Senator ELLISON (Special Minister of State) (6:33 PM) —I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard .

Leave granted.

The speeches read as follows—

AIRPORTS AMENDMENT BILL 1999

The Government's airports sales process and the post-sale regulatory regime is well on the way to establishing Australia as a world leader in airport ownership and management.

None of the proposed amendments represent changes to Government policy. Rather, they have been identified as necessary to facilitate more effective administration of the Airports Act 1996 and Federal Airport leases. The successful completion of both phases of the leasing of federal airports has uncovered a number of issues that require some readjustment of the act. This will ensure that world's best practice, a principle to which the Government is committed, continues to be brought to the development and management of Australia's major airports.

The Airports Legislation Amendment Bill 1999 will make several amendments to the Airports Act.

Firstly, they will extend the time available to the new owners of the regional airports privatised in Phase 2 of the sales process, to have access undertakings to airport services approved by the Australian Competition and Consumer Commission (ACCC).

Section 192 of the act provides for the automatic `declaration' of `airport services' under Part IIIA of the Trade Practices Act 1974 12 months after airports are leased to private sector companies, unless the airport lessee has an access undertaking approved by the ACCC. Section 192 applies to the core regulated airports listed in section 7 of the Airports Act.

The Phase 1 lessees, that is Melbourne, Brisbane and Perth airports, did not have access undertakings approved by the ACCC within the designated period. As a result, services for these airports were effectively `declared' by way of Ministerial determination on 23 July 1998.

The approval of an access undertaking by the ACCC sets a framework for commercial negotiations between airport lessees and service users. An access undertaking sets clear parameters for the provision of services and resolution of disputes.

The 12-month time-period was originally imposed to assist speedy development of access arrangements, so that those seeking access to leased airport services would have a convenient and tailored process by which to do so.

The Government believes that it is entirely appropriate to give the remaining core regulated airport lessees a longer period of time in which to develop and finalise their access undertakings.

Secondly, the amendments will enable regulations to be made that capture activities of a non-structural nature that intrude into protected airspace and impair the ability to pilot an aircraft.

The Airports Act establishes a regime whereby people and organisations who want to undertake certain activities that affect protected airspace around airports require permission from the Department of Transport and Regional Services to do so. The mechanism by which the permission is given is set out in the Airports (Protection of Airspace) Regulations. The regime is an important protection to ensure that developments around airports do not impinge on the safety, efficiency and regularity of current and future air transport operations.

The bill proposes to expand the definition of "controlled activity" in section 182 to include activities of a non-structural nature which cause an intrusion into protected airspace through either the intensity of glare from sources of artificial or reflected light, air turbulence or reduced visibility from discharges into the atmosphere.

An example of activities which can affect the safety, efficiency or regularity of aircraft operations include industrial plants discharging a heat plume, which may endanger or restrict aviation operations within the protected airspace due to the resulting air turbulence or reduced visibility.

Another is direct lighting (such as sport stadium lights or laser beams) or reflected lighting (such as that created by solar power farms) which can adversely affect aviation operations by causing glare or impeding the clear perception of aeronautical navigation lights on the ground.

This clause also enables the Commonwealth to make regulations specifying standards associated with such activities. My Department will be developing these standards after consulting the Civil Aviation Safety Authority and other interested parties. Until the Commonwealth makes regulations specifying these standards, the activities listed in the new paragraphs (d) to (h) will not be controlled under the Part 12 regime.

It is important to note that new controlled activities will not extend to ordinary domestic or household activities, which have virtually no impact on the safety, efficiency or regularity of air transport around airports. Neither will they extend to activities arising out of the operation of aircraft, which are regulated under other Commonwealth legislation.

If required, the Minister will be able to apply for an injunction under Part 15 of the act to prevent any of the new controlled activities from proceeding.

Thirdly the amendments will make a series of minor technical changes to the Airports Act to overcome some practical difficulties associated with day to day administration of airport leases.

The definition of "airport lease " in section 5 of the Airports Act will be repealed and a new definition substituted. The new definition of `airport lease' overcomes some practical difficulties with variations to the boundaries of leased airports through acquisitions and disposal of land, by removing the requirement that the site which is the subject of the lease must include a runway.

I should add that section 14(5) of the Airports Act requires that all airport leases must provide that the use of a site must be connected with its use as an airport. This means that even though the definition of airport lease will no longer require that an airport site must include a run way, it will not be possible to use an airport site for a purpose unconnected with airport operations.

The new definition also removes the distinction between airport leases for joint-user airports and other airports. In practice, however, the only area leased subject to the act at joint-user airports will remain the civil part of the airport. The runways and defence part of the airport will remain under the control and jurisdiction of the Department of Defence.

