My feeling is that is there is a sort of break in the weather for Tony Abbott when it comes to industrial relations reform.
It must be dawning on many people that government attempts to prop up companies simply generate rents that encourage high rates of unionisation and are mainly snaffled by workers, in the form of relatively high wages and conditions, and by unionists, in terms of control (in relation to contracting, part-time work, etc.) and perks (eg. trade union training leave, compulsory income protection insurance paid by companies paid to funds owned by trade unions). They do not guarantee the survival of these companies.
So when the ACTU calls on the government to provide a debt guarantee for Qantas, it is pretty obvious what the government’s response should be.
“Tony Abbott can be the Prime Minister he said he would be and stick up for jobs by providing Qantas with a debt guarantee,” Mr Oliver said.
“The alternative is that Tony Abbott can deny Qantas a debt guarantee, throw the national airline into further turmoil and uncertainty and open the gates for Alan Joyce to sack even more workers.
“Australia is in the midst of a jobs crisis and it’s time the Prime Minister put his money where his mouth is and support Australian jobs.
“It is appalling that the Abbott Government has said that their ultimate goal is to change the Qantas Sales Act which they acknowledge will result in jobs going offshore.
“Unions call on the Abbott Government to support these workers by providing Qantas with a debt guarantee subject to a commitment from Qantas to protect workers against job losses and on the airline demonstrating they have a sustainable long term business plan which is not reliant on a spiral of job cuts.”
Here’s my theory of what the government will do (sequencing is everything):
- Force the politics of changing the Qantas Sale Act, making it clear that Labor and the Greens are standing in the way of giving Qantas a chance at restoring profitability and acceptable returns (which, by the way, is the only way that jobs will be saved);
- Observe the company ‘get its house in order’ (giving a debt guarantee would simply stall this process and egg on union resistance);
- Consider other alternatives other than a debt guarantee. Not that I am very keen on this idea, one option would be for the government offer to invest in a cheap rights issue to allow the company to raise capital, a similar offer that could be made to other airlines (Virgin Australia would presumably not be interested).
- Yes, I know what you are thinking – isn’t this just part re-nationalisation? But if everyone is going to blather on about co-investment, I would rather the taxpayer actually be given some legal ownership of the company and, all going well, the shares can be divested in due course.
- This strategy would overcome the issue of having to offer a debt guarantee to all airlines, which all of them would take up, of course.
Any thoughts? Ideally, the company can really get its house in order so that the rights issue would not be needed, but it is coming from a difficult position. Many of the EBAs have a way to run and so imposing a wages freeze will be technically difficult in the short term.
(And as for those commentators who point out that, after the lock out, the new EBAs contain 3 per cent per annum pay rises, but with no job security clauses, these were arbitrated outcomes, not negotiated outcomes. After s423 of the act was used to terminate the industrial action (lockout), then arbitration was triggered. This was seen as the least worst outcome by the company, rather than continue to bleed with the ongoing guerilla industrial action of the three unions.)