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

LANGFORD, Ms Anita, Acting First Assistant Secretary, Aviation & Maritime Security Division, Department of Home Affairs

PEDLER, Mr Matthew, Assistant Secretary, Air Cargo Security, Department of Home Affairs

STANLEY, Ms Alice, Acting Assistant Secretary, Aviation Security, Department of Home Affairs


CHAIR: Welcome. The committee has received your submission, which is numbered submission 168 and published on our website. Would you like to make any amendments or additions to your submission?

Ms Langford : No, thank you.

CHAIR: In that case, Ms Langford, would you or anyone else wish to make a brief opening statement?

Ms Langford : No, we don't have an additional statement to make.

CHAIR: I reckon you'd have a lot to talk about when it comes to aviation and maritime security.

Senator O'SULLIVAN: Ms Langford, the focus of my interest relates to the pending changes for security arrangements around what I call provincial airports. I'll try to cut straight to the chase: isn't it the case that we've set in play arrangements directly with local government and others about empowering them to be able to finance any changes or modifications of these airports in anticipation of a change in the law?

Ms Langford : There are two classes of airports sitting within that scenario. There's a class of airports that is already captured by screening arrangements. That's most of them. Those airports are already captured by the legislation, and they will be upgrading equipment. Then there's a smaller class, as you mentioned, of more provincial airports where they will need a change to the regulations to be captured as what we call screening airports.

Senator O'SULLIVAN: All right. Let's focus on them. At the moment, has the government not extended finance arrangements for those particular airports to prepare themselves for those changes?

Ms Langford : Where we are with that process is that airports have made applications for the regional security fund. Those applications are with the grants hub. They are in the process of being looked at by the grants hub. No money has been paid.

Senator O'SULLIVAN: Okay. But the burden of where I'm going is the chicken-and-egg effect. Will it require changes to legislation or will it simply require changes to regulation in terms of the security arrangements of these smaller provincial airports?

Ms Langford : In order to make those smaller airports screening airports, there will need to be a change to the regulations.

Senator O'SULLIVAN: Only to regulations?

Ms Langford : Correct.

Senator O'SULLIVAN: To which the minister can exercise his or her discretion without further ado.

Senator PATRICK: I think they said it was a disallowable instrument.

Ms Langford : It is a disallowable instrument.

Senator O'SULLIVAN: Nonetheless, the minister can exercise his or her discretion to put a regulation in place. They don't require the parliament to support that, except if someone brings a disallowable motion. Correct?

Ms Langford : Yes, but there is that option for that disallowance motion.

Senator O'SULLIVAN: That exists for most of these regulations. The point I'm trying to get to is the chicken-and-egg effect here. We haven't changed the law. We haven't been through the argy-bargy that is involved in changing the law, and yet we've already anticipated what the outcome will be.

Ms Langford : I guess there are two parts to that. When you're dealing with aviation security you're dealing with quite long lead times in terms of getting equipment, planning and making infrastructure changes. There always needed to be a judgement about sequencing, especially as the majority of those airports that have access to these grants are already captured. It's important not to hold them up.

Senator O'SULLIVAN: But, Ms Langford, in response to that, why doesn't the minister exercise his or her discretion to put the regulation in place at the front end of this process? The regulation is well known to everybody. We know what it's going to say and what the implications of it are. Why not put it in place, see how it flies and give a lead time of six or 12 months for these airports to get up to stock and go through this process?

Let me go the other way: were you involved in any of the assessments about the impact that this would have on the economy of not just small airports but small regional shires around the country? I'll set the scene. I've been told by the local government authorities in Charleville who'll be responsible for this that they're going to have, I think, eight staff who'll be required to work 1½ hours or whatever the minimum period is each day and that's it. They don't know what they're going to do with them for the balance of the time. We're already dealing with airports where people are struggling with the cost of essential movements. These aren't trips going to the football. These are trips going down to get chemotherapy or returning to school because they don't have a school within 1,400 kilometres of where they live. As a government, we're about to bang this massive cost on the local authorities. They say not all of it's going to be passed on, but they'll do what they can. What test was done within your department who is introducing this? Is it correct that this regulation will come from your end of town?

Ms Langford : It will be our minister, yes.

Senator O'SULLIVAN: What test was done about the social and economic impacts on these communities—these local authorities? If there was some done, just tell me and we'll take it on notice and you can send us the results of that assessment.

Ms Langford : Our policy model around security is about looking at the threat and from that we take advice from the intelligence agencies. We also take advice from the experts, like the Inspector of Transport Security. Then, being very cognisant of those impacts that you're describing, we try to make sure that whatever we need to do to meet that threat is the leanest possible option so that we're not—

Senator O'SULLIVAN: If you're cognisant of it, it means that your department has done a physical cost-benefit analysis, if you like. Even though that won't have any impact on the decision, we know that this is going to proceed. So, if you're cognisant of it, work has been done on the economic and social impacts?

