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Rural and Regional Affairs and Transport Legislation Committee
18/08/2015
Performance of Airservices Australia

SMITH, Mr Dick, Private capacity

[19:10]

CHAIR: Welcome. Do you have any comments to make on the capacity in which you appear?

Mr Smith : I am appearing here as a previous chairman of the Civil Aviation Authority and the Civil Aviation Safety Authority and as a person who is vitally interested in aviation in Australia.

CHAIR: That would be a slight understatement! Mr Smith, you have lodged a submission with the inquiry which the committee has received as submission No. 2. Would you like to make any amendments or additions to your submission?

Mr Smith : No, no changes at all.

CHAIR: Would you like to make a brief opening statement?

Mr Smith : Just a very quick statement to say that I have been involved in aviation on the regulatory and government side since about 1988, I think it was, when Gareth Evans appointed me to the board of the Civil Aviation Authority, and then a couple of years later, with the support of Bob Hawke, I was made chairman of CAA. At that stage it was just after the Henry Bosch report, where the Civil Aviation Authority was set up separate to government, as a government business enterprise, and it ran safety regulation, air traffic control, and rescue and firefighting. The plans then, with discussions I had with Bob Hawke and Paul Keating, were to go on with further reforms and bring in competition with the rescue and firefighting and with air traffic control, and even possibly split the air traffic control side into two organisations—one in Brisbane and one in Melbourne—that would have a certain amount of competition with each other. Unfortunately, none of those reforms went ahead.

I suppose my major concern at the moment, as a 71-year-old, is that on the Queen's Birthday I got this wonderful award and listed there were my services to aviation—but in fact I had failed; I had never completed the important reforms. That has motivated me to get involved again. I tried to turn off for the last 10 years. I would just love to see some of the reforms that were the original plan of the Hawke Keating Labor government, which has really been the only government to have done much with reform in aviation. I think they should be looked at again and completed.

CHAIR: Thank you very much. We will now go to questions, starting with Senator Xenophon.

Senator XENOPHON: Thank you for your submission, Mr Smith. You have real concerns about the automatic dependent surveillance broadcast regulation impact statement. Can you take us through that? What you have said in your submission and what general aviation operators are telling me is that there is a real crisis looming in terms of the affordability and sustainability of general aviation in this country. Is that overstating it from your point of view?

Mr Smith : Yes, and before I talk about—

Senator XENOPHON: How serious is it in general aviation?

Mr Smith : It is an extremely serious situation, where the general aviation industry is extremely depressed at the moment. To give you an example, what was our leading general aviation airport, Bankstown, about 20 years ago did about half a million movements year; it is now down to about 270,000. Consider such a staggering decrease when just about every other equivalent industry would have grown quite considerably in the last 20 years.

I keep one of my aircraft at Bankstown Airport. In recent times of a weekend the one shop does not even open, there are just so few people there. If you walk around some of the hangars, which had thriving general aviation maintenance businesses or training businesses, you see that they are closed up; they are chained up. If you peer in, you can see that junk is being stored inside. This has come about mainly because of a one-way ratchet of increasing costs and regulation over the last 20 years or so without an understanding that, dare I say it, safety has to be affordable by the marketplace. If you put airline type regulations on to small planes, an airline with 200 or 300 people can easily share the high cost of expensive safety regulation, but an aircraft with 10 passengers clearly cannot. All that happens is the business closes down. You do not have a marketplace and so you get towns like Mudgee and people having to drive—they do not have an air service anymore.

I recently completed a fight—I fly all the time. I am very fortunate; I have a number of aircraft. I completed a flight 14 days from home right out to Warburton in Western Australia and back. I landed at probably 14 airports in the two weeks, maybe a few more. The only general aviation I saw was at Parkes aerodrome, where two small planes came in and landed to refuel. I walked over to the pilots. They were Chinese citizens who were learning and getting their licences. They were employed by China Southern, which owns the China Southern flying school at Mangalore. They were going to get their flying licences in Australia because the weather is good. All I could work out is we would sell some fuel to the company. That would be about the benefit to Parkes Airport of that flying. I can see a situation in the next decade or so where Qantas and Virgin will be demanding special visas to bring Chinese pilots in because we simply do not have enough pilots.

Senator XENOPHON: Because of the collapse in part of general aviation?

Mr Smith : Basically it was completely unnecessary and unintentional by the people who were causing this, who are the people at the Civil Aviation Safety Authority. The people at Airservices Australia are quite horrified if I mention any of this. They say, 'No, it's nothing to do with them.' But it is, unfortunately. It is unintentional but it is major damage which is quite unnecessary.

Senator XENOPHON: The regulation impact statement that you refer to—was that done in about 2008 or 2009? What year was it?

Mr Smith : I understand it was done in 2009. If I could just explain automatic dependent surveillance broadcast to you, it is a great idea. It is a little black box which sits in the aeroplane and transmits the GPS position. We all know of GPS in someone's motor vehicle. It transmits their position back to air traffic control. In Australia we have two major centres—Brisbane and Melbourne. So the position of your aircraft will appear there.

That, you would think, adds to safety. In fact, Sir Angus Houston in an article in The Australian a couple of weeks ago, where he was rebutting my criticism, said, in effect, 'Dick Smith is wrong. We don't need to do airspace change because we've leapfrogged into automatic dependent surveillance broadcast and Australia is leading the world.'

