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Aviation and Airports Policy Division

Senator O'BRIEN —Can anyone tell me the current situation in regard to superannuation of former Ansett employees? Do those funds have enough money to make full payments to Ansett workers?

Mr Dolan —The department represents the Commonwealth on the committee of creditors for the Ansett administration. Through that, it has access to a range of information under the normal arrangements under the Corporations Law which means that we are actually under some constraints in terms of what we can make publicly available because of the interest of other creditors.

The whole matter of the administration of Ansett obviously cuts across several departments, and particularly us and Employment and Workplace Relations. I do not have specific information on the current state of play with the superannuation, nor am I sure how much of it—in terms of our presence on a committee of creditors—I could release. I can undertake to take it on notice and supply you with such information as is available to us.

Senator O'BRIEN —In terms of the air marshal situation, can you outline the extent to which this department was involved in the development of the aviation security policy on air marshals?

Mr Turner —This department's role with regard to the air security officers is policy coordination with other departments. The other principal participant is the Australian Protective Service, within the Attorney-General's portfolio, who have the day-to-day operation of the program and are responsible for the recruitment of the air marshals and so on. So we have been involved in organising the indemnities for the airlines but not the day-to-day operations.

Senator O'BRIEN —So it is justice and customs minister?

Mr Turner —The Minister for Justice and Customs is the minister responsible for the day-to-day operations program. Several other departments have some interest but they do that.

Senator O'BRIEN —Can you answer questions about the industry contribution to air marshals?

Mr Turner —In general terms?

Senator O'BRIEN —Yes.

Mr Turner —The contribution that the industry make is really the tickets.

Senator O'BRIEN —So the industry is picking up the cost of the tickets for the air marshals?

Mr Turner —Yes.

Senator O'BRIEN —The industry, therefore, is also paying the Ansett levy on those tickets?

Mr Turner —That is my understanding.

Senator O'BRIEN —Is there a cap on the contribution from the airlines to this program, in terms of number of flights, or value of fares?

Mr Turner —There is no financial figure. The number of officers provides a cap on the number of flights that they can be on, but there is no numerical cap as such.

Senator O'BRIEN —Did the government impose particular criteria on the seats it needs for the air marshals, or is it up to the airline to put them where they like?

Mr Turner —I would rather not discuss that aspect in public for security reasons.

Senator O'BRIEN —Is the goods and services tax payable on tickets that the airlines provide for the air marshals?

Mr Dolan —If I could, perhaps we are characterising it wrongly. It is not a matter of the airlines providing tickets; it is the matter of the airlines providing seats as required. In those circumstances, GST is, in my understanding, not payable but we will need to confirm that. The issue of the Ansett levy, on the other hand, is driven by the number of passengers occupying seats.

Senator O'BRIEN —What about noise levies?

Mr Dolan —I am not sufficiently familiar with the details of the noise levy legislation to give you an answer on that. I would like to take it on notice. Mr Matthews has reminded me that the noise levies at Sydney and Adelaide are driven in terms of aircraft weight, and therefore are an expense to the airlines, in terms of planes that come in and out, as I understand it. The airlines themselves attribute it to passengers and to a ticket price. If we need further clarification, I am happy to provide that.

Senator O'BRIEN —I would like an update on the work of the aviation policy task force. When we last had an update, the task force was comprised of Mr Fisher and his executive assistant, and the agenda seemed a little fuzzy.

Mr Dolan —The aviation task force, as I indicated the last time we discussed this, consists principally of Mr Roger Fisher, who is given project teams of staff from my division to carry out particular projects. The focus of the task force has been on providing policy advice to the government on a range of matters subsequent to the events of September last year, September 11 and the Ansett collapse, and focusing particularly on matters of economic regulation. The key work to date has focused on regional airlines, and particularly the administration of Hazelton and Kendell, issues of airport pricing and the economic regulatory regime for airports, and a general assessment in terms of policy advice to government of the range of matters that need to be considered over time, in the light of the events of September last year. It is work that is still in progress.