Ms Langford : Work is being done to understand the impact of the infrastructure investment in screening equipment that people will need to make.

Senator O'SULLIVAN: No, we understand that; we accept that. I'm asking about the knock-on impact to the economy of those shires and to the travelling public in Charleville and another two dozen places. If the answer is 'no', let's just get it out of the way. If your department, who's responsible for this, entered into this arrangement with a security focus, I get that. The crosshair is: let's make this airport and the travelling public through this airport safe. That is the perfect ideal. If you haven't done any impact assessment of the knock-on effect to the economy, to the airport, to the local authority and to the travelling public, just say so. If you have, I'm going to ask you to provide us, on notice, with the data as a result of your effort.

Ms Langford : The decision to move forward with the assistance package was a decision that was pushed through the budget process with all of the governance processes that that brings with it.

Senator PATRICK: There's no budget item that covers the operating cost of the security equipment. I'll be very clear: we're focusing on the effect of that operating cost on the airport that then flows through the community. So we're not interested in the grant for security equipment that you have just taken applications for.

Senator O'SULLIVAN: Ms Langford, you're an undersecretary. On Monday morning, you call Fred and Betty in: 'Fred and Betty, you're the team. You're going to go to Charleville next week, you're going to go to Port Macquarie the following week and you're going to go here the following week, and you're going to do an economic study of the impacts of this regulation on that community.' And there might be a third person, of either gender, who doesn't have a name; I get myself into a lot of trouble around this. There could be three of them. You say to them, 'You will come back to me and you will give me a written report that will have the data that you've collected and your professional view on the impacts.' Does that exist? If you go back to the filing cabinets at your department, can you flick through—I'm old-fashioned—and pull a file out, hit a key and print a file that will give us that information? If it doesn't exist, just say so.

Ms Langford : If what we're talking about here is operating costs—staffing costs and that sort of thing—then, within our existing policy framework for security settings, which is that industry bears the cost of that, that isn't something that is part of the work that we've done, because historically it's been about putting support through capital, basically.

Senator O'SULLIVAN: But, of course, that support was never intended to be ongoing operational support.

Ms Langford : No.

Senator O'SULLIVAN: To capture this—tell me if I'm wrong—there has been no economic impact assessment done of the implications of the pending regulation on this cohort of airports that would assist this table to determine the impact on the local economy and the social implications of that, the impact on the cost of the operation of the airport and the impact on the travelling public?

Ms Langford : I can certainly say that, in terms of security, we've done the analysis. I can't say what my colleagues elsewhere in government have done in terms of the other analysis.

Senator O'SULLIVAN: I didn't bring security into that question. It's nothing to do with security. I'm particularly exercised about this because, sadly for committee members, we've sat in the lounge rooms of the people who are going to be impacted by this. In some of these provincial airports you will get the ultimate security outcome, because the services will be terminated. That would have been quite predictable had anyone taken the time to have a look at the cost and the economic and social impacts of a decision of government. But it would seem to me we're driving this the other way. It really doesn't matter what those things are. We accept now that we don't know what they are. We don't, and you don't. The legislator and the regulator do not know. I don't know. We haven't been able to find out off anyone. But, despite that, we will make the rule and we will follow it through. These impacts will occur. That's what we're dealing with, Ms Langford. That's what we're dealing with.

I have to tell you, I probably won't be in the parliament when the time comes. I am a member of the government. I would move a disallowance motion on some of these where I'm satisfied that it's going to impact on the public and where I'm satisfied that particular services are going to terminated because of it. I really think your department ought to have a thorough look at this. You should pick a couple of samples and see what the impacts are.

Senator PATRICK: I will just add to that. I will just put to you that this is what Qantas told this committee in Darwin:

Like all of the costs we've talked about, airport charges and others, on relatively marginal routes, there is always a tipping point. In the South Australian market, where we operate two Dash 8 Q300 50-seaters to Port Lincoln, Whyalla and Kangaroo Island, the impost of additional security charges to the level that you have described we think would be critical, in that it would move us beyond the tipping point of viability and put those services at risk.

I can also read from Rex airlines, who made a similar statement in Mount Gambier.

… if then the overhead of the company has to be carried by half of the routes, then that starts to make those viable ones suddenly unviable because the overhead is going to be a heavier burden on them.

They are talking about circumstances where, as it turns out, in some places the security charge is made even though they have a 34-seat aircraft. That's what we're staring down the barrel of. We're staring down the barrel of airlines saying they will shut down routes. Even when they don't, we have heard evidence that it will cause costs to go up that will decrease the amount of travel and it will affect access to travel.

As a South Australian senator, reading what Qantas has said—and they are going to provide the committee with more evidence—I will be in the next parliament and I will move a disallowance, in which case you're going to have to come up with the good reasons why you wish to do this. It appears to me that it hasn't been done yet. None of this has been done. I will be shouting from the inside of the chamber as loudly as I possibly can that this is going to affect regional communities and, on your own evidence, you haven't even considered those effects.