Unfortunately, what was not mentioned is that most of our aircraft in country areas fly in non-controlled airspace. We are very unusual. I did send this document to every senator. It is a document from when I was involved, believe it or not, way back on 12 December 1991, with the AMATS airspace changes. It says 'stage 4 IFR to IFR separation provided in low-level airspace'. That means instrument flight rule planes, which are ones in cloud, are going to be separated, which means they are going to be controlled by air traffic control, in low-level airspace. You might think, 'That's very strange—aren't they now?' But no. In Australia we had a system where air traffic control basically controlled the high-level airspace and the major airports.

Senator XENOPHON: What is 'high level'? Is that 10,000 feet and above?

Mr Smith : Above about 24,500 feet en route and stepping down to the major airports—Sydney, Melbourne, Brisbane. Then there was a separate union, the flight service officers, that gave radio information to pilots, and pilots became their own air traffic controllers.

I was the chairman in 1991, when the board decided that the first step in moving to a more modern airspace system was to increase controlled airspace. So aeroplanes at busy country airports would indeed be controlled from the centre in Melbourne or Brisbane. Unfortunately, that never happened. We have never actually done the upgrade of the airspace, and there is a good reason for this. First of all, most airline pilots, having learnt on the uncontrolled do-it-yourself system, like that system. It has so far not resulted in a midair collision. We have had some very near problems with it and we did have an accident at Benalla that could possibly have been solved by controlled airspace. But pilots are normally picked psychologically to follow rules. The best pilots are the ones that follow the training they have had. That is what we want. If you do decide to change the rules, people naturally resist, unless there is some really good leadership and communication. That unfortunately failed, and so as of today—and you can work it out: from 1993 to now is 22 years—we still have no low-level, class E controlled airspace, as it is called.

By the way, we managed to get the controlled airspace down to 8,500 feet from 24,500 feet, so that was a start. But where the collision risk is greatest is close to the airport and where there is a chance of running into a mountain, which air traffic control can prevent, because if you are on a radar screen there can be an alarm system which rings an alarm for the controller if you are off track. But in Australia at places like Ballina, and every non-tower airport in Australia—and there would have to be 50 or 60 that take airline traffic—they are in completely uncontrolled airspace. That means when the pilots are in cloud, they call each other and hopefully self-separate.

Just yesterday, there was a terrible accident Irian Jaya. Fifty passengers were killed in that plane crash. It won't have been flown by Stone Age people; they will be competent, internationally AKR rated pilots. The plane would have been equipped with an enhanced ground proximity warning system. But the most likely cause of the accident because it is the most common accident by professional pilots around the world is that it will be a controlled flight into terrain. We will find that that is non-controlled airspace in Irian Jaya and someone has possibly made an error which is not hard to do and descended off the track below the minimum safe altitude.

Just to give you an example of how ridiculous our system is, Airservices have put an ADSB transmitter in at Horn Island, not very far from where this accident site was. Below 18,000 feet at Horn Island there is no controlled airspace. So the pilots change onto the aerodrome frequency and talk to each other in the way they would have in the 1930s to separate. That is an ideal airport to put controlled airspace as we now have automatic dependent surveillance broadcast and all the airline traffic coming in from 18,000 feet and above has had equipment fitted now for over a year.

What I am commenting about with this regulatory impact statement is that the document was done six or seven years ago. It was originally based on the fact that they were going to subsidise general aviation aircraft. They were going to pay for the equipment to go in the general aviation fleet of about 8,000 aircraft. That would be the only way you could justify it because fitting ADSB equipment has some savings to the airlines when it comes to direct tracking in controlled airspace that would give them probably some millions of dollars per year savings, but general aviation really can get no measurable saving out of it.

Senator XENOPHON: Sorry, but that is inconsistent with what the regulatory impact statement said. It said there were savings across the board.

Mr Smith : Yes. The regulatory impact statement is severely flawed. It is a completely dishonest document.

Senator WILLIAMS: Who put that statement out?

Mr Smith : The statement was put out by the Civil Aviation Safety Authority. It is quite amazing, because what happens in the bureaucracy is that if someone makes an error, and it is quite simply that there has been a serious made, then everyone closes ranks and says, 'No, don't even discuss it.' I have even had a special meeting with the minister, Warren Truss, over a year ago about this and he finally came back to me and said, 'It was done in 2009, so it can't relooked at.' I am sure he would have been told by the bureaucracy, 'Minister, we can't relook at that,' and he would have been given all these reasons. I even asked Jeff Boyd, who is now the chairman of the Civil Aviation Safety Authority, and I said: 'You've got to get the Civil Aviation Safety Authority to relook at this. There are serious errors in it. It needs to be done accurately.' The CASA expect pilots to be honest and I said that the Civil Aviation Safety Authority has to be honest. But, so far, Jeff Boyd, has not been able to get this relooked at.

The problem is in about 18 months time, a requirement will come in that every single aeroplane in Australia that flies in cloud—and that is every little plane that flies at Bourke or Broken Hill, or Bathurst,, at the flying school—will have to spend anything between $10,000 and $20,000 on fitting this equipment, but they will get no measurable advantage at all because they are in uncontrolled airspace. Even though if there happens to be an ADSB transmitter close by—and to save money Airservices have put in hardly any—the number they have put in gives coverage above about 29,000 feet. But America is putting them right across the country to give coverage down to 2,000 feet. Airservices have not done that because that is the way maximising profits but saying, 'We're the first with ADSB,' when, in effect, at low level where you need it to prevent planes running into mountains, we do not have any coverage.

