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Rural and Regional Affairs and Transport Legislation Committee
08/04/2019
Estimates
INFRASTRUCTURE, REGIONAL DEVELOPMENT AND CITIES PORTFOLIO
Airservices Australia

Airservices Australia

[09:14]

CHAIR: I now welcome Senator the Hon. Nigel Scullion, Minister—a great minister—for Indigenous Affairs, representing the Minister for Infrastructure, Transport and Regional Development. I acknowledge, as we will at the end, Senator Scullion, that this may be your last appearance before an estimates committee. I also welcome Dr Steven Kennedy, Secretary of the Department of Infrastructure, Regional Development and Cities, and Mr Jason Harfield, Chief Executive Officer of Airservices Australia, and your departmental officers. Minister Scullion, do you wish to make an opening statement?

Senator Scullion: Not specifically. I just have one short congratulations. I understand that the South Australian government wrote to the Deputy Prime Minister last week, indicating that they are now including Indigenous procurement as part of their national partnership agreement on infrastructure, which shows tremendous leadership. I'm sure that that leadership will encourage all other jurisdictions to sign up to something that the Commonwealth has shown a great deal of leadership on through this portfolio.

CHAIR: Hear, hear.

Senator Scullion: I thank Dr Kennedy and all of the committee for their efforts to ensure that our First Australians get a crack at the big time in infrastructure. Thank you.

CHAIR: It will be one of the things you'll be remembered for, Minister, I am certain, over time—giving them the opportunity to compete, as you have. That's good news. Dr Kennedy, would you like to make an opening statement?

Dr Kennedy : No.

CHAIR: Mr Harfield, would you like to make an opening statement?

Mr Harfield : No.

CHAIR: Thank you. Senator Sterle.

Senator STERLE: Because of the way things have worked out today, I'll pose questions to the agency to Mr Harfield, but, Dr Kennedy, if you and your crew could have a listen too, because I would like to put them to you. I'd like to put them to you first, but I don't know if you've got the support staff behind you. Is it all right if I do that, Chair?

CHAIR: Of course.

Senator STERLE: There's been a development that I want to follow up. Yesterday the Treasurer was interviewed by Mr Cassidy about advertising spending. I think the words coming from the Treasurer at the time, when he was asked how much, were that the information would be provided. I'll try and see how we go today. Dr Kennedy, given the Treasurer's commitment to transparency, can the department advise the committee how much money you'll be spending on government advertising this week?

Dr Kennedy : Ms Bacon is the relevant deputy who looks after this issue. She will be coming up here to appear with Territories and others, and she will be able to answer these questions in detail. I'll also note that, when Senator Sterle wrote to the department, there were a series of questions there around advertising. It's again a matter for the committee whether you want me to treat those questions as questions on notice.

CHAIR: My position on that is that there'll be a degree of sensible latitude. If there's a matter that's exercising the mind of any senator around these matters, we'll allow them to explore them in the open. It's just if we get, as we did last week, into a systemic situation where senators are asking, one after the other, the same questions that went on notice that the committee will become exercised as to whether that's okay. But, in this circumstance, that line of questioning will proceed.

Dr Kennedy : To help the committee: this is a matter dealt with by our corporate division. They're not actually scheduled to appear today. But of course we'll bring officials forward to suit the committee's request to answer questions on advertising. We're not surprised to get those questions. Ms Bacon is the relevant deputy secretary. We can answer them perhaps when we do the Portfolio Coordination and Research Division, or I can simply put a request for them to come straight up and do it now. I'm in your hands.

Senator STERLE: Chair, things will be fluid today. If they can come up earlier, especially if we've got interstate visitors, that would be appreciated.

Dr Kennedy : Okay.

Senator STERLE: Therefore, I won't go down this path with Dr Kennedy's crew. I'll just go straight to Mr Harfield.

CHAIR: Are you asking the committee to consider interposing them when they do arrive? We've got a schedule.

Dr Kennedy : As a suggestion, Chair, you could take Airservices. If you've got questions for Airservices, I'm pretty sure they'd be here by the end of Airservices, and then we could move to questions. For the corporate division, just so I'm clear, Senator Sterle, so I can get the relevant staff, these will be just questions on advertising today?

