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Thursday, 19 November 1959


Mr TOWNLEY (Denison) (Minister for Defence) . - by leave - I move -

That the bill be now read a second time.

The purposes of this bill are to facilitate development of the business potential of airports so as to obtain the maximum economic return from land, terminal buildings and other facilities not required for operational purposes and to meet the requirements of the travelling public for goods and services.

The value of Commonwealth aerodromes and related facilities at present is approximately £52,000,000 and the annual cost of maintenance and operation exceeds £9,000,000. These figures will rapidly increase as further aerodromes and facilities are brought into operation. At present a portion of this cost is recouped through air navigation charges amounting to approximately £550,000, taxes on aviation fuel amounting to approximately £1,200,000, rentals of premises amounting to approximately £250,000, and business concessions amounting to approximately £50,000. But this leaves a gap of approximately £7,000,000 between revenue and expenditure.

Overseas experience, especially in the United States, has shown that major airports can become virtually self-supporting if their business potential is properly developed, and many countries are making special efforts to reach that position. For example, the United Kingdom Select Committee on Estimates at its 1955-56 session on civil aerodromes and ground services recommended that " more urgent measures should be taken by the Minister to develop amenities and concessions at airports ". The Seattle-Tacoma Airport, as a further example, is an airport with traffic density comparable to that of Sydney or Melbourne and is associated with a city with a smaller population than Sydney or Melbourne. According to that airport's financial report for 1957, airport revenue not only met all maintenance, operating and other costs, but returned a profit of 79,300 dollars. This result was largely due to commercial development of the airport, non-aviation revenue comprising 57.5 per cent, of the total revenue. Larger airports in the United States, such as Los Angeles, returned profits exceeding 2,000,000 dollars.

Under arrangements which this bill will facilitate, it is estimated on a conservative basis that revenue from business concessions on major airports will reach £160,000 by the end of 1960 and may exceed £500,000 within a few years. These financial benefits will, of course, be coupled with better facilities to meet the, needs of the travelling public. The current development of passenger terminal facilities at major airports will further increase the business potential at those airports.

Some of the types of businesses which have succeeded at overseas airports are - advertising, baggage rooms and lockers, banks, barber shops, beauty parlours, car parking lots, children's nurseries, cocktail lounges, coffee shops, conducted tours, delivery service, drive yourself car service, flower shops, gift shops, insurance machines, news stands, photographers, restaurants, service, stations, snack bars, tobacconists, and vending machines. Market research conducted from time to time by the Department of Civil Aviation indicates a positive and urgent demand for the goods and services supplied by these types of businesses.

The scope for the development of these activities is indicated by the size of the ready-made market, for example, at Melbourne airport, where there a

In order to develop business concessions at airports, it is necessary to make some changes in existing administrative arrangements. Under existing legislation - I refer to the Air Navigation Act 1920-1950- there is provision for the establishment, maintenance, and operation of aerodromes including conditions for their use. There are also provisions to the effect that the DirectorGeneral of Civil Aviation is responsible, subject to the Minister, for the control and management of Commonwealth-owned aerodromes. This undoubtedly contemplates important responsibilities relating to the development of business concessions at aerodromes. However, insofar as business concessions require the granting of leases or licences, the Department of the Interior at present has the primary statutory responsibility by virtue of the Lands Acquisition Act and the Administrative Arrangements Order. There has been, therefore, a division of responsibility which, it has been found in practice, retards the rate of commercial development.

Under this bill, control of leases and licences and the granting of business concessions within Commonwealth airports will be the administrative responsibility of the

Department of Civil Aviation. This will effect a substantial saving of time and administrative costs. Other land acquired for civil aviation purposes and the acquisition and disposal of land, including aerodrome land, will continue to be governed by the Lands Acquisition Act and remain within the administrative responsibility of the Minister for the Interior.

I will now briefly outline the main provisions of the proposed legislation. The bill is expressed to apply to aerodromes owned by the Commonwealth and operated in pursuance of the Air Navigation Act and regulations. It also applies to any part of a military aerodrome which has been made available for civil aviation purposes as the result of arrangements made by the Minister with the appropriate defence authorities. The most important military aerodromes which may be affected are Darwin and Canberra where parts of the aerodromes have been set aside for terminal buildings and other facilities necesary for civil aviation purposes.

Clause 6 of the bill provides that the Minister may, on behalf of the Commonwealth, grant leases and licences in respect of land within an airport on such terms and conditions and subject to the payment of such rent or other consideration as the Minister thinks fit. This power of the Minister to grant leases and licences is subject to reasonable restrictions. Clause 11 provides that in the case of building leases, or an authority associated with such a lease, the term granted shall not exceed 99 years. Very long terms are necessary, of course, where the lessee is involved in heavy capital expenditure for buildings. In all other cases of leases, licences or authorities under the act, the term granted by the Minister may not exceed 21 years. The Minister is also required to call public tenders in every case except where the term of the lease, licence or authority does not exceed three years or where the grant is made in pursuance of an option of renewal.

Clause 7 prohibits the sale or supply of goods or services within an airport or the carrying on or soliciting for any business except in accordance with the terms and conditions of an authority issued under the act. It is important for the operators of a;r services that business activities connecter! directly with the operation or maintenance of aircraft or the promotion of airline business, as, for example, the supply of aviation fuel, maintenance services or catering for meals to be consumed aboard aircraft, should not require special authorization. Clause 7 (3.) therefore provides that such activities may be conducted without any special authority.