But let's say I happen to know there is coverage with ADSB at Birdsville; there is a transmitter there. The positions of the small planes will appear very accurately on the air traffic control screen in Brisbane, but because the pilots are in uncontrolled airspace the controller will call the pilot and say—as they did in the 1930s—'Traffic is; aircraft and Metroliner doing an approach', and the pilot then will have to change off the air traffic control frequency, become the air traffic controller, call up the plane and self-separate. Let me explain. If it was the American system—or in fact the system in just about every other country I have flow in, and I am fortunate enough to have done five flights around the world and studied airspace everywhere—then the plane in cloud would be under air traffic control and would not necessarily be told about the other plane but would just be told, 'Commence the approach' or 'Hold at 5,000 feet' or 'Turn left' or 'Turn right' and would in effect be vectored to the approach or told to do the instrument approach which is in the flight plan. A plane departing might be told to hold on the ground for two or three minutes until the plane coming in is visual.

The problem, and the reason I have linked this regulatory impact statement with OneSKY, is that they are purchasing the OneSKY system for the old airspace system. We have not gone to the airspace system that was government policy under the Hawke government and Kim Beazley as minister in 1991 and then 1993 because of a number of claims. One is that it will require a huge number of extra traffic controllers. You have already heard that the cost is nearly $1 billion a year for our air traffic control now. But the interesting thing is that when you fly in Australia—and I fly all the time; I flew my aircraft down today—a lot of the time you fly—

Senator Xenophon interjecting

Mr Smith : I happened to fly a helicopter today, but it can be—

CHAIR: We will not say which one it was like!

Mr Smith : No, I will not say whose helicopter it is similar to, but I do fly a Citation jet, single-pilot, which I own. I have been very fortunate. I fly a Cessna Caravan, which I took to the Kimberleys a little while ago—a wonderful plane. I have a couple of helicopters, too, and I came down in my August 109E, which is a twin-engine single-pilot instrument-rated helicopter. So, I am flying all the time, and I just know what the system is like. Compared with other countries, in Australia you are almost in complete silence all the time. I have said to the air traffic controllers, 'But couldn't you do a little bit more of a workload and actually give us an air traffic control service where we need it?' And quite a few of the controllers have said to me, 'Well, of course we can, but don't tell anyone I told you that'! I fly to Ballina from time to time, and you get this superb service from Bankstown's air traffic control; you just do what you are told. You get told to taxi out to the runway, and you ask for a clearance for take-off, and you take off, and the controller says 'Turn right to 120 degrees', and you meet the airway, and he or she says 'Turn left' and you follow the airway under air traffic control. The most amazing thing is that as you get to 8½ thousand feet, that is the only place on the whole trip where you can actually run into somebody. Up at 45,000 feet the airways are separated, going towards Brisbane and to the right by about 10 miles, from the one coming the other way, and up at 45,000 feet where I fly it is very unlikely for anyone to be there anyway. But when you actually get down to below 8½ thousand feet, the statistics show that is where the mid-air collisions can happen and it is where you can run into a mountain. I then get told, as the pilot—and I am a single pilot when I fly the plane; I do not have a copilot to start writing down call signs—'Traffic is'. In the worst situation, I was given four other aircraft, because the Lismore approach happens to be mingled up with the approach to Ballina. I write down on my pad, 'Four planes', and then I change off onto the aerodrome frequency and I start calling these planes and trying to sort out where they are.

To an Aussie pilot, that is just normal; that is the way we do it. But if you are a pilot from another country you simply cannot believe that a leading aviation country in the world can have something that is so archaic. If we brought in some class E airspace, as planned 20 years ago, instead of the en route controller—it is not an additional controller—giving you traffic information on three or four aircraft the controller would look at his or her radar screen down to about 3,000 feet and below the radar screen they would look at their flight strips on the electronic display, and they would separate you. It is called procedural separation. They would say, 'Hold at 6,000 feet' or 'Do the approach', and they would say, 'I'm holding an aircraft on the ground to depart.'

What I find incredible is that after 20 years we have not gotten even one airport in. And I have said to people who are against it—because resistance to change is staggering—'Let's just try one; if it is going to require hundreds of extra controllers then we obviously cannot afford it.' But my advice is that it will not. To the pilots who say they do not need it I say that I think after flying in it for three or four months you will find that it is a fantastic system.

Senator XENOPHON: Perhaps I could just go to the issue of OneSKY. The OneSKY program is a huge program; it is $600-plus million and it is going to cost $1.6 billion over the life of the project. Are you saying that OneSKY has some inherent problems in it?

