The Albanese government this week announced a review of competition policy. At the same time, it is not able to convincingly explain its decision to refuse Qatar Airways' bid to expand its flights to Australia.
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The case for the flights seems open and shut. Australians want to catch up, post-pandemic, on international travel. More competition would put downward pressure on prices.
Transport Minister Catherine King's explanations don't cut it. She said approving the additional flights wouldn't be in the national interest. It was not in line with the goal of decarbonising the aviation sector. "Qantas [..] has just purchased brand-new planes, that's at a significant cost. [..] They're bigger planes, they're quieter planes, they're [ ...] better for the environment."
Asked this week for her most recent position, she said: "The Australian government takes its responsibilities to competition in the Australian aviation sector seriously".
Air services agreements were "not commercial decisions about any particular airline but rather treaty-level agreements between countries that are determined in the national interest", she said. "The Australian government considers a range of factors when determining whether an expansion of bilateral air rights is in our national interest."
Some critics are pointing to the closeness between Anthony Albanese and Qantas boss Alan Joyce. Qantas - opposed to the Qatar bid on the grounds it would "distort the market" - operates in alliance with Emirates, the biggest Middle Eastern carrier. On Thursday Qantas, which has received much public criticism about its services, announced a bumper $2.47 billion profit.
Launching the competition review on Wednesday with Assistant Minister for Competition Andrew Leigh, Treasurer Jim Chalmers batted away questions about the Qatar Airways issue.
We don't know what Chalmers thinks of the decision, but it would be surprising if he agreed with it.
Tony Webber, a consultant on aviation economics who doesn't work for the Middle Eastern airlines or Qantas, describes the decision as "unusual". He says there would be "very clear positives" in the extra flights - Australia is still 30 per cent below pre-COVID international capacity and the fares are 50 per cent above pre-COVID levels.
A former chair of the Australian Competition and Consumer Commission, Rod Sims, has been very critical of the decision, saying, "When you are taking decisions which would seem to prevent both the extra capacity which we desperately need now and the extra competition, then clear explanations are needed."
Indeed. And, by the way, Chalmers has just appointed Sims to an expert panel to help with the competition review, to be done within the federal Treasury.
That brings us to the extent to which Chalmers is seeking to elevate Treasury as a policy hub within government, going far beyond its core fiscal policy role.
This year, Treasury has produced the new Measuring What Matters report (a stocktake of national wellbeing) and is preparing the soon-to-be-released employment white paper. Chalmers restarted Treasury work on modelling the impacts of climate change. Out this week is the latest intergenerational report. Treasury has previously done these reports, but Chalmers has promoted this one to maximise its impact, with a flow of extracts all week before Thursday's release.
Over the years, Treasury's clout has waxed and waned, depending on particular governments, treasurers and treasury secretaries and their relationships. Paul Keating bonded closely with his Treasury experts as they worked up options for tax reform in the mid-1980s.
Steven Kennedy, the present secretary, who played a crucial role in helping the Morrison government through the COVID economic crisis, is well-placed to drive the work Chalmers wants from his department.
Chalmers has Keating's prime ministerial ambition and also his drive to leave a legacy as treasurer. Like Keating, he understands the need to sell his ideas to opinion makers, including journalists, as was evident this week in his marketing of the Intergenerational Report.
But the differences between Chalmers and Keating are also apparent. They go to the circumstances of their respective times, and their personalities.
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The differences between then and now are obvious in Chalmers' articulation of today's five big shifts: "from hydrocarbons to renewables; from IT to AI; from a younger population to an older one - which changes our industrial base and places a bigger emphasis on the care economy - and from globalisation to fragmentation".
In style, Keating was the ultimate crash-through guy, vocally impatient when thwarted, especially if that thwarting came from his boss, Bob Hawke, as happened on his plan for a consumption tax. Chalmers has a less volatile temperament. No doubt he was frustrated when Albanese last year stomped on his push for a reworking of the stage three tax cuts, but he didn't show it.
On policy, Chalmers is both an expansionist and an incrementalist. He and Treasury are swarming over everything they decently can. But he is also cautious. He has learned from his study of the Hawke-Keating governments and his personal experience of the Rudd-Gillard years.
For instance, he accompanied his reforms of the Reserve Bank with the appointment of an insider, Michele Bullock, as governor. His time as an adviser to then-treasurer Wayne Swan imprinted on him the risks of excessive boldness on tax. The response to the Business Council of Australia's call this week for comprehensive tax reform has been an indication bite-size changes are preferred. Chalmers is also operating within Albanese's prescription that the government should keep its eyes firmly on staying in office, which requires not alarming the voters.
Observers' opinions of how reformist Chalmers' program is will be influenced by their own predispositions. But certainly Chalmers wants to focus attention on the future, not just the present. Asked on Thursday what hurdles he foresaw along a reform path he nominated "short-sightedness". He wants the support of the public and as many stakeholders as possible for changes he proposes. He also has an eye to his colleagues, putting credit into his personal political bank.
- Michelle Grattan is a press gallery journalist and former editor of The Canberra Times. She is a professorial fellow at the University of Canberra and writes for The Conversation, where her columns also appear.