Contributed from Victoria
Qantas is about to be given another $2 billion by the Morrison government. This is om top of the $11.2 billion it got last year. So much for this government’s commitment to free enterprise.
Virgin wasn’t so lucky. The cut price airline was refused the same sort of help, although it did get $368 million. Virgin fell into administration last year.
It smells like government policy is to maintain the Qantas near monopoly of the skies through the pandemic and after. So much for its commitment to competition.
There is no denying, Australia lacks the capacity to host too many airlines and keep the planes in the sky and that a monopoly is inevitable. This being the case, it is surely prudent to regulate it. Instead of this, Qantas was sold to private owners, and in time. its long earned reputation for first class service took a dive.
Qantas’s new business model was to cut costs, trash jobs, and screw those remaining.
Last year it was a major beneficiary of JobKeeper. Instead of using it to keep jobs, 2,500 ground workers were outsourced in inferior pay and conditions. Higher dividends were paid to shareholders. The company was not held accountable, and now the government runs to it with more money.
Qantas outsourced 2,500 ground crew jobs last year
If a major corporation like this is going to be subsidised, it is only right that taxpayer money be provided with some conditions. One is that it is used for what it is supposed to be used for, and the best way to ensure this is to get an ownership stake in return.
Before the usual crowd starts screaming socialism, they should understand that this is not socialism. It is sound business practice, no bank or big private investor is going to hand over a whack of money without it being a loan, to be paid back with interest. Alternatively, they will insist on a share of the business. To do otherwise would be to accept the costs and turn your back on the benefits. Why should it be otherwise for the public? Taxpayers deserve a return for their investment.
A poll conducted by the Transport Workers Union (TWU) last year found that 62 percent of respondents agree that bail outs of private companies should come with public ownership.
Michael Kaine, the union’s national secretary said. “In many countries around the world large amounts of investments in airlines includes equity stakes or the potential for equity stakes, as we have seen in New Zealand, Germany, Korea, Hong Kong and others.”
“The Federal Government failed to tie any conditions to the funding for Qantas. It has failed to set down any rules on retaining jobs, banning outsourcing, ensuring air travel to regional Australia, capping senior executive salaries, banning bonuses, and banning dividends,” Kaine said.
The Morrison government has consistently opposed taking a stake in Qantas.
“It is not the government’s intention to nationalise airlines,” the then deputy prime minister and minster for transport, Michael McCormack, said in May last year. The position has not changed.