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Thursday, 26 March 1987
Page: 1572


Mr LLOYD(12.46) —I move:

That this House-

(1) condemns the Hawke Labor Government for its refusal to allow private investment in domestic and international terminals at Australia's major airports;

(2) condemns the Hawke Labor Government for handicapping Australia's aviation and tourism industries by not moving to upgrade Kingsford-Smith Airport, and for refusing offers of private investment in Brisbane and Darwin Airports; and

(3) calls on the Government to allow private investment in Australia's airports and terminal facilities, and to immediately commence the upgrading of Kingsford-Smith Airport, including the construction of a parallel runway, as Sydney is still the principal point of entry for over 50 per cent of Australia's tourists.

I wish to emphasise the latter part of that motion; that is, I urge the Government to allow these necessary developments so we can overcome these growing problems before they get completely out of hand. I refer to the potential for tourism and the problems increased tourism is creating for aviation, and the fact that we have the opportunity to overcome some of our balance of payment problems if we do capitalise on our tourist potential. If the Government will do those things listed in paragraph (3) of the motion I can assure it of the complete support of the Opposition. A critical situation has been reached, Mr Deputy Speaker, with our airports, particularly the international terminals, and our runway capacity at Sydney (Kingsford-Smith) Airport, or Mascot. That has been caused by, first of all, the dramatic increase in tourists-tourism is up 23 per cent in 1986-and that in turn has been caused by our weak dollar. It is cheaper to come here, and Chernobyl and fears of nuclear problems are far away from Australia. We are free of terrorists, and we have some very competitive international air fares. New technology planes are helping keep air fares down and there are more new technology planes to come to make those air fares even more competitive. There has been a range of favourable publicity for Australia. Some of it has been generated by the Government, deliberately, and I commend the Government for that sort of action. Domestic aviation is also increasing and as there is a swing back to narrow bodied, smaller aircraft there will be further domestic aircraft movements as well into our major airports.

The focal point for all of this is Kingsford-Smith Airport, Mascot. It is our major international airport. Over 50 per cent of all international tourists come through Mascot. The airport is their first impression, and in many cases a significant impression, of Australia so it is important that they be treated efficiently and properly. It is also the major Australian airport for domestic aviation and the major Australian airport for intrastate-that is, within New South Wales-aviation. The problems of Kingsford-Smith Airport, or Mascot, are exacerbated because there are no parallel runways, there is a more stringent curfew than at any other Western nation's major international airport, and there is outdated radar and traffic control equipment. Anyone who flies into Sydney will be well aware of this, because of the holding pattern, and people flying in from overseas will be aware of the further holding pattern as they go through the international terminal. Honourable members do not have to take my word for this. I quote from a report in the Australian of 19 February 1987 of a speech made in Sydney recently by Mr John Menadue, the Chief Executive of Qantas Airways Ltd:

Tourist industry development throughout Australia would be curtailed unless a new international air terminal was built soon in Sydney and public harbour foreshore land was released for hotel development by private enterprise, the chief executive of Qantas, Mr John Menadue, said yesterday.

. . . .

`If Sydney sneezes, Australian tourism will catch the cold,' he told the Pacific Asia Travel Association (PATA) in Sydney yesterday.

`Sydney is to Australia what London is to England and Paris is to France. They are world renowned as their nation's tourist capitals.'

`Australia is so far away for most people that a trip without Sydney, like a trip to Britain without London, will not generally be contemplated.'

Australia was already losing tourist business because of a shortage of accommodation in Sydney and the problem would worsen unless hotel development was launched urgently, he said.

So I just throw the hotel problem in as well. The report goes on:

He quoted as a recent example a United States incentive travel promoter who wanted to send groups to Sydney and Cairns. Because accommodation was available only in Cairns, the promoter sent the entire business to Bangkok.

There are plenty of other quotations that can be taken, too, from various media articles. For example, the Australian Financial Review editorial of 15 January, under the heading `Terminal problems', stated:

Already, tourist promotion bodies are holding back on tourist promotions in Japan because Sydney is effectively at saturation point so far as handling the Japanese tourist potential is concerned.

An article in the Daily Telegraph of 18 November is headed `Sydney Airport chokes on the tourist boom'; and John Spiers, in an article in the Australian of 22 February headed `The Flying Circus', says:

Air travel delays are snowballing across Australia and our long-heralded international tourist boom is in danger of being strangled at birth as political intransigence puts more and more aircraft into holding patterns over Sydney.

So the main problem is in Sydney. But it is not the only problem. Brisbane is to have a new airport opened-I would say very joyfully opened-by the Minister for Aviation and honourable member for Shortland (Mr Peter Morris) in the near future, but it will not have an international terminal. That is 3 1/2 kilometres away, and not adequate at that. At Darwin a Second World War hangar is still being used as the terminal. Progressively, as the aviation industry picks up, there will be more and more problems. When we have the long range Boeing 747-400 series aircraft coming to Australia, there will be genuine one-stop flights from Europe and genuine non-stop flights across the Pacific. Qantas has ordered them. Singapore Airlines has ordered them and British Airways has ordered them. That, in itself, will further exacerbate the problems that we have.

