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Rural and Regional Affairs and Transport References Committee
04/04/2018
Operation, regulation and funding of air route service delivery to rural, regional and remote communities

MacLEOD, Mr Jeff, Chief Executive Officer, MacDonnell Regional Council

[11:58]

CHAIR: Welcome. I invite you to make a brief opening statement before we go to questions. The floor is yours.

Mr MacLeod : Thank you very much for the opportunity to represent the 7,000 constituents of the MacDonnell Regional Council. I will give you some background on the council. The MacDonnell Regional Council is 269,000 square kilometres in size. It runs from the Queensland border in the east, to the South Australian border in the south, to the Western Australian border in the west and to approximately 100 kilometres north of Alice Springs. To put it's size into perspective, it is 32,000 square kilometres larger than the state of Victoria.

Senator O'SULLIVAN: And we are mowing a road right through the centre of that, aren't we? Eventually.

Mr MacLeod : Yes. We'd really be interested in some air services, which is what I'll talk to you about today. The council has 13 large Indigenous communities, many outstations and homelands, cattle and pastoral properties, mining sites, ranger stations and the two very well-known tourist destinations of Uluru and Kings Canyon.

My submission today will be in two parts. Firstly, I will be talking about regional travel from Alice Springs. I will be brief on that. I am sure there are many more people that you will be hearing from today in that regard. But the main purpose of my appearance here today is to represent the remote communities, where there are no airline services whatsoever.

In terms of regional travel, Diane has covered most of that; we and the Central Desert Regional Council, our neighbouring council, have similar travel needs. We travel for meetings, for conferences and for training purposes. Obviously, the cost of the airfares is considerable. When you have sufficient notice, you are sometimes able to pick up some cheap fares. But they come with certain catches as well. If you need to change the name or the time, there are some very heavy penalties associated with changing those tickets. If you have a change of personnel, for example, that incurs a considerable cost in terms of purchasing the cheapest flights available. I will give you an example. Recently, my president, my deputy president and two staff went to Canberra to meet with the minister to discuss aged care. The cost of those flights was $960 return. That is what we consider to be a reasonable price. We have paid as high as $1,400 for tickets from here to Canberra. Depending on the workload, sometimes—

CHAIR: Mr MacLeod, sorry to interrupt you. The way this committee works is that, when there is a question we want to pounce on, we will do that. Please don't take that as cutting you short. It will add to our evidence, and we'll come back to you.

Senator McCARTHY: That price was from Alice Springs to Canberra, not from Yulara?

Mr MacLeod : Yes, that's from Alice Springs to Canberra. The MacDonnell Regional Council has approximately 450 staff, about 80 per cent of whom are local Indigenous staff. For certain positions, we do need to recruit externally—mainly from the east coast or the west coast. These are mainly specialist positions such as team leaders for our childcare centres and accountants. One of the biggest barriers we have is that when people look at the airfares for travelling home they say, 'Thanks, but no thanks.' I will give you a personal example. At Christmas time, I travelled to Brisbane to see my family. My one-way ticket from here to Brisbane was $780. The return flight was $230. As I said, I will leave the cost of flying in and out of Alice Springs to the many other people I am sure you will hear from today.

My main purpose in appearing here today is about there being no service to our very remote communities. We have 13 communities, nine of which have airstrips. The only services that fly into those airstrips are the Flying Doctor; the mail planes, which deliver mail bags only; and charter flights. Charter flights from Alice Springs out to our remote communities can vary from between $2,000 and $6,000 per trip. It depends on the size of the plane and the number of hours on the ground.

We have 7,000 residents. A lot of those do require travel, particularly for medical attention. That is probably the vast amount of travel that is required from the remote communities. We do have people who also travel for school. I know that you’re hearing from the Isolated Parents, and I'm sure they'll take that up.

CHAIR: While you're on that topic, I've read the submission from the Isolated Children's Parents' Association and we are looking forward to talking to them. Coming back to those that need to travel from remote communities for health, this is what I thought was a big ticket item in the Kimberley. It was between the centres of Broome and Kununurra but not Broome and Kununurra to Perth, because of the PATS system. Is that here as well?

Mr MacLeod : Correct.

CHAIR: So, when you talk about those in communities who have to travel for health, the committee is really well aware there are passenger assisted transport services from Alice to wherever, but the big cost or a large impost is getting from the communities here to Alice.

