SPC Ardmona: Abbott Government Right To Refuse $25m Handout Request

THE DECISION by the Abbott government to refuse a request from SPC Ardmona for a $25 million government assistance handout — the latest in a continuing series of demands for taxpayer assistance made on the government by business — is the correct call; whilst there is no doubt SPC Ardmona faces cost pressures in its business, the role of government is not to prop up failing enterprises. The government’s decision is indeed a precedent.

With industrial relations issues (and related considerations) looking daily more likely to define a big part of the politics of 2014, it is heartening to see the new Liberal government appears to have its wits about it.

It has to: the looming onslaught of propaganda, strikes and other disruptive behaviour set to be unleashed by the union movement will require the government to play its hand with skill, and to avoid the temptation to shirk decisions that are difficult — even unpalatable — but nonetheless right.

In this vein, the decision not to shovel $25 million out to floundering fruit processing company SPC Ardmona is absolutely correct.

First things first: if SPC Ardmona closes down its operations (or, more likely, downsizes its payroll), jobs will be lost, and I accept that; unemployment is not a pleasant contemplation at the best of times, and less so when the company might come crashing down as well.

And the voices from union quarters and — of course — an “outraged” opposition will try to nail Abbott on “jobs,” stuck as they are in the conveniently self-serving 1950s view that a job is for life and should not be permitted by government to be lost under any circumstances whatsoever including, it seems, commercial closure.

But Labor and the unions are the last people with any right to criticise Abbott; courtesy of the ALP’s efforts in government the country is hocked to the tune of $350 billion, with no money for bailouts even if the government wanted to pay them, and in any case the unions’ efforts over long years to strike extortionate enterprise agreements that push the companies paying them, literally, to breaking point is the primary reason SPC Ardmona is in the mess that it is.

I don’t believe governments should be interfering in markets, picking winners, shovelling out cash to stave off inevitable closures or subsidising uncompetitive businesses or industries at public expense: that kind of thing is the preserve of the Labor Party and its loopy bedfellows over at the Communist Party Greens.

I have said in this column — quite some time ago — that I’m not interested in discussing the merits or otherwise of bailouts engaged in by the Howard government; those activities were the decision of that government, and there is no causal reason to view them as a precedent for the Abbott government to follow. In fact, to date, the conduct of industry policy has been undertaken by the Abbott government on a much sounder basis than was the case under its conservative forebear.

And I said, just yesterday, that the “high dollar” excuse rolled out by Labor and the unions as an excuse for businesses with bloated workforces labouring under the weight of ridiculous, union-inflicted wage costs doesn’t cut ice any more; the value of the Australian dollar has declined 20% against its US counterpart in the past year, and is expected to fall further, and I pointed out yesterday that were it not for the presence of a shiny new conservative government to take its anger out on, the union movement would have nowhere to hide when it comes to the punitively high real wages its EBAs have inflicted on major businesses.

And this is the case at SPC Ardmona.

Regrettably, the fruit processing and canning firm that has for decades been a trusted Australian brand is one of an increasing number of companies which struck a series of bargaining agreements with the unions, only to see their wages bill spiral out of control to the point the viability of the company itself is at stake.

The unions may well have been able to get away with blue murder when its own political wing — Labor — was controlling the Treasury purse strings; in fact, it’s a breathtakingly efficient rort to push business into virtual bankruptcy merely to see taxpayers prop those businesses up to ensure union demands continue to be met indefinitely.

A responsible government can have no truck with this, however, and Abbott was right — not least given the state of the budget — to simply point out that it is not appropriate for taxpayers to borrow money just to hand it over to Coca-Cola Amatil, SPC’s parent company.

In an irony that I expect will not be lost on most readers, the Chairman of CCA is one David Gonski — a favourite of the Gillard government.

The Prime Minister’s point that CCA is a highly profitable, multi-billion dollar business (and one I would point out is ultimately foreign-owned) is a salient one, and tends to dampen any moral or economic case for the taxpayer to bail out one of its divisions — even if the government were inclined to do so which, in any case, it isn’t.

Like the foreign-owned car companies before it who have chosen to cease manufacturing in Australia, it is understood SPC Ardmona employees are covered by EBAs that confer high wages on its unionised workforce that are unrealistic on any reasonable measure, as well as other ridiculous perks such as bountiful provisions for paid leave, inflated redundancy “entitlements” that look obscene compared to those prevalent in the rest of the community, and the small point that the agreement makes the unionised workers virtually impossible to sack.

The Abbott government had to draw the line in the sand; at the very least, it should send the signal to the union movement that more due care and diligence is required of them in their bargaining negotiations: the assumption the taxpayer would fit the bill for the most flagrant union excesses should be dispelled once and for all.

It is to be hoped this message sinks into the heads of Trades Hall types, and quickly; one of the problems with the union movement is that it really doesn’t represent the struggling worker at all, but aims to create an upper class of privileged industrial warriors for political purposes, and if anyone doubts that, they should ask where the thousands of demonstrators who will soon parade through Australia’s cities demonstrating against Abbott are being rounded up from — and whether they’re being paid for work they should be doing, but aren’t.

My guess is that the unionised workers won’t lose any money in protesting, but the same can’t be said of the firms they claim to be acting in the interests of.

It brings me to two points in closing.

One, the Industry minister, Ian Macfarlane, must at some point start to wear out his welcome in Abbott’s cabinet; it is understood that he argued behind closed doors for the bailout money to be paid to SPC Ardmona. Paying the money might have been the easy way, and the populist way, but neither of those considerations make it right.

This is the second time in less than three weeks we have had to single out Macfarlane for doing things that would not sit out of place at the ALP or, in fact, the Greens; earlier this month, his was a lonely voice in Cabinet arguing for the retention of the mandatory Renewable Energy Target, a policy largely responsible for usurious hikes in essential utility prices that occurred during the term of the previous government.

We’ll keep an eye on Macfarlane, but his performance in Cabinet to date has been less than impressive, especially given the pivotal economic portfolio he is charged with.

And two, the Abbott government’s decision on SPC Ardmona almost obliges the Abbott government to attempt, at the very minimum, to pass legislation abolishing the foreign ownership restrictions of the Qantas Sale Act.

To date, the record of the government on these questions has been to allow the market to determine the outcome, as it should be; unions have thus far refused to budge on the terms of their EBAs in any meaningful sense whatsoever,* with the result Holden is gone, just as Ford and Mitsubishi have already gone.

The SPC Ardmona decision once again puts the onus on the unions to modify the unbelievable provisions of the workplace deal it made with SPC: nobody has any problem with them extracting an agreement that sees their members reasonably and well paid for the work they do. The present agreement takes that to a level of labour expense that puts the company  itself in jeopardy, and if the unions refuse to co-operate now (as they did on the Holden EBA) then any loss of jobs must be on their heads — not the government’s.

