Game’s up for Qantas’ Canberra Crony Capitalism

Written by:
7 September 2023
Game’s up for Qantas’ Canberra Crony Capitalism - Featured image
Originally Appeared In

As a Coalition MP quipped a few days ago – “the federal government once owned Qantas. Now it’s Qantas that owns the federal government.”

Which isn’t bad for a company barely among the country’s biggest 40 corporations and one that’s less than a 20th the size of BHP. The political power and cultural influence of Qantas is a tribute to Alan Joyce and his predecessors.

Cachet and prestige are terms derived from French and until recently Qantas had both. Qantas succeeded in being Australian and also a little bit European.

But all brands have a shelf life and maybe what’s happened to Qantas is simply proof of that. No matter how strong it might appear to be, ultimately a brand lives and dies on the product it’s selling.

All the politicians now complaining about Qantas could very easily put their money (or more precisely, their comfort) where their mouth is.

The disgust of MPs at allegations the airline sold tickets to flights it had already cancelled could be manifest by those MPs publicly declaring they’ll no longer pass through the opaque black sliding doors labelled “Private”.

But giving up the Chairman’s Lounge might be too big a sacrifice.

The end of Alan Joyce’s tenure as Qantas boss has been capped by him achieving a rare feat. He succeeded in uniting a sizeable number of Labor MPs and nearly every Coalition MP against the company.

Many Labor MPs didn’t trust Joyce anyway after he grounded the entire fleet in 2011. Meanwhile, Coalition MPs are angry at the financial and moral backing Qantas has given to one side in the Voice referendum.

More than one Coalition MP has remarked, not without a hint of bitterness, that $2.7 billion in taxpayer-funded support to Qantas during COVID didn’t produce much gratitude – but it did help the company make a $2.5 billion underlying profit and earn for Joyce a potential “golden handshake” of more than $20 million.

It’s not often the secretary of the Transport Workers Union puts into words how Liberal and National Party MPs feel.

In May, Michael Kaine, the union’s national secretary, said of Qantas’ projected profit: “This obscene profit forecast is the result of Qantas management bleeding dry workers, passengers and the taxpaying public. The right thing to do would be to pay back every dollar of no-strings government handouts Qantas received from Scott Morrison before it trashed every essential section of the airline to prop up executives and shareholders.”

It looks like the union has had the last laugh. In 2011 Joyce said: “We are locking out until the unions withdraw their extreme claim and reach an agreement with us … they are trashing our strategy and our brand.”

Qantas didn’t invent the game of Canberra crony capitalism, but it played it better than its competition. The federal government blocking a rival from increasing its flights into the country on the vague grounds of the “national interest” is proof of that – a decision that Qantas has left it up to the transport minister to try to explain.

The views of big business in Australia are increasingly an echo of the government of the day, and that’s certainly the case with Qantas. Nine of the country’s 10 largest public companies are in sectors tightly regulated and heavily policed by the government.

In Australia, once a business reaches a certain size, success is as much a product of political preferment as it is of expertise or innovation.

Big business has always had to get along with government but as the reach of government grows chief executives have no alternative but to spend their time dealing not with the people who buy their goods and services but with politicians.

Which helps explain what occurred at Qantas. When an airline’s most important stakeholders are politicians, not its passengers, there’s a problem.

For many Australians the lasting image of Alan Joyce will not be of him at a baggage carousel talking to a customer. (Indeed, photos of him with passengers, or with staff, are rare.)

Rather, what will be remembered about Joyce is him standing next to the prime minister in front of a Qantas plane with “Yes” written on it.

Related Research

N/A -
This article was original published in The Australian Financial Review and was written by the author in their capacity as a contributor for that publication. It has been republished on the IPA website with permission. The views expressed are those of the author alone.

Support the IPA

If you liked what you read, consider supporting the IPA. We are entirely funded by individual supporters like you. You can become an IPA member and/or make a tax-deductible donation.