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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.


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.


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24 thoughts on “Tony Abbott’s challenge: sell a courageous call on Qantas

  1. paddy

    The right call for QANTAS is a new board and a new CEO.
    But neither Abbott or Shorten are game to go there.

  2. terry macmanus

    “But it’s still a correct and courageous call from Abbott and he deserves credit for it…” I find this entire piece offensive. It suggests your way is the only way. If we do not agree with YOU we are playing politics. Even worse populist. Your piece is opinion. Its not fact. Its the sort of ideological dogma I thought I had escaped when I signed up for Crikey. Clearly I was wrong. Emirates, Garuda, Singapore Airlines,Thai Airways, Cathay Pacific all get and will continue to get favourable treatment from their government. Please explain without insulting our intelligence why we should be different.

  3. ralph

    Yea, well, Julia Gillard managed to negotiate some difficult reforms through a lower house where she did not have the numbers as well as the Senate – think about MDB. Time for Abbott to show his skills.

  4. zut alors

    If a federal election was due mid-year there’s no way Abbott would be running away from a Qantas guarantee.

    If Qantas goes under let’s picture the ALP ads at the 2016 federal election: Abbott will be depicted as the PM who sacrificed Australia’s national airline. An airline with an unequalled safety record internationally.

    But come to think of it, his mentor, J W Howard, did nothing to save Ansett.

  5. MJPC

    I am with Paddy; our esteemed PM can huff and puff all he likes about changing the ground rules for QANTAS employment but is not critical of Joyce and his incompetance on the board.
    That’s Abbott’s challenge, not being seen as shafting the workers whilst looking after the management at the cost of an icon.
    This is just another worker bashing exercise for the LNP.

  6. CML

    Cr+p decision from a cr+p government!
    Qantas can’t have it both ways; be foreign owned and ‘still call Australia home’!!

    I’m also with Paddy – get rid of Joyce and the Board at Qantas, and start again.

  7. cairns50

    abbotts gutsy call give us a break bernard im with paddy why want abbott show some guts and call for joyce and clifford to be sacked? ill tell you why because they are both members of abbotts right wing redneck industrial relations club, clifford is the ex ceo of rio tinto enough said

  8. Venise Alstergren

    The thing that puzzles me is Alan Joyce’s belief-and Tony Abbott’s belief that anyone would want to buy into QANTAS. Unless, of course, it would be to purchase all the planes?

    The moment Alan Joyce leaves the job of CEO of QANTAS, Australians will all Rejoyce at his departure.

  9. Kevin Herbert

    MJPC/CML/Cairns50: so we haven’t recovered from the monumental failure of Rudd/Gillard/Rudd Governments, have we?

    How & why should a PM call for the sacking of a the MD & Board of a public company???.

  10. zut alors

    Kevin Herbert, Abbott could make the guarantee conditional on Joyce’s & the Q Board’s replacement – the guarantee would warrant him making such demands.

    And it would also prevent other airlines such as Virgin Australia requesting similar guarantee treatment as their hierarchies would be highly unlikely to volunteer their own redundancy.

  11. AR

    BK – “Way back..I suggested ..Labor should respond ..in opposition .. behave exactly as Abbott had .. provide a disincentive for the Coalition to repeat s.. when next in opposition. That was .. the most sensible policy course in the long term. But .. bad for the national interest.”
    And that would be a good idea, WHY?
    I think that soi disant Labor should just let the nutters run riot, retain such dignity as such a claque of apparatchiks, men without navels and vat bred & extruded humunculae can pretend.
    I have no hope that they can WIN (WTF does that even MEAN in a mudorcacy?)but the tories will do what they always do, trash all known standards,inmpoverish (further) the battlers and grovel to their betters (ie anything above the intellectual level of slime mould – at least that ‘sticks’ together).
    As usual, the semi sentient sheeple will elect the ALP – cholera or typhoid, wotta choice – just for relief, but with little real hope and purely out of disgust at the Born-to-Rule types.