Having said that, the same determination to allow free markets to determine industrial outcomes must be applied uniformly; in the case of Qantas — faced with identical labour cost problems for identical, union-created reasons — the airline must be permitted to attempt to resolve those problems in a fair environment.

Its foreign-owned competitor, Virgin, faces none of the barriers to sourcing money offshore that Qantas does; in fact, it could be argued that notwithstanding the punitive labour costs Qantas faces, Virgin’s foreign owners are free — and quite capable — of driving Qantas out of business at a time and in a manner of their own choosing.

The Holden issue showed Abbott unwilling to throw taxpayer money at big businesses struggling under the cost of union labour. Now, SPC Ardmona has proven it. Qantas has said it doesn’t want money but that it does need help, and the abolition of the Qantas Sale Act is at the top of its wish list.

It’s time — having done the right thing now — for the government to show some consistency. Qantas may not be making a request for money as others in the field are, but the Qantas Sale Act is every bit as much a market distortion as the assistance packages Abbott is now correctly refusing to dole out.

If industry assistance is a no-no, then so must be the Qantas Sale Act. The government should move to abolish it immediately.

 

*The offer by unions, widely reported immediately prior to the announcement of the Holden closure, that its members were prepared to work an additional 16 minutes per shift does not constitute a reasonable or meaningful attempt to contribute to cutting costs or improving productivity in the business: all such an offer does is to make union labour even more determined to watch the clock than it usually is, and an additional hour or so per week is laughable — especially when most of us in the real world routinely work 50, 60, 70 hours per week (without truckloads of overtime cash an EBA delivers) and don’t even flinch. It just shows how out of touch with reality unions and their adherents in this country really are.

 

To Prosper, Labor Must Jettison Union Link

THE LANDSLIDE DEFEAT of the last Labor government — substantially controlled directly and indirectly by the union movement — should sound the death knell for Australian Labor’s formal links to the trade union movement; increasingly irrelevant, economically destructive and, it now seems, infested with rampant criminality and corruption, the mainstream Left must choose: fundamental reform, or oblivion.

One of the (many) reasons the Liberal Party enjoyed 23 unbroken years in government between 1949 and 1972 — a hegemony reflected in and variously overlapped by long-term conservative administrations in Victoria, Queensland, South Australia and Western Australia — was the endemic division in the Labor Party and in turn, the influence of its union flank in creating, perpetuating and compounding that division.

A key factor in sparking such disarray — and Labor’s “great split” of the 1950s — was, of course, Communism. Yet as Labor’s years in opposition rolled drearily on, the greater enemy was the one within.

Labor parties in the states — which, from the 1960s on, had started to more directly feel the influence of their union wings, as rising numbers of union personnel found their way to Parliament in safe Labor seats — were rendered unelectable, facing successful scare campaigns against socialism, communism, and the trade union culture of industrial anarchy and thuggery waged by formidable conservative leaders like Sir Henry Bolte, Sir Joh Bjelke-Petersen, and the wily Sir Thomas Playford.

In some respects these were Labor’s halcyon days: seemingly consigned to opposition permanently, the ALP actually stood for something, despite the growing presence of its union masters in its ranks; perpetually faced with the prospect of electoral defeat, Labor had to fight if it were ever to succeed, and the only way to do so was to convince a conservative electorate that it stood for something other than the excesses of the union movement and the “nasties” that were widely perceived to accompany them.

To this end, the ALP owes an enduring debt to Gough Whitlam and his election in 1972: the party’s emphasis on education, health, and social welfare under Whitlam paved the way for Australian Labor’s most successful political period; the ALP has held office for a majority of the past 40 years federally and in every state bar Western Australia (where it formed government for 18 of those 40 years).

To further underscore the point, of the 63 years between Federation and 1974, Labor held office federally for just 18 of them.

Clearly, there is a dividend to be reaped by standing for something meaningful, as simplistic as that may sound.

I wanted to post on this today — and yes, I’m keeping it very general for now — in light of the current public debate over the Abbott government’s policy to restore the Australian Building and Construction Commission, and given revelations of rampant criminal misconduct and corruption in a number of unions are now coming to light as “whistleblowers” start to emerge from union ranks to volunteer details of such things.

The prospect of a Royal Commission into the union movement is no doubt helping to motivating these noble actions, too. The unions and Labor — to say nothing of those of their members who may find themselves jailed as an end consequence of the process that will soon commence — have much to fear from a judicial inquiry, and everything to lose.

The risks, however, fall disproportionately upon the ALP, as the political arm of the wider labour movement.

Since the federal election last September, we’ve talked a lot about the unions, the wider political Left in this country, and what should be done about them and rightly or wrongly, I’ve taken a fair bit of heat both through direct comment on this site and elsewhere on account of unapologetically kicking the anti-union can around.

I do believe, however, that we’re on the cusp of a fundamental shift in both the way the Left operates politically in Australia (or we should be, if it wishes to survive) and the way it is perceived in the wider community.

And this will mean that for Labor to survive and prosper as a party, it will need to cut its formal links — once and for all — with the trade union movement.

We have already spoken of the stream of Labor figures either currently before the courts, under investigation over allegations of criminal misconduct, or already prosecuted and convicted: it is perhaps no coincidence that this group has to date been overwhelmingly composed of people whose backgrounds lie in the trade union movement.

As I mentioned, we’re starting to learn of details of alleged criminal activity, corruption and other inappropriate conduct within those unions: the CFMEU, in particular, has in recent days been hit with accusations of misconduct that have found their way into the press; one of the main issues in the Melbourne press has centred on practices at union-controlled construction sites that boil down to blackmail, extortion, abuses of market power, and outright corruption.

(I reiterate: I’m keeping things general; I don’t want to bog down in haggling over the merits or otherwise of specific allegations, people, what they may or may not have done — there will be time for that in due course).

The general public has already witnessed the tawdry saga of the Health Services Union being played out nightly on their television screens and in the press; one senior figure in that fiasco has already been jailed, whilst another — former Labor MP Craig Thomson — will soon learn whether he faces the same fate.

Everyone knows, too, that an alleged fraud involving the AWU is being investigated by Police in Victoria, despite the very best efforts of former Prime Minister Julia Gillard to prevent this — and any involvement she had in it — from ever seeing the light of day; indeed, this being the union once led by current Labor “leader” Bill Shorten, the issue has the potential to become very messy indeed, and potentially to implicate a lot of people directly connected to the ALP.

And of course, if you live in NSW, ICAC has provided a steady stream of revelations about the rotten, corrupt Labor regime that ran that state for 16 years — and it, too, was heavily populated by former union officials.

But if we move beyond the alleged criminalities of the Labor/union edifice, the political effects of the unions on the ALP’s fortunes are a time bomb seemingly ready to detonate.

