Mr St CLAIR (6:19 PM) —While speaking in support of the Aviation Fuel Revenues (Special Appropriation) Amendment Bill 1999 , the Customs Tariff Amendment (Aviation Fuel Revenues) Bill 1999 and the Excise Tariff Amendment (Aviation Fuel Revenues) Bill 1999 and the comments of my colleague the honourable member for Grey on this particular issue, I ask that we not lose sight of the fact that the duty on aviation gasoline will still be 15.8c a litre cheaper than it was when this government took office in 1996. We must keep in mind that it will still be 15.8c a litre cheaper than it was when we came into office in 1996.

The problem has been that, on 1 July 1998, Airservices Australia introduced terminal navigation charges for all its tower services, including those in regional areas, which were based on the costs it incurred at each location. The Federal Court ruled Airservices's charges unlawful other than on such a basis; and the Australian Competition and Consumer Commission, from which Airservices must obtain approval when it seeks to vary its charges, supports location-specific charges.

The move to location-specific charges was accompanied by the abolition of 15.692c per litre avgas duty that was directed to Airservices. The full implementation of these charging arrangements under Airservices's current cost structure would result in increases in charges of up to 300 per cent at some regional and general aviation airports ranging from $7.07 to $38.22 per tonne landing compared to the current subsidised rate of $6.75c at these airports.

An increase in charges of that kind or of the kind necessary to cover costs will destroy aviation services and training facilities in regional Australia, as my colleague the member for Grey mentioned. As some of these airports are vital to important regional centres, it was announced in the 1998-99 budget that the government and users of the major capital city airports would subsidise the charges of these particular airports. However, at the time the subsidy was agreed to, it was on the basis that it was required as an interim measure.

It was anticipated that Airservices would be able to contract out or privatise tower services at many of these subsidised locations, thus reducing the costs imposed on airport users and allowing the subsidy to phase down markedly in the 1999-2000 years and, of course, disappear in the following year. The recent disallowance by the Senate of the contracting out regulations has meant that cost reductions through the use of alternative service providers are no longer an option in the short term. In order to ensure that these essential services are provided at regional and general aviation training centres at a reasonable cost to users, the government has agreed to maintain a subsidy.

I turn to the solution. The Howard-Fischer government believes that all Australians should have access to safe and affordable air services. The government provides a subsidy to Airservices Australia so it can maintain tower services at regional and general aviation airports at prices lower than full cost of recovery. In addition, Airservices Australia will continue to cap general aviation charges at Cairns, Coolangatta and Canberra.

It would be prohibitively expensive to use some of our major regional airports without the subsidised cap. For example, in my own electorate of New England, the cost of landing at Tamworth regional airport would be $38.22 per tonne—quite an extraordinary amount of money. Some people have suggested that we could force airport users to pay the full cost of the tower services or, alternatively, close those control towers. The increases in landing charges necessary to fully recover tower costs at some locations would have a devastating effect on the airports and their local economies, and it would be unsafe to close the towers at some of those locations.

Instead the budget extends the subsidy to 2000-01. It provides an additional $9 million in the 1999-2000 year, taking the subsidy to $11 million next year, and an additional $7 million in the year 2000-01. The government is committed to reducing the cost of tower services in the longer term and has asked the Civil Aviation Safety Authority to develop safety standards for the operation of control towers by alternative service providers by 30 June 2000. The government will increase the duties on aviation turbine fuel and aviation gasoline to 2.71c per litre to pay for the extension of the regional control towers subsidy and the increase in CASA's funding. The tower subsidy component of the increase—0.51c per litre—is a temporary measure that will apply over the next two years.

The budget increases funding for the Civil Aviation Safety Authority by $8.6 million a year. In total CASA will receive $88.1 million from the government in appropriations and fuel duties in 1999-2000. CASA has been running a deficit since 1996-97. The increased funding will make it possible for CASA to carry out a major restructure, which will centralise critical enforcement decisions such as suspensions, cancellations and prosecutions. This restructure is being funded separately through a resource agreement with CASA. One common complaint about CASA is that its district offices apply the aviation laws inconsistently. I am sure we have all heard them. The centralisation of critical decisions will guarantee that pilots and aviation companies are treated in the same fair way, no matter where they are in Australia.

A proportion of the rise in the aviation fuel duty to 2.71c per litre or 0.467c per litre on avgas and 0.391c per litre on avtur will pay for the increase in CASA's funding. The government examined other options—as it should, and as it was duty bound to do—for increasing the organisation's funding, such as a levy on airline tickets or yearly aircraft registration fees. The ticket tax, however, would have been administratively cumbersome, and yearly aircraft registration fees would have greatly increased the tax burden on the vulnerable general aviation sector. In closing, I repeat the fact that the duty on aviation gasoline is still 15.8c a litre lower than it was when the government took office in 1996. I commend all the bills to the House.