Senator O'BRIEN —So the minister announced his explicit reform agenda in a press release on 15 February, and at the last estimates hearing, it was unclear on how each of these are directed to the aviation policy task force. Did you just say it is in your—

Mr Dolan —In terms of the aviation reform agenda, as announced by the minister that as I think I indicated at additional estimates, it is explicitly within the province of my division, rather than the aviation policy task force.

Senator O'BRIEN —So which of these are within your division: the corporatisation of Airservices Australia?

Mr Dolan —Yes.

Senator O'BRIEN —That is in?

Mr Dolan —Yes.

Senator O'BRIEN —The future responsibility for rescue and firefighting services, terminal navigation and tower air traffic control service?

Mr Dolan —That is again within my responsibility.

Senator O'BRIEN —The establishment of an air standard task force to complete the reform of the aviation regulations?

Mr Dolan —That is a matter that, in effect, is jointly being undertaken with my division and CASA. Or in fact, no I am sorry, I characterised that wrongly—the CASA chair, as commissioned by the minister.

Senator O'BRIEN —The chair of CASA? Is he in control of that one?

Mr Dolan —I am sorry?

Senator O'BRIEN —Did you say the chair of CASA was in control?

Mr Dolan —In June last year, on his appointment, Mr Ted Anson was asked, as well as taking on the role of chair of CASA, to undertake a review of a range of issues relating to the governance and administration of CASA. So the matter you raised has some overlap between that activity and the work of my division.

Senator O'BRIEN —Okay; we will come back to that. A review of the structure and reporting requirements of CASA—

Mr Dolan —The same issue, Senator.

Senator O'BRIEN —So in relation to the corporatisation of Airservices Australia, which is your division, what is happening? Where is it up to?

Mr Dolan —We are currently working with Airservices Australia to scope out what would be required in terms of legislation and other administrative change to achieve the corporatisation of Airservices in accordance with the government policy.

Senator O'BRIEN —Can you remind us of the purpose of the corporatisation?

Mr Dolan —It is to enable Airservices to continue its focus on providing air services in a businesslike and effective way, to continue with the government's wish to have Airservices deliver its services in the way a business should.

Senator O'BRIEN —So the criticism is that Airservices is not doing that now?

Mr Dolan —No. it is just to move further down that track, Senator, to more explicitly make Airservices a corporation and to subject it to those sorts of requirements.

Senator O'BRIEN —What is the proposed time frame to achieve this outcome?

Mr Dolan —The minister has indicated that it is a priority in terms of his aviation reform agenda. Since any change is going to require legislation to be put in front of, and considered by, the parliament we are to a considerable extent in the hands both of the legislation program and of the parliament. But we would hope that something potentially will be available in the spring sittings of parliament for the parliament's consideration.

Senator O'BRIEN —I didn't quite hear the start of that.

Mr Dolan —We would hope—although we can't guarantee because of other legislative priorities—that something might be available to the parliament for its consideration in the spring sittings.

Senator O'BRIEN —In the spring sittings.

Mr Dolan —I cannot guarantee that, Senator, because I don't control the legislation program of the government.

Senator O'BRIEN —What is involved with the corporatisation?

Mr Dolan —That is the work that we are currently scoping out, so we can get that into place, get the policy advice to the minister and to government.

Senator O'BRIEN —What impact will it have on the operation, work force and work force size of Airservices?

Mr Dolan —It is hard at this point to give a comprehensive answer on that. I think the clearest indication at this point is that there will need to be an explicit separation in terms of the government's general approach to corporatisation between the current core regulatory and policy responsibilities of Airservices and their business activities, which the minister has characterised as in effect the setting up of an airspace authority. How that split of work would happen and, therefore, the impact that would have in terms of where staff were located between those two potential organisations is part of what we are working through at the moment.

Senator O'BRIEN —With regard to the future responsibility for rescue and fire fighting services, terminal navigation and tower ATC services, where are the draft regulations up to that will facilitate these changes, if any?

Mr Dolan —The regulations have been drafted and are currently being considered by the minister.

Senator O'BRIEN —What form do those regulations take?

Mr Dolan —They take the form of a civil aviation safety regulation about the necessary standards for those services.

Senator O'BRIEN —I suppose the time frame is subject to the minister, but what is your understanding of the intended time frame for promulgation?