I don’t think most Australians have really had a great level of comprehension to date of the minutiae of the kind of enterprise bargaining agreements (EBAs) that various unions have struck over the past 20 years with major companies such as SPC, Qantas, and the car manufacturing companies — to name a few.

Those agreements, however, are being thrown into stark relief as companies that have long been household names (or “Australian icons,” if you like) are either shutting up shop and leaving the country, or are at grave risk of going broke as spiralling labour costs help turn once-viable businesses into basket cases.

The “high dollar” excuse rolled out by unions as an excuse for car makers in particular ceasing to manufacture vehicles here really doesn’t cut ice any more; the value of the Australian dollar has declined 20% against its US counterpart in the past year, and is expected to fall further: were it not for the presence of a shiny new conservative government to take its anger out on, the union movement would have nowhere to hide when it comes to the punitively high real wages its EBAs have inflicted on major businesses.

The other thing to take note of is the conduct of the ALP itself, and the direct correlation between the huge increase in the number of former unionists in its ranks and the deterioration of what the ALP passes off as reasonable or even decent conduct of itself.

Obviously, democratic government (and especially within what is essentially a two-party system) is highly adversarial; there’s nothing wrong with that.

But if readers think back to the last time the ALP was booted out of office federally in 1996, the consequent opposition led by Kim Beazley didn’t behave like the one “led” by Bill Shorten does.

The present incarnation of Labor in opposition bullies, lies, smears, abuses, and misleads; it would rather peddle incorrect information publicly in its quest to cheaply score votes than to evaluate its failures as a government, to develop reasonable and meaningful policies to underpin its claim to regain government, and to get out and sell these new policies to an electorate that is fresh from ejecting it from government by a country mile.

Even the issues Labor likes to claim ownership of, and the “successes” it likes to trumpet from its time in office, are tainted: it is an open secret that the so-called Gonski reforms were more about legislating huge amounts of recurrent expenditure on Education to sabotage the ability of a Liberal government to manage the federal budget than they were motivated by any real interest in education, other than to arrogate the tag of ownership to itself on the basis of a pot of money.

Labor’s National Disability Insurance Scheme is tarred with the same brush, being largely unfunded and dependent on the borrowing of tens of billions of additional (foreign) dollars just to implement the first stage of the intended eventual program — money the country simply can’t afford, irrespective of the merits of the idea. But again, never mind: the Liberals will have to deal with it.

And as the tentacles of union influence have slithered into every aspect of the operations, policies and parliamentary representation of the ALP, it has moved that party further and further from a correlation with the majority in the middle of the electorate as a whole.

One of the reasons the Rudd-Gillard-Rudd government was as obsessed with minorities as it was is very simply due to the fact that programs to pander to those minorities require bureaucrats to run them, and the easiest source of new bureaucrats — if you’re from a Labor government — is over at Trades Hall.

And I make the point that the insiderish, bovverish, spiv-like hack mentality that characterises the way Labor’s foot soldiers conduct themselves — the abuse, the spin, the victimisation of those who cross them — is a straight import from the culture of union organisers across the country.

Try having a debate on Twitter with any of the thousands of Labor-operated accounts that spew out endless streams of misleading political drivel. At best, they’ll dismiss you as “a troll” and block you. At worst, the abuse you’ll experience will dispel any doubt about the point I am making quicker than you can click your fingers.

Yet unions still have a 50% say in how the ALP is run, in spite of the surfeit of evidence of the damage all of this is doing to the ALP and to its prospects of regaining office in Australia, either on its own or in yet another unholy alliance with the Communist Party Greens.

In short, all of this is a turn-off to the everyday Australians Labor — and the unions, for that matter — claim they act in the interests of.

Labor — and the unions — are right to note that companies like Ford, and Mitsubishi, and Holden, and Qantas collectively employ tens of thousands of people: their concern for the jobs of those people is admirable.

Or at least it would be, were it not for the fact that the rising tide of wage costs inflicted on those companies by union-negotiated EBAs is driving them out of business. At some point, decent folk who might be sympathetic to the “fair pay and conditions” rhetoric of the unions are going to wake up to the fact, en masse, that that rhetoric — in light of the usurious conditions already enjoyed by those workers — is just hot air.

The point of this post is really just to lay some ground in the most general of terms in view of the prominence the unions are set to enjoy (or endure) as 2014 progresses; I think the year could prove pivotal — and not in a positive way — to the future of the ALP-union axis, and it brings me to a point I have occasionally but repeatedly made over the lifetime of this column.

Very simply, it is that Labor — far from working out how to shield and exonerate the unions that nourish it financially — should be working to extricate itself from that nexus, with a view to abandoning it altogether: what has clearly become an albatross around the party’s neck in terms of its ability to connect to ordinary voters is set to become lethal.

The Abbott government shouldn’t be blamed for that; no government should tolerate criminal activity, even in its own back yard, and in any case is obliged to do all in its power to stamp it out.

In fact, it’s a damning indictment on the ALP that it has allowed the kind of misconduct a Royal Commission will expose to continue at all, let alone flourish unfettered: and make no mistake, a Royal Commission into the union movement (and the findings from it)  has the potential to keep Labor in opposition for a very, very long time, irrespective of any short-term optimism current opinion polls or a possible win at a by-election might inspire.

Treating the union movement — and its cash — as just another vested interest in a wider coalition of causes lobbying to advance their objectives should be the direction Labor heads in; the union movement won’t change, so if it is to secure its position as the pre-eminent political force on Australia’s Left, then it is the ALP that must change.

Readers will have heard me suggest that becoming a true party of social democracy, unencumbered by virtual ownership by the union movement, should be the end destination for Labor — if, indeed, it were to continue to refer to itself as “Labor” at all after such a fundamental restructure.

But that party has a choice. It can reinvent itself from the top down, or it can face the consequences of its past, content at least with the bitter consolation that nothing ever changes if things are done as they always have been.

The various looming inquiries into the union movement are almost guaranteed to reveal a citadel of criminality unprecedented in the history of this country. If the ALP wants to get the jump on them, it had better start running now.

 

AND ANOTHER THING: with the union movement staring down the barrel of a Royal Commission into corruption and other alleged criminal misconduct, calls from the likes of ACTU president Ged Kearney — in effect, to allow such matters to be dealt with by Police — should be ignored. Stretched state Police forces do not have the capacity to investigate such matters as thoroughly or systematically as a dedicated, properly-resourced judicial inquiry with sweeping powers and terms of reference, and Ms Kearney knows it. Calls of this nature are a red herring designed to divert attention from the problem, not to deal with it, and only add to the impetus for such an inquiry to be instituted at all.