Ms Langford : No. We have considered the effects. That is why the contribution is being made in relation to supporting equipment purchases. Clearly, our responsibility is to ensure that the travelling public is secure. In establishing what the travelling public needs to be secure, there is a cost associated. We are very conscious of it, but we haven't capriciously put in place or proposed settings that we don't think are absolutely necessary to keep the public secure.

Senator O'SULLIVAN: On your own evidence—I'm sorry, Senator, but it's an extension question. I settled down because you had accepted that a cost analysis hadn't occurred. You don't know the cost impact on these communities beyond putting a screening box there and—I don't know—a bloody trail gate there or something else there. That's what you know. But you don't know what impact that will have on the community. You just know the cost to put that in. That will drive, I imagine, the support that government has in its mind to provide the hardware. You don't know the impact on these communities one little bit.

Senator PATRICK: You are very aware that the cost, because—

Senator O'SULLIVAN: Let Ms Langford correct me. Let her tell me that she does know. I will then have the conversation about, chapter and verse, when we're going to get a copy of how you know. There has to be some physical report or analysis done. Do you know or don't you?

Ms Langford : I think you are looking for an economic analysis on operating costs, which I am unable to provide to you. But I can say that we have proposed these settings to government with a view that they are necessary to keep the travelling public secure.

Senator O'SULLIVAN: How have you become cognisant of it? What have you relied upon to become cognisant of it, which suggests that you have some broad scope of understanding about the impact? What have you relied upon? I want it. That's what I want.

Ms Langford : We've relied on quite extensive consultation with the airports. We started talking to the airports on budget night, and we've continued that conversation ever since. We're still talking to them; I'm meeting with an airport this afternoon. We're listening to them, we're listening to their representative bodies and we've offered to work closely with them—so we have heard their stories.

Senator O'SULLIVAN: All right. Have any of them shared with you the tenor of what I'm sharing and what my colleague at the end there is sharing? Have they said to you, 'Hey, Ms Langford, this is going to have a big impact on us'?

Ms Langford : Yes, they've certainly spoken to—

Senator O'SULLIVAN: So you are cognisant, then. Your level of cognitive knowledge here is that what you're doing is going to have a serious negative economic impact on these communities, based on the only source that you've relied upon to become knowledgeable on the subject? Is that correct, Ms Langford?

Ms Langford : No, that's not correct. I'm not in a position to establish what the economic impact is.

Senator O'SULLIVAN: You said that you have a level of cognitive understanding; is that correct? That bit's correct?

Ms Langford : I have listened to the airports, yes—

Senator O'SULLIVAN: No, Ms Langford. Honestly, I've got things to do this afternoon but I can stay here if I need to.

CHAIR: This can go on all day, if we need it to. You need to answer the question.

Senator O'SULLIVAN: All day. You have a level of cognitive understanding of the impacts; correct? That's your evidence; I'm not trying to put words in your mouth, that's your evidence. Let me do it another way: do you have a cognitive level of understanding of the impacts?

Ms Langford : Are you asking me whether I have an analysis of the impacts, or are you asking me whether I have heard what people have said to me?

Senator O'SULLIVAN: No, I'm repeating your words back to you, Ms Langford. You said it to me—you used the word 'cognitive'. I have trouble pronouncing it! You said to me, 'We have a cognitive understanding of the impacts.' Let me turn it into a question: do you, Ms Langford, have a cognitive understanding of the impacts?

Ms Langford : I've heard airports tell me what the impacts are.

Senator O'SULLIVAN: Do you have a cognitive understanding of the impacts? It's your language—your evidence—

Ms Langford : I'm trying to understand what you mean by the word 'cognitive'.

Senator O'SULLIVAN: All right. Let me go—this is about the ninth time I've described it, and if you need to take notes you should: you're going to introduce a regulation that's going to impact on these provincial communities. That impact will be on infrastructure costs, it will be on operating costs and it will include things, in some cases, like the extension of buildings which are not designed to accommodate the new superstructure of the assets which have to go in. It will then mean that those costs have an impact. They will have an impact on the budget of whoever is responsible for operating that airport. They will endeavour to pass those costs on, normally into passenger costs—slices of passenger movements. They'll pass it on to the airlines and the airlines will pay it. And where they can't recover the costs, local authorities will need to meet them if they're the owner of the airport.

Now do you understand, Ms Langford? You come back and ask me any questions so that we get to a point where you do understand what it is I'm looking for—an understanding of those things that I've just described and the impact that they'll have on the communities. Do you understand my question?

Ms Langford : If what you're asking for is an independent analysis—

Senator O'SULLIVAN: Ms Langford, the question before you is: do you understand what I have just said?

