STEPHEN CENATIEMPO:
Time to talk federal politics with Andrew Leigh. He is the Assistant Minister for Charity, Competition, Charities and Treasury and Member for Fenner. Andrew, good morning.
ANDREW LEIGH:
Good morning, Stephen. So, great that you did that shout out to the women Olympians. They’re remarkable aren’t they?
CENATIEMPO:
Well, the blokes need to really lift their game, don’t they?
LEIGH:
I’ll say, yeah, we have some extraordinary women. And the notion that one family could be ranked 16th on the medal table, as you say, is just an extraordinary fact about our sporting success.
CENATIEMPO:
Now, you’re a runner, when you watch the Olympics, are you focused on the running events or what are your most, what captures your interest?
LEIGH:
I do love the running. I mean, the marathon is one of those events where you get to really dig in and enjoy it. The 100 metres – blink and it’s over. But the marathon, you got all those tactics and just the sheer beauty of watching those Kenyans run, you know, I couldn’t keep up with them more than a couple of hundred metres. And the way they just lope along and then, near the end, put in those big surges. Eliud Kipchoge put in a 5k surge at the 30k mark in Rio which would have been the 5 kilometre world record in 1950. So they’re just blisteringly fast.
CENATIEMPO:
Indeed. Now, you’re in Adelaide this morning, is that right?
LEIGH:
That’s right. I’m speaking at Philanthropy Australia’s annual conference about the notion of philanthropy and government working together in what I’ve dubbed ‘a symphony of impact’.
CENATIEMPO:
Yeah, explain that to us because I’ve been reading through your speech. Tell us about the symphony of impact.
LEIGH:
Well, the idea of the symphony of impact is that we work together, charities and government, in order to improve the harmony of society. We have the melodies of social services, the woodwinds of environmental efforts, the brass sections of educational support and the percussion of the arts and culture. And when you think about all that, you think about the reverse, how dull and silent society would be without the remarkable work of charities. And of course, we can’t help but also mention Terry Snow and the Snow Foundation and all of the work that they’ve done in keeping that symphony of impact going in Canberra.
CENATIEMPO:
Yeah, no doubt about that. And a great loss to Canberra, Terry Snow, who passed away over the weekend. Now, I do want to talk about something that I guess falls into your area of competition, and this is this crackdown on uncompetitive practices when it comes to the allocation of airport spots. Why is it taken so long to get around to this? Because, I mean, okay, we’re talking about the imminent collapse of Rex Airlines, which nobody wants to see, but this is not new. I mean, we saw this situation with Qatar not that long ago. The government has been accused by the Opposition of running protection racket for Qantas and Virgin, and it’s hard to disagree with that.
LEIGH:
Well, the system that’s in place was the system that was ongoing through 9 years of Coalition government. So, they had 9 years to put in place a better system and didn’t do it. As soon as we came to office, we got Peter Harris to do a review of slot allocation at Sydney Airport. Now, most airports you can fly more planes in if you want to. Canberra you can fly them in day or night. But Sydney is the really constrained one, the busiest airport in the country with curfew from 10pm to 6am. So, that slot review has taken place and now we’ve got a tender out for the company that will allocate the slots. We also want to make sure there’s more of a bias towards new entrants, Stephen. Bonza wasn’t able to fly into Sydney and we want new entrants to have the opportunity of picking up some slots in Sydney.
CENATIEMPO:
Explain to me why we have to tender out for a company to allocate slots. I mean, surely there’s already some sort of organisation that can do that.
LEIGH:
It’s incredibly specialised. So, you want to think about slot allocation not only in terms of one end of the connection, but the other as well. So, there’s not much point being able to take off a plane if you can’t land it somewhere else. Not much point being able to get a plane into Sydney if you can’t get it out. Airlines want to turn the plane around, and so that turns it into a much more complicated mathematical problem than you’d want it to be otherwise. It’s a specialised process, but the principles are basic. We want more competition in aviation. We recognise that when there’s more players flying a route that airfares go down. Three airlines flying a route means that the airfare per kilometre is half what it is if you’ve got a monopoly carrier.
CENATIEMPO:
Okay, all right. I gotta say, I don’t understand – but if this is only for Sydney Airport, I mean, as you say, you can’t take off a plane if you can’t land it somewhere else. Surely, there’s got to be a national approach to this?
LEIGH:
Sydney is the main constraint and it’s Sydney getting a plane in and getting it back out again. Other airports are constrained and obviously the slot management process takes into account some of those constraints at a place like Melbourne, so it does need to work in there as well. But the constraint on Sydney has been a challenge. Thankfully, with Western Sydney International opening up, that’s going to take a little bit of pressure off, hopefully produce more competition in that critical aviation market, more opportunities, hopefully, for Canberrans to be able to fly Sydney‑Canberra if they want to. Although the bus and the train are pretty good too.
CENATIEMPO:
Yeah, well, and cost‑wise, it’s almost – it’s cost prohibitive to fly out of Canberra to anywhere, which is probably the biggest problem and I guess competition will address that. But the problem I see in a broader sense is that it, it seems almost impossible to run an airline profitably. We’ve seen a number of them collapse over the years. Is it a regulation issue? What do we need to do? What are we doing wrong in Australia? And I know we’ve got a small population, but other countries seem to be able to sustain numbers of airlines.
LEIGH:
It is partly the population size. Competitors have been effective where they’ve gone into the regional routes, but less effective where they’ve gone into the metro routes. We saw even over COVID, Virgin going into administration. Of course you’ve had the challenges with Bonza and Rex, so this does point to the challenge of the Australian market. As a government, we’re not about running airlines, we’re about setting up a competitive system that allows a new player to come in and take on the incumbents. That might be flying a couple of profitable routes, might be taking on regional areas, might be taking on new underserved communities. We’re open to all of those options. I know Catherine King wants to see the flying public to get the very best deal possible.
CENATIEMPO:
Well, and I’m not expecting – I don’t expect the government should be running airlines, although I question whether or not privatising Qantas all those years ago was a smart move. But in moving forward, what is the government’s policy on Rex and what is the government doing to try and stop the imminent collapse of Rex?
LEIGH:
We’re working in with the administrators, looking at whatever supports are appropriate to provide. Qantas and Virgin has stepped up to help the passengers and the administrators have a big piece of work in front of them. We’re not ruling anything out at the moment. We understand the real importance, particularly for regional Australians, where Rex was sometimes the only airline flying in. But we need to first hear from the administrators about what they need.
CENATIEMPO:
Andrew, good to talk to you. We’ll catch up again soon.
LEIGH:
Likewise. Thanks Stephen.