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Byron Shire
July 18, 2024

Common wealth or shareholder wealth?

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Golden handshake or Midas touch? Privatisation has been a very mixed blessing. Cloudcatcher Media with Midjourney AI.

As Alan Joyce runs for cover, with the Australian public baying for blood, it’s a good time to remember that the underlying problem goes well beyond Mr Joyce or indeed Qantas. For decades, thanks to privatisation, once-loved Australian institutions have been hollowed out by international profit-making entities, while still pretending to have national interests at heart. Now we’re all paying for the consequences.

After Germany’s Nazi government dabbled with privatisation (along with the sideline of politicians profiting from the process), the idea of selling off public assets and functions really got going under Margaret Thatcher in the UK. In Australia, both major parties have been in lockstep on the values of privatisation since Bob Hawke’s time, even if they claimed to be doing it for different reasons.

At a state level, Jeff Kennett, Anna Bligh and Mike Baird were all enthusiasts, which didn’t do their subsequent careers in the private sector any harm.

Under Prime Minister Paul Keating, the Commonwealth Bank of Australia was progressively privatised from 1991, followed by Qantas in 1992 and Telstra in 1997. That was under the helm of John Howard, who declared that the coalition had ’embraced a full-blooded policy of privatisation.’

The Commonwealth Bank of Australia is a major lender to fossil fuel interests, among other things, as the Knitting Nannas have highlighted. Photo Kieren Nugent.

So how did that go?

Initially the Commonwealth Bank example seemed to be a good news story for everyone, with an organisation which had been running at a net cost to the taxpayer becoming one of the most profitable banks in Australia.

Unfortunately the bank also became increasingly reckless and dodgy in the pursuit of shareholder profits, being singled out by the Federal Court of Australia a few years ago for its ‘misleading and deceptive conduct’ and paying hundreds of millions of dollars in penalties and refunds, following the revelations of the Banking Royal Commission.

Telstra, formerly Telecom, was deregulated by the Howard Government, and partially privatised, creating the worst of both worlds. They gained a monopoly over pay TV and telecommunications infrastructure, which later had to wrested away from them at great expense, all the while extorting the Australian government and public by refusing to upgrade the national network without additional public money.

The supposed benefits of privatisation (increased market competition and efficiency) continue to be nowhere to be seen in Telstra’s case, with our telecommunications rankings still way below comparable countries. At least shareholders should be happy, with a market capitalisation of $46 billion (four times more than its nearest local competitor), and around $21 billion in revenue each year.

Qantas touches down in Ballina in 2022. Photo David Lowe.

What about the flying kangaroo?

When the iconic airline Qantas went up for sale in 1992, the government legislated to ensure no more than fifty per cent was foreign owned. Since then, the wages paid to CEOs have got preposterously bigger and the company has mostly gone backwards in terms of profitability.

While a Qantas jet hasn’t fallen out of the sky yet, stories of incompetence abound at all levels of the organisation, as the people who actually do the important stuff are underpaid or laid off, and politicians (and their children) are silenced with Chairman’s Lounge memberships.

Ruthless CEO Alan Joyce attempted to subvert the foreign ownership cap with direct approaches to multiple governments, and when that didn’t work he outsourced jobs to external entities and cut service standards, using political connections to maintain profit margins by limiting competition on key routes within Australia and overseas, and ultimately selling tickets on already cancelled flights. It was all a very long way from the Qantas that Ben Chifley nationalised in 1947.

While Labor and the Liberals continue to blame each other for the mess, the fact is that once the privatisation genie is released from its bottle, it’s impossible to return it, and halfway measures tend to make the problem worse.

Now, in spite of everything, and after recently claiming to be on the verge of bankruptcy, Qantas appears to be comfortably back in the black, due to a combination of pent-up tourist demand post-COVID, some very creative accounting, and generous taxpayer-funded benefits, which were not equally shared with its competitors due to the company’s ‘special’ status.

The other costs are still to be revealed, by the largest consumer watchdog investigation in Australian history. Hopefully those seeking to sell off Australia Post and the ABC are paying attention.


