Lots do, all of Europe, South America
That's not really reflective of what is happening here, in that you have to be a member of that group to be able to fly in that region. EK or EY cannot turn up and start flying internally all over Europe next week in its aircraft.
What is being proposed in Australia would be like QF opening a base in London or Santiago and flying internally with feed from it's international flights. Try that on in Europe and see how much they believe in a 'free market'.
Second to all this is the onerous regulatory environment that we operate under in Australia. That is a cost to the business that all these international operators won't have to deal with. A simple example would be FA ratios. An Australian operator in a A320 would have to fly with 4 FA's as minimum, where as a US registered operator would only need 3.
The Australian government don't know if they are Arthur or Martha. On one hand they regulate Australian Businesses into oblivion then in the next sentence allow anyone anywhere in the world with none of the regulatory burdens that we have carte blanche.
Then you have the whole issue of foreign companies bypassing taxation and foreign depreciation laws and compulsory super etc etc etc.....