Ms Langford : I do understand what you've just said.

Senator O'SULLIVAN: Okay. So let me ask you: did your department, or any other agency on your behalf, undertake any active work that would answer the burden of what I've just described, so that I can go to page 77 and go: 'This is the operational impact on the Charleville airport, owned by the Charleville council. It's going to cost $722,000 per annum. There are 300 passenger movements, so therefore it's an increase of $100 per passenger'? Do you have a piece of paper that you can give us so that I can look at this data?

Ms Langford : No, because it would presume a bunch of assumptions on our part about how your operation operates—what your staffing costs and all of that are.

Senator O'SULLIVAN: Again, I'll return you to the senator. You brought me back into play by saying you had an understanding, but now clearly you do not. Your department does not know the answer to my question about the knock-on impacts of the regulation. You don't know, except some anecdotal evidence given to you by these provincial shires and operators who tell you it will be negative. Is that it?

CHAIR: Are you thinking of an answer, Ms Langford, or are you just not answering?

Ms Langford : No, I'm thinking of an answer.

CHAIR: Okay, only because I didn't know if I had to give some other senator the call. You do understand that some airports could take the decision: 'We can't compete. It's going to cost us. We'll shut down.' Senator O'Sullivan will deal, live and breathe in regional Australia the consequences that that will have.

Ms Langford : I understand that.

CHAIR: That's where he's going. If you don't know, just say so. It's not a hanging offence.

Ms Langford : I just don't want to mislead this committee. The important thing is that so far nobody has said to us that that is what they are looking at doing—shutting everything down.

Senator O'SULLIVAN: We've had evidence—

Senator PATRICK: Have you read any of the submissions to this inquiry?

Ms Langford : Yes.

Senator PATRICK: I know the department made one. For example, did you read Rex's submission? They were quite scathing of the security arrangements. They used an analogy and asked why an aircraft has a security requirement when a bus carries more people than their aircraft do. Have you read any of the submissions to this inquiry?

Ms Langford : I can't honestly tell you that I've read every single one. No.

Senator PATRICK: Have you read some of them?

Ms Langford : Yes.

Senator PATRICK: Qantas's, for example, goes to security.

Ms Langford : Yes.

Senator PATRICK: Virgin's goes to security.

Ms Langford : Yes.

Senator PATRICK: They, in fact, gave evidence to us that they've spoken to you.

Ms Langford : Yes, they have.

Senator PATRICK: They gave us some indication of what was said. In all of those cases they said it would be harmful and it would have a negative effect on their operations. Have any of them said that it will have a positive effect? Qantas couldn't come up with a good reason why, for example, you would treat one of their Q200s differently to a Q300 or Q400 just because it has more seats. They couldn't understand the difference between those two aircraft and why there was this arbitrary 40 seats.

Ms Langford : Did you want me to address the question of 40 seats?

Senator PATRICK: We'll come back to that.

Senator O'SULLIVAN: I'm keenly interested in the answer to the first question. If you don't have an independent recollection, you need to say so. Have any of them said to you that this is going to have a positive impact? Then I assume he'll follow with the question: have any of the carriers or the operators of the airports said to you that this will have a negative impact? That's a pretty simple question. You've met these people. Do you have some independent—

Ms Langford : I'm positive the positive impact is measured in terms of confidence, especially—

Senator O'SULLIVAN: Who told you that?

Ms Langford : I don't want to script anything that Qantas is going to say—

Senator O'SULLIVAN: Ms Langford, please listen to the senator's question. He asked: have any of the carriers—and he specifically mentioned Qantas and Virgin and he mentioned Rex in passing—said to you, 'This will have a positive impact on our operations into these centres?' You can say, 'I can't remember,' you can say no or you can say yes.

Ms Langford : No, not as you've described it, Senator.

Senator O'SULLIVAN: Have any of those three, any other operators or any operators of airports said to you that this will have a negative impact on the provision of services to these destinations?

Ms Langford : Some but not all of those you have listed.

Senator O'SULLIVAN: So have any of them gone as far as to say that it could put services to this location under threat?

Ms Langford : Not to my knowledge, Senator.

Senator PATRICK: So were you surprised by what I read to you about what Qantas told this committee?

Ms Langford : I did read the Hansard.

Senator PATRICK: I want to reconcile what Senator O'Sullivan has said. You said that you aren't aware that anything is going to go so negative as to shut something down, but they've said that. It concerns me. They said:

In the South Australian market, where we operate two Dash 8 Q300 50-seaters to Port Lincoln, Whyalla and Kangaroo Island, the impost of additional security charges to the level that you have described we think would be critical, in that it would move us beyond the tipping point of viability and put those services at risk.

That is their evidence. You've said you've read it, yet, in some sense, you're saying that you're not aware of it.

Ms Langford : It wasn't raised with the department. I've since raised it with—

Senator O'SULLIVAN: Qantas's statement?

