,
        Transport, Regional Development and Communications (Department of
        Infrastructure) informed the committee that, as at 30 November 2020, the total
        benefit to industry in direct rebates for fuel excise and domestic security costs
        was $126.3 million. Additionally, the total charges waived for 1300 domestic
        flight operators came to $145.8 million.7
2.6     The following month, the Australian Government announced the $165 million
        Domestic Aviation Network Support (DANS) program to subsidise the cost of

3    Mr Richard Wood, First Assistant Secretary, International Aviation, Technology and Services,
     Department of Infrastructure, Transport, Regional Development and Communications Proof
     Committee Hansard, 4 March 2021, pp. 8-9.
4    Mr John Sharp, Deputy Chairman, Rex Airlines, Proof Committee Hansard, 3 March 2021, pp. 26-27;
     Patrick Hatch, 'Rex's airline miracle: revenue grows thanks to government handouts', The Sydney
     Morning Herald, 1 September 2020, https://www.smh.com.au/business/companies/rex-s-airline-
     miracle-revenue-grows-thanks-to-government-handouts-20200831-p55r29.html              (accessed
     17 March 2021)
5    Department of Infrastructure, Transport, Regional Development and Communications, Submission
     20, p. 12. As at the end of November 2020, more than 16 600 flights had been supported by RANS,
     enabling more than 245 000 passengers to travel and maintaining critical air freight links around
     Australia.
6    The Hon Michael McCormack MP, Deputy Prime Minister, 'Relief package for Australian aviation
     industry', Media Release, 18 March 2020, https://minister.infrastructure.gov.au/mccormack/media-
     release/relief-package-australian-aviation-industry (accessed 3 March 2021).
7    Department of Infrastructure, Transport, Regional Development and Communications, Submission
     20, p. 14.
11

        operating a minimum domestic aviation network.8 The DANS program
        provided shortfall subsidies to four domestic commercial airlines to operate
        flights along the top 50 domestic routes from 16 April 2020 to 31 January 2021.9
2.7     Further measures put in place by the Australian Government to support the
        aviation sector are outlined below:
         The $66 million Regional Airports Screening Infrastructure program was
          introduced to provide a funding contribution towards the minimum
          necessary capital and initial operational costs of enhanced security
          screening at eligible regional airports.10
         Under the International Freight Assistance Mechanism (IFAM), $669 million
          has been committed to 30 June 2021 to maintain established supply-chains
          that support industries delivering high-value, time-sensitive, perishable and
          vital imports and exports. According to the Department of Infrastructure,
          IFAM funding supported transport of over 252 000 tonnes of air freight and
          reconnected supply chains to around 67 international destinations between
          April and 9 December 2020.11
         Federally-leased airports were provided temporary relief and deferrals from
          land tax-equivalent payments if they provided rent relief to commercial
          tenants during the crisis.12

International comparison
2.8     Many jurisdictions introduced support measures for aviation in response to
        COVID-19. The Organisation for Economic Co-operation and Development
        (OECD) reported that two-thirds of that support consisted of direct aid
        (subsidies, loans, equity and cash injection).13 In addition, countries such as

8    The Hon Michael McCormack MP, Deputy Prime Minister, 'Federal Government guarantees
     domestic aviation network', Media Release, 16 April 2020, https://minister.infrastructure.gov.au/mcc
     ormack/media-release/federal-government-guarantees-domestic-aviation-network (accessed 3
     March 2021).
9    Department of Infrastructure, Transport, Regional Development and Communications, Aviation,
     last     updated     5     November       2020,     https://www.infrastructure.gov.au/aviation/
     #:~:text=Domestic%20Aviation%20Network%20Support%20(DANS)&text=DANS%20provides%20
     shortfall%20subsidies%20to,(BITRE%202018%2D19) (accessed 18 February 2021).
10   The Hon Michael McCormack MP, Deputy Prime Minister, 'Regional airports land $66 million in
     grant funding',   Media    Release, 18 December 2020,            https://minister.infrastructure.
     gov.au/mccormack/media-release/regional-airports-land-66-million-grant-funding (accessed 3
     March 2021).
11   Department of Infrastructure, Transport, Regional Development and Communications, Submission
     20, pp. 12-17.
12   Department of Infrastructure, Transport, Regional Development and Communications, Submission
     20, pp. 12-17.
13   Organisation for Economic Co-operation and Development, COVID-19 and the aviation industry:
     Impact and policy responses, 15 October 2020, p. 4.
12

