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Monday, 1 December 2003
Page: 23267

Mr NEVILLE (12:31 PM) —On behalf of the Standing Committee on Transport and Regional Services, I present the committee's report entitled Regional aviation and island transport services: making ends meet, together with the minutes of proceedings and evidence received by the committee.

Ordered that the report be printed.

Mr NEVILLE —by leave—Although the phrase `making ends meet' might seem an unusual choice for the title of a report on regional aviation and alternative sea services, let me assure you it is not. Symbolically and literally, the title is wholly relevant. Symbolically, there is a need for the ends or outposts of Australia to be engaged with the major capital and provincial cities; nationally, there is a need for the regions to be connected to major population centres to guarantee economic and social development; literally, there are many areas of Australia that are quite simply unable to make ends meet in providing air and sea transport services to their local communities; and practically, regional airlines are having difficulties making ends meet as their costs rise and their markets erode.

Some of these added costs are due to increases in taxes, aviation safety regulation and the cost recovery activities of the three tiers of government. On some airline tickets there are as many as 11 taxes, charges and levies. Others estimate the three tiers of government between them add between 20 per cent and 45 per cent to the cost of a regional airline ticket. Regional travellers want cheap, efficient transport and are increasingly turning to motor vehicles, with implications for timeliness, safety and economics. Competition policy can only be successful where the market is well developed and industry structures are sound. Evidence indicates that, while competition delivers savings to larger communities and their air routes, smaller communities cannot sustain a competitive market. This report identifies strategic areas of improvement and intervention to offset this policy conflict.

At a time of many significant challenges to the aviation industry—and to regional and island communities themselves—this report recommends a number of new and innovative policy developments, as well as adjustments to some current policy settings. I will outline some highlights from the report's 28 recommendations. In the field of airport maintenance and upgrade, we recommend only special one-off grants to communities with populations over 30,000, but Commonwealth subsidies of 50 per cent to smaller communities providing regular RPT services to their airports and 33 per cent subsidies for country airports providing less regular RPT services, charter and aerial ambulance facilitation.

The committee also recommends improving the sea transport services or infrastructure for Flinders Island, Kangaroo Island, the Tiwi Islands, Norfolk Island and other external territories; and extending a number of existing measures to assist regional and remote communities. To improve the environment in which regional airlines operate, the committee recommends certain improvements to the administration of aviation safety regulation. Central to this is the establishment of an independent aviation ombudsman to deal with industry specific complaints. The committee has also identified a need for taxation assistance for the replacement of small ageing aircraft. To build the capacity of the operators, the committee recommends training assistance to improve the management skills of smaller regional airline operators in particular.

The issues identified in this report cannot be neglected any longer. To put these issues on the backburner will guarantee that in four or five years time regional Australia, its airports and its air services will be facing an even greater crisis, if not a terminal one. I repeat: action must be taken now. All Australians have a basic right of engagement with the wider Australian community. Improving regional aviation and island services is a matter of equity, a matter of efficiency and economic development and a matter of genuine social engagement. In commending Ian Beckingham and his team, as well as the secretariat itself under Ian Dundas and Anna Dacre, we believe this report can really deliver to regional Australia.