 

G20: Abbott’s ALP Critics Answered

BRIEFLY REVISITING an issue we discussed last week — namely, the outraged criticism of the Labor Party in the face of the fact Tony Abbott dared to allude to its uselessness as an economic manager at an international forum — someone with a better idea of the realities of such matters has returned fire; former Treasurer Peter Costello, who has more economic credibility than the entire ALP, has called the Labor attack for what it is.

I don’t intend to dwell long on this; to be sure, the intention here is really only to follow up on an issue we’ve discussed at length — and one which has generated a reasonable debate among readers.

Most will recall my response to the indignant criticisms levelled by Labor at the Prime Minister last week on account of the brief allusion he made to the previous government; some — here and in other forums — sought to ridicule my analysis, and in particular where knowledge of the previous government’s track record among our international trading partners is concerned.

I don’t pretend to know everything, and whilst the odd “whisper in my ear” backgrounds me to some of the issues I cover in this column, for the most part my calls are made purely on political instinct — which is why, whether I get those calls right or wrong, they usually appear here before they do so elsewhere.

Even so, my judgement — that Abbott’s mention of the Rudd-Gillard-Rudd government at the G20 was a signal to international colleagues who really already knew the truth of that outfit too well — appears to have drawn support from perhaps the most credible quarter in Australia, with Peter Costello arguing many of the same points in his weekly column today for the Herald Sun in Melbourne.

I’m not going to drill into this too far; those who missed my earlier piece can access it through the link above, and I think everyone who makes it that far should check out Costello’s article from the Murdoch press. His remarks carry the clout of somebody who actually ran the system — for 12 years, brilliantly, putting Australia on the soundest footing it has enjoyed in decades — against the sniping and petty mudslinging of a party that managed to comprehensively trash that system in, literally, half the time.

For those who do not have time to read the Costello article in full, I draw attention to one key paragraph:

“Labor worked itself into a huff and pretended this was some international gaffe; that Abbott had no right to point out the previous government had woefully underperformed against the expectations it set itself. But Labor showed sensitivity, not sense. Does it really think other countries are ignorant of what has been going on in Australia? Does it think this is a closely guarded secret? Other nations know what has happened. What they are interested to know is whether it will change.”

I think that says it all.

I can dish it out and take it with the best of them, but the one thing I cannot abide is spivs and shysters from the ALP with their heads wedged so far up their own backsides in self-denial that the shit they talk actually starts to influence the gullible, the stupid, and those who really couldn’t care less.

To the boys over at the ALP: here’s your bone, fellas — go and tear Costello apart. You won’t get off quite so easily if you try it, methinks.

 

 

Finally! Peter Cosgrove Named Australia’s 26th Governor-General

PRIME MINISTER Tony Abbott has confirmed one of the worst-kept secrets in Australian politics of recent times, announcing that retired General and Defence Force chief Peter Cosgrove is to become Australia’s 26th Governor-General; Cosgrove is a standout candidate for the role, and his appointment is to be heartily applauded. The restoration of decency to the office, and respect for the institution it represents, is long overdue.

Confirmation today of the appointment of Peter Cosgrove as Australia’s 26th Governor-General since Federation is to be welcomed, applauded, and even celebrated; this is the highest office in the land, and Cosgrove will take up the role in March with the best wishes and support of millions of Australians.

It is difficult to think of a better — or more suited — candidate as Governor-General at this time than General Cosgrove, who will replace Quentin Bryce when her (extended) tenure comes to an end in March; with a fine record in Australia’s military, business and charitable sectors, Cosgrove brings a broad depth of experience to this role backed by a reputation for competence and a tradition of integrity and probity of service.

Significantly, Cosgrove — a committed constitutional monarchist — is unlikely to rock the boat as his erstwhile predecessor ultimately chose to do; whilst the nature of Australia’s institutions of governance may or may not evolve and change over time as dictated by the will of the people, in accordance with the Constitution, those institutions demand the respect and impartiality of those who serve them and this is especially true of the office of the Governor-General.

It is regrettable that Quentin Bryce — a prominent Labor figure and social activist of many years’ standing prior to her first vice-regal appointment as Governor of Queensland by the government of Peter Beattie — opted, in the end, to sully her tenure as Governor-General by making direct interventions into the realm of partisan political politics.

I have opined in this column previously that political appointees to this office over the decades — Liberal and Labor alike — have forged a surprisingly distinguished tradition of service in the role, however questionable their suitability may have been regarded at the time or however dubious the motives of their Prime Ministers in appointing them.

In seeming to seek to provide vice-regal imprimatur to the causes of gay marriage, affirmative action and the republican movement, Bryce lowered her colours and trashed any value her time as Governor-General may have represented; I have said in the past — and prior to her regrettable foray into active politics — that despite her background her tenure in the office was one of distinction.

That cannot be said of it now; regardless of the elegance with which Bryce conducts herself publicly, or the crisp, polished communication style she deploys, she has shown herself to be just another political grub devoid of timing, sense of occasion, or indeed any comprehension of what constitutes acceptable standards of conduct required of the office she has held — or, it seems, what does not.

Gen Cosgrove comes to the office of Governor-General at what is likely to prove a time of great change for the institution he will now represent; already, it is well known publicly that Prince Charles is taking on the bulk of the public commitments of Her Majesty the Queen, and will continue to assume more of her workload behind the scenes as he prepares to become King. Her Majesty is now 88 years old, and whilst the subject was once regarded as unspeakable, it’s an open secret that government and Palace officials are preparing for a succession in the monarchy, and perhaps sooner rather than later.

In this regard, it is critical that the representative of the monarch is an individual of unimpeachable character at a time when stability and continuity is likely to be required. Gen Cosgrove satisfies those criteria.

And in fact, at 66 years of age, Cosgrove embodies the very youngest end of a generation that might have any direct memory at all of living under a monarch other than Elizabeth II, who ascension to the throne in 1952 ushered in a reign currently standing second in duration only to the 64-year rule of Queen Victoria from 1837 to 1901; it may be the historic nature of this appointment today will run far deeper in retrospect, in years to come, than might be apparent now.

Cosgrove’s appointment is for five years, running from March this year until early in 2019, and is believed to have received the Queen’s assent at the weekend.

Some monarchists will be bitterly disappointed today that former Liberal Prime Minister John Howard isn’t the man at the centre of this announcement.

As a conservative and a monarchist I understand their views and to some extent sympathise, but I cannot stress strongly enough that as much as Mr Howard may be qualified to serve as Governor-General — indeed, the role could have been tailored to him, such is the fit at face value — he is too deeply political and polarising a figure to represent an appropriate selection to the office, and I encourage those who may have hoped for his appointment to get behind Gen Cosgrove. He is a fine candidate for the role.