        Australia, Singapore and the United Kingdom (UK) adopted wage subsidies to
        help employers maintain a connection with their workers.
2.9     Submitters raised concern regarding the level of support provided by the
        Australian Government to the aviation sector, compared to that of other
        nations. In a report commissioned by the International Transport Workers'
        Federation, the McKell Institute indicated that aviation support from the
        Australian Government totals $2.7 billion, or approximately 0.136 per cent of
        gross domestic product (GDP), compared to a mean of 0.24 per cent of GDP in
        support provided by countries analysed by the McKell Institute.14 According to
        the OECD, the Australian Government's support for the aviation industry
        ranks 18 out of the 28 countries it analysed.15
2.10 Additionally, the McKell Institute cited analysis undertaken by the World
     Bank regarding the size of support for the aviation industry, relative to the
     overall size of the relevant governments' support by way of economic stimulus
     in the context of COVID-19. This study found that Australia ranks poorly on
     this comparison, with only 0.33 per cent of our stimulus package being spent
     on aviation, compared to 2.4 per cent of the stimulus provided by both the
     United States of America (US) and New Zealand.16
2.11 Mr Scott McDine, Head of ITF Sydney, International Transport Workers'
     Federation, argued that the Australian Government should exceed the support
     packages of other governments for Australia's aviation industry, including
     airlines.17 In particular, he noted that the Singaporean government had
     provided the highest tier of support to aviation, aerospace and tourism
     workers under its Jobs Support Scheme (JSS), in recognition of the importance
     of aviation. This originally amounted to 75 per cent of average take-home
     weekly wages and has since been reduced to 50 per cent.18
2.12 Mr McDine contended that this higher rate of wage subsidy had significantly
     reduced the number of aviation job losses. He observed that Australian airlines
     have experienced job losses at 31.1 per cent, compared with 19.5 per cent in the
     US and 15.6 per cent in Singapore.19

14   International Transport Workers' Federation, Submission 18, p. 9.
15   Organisation for Economic Co-operation and Development, COVID-19 and the aviation industry:
     Impact and policy responses, 15 October 2020, p. 5.
16   International Transport Workers' Federation, Submission 18, p. 10.
17   Mr Scott McDine, Head of ITF Sydney, International Transport Workers' Federation, Proof
     Committee Hansard, 3 March 2021, p. 2.
18   Mr Scott McDine, Head of ITF Sydney, International Transport Workers' Federation, Proof
     Committee Hansard, 3 March 2021, p. 2.
19   Mr Scott McDine, Head of ITF Sydney, International Transport Workers' Federation, Proof
     Committee Hansard, 3 March 2021, p. 2.
13

2.13 The committee inquired whether there was a correlation between the level of
     financial support provided to the Australian aviation sector, relative to most
     OECD countries, and the proportion of job losses, relative to other countries.
     Mr Brine, First Assistant Secretary, Environment, Industry and Infrastructure
     Division, Department of the Treasury, accepted the existence of the
     correlation.20
2.14 The Australian and International Pilots Association (AIPA) also praised the
     responses of other governments. Specifically, Captain Murray Butt, President,
     AIPA, stated that:
              We have seen Singapore invest over A$20 billion into its airline. The US
              has been supporting the aviation industry such that all airline staff have
              been on 75 per cent of their salary. In the UK, staff have been on 80 per cent
              of their salary, and New Zealand is paying its airline staff 50 per cent of
              their salary until 2022. They recognise the importance of the sector and the
              retention of skills crucial for their infrastructure.21
2.15 The committee notes that the US' COVID-19 relief bill which passed on
     10 March 2021 included an additional $23 billion in support for the aviation
     sector. The measures to date have reportedly saved 27 000 jobs at American
     Airlines and United Airlines alone.22

JobKeeper
2.16 The Australian Government responded to the first phase of the pandemic with
     three economic support packages.23 The third economic support package,
     announced on 30 March 2020, established a new wage subsidy in the form of
     JobKeeper, which initially provided a $1500 fortnightly wage subsidy to
     eligible employees of businesses that could demonstrate a sufficient decline in

