I don't think that deflation, in real terms, is on the cards. Globally
stagflation for individuals has been happening for quite some time now...or at least in North America. Europe is next. Then Australia. Wages will fall while prices for energy (any number over 10% of household spend is dire, and wildly inflationary), food, education, taxes (Swan is already tilling the ground for increases), and durable goods will drift upwards.
Anyone who was an adult in the 1970's will recall with dismay what that leads to: Ennui, despair,....disco.
Australian political parties try to buy their way into power with the voters' money. Election promises are sold as either more handouts or reduced taxes, depending on your bent (and your income bracket). Both are ultimately harmful, and expensive in the long run.
I will observe once again that a socialist government (or as near to that as we have) should eschew the economic rationalist model of unfettered competition because the home team is burdened with (legislated largesse) obligations while the foreigners are not, by virtue of either geological accident (EK and its neighbours) or critical mass (Chinese airlines) or bizarre bankruptcy laws (US carriers, for example).
While not an advocate of protectionism in general I do think that airlines, and QF specifically, are a special case given their iconic role as part of a nation's identity and reach. As such they should be given the benefit of a little protection from wholesale competition.
There ought to be a dialogue between Canberra and the airlines so that both sides are clear on the realities of the market, and of the market for regulation as evidenced in electoral liability. Realpolitik, in other words.