Mr MacLeod : Correct.

CHAIR: I hope we can follow some examples, if you've got some.

Mr MacLeod : And I've got some examples of cost for you. As I said, as I've explained to you, it's a vast area. Many of the roads are not sealed. They are unsealed roads. Some of them are some of the worst roads in Australia. People who want adventures come out to our area to get a four-wheel driving adventure. That's what the roads are like. The wear and tear on personal vehicles is incredible. Many of our constituents in our communities are on Centrelink benefits and they cannot afford to buy big flash four-wheel drives, and many of them can only afford to buy sedans, which certainly are not suited to travelling over vast distances. We've got many rubbish sites in our communities full of hundreds and hundreds of cars. So, in terms of some of the costs, the only option for public transport to the communities is the bush bus, which is a subsidised service which runs out of Alice Springs. I've taken some examples of our three communities which are probably furthest away from Alice. We've got Kintore, for example, out on the Western Australian border. A round trip to Kintore, Alice Springs and back again is 1,040 kilometres, to Docker River is 1,350 kilometres and to Finke or Aputula is 840 kilometres. The bush bus charges $330 for a round trip from Kintore and $360 for a round trip to Docker River. That trip involves a full day's travel—that's how long it takes. It's all day, from very early in the morning to late in the evening by the time the bus arrives here. The impact that it has is particularly on our elderly residents—

CHAIR: That wouldn't be a daily service?

Mr MacLeod : No. Some places weekly, some biweekly. The biggest issue is the number of seats available. There are about 30 seats available on those buses. For example, the Kintore bus services four communities as it goes through to Kintore. So there is very limited seating available on these buses. With the option of using a private vehicle, fuel on the communities can range anywhere from $2 to $2.50 a litre. So the cost of travel in a private vehicle—fuel, wear and tear on vehicles, tyres—is absolutely considerable. The only jet service or airline service which is available in our council area is the flight from Alice Springs to Uluru. It's a 40-minute flight. The price is always $230 for a 45-minute flight, most of which you spend on the tarmac at either end. The flight literally goes up and comes down again.

CHAIR: Who operates that?

Mr MacLeod : That's Qantaslink. I randomly punched in Qantas flights from Sydney this morning, and I could get a flight from Sydney to Christchurch in New Zealand for $270. Our remote residents are severely impacted on with regard to having no airline service. There used to be a service. Aboriginal airlines, up until 2006, operated a passenger service around the council area and other areas in remote central Australia.

CHAIR: What happened to it?

Mr MacLeod : That went into receivership and closed down.

CHAIR: Was it subsidised at all during its operation?

Mr MacLeod : I couldn't say.

CHAIR: Hopefully someone will be able to tell us.

Mr MacLeod : Our submission today is that we would really like to see a subsidised return of a passenger service to the remote communities, even if it were to a central hub, for example. If we could get a hub where community members could drive from those communities within a 50- or 60- or even 100-kilometre radius, it still would save a considerable amount of travel on the road.

CHAIR: Has anyone approached the airlines based here in Alice Springs to pursue this proposal?

Mr MacLeod : The only companies that are here are charter companies.

CHAIR: I understand that, but I also understand a little bit of basic business. If there is a market, people will want to enter it if it's sustainable. That's why I asked if you've been able to sit down, if no-one is interested or if you have had those conversations but you just couldn't—

Mr MacLeod : No.

CHAIR: What I'm leading to is, because it's twofold here: if the requirement was there and it was affordable, someone would do it or there would be a reach-out to government to say, 'Hey, we need a hand.' I certainly cannot make recommendations on behalf of the Northern Territory government, nor would I, regardless of what persuasion, but I'm just interested in if that has happened.

Mr MacLeod : There has been no interest. Basically there have been three charter companies who charter flights. If you want to fly, you charter one. Basically that's how the business is conducted in Central Australia at the moment.

Senator O'SULLIVAN: The burden of the chair's question was: do you know of any effort where any representatives of your communities have approached a commercial operator to look at establishing commercial flights, scheduled flights, into your communities?

Mr MacLeod : We have discussed that with Qantas reps, when I've had the opportunity to meet with them. Basically the answer that comes back is that they haven't got planes small enough to fly into our airstrips, and commercial viability is another matter. Obviously, as the cost burden of flying out of Alice Springs is considerable, you can only imagine what it would be to fly to the remote communities as well.