To those readers of republican bent, I appeal to you to embrace Gen Cosgrove in his new vocation; if there is one thing Bryce has shown, it is that the office of the viceroy can be warmly accepted (even if, admittedly, largely by fellow travellers of her social agenda), and for long as there is a role for a Governor-General in this country it will continue to be filled by a fine Australian. Cosgrove is certainly that, and deserves the support and affection of his peers.

And to those warriors and spivs of the ALP, operating in the unscrupulous and ethics-free spirit of smugly attacking anything and everything even indirectly associated with Tony Abbott — just because they think they can — get a grip and wake up to yourselves for once, and leave Cosgrove alone: it’s one thing to try to force-feed the voting public a steady diet of lies where domestic politics is concerned, but another altogether to take aim at the structural edifices of the system itself. Quite simply: Don’t. The only people impressed by your antics, at the very best of times, is yourselves.

It’s a shame to even dignify such people with a mention on what is a great day for Australia. But the tactics they used to destroy Peter Hollingworth were never deployed against William Deane or Quentin Bryce, and they should under no circumstances be revisited now, just because Cosgrove is Abbott’s appointment.

I am delighted that — finally, after years of speculation — Cosgrove has been appointed to that office which sits at the apex of Australia’s system of governance. I am sure he will discharge the role with distinction, and I congratulate him heartily on his appointment as Governor-General today.

God Save The Queen!

 

Advance Australia Scare: Socialist Fairfax Rant Misses Mark

WHEN THE LEFT wants to trash Australia Day, it usually involves attempts to rebrand the commemoration of British settlement as “Invasion Day,” or to run off on an anti-British, anti-monarchistic, anti-imperialistic tangent that is as outdated as it is offensive. It does however seem that Australia Day isn’t so sacrosanct to the snivellers of the Left as to prevent them from belting their own can, and today the Fairfax press has certainly done that.

The notion that Australia’s Left would treat Australia Day with so much as a shred of the decency or respect it deserves is fatuous; very few thinking people expect any more from those energised spear-throwers of socialism in our midst than cheap cracks about a British invasion of a sovereign nation and a people dispossessed of it, or to use the occasion to rattle on about republican aspirations that are heavy on the language of emotional blackmail but entirely devoid of one syllable outlining how the lives of Australians might be improved were those aspirations ever realised.

This year I have even noticed an increasing number of those from Australia’s migrant community trumpeting the socialist claptrap about “Invasion Day,” apparently oblivious to the ironic contradictions that lie within their own utterances.

It is fair to say that Australia Day — from a cultural and intellectual perspective — is an annual event the Left seeks to trash with relentless abandon; even so, it seems, this is no bar to attempting to hitch its odious political agenda to the bandwagon of the very national celebration it otherwise seeks to destroy.

I have been reading such an attempt this afternoon, published in the august pages of the Fairfax press today across the country; what is presented, upfront, as a discussion of the concept of Australia as “a fairly classless society” is immediately revealed to be no more than a socialist rant about “the growing gap between rich and poor” and “the rising tide of inequality.”

Perhaps unsurprisingly, the points made in this insidious excuse for a responsible perspective on Australia Day read, almost to the letter, like a running sheet that might do the rounds of MPs from the Communist Party Greens or the ALP.

I have never had a great deal of time for the facile bleatings of those who rail against “the gap between the rich and poor;” this kind of case is built on the prejudices and resentments of self-appointed “champions” of the have-nots — not even, in most cases, the have-nots themselves — and ignores, as one reader noted in a comment late last week, the fact that absolute outcomes are the more meaningful yardstick by which to make such comparisons and quantifications of relative wealth.

The Fairfax columnist seeks to split hairs over a 60% increase in the incomes of the wealthiest 10% of the population since 2010, whilst conceding a 40% rise in the incomes of “lower paid workers.” I’m not going to go through the Fairfax article line by line (as satisfying as such an exercise would be): the crux of the argument, and the facts of it, are contained right there.

The lot of the low paid increased 40% in four years: isn’t this exactly the kind of thing the bullies of the Left insist is their objective? Only if the top 10% is pulled down at the same time, it seems.

The problem with socialism — as Margaret used to say, and as we seem to be restating in this column on an increasingly regular basis — is that sooner or later, you run out of other people’s money to spend.

For there to be wealth to be distributed, there must be wealth created; and for those in need of the fruits of that wealth to be distributed to them, there must be those who are wealthier than them.

This is not — as the Fairfax article would have its readers believe — a reality confined to “capitalistic Americans or stuffy Brits,” or even to capitalist, market-based economies at all: in fact, it is a reality whose “excesses” are arguably far more pronounced in socialist societies, and the more socialist a society is in nature, the more pronounced the “gap.”

In Soviet Russia, perpetual ownership in virtually everything — real and actual property — resided in the state; at the apex of the USSR sat a privileged and indulged governing class who enjoyed the kind of luxuriously opulent lifestyles undreamed of in the “working” classes, as wealth was locked away by the Soviet government for the benefit of the relative few, whilst the masses were provided squalid accommodation and a level of essential service delivery that would be regarded as third-world by Australian standards.

A similar reality existed in China, and to some extent still does; the market reforms engineered under the leadership of Deng Xiaoping in the 1970s and 1980s were not predicated on increasing the living standards and/or wealth of his people (although that has been an incidental and ongoing consequence) but rather were based on the hard political recognition that the burgeoning population would render China’s Communist system unsustainable unless the masses, to put it crudely, were thrown a few scraps off the table in return.

In other words, to keep the ruling junta — and its privileged existence — intact.

And even in North Korea — the last rigidly Stalinist society on Earth, and one of the most repressed by the cruel tyranny of Communism — those who rule enjoy distinctly first-world levels of luxury and comfort, to say nothing of being the only people in the country to even enjoy continuous supplies of running water and electricity, let alone a plentiful and reliable supply of food.

And all of this points to the first of two fatal errors in the entire dogma the Left would aspire to inflict in the name of “redressing” inequality and the “wealth gap:” to do so redresses nothing; it merely shifts the balance, transferring ownership, property rights and wealth to a privileged junta who sit in dictatorship over the population at large.

The second of these flaws lies in the consequences of attempts to “redress” the balance: crack down on “the rich” too much, and they stop generating wealth at all.

This is human nature, a condition socialist theories of society or politics singularly fail to grasp; the higher the slice of a profit, or a commercial return, or indeed the prosperity derived from any enterprise that is extracted by the state in the form of taxes (or whatever stipend you call it), the less incentive there is to engage in such activities, and eventually the “enterprise class” (as I will call it for the sake of expediency) ceases to undertake wealth-generating activities at all.

There are ample illustrations of this phenomenon — which also works in the obverse — both in Australia and elsewhere.

In the United Kingdom, the Conservative government of David Cameron abolished the top rate of income tax, cutting it from 50% (as introduced by Labour) to 45%, and ultimately to 40%. Remember that the UK’s VAT — a GST equivalent — is levied at 20%, double the rate of our own GST, which means that under Labour, Britons in the top income bracket faced notional marginal rates of some 70% on their income and expenditure.