I acknowledge that this critical situation has not just developed; it has been growing for years. When we were in government as a coalition four years ago we were aware of this and were moving then to construct a parallel runway at Kingsford-Smith. In the four years since March 1983, when we lost office, this Government has had plenty of warnings. The Kingsford-Smith Airport Task Force, the Sydney Chamber of Commerce, all of the airlines-Qantas in particular-the Federation of Air Pilots; the New South Wales Labor Government and the New South Wales Opposition, the Federal Opposition, tourist organisations and media articles have all supported a second runway and a new terminal. So the Government must act. But the Government has a problem. It has to reduce the Budget deficit to allow interest rates to fall. So it cannot do what it did in its confidence trick of the present year-that is, just reduce the deficit by increasing taxes. Hundreds of millions of dollars are needed for these new international terminals; plus the runways which are required at Kingsford-Smith and Cairns; and the radar which is needed for Sydney and Cairns. All of these things are needed.

What is the Government doing about this particular problem at a time when money has to be spent but there are budgetary restrictions on what it can do? The Minister has a very curious attitude. When it suits him-that is, when this Government and he in particular are reaping the benefits of previous coalition Government policies-he says: `Eat your heart out'. He must have said it 20 times yesterday. The bicentennial road levy, for example, which the previous Government introduced, has meant that some good things are being done for this nation's roads. That is good, but that program is ending next year. There is no word from the Government on the hard decision, to carry on. He has also been fond of citing 1981-82 as that terrible year of government expenditure on roads, and of course we were in government at that time. But he is strangely silent about the fact that this year this Government will be spending a lower percentage of Budget outlays on roads than in even the worst year under the coalition. So it is about time he shut up on that one.

I turn to new airport terminals. The Minister opened the Perth terminal recently. Which government got things going for Perth? The previous Government. He is going to open Brisbane later this year. He is always keen to criticise the coalition decision on Brisbane, its cost and all other aspects of it, but I will bet on the day of glory he does not mention any of that. He will open it with great glee and, if he carries on as he has with roads, he will probably open it twice.


Mr White —That is right. How many times is he going to open it?


Mr LLOYD —It will be interesting to see that. At long last Adelaide and Melbourne have new radar, but when it comes to actual decisions by this Government and criticism that this Government is not doing anything, the Minister has a completely different argument. Darwin, for example, with its outdated terminal, is the best example. He tells everybody: `Money does not grow on trees. We have to make commercial decisions here in government. It is the end of pork barrel politics et cetera'. So one would expect logically that any offers of private finance would be accepted because the Government is making commercial decisions. There are no politics any more, so political decisions, political problems, will no longer impinge on any possible Government decisions. Acting logically would also solve the Government's budgetary problems. It would save hundreds of millions of dollars on terminals and allow the Government to concentrate its scarcer resources on runways and radar, et cetera, to improve our efficiency. But, no, the Minister is ideologically opposed to the private sector in international terminals. Here he has a curious distinction between, in some cases, international and domestic terminals. We also have the Federal Airports Corporation and its problems, and the runway and curfew problems in Sydney. So with this Minister, there is more short term politics involved than under any previous Minister for Aviation.

Sydney is acknowledged by all to have tremendous problems with its international terminal. It is completely out of date; it is saturated. The parliamentary Public Works Committee recently reported on this, and the Minister's proposal to solve the problem, costing $23m to upgrade the present terminal, was rejected by that Committee because not only would there be chaos during the upgrading but also the problems would actually be worse after the upgrading than they are now. But the Minister has gone ahead against those recommendations; he is still dogmatically proceeding with what everybody says is a stupid proposal. There have been some very good proposals. Qantas has offered to build a separate terminal and that is very sensible.


Mr Martin —No, it hasn't.


Mr LLOYD —There are plenty of examples of Qantas time and again saying that, and Mr Menadue has said that there must be a separate terminal built for Sydney commencing no later than early next year. So the honourable member should check what Qantas is saying to the Government and what it is saying to everybody in the industry-as well as what the Minister says that Qantas is saying. I can assure him that they are quite different things.

Let us not stop at Qantas. I have had three private groups come to me and say that they would be very willing to put up private sector finance to build what is needed; that is, a separate terminal which Qantas would use because it handles about half the international traffic into Sydney. That would overcome this problem very nicely.

I want to say for the benefit of the honourable member for Macarthur (Mr Martin), who will follow me, that he can quote Qantas to me all he likes and I can quote Qantas back at him. Our quotes will be quite different, but Qantas is on record as saying that the new terminal is needed, that it can provide it, and even if Qantas does not provide it there are plenty of other offers from very good industrial investment people who will do it.

Let us look at Brisbane. There has been a number of offers there for the building of a terminal at the new airport. Some of them combine a terminal and a hotel. The Minister has said that they are unsuitable, they are outside the guidelines, or they are all made by friends of the Queensland Premier. If that same rule of not accepting a tender or an offer because someone is a friend of the Premier were used in New South Wales, and we excluded friends of the New South Wales State Government, no building proposal would be ever accepted in Sydney. So, let us not be too choosy on that one. When it comes to Darwin, the latest of a number of proposals put forward by the Northern Territory Government was sent to the Prime Minister (Mr Hawke) in December 1986. So far it has not even had the courtesy of a reply. That was a proposal to use private sector finance in Darwin to reduce the cost dramatically, and to take advantage of the $10m already spent by this Government on a northern site by retaining that site. The Minister for Aviation himself has even admitted in this House that you can still see the bullet holes in the World War II hangar used as the present terminal.

