Qantas slammed by Simon Birmingham over HQ ‘auction’

A federal minister is urging the states not to be sucked in by a Qantas move that risks a ‘wave of corporate welfare-seeking’.

Qantas is considering abandoning its Sydney base for a better offer. Picture: Chris Pavlich.

Qantas has hit back at remarks by a federal minister who warned states against throwing taxpayers’ money at the airline as it contemplated a new location for its national headquarters.

The carrier revealed on Tuesday it had written to state and territory leaders, inviting them to lodge an expression of interest for the airline’s HQ which has been in Sydney since 1938.

About 5000 people are employed at the Mascot office building, and another 1000 at the Jetstar HQ in Melbourne, with a “co-location” of the two airlines among the options being considered.

But Federal Tourism and Trade Minister Simon Birmingham told ABC Adelaide radio, the tactic being used by Qantas to create a bidding war between the states was a “pretty blatant attempt to extract taxpayer dollars”.

“I’d have to urge caution from the states. This bidding war won’t create one extra job in Australia. It just shuffles jobs around Australia,” said Senator Birmingham.

“Our focus federally is how we save jobs across the country and try to start to grow those numbers again.”

Qantas has appointed Colliers International to sublease space in its Mascot headquarters. Picture: Supplied

He said competition between the states for the Qantas HQ threatened to “spark a wave of corporate welfare-seeking by businesses”.

“This has the potential to represent the worse of federalism … if we sort of have big companies around the country just auctioning off their head offices to states and territories,” Senator Birmingham said.

“This is just Australian companies trying to auction off jobs to the highest bidder. That’s not going to help our productivity.”

In response to his remarks, a Qantas spokesman said few major companies had been hit as hard by the COVID crisis as Qantas.

“With 20,000 of our people stood down and most of our aircraft in storage, we have to look right across our business for ways to be more efficient, which is why we’re reviewing our property footprint among other things,” he said.

“Under those circumstances, it’s hard to see why state governments responding positively is a bad thing.”

In August, CEO Alan Joyce announced a $2.7bn before tax loss for the airline group in the 2020 financial year and warned worse times were ahead in 2021.

A similar “bidding war” tactic was used by Qantas in 2018, when it ran a contest among regional centres for its first pilot training Academy.

Queensland taxpayers and the owners of Toowoomba Wellcamp Airport, provided significant funds, thought to be in the vicinity of $30m, to win the facility.

The state also won a commitment from Qantas for a second pilot Academy in Mackay, which is currently on hold due to the COVID crisis.

Senator Birmingham said the federal government had recently stood up a global talent and attraction investment taskforce to try to get “more investment, more global talent to Australia to grow more jobs overall”.