Barely a day goes by when some form of deal isn’t struck that further
concentrates Australia’s already notoriously entrenched club of large
and powerful corporate players. However, we really seem to be cranking
it up at the moment.
Adam Schwab neatly deals with the inexorable rise of ABC Learning
elsewhere in this edition, but consider the other developments over
Firstly, the Howard Government is effectively allowing a free-for-all
on media ownership which will only serve to further entrench the power
of Australia’s two wealthiest families, the Murdochs and the Packers.
As usual, the government has taken an approach that puts the interests
of the big corporates ahead of the long-suffering consumer.
Then you have the collapse of Paul Stoddart’s OzJet yesterday, again
demonstrating how difficult it is to take on Qantas with its
world-leading 60% local share and all those invaluable international
And don’t give me this “Australia can only support two airlines”
rubbish. Melbourne-Sydney is one of the busiest routes in the world and
OzJet was merely aiming to break the Qantas monopoly on providing a
business service on this route. Sadly, it was all too hard, partly due
to consumer apathy, the power of the Qantas loyalty programs and its
entrenched presence at Australian airports.
Managing regulator and government relationships has long been a vital
determinant of business success in Australia and Qantas is one of the
past masters. Telstra has also been brilliant at it over the years,
although Sol Trujillo’s combative posturing might just see it cop a
regulatory slap or two in coming weeks.
Graeme Samuel’s approval of the revised Toll bid for Patrick is another
dangerous development. Patrick and P&O have milked huge duopoly
returns out of the waterfront since the 1998 industrial showdown and
now this will be folded in with Australia’s largest freight and
For all the undertakings Toll has given, yesterday’s $1 billion boost
to the combined Toll-Patrick market capitalisation tells you one thing
– investors think profits will surge as customers will be slugged even
more by the new powerhouse.
Whilst the sale of Myer is a sad day for those who fret about
spiralling foreign ownership of Australian assets, at least the deal
reduces the market power of our grocery duopoly, a powerhouse
unprecedented anywhere in the developed world.
Wouldn’t it be nice to see some similar power reductions through BHP
and Rio unloading some of their iron ore assets, Rupert selling a few
newspapers, banks getting out of funds management, Leighton demerging
its mining operations, Westfield disposing of some shopping centres and
Telstra offloading Sensis.
As a small shareholder in most of the companies mentioned above, it’s
nice to see those surging returns, but let’s not lose site of the
importance of competition and the consumer in this debate. For too long
corporate Australia has been dominated by a service sector oligopoly
that does little more than live off the fat of cosy government
concessions and a captive domestic market.