What we are suggesting, Mr Deputy Speaker, is not radical; it is what everyone else is proposing. It is here, and has been here for many years, to a degree, with local ownership. A lot of our domestic terminals have actually been built by the private airline users. If one looks overseas, it is not only common but is becoming increasingly more prevalent.

The Minister's answer to all of this is: `Just wait for the Federal Airports Corporation. That is going to solve all the problems'. I do commend the Minister on the establishment of the Federal Airports Corporation, because it is a step forward. But that corporation was to commence in January. It may now commence in July. the details of administration, of debts and assets, et cetera, are still being worked out. There are a lot of fundamental decisions still to be made and the degree of ministerial interference is such that it will never be allowed to operate commercially. For example, for every item of expenditure of $6m there will need to be ministerial approval-and we can not get too many terminals for under $6m these days. The Minister is also trying to force 1,500 or 1,600 staff from the overstaffed Department of Aviation on to the Federal Airports Corporation, but the Federal Airports Corporation only needs 1,200 people to be in any way efficient. So it will be loaded with up to 400 more staff than it wants or needs. Employment conditions are still being worked out and my understanding is that the Corporation will be far too departmental ever to be commercial. Superannuation is still being sorted out.

This Labor Government can learn from the New Zealand Labour Government. It has opened up its domestic aviation. It is turning eight government departments into eight state-owned enterprises or public companies, sacking hundreds of people. The airports are included and made into truly commercial operations. If one looks to the guidelines on finance, which are quite critical for the efficient operation of the Federal Airports Corporation, at this moment my information is that the valuation of the assets that the Government is putting on the transfer to the Federal Airports Corporation is double what it should be. Think of all the potential cost problems that will create for the Corporation.

The Government is also saying it will sell the terminals. This is a nice contradiction-it is going to sell the terminals. If honourable members do not believe me they have only to look at a recent issue of Time magazine, dated 30 March. Mr Hawke is reported to have met with some interesting people, including the Minister, and they referred not only to selling the terminals but also selling Australian Airlines. There have been many other Press reports recently on this. So not only will the Government be preventing the Federal Airports Corporation from acting efficiently but also be selling the terminals from under its nose for the sake of a quick dollar for the Budget, it could be presenting the Corporation with an horrific debt equity ratio problem. There is also the question of whether or not the Federal Airports Corporation will be allowed to use lease-back arrangements, and other completely commercial arrangements, or whether it will be forced to borrow. Of course borrowing by the Corporation will be done through the public sector and will be subject to the same budgetary considerations as restrictions are placed on the public sector borrowing requirement. That also carries with it some pretty horrific debt equity ratio problems as well.

So I think the Federal Airports Corporation as it presently stands is certainly not the correct vehicle to get commercial enterprise into our airports. For example, this week a Western Australian company has spoken to me. It wants to put in some buildings at the Perth Airport, but it was told by the Department, acting on behalf of the Federal Airports Corporation, that it could have a 25-year lease, at the end of which the area would revert to the Government. The company would then become tenants of the Government or the FAC, and no company can get money to borrow under that sort of arrangement. So the FAC, before it even starts, has already got a lousy name out in the commercial world. That is most unfair on a corporation which I do believe does have some potential to overcome some of the Government's problems. So the Minister must act to overcome these limitations, this political interference and these restrictions on the Federal Airports Corporation.

One can go on further from that, Mr Deputy Speaker, to discuss the problems of terminals in the private sector. There have been some fairly interesting and ignorant comments made that somehow or other, once the two-airline policy ends-as it must inevitably end-and we allow the private sector into these terminals, this will restrict rather than enhance the possibility of providing more terminal capacity for new airlines. Nothing could be further from the truth. We already have that problem with the terminals we have now. Just ask East-West Airlines Ltd what it thinks about the availability of terminal space. The ability of the private sector to come in and either have lease arrangements or common user arrangements through the FAC presents tremendous opportunities to work hand in hand with the ending of the two-airline policy.

It is inevitable that there will be greater private sector involvement and less Federal Government involvement in aviation in Australia. World-wide trends must flow to Australia because of this continuing budgetary public sector borrowing restriction problem and the fact that the original reasons for government involvement no longer apply. We can also do things far better in the private sector than we can in the Government sector. So the immediate thing the Government must do is open up these terminals for private investment as well as sell Australian Airlines. I want to say to the people of Australia that, whoever forms the next Government after this forthcoming election, both those things will be done. If the Government will do them now, which is the right time to do so, the Opposition will support it.


Mr DEPUTY SPEAKER (Mr Ruddock) —Order! The honourable member's time has expired. Is the motion seconded?


Mr White —Mr Deputy Speaker, I second the motion and reserve my right to speak.