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Qantas: How bizarre can this get?

If you haven’t been paying close attention to the goings on at Qantas over the past week, give yourself a tick. I’m still trying to get my head around it and it’s making me nauseous. Let me see if I’ve got this right.

On the Qantas website it says, “When the carbon price was introduced, Qantas added a small surcharge to domestic fares to reflect the impact on our cost base and attempt to recover some of that cost. Since 1 July 2012, this cost recovery has been unsustainable due to the challenging conditions in the Australian aviation industry.”

So Qantas says it has recovered the cost of the carbon tax by placing a surcharge on domestic flights since 1 July 2012. However, it also says recovering that surcharge has been unsustainable because of fierce competition. But, correct me if I’m wrong, the surcharge hasn’t been removed; it is still there but price discounting has made it look like it isn’t. Is that right?

Well, a surcharge is a surcharge isn’t it? Price discounting is something else. The two are not connected. Discounting the price of a ticket doesn’t remove the surcharge does it?

Certainly the chairman of the ACCC (Australian Competition and Consumer Commission), Rod Sims thinks so. He has stated that when the carbon tax is repealed Qantas and any other company that passed the tax on to consumers will have to remove it. “We would have to look at the individual circumstances but we would assume that any surcharge imposed because of the tax would come off. We will engage with airlines to work out the details of their situation,” he told Lenore Taylor at The Guardian Australia. Lenore Taylor has also said that according to a spokesman Qantas recovered all of the $106 million it paid in the first year of the tax. This means that none of those companies that applied a surcharge, Qantas included, will benefit from the removal of the tax. The bottom line impact, therefore, both with a carbon tax and without it, is zero….isn’t it?

How bizarre can this get? First, we had Qantas issue a statement on the Monday saying that the carbon tax was not a factor in its financial problems. Then further into the week CEO Allan Joyce reversed that position when he said, “the carbon tax has been a big cost for us. It’s $106m last year. It’s going to be over that again this year. And it is absolutely one of the factors that is impacting the airline.”

Considering this was also the week the government announced that there would be no guarantee for what we were told was a struggling airline, but which we are now told is in good shape, one could be forgiven for thinking that somehow the three events are connected. Fran Kelly on ABC’s Breakfast Radio thought so.

In an interview with Joe Hockey on March 6th, the Treasurer explained Joyce’s apparent back flip. Fran asked Joe, “Has the Government, as the Opposition alleges, leaned on the carrier?” Hockey acknowledged that he had spoken to Joyce on 5th March. He said to Fran, “Alan Joyce rang me yesterday and we talked about it but it was nothing more than him saying, ‘The interpretation about the Carbon Tax was entirely incorrect. A low level person at Qantas put out the statement which is not consistent with either of his statements or his previous statements on the Carbon Tax’ and I said that’s a matter for you, that was about it. We certainly don’t put pressure on companies like that and Labor shouldn’t judge us by their standards.”

Really? How low level? Was this low level person someone in the mail room, a junior desk clerk, a typist? I doubt it. Corporate press releases are NOT given out by low level staff. But, no matter who issued the first statement, that doesn’t change the fact that the surcharge covered the impact of the carbon tax and the removal of it will make no difference to Qantas’ bottom line.

All this, of course, flies in the face of Prime Minister Tony Abbott’s claim in parliament this week when he said, “Just so that members of this house should know what the situation is, Qantas has today put out a statement to say: we have said that the price on carbon is a cost to our business that we have not been able to recover through fare increases … So there we have it: the carbon tax is a drag on Qantas that it does not need. It is a $106m hit on jobs at Qantas. We will get rid of the carbon tax, but the leader of the opposition wants to leave this $106m-a-year hit on Qantas in place.”

Apparently, the Prime Minister was not aware of either the surcharge or the ACCC’s intention to monitor its removal. If he did, he would not be saying that the carbon tax was ‘a drag on Qantas that it does not need,’ because clearly it isn’t.