Senator STERLE: Yes.

Senator MOORE: The one or two questions I have for the whole department could come under corporate. Their questions you could handle, Secretary, but I think that possibly they would be better with the corporate support.

Dr Kennedy : We'll bring a larger group up then.

Senator STERLE: Just to confirm, Dr Kennedy, through you, Chair, yes, advertising, media monitoring and promotional merchandise. It's all in the same basket. With your blessing, Chair, I'll go back to Mr Harfield.

CHAIR: Senator Moore, your questions will be directed at portfolio coordination.

Senator MOORE: The questions go to individual agencies as well, into gender focused analysis through the Office for Women and the role that the department has with that, and also to an update on the SDGs.

Dr Kennedy : They're probably best done through portfolio coordination or research and development.

Senator MOORE: Happy for them to be there.

Dr Kennedy : That's when sustainable development goals are discussed.

Senator MOORE: I'll be asking similar questions of the agency directly.

Dr Kennedy : We'll do that.

CHAIR: Each agency can cope with the question their own way. They ought to have the answers for Senator Moore. If that works for you, Senator Moore, that's how we'll approach this.

Senator STERLE: Mr Harfield, I'll repeat the question for you: given the Treasurer's commitment to transparency, can the agency advise the committee how much money you will be spending on government advertising this week?

Mr Harfield : Zero dollars.

Senator STERLE: Right, that's very easy. Thank you very much. I'll go to a couple more. Can you tell us what, if any, the agency's expenditure on media monitoring in the financial year commencing 1 July 2018 has been?

Mr Harfield : I'm not sure that we have that with us, but we can take that on notice.

Senator STERLE: Do you want to check? Only because it's so much easier for you, for a simple figure, if you've got it now rather than going back.

Mr Harfield : Do you want to go on to the next question and we'll see if we can get it chased up.

Senator STERLE: Sure. I'll also ask for an itemised list of all AusTender contract notice numbers for media monitoring. Have you had any AusTender for media monitoring contracts in the period? That might be for the department.

Mr Logan : Yes.

Mr Harfield : Maybe. We'd have to check on that, Senator, but off the top of my head—

Senator STERLE: I'll leave them for the department. That's all right, I won't bug you any more on that. If you can just come back with that figure, that will do fine. I'll channel them to you, Dr Kennedy, and your team. I don't have any further questions for Airservices Australia.

Senator MOORE: Mr Harfield, I have two questions, and I'm asking every agency I can get to. One is around the information from the Office for Women that they've been doing some work encouraging every agency and department to look specifically at the gender impact of decisions and policies. That's particularly around budget, as well. They've said that each department has had correspondence from them and many departments have had some training in this space. I want to find out whether Airservices Australia has had discussions with the Office for Women about, specifically, gender based impact studies on budget decisions and policy?

Mr Harfield : I'm unaware of any, but it would be unlikely because we're not under any budget appropriations, but we do have a range of activities in the diversity space.

Senator MOORE: And policies and process.

Mr Harfield : Yes.

Senator MOORE: Would you check with your corporate area? This is just a general issue. It's looking at how this communication process operates across the whole of government, so it would be useful.

Mr Harfield : We can do that.

Senator MOORE: The other area is the sustainable development goals. I'm of the opinion that Airservices Australia does have a role in that space. I just want to know, from your perspective, have you been involved in discussions around where, in the goals, Airservices would operate, and particularly around infrastructure, development of skills and partnerships—the various goals that look at that.

Mr Harfield : I'd have to take that on notice, because I'm unaware of any conversations. But we'll check and provide that advice.

Senator MOORE: Supplementary to that, when you do, check—I'll check with the secretary, because I do believe that the department is part of the departmental secretaries group—whether you have any discussions through the department back into the SDG agenda for the government?

Mr Harfield : Will do.

Senator PATRICK: Mr Harfield, thank you very much for allowing me to visit the control operations—

Mr Harfield : The Brisbane Centre.

