Mon "Australian Financial Review" 5/5/03
Costello tells Anderson off over Qantas
May 5
Toni O'Loughlin
Federal Treasurer Peter Costello warned Transport Minister and Deputy Prime Minister John Anderson yesterday against pressuring the Australian Competition and Consumer Commission into approving a merger between Qantas and Air New Zealand.
Mr Costello said Qantas and Air New Zealand had to change the original merger proposal to ensure competition would not be undermined.
"I don't think the proper way to progress this is to try and heavy the regulator," Mr Costello said, alluding to comments by Mr Anderson and NSW Premier Bob Carr that the merger was vital.
"The proper way to progress this is to try and make sure that structural improvements and undertakings can be given which will guarantee competition," Mr Costello told Channel 10's Meet the Press.
In particular, Qantas and Air New Zealand had to reassure the ACCC "that the consumer will not be slugged" with higher prices, Mr Costello said.
His comments follow those of ACCC chairman Allan Fels who said last week that he would not succumb to political pressure.
Nevertheless, Mr Anderson continued to urge the ACCC to take into account the view that "further alliances ... of international aviation players is inevitable".
"We have a chance in this region to secure a major player," he told Channel 9's Sunday program.
Qantas was doing well at the moment but "it's a dog-eat-dog world in international aviation", Mr Anderson said.
However, he said he did not believe Professor Fels would continue to rule it out unless he had good grounds for doing so.
The ACCC and its counterpart, the New Zealand Commerce Commission, rejected the proposed merger last month in a draft determination, arguing that the anti-competitive effect would have outweighed any public benefit from the deal.
Qantas and Air New Zealand are in the process of reapplying for a formal determination.