Scott Morrison suggests union industry superannuation funds could invest in Virgin Australia

Scott Morrison reveals the surprise buyer to take control of Virgin to stop your airfares from rocketing as the airline begs for a $1.4billion loan to survive coronavirus downturn

• Prime Minister has suggested union-backed super funds could rescue Virgin
• Scott Morrison is refusing to provide the airline a $1.4billion emergency loan
• His Kiwi counterpart Jacinda Ardern is providing Air New Zealand with lifeline 
• Learn more about how to help people impacted by COVID

By Stephen Johnson For Daily Mail Australia

Published: 02:19 BST, 17 April 2020 | Updated: 02:19 BST, 17 April 2020

Scott Morrison has cheekily suggested trade unions instead of taxpayers could financially rescue Virgin Australia.

The Prime Minister has repeatedly ruled out giving the embattled airline a $1.4billion emergency loan as high debt levels threaten to push it into administration.

Instead, the former head of Tourism Australia said union-backed industry superannuation funds could bail out Virgin as COVID-19 threatened 16,000 jobs.

 

Scott Morrison has cheekily suggested trade unions instead of taxpayers could financially rescue Virgin Australia. He is pictured on the ABC’s 7.30 program on Thursday night

‘I mean, the industry super funds in this country have got $3 trillion dollars worth of assets here we’ve got a company that needs capital,’ he told the ABC’s 7.30 program on Thursday night.

Virgin Australia Holdings annual losses

2009: $160million

2011: $67.8million

2013: $98.1million

2014: $353.8million

2015: $93.8million

2016: $224.7million

2017: $185.8million

2018: $653.3million

2019: $315.4million

Source: Virgin Australia Holdings annual reports showing the statutory net loss after tax for the full year

‘Its own workers have been paying in to industry funds and there are funds out there, in these super funds that could be investing in a number of companies. 

‘Now, I appreciate that comes in a different risk premium, but this is their own contributors that are involved here.’

He suggested the Labor Party-affiliated Transport Workers Union could invest in Virgin through its TWUSuper industry fund.

‘What’s very important is that we don’t get in the way of a commercial solution, like the TWU super fund,’ he said.

TWU national secretary Michael Kaine described the Prime Minister’s call as a bizarre suggestion that would ‘trash prudential standards’.

‘This makes a mockery of basic superannuation principles like diversifying risk,’ he said.

‘There is certainly a role for superannuation in recapitalising Australian industry after this crisis, but asking one super fund to bail out an entire airline during a black swan event is reckless.’

The Prime Minister has repeatedly ruled out giving the embattled airline a $1.4billion emergency loan as high debt levels threaten to push it into administration. Pictured are grounded Virgin Australia planes at Brisbane airport on April 7, 2020

Virgin Australia chief executive Paul Scurrah has warned Australians would be forced to pay significantly more for airline tickets if Qantas had a monopoly.

CORONAVIRUS CASES IN AUSTRALIA: 6,509

New South Wales: 2,926

Victoria: 1,302

Queensland: 1,001

South Australia: 434

Western Australia: 535

Australian Capital Territory: 103

Tasmania: 180

Northern Territory: 28

TOTAL CASES:  6,509

RECOVERED: 3,752

DEAD: 63

His airline has $5billion worth of debt and has made losses every year since 2013 as it engaged in a price war with its flying kangaroo rival.

Virgin Australia stood down 8,000 staff on March 25, five days after Australia’s borders were closed to non-citizens in a bid to stop the spread of coronavirus. 

Mr Morrison exaggerated the value of industry super fund holdings.

The savings in all superannuation products, from industry to retail and self-managed funds, were worth $3.037billion in the December quarter, Australian Bureau of Statistics figures showed.

Across the Tasman, his Kiwi counterpart Jacinda Ardern has lent Air New Zealand $NZ900million ($A849million).

Instead of offering loans, the Australian government is instead giving Virgin and its rival Qantas $165million worth of subsidies to fly between the capital cities and major regional centres.

Virgin Australia chief executive Paul Scurrah has warned Australians would be forced to pay significantly more for airline tickets if Qantas had a monopoly. Pictured is a near empty check-in counter at Sydney’s Kingsford Smith International Airport

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