One wonders just how bizarre can this farce get? One also wonders about the broader question of the ACCC’s intention to monitor the removal of all carbon tax costs that have been passed on to consumers. One could get very nauseous just thinking about it.

 

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26 comments

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  1. Terry2

    Qantas and Virgin pass on the carbon tax to their customers just as they pass the GST on to customers the rest, I’m afraid is LNP spin.

  2. PeterF

    John, I heard the interview with Fran Kelly live. His responses were barely intelligible, being punctuated with ‘um’s and ‘arr’s. this in contrast to his spiel when he was spouting the government’s line a minute or so later. He will have to become a better lier if he wants to convince me.

  3. John Kelly

    Reblogged this on THE VIEW FROM MY GARDEN and commented:

    Apparently, the Prime Minister was not aware of either the surcharge or the ACCC’s intention to monitor its removal. If he did, he would not be saying that the carbon tax was ‘a drag on Qantas that it does not need,’ because clearly it isn’t.

  4. Zathras

    I thought the costs pf the Carbon Tax was passed onto the customers, so it should have no financial effect on QANTAS beyond the administrative one. That also affects other carriers so it should cancel itself out.

    Furthermore, QANTAS was previously subject to a 15% Carbon tax on European flights because Australia did not have a reduction mechanism in place.

    When (if) our tax is scrapped, will Abbott’s new scheme be recognised or will the 15% tax be reimposed?

  5. Matters Not

    Zathras said:

    When (if) our tax is scrapped, will Abbott’s new scheme be recognised or will the 15% tax be reimposed?

    One would assume that the 15% will be reimposed. Why aren’t Labor and the MSM all over this?

    Also it’s likely that this retreat from Carbon Dioxide pricing will be discussed at the G20. Will the MSM entertain that ‘issue’?

  6. Graeme Rust

    oh dear oh dear oh dear, mr eleventy ,when first we practice to deceive oh what a tangled web we weave, JOE, how’s your plans going to roll your friend mr slime munster ? (abbott)

  7. lawrencewinder

    How much longer are this rabble going to be listened to? It’s past Orwellian and getting into Kafka territory.

  8. Keith

    In all of this is the fact that anything the Abbott gang says needs to be thoroughly checked.
    Integrity and truth have been casualties since the Abbott gang have been elected.

  9. @N0mad1c

    Apples and oranges. Your comparison only assumes competition exists in a domestic market where all players have carbon tax (on or off). Qantas competes with foreign airlines unencumbered by it, including Virgin’s foreign owners.

  10. John Kelly

    @NOmad1c, Qantas doesn’t pay the carbon tax on international flights. But it will soon if the European Union and the UK apply a levy for flights into their zones from 2015. The proposed levies will apply to airlines whose home base does not have a carbon tax mechanism in place.

  11. DanDark

    “POLITICAL LANGUAGE
    IS DESIGNED TO MAKE LIES
    SOUND TRUTHFUL AND
    MURDER RESPECTABLE”

    MARCH IN MARCH
    A VOTE OF NO CONFIDENCE
    IN THIS FED GOV OF LIARS

    JOIN IN THE RALLIES NEAR YOU
    NEXT WEEKEND
    AUSTRALIA WIDE PROTEST
    “THE MICE ARE ON THE MOVE”

  12. Graeme Rust

    notice when mr eleventy and the slime munster know they have been caught out they sit there with they’re arms crossed, they do a lot of that.

  13. john921fraser

    <

    There are still a lot of Aussie taxpayers who haven't given a moments thought as to who will make up the "carbon tax" and mining tax loss to Treasury.

    Although self funded Pensioners are getting an inkling, with health costs being mooted.

  14. Terry2

    john921fraser

    You noticed that too did you, John ? So far this government have stripped themselves of revenue without replacing it. This at a time when Abbott has promised a cut in company taxes of 1.5%. ( for some, whilst some get an impost of 1.5% to pay for his PPL scheme – crazy stuff)

    Interestingly, the MRRT is just starting to kick-in and even the Weekend Australian conceded that the profits of the big three iron ore miners ( Fortescue – Rio Tinto and BHP Billiton ) have soared 81% and the price of the commodity (iron ore) rose to more than $US 130 a tonne – from a low of $US 87 per tonne the previous year.