20   Mr Matthew Brine, First Assistant Secretary, Environment, Industry and Infrastructure Division,
     Department of the Treasury, Proof Committee Hansard, 4 March 2021, p. 15.
21   Captain Murray Butt, President, Australian and International Pilots Association, Proof Committee
     Hansard, 3 March 2021, p. 57.
22   Niraj Chokshi, 'Relief Bill Gives Airline and Airport Workers a Reprieve, for Now', New York
     Times, 11 March 2021, https://www.nytimes.com/2021/03/11/business/stimulus-bill-airline-
     jobs.html (accessed 16 March 2021).
23   See, for example, the Hon Scott Morrison MP, Prime Minister, and the Hon Josh Frydenberg MP,
     Treasurer,    'Economic     stimulus    package',   Media     Release,  12     March    2020,
     www.pm.gov.au/media/economic-stimulus-package (accessed 4 February 2021); the Hon Scott
     Morrison MP, Prime Minister, and the Hon Josh Frydenberg MP, Treasurer, 'Supporting
     Australian     workers      and     business',    Media     Release,   22     March     2021,
     www.pm.gov.au/media/supporting-australian-workers-and-business (accessed 4 February 2021);
     the Hon Scott Morrison MP, Prime Minister, and the Hon Josh Frydenberg MP, Treasurer, '130
     billion JobKeeper payment to keep Australians in a job', Media Release, 30 March 2020,
     www.pm.gov.au/media/130-billion-jobkeeper-payment-keep-australians-job (accessed 4 February
     2021).
14

        revenue during the pandemic.24 JobKeeper was designed to help keep
        Australians employed as large parts of the economy went into 'hibernation'. It
        provided payments that enabled businesses to retain their employees where
        COVID-19 restrictions on movement reduced revenues.
2.17 For many Australian businesses and workers, the fallout from public health
     measures was immediate. By April 2020, the number of employed Australians
     had fallen by a total of 594 300—including 220 500 from full-time employment
     and 373 800 from part-time employment.25 828 300 people were unemployed
     and the underemployment rate had increased to 13.7 per cent.26
2.18 From April 2020, JobKeeper was supporting 850 000 organisations to pay
     3.3 million working Australians a wage to live on in the absence of normal
     business operating conditions.27 According to Mr Brine this included:
              …over 300 unique entities in the air and space transport… covering on
              average around 31 000 employees per month and delivering assistance of
              around $250 million to the sector [during the first quarter of the extension
              phase of JobKeeper].28
2.19 On 21 July 2020, the Australian Government announced that due to the
     ongoing COVID-19 crisis, JobKeeper would be extended by six months until
     28 March 2021, from the original end date of 27 September 2020. From
     28 September 2020, the payment rate was reduced and a lower payment rate
     introduced for those who worked fewer hours.29 The JobKeeper payment is
     currently due to finish on 28 March 2021.
2.20 The majority of submitters voiced support for JobKeeper. For example, Mr
     Scott Connolly, Assistant Secretary, Australian Council of Trade Unions
     (ACTU), stated that '[t]here's no question that JobKeeper has played a

24   The Hon Scott Morrison MP, Prime Minister, and the Hon Josh Frydenberg MP, Treasurer, '130
     billion JobKeeper payment to keep Australians in a job', Media Release, 30 March 2020,
     www.pm.gov.au/media/130-billion-jobkeeper-payment-keep-australians-job (accessed 4 February
     2021).
25   Select Committee on COVID-19, First interim report, December 2020, p. 70.
26   Australian     Bureau    of    Statistics, Labour  Force,  Australia,  14    May       2020,
     www.abs.gov.au/statistics/labour/employment-and-unemployment/labour-force-australia/apr-
     2020#:~:text=Seasonally%20adjusted%20estimates%20for%20April,Employment%20decreased%20t
     o%2012%2C418%2C700 (accessed 10 February 2021).
27   Department of the Treasury, The Jobkeeper Payment: Three-month review, June 2020, p. 17.
28   Mr Matthew Brine, First Assistant Secretary, Environment, Industry and Infrastructure Division,
     Department of the Treasury, Proof Committee Hansard, 4 March 2021, p. 16.
29   For further information see The Treasury, Economic Response to the Coronavirus - JobKeeper Extension,
     https://treasury.gov.au/coronavirus/jobkeeper/extension (accessed 4 February 2021).
15