Mr Dolan —I do not have any formal indication of the time frame for consideration but, again, this is a matter that the minister has indicated is a priority.

Senator O'BRIEN —If the prerequisite regulations are passed, what happens next?

Mr Dolan —If the regulations are put in place, that transfers responsibility for achieving standards to operators. Various bodies would need to determine—airports, in particular—the most cost-effective way of meeting those standards. At the moment those services are all provided by Airservices. Over time there is a potential that other providers may be able to provide an alternative cost-effective service.

Senator O'BRIEN —Are any other legislative changes needed to facilitate this policy change?

Mr Dolan —We would have to take a look fully to understand that. There would certainly, for example, need to be changes to the Airports Act in relation to rescue and fire fighting services.

Senator O'BRIEN —Has the department considered potential job losses with this policy and the location of those shops?

Mr Dolan —I certainly haven't given explicit consideration to that at this point, Senator.

Senator O'BRIEN —Has the department been approached by any organisations interested in providing the services—be they airports themselves or other contractors?

Mr Dolan —I am not aware of any formal approaches. I have had, and I believe some of my colleagues have had, conversations with a range of airports or their representatives and potential alternative providers who are attempting to understand what the future framework may look like. So there certainly has been informal interaction.

Senator O'BRIEN —Can you identify those organisations for the committee?

Mr Dolan —I am trying to recall the basis on which approaches were made and whether there were any sensitivities in terms of the commercial position of those involved, and I would have to refresh my memory on that. Could I take that one on notice and get back to you?

Senator O'BRIEN —In relation to the establishment of an air standards task force, is this the one that was subsequently established including Dick Smith?

Mr Dolan —No, Senator. The Aviation Reform Group that was established that involved Mr Ted Anson, Mr John Forsyth and Mr Dick Smith originally required additional members and was set up primarily for the purpose of pursuing low level airspace reform. The task force is a matter that is still being worked through but, in terms of its design, it tended to be a group that will assist CASA to move forward with its regulatory reform agenda. The details of that are still under consideration.

Senator O'BRIEN —So it has not started work?

Mr Dolan —No, which is not to say that there is not considerable work going on in CASA on a range of existing consultative and other arrangements to support a regulatory reform program.

Senator O'BRIEN —Does the review of the structure and reporting requirements of CASA fall into the same category?

Mr Dolan —That is the review I referred to that is being undertaken by Mr Ted Anson, who has been asked to report to the minister by the end of June. As I indicated, there is an overlap of roles. In our policy advisory role we would expect that the minister would seek our views on such an arrangement.

Senator O'BRIEN —Is the department assisting Mr Anson in his task?

Mr Dolan —The department has discussed with Mr Anson the department's understanding of possibilities or scenarios, but the clear responsibility for the review is with Mr Anson.

Senator O'BRIEN —Is Mr Anson taking submissions from interested persons and organisations?

Mr Dolan —Not that I am aware of.

Senator O'BRIEN —Will the department have any role prior to announcement of his findings?

Mr Dolan —As I indicated, I have an expectation—which may not necessarily be supported—that the minister would seek our advice before his response to the report is finalised. But that is obviously a matter for him.

Senator O'BRIEN —What is the department's view on the return of regulatory drafting responsibility and function to the department?

Senator Ian Macdonald —I do not know that that is a fair question to the officers. The government has obviously asked them to do it. I am sure they would say they would always agree with what the government said, but if they do not it is a bit of embarrassing to put those sorts of questions to them. I do not think that is the purpose of estimates committees, Senator.

Senator O'BRIEN —I certainly was not asking the question to embarrass them. If they are embarrassed, then they do not need to answer it.

Mr Dolan —I do not feel any embarrassment, but I would prefer not to answer the question.

Senator O'BRIEN —Mr Toller did not have any problems expressing a view on the matter.

Senator Ian Macdonald —Perhaps I was not awake then.

Senator O'BRIEN —You may not even have been there, Minister. I would not 'fess up to falling asleep during estimates. It is on page 310 of the Hansard, if you feel inclined to see what you missed.

Senator Ian Macdonald —I think I could be forgiven for falling asleep at times.

Senator O'BRIEN —Minister, that is not appropriate, given your responsibilities.