  12. Itsarort

    If QANTAS is actually going down fast, who would want to buy into it?! Of course, if Joyce has gratuitously ‘train-wrecked’ the business so as to contrive the recent financial losses thus ‘forcing’ the retrenchment of 5000 jobs and precipitating action by the government to amend the Sales Act thus allowing for more foreign ownership, cutting overheads and ultimately boosting QANTAS shares in the future, has he broken the law?

  13. danger_monkey

    @Kevin Herbert

    “How & why should a PM call for the sacking of a the MD & Board of a public company???.”

    Given that he’s felt he could tell employers that they were paying their workers rates that were too high, I don’t see why he can’t tell an employer that they are paying their CEO too much.

  14. danger_monkey


    “And that would be a good idea, WHY?”

    It’s a terrible idea, but as the author said, it’s what game theory suggests the ALP should do. Wanna see what it gets you? Go look at the US legislative gridlock for an idea of what it could be like.

  15. Kevin Herbert

    Zut Alors: what planet are you on…what legal right does Abbott have to interfere in the running of a public company against the current wishes of its Board & shareholders.

    Also,for the record, Qantas is in better condition than many long established airlines globally e.g. Delta & United. Airlines globally have been feeling the pinch since the GFC.

    Danger Monkey: how to answer a fanciful proposition such as yours without sounding condescending……

    I can remember when Crikey posters had the ability to back up their statements.

    As for Labor’s ‘tactics’ in this matter, I get the impression that the current Leader’s odds to keep his position til the end of 2014 will’shorten’ with every puny parliamentary performance such as today’s.

    For the record, I’m a swinging voter so don’t give me any of that ‘you must be an Abbott/Howard Liberal Party devotee’ (particularly in regard to the Rodent).

  16. AR

    KH – a self confessed “swinging voter”.
    Somebody so dumb that they, allegedly, vote according to what is proffered by the majors, despite copious, continuing & incontrvoertible that they are lying.
    Somebody so dumb that they have no internal values system and just live by the hip-pocket nerve.
    Thanks for outing yourself but it was always obvious from your comments that you are a fool.

  17. Gavin Moodie

    I don’t see the justification for restricting airlines that can land in Australia beyond strong safety criteria. Why should airlines be any different from shipping companies?

  18. Michael Jones

    There’s nothing courageous about trumpeting the same old
    free market dogma that has repeatedly been proven false by both theoretical analysis and real-world tragedy.

  19. JMNO

    I’m with Terry McManus. And Labor’s position is, I think, consistent with what it was when Gillard was Prime Minister so I don’t see why it is cynical to adhere to this position. It is the Government that has radically changed its position since gaining power.

    Commentators are still focussing on Labor and not on the Government. Why did the Government put up a proposal that it knew all the main opposition parties would reject? How about some consultation and negotiation on something that all parties would accept and that would be workable?

    The article by Manning and Dyer follows through on the implications of Abbott’s scheme and suggests that it could actually destroy Qantas. Are you such a believer, Bernard, in the supremacy of markets to think that this is a good idea? Another Australian company bites the dust, not because of unions but because of grossly incompetent management.

  20. Kevin Herbert

    AR: can’t provide a cogent argument eh…so go the witless ad hominem route.

    Consider yourself duly admitted to my ‘not worth responding to’ classification of Crikey posters.

  21. Kevin Herbert

    Michael Jones:

    can you provide those examples of the failure of the free market

  22. drmick

    AR; You have found the supporter of the year to match Bernard and his politician of the year. It looks like they all have their heads up the one clacker; and that exclusive club you have just been resigned to, has about 27 million people in it.

  23. Venise Alstergren

    BERNARD KEANE: It’s a pity that Tony Abbott displays no courage at all on matters environmental. Of course the environment and wildlife don’t vote.

    The only things that reproduce like fertile rabbits are the acres and acres of new housing estates and barren gardens whose inhabitants do vote. Oh, I forgot to mention the politicians.


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