CHAIR: I won't dwell on it. I haven't been here for 38 years—and I need a good smack for that!—but I've put my head around Broome and I've put my head around Kununurra, where there are a number of other operators that fit this sort of market. That's why I asked. So the answer to my question is no. That's fine. I'm keen for senators to ask you questions. Is there any other evidence that you want to put on the table before we go to that?

Mr MacLeod : No.

Senator PATRICK: I'll just go back to the same question I asked the previous witness, about access to general aviation and the health of general aviation in the region, noting that it sounds like you have airstrips that rely on that.

Mr MacLeod : Yes. The critical role of our airstrips is obviously for the flying doctor. The flying doctor does multiple trips a day out of Alice Springs to remote communities. The distance speaks for itself in terms of emergency evacuations. We have 24-hour access to approximately half our strips. The other half are only daylight strips. If a healthcare patient needs to be evacuated in a community that doesn't have a night strip, for example, they have to be driven to the closest airstrip. In terms of general aviation, we do have the three services that come into Alice, which are QantasLink—

Senator PATRICK: So general aviation is the small guys that you charter as opposed to regular public transport flights?

Mr MacLeod : Yes.

Senator PATRICK: You typically find general aviation are the younger commercial pilots that might have set up an operation out of Alice Springs?

Mr MacLeod : Ours are mainly serviced by two large commercial companies. NT Air Services are across the Territory. I think they are based in Darwin. We also have Chartair, which is a large organisation.

Senator PATRICK: Do you have any charter operations based out of Alice Springs?

Mr MacLeod : Yes, we have those two. Those are the two main ones. The Alice Springs Aero Club from time to time has a plane available, but that usually depends on whether they have a pilot available to fly that plane on that particular day. It's really the two major ones: Chartair and NT Air Services.

Senator PATRICK: Thank you.

Senator McCARTHY: Mr MacLeod, I want to just go back to some of the evidence you gave. You can take this question on notice. You said that changing the name or the time meant heavy penalties.

Mr MacLeod : Correct, if you buy a discount ticket.

Senator McCARTHY: How much are the penalties that you receive for both? You can take it on notice.

Mr MacLeod : From what I have experienced it could be anywhere from $90 to $120. Normally you get the offers of cheap fares. There is the cheap fare, the standard fare and the higher fare. Normally we get three options on a fare other than business class. Each of those comes with a different ability to change. For example, if you buy the cheap tickets and you want to change your name, normally you will find that the penalty is what it would have cost you for the next highest ticket. That's normally our experience.

From time to time we have to change. We may have someone who is travelling, but for family or cultural reasons they can't travel so we need to substitute another one. This is particularly with councillor travel. I have 12 elected members. From time to time we have to make a change to travel. To get those cheap fares normally we have to book months in advance, so when we have notice of things like the ALGA meeting, which is held in Canberra, the LGANT meeting in Darwin et cetera we get in as early as possible to get the cheap flights to save money.

Senator McCARTHY: You also said that you've got 13 communities and only nine have airstrips. What happens to the other four?

Mr MacLeod : One is close to town. One of our communities is only just out of town—that's Amoonguna. It is 13 kilometres out of town. The other communities have to drive to the closest airstrip—for example, Wallace Rockhole has to go to Hermannsburg. Imanpa is really on its own. It's halfway along the road to Uluru from Erldunda, from the highway. They have an emergency strip down at Erldunda, so they have to travel a considerable distance to get a plane. Titjikala is 120 kilometres by road. They have to transport patients by road.

Senator McCARTHY: You said you met with Qantas to talk about flights; is that correct?

Mr MacLeod : Yes, at various conferences. Nothing has been official. I did quiz them on what it would take to get some sort of regional establishment. They said that they would need a population of at least 1,500 to 2,000 people to qualify. I make the point that that's one of the issues with Central Australia as opposed to the Top End, where they have very large communities. The size of the communities in the Top End makes regional passenger services to those large communities a viable prospect, not to mention the fact that half of the year the roads are closed too.

Senator McCARTHY: In those conversations did you talk about penalties or any other possibilities?

Mr MacLeod : No.