Mr Smith : Yes, because it is being purchased for the existing air traffic control system. One way to explain it is that there are vertical lines in the sky and as you are flying along one air traffic controller cannot do the whole of Australia, so they divide it up into sectors. But for historical reasons, because we used to have flight service below, they have put a horizontal boundary in the sectors, and the sectors are very large. Say you were going to put controlled airspace at these airports. I would not suggest every airport, which is the US system, because our pilots are experts at self-separating; at places like Birdsville, where you have no mountains and only one instrument plane a day, you obviously cannot run into a mountain, or anybody, so you probably do not need air traffic control. But at a place like Lockhart River, where 15 people were killed simply because two professional pilots descended too early on the approach, if there had been an ADSB transceiver nearby and that had been class E controlled airspace, the alarm system would have gone off in the air traffic control tower and the pilot would have been told to immediately climb and we possibly would have saved 15 lives.

Senator WILLIAMS: But we would not have had that back then, in that time, would we?

Mr Smith : No, but if it happened tomorrow the same thing would happen.

Senator WILLIAMS: Yes, but if you are talking about that accident when it went into the hill in Queensland, things have changed since then. Hindsight is a wonderful thing.

Mr Smith : Absolutely. And what I am saying—perhaps I can just quickly finish the discussion about the ADSB. The problem here, and I have put it in my submission, is that while I am not an expert at reading regulatory impact statements, because they are so complicated, I have had some experts look at it and they have said that rather than general aviation getting a benefit out of the ADSB mandate which is coming in it is in fact going to give them a net position of minus $62.2 million. To fit every aeroplane that flies in cloud with one of these units that, if you are in uncontrolled airspace, does not actually give you any safety system anyway, that is the type of money. That will completely destroy our general aviation industry. Perhaps I could just mention one other thing, which is really serious. I noticed that you were asking questions—

Senator WILLIAMS: Mr Smith, I am just a broken-down shearer, and I have been in a few planes but have never flown one. Are you saying that the ADSB is far too expensive and will stop people flying the small planes?

Mr Smith : I am saying that it is not necessary for small planes that fly in uncontrolled airspace. We started to bring it in five years ahead of the USA. But, what is more to the point, in 2020, when the US mandate comes in, below 10,000 feet in E and G airspace—E is the controlled airspace—there is no requirement in the US. They have said, 'It would destroy our industry', and they are one of the wealthiest countries on earth. So, they do not even have a requirement coming in. But in 18 months time we will have this requirement, and already Aminta Hennessy, who operates a fantastic flying school at Bankstown, has gone and mortgaged the house to pay for the extra equipment to go in these aircraft. The thing I find extraordinary is that if Airservices had added some extra controlled airspace you would say, 'At least at Bathurst you are going to give us a control service.' But what they have done is say: 'Well, we might have to train our controllers; that will cost money. Or we might have to get some more controllers; that will cost money. So we won't do that, but we will support the early introduction of ADSB.'

When they brought in the first requirement, which came in about 15 months ago, I said: 'This is going to damage the business aviation community. Many of them will go broke, because the cost to put ADS-B in a small business aviation aircraft is something like $150,000.' The reason that it is $150,000 is that the American mandate does not come in till 2020, so we are actually doing the design for America. So John McCormick, the head of CASA, came back and said: 'Don't worry. There will be a dispensation. I have spoken to everyone and, just as there was a dispensation for the very accurate altimeters called RVSM, there will be a dispensation to allow aircraft to fly in it.' As well as telling me verbally, he wrote to Brad Edwards and confirmed that in writing. He has also spoken to me in the last couple of weeks and confirmed it once again.

But when he got in touch with Airservices, even though CASA is the safety regulator, Airservices said, 'No, we won't allow it.' Then he said, 'Well, how come you have allowed it for the military?' The military have King Airs, which business aviation have, and they have Orions; they said, 'It'll cost us a lot of money to fit ADS-B,' and that is taxpayers' money. So immediately they have been given a dispensation to fly about 29,000 feet anywhere across Australia—

Senator XENOPHON: So Defence has a different rule for Air Force aircraft?

Mr Smith : Absolutely, at this moment—because, I presume, of the mates network, with Defence running CASA and Airservices. This is the fact—

CHAIR: Just pausing there, Dick, before I ask you how many hours you have on your caravan now, I have to leave for another appointment. We are most grateful for your attendance. We are going till eight o'clock. Senator Williams is going to chair in my absence, and I hope everything goes well. You are in good hands. Thank you.

Mr Smith : Thank you. Anyway, the military have been given a dispensation, and they have one now. The airlines have been given a dispensation for flying up to three days with the equipment faulty. The particular mandate that came in 18 months ago—five years ahead of America—says that if you fly an aircraft above 29,000 feet across Australia, you have to have ADS-B. That is because Airservices have fitted stations across Australia that will work above 29,000 feet. There are not many of them, because it is line of sight, so there might be one at Birdsville and one at Bourke. The amazing thing is that CASA said to Airservices, 'Can't you just procedurally separate the plane which does not have ADS-B?' which is the system we have used for 50 years and it is the system used below 29,000 feet, where ADS-B is not required. But they refused to do that. It was a most extraordinary—

ACTING CHAIR ( Senator Williams ): On that very important issue: who has the call, CASA or Airservices? Who is the boss in this relationship?