Senator PATRICK: and the tower. That was greatly appreciated. It helps me put things into context. I want to ask some questions about CMATS. I don't know who the best person to ask about that is.

Mr Harfield : Just start, and we'll see.

Senator PATRICK: The schedule you've provided—I think it was to the committee, but it may have been to me—has a list of project and operational milestones. The latest milestone that is supposed to have been completed is the voice communication system, phase 1, being successfully commissioned into Brisbane. I wonder if you can give me an update on that.

Mr Harfield : That was successfully implemented in late February—I think that was the date—and we've now got it commissioned in Perth, Melbourne, Sydney and Brisbane.

Senator PATRICK: You've got to roll it out to the other major airports?

Mr Harfield : No, not for phase 1. That's it. Phase 1 is complete.

Senator PATRICK: And I've got, for Q4 of this year, voice communication system productivity and efficiency benefits realised. What are you doing in the context of that next milestone? I guess that involves some analysis as to how the system is performing?

Mr Harfield : The productivity benefits associated with the new voice communication system allow us to put in more networks than we had previously with the old system and to combine and split different airspace structures; therefore, we will find some efficiencies in the air traffic control rosters. At the moment it's classed as 21 full-time equivalents across the entire operation, which gives us the capacity, when we do the transition, to free up people to do the transition to the broader CMATS. Off the top of my head, in the last report that I saw we were about a quarter of the way through achieving those benefits.

Senator PATRICK: And the preliminary design review is due for Q4 this year. Is there any reason you believe that won't be there?

Mr Harfield : No reason at all; that's all on track.

Senator PATRICK: What's the total budget for CMATS? I know there's a Defence component and an Airservices component?

Mr Logan : The budget for the contract for the Airservices component is about $665 million.

Senator PATRICK: Sorry, did you say that's combined?

Mr Logan : That's the Airservices component.

Senator PATRICK: But there's some agreement between Air Force and—

Mr Logan : There is. The total contract is about $1.2 billion.

Senator PATRICK: How much have you committed to that project by way of contract at this point in time?

Mr Logan : The complete amount.

Senator PATRICK: So the entire contract—it's just one contract?

Mr Logan : Yes, that's one contract.

Senator PATRICK: That implies that it's only internal costs that you've put in the $665 million. There must be other costs—consultants, internal operating costs?

Mr Logan : There's about $150 million worth of internal program costs on top of that.

Senator PATRICK: How much to date has been spent on consultants in that project?

Mr Logan : I don't have a specific figure for you today, but I can certainly get you one.

Senator PATRICK: Okay, so you'll take that on notice?

Mr Logan : I'm happy to.

Senator PATRICK: The other thing I'm interested in, noting the history of this particular project, is rates for consultants. I'm wondering if there is anyone above $2½ thousand per day in terms of consultants?

Mr Logan : I don't have that level of detail with me. I'd need to take that on notice.

Senator PATRICK: The standard I'm working from is in the Legal Services Directions. There's a requirement for the minister, the Attorney, to sign off on rates for SCs, and I'm pretty sure it's $2½ thousand. That's the benchmark, in my view. If the Attorney has to sign off on something higher than that, I imagine we'd want to apply the same standard in your particular projects. So I'm just wondering if you could perhaps break down what is the top rate—I don't mind if you band it—for consultants and how much is being paid at that top rate—perhaps something above $2,500 and between $1,500 and $2,500. Could you just tell me how many contractors are being paid in each of those brackets and what the total value is within those brackets.

CHAIR: Mr Logan, one of the things that the senator's question is based on is an assumption of the policy setting. Do you have anything of that in your mind, about the policy settings that guide the delegated approvals?

Mr Logan : The delegated approvals for consultancies are that they're approved by the chief executive officer.

CHAIR: I appreciate that, but I'm certain there'll be discretionary limits. The point is that he's asked you to go away and do a whole host of work and bring back a whole host of information. That might be a moot point if a policy setting provided a discretion to the chief executive officer to approve that in the first instance. It may change the particularisation that the senator's after. He's assuming anything over $2,500 a day requires you to send it up to the moon, and they'll sit on it for a week. Is that the case, or does the chief executive officer have a threshold of approval above $2,500 for consultants in the program?