        significant role in enabling the industry to survive and get to where it is
        today'.30
2.21 Ms Jayne Hrdlicka, Chief Executive Officer and Managing Director of Virgin,
     stated that JobKeeper had been essential for Virgin and the thousands of
     employees it had stood down throughout the pandemic:
              JobKeeper has meant that we have been able to keep the family together
              and retain thousands and thousands of skilled jobs that would otherwise
              not have been possible and to protect the integrity and resilience of our
              operations in an environment where the pandemic and border closures
              have caused demand to be highly variable, with no ability to plan and
              predict what tomorrow will bring.31
2.22 Similarly, Mr John Sharp, Deputy Chairman, Rex Airlines, commented that
     JobKeeper has 'enabled us to keep people stood down, but paid, and it enables
     us to bring people back into the workforce when things are picking up'.32
2.23 Mr Alistair Reid, Member, Australian Aviation Ground Handling Industry
     Alliance, stated that the $66 million received by Menzies Aviation through
     JobKeeper 'has enabled us to keep the staff attached to the business'.33
2.24 Captain Louise Pole, President, Australian Federation of Air Pilots, argued that
     JobKeeper has allowed a number of employees to maintain a connection with
     their employer, albeit with a reduced income in many cases. She called for the
     Australian Government to extend JobKeeper and argued that without it 'you
     will find more and more pilots considering leaving the industry
     permanently…'.34
2.25 Mr Daniel Gschwind, Chief Executive, Queensland Tourism Industry Council,
     told the committee that 'some businesses will not be able to survive without
     some additional support'. He recommended that Australian businesses
     severely impacted by international border closures and domestic disruption be
     given access to a wage subsidy program beyond 28 March 2021.35

30   Mr Scott Connolly, Assistant Secretary, Australian Council of Trade Unions, Virgin Australia,
     Proof Committee Hansard, 29 January 2021, p. 24.
31   Ms Jayne Hrdlicka, Chief Executive Officer and Managing Director, Virgin Australia, Proof
     Committee Hansard, 29 January 2021, p. 2.
32   Mr John Sharp, Deputy Chairman, Rex Airlines, Proof Committee Hansard, 3 March 2021, p. 23.
33   Mr Alistair Reid, Member, Australian Aviation Ground Handling Industry Alliance, Proof
     Committee Hansard, 3 March 2021, p. 38.
34   Captain Louise Pole, President, Australian Federation of Air Pilots, Proof Committee Hansard,
     28 January 2021, p. 3.
35   Mr Daniel Gschwind, Chief Executive, Queensland Tourism Industry Council, Proof Committee
     Hansard, 29 January 2021, p. 29.
16

2.26 The Flight Attendants' Association of Australia (FAAA) agreed that JobKeeper
     had saved jobs and helped employees maintain their connection with their
     employer. In particular, it shared the results of surveys undertaken in relation
     to the impact of JobKeeper on cabin crew in 2020 and 2021 which found that
     JobKeeper had positively impacted 96.9 per cent of survey respondents.36
2.27 Aviation workers also emphasised the vital role that JobKeeper has played in
     keeping them connected with employment. Ms Anna-Maria Saglimbeni told
     the committee that '[t]he support the government has provided through the
     JobKeeper has kept my family afloat, financially, and has been a lifeline for
     me'.37
2.28 Ms Teri O'Toole, Federal Secretary, FAAA, relayed the following statements
     from the FAAA's members:
          'My wife and I are both flight attendants. The shutdown has had huge
           financial ramifications for us. We have both managed to find some casual
           work. However, this is on a week-by-week basis. Without JobKeeper we
           would not have survived'.
          'We're struggling to put food on the table and pay bills and our mortgage as
           my husband is also a pilot and he is stood down. Without JobKeeper we
           would not have been able to make our financial commitments. JobKeeper
           has also had a positive impact on our mental health'.
          'I've been able to remain in employment at Qantas and keep food on the
           table. Without this support, I would have to have moved back to South
           Australia and possibly be split from my husband whilst I am pregnant with
           our first child'.38
2.29 Meanwhile, Ms Tanana asserted that '[s]hould JobKeeper be discontinued, our
     employer will have to discontinue the employment of thousands more staff'.
     She argued that '[JobKeeper] is an investment in the families and livelihoods of
     people in the industry and in this country. We need the funding to help us
     through'.39

Eligible employees
2.30 While the majority of submitters supported a large-scale wage subsidy, a
     number of submitters highlighted problems with JobKeeper: namely, the
     exclusion of many aviation workers from the scheme. 40 For example, Mr James

