Scott Morrison is apparently keen to reassure his electoral base that government intervention remains the exception rather than the rule.
Policy frameworks that we had prior to the election?
Was the Prime Minister throwing out all the governments election promises? Well, no, apparently not, just something more substantial: the underlying 2019 election message pitch that the government was not of a radical ideological bent.
The agenda at the heart of the Coalitions world: tax, industrial relations reform and deregulation, which would include the fast-tracking of development, is going to be necessary, the Prime Minister argued (and argued that the Treasury and RBA argued), to get the country back on track.
Not everyone who heard that officials briefing seemed to get the same message. Victorian Premier Daniel Andrews, for example, told reporters on Friday morning the RBA governor “made it very, very clear that now is not the time to run surplus budgets, now is not the time to be getting into an argument about debt and borrowings.
“When you need the money, then you need to take advantage of the fact we have a AAA economy. People are prepared to lend to Australia because we’re seen as a good bet.
Ideology and necessity
And thus we make a not so subtle transition from a world dominated by the twin health and economic crises of the coronavirus, to a new twin-edged world of ideology and necessity.
Just as the health and economic considerations of dealing with this crisis have required delicate and often difficult balance, so too does the rebooting of politics into a completely different world.
Treasurer Josh Frydenberg told 7.30 last week there was no room for ideology when dealing with a crisis like the coronavirus.
This week, we can see the Prime Minister re-establishing the ideological lines, apparently keen to reassure his electoral base that government intervention remains the exception rather than the rule.
Emphasising the point was the governments move, by regulation, to slash the time employees have to consider changes to enterprise bargaining agreements to just 24 hours.
There is just the hint of the governments ideological commitment too in the way it has approached a range of other issues.
Yes, it has provided assistance to universities, but only in the form of agreeing not to take away money it has already committed to them if domestic enrolments fall short. This hardly covers the existential crisis some face with the collapse of their international student numbers.
Airline policy inconsistencies
You also have to wonder if the government given its long-held position on superannuation is too fussed about what the impact on the super sector will be of allowing more than 1 million people to access some of their super now.
Then there is Virgin Australia.
The government has made no secret of its disdain for Virgin in recent weeks, even if it has been careful in what it has said publicly.
There has been little sympathy for an airline that ministers have described as badly managed, carrying too much debt, and also foreign-owned.
This description is in line with what Qantas has said about its arch-rival, but compares with the assessment of ratings agency S&P which wrote on March 26 that in our opinion, Virgin Australia is fundamentally well managed.
The airline has successfully repositioned itself as a full service carrier, has the youngest domestic fleet, a dual-brand strategy, and integrated frequent-flyer business.
This assessment did come as it downgraded Virgins credit rating to CCC but it said this downgrade was in response to government-led COVID-19-related restrictions. That is, Virgins problems are caused by government action, no matter how necessary that action was.
The government has insisted that any assistance it provides to Virgin must be on a sector-wide basis: that is, that all airlines must be treated equally.
On Friday, it announced it would be subsidising losses on individual flights by Qantas and Virgin on the major trunk routes which would keep these vital lifelines of the economy in operation.
The government had already organised a similar scheme for regional airlines.
For both schemes, the airline has to apply on a per flight basis, setting out any net loss after passenger fares and freight income is taken into account.
Thats all pretty sensible on the face of it, and keeps the focus on a subsidy system built on users, rather than operators.
But in addition to this, the government also announced a couple of weeks ago a $100 million cash grants scheme for regional airlines which dont impose any of those conditions.
Straight bailout for Rex
Its a straight bailout, however short lived, for regional operators which are facing losses. The largest of those, Rex, is also majority foreign-owned. So much for consistency.
Theres every good reason for the government to play hard ball on Virgin, and to insist that it try to seek “market-based” solutions to its problems before it comes cap in hand to the government.
Intriguingly, as signs emerged on Friday there may be private investors interested in bailing out the airline, the language from ministers including the Prime Minister, Deputy Prime Minister Michael McCormack and Trade Minister Simon Birmingham became more conciliatory, leaving the door open for the government to step in if all else failed.
Labor and the trade unions have their own ideological positions on this issue of course. They are alarmed that “private equity” in Virgin may equal the path to a foreign airline taking over management and, with it, being allowed to introduce foreign crews and, with them, foreign wage rates.
The flying publics perspective, and the broader interests of the economy, however, are served by having a competitive domestic aviation market, and not by politicians playing ideological games, or favourites.
Anyone who remembers how atrocious Qantas was when it was left to run a monopoly post-Ansett will remember the value of the competition Virgin brought into play. And will be hoping that these considerations, rather than a new surge into ideological warfare, will determine the outcome.