    I think we are all in for a rough time as conservative ideology takes over from reality.

  15. Stephen Tardrew

    I choke on my womit
    Piss in my shoes
    Scratch my amygdala all because of yous
    Taxing my income without by or leave
    Steel from workers
    Profits up sleeves

    Give up the silver to Bankers and friends
    To these greed bastards there is never an end
    Gina the lovely
    Maggy the mole
    All of you workers crawl down this black hole

    Sell of the media until my mind bends
    Twisting the truth to suit your own ends
    Crooked my thinking inured to lies
    Just to make money for ultra rich guys

    Cook up the planet
    Flood the worlds poor
    Just because Pell’s Gods said
    “I Am the Law”

    Brought to you by your friendly Lucifer welcoming you all to my fully funded, all costs included, terminal barbeque.

  16. Stephen Tardrew

    You horrible Australians taxed Qantas to death. How do you feel now? Yesterday it was OK today it’s hell. Suffer the little Joyce’s bonuses and all. Bad, bad, bad Australian labor leaches. We on the right like the heat after all.

  17. Stephen

    Joyce was nobbled. What a laugh

  18. Richard

    Both men are liars …… come on MSM make them accountable for their liars.

  19. david linehan

    Obviously the message of deceit, lies, secrecy, asylum seeker inhumanity is not getting across to Tasmanian and S.A.voters who seem hell bent on returning Tory Govts. May they live to regret it.

  20. Paul Raymond Scahill

    Between Joyce and Mr. Eleventy, not forgetting our “Economics Genius” Phony Tony, it would appear as though we have a real mathematics bunch. Wouldnt you like them together with George (The head, should that be bottom, denialist at the Vatican) Pell, the purveyors of our future, between them all, they would have difficulty in balancing a budget. One can only hope that a decision never has to be made!

  21. Don

    How can they get away with misleading Parliament all the time and no one pulls them up, my understanding there are laws in place to punish those who offend, why are they not being followed.

  22. John Kelly

    Don, when Abbott said in Parliament “So there we have it: the carbon tax is a drag on Qantas that it does not need. It is a $106m hit on jobs at Qantas,” I would have thought that he misled the house and should have been censored. Why he wasn’t can only be put down to a weakness in the opposition to push back. Perhaps an Independant such as Palmer or Wilkie should be approached to hold Abbott accountable.

  23. dafid1

    John I have posed that question to Bill Shorten several times on many topics, Manus Island being at the top, never a response. I doubt he gets to see let alone read majority of them from twitter. Like Abbott his staff decide what he should see.
    So I am left to conclude, Labor have dirty washing they dont want revealed. their lack of fight on so much says so.

  24. Ian Hoffmann

    Thanks John. I thought I’d missed something when I instantly saw the absurd disconnect between Qantas slapping on a surcharge for the carbon price and then bleating about the loss of this revenue because they implemented a discount pricing strategy, but no-one in the old media picked it up, or chose to smell the rat. There is also something really questionable in the relationship between the rent-seeking senior management of Qantas and the current governments ideological obsession.

  25. Graeme Rust

    joyce nobbled ? who by ? maybe missie crissie poin ?

  26. cartoonmick

    The really really annoying aspect of this entire scenario is that they (pollies and Qantas execs) actually expect us, the public, to believe everything they say. WE DON’T !!!!!

    We, the public, are not gullible !!

    We can see right through all the spin which is being offered up as clean precise truth. NO, we’re not that dumb.

    There may be small crumbs of truth lurking within each speech, but it’s buried deep under yards of spin.

    Anyhow, enough of this serious stuff, here’s a cartoon on a possible future Qantas and something Mr Abbott revealed the other day in Tasmania . . . . . .

    Editorial / Political

    Cheers
    Mick

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