Ms Langford : Yes.

Senator O'SULLIVAN: You're saying that, because the evidence was given to a Senate inquiry, it's not your bother?

Ms Langford : No. I did actually call Qantas after that and talk to them about it.

Senator O'SULLIVAN: What have you done as the undersecretary? I assume you have regular meetings with the mob, with the team, in relation to this?

Ms Langford : Yes.

Senator O'SULLIVAN: I'll be asking for agendas and minutes in a minute.

Ms Langford : Sure.

Senator O'SULLIVAN: What did you do with that? Did you go back and say, 'Lads and lassies, we've now got the biggest carrier in the country saying that, as a result of our pending regulations, there may be a reduction of services to some of our Australian citizens in these provincial places'? Did you do that? Did you workshop that?

Ms Langford : No, I went back to Qantas and asked them about it.

Senator O'SULLIVAN: Yes, you did, and I appreciate that, and Qantas told you whatever they told you. But did you internally deal with this piece of intelligence which came to you from your conversations with Qantas and from evidence to this inquiry?

Ms Langford : We will need further assistance from Qantas to understand what they're saying about that before I send things running internally.

Senator O'SULLIVAN: Okay.

Senator PATRICK: It's in their submission. They actually spell out what the costs are. It's in one of their submissions where they talk about making a profit in the order of something like $5 a seat. You know what the security cost is because, in your own submission, you say that the ongoing cost will be between $530,000 and $760,000 per annum. That's the expensive bit. The capital cost is nothing. I guess that's why you've addressed it, because it's a small amount of money. It's the ongoing cost that you've shied away from, and that's the bit that's going to cause the harm. In their submissions, they walk through how that is going to affect the viability of their airline service, and the question Senator O'Sullivan is asking is: when you know that—and you do know that, because you said you've read those submissions and read the evidence—you must react. You must go back to your department and say, 'Well, there's something we haven't thought about here.' I'm just trying to get to what it is you've done in response to what you now know.

Ms Langford : This has been an ongoing process of working with affected airports and their representatives since the budget. That process is still ongoing. We're still listening, as I mentioned—

Senator PATRICK: Where is it heading? Listening is good and consultation is good, but you've got to act. You've got to say, 'Here's a problem and here's what the department is thinking about doing in response to the evidence that we currently have.'

Senator O'SULLIVAN: Are you contemplating socialising some of these burdens on these local authorities and the Commonwealth subsidising this so that it's not pushed onto the travelling public? Has that even been considered or is that under consideration?

Senator PATRICK: Or even just: what has been considered as a remedy?

Ms Langford : It's not under consideration. I know that the different models are the subject of a lot of debate. Around the world, you've got a number of different models and some of those include governments covering operating costs, but, as far as I'm aware, there's no consideration of moving to one of those models where governments would cover operating costs.

Senator PATRICK: So you're just going to sit on the information that you have. We've got to take Qantas and Rex and the evidence they've given to the committee and their submissions at face value—and, indeed, those of the various district councils around the country. You've got to take that evidence at face value. There's a problem, yet you inside government are not working on that problem. You're not trying to work out how to solve that problem.

Ms Langford : No, that's not correct.

Senator PATRICK: Then tell me what you're doing.

Ms Langford : We're still talking with airports—

Senator PATRICK: What are the ideas you're talking to them about? What have you proposed to them to remedy those situations? I'm not trying to bind you to any promise or commitment, but what ideas have you talked about with them to remedy their concerns?

Ms Langford : At the moment we're listening to them. As you'd understand, what we're talking about here is airports being captured by security settings which are to do with both the aircraft and the airport, and the numbers of passengers that go through them. There are a number of different ways that you can slice and dice that. What you've got to make sure is that, at the end, you've got a security outcome that is fit for purpose. I don't want to suggest that there is anything other than the existing government policy that is the policy right now, but we are not in a position—

Senator O'SULLIVAN: I think you've summed it up, so we can stop all this dancing that's going on. The government decided on an initiative. The policy was driven to the department. The department's responsibility is to implement it. There will be casualties, but that's not the main focus. The main focus is to get the right security settings in accordance with the policy of the government in relation to these provincial airports. That's not your fault, if that's the case. I want to get on to asking about when we're going to put this in for the Ghan or the Trans-Pacific or the bus lines, and all of these other things. When 40 schoolkids in Port Augusta get on a hired bus that's come down, I want to know how we're going to screen them and stop the bombs in the bags. To those of us who live and breathe these provincial communities, this is ludicrous. So let's just get on with it. Your brief isn't to look at the cost impacts and come up with solutions; your brief is to get the security settings into the identified airports in accordance with the definition and description, full stop.

CHAIR: That's a yes, Ms Langford? You nodded, but Hansarddoesn't pick up nods.

Ms Langford : If it's all right with you, I just want to quickly consult with my colleagues.