36   Flight Attendants' Association of Australia, Submission 22, p. 9.
37   Ms Anna-Maria Saglimbeni, Private capacity, Proof Committee Hansard, 10 February 2021, p. 7.
38   Ms Teri O'Toole, Federal Secretary, Flight Attendants Association of Australia, Proof Committee
     Hansard, 3 March 2021, p. 54.
39   Ms Claudine Tenana, Delegate, United Services Union, Proof Committee Hansard, 10 February 2021,
     p. 7.
40   See, for example, Flight Attendants' Association of Australia, Submission 22, p. 7.
17

        Goodwin, Chief Executive, Australian Airports Association (AAA), noted that
        while eligible airports are thankful for JobKeeper:
              …there are many organisations in the value chain of aviation that go
              unseen: ground handlers, people working behind the scenes in baggage
              handling, people in refuelling, people making sure that the airfield is safe
              and secure. Many of that workforce are going unseen by those who are on
              an aircraft, but they are vital. They are essential workers and, regardless of
              the company structure, they are workers in Australia and paying taxes in
              Australia. It's important that they are supported during this period.41
2.31 In its first interim report, the Select Committee on COVID-19 noted that in the
     initial design of the program the Australian Government made some
     deliberate exclusions primarily on the basis that, at a projected imposition of
     $130 billion on public finances, they needed to impose limits on the cost of the
     package.42 It received evidence that many of these exclusions severely
     impacted workers and industries who had been hardest hit by the pandemic. 43
2.32 These exclusions cost thousands of Australian aviation workers access to a
     crucial lifeline during an unprecedented jobs crisis, including:
         casual employees who could not demonstrate 12 months of continuous
          employment with the same employer;
         all employees of local government (194 000 people)—including workers in
          council-operated airports; and
         all employees of companies owned by foreign governments—including
          several thousand dnata workers.

Casual employees
2.33 Some submitters questioned the Australian Government's decision to exclude
     casuals who had not been with their employer for at least 12 months.44
2.34 The committee heard evidence that the vast majority of aviation workers are
     employed on a permanent part time or casual basis. For example, the
     Transport Workers' Union (TWU) submitted that Swissport, a ground and
     cargo handling services provider, employs all of its workers, save for senior
     managers, on a permanent part-time or casual basis.45 It also noted that '[p]art-
     time work has also become the dominant form of employment at all companies

41   Mr James Goodwin, Chief Executive, Australian Airports Association, Proof Committee Hansard,
     29 January 2021, p. 16.
42   Select Committee on COVID-19, First interim report, December 2020, p. 75.
43   Select Committee on COVID-19, First interim report, December 2020, p. 76.
44   See, for example, Australian Council of Trade Unions, Submission 13, p. 11; International Transport
     Workers' Federation, Submission 18, p. 19.
45   Australian Services Union, Submission 19, p. 9; Transport Workers' Union, Submission 23, p. 6.
18

        across ground handling operations'.46 For example, approximately 90 per cent
        of the Qantas Ground Services workforce is either part-time or casual.47
2.35 Ms Marian Harris, a cabin cleaner employed by Cabin Services Australia, told
     the committee that this exclusion disproportionately impacted the aviation
     sector, where '95 per cent of [dnata's] workers are casual'.48
2.36 The ACTU observed that '[m]any [aviation workers] were casuals who did not
     meet the tenure requirement the government put in place'. 49 In addition, Mr
     Connolly drew the committee's attention to what he termed 'fundamental
     failings' with the package:
              In this sector, in particular, there are some challenges with the transitory
              nature of some of the workers—not by their choice, but by the design of
              their employment relationships being casual and insecure. They've been
              disadvantaged in terms of their capacity to receive the benefits.50
2.37 Furthermore, in its report Australian Aviation and COVID-19, the McKell
     Institute noted that some elements of the JobKeeper design were severely
     deficient: 'namely, its lack of application to companies owned by a sovereign
     entity, such as dnata, and the exclusion of recently hired casuals'. 51
2.38 The Treasurer had previously justified excluding more than one million casual
     workers from JobKeeper using the rationale that 'at $130 billion… we had to
     draw the line somewhere. This is a massive call on the public purse and it is a
     debt that the country will pay for years to come…'.52

Local government
2.39 Local governments employ approximately 194 000 people, all of whom were
      excluded under JobKeeper eligibility rules.53 The committee heard evidence
      that the exclusion of local governments from JobKeeper disproportionately
      affected council-operated airports and the communities they serve in regional
      and remote Australia.54

