Ansett Australian Global Rewards - Tesna wanted $1.1 billion from the govt??

Tesna's assistance wishlist
By SID MARRIS
01Mar02

THE Howard Government baulked at a wishlist of taxpayer assistance presented by Tesna during its failed bid to buy Ansett because it believed it would cost the nation more than $1.1 billion.

The wishlist, obtained yesterday by The Australian, reveals a range of administrative, tax and legal concessions sought by Lindsay Fox and Solomon Lew just after John Howard's election win last year.

Mr Fox yesterday accused the Government of punishing Tesna for noisy protests by Ansett workers during last year's election campaign.

But it is understood the Government was alarmed at the costs implied in Tesna's bid for tax concessions.

Furthermore, Tesna's proposed legal changes would have seen the competition watchdog regularly interfering in the aviation market. As a result, the Government only agreed to six of the consortium's 11 demands.

A special government negotiator, former KPMG accountant David Crawford, was appointed to deal with Tesna on a daily basis.

Mr Fox said Tesna's requests to the Government were not a call for money.

"The Government has seen our transaction as ACTU Airlines, and because of that the games played behind the scenes have been quite substantial," he said.

"One thing about Mr Howard, he has a very good memory and a very long memory."

But Transport Minister John Anderson said yesterday his departmental advisers were never told the deal was about to collapse because of problems with airport leases.

"I'd spoken to Lindsay Fox (since December) and he had my telephone numbers, he could always call me. In fact, he did reasonably regularly until late last year, but I don't think that is the issue," Mr Anderson said.

"To suggest we've been inactive is an absolute nonsense."

Government advisers said a press release from Tesna said the deal with Sydney Airports Corporation Limited had been agreed.

They said Mr Crawford was told as late as Monday night that Tesna's problems with Sydney Airport were likely to be resolved. On Tuesday, Tesna nominated wrangles over the lease with Sydney Airport as a major factor in its decision to scrap its bid for Ansett.

The most expensive claim in Tesna's letter, sent to the Prime Minister on November 13, was a special concession allowing airlines to write off the value of assets more quickly, known as accelerated depreciation.

Tesna was told that a concession could be offered only if it was to all airlines including Virgin Blue and Qantas, and not just Ansett II, and would cost $1.1billion.

As a result, Mr Fox and Mr Lew did not press the issue at a meeting with Mr Anderson two weeks later.

Tesna had also asked for relief from withholding tax on aircraft leases and a guarantee of employee entitlements for five years.

As part of a deal to underwrite passenger numbers, the Government was asked to pre-purchase tickets for public servants worth $150 million.

The airline owners also wanted the Government to hand the Australian Competition and Consumer Commission sweeping new powers to reign in any anti-competitive behaviour by Qantas or Virgin.

The changes would allow the ACCC to judge behaviour on its "effect", not just the intention, of actions and allow the watchdog to compel an end to the actions through "cease and desist notices".

http://www.news.com.au/common/printpage/0,6093,3865189,00.html

[This message has been edited by RichardMEL (edited 02-28-2002).]

Tycoons wanted $1b to save Ansett
By GEOFF EASDOWN
01mar02

TYCOONS Lindsay Fox and Solomon Lew wanted more than $1 billion a year in government subsidies to save Ansett.

They asked for generous tax concessions, seat revenue guarantees, and a five-year break from funding staff entitlements.

They wanted the nation's taxpayers to make up their losses on empty seats.

The seats deal alone would have locked the Treasury to underwriting losses of up to $800 million a year on flights less than 65 per cent full.

The wish list was faxed to the Prime Minister on November 13 last year. The document contradicts remarks Mr Lew made yesterday that the Howard Government was not asked for funding.

The retail magnate told ABC: ". . . we never asked the Government for funding. It would be a wrong statement of fact if the Australian public thought that we asked the Government for funding," he said.

But four claims contained in the Fox-Lew letter to the Prime Minister make specific requests for Commonwealth support that would have to have been underwritten with large sums of cash.

A page of the earlier Fox-Lew letter to the Prime Minister was obtained after the broadcast by the Herald Sun.

It contains 11 separate requests for government support.

A Treasury costing found that $1.1 billion a year also would have to be spent funding fleet depreciation write-offs for all three airlines.

In other developments: MR FOX today jets off on a luxury European ski holiday.

THE Federal Government confirmed it would stand by its guarantee of employee entitlements.

THE tycoons may face legal action from the Ansett administrators because of the last-minute withdrawal.

MR FOX yesterday accused the Howard Government of surreptitiously killing the Tesna deal as political payback for embarrassment caused by Ansett staff before last November's federal election.

Aviation sources said a request for relief from withholding taxes on aircraft leases could cost the country $60,000 a year a plane.

The tycoons also had sought a five-year break on withholding tax on new aircraft.

A study of their claim showed the Government would have accepted responsibility for $183 million in staff entitlements due to the 3000 Ansett staff their Tesna syndicate hoped to employ.

A spokesman for Transport Minister John Anderson last night confirmed the authenticity of the document seen by the Herald Sun.

They said the document was the second page of a letter Mr Fox and Mr Lew faxed to the Prime Minister's Sydney office on November 13.

It was sent just three days after the November 10 Federal election when a victorious Howard Government was openly hostile to the pair.