Senator O'SULLIVAN: I'm not trying to trap you, Ms Langford.

Ms Langford : Apologies for that. Could you repeat the question for me?

Senator O'SULLIVAN: Let's go a step at a time. This policy didn't come from within the department; this policy came out of the government. You will design a policy that enhances security movements at all airports in the country in accordance with the definition—that was the policy. It might not have had specifics in it but that was the policy.

Ms Langford : The government was guided by the Inspector of Transport Security on a number of issues—

Senator O'SULLIVAN: Ms Langford, look, can you just take my questions in good spirit. I'm not trying to trap you. Someone picked the 'eau de cologne' up one day, rang your department and said, 'Hey, here's a work brief.' Is that correct? It doesn't matter where they got the idea from—security agencies, an inquiry or whatever it happened to be. Your department was tasked with dealing with this security challenge in the following airports, provincial and otherwise.

Ms Langford : We had to respond to the events of July 2017, so yes.

Senator PATRICK: Sorry, what was the event?

Ms Langford : The failed Sydney bomb threat.

Senator O'SULLIVAN: But your brief was about security?

Ms Langford : Yes. Our brief is always about security.

Senator O'SULLIVAN: You've got a general understanding that there will be cost impacts on various entities, whether they're an airline or local government or the owner of an airport. Is that a fair statement?

Ms Langford : Yes.

Senator O'SULLIVAN: But it's not your brief or the brief of your department actively at the moment to look at ways to relieve those economic impacts, even if you knew what they were. No-one is in the back room; you don't have a team going: 'Righto, the big fellas up the front are getting the security in place. It's our job to see that it doesn't have a negative economic impact on Charleville, Port Macquarie or Port Augusta.'

Ms Langford : It's certainly our job to work with those airports to make sure that we give them as much good advice as we can about standing up this sort of arrangement.

Senator O'SULLIVAN: What are the names of your public servants who are working on a model to alleviate these particular economic impacts on local authorities, airport operations and airlines in these provincial centres? What are the names of your staff who are tasked with that? That'll clear this up. I suspect you're going to tell me that there are none.

Ms Langford : We have an aviation security branch that has staff in it who are responsible for delivering this policy in the broad, and that includes working—

Senator O'SULLIVAN: We got that, and thank you for that. That was a given. How many of those staff—do you—

CHAIR: You're going to need a valium, Senator.

Senator O'SULLIVAN: No, I've only got a week to go in this bastard of a job and I'm trying to behave myself. Is there anybody looking to develop measures within your department that will alleviate the economic impacts of this policy on small provincial airports such as Charleville?

Ms Langford : We're operating under a broader government policy which has been in place for a long time, where there is occasionally the option to provide capital funding, but, once we start to get into that operational funding space, it's outside our policy framework.

Senator O'SULLIVAN: Ms Langford, I promise you—

Senator PATRICK: So the answer, therefore, is no?

Ms Langford : Correct.

Senator O'SULLIVAN: That's right—no. It took us an hour, but that's it.

Senator PATRICK: Regarding process here, surely there would be a flag being raised. I'm letting you know that I am intending to move a disallowance motion and I think I'm going to get some sympathy from my parliamentary colleagues, particularly noting that, on evidence now, we know that no analysis has been carried out as to the effects this has on communities. It might be the case that you do some analysis and you come up with some remedies and then that changes the situation, but, based on what I've just told you—and I'm a man of my word—you must be thinking now: 'I've got to go back to the department. We are about to issue grants of taxpayers' money.' Just to be clear, have all the grant applications gone in?

Ms Langford : Correct.

Senator PATRICK: And each of the airports identified on the list with the various different tiers that you've described to this committee in private briefings has made an application?

Ms Langford : Correct.

Senator PATRICK: Has anyone missed out?

Ms Langford : No.

Senator PATRICK: So, basically, they know they have to come to you to get the money. When is it intended for those grants to be approved and money made available to these airports?

Ms Langford : I might throw to my colleague Mr Pedler for that.

Mr Pedler : The applications will be processed by the Business Grants Hub. There will be different times depending on different airports. Some of them still have tender processes to go through; some of the airports are being processed now. I don't know the exact timings of when the contracts will be drawn up, but it will be over the coming weeks and months.

Senator PATRICK: But the situation is that the regulation that allows you to pay these people, once you've established that they've met the grant conditions and you've sorted out that airports X, Y and Z can have that money, has gone through the parliament. I'm just pointing out to you that you now have a real proposition—or the proposition I'm foreshadowing around moving a disallowance, and I will move it in the next parliament. That creates a very problematic issue for you in that I don't think it's now possible for you to proceed to make those grants, knowing that that taxpayers' money may be spent with a real risk of it being wasted, because the regulation necessary to implement the security screening may not pass the parliament.

