COMMENT: NOEL MURPHY
THROWING good money after bad is never a good idea. But politics, public sentiment and business pressure often conspire to make the idea much more alluring than it should be.
This is why we see Canberra falling over itself to throw money at non-performing car makers, businesses that despite a generation of assistance packages aimed at helping them compete in the real world, the level playing field, still can’t do so.
It’s why every time a big company with lots of employees finds itself in strife – whether through poor management, poor conditions or just bad luck – is happy to go cap in hand to government asking for money.
And politics being what they are, especially with marginal seats and governments holding office by the skin of their teeth, it’s all too easy for them to dip into the public purse thinking they’re keeping everyone happy.
But it’s not what you can call sustainable economics. Even if all the competition, overseas, seems to be doing the same.
All the millions Ford has been tossed aren’t going to keep it here. And this week it wanted more to keep its product development arm in Australia – the arm that it’s not closing down and says is growing and one of four vital research hubs it maintains around the world.
All the cheap electricity Alcoa has received from Spring Street won’t keep it here. That’s been made abundantly clear. Nor will Canberra’s kickbacks.
The same goes for Avalon where Jetstar is looking to shut down operations.
What will government kickbacks to its mother company Qantas, which is looking at a $300 million loss for the second half of this year, do?
Where would the money go? Into keeping jobs? Into lifting the number of daily flights in and out of Avalon, which have fallen from more than a dozen a day to just five?
Into schedules that match what customers want? Into better managing its attempt to get an international airport up and running?
Into making a highly expensive rail spur into the airfield a useful proposition instead of a white elephant?
Importantly, will government assistance enhance the important longer-term strategy of developing Avalon, and attracting more domestic, and critically, international carriers that might dovetail into so many other growth sectors across the region?
Geelong needs a sustainable economy. It’s been working hard towards this end. Things don’t happen overnight but significant long-term changes to Geelong’s economy are being revved up with well-spent government cash going toward emerging exciting new industries that play to our strengths that will bolster wealth-generating private sector enterprises.
Taxpayer-propped private industries that can’t perform aren’t what Geelong needs. Which is why Premier Denis Napthine and Geelong mayor Darryn Lyons are calling for Avalon to match their willingness to commit to its operations.
Between them, they’ve put in a great deal already, as has Avalon.
But airlines operate on the slenderest of profit margins — as little as a couple of dollars a head per flying customer — and require high turnover.
Jetstar clearly does not enjoy that turnover.