As a result of cutting the top rate, the UK experienced a surge in taxation receipts, which also coincided with a surge in economic activity and GDP growth.

The Fairfax article points to the Abbott government’s abolition of government-funded concessional super contributions for some workers that were meant to be paid for by the Gillard government’s mining tax. Not only did the tax raise no money to fund those contributions, but it punched a colossal hole in foreign investment in Australia’s minerals and energy sector, which in turn did nothing to help Australia’s already-fragile domestic economy.

Just as it is true — and oft-stated — that no society ever taxed itself to prosperity, it is also true that no society has ever successfully taxed itself to equality. This is the basic and brutal truth that irrefutably renders these kinds of arguments fallacious.

As I said earlier, I’m not going to go through the Fairfax article on a line by line basis, although several idiocies in its claims do stand out.

Have “most developed countries become more unequal in recent decades as they freed up labour markets and opened themselves to increasing competition?” No. To the extent adverse consequences of “free” trade and competition have occurred, they are almost exclusively the consequence of market-distorting forces such as industry subsidies, collective bargaining agreements on wages, and other interventionist behaviour either by governments and/or those pillars of their economies that are favoured by such activities. The collapse of Australia’s car making industry, and the existential problems faced by companies such as Qantas and SPC, all in the face of unsustainably high real labour costs inflicted by extortionate enterprise bargaining agreements, are excellent examples of the end destination of this destructive bus.

Fairfax holds the President of the United States — the socialist Barack Obama — up as some kind of oracle, referencing his Rudd-esque remarks that the “income gap” is the ”defining issue of our time;” far from leading the US to nirvana, Obama’s administration has crippled it with the greatest expansion of government regulation in America’s postwar history, and sought to strangle it with the most doctrinaire attempt to redistribute wealth in the United States since it was founded.

Far from “a rising tide lifts all boats,” as Fairfax quaintly postulates, Obama’s regime has seen to it that the boat can barely rise at all.

And its contention that the Abbott government exists only for the benefit of “the wealthy” (which, remember, is a household earning more than $150,000 per annum — the ALP said it was thus) fails to stack up.

The arguments of the Left don’t withstand scrutiny at the best of times, despite the best efforts to the contrary of its cheer squads at Fairfax and the ABC, and this article is right down with the worst of such endeavours: misleading, misguided, and bordering on intellectually fraudulent.

But it has nothing to do with the merits or otherwise of Australia as a “fairly classless society,” and nor does it argue with any rigour or substance the solutions to those gold-standard articles of faith the Left would be lost for a cause without: “the growing gap between rich and poor” and “the rising tide of inequality.”

In fact, the Fairfax article has nothing to do with Australia Day at all, and my rather blunt response to that is if it is unwilling to celebrate Australia Day — and everything that goes with living in what is inarguably the best country on the face of God’s green Earth — then it can, quite frankly, peddle this kind of shit somewhere else.

 

Davos, G20: On Economic Matters Labor Should Keep Very, Very Quiet

BRIEF REMARKS on domestic politics made by Tony Abbott at a forum of the G20 in Davos need to be kept in perspective; for the past six years, this country — through those who governed it — sent the rest of the world the message that Australia’s “miracle economy” was being trashed, and held out the prospect of sovereign risk to those who invested here. If Abbott wishes to drive home his “we’re open” message to a wider audience, so be it.

The tiresome, hypocritical, troublemaking rabble that the Labor Party has reduced itself to knows no low too low to steep to; not only does it deny any and all responsible for the mess it left others to clean up — or that a mess exists at all — but increasingly, it seems determined to stifle that clean up effort for reasons best known to itself. It lost the election last year, after all; one might expect the ALP to wait until after the tough elixir has been administered before trying to score political points from it.

By now, I think everyone knows that the Prime Minister touched, e’er briefly, on domestic political matters in his speech to the G20 today.

To some extent, he had to: this was his first address to the G20 both since assuming office and since Australia assumed the group’s rotating presidency. And whilst a little vision (as melodramatically demanded by opposition “leader” Bill Shorten) may be a nice thing on such an occasion, the reality is that the government still doesn’t know the exact scope of the budget problem it’s inherited, and thus precisely how to proceed as a result.

What it does know, however, is that Labor’s mining tax — despite raising two-tenths of diddlysquat in terms of revenue — sent a dreadful message to Australia’s trading partners, cruelling investment in mining and sending a shudder through other sectors, and signalling a very real prospect of sovereign risk to anyone prepared to invest here on Labor’s watch.

And what the leaders of the G20 countries and their economics ministers know — even if the rest of the world doesn’t glean this from their consumption of news media, and certainly if Australian voters don’t as a result of the best efforts of the ALP to hide it — is that the previous government chewed through close to half a trillion dollars in spending outlays, more than $300 billion of it now sitting on Australia’s balance sheet in debt to creditors, in an unprecedented exercise in pissing money up against a post with next to nothing to show for it.

What the Labor Party does not want Australians to know is that it acquired, through its “negotiations” to win Australia a seat on the United Nations Security Council, an international reputation for wanton profligacy, throwing money at delegates in the form of promises of “special aid” and other bribery, that did the image of the country no favours behind the closed doors of the very international partners Abbott was addressing.

What the Labor Party certainly does not want Australians to know is that it had 80 new taxes in various stages of development when it was thrown out of office: taxes designed to fund even more crazy and unrestrained spending had it been re-elected, but which would have pushed huge numbers of ordinary middle-class families into unsustainable financial territory.

And what it really doesn’t want Australians to know is the huge number of stalled trade and investment deals that were left on the table, mired in red tape, the benefits of which it comprehensively failed to deliver.

In this sense, comments by Abbott that “governments can be like addicts in search of a fix” and the allusion to the Rudd-Gillard-Rudd government using the Global Financial Crisis as a pretext to “change the rules and…spend our way to prosperity” are not simply appropriate or reasonable but importantly, were delivered to precisely the audience needing to know, and quickly, the attitude of Australia’s new government to its old where matters of economics and financial management are concerned.

Of course Wayne Swan — that petulant, odious, self-important brat who presided over virtually the entire debt and spending binge as Treasurer — would race out with a self-serving and moralising column in the Fairfax press to waffle on in his own defence.

And of course Shorten would paint Abbott’s speech as “embarrassing,” and he’s right: the track record of the last government was, to be sure, an international embarrassment; far from simply guiding Australia through the GFC six years ago, it went much, much further, squandering the handsome position it inherited and ultimately raising questions in international circles about Australia’s long-term direction.

Yes, that is embarrassing, Bill.