Mr Pedler : The majority of the airports affected are already conducting security screening and a number of them have asked us to process these as soon as possible so that they can upgrade their equipment. The grants hub is processing the applications. There is—

Senator PATRICK: Let me talk about Whyalla Airport. I know there is no security screening there. I've been there recently. Let me talk about Port Lincoln. I know there is no security there and—

Senator O'SULLIVAN: Some of this is not just grants, isn't it? There are some loans.

Mr Pedler : No, it's all a grant program.

Senator O'SULLIVAN: All grants? At no stage will these airports have to borrow money off anybody, anywhere, to put in infrastructure that will be required to be paid back to any individual—extensions to their airports or any of that?

Mr Pedler : I can't answer that question. The grants program is—

Senator O'SULLIVAN: Your department's not providing loans?

Mr Pedler : No, it's not.

Senator O'SULLIVAN: But you don't know the answer to that—that your policy may be burdening some of these airports to the extent that they will have to go and borrow money off third parties to meet the requirements that your regulation is going to introduce? You should know the answer to that, Mr Pedler.

Mr Pedler : As Ms Langford has said, the longstanding policy of successive governments is that the cost of security is borne by industry. I have no knowledge of—

Senator O'SULLIVAN: Mr Pedler, do you know what? I understand that. My question to you, sir, is: within your scope of knowledge, are you aware whether any of these airports and entities have to borrow money over and above your grant system to fulfil the requirements of this policy setting? Full stop; it's a simple question. I know the answer for you; you're going to tell me no. Then I'm going to ask Ms Langford, and she's going to tell me no and the job's done. Do you know whether any of them have to borrow money on top of the grant?

Mr Pedler : No, I don't.

Senator O'SULLIVAN: No, you don't. Ms Langford, do you know if any of these airports, or airport authorities or local governments, have to borrow money on top of the grant to do anything to give effect to the policy setting?

Ms Langford : I'm not privy to their private business interests, so, no, I don't know whether they're planning—

Senator PATRICK: Ms Langford, I've spoken to the CEO of Whyalla council, Mr Cowley, about the airport. He has assured me that he has to find additional money. I'm just wondering: you said before in your evidence that you'd spoken to all of the airport operators, or a lot of them—

Ms Langford : The department has, yes.

Senator PATRICK: Have you spoken to the CEO of Whyalla council?

Ms Langford : Can I ask you to take that?

Ms Stanley : Yes, we have, on a number of occasions.

Senator PATRICK: Okay. And have they indicated to you that they have to spend more money than is available in the grant in order to be able to modify their airport to take the security equipment that might be required of them?

Ms Stanley : Whyalla have indicated that they will have to make changes to their terminal, yes.

Senator PATRICK: And that the scope of funding available to them is not sufficient to cover off on all of the cost? That's what the Whyalla council has told me.

Ms Stanley : I can't recall. I'd have to—

Senator O'SULLIVAN: Ms Stanley, in the conversation, as the man indicated to you, 'We have to make changes to our airport.' Did you look down at the funding model that you're going to give them—the grants—and go, 'Yes, covered in 14C: extensions to your building'? You were there, were you?

Ms Stanley : Yes, I was. There are a number of airports that will be eligible for infrastructure funding under the grants arrangement—

Senator O'SULLIVAN: Is Whyalla one of them?

Ms Stanley : I'm not in a position to comment on particular airports and their funding eligibility or amounts, or their security requirements at those airports.

Senator O'SULLIVAN: Because? On the funding arrangement of Commonwealth money, this is an oversight committee. You're going to spend some of the people's money—perhaps at Whyalla, to put in an extension—and you're telling us that you can't answer that question here?

Ms Langford : I think Ms Stanley's concern is that by providing the detail about Whyalla we're then providing detail that people can use to work back to work out what would be in place in Whyalla.

Senator PATRICK: Let's go to the 40-50-seat aircraft decision. Qantas have indicated to us that they don't understand the reasoning behind the difference between the Q200 and the Q300 and 400, which has 50 seats. Can you tell us how you've made that decision in respect of where the crossover is?

Ms Langford : Yes. I'll preface my remarks by saying that setting security thresholds is not a straightforward matter. Wherever you set them, somebody will have a view that you have it wrong and some will have a view that you've got it right.

There are three main areas which we looked at. One was to ask, 'What do our like-minded partners do?' While they don't like their security settings being discussed in public any more than we do, I can say that some of them are below the 40 seats and some of them are above the 40 seats. And that 40-seat threshold operates in concert with other thresholds like the number of passengers that might go through an airport in a year, what their local intelligence agencies think is a local threat, just as we also take that into account, and, finally, we took expert advice from the Inspector of Transport Security on the threshold.

Senator PATRICK: I wonder why Qantas were confused about the reasoning. Was it talked out with Qantas as to what the reasons were?

Ms Langford : We have had a number of discussions with Qantas about the seat threshold, yes.

