Is a conscience lobotomy the price of entry into politics?
Minister for Nothing, Dr Andrew Leigh, has been banging on about competition for years, yet what progress has he made?
ADAM SHIRLEY, HOST: The skies well, clear as a bell. A good day for take-off and landing, but you’ll pay the price. As we know, flying in and out of Canberra costs a fair bit more than any other city in Australia. For a long time it’s been a bugbear. But will anything fundamentally change it and stop the gouging that you might feel?
Dr. Andrew Leigh is Federal Member for Fenner and Assistant Minister for Competition and Charities. Dr. Leigh, is it too much money to fly in and out of Canberra?
ASSISTANT MINISTER FOR CHARITIES, COMPETITION, AND TREASURY ANDREW LEIGH: Certainly an expensive route, isn’t it, Adam? The cancellation rate is among the highest in Australia and this analysis that we’ve gotten out of Treasury suggests that there’s a direct relationship between airline competition and how much you pay. When one airline services a route, then you pay on average about forty cents per kilometre. With two, you go down to go down to twenty-eight cents, with three you go down to nineteen cents. In other words, when you got three competitors on a route, then you’re paying half as much per kilometre as when you’ve just got a single monopoly carrier.
SHIRLEY: In the end, if they are the providers and they rule the roost, is there anything that can be done by government, or any of us for that matter? It’s not a simple case, I’d argue, of just shopping around.
LEIGH: There’s a slots review taking place at the moment, Adam, which will be important in terms of ensuring that there is plenty of competition that occurs in the airline sector. One of the important things is that the monopoly airlines don’t lock up slots and that we have plenty of vibrant competition. You can see this in Australian history, we actually had a vibrant, competitive airline industry before the Second World War. But in the decades after the war, the duopoly prevailed and that meant that most Australians just couldn’t afford to fly. It was only when we’ve gotten more airline competition that airline travel has come within the reach of the average middle Australian household.
As an example of market failure, the choice of airlines says it all.
Was the good doctor away over as 2023 as the Albanese Government invited the Qantas fox into the Canberra henhouse?
Where was he when Albo was cooking up schemes with the greedy leprechaun to keep competition out while the airline supported Voice?
Does Dr Leigh use the Chairman’s Lounge, reserved for captured executives, on his way through the airport?
Indeed, the interview was more like a plane crash than a soaring policy moment:
SHIRLEY: You mentioned the Qatar Airways decision. In hindsight, and it’s an easy thing to use, I know, but was that handled poorly by the government or as best as possible? Because if you’re talking competition and that lowering costs, the government intervened to basically reduce competition in this country.
LEIGH: Well, it’s a decision that was made by the Minister in the national interests and I don’t think people should –
SHIRLEY: How was it in the national interest, though? I’m really trying to understand that if we’re talking directly about competition, more players pushing prices down, not up for consumers.
LEIGH: Look, it is generally in the interest of consumers to have more competitors, but there can be particular instances in which it’s not in the national interest to improve movements.
Leigh has been rolled out to snow the issue, not illuminate it:
LEIGH: The best way to bring down prices is more competition. That’s why the Government’s been so laser-focused on competition reform since we came to office. We’ve raised the penalties for anti-competitive conduct. We’ve banned unfair contract terms. We’ve set up the Competition Taskforce, and particularly in the grocery sector, we’ve got CHOICE doing quarterly price observations of the best supermarkets. We’ve got Craig Emerson, a former Competition Minister, reviewing the Food and Grocery Code. We’re very alive to the value of competition in alleviating the cost-of-living crisis and the importance of competition for productivity and for economic growth. In Australia, the competition reforms of the 1990s were one of the reasons for that productivity surge and the benefits that flowed through in living standards. So, competition reform can raise living standards.
There is nothing in there to increase competition or to control monopolies in its absence.
No anti-trust break-ups, no cost-plus regulation, no sector-by-sector microeconomic reform, no tax incentives for new entrants, no sweeping reform agenda, no attempt to shake Albo’s dills awake by Dr Leigh.
It’s an insult to the intelligence.