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Mar 4, 2014

Tony Abbott's challenge: sell a courageous call on Qantas

Tony Abbott has made the right call on Qantas. But it's a tough sell in the face of Labor opposition -- and convincing voters will be important to his government's prospects.

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The Prime Minister’s gutsy call on Qantas and Labor’s cynical response means both continued difficulties for the airline and a real test for the Abbott government’s ability to sell a more hard-edged economic policy to resentful voters.

Voters don’t like the idea of foreign ownership of Qantas. Allowing greater foreign ownership was the least popular option to help Qantas, Essential Report found last week — 31% of voters back it, but 52% oppose it. Even 48% of Liberal voters don’t like it. But the government, led surprisingly by Tony Abbott on the issue rather than Treasurer Joe Hockey, has said the only assistance it will provide the beleaguered airline is to remove foreign ownership restrictions.

Well, not all of them — the stench of aviation protectionism still lingers in the Air Navigation Act, with its “national carrier” designation rules, a legacy of an era characterised by anti-competitive aviation regulation in which Department of Transport bureaucrats spent their time swanning around the world negotiating which airlines would be allowed to offer services to Australian consumers, and in what amounts.

But it’s still a correct and courageous call from Abbott and he deserves credit for it, however many dodgy Cadbury’s handouts he throws at marginal electorates. Now he just has to sell it. Apart from voter xenophobia, the biggest impediment to that is the logic that greater foreign ownership will entail greater offshoring of Qantas jobs. Abbott had to admit that logic last night, but he insisted “the best way the maximise employment at Qantas, the best way to maximise sustainable Aussie jobs is to maximise Qantas’ ability to compete”.

It’s not an overly convincing line — we have to offshore jobs to maximise Australian jobs (as Opposition Leader Bill Shorten immediately picked up). But it’s probably better than the alternative of telling voters that either they can have a foreign-controlled Qantas or they can have no Qantas at all given the government is not interested in getting back into the airline business.

Abbott challenged Labor to in effect complete the process it started when it privatised Qantas in the 1990s — which entailed more of this bizarre praise of Keating-era Labor, which at the time the Coalition (including Abbott, as a staffer) vilified as the most disgraceful government in Australian history. He also lamented that the opposition would be tempted to play “populist politics” on the issue.

Well. Rarely has a blacker pot issued a darker colour assessment of a kettle.

Way back when, I suggested that game theory provided a good guide as to how Labor should respond to Abbott’s extraordinary cynicism when in opposition in blocking at every turn Labor’s efforts to govern responsibly. In short, once in opposition, Labor should behave exactly as Abbott had behaved, in order to provide a disincentive for the Coalition to repeat such behaviour when next in opposition. That was the most sensible political course, and perhaps the most sensible policy course in the long term. But in the short term, it would be bad for the national interest.

On Qantas, Labor’s elected to go with the populist politics and repay Abbott in kind. The Labor message is that the government is all over the place on the issue (which is correct) but that ideology has triumphed, while Labor would do the right thing and protect Qantas jobs with a handout and leave the foreign ownership restrictions intact. Shorten even took to quoting I Still Call Australia Home in question time yesterday, a new kind of low in that much-abused ritual.

So now the Coalition has the task of trying to blame Labor for Qantas’ woes and obstructing the Coalition’s efforts to unshackle the airline. But Labor’s hand is strong. In 2011, nearly 90% of voters thought Qantas should keep jobs in Australia — and over 50% thought that “strongly”. Voters also think Qantas management are the ones most responsible for damaging Qantas’s reputation. Pinning the blame for the airline’s woes on Labor will be a difficult task, especially while Alan Joyce remains at the, er, helm.

As Labor in government found, it’s one thing to take the right policy decision, but another thing to successfully sell it. Abbott hasn’t got off to a strong start in selling his approach to Qantas, but it’s important to his government that he prosecute the case effectively.

Bernard Keane — Politics Editor

Bernard Keane

Politics Editor

Bernard Keane is Crikey’s political editor. Before that he was Crikey’s Canberra press gallery correspondent, covering politics, national security and economics.

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