Senator O'SULLIVAN: This gets very hard for me. Does it follow that your wholesome answer to his question is yes, you talked to Qantas about what the security parameters were in relation to the number of seats?

That was his question to you; it wasn't about: did you talk to them about 40 seats versus 38? It was about: did you explain to Qantas about how you arrived at 40, because the agency said or because people don't bomb anyone under 39—I have no idea what would drive you. Did you tell them the reason?

Ms Langford : Yes, we have talked with Qantas because Qantas, like many of our major partners, have appropriate security clearances.

Senator O'SULLIVAN: We have all talked with Qantas. Have you talked with Qantas about the rationale behind the 40-seat decision?

Ms Langford : Yes.

Senator PATRICK: I will provide you with an experience I had a few weeks ago when I flew to Moomba, which is in the north-east of South Australia. I did so on a Fokker 70 with more than 100 people on the flight. When I was in Moomba, I jumped on the flight. I was a guest if Santos but had paid for my portion of it—just to put that on the record. We know people who conduct terrorist attacks can quite often be quite motivated and ingenious in the way they do things. Simply being an employee of Santos in this instance or one of their subcontractors effectively gives them the ability to jump on a Fokker 70 and probably conduct the same sorts of operations that you might be concerned about with a Q300 flying out of Whyalla. How do you differentiate between those circumstances?

Ms Langford : I think here would be a useful point to go in camera, if it were to be helpful for you.

Senator PATRICK: I have probably exhausted what I want to ask in public anyway.

Senator O'SULLIVAN: Can I make a point, Ms Stanley? I hope we don't go in camera to find you tell me that there has been no provision for capital works for the Whyalla airport for the expansion that they spoke to you about, because the purpose wasn't to expose. If there is nothing then the answer should be no, but let's go in camera and test it, eh?

CHAIR: Do you want to think about that, Ms Stanley, or do you want to go in camera?

Senator PATRICK: I have talked to the council. It has been talked about in the media that Whyalla will become subject to additional security requirements. Council has got to deal with this in terms of publicly sitting down and working through their own finances and explain to the other councillors and indeed the community what is happening with this money.

CHAIR: It's not that we want you to tell us where the deficiency in security is; the question was on funding, and was the funding or the grant suitable to complete the works that were required, let alone Senator O'Sullivan's line of: what the hell does it mean to the community if they can't meet it, run the operations, get the staff? Ms Stanley, I will give you the opportunity in terms of Whyalla. Senator Patrick did ask very clearly: is there enough money in the grant to do those works or would the council have to go and seek further funding over and above the grant?

Senator O'SULLIVAN: If you are not comfortable, go in camera.

CHAIR: We are not here to terrorise you.

Ms Stanley : We have given information in relation to the grants to you in camera. I can talk about that separately in camera again if you want to.

Senator PATRICK: But you accept my proposition that the council in Whyalla knows and anyone who turned up to the council meeting knows. In some senses I'm questioning—

CHAIR: It's been in the media too.

Senator PATRICK: It's been in the media, yes.

CHAIR: We don't want to know what's missing.

Senator O'SULLIVAN: Can I say this to you: ultimately the expenditure of public money in this country is subject to scrutiny. I've got to say, with the exception of matters of national security, where the line items are fuzzy—and we all get that, and I understand that—that this is not such a thing; this is about infrastructure funding. But Ms Stanley's uncomfortable, and I understand why.

Proceedings suspended from 12:45 to 13:09

Senator PATRICK: I would indicate on the record that I intend to move a disallowance. I think that you should react to that before you allocate public money to two entities which may not require the security equipment because the parliament does not agree to the regulation. I think the best thing you could possibly do is expedite that regulation coming before the parliament. I will draw out this discussion in the chamber when that decision gets made, because I don't want the government saying, 'But we've spent the money.' To speak on the record for the Hansard, you need to say yes or—

Ms Langford : Yes, I understood you.

Senator PATRICK: Thank you.

Senator O'SULLIVAN: Can I assume that this particular issue, this particular challenge, may now become an agenda item at the next cohort meeting amongst the mob? Can you give us an undertaking that you'll at least explore it in the spirit of the concerns that we've raised? At the end of that, you might decide, 'Bugger Whyalla.' We don't get to control what you do but we'd like to know that at least the department has had a serious exhaustion of consideration of these impacts on our little communities.

Ms Langford : Yes. Perhaps I wasn't clear, but we are looking at those airports now.

Senator O'SULLIVAN: That's with a view to identifying the problems, measuring the problems and perhaps supplying solutions—or not.

Ms Langford : Certainly a solution will be lovely.

Senator O'SULLIVAN: You've earned your money for today!

Senator PATRICK: I will put it on notice that, if estimates goes ahead, I will be asking the secretary about his views in respect of what I just talked to you about.

CHAIR: Ms Langford, thank you to you and your officials.