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Tuesday, 4 October 1983
Page: 1286


Mr SPENDER(8.13) —In the time allowed to me I should like to comment briefly upon three subjects-the capital works program which the Government announced, air fares on trunk routes, and Trans Australia Airlines. The Government, through the Minister for Aviation (Mr Beazley), announced a capital works program and I think it should be placed on record immediately that the capital works program which the Government announced in the news release put out by the Minister on the night of the Budget was very largely the capital works program of the previous Minister, a Minister who had both courage and a sense of direction in terms of policy making and who held the position for only a relatively short time. He is not well at the moment, although he will be returning at the end of this month. I wish to make it perfectly plain to the Committee that the present Minister, perhaps by oversight, in arrogating to himself the capital works program of the previous Government, with some modifications, completely overlooked in his public statement, at least the copy of the public statement I have-he may have said something about it elsewhere-the fact that he was really dealing with the capital works program of the previous Government and in particular of the previous Minister, the honourable member for Farrer (Mr Fife).

On the subject of what the Minister had to say, I should like to make these comments: He said in his news release that this year's Budget provided the largest national airports and airways program in Australia's history. That is a very questionable statement since, on my interpretation of the facts, the previous Government's program was the largest. He then went on, in relation to the airports and airways development program, to say that total Commonwealth spending would be $620m over the next four years. In fact, under the previous Government the figure was very much higher since in the Budget of 1982-83 it had announced the Sydney program for a third runway at the Sydney (Kingsford-Smith) Airport, and it announced the program for the development of Darwin Airport, which amounted to some $86m, on 24 November 1982.

I am sure the Minister will acknowledge these things; that, for example, where he refers in his Press release to particular features such as the redevelopment of the Darwin Airport international and domestic airline facilities, which he has estimated to cost $96m, he was there referring to a decision of the previous Government, the estimate then being $86m. I have been to Darwin recently; I have had a look at what is proposed, and there have been no alterations whatsoever to what was proposed by the previous Government. To take one or two more items, the Minister went on to say that there was to be construction of a new international terminal complex and associated works at Perth Airport, as though that was something novel. It was not. In fact, it was a Budget decision announced in the 1982-83 Budget by the previous Minister, as was the next item, when the present Minister referred to the construction of a parallel taxiway at Perth Airport to cost a total of $3m. Other items fall into precisely the same category.

I wished to make that plain since I think it should be known that the capital works program of this Government, as indeed is the case with so many other policy directions of this Government, is in fact no more than a continuation of what the previous Government set in place, the major difference in the capital works program being that this Government decided to abandon the third runway at Sydney, an abandonment which of course was no more than a purely political response.

I wish next to say something about pricing. We have the situation where prices for carriers-I refer in particular to Ansett Airlines of Australia and Trans Australia Airlines-are set by the Independent Air Fares Committee. One can view only with concern the trends in airline fares in this country. I presume this is a concern which the present Minister shares. In the report of Price Waterhouse on the practicability of selling TAA, which was made to the previous Government in December 1982, this is said at page 34:

Air fare rises have accelerated in the last few years. Since 1979 the CPI has risen by 31 per cent while the network economy fare has risen by 69 per cent and the Melbourne-Sydney fare by 80 per cent.

That is a quite staggering increase, one would think, when measured against the rate of inflation. The report went on:

These fare rises have contributed to the slower growth in passenger traffic in the last few years.

One could hardly argue with that proposition because it is the inevitable consequence of such a price rise. Some other figures of equal interest have been taken out by Mr Sandilands, the travel editor of the Sydney Morning Herald. They appear in the Sydney Morning Herald of 1 October. I extract these figures from what Mr Sandilands wrote: The average domestic fare since January 1981 has increased by 54.2 per cent. The Sydney-Melbourne fare has increased by 71.2 per cent. Of course, just recently a 6 per cent increase has been granted by the Independent Air Fares Committee to Ansett and TAA, which has the result of bringing total fare increases approved by the Independent Air Fares Committee this year to 12.8 per cent, which is roughly twice the rate of inflation during that period.

To sum up, over a period of some years one sees what can only be described as an exceedingly dangerous trend-dangerous for the airlines since it bears upon their profitability, when air fares have been increasing at roughly twice the rate of inflation. This leads one, of course, to some obvious questions: What is the reason for this trend? How long can it continue? Is it simply a temporary phenomenon or is this something which is built into the system? Is it perhaps the consequence of the insulation of Ansett and TAA from market forces? How long is the long-suffering consumer to put up with these kinds of increases? The consequences, of course, in the long run are as bad for the companies as they are for the consumers because, as the Minister pointed out in his Budget summary , there has been a drop in air travel in the 1982-83 financial year of about 9 per cent and the Department expects that to continue. This trend has been in place now for some years. So on the one hand there is an increase in prices and on the other a decreasing number of passengers carried.

Lastly and very briefly I will say something about TAA. The financial position of that company is well known; indeed, too well known. I have put on the Notice Paper a number of questions for the Minister's attention. I ask for his early attention to those questions. They have been there now for a month or so. I would have thought that they were fairly simple to answer. The report of TAA for 1982-83 reveals that that company, which received $115m of taxpayers' funds this financial year, is in a serious financial position and that the Auditor-General has very grave and trenchant criticisms to make of its accounting practices. The questions I have put to the Minister are ones that should be considered by him in the implementation of his portfolio and in the interests of the Australian public knowing what is happening in TAA this year and what we can expect for the future.