Mr Smith : CASA is the boss, but if Airservices say, 'It is not safe,' what does CASA do? What Airservices have said is, 'No, it's not safe for us to use procedural separation.' By the way, the understanding would be that, because you are going to mix aircraft with ADS-B and aircraft without, the aircraft without ADS-B might have to have a delay. In other words, let us say that it is flying at 43,000 feet over Longreach, it wants to descend and there is an aircraft with ADS-B nearby, the air traffic controller might have to say to the plane without ADS-B, 'I have to procedurally separate you,' which is a bigger separation standard—I think it is 10 minutes, which is quite a distance—'You'll have to delay,' or, 'You might have to turn right for three minutes before you can descend.' The very fact that military aircraft and airline aircraft are flying there without ADS-B shows that it is possible. But, in an act of what I would call sheer bastardy, Airservices said, 'We're not going to allow that.'

It is something I have seen of recent times: they are completely oriented to the airlines. They mentioned 80 per cent today, but I would say that 90 per cent of Airservices' income comes from the airlines. They consider general aviation a nuisance. In fact, at meetings I have heard them say this to people: 'Look, you are lucky we allow you in the system at all. You don't even pay your own way.' For Airservices, for a small plane flying instrument flight rules compared to a large plane, the small plane creates extra workload because it takes longer to get somewhere, but the large plane with 200 passengers in it is giving Airservices 100 times more income. What has happened—I do not think it is intentional by the people at Airservices—is that, as they have become more isolated from the reality of the industry, general aviation gets more and more damaged, people sell their planes, they close their charter operations and they move and fly with the airlines, which is great for the airlines but it is absolutely disastrous for Australia because we are going to lose a complete industry that we need.

At Bankstown Airport I used to have three companies that could service my aircraft. Now there is one, so the charges are sky high. The places that used to have fuel do not have fuel anymore. We have a major catastrophe happening here with general aviation. We have to say as a country, 'Well, do you want to wipe out that industry and not have it at all?' I think that would be a terrible mistake. It could employ tens of thousands of people. We could be leaders of the world in flight training. But the way we are going this enormous damage is being done. I implore you—I do not know what powers you have—to ask CASA to redo this regulatory impact statement properly. By the way—Senator Xenophon, you covered this point—a regulatory impact statement is supposed to show the winners and the losers, but it just shows the winners and implies that the losers are winners.

Senator XENOPHON: It is misleading.

Mr Smith : It is completely misleading. Even when this has been pointed out they do not answer the question. In other words, the Civil Aviation Safety Authority have obviously decided, 'That was done in 2009 and it would be embarrassing to relook at it.' The latest thing I have heard is that they are planning to give dispensations. This is a ridiculous way to regulate, where you have a requirement of all these small operators—some of them are mortgaging houses and some of them are fitting the equipment now—and then you are telling people, 'But don't worry; in 18 months time, when it's going to be mandated, we'll give a dispensation if you're lucky.' It is just not a fair way.

Senator XENOPHON: The Air Force has got a dispensation.

Mr Smith : The Air Force has a dispensation. It is not required to fit the equipment in things like King Airs and Orions and any other planes that are expensive for them to fit.

Senator XENOPHON: There is a bit of a double standard there.

Mr Smith : It is outrageous. It is absolutely outrageous. It is a matter of who has the power and who is weak. It is very un-Australian. It is not fair. It does not affect me in the slightest—I can afford any of this equipment—but I see an industry being destroyed.

If I can just add one other thing, you have these great problems with Airservices. The problem with Airservices is the same as why the Soviet Union collapsed. It really is. It is a government-owned body that is trying to give a service like that. I remember back in the two-airline days, when everyone said that if competition were brought in with the airlines—and it was the Labor government that decided that competition would come in—there were all these predictions that if the government did not own and control the airline prices then everyone would die. What happened, of course, is that the costs have come down dramatically, far more Australians have flown than ever before, and our road toll is down from about 3,500 a year to about 1,000 because so many people have moved off the roads into flying, which is so much safer.

ACTING CHAIR: And other reasons.

Mr Smith : Other reasons? Yes, I am sure there are plenty of reasons.

ACTING CHAIR: RBT halved it in New South Wales in the first year—from 1,800 to 900 in the first year.

Mr Smith : Definitely—RBT, but all of these things together. I am naturally pro-aviation so I am going to mention the positives of aviation.

ACTING CHAIR: I will just hold you up, because so far we have been going for about 40 minutes and we have had two questions asked.

Mr Smith : Certainly, I will let you go.

ACTING CHAIR: Senator Xenophon, do you have another question? And can we concentrate on Airservices, please. That is what this inquiry is about.

Senator XENOPHON: You heard the evidence from Airservices. What is your view? Is it functioning well or is it a dysfunctional organisation, in your view, in the context of aviation? You heard my question about what appeared to be a near miss with a double go-around at Melbourne Airport on 5 July. Do you think that the ADS-B system will cause some general aviation operators and small commercial aviation operators to cut corners?

Mr Smith : Yes. What it will do is move money from important safety issues to an issue which is not going to improve safety in any measurable way for these aircraft. You will find the ones who stay in business will do less flying training. The extra things that every small aviation company should do, they will do less. They are forced to by the reality of the marketplace. We also have to be careful about getting below the efficiencies of scale where you end up with an industry which does not have enough maintenance organisations available.

Senator XENOPHON: That poses safety issues in itself, does it not?

Mr Smith : Absolutely. When it comes to airline safety in relation to the incident in Melbourne, I would not make any comments until I had all of the information. So I do not know enough about it, I am sorry.

Senator XENOPHON: That is fine.

