Govt to repeal Qantas Sale Act

PM Tony Abbott says cabinet will repeal part of the Qantas Sale Act to "unshackle" the airline. Source: AAP

THE federal government will seek to repeal part of the Qantas Sale Act that governs foreign ownership laws.

But Prime Minister Tony Abbott says cabinet does not intend to offer a debt guarantee or a line of credit to Qantas.

Part three of the Qantas Sale Act restricts foreign ownership of the airline.

Foreign ownership of the airline will now be capped by the Air Navigation Act and the Foreign Investment Review Board.

Deputy Prime Minister Warren Truss said the repeal of the Act would allow Qantas to compete on a level playing field with other airlines.

"It's quite clear that the competition has been vigorous," Mr Truss said on Monday night.

"That's meant that it's been hard for Qantas, hard for Virgin, hard for its competitors and good for travellers."

Mr Abbott said the decision was made after two hours of deliberation in federal Cabinet on Monday.

"We've come to a decision and I'm very confident that this is a decision which is best for our nation and ultimately best for Qantas," he said.

Mr Abbott said Qantas could still in a "meaningful sense" be considered an Australian business if it was foreign owned, in the same way as its foreign-owned rival Virgin Australia.

"I reject ... this idea that Qantas is Australian and Virgin isn't because let's face it, Virgin is employing Australians and it's serving Australians.

"It's hard really to say that Virgin is substantially less Australian than Qantas itself and what we want to ensure is that both of these fine airlines are operating under the same rules."

Mr Abbott acknowledged the potential for further local job losses as warned by federal Labor.

"If some jobs have to go offshore in order to ensure that Qantas has a strong and viable long-term future, it may be regrettable, but nevertheless it is the best way to guarantee Australian jobs for the long term," he said.

Mr Abbott said a debt guarantee was discussed but rejected by cabinet.

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