Senator Ian Macdonald —I am not saying I did, but I feel I could be excused if I did. These things do get rather tedious, to put it politely.

Senator O'BRIEN —Thanks for the compliment.

Senator Ian Macdonald —I was not meaning you, nor Senator Colbeck nor Senator Crane. Your questions are always entertaining and exciting, Senator. The senators I was talking about are not here to defend themselves.

CHAIR —I think if you could ask questions in your dreams it would be most entertaining. It is even better if you can reply to them in your dreams.

Mr Matthews —He certainly was not talking about the answers, that is for sure.

Senator O'BRIEN —Mr Anson's appointment is for three years from 1 July 2001. Is that right?

Ms Chilvers —I would have to clarify that. I think so, but I am not 100 per cent sure. We could answer that tomorrow.

Senator O'BRIEN —That is fine. It is not going to change between today and tomorrow, I am sure. I will not lose any sleep over it. The topic of airspace reform was included in a media release of the minister's of 15 February but a probably more detailed development was announced on 13 May, the day before the budget. I want to get a better understanding of it. Did the minister make the announcement at a conference, or a special forum, or was it just a media release?

Mr Dolan —In terms of an announcement, it was in a media release.

Senator O'BRIEN —The special Aviation Reform Group was established on 22 February, comprising Messrs Smith, Anson and Forsyth, as I understand it. Is it fair to assume that these people were appointed on the basis of their positions—that is, as chairs of CASA and Airservices—or, in the case of Mr Smith, personal individual experience?

Senator Ian Macdonald —I am sure Mr Anderson appointed them because they were the best people available.

Senator O'BRIEN —Perhaps you could take that on notice for Mr Anderson to answer.

Senator Ian Macdonald —Okay.

CHAIR —What is the question? Is it why these were people appointed?

Senator O'BRIEN —No, I asked for the basis of their appointment. They were appointed to a very high-powered committee. I am saying that the presumption that I make is that they were appointed because they were the chair of CASA and Airservices and, in the case of Mr Smith, because of personal experience. He does not hold any particular office that I am aware of.

Senator Ian Macdonald —We will have that clarified.

Senator O'BRIEN —Is it significant that the department has no representative on that group?

Senator Ian Macdonald —I was going to say we could not find anyone good enough in the department, but I have just been told that Mr Matthews has also been appointed, so we must have found someone. For the record, I am only joking there. Any one of our departmental officers would have been a good appointment. Perhaps Mr Dolan should go on and say what he was going to say before I interrupted.

Mr Dolan —The Aviation Reform Group, as the minister announced in his latest press release, now consists of five members: Mr Matthews as the chair of the group, Air Marshal Angus Houston and the three gentlemen that you previously referred to, Senator.

Senator O'BRIEN —When was that announcement made?

Ms Chilvers —That was on 13 May.

Senator O'BRIEN —When was the decision made to add Mr Matthews and Air Marshal Houston?

Mr Dolan —The addition of Air Marshal Houston was made in early March. The addition of Mr Matthews was at the point at which the minister announced the future of the group and the preferred model for future low-level airspace reform.

Senator O'BRIEN —I did not hear the dates you referred to.

Mr Dolan —Early March for Air Marshal Houston and the date of the press release, 13 May, for the employment of Mr Matthews.

Senator O'BRIEN —Have any of the individuals any direct experience in air traffic control?

Mr Dolan —Not that I am aware of.

CHAIR —Can I ask the questioner and the answerers to speak a little louder. Everything is turned up as loud as we can get it at the back. It is very hard to hear.

Senator O'BRIEN —The minister's release said the ARG would be supported by an executive officer appointed by the Airspace Reform Group and located in the Department of Transport and Regional Services. Has that appointment been made?

Mr Dolan —Yes.

Senator O'BRIEN —Who has been appointed?

Mr Dolan —I am the executive officer.

Senator O'BRIEN —How long has this panel got to report to the minister?

Mr Dolan —The group has reported to the minister. It reported to the minister at the end of March. The minister has now commissioned the group to oversee the implementation of the NAS system for low-level airspace.

Senator O'BRIEN —It is the Dick Smith model that has been adopted by the ARG?

