Cronyism, or the Game of Mates as we call it Downunder, is an endemic risk in the Australian political economy.
Owing to the culture of mateship and populism, and one of the world’s least complex economies, Australia is more at risk than most to corruption and special favours economics.
Cronyism was rife through much of the twentieth century. After the great mining booms at the turn of the 19th century set the country up as one of the world’s richest, nearly a century of cronyism steadily reduced living standards.
It took a truly exceptional moment of reform in the 1980s to break the spell. But we’ve slowly been reverting to mean ever since.
Every government after the 1980s has increasingly done favours rather than reform in the national interest.
- The Howard government recycled Chinese commodity largesse as regressive tax concessions.
- The Rudd government bailed out banks and blew up around the Henry Tax Review.
- The Gillard government entrenched mining corruption in the tax system and unleashed the gas cartel.
- The Abbott government wrecked the energy transition for fossil fuel interests.
- The Turnbull government did nothing except try to cut corporate taxes.
- The Morrison government turned ministerial corruption into a fine art and, again, was twisted around fossil fuel interests.
Also, every government post-GFC served the growth lobby of banks, developers and retailers with quantitative peopling that killed living standards for the wider population.
Now we have the Albanese government, which combines the worst characteristics of the six previous failures:
- It loves doing special deals with corporations like the gas cartel.
- It has unleashed the largest immigration intake in history for special interests with no mandate.
- It supports enormously regressive tax cuts.
- It grovels to China on behalf of miners while, in return, it threatens to crush Aussie freedom.
- Even Voice can be seen in the light of favours if one does not accord special significance to First Nations peoples.
It is this background that one must consider when considering what is happening at Qantas. Many Australians sense that something is amiss with the government. They see it every day in falling living standards. But, equally, most are not economists and do not see the specifics.
However, the Qantas scandals are obvious and capture many of these dynamics in a popular lightning rod.
Even the AFR’s business mouthpiece, “Junket” Jen Hewitt is all over it:
Community anger has targeted Alan Joyce as villain-in-chief – a role he will continue to play well after his parachute out of the emergency exit this week. Arguments over the board’s responsibility to restrict Joyce’s right to $24 million in salary and bonuses as part of his personal luggage will haunt Richard Goyder. It’s also hard to see how Joyce’s successor, Vanessa Hudson, can avoid sharing the public opprobrium given her close involvement with the Qantas record of behaviour as former CFO.
…But far more startling still has been the failure of the Albanese government to notice the ominous black clouds gathering around an airline still proudly proclaiming itself the spirit of Australia. It meant King’s decision on July 10 to refuse Qatar’s requests for 28 more flights a week lit a dangerous spark once The Australian Financial Review revealed this eight days later.
This has since built into a destructive electrical storm engulfing the government. Joyce’s close relationship with Anthony Albanese – and Qantas’ history of success in lobbying governments – became a lightning rod for free-floating fury.
It is worse than that. Qantas encapsulates community anger because it is the perfect cypher of Albo’s quintessential Cronystralia. A misshapen grabbag of corporate interests, woke ideology and outdated globalisation that cares nothing for broader living standards, what people voted for, nor the nation as an entity in the world.
Qantas and Albo alike have treated the community like a fool. Wrecking lifestyles while blowing smokescreens with minority social goods that are meaningless to most.
Thus, it is going to get worse for both Qantas and Albo. Bloomie:
Hudson, herself a company veteran, will be left to clean up. She’ll face inquiries and lawsuits, and won’t have any choice but to apologize and pledge to do better. But it’ll be very difficult for her to do so.
The ACCC’s case in Federal Court, coupled with a separate class-action suit related to refunds, will have her hamstrung. There’s little room for her to leverage the carrier’s pricing power, and calls to break up the airline will grow louder. The government will be less eager to maintain barriers to foreign entrants, and customers’ fragile loyalty won’t easily mend.
Quite right. And Albo will lead it if he has any political sense. Such as it is, Albo’s vision for Australia is crashing with Qantas.