It’s just unfortunate that the real message at the heart of the Abbott speech — the need for developed countries to recommit to free trade with each other, and to refocus on removing trade barriers in the aftermath of the GFC rather than erecting new ones — was completely ignored by Shorten, Swan, and the rest of the shysters at the ALP who want to be taken seriously as candidates for government.

The irony is that in accusing Abbott of offering nothing, they have shown themselves utterly bereft of new ideas of their own.

And whilst Labor is unprepared to own the consequences of its own incompetence, it is happy to shoot the messenger who brings word of fundamental change in the way things are to be done.

The ALP has neither the moral authority nor any record of substance when it comes to economic matters, and not certainly those involving Australia’s international partners at the elite level the G20 represents.

It would better serve its own interests — and that of Australia — by keeping very, very quiet indeed.

 

Surely, Qantas Is Better Alive And Shared Than Extinct?

TIME HAS PROVEN the Qantas Sale Act to be a red herring; rather than a protection for an Australian airline in Australian ownership, headquartered and managed in Australia, this well-intentioned but misguided legislative time bomb now threatens to detonate, wiping out the airline and tens of thousands of jobs with it. The cavalier attitude of those able to help is astonishing. Surely a partly foreign-owned Qantas is preferable to an extinct one?

Once again, Qantas is in the news; not for the right reasons, and not (directly) of its own making.

Before we get started I want to make it clear that the renationalisation of Qantas, government guarantees of its debt, and other silliness publicly indulged in by those who should know better are the last things I would ever advocate: maybe, maybe, if it ever came down to Qantas folding or not, there could be a case for the government taking it over, restructuring the living daylights out of it, then privatising it again. But that time is not now, and there remains a number of other options to try before anything so drastic is even contemplated.

I read an article in The Australian yesterday that had me shaking my head, ruling out as it does the prospect of either relaxing or abolishing altogether the provisions of the Qantas Sale Act that prohibit majority foreign ownership of the airline, and place restrictions on the size of the shareholding individual foreign investors are able to take in it.

At the time the Keating government privatised Qantas in 1995, the Qantas Sale Act was in some respects justifiable, if not a textbook case of hypocrisy. That sale followed the privatisation of the Commonwealth Bank, an institution not subjected to the same market-distorting restrictions that Qantas was encumbered with.

But Qantas held (and I contend, still holds) a unique place in the modern Australian psyche, and even those who openly refuse to ever fly on it still confess to feeling some kind of affection when they see Qantas planes on airport tarmacs thousands of miles from home. This is what Keating sought to safeguard: the legend of the flying kangaroo, the spirit of Australia, with its fearsome reputation for safety, reliability, and service. And so dreaded foreigners were prohibited by law from owning more than 49% of it, foreign airlines investing in Qantas no more than 35% in total, and no single foreign investor or entity more than 25%.

Admirable, but utterly misguided.

An early warning of the pointlessness of the Qantas Sale Act came in late 2006, when a quaintly named consortium known as Airline Partners Australia — cleverly structured to comply with the Qantas Sale Act despite a significant shareholding by US private equity funds — narrowly failed to win the required 50% acceptance rate needed for its takeover attempt to succeed, despite carrying the endorsement of the Qantas board of the day. It was widely speculated  at the time that the primary objective of the takeover, had it been successful, was to siphon out about $3 billion in cash Qantas continues to hold on its books even now before disposing of the airline in a fire sale.

(The bulk of the money held as cash by Qantas is to fund accrued workers’ entitlements, just in case anyone thinks it’s crying poor whilst sitting on a war chest).

It showed that compliance with the Qantas Sale Act did not equate to the longevity or prosperity of the airline itself. It would almost certainly have been fatal to Qantas’ business had it proceeded, just 18 months out from a savage global downturn that hit aviation businesses disproportionately hard, and robbing Qantas as it would have of the very liquidity that had made it an attractive target to begin with.

It is instructive to revisit the episode given the supposedly competitive environment Qantas now finds itself operating in. But first, I want — very openly — to kick the anti-union can around a bit, for reasons that will become obvious a little later.

Longstanding readers will recall that back in 2011 when Qantas CEO Alan Joyce grounded the airline in response to militant union bastardry and rampant industrial action over a series of ambit pay demands, I came down in this column very firmly on the side of the airline and its management and against the unions. Most will find such a judgement to be of no surprise. The management, however, happened to be right.

More recently, I shared this little gem, which provides a salutary insight into just how mad, bad and dangerous the unions in this country really are to business and to jobs (and jobs at Qantas especially), despite their grandiose but empty rhetoric about the rights and conditions of the worker: the end destination of this madness is to drive the companies to the wall, and the people they employ onto the scrap heap. So much for constructive workplace relations, union-style.

There are two reasons I bring this up.

Firstly, Qantas — like the car manufacturing companies and a number of other Australian “legacy” brands — has reached a tipping point with its labour costs; simply stated, that point lies where the continuing perpetuation of enterprise bargaining agreements that secure rolling wage rises year in, year out and usually well above the rate of inflation has become unsustainable. It is no secret that in spite of the billions of dollars in taxpayer monies thrown at car makers for years, labour costs lie at the heart of the decisions of Nissan, and Mitsubishi, and Ford, and now Holden to stop making vehicles in this country. And for that, the unions must take their share of the blame.

Qantas, along with Victorian food processing firm SPC Ardmona, seem to be the next cabs off the rank when it comes to this insidious cancer of union-inflicted insolvency and the mortal threat it poses to the viability of those businesses.

But the case of Qantas is different when it comes to the consideration of factors arising from its unionised labour costs; this is the second reason for belting the unions, culpable as they are on this point as well.

The same unions that tried to cripple Qantas in 2011 with ridiculous claims on pay and conditions (but have already done more than enough damage, thanks to the legacy of historical EBAs) strike deals for the same work to be done by an equivalent workforce at Virgin at rates of pay 16% less than they received at Qantas prior to that year’s round of wage claims. As readers will see, this is even more pertinent when it comes to cabin crew, one of whom on a “legacy” agreement at Qantas can earn roughly double what the union-struck deal at Virgin would allow them to.

It not only smells of hypocrisy — nay, stinks of it — but it also points to an agenda within the unions affected of preferment, of trying to set one company up to fail and another as an industry “winner,” which has not only contributed to the unsustainable and unrealistic levels of wages Qantas is forced to shell out, but is an object lesson in why, even with coverage of just 16% of the Australian workforce, the union movement still has far too much influence and clout in this country.

My point is that even before we get to the other factors that have put Qantas in the situation it finds itself struggling to survive in, the odds were already stacked against it by those sections of its workforce represented by trade unions. As I said, this will become important later on.

Now, it seems the pleas from Qantas for the Abbott government to do something to help it will go unheeded, with the article from yesterday’s issue of The Australian showing that deputy Prime Minister Warren Truss has effectively conceded there is nothing it can do on account of the numbers in the Senate — even after the new Senate, friendlier to the government than its present incarnation, is constituted in July.