Mr Logan : Yes, the chief executive officer does have an approval greater than $2,500.

CHAIR: Right. So then Senator Patrick may well change what he's after.

Senator PATRICK: Thank you, Chair. That's very helpful of you. I was just looking at the Legal Services Directions, and in some sense this is the standard I put on all departments:

Senior counsel are not to be paid a daily rate above $3,500 … without the approval of the Attorney General. Junior counsel are not to be paid a daily rate above $2,300 …

So I'm interested in those bands, but what is the exact delegation within your organisation? When does the chief executive officer need to be involved, and when does a minister to be involved?

Mr Logan : In our case, the chief executive officer is able to sign, so all consultancies go through the chief executive officer for approval to engage consultants. There is no further approval sought from ministers, because we have a different governance arrangement.

Senator PATRICK: Mr Harfield, what's the maximum you would be inclined to pay? In your memory, over the last year or so, what are the maximum numbers you've been asked to pay on a daily rate?

Mr Harfield : A daily rate for a particular consultant would probably be, off the top of my head, in the ballpark that you were talking about. There's nothing extreme. But it depends on the nature of the work—whether it is, for example—

Senator PATRICK: Long term?

Mr Logan : Long term and then depending on the range and all that. There are a whole lot of considerations that need to be taken into account in how that's packaged up, for example.

Senator PATRICK: Yes, but you see what I'm getting at: there's a standard at least set somewhere in the government as to when a minister needs to be involved, and in this case I understand your governance arrangements are different, but in some sense there's an expectation, if you're going above those sorts of levels, that for senior counsel $3,500 is about where you top off. I suspect that also drives costs down, because SCs will be more inclined to put their fees below that number so that it doesn't have to go to a minister, and that's not a bad thing.

Mr Logan : Yes. I would need to also check. We also have at times been under the Legal Services Multi-Use List agreement as well. In the case of legal fees, that would be in line with those.

Senator PATRICK: For legal fees, that condition is binding across all departments.

Mr Logan : Yes.

Senator PATRICK: So I'm presuming you wouldn't have gone above those rates without the minister's or the Attorney's approval—or do you have some ability to go above those rates?

Mr Logan : I'd need to check the specifics of the legal services framework.

Senator PATRICK: If you could come back with—

Mr Logan : Sure.

Senator PATRICK: That's the sort of range in which I'm quite interested.

CHAIR: Just for my benefit, could you particularise what you want them to take on notice a little bit further?

Senator PATRICK: Yes. I would like you to provide me with the total amount you've spent to date on consultants. I'd like to know what the top rate is that you have paid. Then I would like to know, from a consultant's perspective, how many consultants—and I'll just change it to how many are being paid above $3½ thousand per day. How many consultants have been paid between $2,300 and $3½ thousand? And I'd also like to know—I guess, separately—if you can confirm that you have complied with the legal services direction in respect of legal counsel. I'm presuming the answer's going to be a very simple yes to that. But if for some reason you have a variation, because of the nature of your governance arrangements, then please provide that. And that's it.

Mr Harfield : In the confines of CMATS, or are you looking more broadly?

Senator PATRICK: No. Actually, that's the largest project you're working on, isn't it?

Mr Harfield : Correct.

Senator PATRICK: So I'm happy to just work in that space. The other question I have goes to risk. You provided me with quite a high-level risk register back as of January this year. Indeed, reflecting on that, the one risk that you had that was open was: civil military air traffic management system may not achieve required user and quality requirements. I don't know if you've got anything updated on that particular risk at this point in time.

Mr Harfield : The update is that that's reducing as we go through the program. We've got through the SDR. We'll be going into the preliminary design review, and as we work through those engineering requirements and also settle the human-machine interface, which is the thing with the control of that, that will reduce over time. It's just something we're cognisant of. At the end of the day, this has to be utilised by controllers to work. So going off one tangent and then turning up and going, 'This is unworkable,' is probably the major risk of the program. But it is reducing over time and with the work that we're doing, so when we provide the next update you'll see that it's reducing.