David Lowe
David Lowe. Photo Tree Faerie.

Originally from Canberra, David Lowe is an award-winning film-maker, writer and photographer with particular interests in the environment and politics. He’s known for his campaigning work with Cloudcatcher Media.

Long ago, he did work experience in Parliament House with Mungo MacCallum.


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11 COMMENTS

  1. Nothing much good lasts for long with these neoliberal privatisation frolics.

    The Flying Shark ( Shark replaces Kangaroo ) bringing it home for the travelling public and the workers.
    With that $’s2.7billions of Covid rescue moolah that was sent Joyce’s / QANTAS’ way, the Government should have taken back ownership.

    Australia Post next on the privatisation chopping board, lets see if our ALP Fed Govt has learnt anything.

  2. Great article david ! Yes stands a reason to have
    Our iconic brands stay in Taxpayer’s hands ..
    and no better example’s of that with flogging off
    Qantas & commonwealth bank.. to shareholders
    Who along with the top heavy CEO’s .. Greed
    Comes to mind ! ..so what is greed to shareholders
    no such thing really..just part of the investment..
    So what value for money did the did the general public receive from selling off our iconic brands ?
    Zero really ..paid off debt racked up by both labor
    and coalition governments .. if only the Taxpayer’s
    Had a vote on keeping Qantas & commonwealth bank in the general public’s hands interest rates
    Would certainly be more competitive.. more
    Employees keeping positions.. more services
    Less bank closures..as for Qantas was a disgrace
    This company has become under that enept
    Joyce ..over a 120million he has received
    Thus far as CEO ..what an arrogant out of touch bloke this is …his resent appearance
    at the senate inquiry just tells you everything
    About this head of Qantas… had no intention to refund those who paid for tickets during covid .
    Only when caught out by the ACCC for selling
    Tickets for a flight that had already been cancelled
    Did he back track ..and confirm no expiry date
    Will be applicable for those refunds..”you can’t make this up really ” about 700 million Qantas
    and jetstar were going to pocket.. you are right
    David most at the banking royal commission
    Received a slap on the wrist ..the outcome
    Same old.. same old .. ! I mean i have been asking the commonwealth bank for 12 months for a breakdown of my homeloan i paid out..must have been at least 50 emails ..phone calls ..branch visits
    still nothing .. !! The last straw for my membership
    With Qantas..four times in a row Qantas club
    Closed at the gold coast airport.. reason ?
    Qantas has contracted the rights to the lounge
    open one hour prior to Qantas flights only .
    Centre management when asked why this is ?
    Receive 100s of complaints from not only Qantas
    Passengers but Jetstar as well ..why should jetstar
    Customers but shut out of the lounge..they are owned by Qantas and should receive all the benefits as Qantas customers do… just more reason
    To give Qantas a miss..and i did after walking to the
    Virgin lounge..half the price 12 months subscription
    To the lounge..asked do you ever close ? NO was the
    Answer ..cheaper flights..less cancelled flights
    No charge for baggage.. easy choice Joyce !!
    But if wont be for this bloke ..walks away with
    limitless flights just one of many perks this
    Jerk will receive..

    • Barrow, I detect some dissatisfaction with Qantas on your part.
      You forgot to mention the Qantas workers that were illegally sacked by Joyce. The High Court has thrown out Joyce / Qantas appeal.
      Just waiting for the $’scompensation bill that will be coming new CEO Hudson / Qantas way now.

      • Yes Joachim..in a cost of living crisis
        the coalition & labor and the Greens
        Could not give a toss about the population
        Most have Chairman’s lounge access
        Including Mr Bandt… how convenient to cosy up to Qantas at our expense ..again most
        Politicians receive an allowance of about
        25k to travel annually..even if they don’t fly ..
        Give themselves a 5 percent payrise…
        Meanwhile nurses who keep this
        Country going medically during the Pandemic treated like crap for asking for a payrise… ever see a politician keep and scream for more money !!

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