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Tuesday, 16 October 1984
Page: 1767


Senator MAGUIRE(5.14) —I move:

That the Senate take note of the paper.

This is the third report of the Independent Air Fares Committee. The report refers to a general improvement in the Australian economy which has been reflected in a rise in passenger numbers on Australia's domestic air routes. As its name suggests, the Committee determines air fares in Australia, it has done so since 1981. During the financial year 1983-84 the report states that there were three rises in domestic air fares for the major airlines. There was a 1.3 per cent rise in July last year, followed by a 6 per cent rise in October and a 2 per cent lift in fares in April this year. The total air fare increase awarded for travel on trunk routes was 9.8 per cent for the financial year just ended. It is a matter of some note that that was the lowest rise in air fares in Australia since the financial year 1977-78. However, it should be noted that the rise in fares is still well above the overall inflation rate in the community. The 9.8 per cent lift in economy air fares is well ahead of the 6.5 per cent rise in the consumer price index in the 12 months to June.

I think a very clear conclusion that can be reached is that air travel is still becoming a relatively expensive item in Australia. It is a commodity growing in cost compared with other commodities available in the Australian community. I think it is a matter of some regret that air travel is such an expensive item in Australia. As we live in a large continent I think our interest should be in cheaper air travel to reduce isolation and enable people to move from the far- flung parts of Australia more quickly. Unfortunately we do not have cheap air travel in this country. Certainly in the last financial year a range of discount fares was introduced but these fares are still subject to a number of restrictions which reduce their availability and accessibility.

There is no doubt that the level of air fares has had a major influence on volume of travel. I simply refer to the report tabled last week by the Department of Aviation entitled 'Outlook for the Aviation Industry' which predicts only a 2 per cent growth in Australian air traffic in the current financial year 1984-85. Of course, that figure of 2 per cent is a far cry from the levels of growth we saw in the late 1970s of 7 per cent or 8 per cent per annum, with very rapid rises in air travel. I think it is fair to say that in recent years the Australian aviation industry-the domestic trunk passenger industry-has contracted relative to the national economy. It is a smaller element now within the national economy due to a smaller growth of the air transport sector. It is of some interest that passenger numbers carried in the last financial year, 1983-84 were only marginally above those for the year 1977- 78. As I have noted, the Independent Air Fares Committee reported a 9.8 per cent lift in economy fares during the last financial year. It is interesting to read that figure in conjunction with the figures published by the Department of Aviation which suggest that the real fare increases-that is, the increases above the inflation rate in the last financial year-were the smallest on the short- haul routes and highest on the medium and longer haul routes.

It has been reported that in the last financial year the real increase in fares on short-haul routes was 4.5 per cent compared with 5.4 per cent on longer haul routes. I think that is a very interesting finding in view of the recent restructuring of our airline fare structure to reduce the penalties on travellers from far-flung parts of Australia, for example, people travelling from the Northern Territory, North Queensland and Western Australia to other parts of Australia. It is surprising indeed to me to see that in the financial year just ended we had larger increases in domestic air fares on the shorter haul routes. That simply means that the trend, which we have noticed in recent years, has been reversed to make relatively more expensive short-haul travel in Australia. I think that is a very surprising finding in the circumstances.