I don’t think nationalising Qantas is in anyone’s interests: airlines are businesses governments have no place in running, and before anyone starts talking about the likes of Emirates, Qatar, or even Singapore Airlines, it should be noted that these and others like them are mostly countries ruled by one-party states and/or dictatorships, and far from primarily serving a commercial purpose, their airlines also fulfil political functions that can also become military functions under certain circumstances as well.

Either way — and certainly when it comes to the likes of the Middle Eastern carriers, and perhaps some of the Chinese airlines now expanding rapidly — their airlines seek to eke out market share to the destruction of other airlines, not to co-exist with them.

I think the Rudd government made the gravest mistake back in 2009, when it made what was basically a politically motivated decision to block a proposed merger of Qantas with British Airways. The resulting entity would have been majority-owned by Australian interests, controlled by Qantas, based in Sydney, and run by a management populated with a majority of Australian personnel. Qantas and British Airways would have continued to operate as separate brands within a common ownership structure.

But it would also have been a truly global business: and in the modern world of aviation, scalable businesses are the ultimate objective for an industry beset by rising costs and in an environment where travellers want service and standards of safety, certainly — but on a cost-effective basis, which also means lower fares overall.

This is the reason the larger state-run carriers are almost predatory in their expansion plans. It is also why, for example, airlines in the US that are already huge in their own right, such as United and Continental, are merging to form mega-airlines. It is all about scale.

In the aftermath of the Rudd government decision, BA merged instead with Iberia, and later divested itself of its stake in Qantas. And now, the chickens come home to roost.

Qantas competitor Virgin has got around the requirements for 51% of its international operations to be Australian-owned very easily: excluding its piecemeal business to New Zealand and the Pacific Islands, Virgin operates just five (5) truly long-haul aircraft, the 777-300ERs I still contend Qantas should have bought, and flies them to Fiji and the USA. For everything else it has built a so-called “virtual airline” based on codeshares with other airlines (Singapore Airlines, Air New Zealand and Etihad chief among them) to provide its customers with access to a route network of international destinations.

Virgin’s domestic airline business — operated by a separate legal entity to its 777s — faces no restrictions on foreign ownership; it just happens to be 77% owned by — you guessed it — Singapore Airlines, Air New Zealand, and Etihad.

Like Qantas, Virgin also lost several hundred million dollars last year, but unlike Qantas, it was able to undertake a capital raising exercise, reaping some $350 million in cash, from its foreign owners.

In other words (and given the bottomless pockets at SIA and Etihad), Virgin has one huge competitive advantage over Qantas in terms of labour costs. It has a second in terms of ready and limitless access to cash, courtesy of its ownership structure.

And it goes without saying, to put it bluntly, that Virgin is a foreign airline operating in Australia on domestic and international routes.

Unable to compete on the same basis and with one wing effectively hooked behind its famous tail, it doesn’t take an economics professor to see that Qantas is boxed in. Unless someone kicks one of the walls out, the building will collapse, crushing the airline as it does.

I don’t know if repealing the Qantas Sale Act will enable the airline to fight its way back onto a competitive footing or not; I really don’t. But it seems logical that as that Act places Qantas at a severe competitive disadvantage to Virgin that is slowly suffocating it, that disadvantage should be removed.

The alternative — perhaps not now, perhaps not in the next two or three years, but certainly in the foreseeable future — is for Qantas to collapse.

It is locked in a battle for domestic market share with Virgin that it can neither win without access to investor capital, yet cannot cease to fight: Qantas’ domestic business is highly profitable, for now, and built on decades of loyalty from high-yield customers. But Virgin will continue to be unrelenting in adding capacity (extra plane seats in layman’s terms) into the domestic market to push Qantas to breaking point, funded by foreign interests, and when Qantas’ domestic business breaks, that’s it: the international arm of Qantas is already haemorrhaging red ink and has done for years. There is nothing left to prop the edifice up if its strongest turret is destroyed. The whole thing will come crashing down.

Game over.

Those disinclined to repeal the Qantas Sale Act (or to support its abolition) should carefully consider what the collapse of Qantas would mean.

The foreigners who own Virgin will be disinclined to keep air travel for Australians affordable in a monopoly market, and even if such a scenario generated a terrific surge of public anger, it would take months — if not years — for a viable competitor to be planned, established, and then grown to the point it represented any meaningful replacement for Qantas or any realistic sort of threat to Virgin’s market position.

In turn, the economic damage would be incalculable.

Qantas and its subsidiaries operate roughly four times the number of aircraft Virgin does; it services the travel requirements of an exponentially wider number of locations across the country than Virgin, and its importance to Australia’s economy cannot be understated. Travel, tourism, freight, communications and other logistics are heavily reliant on Qantas continuing to operate, irrespective of whatever Virgin does, and once the breach exists it will take many years for any competitor to fill.

I’m loyal to Qantas but I’m no sycophant; it’s done many great things over many years, but it has made its mistakes too. Nobody would deny that.

But the gross errors that were Airline Partners Australia and the Rudd government’s torpedoing of the Qantas-BA merger were, for different reasons, mistakes that could have been terminal for Qantas: the first for breaking it up and selling it for the higher value of its parts, if that had been the end result. The latter might have wrecked the opportunity for Qantas to secure its long-term survival. That could well still be the final result of that incompetent, stupid, ideologically driven Labor Party decision.

Very simply, what is worse: a Qantas owned by offshore investors, subject to some stringently legislated conditions such as being headquartered in Australia, managed by Australians, and mandated by law in areas such as the standard of maintenance its planes receive — wherever that occurs?

To say nothing of the bulk of its workforce remaining employed, and a cherished Australian icon enjoying a stable, secure, long-term future.

Or a Qantas forced to close, when the pressures of an uncompetitive commercial environment and a labour movement hellbent on driving it out of existence finally succeed in doing so?

If you’re still not convinced that abolishing the Qantas Sale Act is the right thing to do, then consider this.

Whether you like or hate Qantas CEO Alan Joyce, and irrespective of what you might think of the merits or otherwise of the management regime he is pursuing at Qantas, his grounding of the Qantas fleet in 2011 was a masterstroke: had he not done so, shutting off the right of the Qantas unions to engage in industrial activity over wages for three years, the higher wage outcomes the unions would probably have extracted from Qantas management at that time — in light of what we now know of the airline’s predicament — could well have already put Qantas out of business by now.

Just remember, the three-year prohibition on the unions taking aim at Qantas, in yet another round of thuggery and bastardry designed to extract yet more extortionate pay rises, expires in October.

If all hell breaks loose at that time, the consequences for Qantas, quite literally, could be anything.

In fact, it could get very ugly indeed.