Abbott’s Qantas dilemma

The Herald reports:

The disastrous results and huge job-shedding announced by Qantas yesterday is battering at the door of Australian Prime Minister Tony Abbott, who must decide what the Government will do for the ailing national airline.

The decision will test his resolve and the Government’s mantra that “the age of entitlement is over” as he comes under furious fire from Labor, the Greens and unions, which have accused him of plans to tie federal assistance to an attack on wages and awards.

I guess they just think taxpayers should subsidise Qantas.

The airline’s A$252 million ($270.5 million) pre-tax half-year loss, and its plans to shed the equivalent of 5000 jobs – meaning the final tally of sacked employees will be even higher – add to the series of Australian corporate icons hammered since Abbott won power in September last year.

These include the end of the local automotive industry with the loss of Holden, Ford and Toyota. The Government has repeatedly said companies must stand or fall on their own.

He’s right.

“We’re determined to help Qantas,” Abbott told Parliament. “We’ll help Qantas by guaranteeing a level playing field [and] by saving Qantas some A$270 million in carbon tax costs over two years … This is a Government which is determined to keep faith with businesses which have made investment decisions honestly and fairly on the basis of government policy. Second, this is a Government which will do its best to ensure, as far as is humanly possible, a level playing field between the domestically produced and the imported product.”

Transport Minister Warren Truss blamed much of the airline’s problems on the carbon and mining taxes, high wages and award conditions, and said fewer jobs were needed with new technology.

Air New Zealand uses technology well. The check in system is almost entirely automated, and the number of staff they have there now is probably 20% of what it used to be – and with far fewer queues.