Senator PATRICK: It just seems to me also, and I do have a project management background in complex projects, that you've got 10 or 15 risks here that have all been closed off and you're very early in the program. I've no basis other than my own experience to look at this and say, 'This is not a complete list.' You are very early on in the piece and the risks are very few.

Mr Harfield : There probably needs to be an update to where we're currently at as we've gone through the different phases of the program. Obviously, there are new risks. There are some higher-level ones, and then, as we go through the phase, some will get retired and others will come on to the program as we move through. That's probably from the start of last year, if I remember correctly.

Senator PATRICK: As of January 2019.

Mr Harfield : So it's earlier this year. Probably because of the nature of providing the information, we actually keep quite a fairly high level, so, at some stage, we can go through the detail of our whole risk register, if you like, to give you the comfort that there is actually a lot more to it than the high level—

Senator PATRICK: That was my concern, if this were a risk. If I were to see how this was presented to me, I'd say the project was not well informed.

Mr Harfield : That's very well understood.

Senator PATRICK: Is it possible to go down and, in effect, provide the committee with the risk register? Are there any commercial risks associated with doing that?

Mr Harfield : I would have to take that on notice to go through it, but we can provide you with the next level down.

Senator PATRICK: I will move now to matters of charges. And please excuse my ignorance; I'm just trying to get some information in terms of the way in which you charge airlines for air services. I'll tell you the endpoint I'm trying to get to. Right now we know that flights to regional airports are more expensive than a Melbourne-Sydney flight. I wonder whether your costs to the airlines are consistent on any route. Is it on a per-mile basis?

Do you charge separately for ground related services, air services and air traffic control services? How do you charge that for, say, a Qantas flight flying Sydney-Melbourne versus a Qantas flight flying Adelaide-Whyalla?

Mr Harfield : Ostensibly we have three charges. We have a terminal charge, an en route charge and the aviation rescue and firefighting charge. The terminal charge is based on the tonnage of the aircraft based on what I'll call a basin price. I'll ask Mr Logan to speak to that in more detail. That depends on how much tonnage is going through the particular airports. Then we have the en route charge, which is about the weight and distance flown by the aircraft. The aviation rescue and firefighting charge is based on weight and the type of category of the aircraft. I will hand over to Mr Logan.

Senator PATRICK: If a flight flies Adelaide-Whyalla and there is no air firefighting service in Whyalla, I presume—

Mr Harfield : The charge would only be for Adelaide, depending on the category of the aircraft.

Senator PATRICK: But not the Whyalla sector.

Mr Logan : If you're flying from Adelaide to Whyalla, assuming the aircraft was flying instrument flight rules, there's an en route charge, which is based on the distance and the weight of the aircraft. There's no terminal navigation charge and there is no rescue and firefighting charge.

Senator PATRICK: I'm wondering if maybe you could provide the committee with a breakdown of what those charges are. I presume they're not commercially sensitive in that you charge the same rate whether it's Qantas, Rex et cetera.

Mr Logan : Yes.

Senator PATRICK: And it's reviewed by the ACCC, isn't it?

Mr Harfield : Correct.

CHAIR: The further away you are, the bigger the charge if there's a mileage component to it?

Mr Logan : Yes.

CHAIR: So clearly these remote communities—what we call regional communities—are at a disadvantage from the get-go.

Mr Logan : For the en route component, yes.

CHAIR: Our experience with all this stuff has been that every bit of pain that can exist lands in the lap of the people, communities, local governments or economies that are least equipped to meet these charges. Has there been any consideration that, the further you go, the rate could reduce?

Mr Logan : I could compare that to an international flight. If you're flying to, say, Dubai, the international long-haul carriers are certainly flying 6,000 or 7,000 kilometres, so they're certainly paying a significant amount for that distance charge. The charge works out depending on the weight of the aircraft, so for a smaller aircraft the charge is—for up to 20 tonnes as an aircraft, they're paying about 90c per 100 kilometres per tonne.

Senator PATRICK: What's a Q400. Is it 20 tonnes?

