Future Fund chief backs Qantas in dispute with its workforce
The Future Fund chief, David Murray, has backed Qantas in the dispute with its workforce, saying unless companies like the airline tackle entrenched union privilege Australia risks the same fate as Eu
The Future Fund chief, David Murray, has backed Qantas in the dispute with its workforce, saying unless companies like the airline tackle entrenched union privilege Australia risks the same fate as Europe.
And he says the government is aping Europe by borrowing to buy votes.
”My European banking counterparts tell me they can’t cut jobs without offering three years redundancy,” he told a forecasting conference in Sydney.
Advertisement: Story continues below ”We are creeping towards that in the new industrial relations framework. It gives unions a right to bargain in areas [that were] traditionally the management’s prerogative.
”Australia started out after the Second World War making work arrangements a little bit more reliable, introducing the rule of law, but the process has gone too far – it gets to the point of unaffordability.
”Qantas management have no option but to do what they are doing. They are running an unviable airline.
”With terrible productivity internationally they are hostage to competitors domestically. The stakes are high. Qantas is not the only company.”
The former Commonwealth Bank chief was appointed chairman of the Future Fund in 2004 by the then Coalition Treasurer Peter Costello. He steps down in April and has already accepted a part-time role with the global investment bank Credit Suisse.
”I don’t see anything concrete on productivity,” he said. ”I don’t see governments trying to wind back their debt positions rapidly, I don’t see people coming off subsidy arrangements for industry, in fact new arrangements are more the norm.
”I would have thought what is happening in Europe would be one of the most timely wake-up calls in Australia’s history.
”Yet it is being completely ignored because we’ve had 20 years of growth.
”The size of complacency here is outrightly dangerous.
”What is it that’s wrong? It is the process by which public debt is used to buy votes with the promises of entitlements. If you borrow to buy votes you are expropriating the savings of other people.”
Asked whether now was the right time to slash spending and cut debt, Mr Murray said it was better to do it when unemployment was around 5 per cent than later, when it went higher.
The carbon tax and the mining tax were also badly timed.
”Irrespective of what you believe about climate change, given what’s happening in the world, the timing of the policy response is not good at all,” Mr Murray said.
”The timing of [the] introduction of a mining tax when the terms of trade boom was just about to end is not good at all either.”
Mr Murray said a simpler way of redistributing mining income would have been to end the tax deductibility of royalty payments and use the proceeds to cut company tax.
”It could be done in two lines of code, a few lines of legislation,” he said.