Friday, 28th February 2014

THE ABBOTT WEDGE

Tony Abbott seemed to back away from providing immediate assistance to Qantas. Treasurer Joe Hockey had earlier intimated that the government was being dragged, "kicking and screaming", to a debt guarantee, but Abbott in parliament yesterday indicated they would not be rushing into anything.

Instead he sought to wedge the Opposition by inviting it to review the Qantas Sale Act, which is preventing further foreign investment in the airline. His intention was to test the ALP's rather simplistic (union-backed) argument of "protecting Aussie jobs". Abbott also sought to tie Qantas problems to the carbon tax.

It was a canny response by the prime minister. Consistent with the end-of-entitlement message, it suggests his government wants Qantas to be able to help itself – but the Opposition is getting in the way by refusing to change the foreign ownership provisions (or repeal the carbon tax).

It's a strategy that nevertheless carries risks: first, changing the Sale Act may not make a substantial difference, especially if foreign investors aren't interested in Qantas; second, if it only results in more jobs going overseas it will be received poorly by the public, all the more so if Qantas' financial woes continue; and perhaps most significantly, it again leaves the government open to accusations it would rather let Qantas go abroad, blaming the Opposition, the carbon tax and the unions, than act to stem the flow of local job losses.

There is a further reason for nervousness in Coalition ranks this week: It was barely noticed in a feverish news week, but Australia's latest business investment figures were disastrous. Actual investment spending slid 5.2% in the last three months of 2013, and the projected full-year decline for 2013-14 is 11%. The mining boom is clearly over and the manufacturing sector is bleeding. Other sectors are not picking up the slack.

Regardless of what the government does, the jobs being lost now are unlikely to return any time soon. 

Finally: Here is an investment we welcome gladly – the Saturday Paper launches this week, and we wish it all the best. 

Nick Feik
Politicoz Editor

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Qantas moves to crash through

"The government was waiting to see Joyce's plans to ''modernise'' workplace practices and how it planned to get out of its hole. But it seems Prime Minister Tony Abbott might now be going cold on the debt guarantee which, if given, would have a negative affect on Virgin and regional airline Regional Express. In Parliament on Thursday, Abbott said ''what we do for one business, in fairness, we have to make available to all businesses''. No doubt Qantas faces many challenges, but what's new?"

Also: No Golden Ticket (cartoon, Kudelka)

Qantas not such a special case in Abbott’s eyes

"The government-Qantas story still has a way to run, with cabinet expected to discuss the situation next week. As Abbott increased the pressure over the Qantas sale legislation, he also (of course) grabbed the opportunity to focus on the carbon tax repeal."

AlsoQantas hangs in the balance while politicians argue (Lenore Taylor, Guardian)

Business investment collapse after Coalition election victory to cost jobs

"Business investment collapsed after the election and worse is to come. Official figures released on Thursday show investment slid 5.2per cent in the last three months of last year - the most since the global financial crisis. And the plans for 2014-15 are even worse. The estimate financial officers reported to the Bureau of Statistics is 17 per cent down on the estimate for 2013-14 reported a year ago."

AlsoFormer Labor minister Martin Ferguson backs Tony Abbott's planned changes to Fair Work Act 

 

Coalition MPs at odds over Tony Abbott's paid parental leave scheme

"Prime Minister Tony Abbott is facing renewed pressure from his party room to scale back or postpone his promised paid parental leave scheme. The $5.5 billion-a-year scheme is Mr Abbott's so-called signature policy. It offers new mothers six months' paid leave based on their wage and is capped at $75,000."

AlsoTony Abbott’s scientific and business advisers at odds over climate change (Guardian)

Also: 

Welcome back to White Australia

"Before our eyes, day by day, Scott Morrison becomes the hollow man. His face tightens and twists, his eyes are dead, and his words strangled with jargon. We've seen this before. Remember Philip Ruddock gradually turning into a stick of chalk, as immigration minister and later attorney-general, while he plodded his way through the ''Pacific solution'' and the vilification of David Hicks? This is what happens to human beings who believe the ends justify the means."