How does this subsidy even work politically, with an Australian city / state (wherever the subsidy is coming from exactly, but ultimately the Australian taxpayer one way or another) giving money to a foreign airline instead of an Australian one to operate a route?

And wouldn't this encourage UA to consider pulling out of the market since it would be creating such an uneven playing field, while the goal of the subsidy seems to be to encourage MORE airlines and flights? (Same issue for QF, but my first question above would seem to be of more importance to them.)