Life can come at you fast on a sitting morning in Canberra if you’re a shadow minister.
At 5 am yesterday, the Financial Review published an op-ed by shadow infrastructure minister Bridget McKenzie headlined “Is it time to force Qantas to break up with Jetstar?” Within it, the Nationals senator opined:
I am calling upon federal Treasurer Jim Chalmers to include in his competition review a strong focus on aviation competition because of the failure of the aviation white paper to deal with this imperative. The treasurer will have failed another reform opportunity unless he deals with divestiture as a measure to ensure consumers’ interests are protected, and not at the mercy of the entrenched duopoly, and the proper role of divestiture.
Ah, divestiture. The opposition has had quite the time with break-up powers. The Nationals pushed for divestiture powers for big retailers, like supermarket duopoly Coles and Woolworths, earlier this year and were rebuked by Peter Dutton for their efforts — especially given the only other party in the building that backs divestiture powers is the Greens.
But by July, the Nationals had pushed Dutton and his shadow (or, more accurately, invisible) treasurer Angus Taylor to endorse the idea. Some Liberal backbenchers were deeply unhappy with it.
So it was this time around, too. And McKenzie, it seems, hadn’t sought the approval of the leadership for extending divestiture powers to aviation. Before too long, her leader David Littleproud went on Coalition in-house channel Sky News to back away from the idea and confirm it hadn’t been to shadow cabinet. For added measure, Dutton’s office made sure to kill it off.
By 11.45 am, McKenzie had to deliver a humiliating media conference insisting she hadn’t ever supported divestiture powers, merely that it was an option that should be considered. “In my opinion piece in the AFR, that I hope you have all read, I explicitly rule out needing to break up Jetstar and Qantas.”
Of course, she’d done no such thing.
The problem is, McKenzie is right. Divestiture should be on the government’s agenda as a policy tool. Even economists who refuse to accept that price gouging is going on in other sectors of the economy accept that Qantas’ dominance of aviation allows it to rip off customers and deliver poor service with impunity — particularly after the death of Bonza and the administration of Rex.
When Jetstar enters a market, Qantas actually increases its prices, evidence from Treasury has shown. It’s all the evidence needed of the benefits of subjecting airlines to a credible threat of break-up. Contrary to what Littleproud said yesterday, the evidence of the need for divestiture is actually stronger for aviation than for supermarkets.
Limiting break-up powers to particular sectors makes no sense anyway: why not Qantas, if Coles and Woolies and Bunnings face divestment? Why not the banks? Media companies? Energy companies?
The idea enrages big business and their media cheerleaders, and upsets traditional business-friendly Liberals (after all, where will their donations come from if they upset big business?) But once you allow divestiture for one sector, the pressure grows to extend it to wherever consumers are being ripped off by big companies, or where the latter are using their market power to harm smaller companies. And the Coalition, led by the Nationals, has stolen a march on Labor by embracing break-up powers for at least one sector.
It also gives substance to Peter Dutton’s insistence, from the first day of his leadership, that there would be a divide between his party and big business. McKenzie might have lost this particular battle, but the Nationals might yet win the war by making the Coalition a party less dedicated to looking after big business and more focused on delivering for consumers.
Watching big business and its lobbyists have conniptions over it will be a healthy source of entertainment between now and the election.