Mr Logan : A Q400, I think, is 15 tonnes, but, again, I'd need to double-check. That's off the top of my head.

Senator PATRICK: I think we were mucking around with security, and they were talking about 40 seats or 20 tonnes.

Mr Logan : They could be just under 20. I feel like they're on the cusp of that.

CHAIR: One of the points I'd make is that, for some of these communities, air freight is the only freight. It's not as if they're on the eastern seaboard, where they can choose rail, road or air. Air freight is it for them. They don't have rail into their communities. Road transport, because of the volume, is not an option. In any event, the cost on the freight is much higher. God forbid I would use the word 'socialism', but, in terms of socialising these extraordinary costs that don't meet the test of fairness and parity in relation to our smaller and more remote communities, has it ever been considered? Maybe I'll direct it to you, Mr Harfield. When you review charges, is it a possibility that someone can factor in a consideration?

Mr Harfield : Absolutely. When we come up for our review of charging it goes out for consultation, and this is the area we look at every time within the confines of how we have to charge on how to get the balance right for communities and operations that you have mentioned versus where you get quite heavy utilisation up and down the east coast, for example. It's one of the reasons we have gone through the reforms in the organisation. Instead of putting our prices up back in 2015, we've been able to hold our prices at 2015 levels, and have guaranteed they will continue to 2022-23. Because we continue to review how do we actually make a better—

CHAIR: All right. Senator Patrick, I'm sorry for hijacking this.

Senator PATRICK: No, I want to go here as well.

CHAIR: So that then, suggests, that you do have some sort of a sliding scale. It suggests that you've considered matters such as these before, and that has resulted in a different, if you like, charging regime, cents per kilometre for longer haul to regional community than perhaps Brisbane to Melbourne or something to that effect. Is that right? So there's a schedule? I could run my finger down it?

Senator PATRICK: I've asked them to table that schedule.

CHAIR: Yes. I'll go silent on this if the answer is, 'Yes, there's a table and we've considered it and we take

into account the burdens of rural communities and so on and so forth and that's reflected in the charges'.

Mr Logan : So the sliding scale is based on the weight.

CHAIR: So everyone pays the same. It's pure communism. Everyone gets the same loaf of bread at the same time every day.

Mr Logan : In the case of en route that's true. In the case of rescue and firefighting, when we were putting in new regional locations, the process that we went through there was looking at how do we deal with the potential dislocating effect—sorry, that's an economic term—of putting a very large charge when we put a new service into a regional location for rescue and firefighting? In that case we have a network charge for rescue and firefighting, so that the same price is paid in a regional location as it is in the city for rescue and firefighting services, for example. So, in those kinds of charges, we do. And in the case of—

CHAIR: But are they getting apple for apple there? If I—

Mr Logan : Yes.

CHAIR: If you've got a firefighting charge on, I don't know, Longreach Airport, I've got—if a plane lands and it crashes in Brisbane and there are 50 men and women ready to go with five vehicles and 10 sirens. If the same crash with the same airline happens in Longreach, have I got 50 men and women with the same number of sirens and trucks to come out? It seems to me that that wouldn't be the case.

Mr Harfield : If it was the same aircraft type, you would have the same equivalent response. So what we're getting at is, for example, Brisbane, Sydney and Melbourne are all staffed up to take, at some stage, an A380. Unless an A380 is landing at Longreach, you're not necessarily going to have that exact same response, but we would have the response available to—

CHAIR: So you're telling me that at Longreach today, when the—what's the twin prop that goes in the cigars?

Senator PATRICK: Dash 8?

CHAIR: When the Dash 8 arrives, there is a live contingent of firefighters who are sitting in a shed somewhere?

Mr Harfield : No. Not in Longreach because we don't have the service established for using that. If, hypothetically, there was the service there—let's take Coffs Harbour, as an example—

CHAIR: So they don't get charged. Longreach doesn't get charged?

Mr Harfield : No, they don't get an ARFF charge.