Senator RICE: In your submission at point 4, you say that Airservices is functioning as a secret organisation. My concluding question of Airservices Australia was whether they saw that they needed to make any improvements in terms of transparency and accountability, which they did not mention in terms of the key priorities that they were taking on board. Can you expand on that assertion, that it is operating as a secret organisation, and what changes in transparency and accountability you would like to see out of Airservices Australia.

Mr Smith : They are a monopoly; they are not a real business; they are a government-owned monopoly.

ACTING CHAIR: On that issue, you could not have competition and 10 companies doing it, could you? It would have to be a monopoly.

Mr Smith : First of all of the air traffic control towers could be opened to competition. In the United States, 50 per cent of the control towers are contract towers run locally by air traffic controllers who are employed in the town. For the rescue and firefighting service, we are the only country in the world that I know of that runs it as a government monopoly from the capital city. It is just run from each airport and everyone is multitasked.

ACTING CHAIR: In the capital cities, every fire service at every country airport is run from the cities on a monopoly base as well.

Mr Smith : Yes. At Ballina airport there are 17 firemen who are employed from Canberra. They play table tennis. Do they do security work? No they are not allowed to. A decision was made under Mark Vaile and a press release was sent out saying that we were going to open up the small towers and the rescue and firefighting to competition but it never happened. If it is opened to competition—

ACTING CHAIR: Why did it not happen?

Mr Smith : For political reasons I think. The department would have advised the minister, 'Minister, the air traffic controllers might go out on strike or the firefighters might go out on strike if you open it up to competition; so if you don't do anything, nothing will happen,' and nothing happened.

Senator RICE: In response to my question, you were saying a monopoly is an issue.

Mr Smith : Yes. It is interesting—they are in a no-win situation. They try to be secretive because I suppose it is just natural for a bureaucracy to be secretive but as I explained when I was chairman of the combined organisation, there will not be any secrets because people just fall out and they leak and recently documentation has been sent around about OneSKY. It shows the futility of secrecy; it is better to be completely open. This is about aviation safety and what Airservices are. The reason they are still owned by he government is that everyone is so concerned that might go off to some form of competition.

I like the British system where it is half government owned and half owned by the industry. And by the way, all of the approach facilities—Newcastle airport, Bristol airport—are run either by the airport or by the civil aviation air traffic control service provider quotes and sometimes get the contract for the next three years. All of the terminal services are open to competition, which means first of all a very much lower cost and secondly a high level of safety because if you have too many incidents it is pretty obvious you are not going to get the contract next year.

It is exactly the same with flying in planes. There are certain international airlines people do not fly with because they have accidents; people know very quickly which is the safest service provider. Often air services claim commercial-in-confidence when there really should not be anything that is commercial-in-confidence. I know when I was chairman of CAA nothing I ever saw could be considered to be commercial-in-confidence because we were a monopoly. We were owned by the government.

Senator RICE: Yes, there is no competition.

Mr Smith : There is no competition; no-one can compete with us.

ACTING CHAIR: On the firefighting service, wasn't there a trial in Townsville about opening it up to competition? Are you aware of that?

Mr Smith : I think there was, but it was kept pretty secret.

ACTING CHAIR: I do not think it was very successful, either. And why?

Mr Smith : They would make sure that it would not work, I suppose. But, as to running fire engines, what I have been told is that, at an airport like Ballina, the best thing to do would be to have a small truck, like an Isuzu truck, and to train the existing airport personnel to do the fire service—they would go off and do a course every year—and the small tender is to get to the aircraft quickly, because it appears that you need to get to the aircraft within a couple of minutes; what you can do in the first few minutes is what is going to save lives.

ACTING CHAIR: If you have a fire with a heap of fuel, you need to get there quickly.

Mr Smith : Absolutely. Our criterion for the fire engines is obviously quite ridiculous at the moment, because, in other countries, first of all—

ACTING CHAIR: Who sets that criterion—Airservices?

Mr Smith : No, it is set by CASA, and they have accepted an ICAO recommendation—

ACTING CHAIR: What is ICAO?

Mr Smith : The International Civil Aviation Organization. But it is obviously completely ridiculous, because what you would do and what other countries do is to help prevent the chance of an accident happening in the first place. So what happens at a small country airport is: first, you get a radio operator at the airport, because the common problem is someone on the wrong frequency; it is called a Unicom. Then the next thing you get is class E controlled airspace. In America, any airport with airline traffic has controlled airspace.

ACTING CHAIR: I live in Inverell. I fly out in a Baron three or four times a year. We could not have—

Mr Smith : In America, that would be class E controlled airspace. Every airport—

ACTING CHAIR: But what I am saying is: you would not have a full-time radio operator sitting there—

Mr Smith : No. You see, this is the thing: it is done from—at the moment, the airspace in Inverell is uncontrolled airspace, but there is an air traffic controller responsible for that airspace talking to you on the radio and giving you traffic information. The change is: you make it controlled and you separate traffic. At Inverell, if there is only one plane an hour, there is no extra workload.

ACTING CHAIR: It would be less than that.

Mr Smith : But if there are two planes at once, then the air traffic controller will ask one to hold. Let me just finish this. So the criteria in other countries are: you prevent the accident in the first place, and then you put a control tower in, and then you eventually meet the criteria for a rescue and firefighting service. At Ballina, we have reversed the whole thing—we have put in a fire station worth $12 million, with, I think, 17 staff. We have not even a radio operator to check that your radio is on the correct frequency; there is no controlled airspace and no tower. It is completely reversed on common sense and logic.

