The potential takeover of Qantas couldn't have come at a worse time for the federal government. Kevin Rudd is luxuriating in a seemingly endless honeymoon, while for John Howard, issues such as Australian troops in Iraq and climate change become more difficult by the day.
It is almost understandable that, in Canberra at the moment, there's little appetite for economic common sense: $40 billion in new spending has already been announced, and no doubt much more will come in the budget in a few months; there are hints of extra tariff protection for car manufacturers; and the Nationals will probably win their battle to maintain the wheat single desk.
Given all of this, it wouldn't be a surprise if the coalition stopped the sale of Qantas. The threat of lost jobs and reduced regional services provides enough of a "national interest" excuse to justify finding a way to prevent the success of the private equity bid. Even if somehow the deal is allowed, such onerous conditions will be imposed that it will be almost impossible for the airline's new owners to turn a profit.
Blocking the sale of Qantas is bad policy, and good politics -- especially six months before an election. And if the sale is in fact blocked, the people to blame won't be the Prime Minister and some noisy backbenchers. The real culprit will be the Australian business community.
We expect our political leaders to resist short-term, populist solutions and to make decisions based on the best long-term interests of the country and its citizens. Allowing the Qantas takeover to proceed falls into the latter category. But in democracies there's a limit to what politicians can achieve on their own. While sometimes they can defy popular opinion, they can't ignore the attitude of the electorate indefinitely.
Bob Hawke and Paul Keating, after pursuing economic reform against the tide of community sentiment, eventually retreated. Malcolm Fraser is rightly chided for his years of missed opportunities. What's often forgotten is that in the 1970s, business leaders weren't lining up to advocate the sort of wholesale change that would later occur under Labor. The "dries" are remembered precisely because there were so few of them.
Myriad factors create "popular opinion". What companies and their executives say and do has a big impact on popular opinion. Look no further than to matters like the James Hardie saga for a partial explanation of the "anti-business" outlook expressed in much of the media. But it isn't only a few cases of malfeasance that create such an environment.
Much of corporate Australia apologises for being in business. The rush to embrace "corporate social responsibility" is an example of this. Companies have abandoned support for free enterprise in favour of a system of quasi-regulation by government, non-government organisations and a miscellany of "stakeholders".
It's difficult to recall the last time a serving CEO of a major public company said unambiguously "free markets are good, competition is great, and government should get out of the way". Our MPs cannot be expected to pledge themselves to free enterprise if its supposed beneficiaries do not.
The bidders for Qantas themselves have an uneasy relationship with competition. They like it -- but only in certain circumstances. On the one hand they want a competitive bid for the airline to proceed with as little government interference as possible. At the same time they want the government to continue limiting competition from overseas airlines.
The best solution would be for the federal government to allow the sale of Qantas, impose no conditions on the takeover, and open Australia's skies to competition. Of course, kangaroos might fly before this happens.
Even after decades of economic globalisation and business internationalisation, it is debatable whether the approach of Australian business has changed at its core.
In 1964, the then Liberal prime minister, Robert Menzies, was reflecting on the relationship between the government and its corporate supporters. "It is, I suppose, natural [that] many men in industry should take short views and be affected by the prospect of some immediate advantage. After all, very few of us look over the wall of our own garden to get a picture of the outside world".
And he revealed a few home truths when he said: "The old-fashioned 'sturdy individualist' who told government to keep clear of his business, that he wanted neither help nor hindrance from it, is as dead as the dodo".
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