Mr Dolan —It is a model that Mr Smith was influential in developing that draws largely on North American airspace.

Senator O'BRIEN —How different is it to the system we have in place as we speak?

Mr Dolan —It is substantially different to the current system.

Senator O'BRIEN —Can you describe the system for me and indicate where it is different?

Mr Dolan —Not at any level of technical detail. I could certainly on notice provide you with the key characteristics of the system and how they differ from existing low level airspace arrangements. It is not something I have a detailed briefing on here.

Senator O'BRIEN —What about you, Mr Matthews?

Mr Matthews —I think that would be a much more comprehensive way of doing it. If either of us tried to do it extemporaneously it will be an incomplete job. We are quite happy to provide a summary in a written form of the significant differences.

Senator O'BRIEN —Without holding you to that, I accept your offer to do it on notice. What are the key differences?

Mr Dolan —From the point of view of a pilot, and this is oversimplifying it considerably, the key differences are in terms of the use of radio communication in airspace and entry into that airspace.

Senator O'BRIEN —The minister's press release said that the second model was developed by the airspace working group model called the LAMP, Low Level Airspace Reform Plan. Who in the airspace working group developed that model?

Ms Chilvers —The aviation working group which developed the LAMP model comprised representatives from Airservices, AOPA, Qantas, Ansett, Defence, some of the regional airlines, the regional airspace users advisory committees and various other parties. I do not have them all here.

Senator O'BRIEN —The minister's media release of 22 February announced that the ARG was given a very specific range of principles to be taken into account when comparing the two systems:

(i) the cost effectiveness of each of the competing proposals;

(ii) the degree of industry support for each proposal and the comments of the industry stakeholders on the merits of LAMP and NAS;

(iii) the ability to implement each proposal within a reasonable time frame;

(iv) the degree to which each proposal is in accordance with ICAO airspace classifications;

(v) which proposal is more closely harmonised with international best practice; and

(vi) other substantive issues that the ARG considers relevant to an informed recommendation.

ARG recommended its preferred proposal was met by 25 March 2002, and it met that timetable.

Mr Dolan —Yes.

Senator O'BRIEN —Did the department develop those criteria or were they developed in the minister's office?

Mr Dolan —The department was involved in advising the minister on the development of those criteria.

Senator O'BRIEN —Why were criteria such as the safety of the travelling public, industry workers and those living under the flight path absent from the points in comparing the two models?

Mr Dolan —To the extent that they were not picked up, the clear understanding was that there were a range of regulatory hurdles that needed to be met by either proposal in its implementation, which would address safety and related issues.

Senator O'BRIEN —The first point was a comparison of cost effectiveness. The second popularity with industry The third how quickly each could be implemented. Point four is a question about the degree to which it complies with ICAO rules. The fifth is about harmonisation with international practice, whatever that means. The sixth is a bit of a catchall.

Mr Matthews —The record needs to show, as Mr Dolan has been saying, that the process of implementing this new airspace model will give very high importance to the question of safety. Before it can be implemented there needs to be a satisfactory safety arrangement. You are looking for that in terms of the criteria for selection. Safety is delivered through the process of adopting it. It will need to move through the CASA process in a way that satisfies CASA.

Senator O'BRIEN —It will go through an MPRM?

Mr Dolan —No, Senator. There is a procedure which effectively is developing a safety case for the implementation of the system so that CASA can satisfy itself that it meets the appropriate safety standards. It is not about CASA making new rules; it is testing the proposed arrangements under its existing rules.

Senator O'BRIEN —What role does Mr Anson play with CASA while they perform an assessment of a proposal which he has presented to the minister?

Mr Dolan —That gets back to one of your earlier questions. Mr Anson's membership of the Aviation Reform Group is in his personal capacity, not in his role as chair of CASA. That is explicit in his letter of appointment.

Senator O'BRIEN —So he is personally committed to it, but as chair of CASA he is not committed to it. I am not sure what that means. Frankly, I do not see how you can differentiate; that is the point. I would like you to explain how you can differentiate on the basis that the chair of CASA, in whatever capacity, has recommended this to the minister.

