Steve Price: Australia Correspondent on Jetstar's plan to bring in charges for overhead carry-ons

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The Mike Hosking Breakfast 7 min 2 speakers 5 chapters transcribed 1 month ago
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What is the main topic discussed in this episode?

Mike Hosking 0:00
Steve's with us in Australia. Morning, mate. Good to be with you. And speaking of airlines, Qantas, just quickly, that thing yesterday, when they're talking about 1,000 jobs outsourcing to India, is there a frisson about that in the community or is that just tech and AI and that's the way of the world?
Steve Price 0:17
Yeah, I think it's the way of the world. I mean, all the banks have done it. You try ringing any organisation, whether it's about insurance or your bank or whatever, You are directed by phone to normally the Philippines, sometimes India, other parts of Asia. So those behind the desk jobs are probably gone for good. And Qantas is just the latest, just on airlines, by the way. A story this morning suggesting that from next year, Jetstar, the budget airline, is going to start charging you to put a bag in an overhead locker. You're only going to be able to, under a normal ticket, get on the plane and stick something under your seat.
Mike Hosking 0:53
I mean, seriously? Yeah, it's funny. I don't know how they're going to do it. I was mentioning it earlier because you're allowed like a purse or like a laptop. But then you turn up, you paid your 23 bucks and you got a bigger bag and they're going to go, well, that's too big. And you go, well, I paid for it. And I can see some aggro there, can't you? I mean, aviation's not what it used to be.
Steve Price 1:11
And don't they yell at you for putting your laptop under, you can't put it under the seat.
Mike Hosking 1:15
No, exactly. Put it up top. Exactly. Now this housing thing, so I'm fascinated by it because you're in trouble. What I want to know is, there's two parts to it. How much is it down? But the more important part probably is how long does it last?
Steve Price 1:30
Two very good questions. And this all goes back to the budget, of course, where Jim Chalmers introduced changes to negative gearing and to capital gains tax. At the time, everyone in government said, oh, don't worry about it. Minor changes is not going to have an impact. Well, how does $230 billion wiped off the value of housing in Australia in four months sound like? Not very much. The Prime Minister's on holidays. The Deputy and Acting Prime Minister said, Richard Miles and one of his frontbenchers, Matt Keogh, tried to play down this threat. One of the threats, of course, is the government introduced a 5% home deposit. So instead of having banks requiring you to have 10% deposit to buy a house, the government backed up and guaranteed that they would guarantee the other 5%.

What is Jetstar’s new overhead carry-on charge and who does it affect?

Steve Price 2:18
And so that's tipped a lot of young people into housing. And they were asked questions yesterday, those two ministers, about the threat of negative equity for first home buyers. They tried to brush it off and say, oh, well, you know, most of the people who took up the 5% deposit scheme are not in negative equity. We think if we look across the economy, that's just 1%. Well, if you had a 1% of new home buyers who now owe more on the house than what the house is worth, would you not call that some sort of a crisis?
Mike Hosking 2:50
It's a lot of people and a lot of money.
Steve Price 2:53
And a lot of these young people are going to end up having to sell their houses.
Mike Hosking 2:57
Yeah, exactly.

Why does Jetstar claim passengers stress about finding overhead locker space?

Mike Hosking 2:58
There's a great discussion here, and I think it's over there as well, is that the days when you and I were around buying our first house, that in many respects was the way you save for retirement because the return was virtually automatic and it was every year and you were set for life. Those days, I think, now are gone, aren't they?
Steve Price 3:15
Probably, and those were the days before superannuation, so your biggest asset did become your retirement income. You got to a point where you downsized and you banked the cash that you made from the home. Didn't have any capital gains tax on it, and away you went, but not any longer.
Mike Hosking 3:30
No, indeed not. My question on the Ellen Jones, I followed it for the last two days, does, and I'm following through the Sydney Morning Herald, and they're doing live updates sort of virtually minute by minute.

How might enforcement and disputes arise when passengers pay for overhead bags?

Mike Hosking 3:41
Do they stick a journalist in court for what will go every day until Christmas, or do at some point they pull the pin, and therefore is that proper coverage, et cetera, et cetera?

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