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Alan Joyce: Qantas likely to pay tax next year

Qantas chief executive Alan Joyce says the airline will probably start paying corporate tax again next year.

Qantas chief executive Alan Joyce says it may pay tax next year.
Qantas chief executive Alan Joyce says it may pay tax next year.

Qantas Airways chief executive Alan Joyce has indicated the airline will probably start paying corporate tax again next year.

Speaking yesterday on ABC Radio, Mr Joyce said that the company had $950 million left in tax credits.

“Last year we made $1.4bn, if we make that again this year, we’ll be paying tax again next year,” he said.

Mr Joyce has been a backer of the Turnbull government’s push to cut the company tax rate for all businesses to 25 per cent, which is expected to get blocked in the Senate.

“What I’m worried about is what will happen … in the US with the lower tax rate and a better tax system … we will lose investment from Australia,” he said.

“That will mean that the economy here will struggle compared to the rest of the world. Qantas and other companies won’t do as well.”

A share price for Qantas
A share price for Qantas

Mr Joyce pointed to US President Donald Trump’s new tax arrangements, which delivered “a huge concession and a huge benefit” to American airlines through new rules on capital expenditure.

“We’re spending $1.5 to $2 billion a year on capital, new aircraft. That would be a huge offset in our tax benefit, which we don’t get in this market.”

He said that if the business case worked and the aircraft could do it, by 2021 or 2022 Qantas would have aircraft that could fly from the eastern seaboard to London and New York non-stop.

Mr Joyce said that Qantas had been able to recruit about 2000 people in the past few years because the business was doing well.

Earlier in the week, Qantas issued a statement saying the suggestion the company couldn’t argue for tax cuts was “nonsense” after the ABC reported that Qantas hadn’t paid company tax for close to 10 years and noted Mr Joyce’s advocacy for company tax cuts.

The comments come as S&P Global Ratings said the airline’s “investment in new aircraft may coincide with the resumption of company tax payments”.

In a later statement, Qantas said its ability to meet its long-term capital expenditure needs was “clear” and the fleet was “constantly under renewal”.

“Around 60 per cent of our existing aircraft are debt-free and our recent aircraft purchases have been in cash because our business is performing strongly.”

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Original URL: https://www.theaustralian.com.au/business/aviation/qantas-likely-to-pay-tax-next-year/news-story/c48217f6282378e711815a5fef694cbb