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Issue #1629      March 5, 2014


Qantas and the death of the private enterprise myth

Qantas is just the latest big company operating in Australia to announce that it is in trouble and planning to shed thousands of jobs. The stressful impact on the over 5,000 workers involved, their families and communities is immense and the numbers will boost the high (though greatly understated) jobless rate in the country. The difference in the case of Qantas is that it was once a public enterprise offering world class service and holding an unmatched safety record. It was held in high esteem by the Australian and international travelling public.

The current perilous situation for the airline did not have to develop and there is a growing public awareness of that fact. More and more Australians are coming to realise that there was nothing inevitable let alone desirable about the various privatisations carried out over the past few decades. The myths built up around “free” enterprise are now clear for all to see and the call for re-nationalisation has gone mainstream.

Qantas was typical. The mantra was and is that the government has no business in business; that it shouldn’t take on functions that could be carried out by private interests. And besides, everybody knows that government enterprises are full of overpaid public servants who don’t try very hard to please the ever more discerning customer. For a long time these threadbare arguments have been winning the day.

Now the ideological and economic chickens have come home to roost. Governments like that of Tony Abbott have to choose whether to give cash grants or debt guarantees to struggling corporations (protectionism is not allowed under totally globalised capitalism, remember) or to let them go to the wall. So far Abbott has elected to let them crash and then blame and punish the unemployed victims of corporate failure.

The neo-liberal rear guard will argue that the Qantas Sale Act of 1992 ties the airline’s hands in the battle with wholly foreign owned Virgin; there’s government red-tape and meddling in the operation of the otherwise perfect market system. Fewer and fewer people are listening to these voices. Realities are pressing in. Who will provide services in regional Australia if private corporations can’t turn a satisfactory profit? And what does it say about the sovereignty of the country if we can’t point to a majority Australian owned national carrier? What happens to the engineering skills base of the country if all aircraft maintenance is shunted off to low-wage centres?

The truth is that these bigger picture issues are of no interest to corporate investors. It’s all about profits. No stone is left unturned or corner left uncut in that cause. Wages will always be a battle ground and a freeze has already been moved by Qantas management ahead of enterprise bargaining negotiations. Unions have given notice that they will fight and they are absolutely correct in taking that stance. A defensive attitude on the part of workers in the industry would encourage airlines to press on with plans to increase the numbers of international crews working on lower wages – so low as to be unliveable in Australia.

Abbott has said he will push for the lifting of the foreign ownership limit for Qantas from 25 percent to 49 percent. It is hard to see how that measure will help. What’s to stop another group of profit-chasing executives from taking some ill-advised gambles? South Australian Senator Nick Xenofon has called for an urgent inquiry into the running of Qantas and its future. The Greens are supporting the call. Labor won’t back it though an investigation is clearly warranted to understand precisely how the airline wound up with a $252 million half-year loss and in need of a $2 billion restructure.

The ACTU is calling on the government to issue a debt guarantee. That may get the airline out of its present predicament but is only postponing the inevitable. The airline needs to be re-nationalised. Public enterprises under capitalism are not little islands of socialism in a sea of exploitation but at least the public has some influence on their social functions and their standards.

Next article – The CPA welcomes the release of Fernando Gonzalez

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