46   Transport Workers' Union, Submission 23, p. 8.
47   Transport Workers' Union, Submission 23, p. 8.
48   Ms Marian Harris, Private capacity, Proof Committee Hansard, 10 February 2021, p. 7.
49   Australian Council of Trade Unions, Submission 13, p. 11.
50   Mr Scott Connolly, Assistant Secretary, Australian Council of Trade Unions, Proof Committee
     Hansard, 29 January 2021, p. 24.
51   International Transport Workers' Federation, Submission 18, p. 19.
52   The Hon Josh Frydenburg MP, Treasurer, 'Interview with David Speers, Insiders, ABC', Transcript,
     12 April 2020, https://ministers.treasury.gov.au/ministers/josh-frydenberg-2018/transcripts/inter
     view-david-speers-insiders-abc-0 (accessed 10 February 2021).
53   Select Committee on COVID-19, First interim report, December 2020, p. 77.
54   Australian Local Government Association, Submission 15, [p. 2].
19

2.40 The majority of registered airports in Australia are owned and operated by
     local government.55 Indeed, more than 200 regional, rural and remote
     council-owned airports provide aviation services to their populations, as well
     as providing vital services to local health, education and other providers and
     local businesses.56
2.41 The Australian Local Government Association (ALGA) submitted that '[t]hese
     airports are needed for everything from passenger transport to [] tourism,
     postal services, air ambulances, emergency services operations, crop dusting,
     surveying and flight training'.57 It further noted that the impact of COVID-19
     has severely impacted the revenue that local governments draw from their
     airports and, in some cases, this has put their ongoing operation at risk.58
2.42 Mr Adrian Beresford-Wylie, Chief Executive, ALGA, argued that it was a
     'bitter disappointment' that local government employees were excluded from
     JobKeeper.59 He pointed out that councils are not motivated by profit, but
     instead 'undertake a lot of activities in thin markets where there aren't private
     sector suppliers' to provide benefit to their communities.60
2.43 The AAA contended that the exclusion of employees of local governments
     from JobKeeper eligibility has resulted in skilled workers leaving the aviation
     industry. It argued that this represents a significant loss of competency, skills
     and experience in airport operations and will slow the restart of the aviation
     industry through the need to re-certify, re-qualify and re-accredit staff
     returning to the sector.61
2.44 In addition, Mr Goodwin called for JobKeeper to be extended to cover local
     government staff employed in the aviation sector.62 He argued that if
     JobKeeper were not extended there is a 'very real threat that many airport

55   Australian Airports Association, Australia's regional airports: facts, myths and challenges, November
     2021, p. 56; Australian Local Government Association, Submission 15, [p. 1].
56   Australian Local Government Association, Submission 15, [p. 2].
57   Australian Local Government Association, Submission 15, [p. 2].
58   Australian Local Government Association, Submission 15, [p. 2].
59   Mr Adrian Beresford-Wylie, Chief Executive, Australian Local Government Association, Proof
     Committee Hansard, 4 March 2021, p. 34.
60   Mr Adrian Beresford-Wylie, Chief Executive, Australian Local Government Association, Proof
     Committee Hansard, 4 March 2021, pp. 36-38.
61   Australian Airports Association, Submission 16, Attachment 1, p. 8.
62   Mr James Goodwin, Chief Executive, Australian Airports Association, Proof Committee Hansard,
     29 January 2021, p. 15.
20

        operations would become unsustainable' and 'it would be a devastating blow
        to many regional areas if it were to occur'.63
2.45 Mr Trevor Willcock, Chief Executive Officer, Mildura Airport, provided
     insight into the experience of council-owned regional airports. He explained
     that Mildura Airport was corporatised in 2008, but remains owned by Mildura
     Rural City Council. As a result, it did not qualify for JobKeeper. Mr Willcock
     revealed that Mildura Airport can only absorb further operational losses for a
     further 6 to 12 months before all cash reserves have been depleted.64 He
     contended that an extension to JobKeeper for a further 12 months to all airport
     employees, regardless of ownership structures, is '[v]ery essential' and 'would
     go a long way in keeping us compliant, safe and open'.65
2.46 The AAA estimated that more than 70 per cent of staff at regional airports
     have been placed on reduced hours, been re-deployed or made redundant.66
2.47 Similarly, the ACTU noted that most regional airports are council-owned and
     are not well-capitalised or self-sustaining in terms of direct fees received for
     use. It submitted that '[w]hat this means is that ultimately shortfalls are met
     through general council revenue, meaning that regional airports are
     predominantly supported by ratepayers'.67

