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Tuesday, 18 March 1997
Page: 2305

Mr TANNER(5.29 p.m.) —This Aviation Legislation Amendment Bill (No. 1) 1997 amends three acts of this parliament, two of them substantively and one in a technical way. The two substantive sets of amendments I will deal with briefly. The first set relates to the Airports Act 1996. There are a variety of amendments to this act which are essentially tidying up amendments to various oversights or difficulties which have emerged from that legislation, which was passed roughly six months ago by this parliament.

Some examples of the amendments are: the adoption of a tiered process with respect to offences and penalties for environmental matters, which ensures that there is, in a sense, a cascading sequence of penalties that can be applied so that people can be found guilty of and penalised for lesser offences rather than greater offences; and an obligation to be imposed on all persons to comply with an airport environmental strategy rather than just to be imposed on the airport operator. This fixes an oversight in the original legislation.

One rather spectacular amendment imposes an obligation upon an airport lessee to operate the land as an airport. It is rather surprising that was not in the original legislation. Other amendments are: a requirement of consultation with respect to major changes to airport master plans be undertaken in line with the original requirements with respect to consultation; a requirement upon the minister to extend consultation beyond the operator for the exercise of certain powers under the legislation; prohibition on subleasing an airport through means of trusts to avoid the act and guidelines on how the airport should be operated.

There are a variety of other specific amendments in this section which I will not go into in detail but all of them are essentially tidying up provisions to facilitate the operation of the Airports Act. The opposition strongly supports these provisions. It does illustrate—an observation I have made a couple of times in the past in the debate on the sale of the airport leases—that there will be a substantial learning process with respect to the airport sales. Already I think some problems and issues are emerging that were not necessarily conceived at the time the former government was dealing with these issues and have not as yet been addressed by this government.

I cite as examples the question of future investment and, in particular, the distinction between investment in non-aeronautical airport activities and aeronautical activities, which may lead to an imbalance between the two, and the question of price capping and concerns that I have indicated about the likely future effectiveness of the price capping arrangements that have been adopted. These are just a couple of examples of problems that I think we will have to deal with in the future. It will be to some extent a learning process and I suspect there will probably be other difficulties that emerge as well. The fact that we are already amending legislation does indicate that that is going to be the case.

The second substantive set of amendments relate to the Air Navigation Act, one of which is to establish a register of encumbered aircraft so that prospective buyers of aircraft can have some information about any legal encumbrance that may exist on the aircraft. I understand that there are a variety of circumstances where parts of aircraft can be encumbered as collateral for loans and the like and it can actually be quite confusing and difficult for prospective buyers. The proposal to establish a register has the support of the opposition. It does not entail any legal implications with respect to the relationship between buyer and seller, but it should facilitate the process of purchase of aircraft and make things a bit easier for prospective buyers and therefore has our support.

The second section, which the opposition does have a couple of amendments to, relates to the approval of international charter operations by the secretary to the department. Under the previous provision, the essential criterion which applied in this case was `the need to provide reasonable protection' to the Australian aviation industry. Under the new criteria proposed by the Minister for Transport and Regional Development (Mr Sharp) in the amending act, there is a list of concerns which the secretary to the department must take into account prior to granting an approval for an international charter. These include such matters as consumer needs, promotion of trade and tourism, aviation security, the location of the services concerned, international relations generally and the criteria that are followed by the International Air Services Commission.

The opposition does have a slight concern, albeit a substantive concern, about the drift of this particular set of legislative amendments, the concern being that there is a gradual shift occurring under the new government towards an open skies policy. The opposition does not oppose the concept of broadening the criteria which govern the secretary's decision with respect to granting international charter rights but in the context of some other decisions that the government has taken we do wish to register our concern at the gradual drift in aviation policy which may ultimately be to the significant detriment of our two major national operators, Ansett and Qantas, and the Australian industry more generally.

I indicate that I will be moving two amendments circulated in my name, the second of which is actually a condition or contingent amendment. There are two options there depending on whether or not the first is adopted. I will not go into the detail of those amendments. That will be dealt with in the consideration in detail stage. I will flag what they relate to.

The first of these amendments would add an extra criterion to the government's proposed new set of criteria for the secretary to the department to consider and that would be `employment and investment in, and general development of, the Australian Aviation industry'. The second of these amendments would be to apply the same set of criteria to any decision by the secretary to the department to exempt a particular charter operation from the requirement to be given approval. That power is currently in the amending legislation. The amendment that we will be moving would seek to ensure that in exercising that power the secretary would take note of the same issues that he would have to take note of in exercising his power to grant an approval.

I understand that the government's intention with respect to this power of exemption is that it would relate to, in a sense, one-off charters to unusual or very small or low key situations. Certainly, we do not object to the intent of what the government seeks to do with the legislation. Our concern is that the power that is granted to the secretary to exempt is a fair bit broader than that intent applies.

As I have indicated, the opposition does have some concern about what we would see as a drift towards a more open skies policy. Clearly there is a difficult balance to be maintained here. Competition in international aviation needs to be fostered, but at the same time we need to make sure that there is a viable Australian international aviation industry.

We are very proud of the fact that we have an internationally renowned carrier in Qantas, which has a worldwide, top-class reputation. Clearly, we want to make sure that Qantas can continue to operate and function in a similar way to the way in which it has historically functioned. We can also take great pride in the fact that we now have a second Australian international airline in Ansett. We look forward to Ansett's share of the total market increasing—preferably not at the expense of Qantas but at the expense of other international operators.

