Why are sacked Ansett workers out of pocket while the Federal Government stands to make hundreds of millions of dollars from the airline’s collapse asks ACTU Secretary Greg Combet.

My office has received many calls from former Ansett workers who are out of pocket – despite the Howard government holding $260 million collected from the Ansett ticket levy.

And soon the government will collect a further $190 million from Ansett’s administrators.

So why is it that sacked workers remain unpaid while the government stands to make a profit of between $115 million and $260 million from the Ansett collapse?

Most of the 15,000 redundant Ansett employees are still owed a total of more than $350 million in redundancy pay and many also face shortfalls in superannuation entitlements.

Melbourne couple Lyndall Connolly and her husband David are typical. They worked as Ansett flight attendants for 16 and 17 years respectively and are still owed $73,000 in redundancy pay.

Robbie Holdaway from northern New South Wales is even worse off. After working in Ansett cabin crews for 25 years, she is still owed $90,000.

The $400 million amassed so far from asset sales by the Ansett administration is frozen due to court action by one of the superannuation funds. But the first $190 million of this money must be paid to the government as a priority.

The financial arrangements surrounding the Ansett administration are complicated. But these are some of the key facts:

  • The government initially loaned the Ansett administrators $335 million,
    which has been used to pay less than half the employee’s
  • The government is requiring this loan to be repaid by the administrators
    from the proceeds of asset sales.
  • At the same time, the government is keeping the $260 million collected
    through the air ticket levy, instead of using it to pay outstanding
  • In all, the government’s double dipping into the levy and the loan repayments will leave a shortfall in funds available to pay outstanding entitlements to thousands of former workers.

    Even in a worst case scenario (the government only receiving the first $190 million from the administrators), they will make still profit by $115 million.

    If the loan is repaid in full, then the government will make a profit of $260 million – something Deputy Prime Minister John Anderson has suggested is likely.

    Announcing the scrapping of the ticket levy last month, Mr Anderson said:

    “The Government has received advice that irrespective of the outcome of legal proceedings, there is likely to be sufficient funding available from the Ansett administration to repay the $335.5 million in taxpayer’s money advanced from December 2001.”

    The government has said any surplus Ansett ticket levy funds may go to an as-yet-to-be-explained “tourism fund”. That’s despite the travelling public who paid the $10 levy doing so in the belief that it was going to relieve the plight of former Ansett employees.

    Let’s remember the levy was only imposed to pay sacked Ansett workers. The legislation authorising the impost, the Air Passenger Ticket Levy Collection Act, states:

    “The purpose of the levy is to meet the cost of payments by the Commonwealth under the Special Employee Entitlements Scheme for Ansett (SEESA) group employees.”

    The government has rejected repeated union requests for the levy proceeds to be used to pay outstanding redundancy entitlements.

    One of the government’s arguments is that the SEESA scheme, like the broader General Employee Entitlements Scheme, only pays up to eight weeks in redundancy entitlements.

    So given this apparent impasse, I would like to propose a new and practical solution.

    If the government remains unwilling to fund any redundancy pay in excess of eight weeks, then it could instead allocate the ticket levy surplus to meet shortfalls in the Ansett superannuation funds.

    This solution could meet the requirements of the SEESA scheme and the levy legislation. It would allow an immediate end to the superannuation litigation, clearing the way for the administrators to restart payments to employee creditors and to the government.

    The government could have its loan repaid in full; former employees would have a far greater chance of receiving their full entitlements; the travelling public would know that the ticket levy they have paid was used for its stated purpose; and superannuation shortfalls would be relieved.

    John Howard should at least consider this proposal, before his government becomes the biggest financial winner from the Ansett collapse.