Senator PATRICK: But is the charge constant? So, in Melbourne, you have a team on the ground that can deal with an A380. That involves a particular cost. In Coffs Harbour, you have a team on the ground that can deal with a 737, presumably? The charge would be different?

Mr Harfield : Mr Logan will correct me if I'm wrong here, but, with the ARFF charge, we have a network charge at the base there, which is category 6, which is where we normally establish a firefighting service. That level is paid the same anywhere in Australia where there's an ARFF service being provided. It's a networked charge because we have to continue to balance the principles of location specific versus networking, and that's the best way of doing it. If you're an A380 aircraft, you're a cat 10, and you pay a cat-10 charge when you land at Melbourne, which is far above the cat 6, so you pay whatever category. Up to cat 6, it's exactly the same but if you provide a higher category aircraft, because it's a bigger aircraft, you pay more because of the type of aircraft.

Senator PATRICK: Okay. I just had a quick look at aircraft weights. It looks like a Q400 is somewhere around about 30,000—

Mr Logan : I must have been thinking about the old Dash 8s. I apologise.

Senator PATRICK: Yes. There's a 200 series as well; it has fewer passengers. Mind you, my googling could be wrong. I've just looked at it. That's maximum take-off weight, which I presume is how you're going to work it off?

Mr Logan : Correct.

Senator PATRICK: And then we have 737. That's got a maximum take-off weight of about 80 kilograms. What's the charge for that? You said 90c below 20 tonnes. What's the next bracket up?

Mr Logan : The next bracket starts to work on a square root, and this is an international convention, so bear with me; it's slightly complicated.

Senator PATRICK: I can do square roots.

Mr Logan : It's the square root of the tonnage once it's above 20 tonnes, but it's at a rate of $4.

CHAIR: So does that make it cheaper per cubit of weight? I imagine it would.

Mr Logan : It does as you get higher, yes.

CHAIR: So—

Mr Logan : Which is the international—

CHAIR: What service do you provide that you need to recover this particular charge?

Mr Harfield : This is providing the air traffic services across the country.

CHAIR: And the freight has what to do with that? It's just a mechanism?

Mr Harfield : It's not an airport charge. It's flying through the airspace and getting the service from—

CHAIR: I appreciate that, but what's the freight got to do with it?

Mr Logan : The aircraft convention is using the maximum take-off weight of the complete aircraft, regardless of how much freight is on board.

CHAIR: No. Guys, at some stage, an airline has to do a return to you that said, 'Look, I've got 20 tonnes in the cargo on that trip'. Or, if they put the return in that they only had 18 tonnes and they will pay you less; 16 tonnes they’ll pay you less again, and so on. I'm asking you: what charge—and I know your answer; you're going to tell me that that money that's paid to you is meant to offset the cost of providing OneSKY or whatever you're providing them to guide them from A to B. Is that correct?

Mr Logan : That's correct. But we don't change the charge based on the actual weight of the aircraft. It's based on the maximum take-off weight, which would include what the maximum freight load—

CHAIR: But what does it have to do with you guiding them through the air? Is it just that you had to find a formula?

Mr Logan : Yes. It's an international convention and typically uses that formula for enroute services.

CHAIR: Yes. I appreciate that.

Senator PATRICK: You said, for up to 20 tonnes, it was 90c per kilometre?

Mr Logan : Per 100 kilometres.

Senator PATRICK: So this is not a huge charge, then?

Mr Logan : It's not a huge charge, no.

Senator PATRICK: So it's probably not significant in a—

CHAIR: It would cost you more to recover it, wouldn't it?

Mr Logan : Senator—

CHAIR: I mean, if they're short-haul stuff. If it's 200 kay, you're going to get, what, $1.80.

Senator PATRICK: Yes. It's nothing. It's $1.80. So it's not significant. Can you provide the schedule of those?

Mr Logan : Yes.

Senator PATRICK: Just for the committee's benefit. Really, in some sense, this is related to the other inquiry that we're doing. The terminal charge, how does that work?

Mr Logan : That's based on the weight of the aircraft—again, using the maximum take-off weight as the standard. There's a charge that's related to the particular location. So, depending on where you're landing, if we have a tower service that's open, then there's a terminal navigation charge that's based on the weight of the aircraft.