ACTING CHAIR: How many flights a day into Ballina would there be now?

Mr Smith : There is quite a large number and quite a large number of passengers, but to put in a fire station to pull burning bodies out of planes when you do not even have any controlled airspace or even a radio operator to help prevent the accident happening in the first place is just completely incompetent.

ACTING CHAIR: Senator Rice, did you have another question?

Senator RICE: I want to go back to Senator Xenophon's question about the interaction of OneSKY being introduced and the fact that there are no plans to increase the amount of controlled airspace. What you have outlined is: we have ADS-B—expensive—being imposed upon general aviation to no benefit, because they are all flying in uncontrolled airspace. But there are no plans to increase the amount of controlled airspace.

Mr Smith : And, by the way, there is a plan called NAS—it was in a plan approved by a committee which Sir Angus Houston and I were on. It was policy under Mark Vaile, but it seems—

Senator BULLOCK: What year was that?

Mr Smith : It was in 2006, I think—anyway, when Mark Vaile was the minister responsible. That suddenly disappeared from the policy, and so there is no policy at the moment to put any controlled airspace in, and that is why, even though there has been some extraordinary publicity in The Australian newspaper, they actually announced they were going to increase the controlled airspace from 8½ thousand feet down to 6½ thousand feet. That is actually going to reduce safety because you then have less time to self-separate—to become your own air traffic controllers. It is just complete madness. It is all because Airservices is so lacking in leadership to have someone say: 'This is ridiculous! If America does it at every airport, let us do it at one airport. I want controlled airspace operating from the Brisbane centre to be trialled at Ballina airport. How long will it take us to do it?'—and they would take six months at least to sort out the maps and six months to train the controllers—'Okay, in 12 months' time, we are going to put in a trial for 12 months.' In over 20 years, that has not happened—there has not been one person who has said, 'Let's move forward from the 1930s.'

Senator RICE: So, basically, what you are saying is that, for all of the reasons that you have been discussing, it would be desirable to have more controlled airspace but OneSKY is inconsistent or there are problems with OneSKY as it is being rolled out if we went down the track of having more controlled airspace.

Mr Smith : Absolutely. Another problem I see with OneSKY is—if I can read this out to you: 'Most importantly, it seems as if a combined air traffic control system won't be able to reconcile the completely different missions of two organisations—ie., the strategic planning and orderly flow of civil traffic maximising flight efficiency supported by a comprehensive flight data process via the tactical and largely unplanned nature of military operations.' I do have a problem that OneSKY could be another Super Seasprite disaster. The Super Seasprite disaster was effectively covered up. I do not know why it was covered up, but $1.4 billion of our money was just lost. It could have bought a number of hospitals. What happened there was that the military decided to get this special helicopter made that was different to the rest of the world.

Senator RICE: We are good at that.

Senator XENOPHON: Yes, it is a complete disaster.

Mr Smith : It was a complete disaster, but—

Senator XENOPHON: But then it was fixed up by the Americans and they sold it to the Kiwis for a complete bargain—correct?

Mr Smith : No, it was never fixed up, and I think the Kiwis have some of the helicopters as spares or something.

ACTING CHAIR: Getting back to Airservices, are these fire stations and air traffic control controlled by CASA or Airservices?

Mr Smith : Airservices.

ACTING CHAIR: They are responsible?

Mr Smith : Absolutely.

ACTING CHAIR: They make the decision about the fire trucks—how many, when they go in, what model, how many staff et cetera?

Mr Smith : They are completely employed. Go to Ayers Rock—

ACTING CHAIR: Airservices have the complete say in that?

Mr Smith : No. The Civil Aviation Safety Authority sets the criteria that say with a certain number of passengers or movements you need to put in a fire service.

ACTING CHAIR: So CASA sets that fire service regulation.

Mr Smith : But Airservices have the monopoly in Australia—

ACTING CHAIR: But what I am saying is that CASA makes the rule. It says Ballina has 62 movements a day and so many passengers; therefore you have to have 17 firies and five fire trucks.

Mr Smith : Absolutely.

ACTING CHAIR: So CASA sets that.

Mr Smith : That is probably a rule that came in with avgas powered aeroplanes, when planes all burst into flames.

ACTING CHAIR: Have you met with Mr Skidmore?

Mr Smith : Yes, definitely.

ACTING CHAIR: I am very impressed with that man. He came to Armidale and addressed the Armidale Aero Club at my request when he was not long into the job, and he came into my office. His goal is to have more people flying. Were you received well by him? Did he listen to your ideas about the policy? You want more people flying; he wants more people flying.

Mr Smith : I want more people flying. By the way, you might think that is the opposite to wanting more controlled airspace. If putting in controlled airspace means more air traffic controllers and higher costs, I do not want that, but I really believe we can have controlled airspace at most of these busy country airports without any extra costs.