ACTING CHAIR ( Senator O'Sullivan ): Mr MacLeod, you mentioned earlier that the development of a commercial service would need to be subsidised. I think that's quite clear. Do you have any thoughts about how one might decide which communities a government would subsidise services to and where the cut-off point would be, because let me tell you I've got people who live in areas only 20 minutes from town and they want something subsidised as well? I'm not trying to make light of it. I think there is a very valid argument here. Is there some way to test this? Do you have other tests in terms of your local government grants or anything like that that have this descriptor that would allow us to identify communities that would fit?

Mr MacLeod : One of the components of the calculation of how funds are allocated in the financial assistance grants, for example, that we get from the federal government that come by the NT government is based on distance from the hub, the number of Indigenous people and things like that. That is a component which can be put to the test in a formal way that grants are allocated. My suggestion would be the records from the Alice Springs hospital and also from the Alice Springs health services would show the number of people who have to travel in from community. I think those would be records that could be easily accessed and would show particularly the number of people who are travelling regularly for medical services. Alice Springs is the place that they have to come to for all specialist medical services.

Senator O'SULLIVAN: I'm going to ask you a political question. I know nothing of the politics of the Northern Territory so I don't know if the members here are members of the Greens party—I suspect they are not. Have your local federal or state members of parliament taken up this question, for example, with the Northern Territory government? Who is in power here?

Mr MacLeod : Labor.

Senator O'SULLIVAN: Has the contemporary government been tested to look at the provision of a regional air service to your community?

Mr MacLeod : In my council area, we have two representatives from the legislative assembly for the Northern Territory so the electoral boundaries are just as large as the council boundaries. We have one federal member who looks after everything outside of Darwin, including Christmas Island and everywhere else. They are all very much aware of the situation. I can't say whether they have actually taken it up directly with airlines. I would suggest that they certainly have at a very high level here with the tourism minister and everything. I know they have been in talks with a number of the airlines about additional services.

Senator O'SULLIVAN: Would that be to Alice Springs?

Mr MacLeod : That is to Alice Springs and Darwin.

Senator O'SULLIVAN: We will get into Alice Springs but I am more interested in your regional service needs. I will ask the question again. If you don't know, just tell me.

Mr MacLeod : I don't want to comment on something I don't know but I would say that both the local members are very much aware of the problems associated with travelling.

Senator O'SULLIVAN: This may not be fair to you but can you take the question on notice? I'll tell you why. It would be useful if the committee knew that there had been an effort, for example, to establish a regional and commercial service to your area and the effort failed, because it might guide us then why it had failed and allow us to put our thinking caps on about an alternative approach, for example. Again, I know there is complexity because you are a territory versus a state. Normally these are state issues, not Commonwealth issues where we come from. But being a territory, I suspect there is a closer relationship with the Commonwealth government than the normal state relationships. If you are able to take that question on notice and ask your local members whether they have specifically put a proposal to the government to say, 'Let's establish an air service that looks a bit like this.' Who did you say runs the bus service?

Mr MacLeod : Centre Bush Bus.

Senator O'SULLIVAN: Is that a private enterprise?

Mr MacLeod : Yes it is. It is operated out of Alice Springs.

Senator O'SULLIVAN: How many passengers? I am just interested? You said it was $300 round-trip.

Mr MacLeod : It seats a maximum of 30. They're basically heavily modified trucks with a box on them, and they're the only ones who can actually take the—

Senator O'SULLIVAN: It operates once a week?

Mr MacLeod : To some locations once week and to others twice a week.

Senator O'SULLIVAN: It's normally full?

Mr MacLeod : Yes, it is.

Senator O'SULLIVAN: And it's $300 a head?

Mr MacLeod : To Kintore, it's $330 return; and, to Docker River, it's $360 return.

Senator O'SULLIVAN: It was established out of here?

Mr MacLeod : Correct.

Senator O'SULLIVAN: How long would it take me to go out and pick up the 30 passengers and come back here?

Mr MacLeod : They pick up at various locations in town. Normally, they make stops at the town camps because that's where most of the residents usually stay with relatives or others, and they also pick up at the hostel. They would go around and pick up first thing in the morning and then they head out. As I say, I think it leaves here around about 8 o'clock and gets into Kintore around 6 pm.

Senator O'SULLIVAN: And then they return?

Mr MacLeod : The bus stays overnight, the driver has a rest and then they return the following morning.

Senator O'SULLIVAN: It's $330 return?

Mr MacLeod : Correct.