Australian companies owned by foreign sovereign entities
2.48 Employees of companies owned by sovereign entities were also excluded from
     JobKeeper due to a 'deliberate decision to refine the policy'.68 As a direct result
     of this exclusion, thousands of Australian aviation workers faced job losses,
     including over 5500 staff in aviation catering and ground handling business
     dnata.69
2.49 Mr Hiranjan Aloysius, Chief Executive Officer, dnata Catering Australia,
     explained that prior to COVID-19, dnata employed approximately 6800 people
     in Australia. Since April 2020, some 2500 dnata workers have been made

63   Mr James Goodwin, Chief Executive, Australian Airports Association, Proof Committee Hansard,
     29 January 2021, p. 16.
64   Mr Trevor Willcock, Chief Executive Officer, Mildura Airport, Proof Committee Hansard,
     4 March 2021, p. 40.
65   Mr Trevor Willcock, Chief Executive Officer, Mildura Airport, Proof Committee Hansard,
     4 March 2021, p. 42.
66   Australian Airports Association, Submission 16, Attachment 1, p. 5.
67   Australian Council of Trade Unions, Submission 13, p. 13.
68   Mr Matthew Brine, First Assistant Secretary, Environment, Industry and Infrastructure Division,
     Department of the Treasury, Proof Committee Hansard, 4 March 2021, p. 19.
69   See, for example, Kate Burgess, 'JobKeeper: Aviation workers rally for support', The Canberra
     Times, 10 June 2020, www.canberratimes.com.au/story/6788036/thousands-excluded-from-
     jobkeeperafter-company-was-sold-to-a-foreign-government/ (accessed 4 February 2021).
21

        redundant. Mr Aloysius told the committee that hundreds of these jobs could
        have been saved if JobKeeper had been extended to dnata.70
2.50 A number of submitters criticised this exclusion, with some going so far as to
     describe the treatment of these workers as 'gobsmacking' and an 'absolute
     disgrace'.71 In particular, these submitters highlighted the sale of Qantas'
     catering business to dnata in 2018. Following completion of the sale, 1200
     Qantas employees become part of the dnata operation.72 The committee heard
     evidence that despite having no say in this decision these workers were, as a
     direct result, excluded from JobKeeper.73
2.51 The TWU noted that '[t]hese workers are paid in Australia and pay taxes in
     Australia'.74 Mr Michael Kaine, National Secretary, TWU, argued that 'it was
     Australian workers [the Australian Government] were depriving of money'. 75
     The TWU submitted:
              Over a thousand of the workers were originally employed by Qantas, until
              the airline sold its Q Catering arm to Emirates-owned Dnata in 2018. The
              Federal Government did not intervene in the sale of an Australian business
              to a foreign-owned business, yet used this distinction to exclude thousands
              of tax-paying workers from wage subsidy support.76
2.52 The TWU further noted that '[a]lthough the changes impacted aviation
     workers at Dnata and SNP, Swissport, which is owned by Chinese controlled
     HNA, continued to receive the subsidy'.77
2.53 The AAA expressed concern that the 'exclusion of foreign-owned firms from
     JobKeeper eligibility also cut out many links in the aviation value chain from
     income support, including ground handling and security screening firms'.78

70   Mr Hiranjan Aloysius, Chief Executive Officer, dnata Catering Australia, Proof Committee Hansard,
     3 March 2021, p. 34.
71   Mr Scott McDine, Head of ITF Sydney, International Transport Workers' Federation, Proof
     Committee Hansard, 3 March 2021, p. 2.
72   Qantas Group, 'Sale of Qantas catering business', Media Release, 11 April 2018,
     https://www.qantasnewsroom.com.au/media-releases/sale-of-qantas-catering-business/ (accessed
     3 March 2021).
73   See, for example, Transport Workers' Union, Submission 23, p. 36; Ms Darlene Bailey, Submission
     26, [p. 2].
74   Transport Workers' Union, Submission 23, p. 36.
75   Mr Michael Kaine, National Secretary, Transport Workers' Union, Proof Committee Hansard,
     3 March 2021, p. 44.
76   Transport Workers' Union, Submission 23, p. 36.
77   Transport Workers' Union, Submission 23, p. 35.
78   Australian Airports Association, Submission 16, p. 4.
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