Labor fails to explain why it shields Qantas from rival

Jim Chalmers is right when he says greater competition is critical for lifting dynamism, productivity and wages growth, putting downward pressure on prices and delivering more choice for consumers dealing with cost-of-living pressures. The government has got the theory right, which makes Transport Minister Catherine King’s decision to deny Qatar Airways more flights into Australia all the more egregious.

ANZ boss Shayne Elliott told the QUT Business Leaders Forum in Brisbane on Tuesday he was disturbed by suggestions the government had acted to protect Qantas profits. “I thought we believed in the market economy,” Mr Elliott said. “I found it a bit troubling.” So do travellers, who are fed up with paying airfares that are about 50 per cent higher than they were pre-Covid. It was not uncommon to hear of people paying $700 for a one-hour Sydney-Melbourne flight in economy or $2500 for a Sydney-Perth flight, Robyn Ironside reports in Business Review. According to Virgin chief executive Jayne Hrdlicka, international fares could have come down by 30 to 40 per cent if Qatar Airways were allowed to schedule more flights into Australia, boosting capacity.

Anthony Albanese has washed his hands of the decision to block Qatar’s bid. “Well, it’s not up to me,” he said on Tuesday. “It’s up to the Transport Minister who’s made the decision.” It is not clear who Ms King consulted. But the matter was not decided by cabinet, as Joe Kelly and Glen Norris report.

None of which is in the best interests of competition, consumers, the tourism and accommodation sector or economic activity. And outgoing Qantas chief executive Alan Joyce has made it clear the airline does not intend to repay the $2.7bn in taxpayer-funded JobKeeper and other Covid subsidies provided under the Morrison government. “Should we refund that? No, we provided a service,” Mr Joyce said last week. Some companies, such as Harvey Norman, Cochlear, Mirvac, Seek, CIMIC and Blackmores, have returned millions of dollars to taxpayers after posting healthy profits. Qantas Group last week announced a record full-year statutory profit of $1.74bn after it lost $7bn during the pandemic. As the federal Treasurer says, there was no agreement companies would repay the subsidies.

Mr Joyce, in general, has steered Qantas well. But his attitude, with airfares so high and service often ordinary, has left a sour taste with many. At a time the government appears to be protecting Qantas, Mr Joyce’s refusal to confirm whether the Prime Minister’s 23-year-old son, Nathan Albanese, was given membership to the exclusive Qantas Chairman’s Club is a bad look. Questioned about it, Mr Joyce again declined to answer. “I will not be making any comment on that, confirming or denying it,” Mr Joyce told the Senate’s cost-of-living inquiry on Monday. “I am not going to comment on Chairman’s Club membership, I’ve got privacy issues.”

Australia needs a national airline. And it is in the public interest that Qantas is a business owned by shareholders, not government, which it was until it was privatised in the Hawke-Keating era. But Australians also want more affordable airfares, which would come from competition. Mr Joyce makes a good point when he says he has a responsibility to ensure the airline, which is a national icon, survives. It must maintain its high safety standards in a turbulent, challenging industry. That does not excuse it from competition, however. On Monday Ms King backed away from Assistant Treasurer Stephen Jones’s view that she blocked Qatar Airways’ application for an extra 28 flights a week to protect Qantas’ profitability. “There’s no one factor that swayed my consideration one way or the other,” she said. That is not a good enough explanation, minister.