The case to renationalise Qantas

Saturday, March 22, 2014
The renationalisation of Qantas could be the first step in the development of an integrated public transport system.

"The solution to Qantas's problems is being framed as a choice between lifting the level of permissible foreign ownership or a public debt guarantee,” Chad Satterlee wrote in article in the Guardian on March 3. “There is another option: renationalisation".

The alternative of renationalisation of Qantas, under workers' and community control is the course that would advance the interests of the public and the environment over the future of Australia's major airline in the medium term.

Satterlee said: "Neoliberals assume that private ownership is more efficient than other forms of ownership. By the test of the market, this assumption does not hold in view of Qantas: its board and management have performed poorly compared to other airlines, many of which are publicly owned and operated. The chickens are now coming home to roost.”

Satterlee rejects both the Tony Abbott government's push for relaxation of the foreign ownership provisions of the Qantas Sale Act, and the Labor Party’s policy of giving Qantas a public debt guarantee. "The optimal solution, therefore, is to renationalise Qantas and keep it in public hands.

"At the same time, direct democratic control over major decisions in a nationalised Qantas, including the composition of the board, must be implemented. Modern communications technology makes this easy to coordinate. A core reason behind Qantas's underperformance is that the people directly affected by its operations — passengers, employees, citizens — are excluded from participating in the major decisions of the enterprise. These decisions are made by a private shareholder-appointed board, who have in recent times locked out employees, stranded passengers and sent jobs offshore.”

In a world dominated by the neoliberal capitalist offensive of the past three decades, the notion of public ownership of major industries and facilities is now totally dismissed by mainstream politicians and media. Australians have seen the wholesale sell-off of government-owned enterprises in a frenzy of attempts to supposedly pay off public debt by "selling the family silver".

The Liberals are now leading the charge on privatisation. But the Labor Party must take considerable responsibility for its role in the sell-off of the Commonwealth Bank and Qantas under the Bob Hawke and Paul Keating government of the 1980s and early 1990s.

Since then, Liberal and ALP federal and state governments have competed to be the worst offenders in virtually handing over public assets to greedy private corporations.

The worst recent example of this folly must surely be the Anna Bligh Labor state government's sell-off of Queensland's freight rail, ports, roads and forests to private investors in the 2010-11 period. This turned out to be a fatal move for the ALP, which was decimated in the 2012 state elections.

Now, a plan to privatise Australia’s remaining public assets is at the top of the agenda for the Abbott government and its Coalition counterparts around the country, as part of their neoliberal "free market" war on working people. An estimated $130 billion of government-owned assets, mainly under state jurisdiction, is in the firing line to be sold off in coming years, says an ANZ Bank report.

Top of the list for privatisation by the federal government are Medibank Private and Australia Post. Strong opposition to the sell-off of these institutions, which are profit-making for the public purse, is developing in the community.

The ideological war in support of this privatisation mania is being stepped up by the big business media and their allies in the corporate media. In an article Sydney Morning Herald on March 10 economics columnist Ross Gittins wrote: "So how can states do a lot more infrastructure investment without increasing their debt levels? By privatising existing businesses and reinvesting the proceeds in new infrastructure. That's what [federal Treasurer Joe] Hockey hopes to encourage."

But that option is just like selling off the priceless family silver to buy a new, plastic dinner set. It will not benefit the public, but only a handful of private capitalists.

The revenue from public enterprises, once sold, is lost from government coffers forever. The bulk of any profits, less a minimal and reducing amount of tax, are then stolen by the wealthy 1%.

Privatisation is grand larceny from the public purse on a massive scale.

Working people must now go on the counter-attack and say enough is enough. We need a broad campaign by trade unions and social movements to keep public assets in public hands.

In the case of Qantas, renationalisation under workers' and community control is the obvious way to go. Qantas CEO Alan Joyce has been calling for yet another public hand-out, after trashing the airline, locking out its workers, moving to sack 5000 of them, closing down maintenance facilities and attacking the unions. This is the real legacy of privatisation.

If we compare some other government-owned airlines, we see a superior record.

For example, Air New Zealand, which was privatised in 1989, then renationalised in 2001, has just posted a 40% increase in its half-year profit, to NZ$140 million — which is a boost to the public coffers, not a potential drain on it as is Qantas now.

Another interesting comparison is with Aerolineas Argentinas. The Argentine national airline was privatised in 1990 under the neoliberal government of the day. Its fortunes declined until it was almost bankrupt, with debts of over US$1 billion in 2008.

In July that year, the government of President Christina Kirchner moved to renationalise it. Despite many problems, Aerolineas Argentinas is now functioning relatively efficiently, and making a profit for the country's treasury.

Of course, having key airlines in public hands is only part of the solution. Many airlines in Asia and the Middle East, for example, are under some kind of government ownership.

The related part of the struggle for working people is to make sure these crucial transport facilities are operated in the public interest, and that profits are used for the common good — not to subsidise other capitalist ventures, for instance.

The renationalisation of Qantas could be the first step in the development of an integrated public transport system, linked to a huge expansion of the national railway network, with special priority given to the construction of a very fast train system. A nationalised airline would have to be under workers' and community control, as part of a national public transport plan implemented by a genuine people's government.

Only such a democratic socialist plan could effectively work to rationalise highly polluting air transport within a framework of fully unionised, green jobs with fair wages and conditions, in an environmentally sustainable, national public transport system.

A publicly owned and community controlled national transport system is essential to drastically reduce carbon pollution in a world threatened by climate change.

Now is the time for working people and their organisations to mobilise to defend the public sector.

From GLW issue 1002

Comments

Slight error in the article -

Slight error in the article - the claim that Air New Zealand is government owned is only partially correct. In fact Air New Zealand is 53% owned by the New Zealand government, and 47% owned by investors, both institutional and individual. It is protected from any one shareholder gaining a majority stake by legislation that looks strikingly similar to the Qantas Sale Act in clauses that prohibit any airlines taking ownership of shares at all, any one holder from getting more than 10%, and the government from having less than 51%.