ACTING CHAIR: Where do we get the savings? If we are going to put air traffic controllers seven days a week into, say, Bathurst, Orange or Dubbo—

Mr Smith : Let me explain to you. You are not putting controllers in a tower; you are using the existing controllers, who do the en route airspace, to also do approach work, which is what happens in other countries. In Australia, if you got to Bathurst the controller has to say, 'Traffic is'—and he gives all the traffic, and then you become your own air traffic controller. In the international system, the controller would tell you what to do, and it is the en route controller. We have never done that. In the history of Australia, we have never used an en route controller, who is doing the traffic flying along en route, to do approach work, and that is what we have to do.

Senator BULLOCK: Thank you for the enormous amount of information, a proportion of which I have actually understood. Certainly I have taken on board the regulation impact statement. I think that 2009 statement is something that we should suggest be reviewed.

Mr Smith : Thank you.

Senator BULLOCK: I am not going to delay the committee by asking a question, but, for the sake of disclosure, I need to put on the record the fact that the union of which I am president has a significant number of members in the retailer that bears your name.

Mr Smith : Wonderful, thank you. I did not know that. As you probably know, I sold Dick Smith Electronics about 35 years ago, but I am very proud that it is still Aussie owned. It has a turnover of $1.4 billion and was a little business that my wife and I started with $610 in 1969—only in Australia. That is, by the way, why I think I need to spend a lot of my time at the moment in trying to get these important reforms finished.

ACTING CHAIR: I will put the question: how much of what Dick Smith sells is actually made in Australia now? Probably very little.

Mr Smith : Very few, because my belief has always been—

ACTING CHAIR: Because electronic gear has all come from overseas.

Mr Smith : No, my view is that you always sell the best and the best electronics are made—in my day it was in Japan and the best watches in Switzerland. It just so happens that we Aussie farmers grow the best food.

ACTING CHAIR: Do we ever!

Mr Smith : So that is why I support Aussie farmers with food.

ACTING CHAIR: I am glad to hear that. I have to ask you one question regarding your statement and then we are going to have to wind it up. Why did you not complete the reforms? You said when you kicked off it was 1990s, What happened there?

Mr Smith : Because I completed my term—

ACTING CHAIR: As—

Mr Smith : As chairman of the Civil Aviation Authority, and I naively thought, 'Everyone is so enthusiastic and so supportive,' but I did not understand the bureaucracy. In my businesses when people worked for me they would stand up and say if they did not agree with me, but what happened when I finished my term at the Civil Aviation Authority was that I found that within months they started to either stop the reforms or reverse them. Ever since then there has never been a move forward with these reforms, because it is hard work to bring in change. They will be in the newspapers every day with people criticising them, and that is the difficulty. Normally what happens in aviation—the message here is that these changes are made when you have accidents. It would be great to bring the change in before we had the accidents.

ACTING CHAIR: You had some problems too with the CO and the board at the time, didn't you, when it came to—

Mr Smith : No, that came after me. Frank Baldwin was the New Zealander we brought in. If you remember, there was the tax contact—

ACTING CHAIR: Mr Toller—didn't you call a Sunday meeting or something to have him dismissed and the board voted for him and not you?

Mr Smith : Yes, when I was back at the Civil Aviation Safety Authority I had put Mick Toller on. Within six months we realised he was not going to do any reform, so I said he should go but the minister said, 'No, he can't go.'

ACTING CHAIR: The minister or the board?

Mr Smith : The minister.

ACTING CHAIR: Anyway, that is all history. The main thing is—

Mr Smith : It is all history, yes.

ACTING CHAIR: Exactly. The main thing is affordable flying and safety, and this inquiry into Airservices doing their job efficiently. Please continue on.

Mr Smith : Do you mind if I just finish this bit I was saying about the OneSKY policy? The OneSKY has somehow got off track, because what Sir Angus Houston said in a document in 2002 was:

Australia simply cannot justify, sustain or afford to continue operating two almost identical air traffic management systems.

At that time I think Allan Hawke was the head of the defence department and it was decided that, instead of having separate air traffic controllers in the military, they should come over and be with Airservices, because we are a very small country. The ATSB has shown there are quite a few safety incidents at the military controlled airports. Darwin airport has 95 per cent civilian traffic but it is run by the military. Somehow that got changed—in other words bringing the air traffic controllers into Airservices—to buying a radar system that will do both jobs. My gut feeling and advice I have received is that no-one has ever done that in the world—this is the OneSKY, military and civilian. People have pointed out, 'Dick, it would be similar to Tony Abbott saying, "I need to get the new VIP fleet but we won't buy it from Boeing or Airbus; we're going to get something made that will have rockets underneath the wings so it is a combined aircraft."' You would just say, 'That is ridiculous.' You want to buy something prudent.

ACTING CHAIR: You are saying the OneSKY proposal is ridiculous?

Mr Smith : I am saying people are saying that it will not work to try and buy a combined system. It will be like the Super Seasprite. I do not know enough about it because it is so incredibly complex, but we do not want to find that we have given these blokes, who are competent people, a job where they say in five years time, 'We told people that to try and make an air traffic control system operate military traffic—where you want to identify completely non-planned flights—and operate civilian traffic at the same time is not really possible.' That is what worries me. I would have thought it would be better to keep the civilian air traffic control system as a civilian system. Time will tell if they can get it to work—let's hope they can.

ACTING CHAIR: With that, we have to wind it up. Thank you for your attendance, your input and your experience. Thank you, Hansard, for your work, and thank you, members.

Commi ttee adjourned at 20:04