I will quote from a press statement the minister put out on 10 June of last year relating to charter flights, particularly in the freight area, to indicate the general drift that is occurring in policy. The minister stated in this press release that freight was being neglected in favour of passenger demand and that the government would seek to `bilaterally negotiate significant increases in dedicated capacity for air freight services in key export markets' and that `an APEC model air freight agreement for greater liberalisation of air freight operations' would be sought to be developed and the government would seek to `liberalise the freight-charter approval process for carriage of Australian exports'. Finally, he stated:

Throughout the world, passenger charter services have served to stimulate international tourism growth by providing seasonal services on many routes not normally served by scheduled carriers, at prices affordable to tourists who would not otherwise travel internationally.

As you would recollect, Mr Deputy Speaker Vaile, having chaired the House of Representatives Standing Committee on Communications, Transport and Microeconomic Reform which did a study on air freight recently, the lack of available freight charter capacity is not really a major problem in the total picture of Australian airfreight. Clearly there are issues associated with capacity, but the findings of that committee, which you chaired, were that there are numerous problems that appear all along the chain and there is no great single dominant problem. There are a number of problems with our airfreight situation.

Contrary to popular myth, Australian exporters actually get access to pretty good airfreight prices, primarily because they are cross-subsidised by passenger tickets, because the vast bulk of the airfreight currently goes out in passenger planes. I do not necessarily agree with the minister's comments on freight charters.

With respect to tourism, the statement the minister made in that media statement is in fact broadly accurate, but it fails to recognise that we have a slight backloading problem in Australia. Tourist charters that operate, for example, between Britain and Spain clearly have a fair potential to operate with substantial passenger loads in both directions. One of the difficulties with tourism charters to Australia is that in many instances it is very difficult to maintain the number of people going from Australia with sufficient regularity to make the charters economically viable. Clearly, ultimately people have to go back to where they came from, but the time they wish to spend in a particular place is going to vary and the volume you are able to get in a charter operation is going to depend on the amount of demand for travel in both directions. That will be a significant influencing factor. I question just how strong that is likely to be in Australia. That may be a significant restraining factor.

I understand that today the government will vote against the amendments we will be moving but is going to give some further consideration to them subsequently. The minister may wish to elaborate on this in his closing remarks. On that understanding, we will not seek to divide on the two amendments we will be moving. The matter can perhaps be revisited when the bill gets to the Senate.

I conclude with a reference to my concern about the government's general approach to transport and transport policy; that is, transport in essence is primarily a cost and little else. It is more than just a cost. Yes, it is an important cost consideration for the vast bulk of the Australian economy in a direct or indirect way, but transport, particularly in aviation, is also a major export earner. Qantas is our third largest individual export earner. Ansett is now earning substantial export dollars directly as an international carrier and, as I indicated before, hopefully will increase its share.

Qantas's market share is now below 40 per cent of the Australian international aviation market. I certainly hope that it does not go much below that. I think our international aviation market, where Australian operators supply roughly half of the total, is probably about right and has a reasonable balance. It is important that we do not alter our policy framework in a way that might derogate from that.

Clearly, the proposals the government are enacting are not likely to have a sudden, direct impact on the viability of Ansett and Qantas, but it is important to ensure that we do not, through the back door, introduce competition that is outside International Air Services Commission agreements and which might undermine the economic viability of Qantas and Ansett services and might undermine their capacity to compete with the other international operators that ply the Australian routes.

The concern I have is that the government, in pursuing its general direction in this area, is focused excessively on the issue of cost, which is important, and is failing to focus on the importance of maintaining a viable Australian international aviation industry which, as I have indicated, delivers very substantial export dollars and a large number of generally highly skilled and generally well-paid jobs to Australians.

Efficiency is important, but so is the capacity to participate in our society, to have employment, to earn a reasonable income and to have a reasonably skilled job. I think there will be a role for additional foreign charter flights in the future in the areas of freight and tourism. It is reasonable to anticipate that that section of the aviation industry in Australia will probably expand. The minister and I may differ a bit on precisely how large such an expansion might be. But, as I have indicated, I think it is very important that any such expansion not undermine to a significant extent the viability of our existing international carriers.

It is also important to ensure that safety concerns are protected. CASA has undertaken recently a program of enhanced safety examination of foreign carriers. We have a lot of foreign carriers coming to Australia from small countries. Sometimes there are question marks over the maintenance regimes, in particular, that apply to the aircraft and sometimes there are question marks over the age of the aircraft—things of that nature. It is very important that we maintain our overall safety profile and performance. Increasing the access of foreign charter flights to Australia is one way that safety could conceivably be undermined.

I would be interested to know what discussions the minister has had with Qantas and Ansett about this legislation. I hope that he has consulted with them about it and that he has had some discussions with them, because these issues do ultimately affect their viability and capacity to operate as major Australian operators and as an important Australian industry.

The opposition's amendments are not designed to protect the Australian industry and not even designed to be as strong as the previous criteria were. They are simply to ensure that, in the criteria before the secretary of the department in making decisions about granting international charter approvals, there is some reference to the interests of Australian industry. At the moment it is virtually the only thing, the one aspect, that is left out. All of the other issues that have been put in the draft legislation are entirely legitimate and perfectly reasonable to consider. The one thing that is missing is the potential impact on Australian industry.

If that change is made to the legislation, we feel that it is entirely supportable and worth while. As I have indicated—I will wait to hear what the minister has to say in reply—on the understanding that the issues will be considered further in the context of the matter being in the Senate at the end of this week, we will put up the amendments and, on the assumption they will be voted against by the government in the House today, will not seek to divide in the hope that we can reach some agreement in the context of the Senate debate.