Believing Labor would win the election, Mr Fox and Mr Lew had courted senior Opposition MPs in a publicity stunt to announce their bid for Ansett on the eve of the poll.

The letter signed by both men begins: "Dear Prime Minister, Sincere congratulations on your magnificent third term victory . . ."

It then asks: "We would appreciate a meeting to provide you with a briefing about our agreement with the administrators, our plans for Ansett, and the support we are seeking from the Commonwealth."

The Herald Sun was told last night Commonwealth approval was given to the first six items on the list. None involved a request for money.

The five outstanding claims were rejected.

The last four would have committed taxpayers to effectively subsidising the day-to-day operations of the airline.


http://www.heraldsun.news.com.au/common/story_page/0,54

Posted: Fri, 1 Mar 2002 12:13 AEDT

Fox/Lew lied: Anderson
The Federal Transport Minister, John Anderson, has accused Tesna co-chairmen Lindsay Fox and Solomon Lew of not telling the truth, about requests for Government assistance in the attempt to save Ansett.

Mr Fox confirms Tesna wrote to the Government last November seeking tax concessions, accelerated depreciation and restricting Qantas to 65 per cent of market share.

But he cannot see what all of the fuss is about.

"All of the issues that we raised with the Federal Government would be normal practice to try and keep something going," Mr Fox said.

He adds Qantas had similar requests for tax relief after the events of September 11.

Mr Fox has also rejected claims the subsidies would have cost the public $1 billion, but Mr Anderson insists it was a request for taxpayers' money.

"They actually put forward a list of requests that would have translated into very large amounts of money indeed," he said.

Mr Anderson says he has correspondence to prove their request and is stunned by the claim.

"I frankly became very angry when I heard Mr Fox say that they had not sought financial concessions or assistance from the Government.

"They actually put forward a list of proposals which would have run into very large amounts of money indeed," Mr Anderson said.


Distraught staff

Meanwhile, a meeting between Ansett staff members and administrators is being held at Sydney Airport.

Administrator Mark Mentha will tell staff about their claims to unpaid entitlements.

It follows a similar meeting where administrators spoke to Ansett workers in Melbourne yesterday.

The Australian Services Union is maintaining daily briefings for Ansett staff as the reality of the airline's collapse continues to hit home.

The union's Helga Svendson, says the union is providing financial and other advice.

"We're also going to be in contact with some of the other airlines or ground handlers at the airport to see if there's any other work available, or any other provider of work to see if we can keep them up to date with those sort of details as well," Ms Svendson said.

Virgin Blue's Sir Richard Branson has told Channel Nine his company is prepared to interview former Ansett workers interested in joining Virgin Blue, as the company prepares to take on up to 1,000 more people.


http://www.abc.net.au/news/justin/nat/newsnat-1mar2002-40.htm

There goes with Howard Government's excuses.

If you look in detail, it's simply asking for various non-direct incentives from the Government eg. Tax breaks etc. Here is the government adding it all up and putting a number on.

You'd be surprised if you do similar calculations on a number of major companies that has government's favour. Obviously AN isn't in that list.

Tycoons change story
By GEOFF EASDOWN
02mar02

TYCOONS Lindsay Fox and Solomon Lew changed their story yesterday about an attempt to win Federal Government funding for Ansett.

A day after Mr Lew denied seeking government funding, the pair subsequently acknowledged an approach was made to the Prime Minister for "start-up insurance".

Their about-face came after the trucking and retail magnate sought to blame the demise of their bid to buy Ansett on the Howard Government.

Mr Lew told the ABC on Thursday:

". . . we never asked the Government for funding, never. It would be a wrong statement of fact if the Australian public thought we asked the Government for funding."

But Mr Lew's remarks were contradicted by the text of a letter sent to the Prime Minister on November 13 last year.

The second page of that letter, published in yesterday's Herald Sun, revealed it would have cost taxpayers more than $1 billion to fund four requests that Fox-Lew made to Mr Howard.

The full text of the letter, issued last night by Transport Minister John Anderson, further supports his account about his various dealings with the pair who were seeking government support.

Mr Anderson told reporters after the collapse of the Ansett deal that Mr Fox and Mr Lew requested a very, very large amount of money.

The controversial Fox-Lew letter was faxed to Mr Howard's Sydney office three days after his Government was unexpectedly re-elected on November 10.

At the time, hostility existed within sections of the Government over attempts by the Fox-Lew Tesna syndicate to court support from high profile Opposition MPs, including then deputy leader, Simon Crean.

Mr Crean and other Labor acolytes had attended and been captured in televised news reports of the press conference announcing Tesna as the preferred bidder for Ansett.

The letter to Mr Howard opens with "Dear Prime Minister . . . Firstly our sincere congratulations on your magnificent third-term victory".

It ends four paragraphs later, signed "yours sincerely, Solomon Lew and Lindsay Fox".

Responding to the letter's disclosures yesterday, a Tesna press release offered no comment about the conflict between Mr Lew's comments to ABC radio this week and the text of the November 13 letter.

Instead the syndicate questions why confidential commercial correspondence between an Australian company and the Australian Government had somehow been selectively leaked to the media.


http://www.heraldsun.news.com.au/common/story_page/0,5478,3872118%255E662,00.html