Senator MACKAY (5:22 PM) —I rise this afternoon to speak briefly on the Labor Party's position with respect to the Sydney Airport Demand Management Amendment Bill 2001. It relates to the operation of traffic arrangements at Sydney airport. I also propose to mention some of the issues underlying the bill which go to the government's direction as to the future operation of Sydney airport and, specifically, the difficult questions in regard to the slot management system at Kingsford Smith. In many ways, the bill before us is of a technical nature. It clears the way for substantive changes which relate to the slot management system with specific reference to the operation of Kingsford Smith. It is those changes which will impact on the operation of airlines and the operation of Kingsford Smith airport, Australia's major gateway. The bill also seeks to amend the act to specify that the Sydney airport slot management scheme may deal with a specific allocation of slots for specified categories of aircraft movements.

The purpose of the bill is to underpin the government's December 2000 announcement not only with respect to the operation of Kingsford Smith but also with respect to its view about the operation of Bankstown airport. In particular, the bill follows a further announcement of the government in January this year when, under pressure from regional areas of New South Wales, it announced its intention to amend the slot management scheme to address concerns about its announcement of December on the operation of airports in and around Sydney, with specific reference to how it would impact on guaranteed regional access to Kingsford Smith airport.

The actual slot management system and any changes to it are disallowable instruments under section 40 of the act. The detail of the actual changes to the slot management system have now been laid out in a discussion paper which the minister released on 27 March this year. Whilst confirming that it does not intend to alter the curfew, the 80 movements per hour cap or the guaranteed slots for regional airlines, the government has announced four changes to the slot management system. These changes are of specific importance not only to the operation of airlines in general from a national perspective and from the point of view of Kingsford Smith but also to the future operation of regional airlines in and out of Kingsford Smith with particular attention to the needs of people living in areas outside the Sydney metropolitan area.

The changes proposed in the discussion paper and considered by the Senate committee seek to: firstly, cap the number of regional slots allocated in the peak periods at the current level; secondly, encourage airlines to progressively introduce larger aircraft; thirdly, establish a minimum seat limit for the allocation of new slots to be determined in consultation with industry; and, finally, remove any risk that the major airlines could avoid the regional guarantee by migrating the regional slots held by their affiliates into non-peak periods. I understand that the government will now slow down some of these changes, after accepting some input from the aviation industry during the Senate processes. These changes will be outlined by my colleague Senator O'Brien later.

It is in this context that I suggest that the bill now before the Senate is clearly about facilitating those changes by ensuring that the provisions of the Trade Practices Act 1974 that allow access to declared services do not override the slot management system. In raising this issue, the provisions of part III of the Trade Practices Act that will be effectively overridden by the act by virtue of this bill were introduced to the Trade Practices Act through the Competition Policy Reform Act 1995. The purpose of the section is to ensure access to certain facilities with monopoly like characteristics. These provisions are intended to allow a party who believes that they are being denied access to a service by such a facility to apply to have the services `declared'.

When a service is declared, arrangements for access to those services are then negotiated with the service provider. Obviously, disputes can arise from time to time, and disputes regarding arranged access to declared services can be arbitrated by the Australian Competition and Consumer Commission, whose decisions can be reviewed by the Australian Competition Tribunal and the Federal Court. Labor clearly believes that there is a role for government involving itself directly in schemes like the slot management system, free of these processes. That is clearly in the public interest as an accepted role of government. This bill confirms that.

The amendment contained in the bill to specify that the slot system may deal with particular categories of aircraft is also supported. In fact, we venture to suggest that this amendment may be seen as unnecessary, as the existing section 35 of the Sydney Airport Demand Management Act 1997 already allows the system to deal with the allocation of slots and associated matters, such as the conditions that may be imposed on slots. It therefore seems that the government has proposed this amendment perhaps for more abundant caution so as to put the matter beyond any doubt.

In passing, I also refer to the fact that we all believe that the slot management system is a complex system. Therefore, any change to the system has ramifications for the travelling public, airline operators, communities, those affected by the airport and those who depend upon the affected aviation services to meet their business and social needs. The response of the communities and industries to those changes must therefore be considered in any response to the slot management system changes. To do that, those affected need to see the actual detail to assess the impact. Making the Trade Practices Act 1974 subject to the act is not contentious. The same measures apply in, for example, the Airports Act 1996. In the Airports Act, the same provisions of the Trade Practices Act are overridden to ensure the minister can determine the capacity of particular airports and implement measures to manage aircraft movements and other matters.

The proposed changes to the slot management system involving the Sydney airport slot management scheme were made in the context of the government's broader policy statement about the future of Sydney airport, and we should not lose sight of that. That decision was roundly criticised by the opposition as a non-decision. It included the use of Bankstown airport for spill-over capacity from Sydney airport. The eventual decisions on aircraft size will have an impact on this issue. The outcome of the committee deliberations have influenced our response to the regulations that could, if not properly handled, make significant changes to the slot management system at Kingsford Smith airport. In saying that, as previously stated, Labor supports the bill and its intent. I indicate that my colleague Senator O'Brien will deal with these matters in more detail.