Clause 8 authorizes the Minister to grant an authority to engage in business activities at airports for such period and on such terms and conditions as the Minister thinks fit and provides that the authority may be included in or granted in relation to a lease or licence.

The most important clause in the bill is unquestionably clause 9. Sub-clause (1.) of clause 9 provides that the holder of an authority may act in accordance with the authority without obtaining or having any other authority, licence, permit or registration. Sub-clause (2.) provides that the Minister may, having regard to the special needs of the travelling public, specify, in the terms and conditions of an authority, the days on which and the times during which the authority may be exercised, and the authority may lawfully be exercised on those days and during those times. The intention of this clause is to permit the conduct of all businesses, other than the sale of intoxicating liquor, outside normal trading hours, but only in circumstances where the extension of trading hours is necessary to meet the needs of the travelling public.

Sub-clause (3.) provides that an authority to sell or supply intoxicating liquor shall contain terms and conditions under which the holder is subject to requirements, prohibitions and restrictions as to the days on which, and the times during which, such liquor may be sold or supplied, corresponding to those that apply under the law of the State in which the airport is situated. Apart from restrictions as to days and times of trading, the authority must also impose other prohibitions and restrictions corresponding as nearly as possible to those that apply under State laws. Sub-clause (4.) requires an authority to contain terms and conditions necessary for the purpose of preventing the sale or supply of goods or services to persons resorting to the airport solely or principally for the purpose of purchasing or obtaining goods or services outside normal trading hours. Finally, subclause (5.) provides that a lease, licence or authority under the act does not exempt a person from compliance with other laws of the State or Territory in which the airport is situated. Before discussing the provisions of the clause in greater detail, I think I should complete my outline of the provisions of the bill.

Clause 10 requires an authority to contain terms and conditions in relation to the inspection of premises and the sampling of goods, and also authorizes the Minister to make arrangements with the Governor of a State for the performance by members of the State police force or Public Service of any work required by the Commonwealth, including the payment for any such work. This clause, therefore, makes it quite clear that in appropriate circumstances the Commonwealth may make full use of State personnel in the administration of requirements of the Commonwealth which are based on State law.

Clause 12 has the effect of saving existing leases and licences which have been granted by the Commonwealth before the date of commencement of the new act. Other provisions of the bill deal with evidentiary matters, delegations and the making of regulations.

The provisions of the bill relating to the sale of intoxicating liquor are designed to meet prevailing points of view of the various States, as manifested in their licensing laws, to the fullest extent consistent with the Commonwealth's constitutional position.

As regards intoxicating liquor, clause 9 maintains the principle that a licence under State law will not be necessary, but at the same time provides for terms and conditions, operating by force of federal law, corresponding to those applicable under State law. While the clause excludes State laws which might require an authority, licence, permit or registration it recognizes, however, that the terms and conditions of an authority under the act could themselves require the holder to obtain or have an authority, licence or permit under State law or under some other Commonwealth law.

It would be quite wrong to suggest that the bill usurps State powers and functions in this regard, since section 52 of the Constitution provides that Parliament shall have exclusive power to make laws relating to places acquired by the Commonwealth for public purposes. The word " exclusive " means, of course, that the power is to be exclusive of the power of the Parliament of the State. It is envisaged that where a State has laws relating to the sale of liquor which, in fact, meet the needs of the travelling public, the Commonwealth authority may require the concessionaire to obtain a State licence and to comply with all its provisions.

It follows, therefore, that State governments retain substantial initiative, because in any case where a Commonwealth authority is issued it must contain conditions and restrictions especially those relating to the days on which and the times during which liquor may be sold, corresponding with the provisions of State law which would be applicable in the State in which the airport is situated.

I should also emphasize that there is certainly no intention of authorizing the sale of liquor at any airport unless the volume of traffic passing through the airport fully warrants the establishment of this facility. I do not envisage that during the foreseeable future it will be necessary to authorize the sale of liquor at more than six or seven airports throughout the Commonwealth and its Territories.

In proposing this bill I am conscious of the need to ensure that the ever-increasing costs of operating and maintaining our civil airports do not remain a burden upon the Australian taxpayer. Other countries have proved to us that with proper commercial development of civil airports we can, under legislation such as I have outlined, do much to offset these high but very necessary costs. I am also equally conscious of the growing demand of the travelling public for adequate facilities at Commonwealth airports. There is a rapidly growing public demand for the type of airport facilities with which the bill is concerned, and it is essential to lay sound foundations for future development in this direction. I would emphasize that the bill does not mean that the Commonwealth will engage in business activities on airports. On the contrary, its purpose is to facilitate the extension to private enterprise of excellent opportunities to develop the valuable business potential which is generated on these airports.


Mr Calwell - Ansett will be the chief beneficiary.


Mr TOWNLEY - I do not think that Ansett runs beauty salons and shops. Although civil aviation in Australia has kept pace both technically and operationally with other world leaders in the field, we have not until more recently been able to devote much effort to the provision of facilities and services required by the travelling public and other users of our airports. I feel certain that the scheme contemplated by this bill presents the satisfying prospect that, with greatly increased passenger facilities of many varieties, and with the resulting increase in airport revenues, our major airports will soon compare favorably with the more attractive and successful airports overseas. I commend the bill to honorable members.

Debate (on motion by Mr. Calwell) adjourned.







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