There are a number of interests in land which do not involve the exclusive use or possession of it and it was never intended that the Commonwealth would maintain detailed control over those types of property transactions at leased airports. However, concerns have been expressed in some quarters that the existing provision could be interpreted to include all interests in land.

In order to put the matter beyond doubt, the amendment excludes subleases, licenses, restrictive covenants, easements and similar interests from the definition.

Lastly, some minor technical amendments will clarify how various Parts and Divisions of the Airport Act apply within the boundaries of the airport site for that airport.

Airport lessees are already requesting amendments to airport sites to enable minor land acquisitions and disposals at airport boundaries. While the current provisions of the act probably do not prevent partial surrender of airport lessees, the new section 163A will provide greater certainty by making it clear that airport lessees may seek to vary airport boundaries without surrendering the whole lease.

BOUNTY (SHIPS) AMENDMENT BILL 1999

The purpose of this bill is to amend the Bounty (Ships) Act 1989 to implement key elements of the Government's arrangements for the Australian shipbuilding industry by:

. extending the shipbuilding bounty at the rate of 3 per cent until 31 December 2000;

. introduction of a three year phase out period for the production bounty; and

. establishment of an industry specific bounty scheme for eligible research and development expenditure, to be called the Shipbuilding Innovation Scheme (SIS), which will come into effect on 1 July 1999.

In doing so, the bill gives effect to the framework of assistance for the shipbuilding industry announced on 8 September 1998 and 16 December 1998.

Under the terms of the present legislation, prescribed shipbuilding activities are eligible for bounty payments at the rate of 5 per cent until 30 June 1999. These arrangements were introduced in 1997, pending a review of the industry. This was in response to concerns that the termination of the production bounty could erode the competitive position of Australian shipbuilders while their main overseas competitors continued to be heavily subsidised.

In January 1998, the Government established the Shipbuilding Review Panel to undertake an independent review of the industry. The aim of the review was to examine the long term strategic direction of the industry. It also assessed the assistance arrangements of competing nations and progress in implementing the OECD Shipbuilding Agreement.

During consultations leading up to the establishment of the review, the Australian shipbuilding industry publicly acknowledged that the bounty should terminate when an effective OECD Shipbuilding Agreement came into effect. Such an agreement would remove measures and eliminate practices which distort competition in the international market for commercial shipbuilding and ship repair.

The Shipbuilding Review Panel reported in June 1998. The legislative amendments introduced today respond to the recommendations of the review.

Extension of the shipbuilding bounty

The bill gives effect to the extension of the bounty for registered shipbuilders at the rate of 3 per cent of eligible costs from 1 July 1999 until 31 December 2000.

The bill also introduces phase-out provisions which will operate over the period 1 January 2001 to 31 December 2003. The present phase-out provisions will be extinguished, with effect from 1 January 1998.

The bill contains transitional provisions to allow shipbuilders to be registered and claim a benefit within 30 days of the bill receiving the Royal Assent. This will cover the period from 1 January 1998 to June 1999.

The phase-out arrangements for the new bounty will cover the eligible construction costs for a bountiable vessel that is contracted for sale before 31 December 2000 and delivered on or by 31 December 2003. Australian shipbuilders will then enjoy phase-out arrangements which are comparable with those being adopted in the European Union. This should minimise the risk of distortions unfairly impeding Australian shipbuilders' ability to compete in global markets.

Establishment of the Shipbuilding Innovation Scheme (SIS)

The bill provides for the establishment of an industry specific bounty scheme for eligible research and development. This scheme will be called the Shipbuilding Innovation Scheme. The Shipbuilding Innovation Scheme will entitle shipbuilders registered under the Bounty (Ships) Act 1989 to the payment of a benefit, at the rate of 50 per cent of expenditure in eligible R&D activities, up to an amount equal to 2 per cent of eligible production costs of a bountiable vessel.

The bill contains provisions to prevent firms which elect to claim benefits, where they have received a benefit under other Commonwealth innovation support schemes from also receiving a benefit under the Shipbuilding Innovation Scheme for the same eligible activity. There are also provisions to limit the amount of offshore R&D expenditure eligible for benefits under the Shipbuilding Innovation Scheme to not more than 20 per cent of the eligible R&D expenditure undertaken in Australia.

Summary

These measures continue to provide transitional support for Australia's lightweight shipbuilding industry which has been a successful competitor in global markets. They are designed to sustain the industry through a period of uncertainty pending the introduction of effective measures to eliminate subsidies and other market distorting practices in the international market place. The new emphasis on innovation will help underpin the long term competitiveness of the Australian industry. The package will provide certainty for the shipbuilding industry and secure investment.

I commend this bill to the Senate and present the explanatory memorandum to this bill.

Ordered that further consideration of the second reading of these bills be adjourned till the first day of sitting in the winter sittings 1999, in accordance with standing order 111.

Ordered that these bills be listed on the Notice Paper as separate orders of the day.