Mr Dolan —In his personal capacity, Mr Anson has been part of a process that recommended to the minister a preferred model. That model, in its implementation, needs to pass all the regulatory rules and arrangements set in place by CASA.

Senator O'BRIEN —His organisation needs to vet it.

Mr Dolan —It needs to discharge its regulatory function, yes.

Senator O'BRIEN —Did the ARG provide the minister with a detailed assessment of any further work required before an implementation safety case can be provided for endorsement by CASA?

Mr Dolan —The ARG reported to the minister against the terms of reference that the minister had commissioned from them.

Senator O'BRIEN —So they did provide such a detailed assessment?

Mr Dolan —Yes.

Senator O'BRIEN —Did they provide a schedule of implementation including training, education and tax system change requirements?

Mr Dolan —The report proposed to the minister a process of implementation that was the way of moving forward on those issues, including, as the minister has accepted and announced in his press release, the setting up of an implementation group.

Senator O'BRIEN —What is the time frame specified to achieve the full implementation?

Mr Dolan —That is a matter on which the Aviation Reform Group, in its role of overseeing the implementation, will come to a conclusion and advise the minister.

Senator O'BRIEN —So that has not yet been conveyed to the Deputy Prime Minister?

Mr Dolan —No, that is a matter that the implementation group and the ARG will consider and work through as part of their continuing responsibilities.

Senator O'BRIEN —I thought that was supposed to be provided by 25 March.

Mr Dolan —As I think I indicated, a process was put forward to the minister in terms of how to move forward with that.

Senator O'BRIEN —Will a copy of the ARG report be made public?

Mr Dolan —I cannot comment on that. It was a report to the minister, requested by the minister, and I would have to refer that to him.

Senator O'BRIEN —You may have told me, but just to clarify: when did the minister receive the report from the ARG?

Mr Dolan —On 25 March.

Senator O'BRIEN —Was that before you were appointed, Mr Matthews?

Mr Matthews —That is correct. I was appointed on 13 May.

Senator O'BRIEN —The date of the announcement of the decision.

Mr Matthews —That is right.

Senator O'BRIEN —What will your role be now?

Mr Matthews —I will chair the group in the period of its oversight of the implementation process that Mr Dolan has been talking about.

Senator O'BRIEN —In the media release, the minister says that the model was developed by Dick Smith and Qantas. Can you tell me the extent of Qantas's involvement?

Mr Dolan —My understanding—and I was not closely involved at that point—was that an individual employed by Qantas assisted Mr Smith, but that Qantas as an organisation did not have an involvement in the development of NAS.

Mr Matthews —We are not talking about a model which was developed by Mr Smith or by Mr Smith plus Qantas or any other formulation; what we are talking about, rather, is the North American model with a very small number of adaptations for Australia. It is a well-established model which has been in operation in the busiest airspace in the world and which is the basis for an internationally approved—ICAO approved—airspace model. I make this intervention to make the point that what we are dealing with here is a very well-founded, well-established and internationally well-understood airspace model, not something that has been developed, as it were, by a small team of two people.

Senator O'BRIEN —With some changes, I take it.

Mr Matthews —With, deliberately, the very minimum of changes to adapt for conditions peculiar to Australia.

Senator O'BRIEN —Can you tell me what the differences are between the NAS program and the US model?

Mr Dolan —As I think we indicated, rather than make a possibly inadequate attempt to describe the key details, we prefer to take that on notice. Perhaps, as well as explaining the key differences between NAS and the existing arrangements, we could expand it to take account of your further question.

Senator O'BRIEN —So you will take that on notice with the other one?

Mr Dolan —Yes.

CHAIR —It is 11 o'clock. Do you want to finish this now?

Senator O'BRIEN —No, we will come back in the morning.

Mr Matthews —Could we just table a paper which was called for earlier?

CHAIR —Certainly.

Mr Chandler —In response to a question from Senator O'Brien last night in which he sought information in relation to the costs of the certified agreement with the department, I would like to table a one-page summary of the costs, which assumes a positive vote for the certified agreement. That process is still to be concluded, the estimates for 2001-02 being based on an assumption for certification on 1 June this year.

Committee adjourned at 11.00 p.m.