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Monday, 10 September 2012
Page: 9919


Mr GEORGANAS (Hindmarsh) (12:41): I rise to support the Aviation Legislation Amendment (Liability and Insurance) Bill 2012 and the additional protections that it will give to members of the public. I start off by saying that, despite the constant doom and gloom from the opposition, aviation has a bright future here in Australia. Australian aviation is projected to grow at four per cent per annum over the next 20 years. It is a very different story to what we have just heard.

We have had mandatory airline insurance in this country for a considerable time, and it is certainly nothing new. I believe all concerned, or potentially concerned, recognise the need for such requirements, and would expect that their settings be appropriate over time. There has been an approach to airline insurance applied around the world since the 1929 Warsaw convention, which strived to strike a balance between an appropriate level of coverage for the public, accessed smoothly and simply without discomfort for the members of the public concerned, and the affordable premiums for the airlines.

A decision was made at that time to balance the amount of compensation potentially available to members of the public and the ability of airlines to be able to afford the insurance premiums. At that time, the industry was only just getting off the ground, so to speak. A very real compromise was made: lower payouts and lower premiums; affordable premiums. But, in the interests of passengers, it was determined that the policies and systems should be such that making claims and receiving payouts should be as simple and straightforward as possible. This was the benefit to the public of this compromise.

The airline industry has done well since that time. Circumstances have changed; but not the comparative ease and simplicity of the system and the accessibility of compensation by members of the public. The most recent world standard or benchmark was established in 1999, the Montreal convention, which imposes unlimited liability on airlines. Liability is strict up to a threshold of approximately $175,000 per passenger. Beyond that, the onus is on airlines to prove that they were not at fault. It is meant that there is no requirement for the victim to prove fault. They do not have to argue their case for compensation.

Australia has implemented that convention, becoming operational in 2009. The matter of insurance was addressed in the government's 2009 aviation white paper, the first aviation white paper in this nation's history. The white paper noted that the government also conducted a comprehensive review of Australian carriers' liability and insurance framework, examining the following: liability arrangements for both passengers and third-party victims; the associated minimum insurance standard for each; the international development; and the specific requirements for Australian domestic operations.

The government received submissions in response to a discussion paper that was released to progress the review. So the white paper made clear that the government would act on the findings, taking into account the feedback received through consultations, and would move forward with modernising the carriers' liability and insurance framework.

We see the outcome of that modernisation process before us today in this bill. The government is raising mandatory passenger insurance payouts from $500,000 to $725,000 per passenger, an increase of approximately 45 per cent. The amount of $500,000, set in 1994, has not been changed in almost 20 years and would have to be seen as having lost its real value over that time. It is therefore necessary, I am sure we would all agree, to address this matter and ensure that the this mandated passenger insurance scheme is set at appropriate levels.

This bill also brings the definition of 'injury' within our domestic insurance framework into line with the international framework as set out by the Montreal convention of 1999, which withdrew coverage for mental injury—that is, non-physical injury. Just to be clear on this point, we are aligning our domestic definition with our current international definition, which was set out by the Montreal convention. This is just one area in which the aviation industry and, more to the point, the public are benefiting from the government's aviation white paper.

We have seen tremendous change and improvement in the experience of flying around much of Australia since the then Labor government reformed the industry some 20 years ago and enabled private investment to renew ageing infrastructure at our nation's airports. We have seen a tremendous amount of capital invested in modernising our airports around Australia. We have seen the community's interests amplified in discussions of matters of common interest between the public and airports. I have seen this firsthand, having the Adelaide Airport in the middle of my electorate.

This government's 2009 aviation white paper has broadened the positive experiences that some of us have enjoyed for some time. In Adelaide we have benefited from the Adelaide Airport Consultative Committee, which was created about a decade ago and which has seen members of the community, council representatives, neighbourhood group representatives, state government representatives, Airservices Australia and other representatives participate in quarterly meetings every three months with Adelaide Airport Ltd. A great deal of the business of the airport and the effect of the airport on surrounding interest groups is freely and openly discussed, with goals towards solutions. It is a really healthy working relationship, and that has developed over time. It is a great model that is being used around Australia. Neighbourhood groups raise their concerns, whether it be noise or environmental concerns, directly with Adelaide Airport Ltd, and their environment officers and others address noise mitigation strategies and other issues. Local councillors raise issues concerning planning in the airport vicinity and work cooperatively with the airport to resolve outstanding matters. It has been a very positive experience, so I was particularly pleased that the 2009 aviation white paper put forward the introduction of similar groups around the nation. I commend this government's preparation of the 2009 aviation white paper and the many, many positive elements it has within it. I will just mention one as an example that is particularly meaningful to me: the ability of the community to discuss concerns and seek resolutions to issues through the consultative committees.

We have been speaking on the modernisation of the insurance framework as dealt with in this bill. The subject of this bill is in accord with our international approach and addresses the potential loss of value available to members of the public who suffer in airline accidents through no fault of their own. I commend the bill to the House.