QANTAS is more than the Victa motor mower, Hills Hoist and Peters Ice Cream phenomena, where the brand lives on under new owners. The Qantas brand is a big deal to Australia. Its loss would cause heartburn for the Abbott government. Can Australians understand an economy without national symbols of production, as well as “national” ownership?
The challenge for the Abbott government is different to that faced by the Hawke and Keating governments. Their task was to sell government assets into private hands. What was not so apparent then is becoming more so. As with Holden (assuming the brand fades), what will the Australian industrial landscape look like without familiar brands as well as Australian ownership?
In the late 1980s senator John Button, then industry minister in the Hawke government, walked into an ALP centre-left caucus meeting, my then home team, at Parliament House, Canberra, and asked the question, “What is the government doing owning an airline?”
His question related to government ownership of Trans Australia Airlines. We did not have a convincing answer. The same questions about other government assets had been asked elsewhere in the party and in the electorate. There were no convincing answers, just the special pleading of government workers and their union ringmasters in protected jobs.
So commenced a long line of privatisations in the Australian economy, including Telstra, Commonwealth Bank and, incidentally Commonwealth Serum Laboratory (CSL), the privatisation of which I was proud to initiate. TAA (as Australian Airlines) was rolled into Qantas, and Qantas was sold, conditionally. The government held out on foreign ownership.
It was a long time ago, and yet, governments, in the main state governments, still hang on to assets that would not pass the “what is the government doing owning?” test. Clearly, voters are still anxious about losing the family silver. They are unsure about the distinction between ownership and wealth. Public ownership, or Australian private ownership, does not ensure wealth. When the chief executive of CSL explained what he wanted and why – access to capital to expand the business – and that government would not help out in his timeframe, the answer seemed clear: sell. It is now one of Australia’s greatest companies.
The motivation for selling assets then was no more glorious than now, which is to pay off debt. No matter, so long as assets are sold into markets where competition is assured, the economy, that is to say, consumers and taxpayers, gain. Workers follow consumers, not the other way around. When workers demand work and government do their bidding, trouble abounds.
Too many Australian goods and services have been preserved for workers, not consumers. The same was true for Holden, it does not matter that Holden may have faced “unfair” competition from abroad, other nations’ subsidies for their producers is a windfall for Australian consumers. Australia is not in danger of running out of things to do; as long as we pay our way, all will be well. Paying our way is most likely when Australians chase the highest rewards for what they do in the marketplace, not cabinet, or even the Australian stock exchange.
There are a number of ways government can help Qantas. The Qantas Sale Act 1992 required certain provisions in Qantas’s articles of association. These impose restrictions on the ownership of shares in Qantas to prevent “foreign persons” having more than 49 per cent (mirrored in the Air Navigation Act 1920), foreign airlines having more than 35 per cent, and any one foreign person having more than 25 per cent.
Three other matters will cause disquiet. The articles prohibit Qantas from conducting international services under a name other than “Qantas”; the head office must always be located in Australia; and the facilities – for example, for the maintenance and housing of aircraft, catering, flight operations, training and administration – located in Australia must represent the principal operational centre for Qantas.
The longevity of the Qantas brand depends on its market worthiness and customer loyalty, not ownership. Ownership is not so important in the scheme of things. The moment Qantas was floated Australians ceased to own it, collectively. Restrictions on ownership and those on operational matters, but also including the brand name, must be removed. None can guarantee Qantas survival, either as an airline or as a brand, but they can remove some impediments to trying.
Australians have a strong attachment to Qantas as a national symbol, but they fly by price. If the Abbott government is to remove the remaining conditions over the ownership of Qantas, as it surely must, one day, the brand too may disappear.
The Qantas privatisation was a halfway house. The Abbott government must complete the task, but explain to Australians that Australian brands may no longer play a part in the nation’s success.