Senator O'SULLIVAN: So they're making $5,000 a day at the commercial rate—they must be subsidised. That wouldn't work, would it?

Mr MacLeod : They are subsidised by the NT government.

Senator O'SULLIVAN: Do you know whether there's any nexus federally—whether that funding is tied from the federal government through the Northern Territory government—in relation to this?

Mr MacLeod : No, I have no knowledge.

CHAIR: Senator O'Sullivan, what I might do is, firstly, if there are questions taken on notice, can I get agreement from the committee that we set the date of 4 May for answers coming back—is everyone happy with that? For our witnesses, that gives you a couple of weeks—that's what we normally do. If there is anyone who does have an answer to Senator O'Sullivan's question, if you could pass that on that would be very helpful.

Sorry, Senator O'Sullivan, to cut you off. Mr MacLeod, we do know where to find you should we need to follow up. Thank you very much; you've put a completely different perspective on the work that we're trying to do here to develop some form of assistance for governments to develop with policy.

Senator McCarthy has informed me that we have two members from the Northern Territory Legislative Assembly present. You can't hide; we know you're there—and we know you're not hiding. Thank you; we want to acknowledge you. We want to acknowledge the member for Namatjira, Chansey Paech—good on you, cobber; well done, mate; and the member for Araluen, Robyn Lambley—Robyn, thank you. It's good to see our parliamentary colleagues here too. Mr MacLeod, thank you very much.

Senator PATRICK: I still have one question.

CHAIR: Sorry, Senator Patrick, you did say you had one quick question.

Senator PATRICK: In some of the submissions that we've received, there's been an assertion or a claim that airfares out of Alice Springs are substantially more expensive than airfares out of Uluru and, obviously, your council covers both of those areas. You clearly talk to a range of people. Is it your understanding as well that it's much, much cheaper to fly out of Uluru?

Mr MacLeod : Absolutely, simply because the discount airlines fly out of Uluru and they don't fly out of Alice Springs. There are no recognised discount airlines that fly out of Alice Springs.

Senator PATRICK: I note that Qantas and Virgin have made some submissions where they justify cost variations on the basis of the remote destination that they arrive at. Indeed it's quite interesting because there are fewer passengers through Uluru than there are through Alice Springs, yet the flights are cheaper. The only difference I can see is that Jetstar operate out of Uluru and they don't out of Alice Springs. That's something I want to test with some of the later witnesses who have brought this to the committee's attention, but also with, perhaps, Qantas and Virgin when they appear before us. I just want to establish that that's your understanding and that people here in your council area make a conscious choice to go to Uluru to catch a flight out of the NT to somewhere in the eastern states.

Mr MacLeod : Personal friends of mine do it, so I know that they do. And that's simply, as I said, because Qantas and Virgin are full-cost airlines, and Jetstar is not. Jetstar offers very good prices into Uluru.

Senator O'SULLIVAN: You may just have answered this question, and I want to separate flying into Uluru as opposed to flying out of Uluru, but do you know of anyone who flies into Uluru to try and get the advantage of a cheaper fare? The focus of my question is that I am wondering whether the airlines are going to try and defend themselves by saying that most of their passengers into Uluru are part of a package. They're visiting, so there's accommodation, a trip to the Rock and the airfare, whereas with back loading, as my good friend here knows, as an owner-driver of trucks, you can do all sorts of things.

Mr MacLeod : Yes, and most of the time the planes go in and out and they obviously off-load one group of tourists. They're usually packaged up, and there's a coach waiting for them. They do the full tour package—they do the lights—

Senator O'SULLIVAN: That may explain why, but my question is: do you know people who have chosen, from some other destination, rather than flying into Alice Springs, flying into Uluru just as a fare-paying passenger because it's cheaper than flying into here—or is it normally the other way around?

Mr MacLeod : It's certainly people who are flying out and flying back on the return leg, but it's also family and friends.

Senator O'SULLIVAN: So you can get a return ticket to Uluru cheaper than you can get the—

Mr MacLeod : Absolutely.

Senator O'SULLIVAN: Okay.

Mr MacLeod : Normally, what happens is that people who have family or friends living here will drive down to the Rock. People will fly in and they'll have a look at the Rock. Then they'll take them in their cars back to Alice Springs.

CHAIR: Mr MacLeod, thank you very much for your time.