Senator PATRICK: What are those charges?

Mr Logan : There's a schedule across the 20-odd locations that we're at.

Senator PATRICK: For each aircraft, does it get cheaper per tonne as the weight goes up?

Mr Logan : No.

Senator PATRICK: I am just after an order of magnitude. Once again, flying to Whyalla, Whyalla doesn't have a tower, so do they have a charge at all?

Mr Logan : No.

Mr Harfield : It is only where we're providing an air traffic control service at that airport.

Senator PATRICK: So it is just the Adelaide sector they get charged?

Mr Harfield : On the way to Adelaide.

CHAIR: Does Roma, for example, have a tower?

Mr Logan : No.

Mr Harfield : No, it does not.

CHAIR: Tell me what would be your smallest community with a tower? Or give me one.

Mr Harfield : Karratha.

Mr Logan : Albury.

Senator PATRICK: Is it possible to table that?

Mr Logan : Sure.

Mr Harfield : It's on our website, that schedule with all the charges.

CHAIR: So just pick one, Mr Harfield, any one you like.

Mr Harfield : Alice Springs.

CHAIR: Alice Springs, probably not a good one.

Mr Harfield : Karratha.

CHAIR: Let's do Karratha. Your recovery out of Karratha would be significantly less than it would be out of a larger centre with more flights, correct?

Mr Harfield : That is correct.

CHAIR: So is it fair to say that the income is consolidated to cover the costs? For example, Karratha might not cover itself?

Mr Harfield : If you left it and we did a full cost recovery, the price would be higher into Karratha than is currently charged.

CHAIR: But perhaps less in other centres, according to the same principle?

Mr Harfield : That is correct.

CHAIR: So, overall, when you stand back and have a helicopter look at the costs for this particular service versus the income, are we at line ball or do you pick up a little bit for the Christmas ball or something?

Mr Harfield : Our regional centres are usually cross subsidised by our capital cities.

CHAIR: I appreciate that, but that's not the question.

Mr Harfield : The revenue that we attract there with that cross subsidy would be less than what it would be to run that facility.

Dr Kennedy : I think that the chair's question is about do you fully cost recover overall for the—

CHAIR: We put a passenger movement cost on, on the pretence that we're going to spend it on biosecurity some years ago. I don't want to mention any particular nationality or any food type or any piece of clothing, but I did examine this once before. The income is $1.2 billion and $787 million is what's spent on biosecurity. So my question to you is: if you had no other business in life but to supply towers to these places and charge the airlines, at the end of the year, what does the P and L look like? Have you got a bit left over? Have you got a bit of fat in there? Is it over and unders?

Mr Logan : In the totality, it's at an organisational level. If I just work down to it, in the aggregate level, airways charges, which are the three Mr Harfield spoke to, equate to about 97 per cent of our revenues and about 97 per cent of our costs, including a cost of capital, which is generating a return on the assets, as we're expecting.

CHAIR: That's great work. So there are three categories. So then, Mr Logan, if we're about to privatise it, and I was going to give you one of them to operate free as a business for you, which one would you pick? It would be the one that recovers more than it costs, and I'm trying to get a sense of that.

Mr Logan : It's been changing over the last year, so I don't have the exact numbers we're at but en route was typically over recovering. Terminal navigation was probably break even, and rescue and firefighting was probably slightly below breakeven.

CHAIR: So when you talk about over recovery, have you got a sense? Don't go down to specific numbers, but were you getting back $12 and it was costing $10?

Mr Logan : Our revenue is generating $1.2 billion and our net profit after tax last year was about $75 million.

CHAIR: But again, Mr Logan, let's just go steady. On the best one? Don't make me go door-to-door here. How much of the $1.2 billion was on the most profitable recovery?

Mr Logan : About $500 million.

CHAIR: And a cost outlay of?

Mr Logan : It would be somewhere in the 400s.

CHAIR: So there's possibly 100. And I understand this; I'm not coming after you to try to turn you into a Communist nation. There's about $100 million you pick up there but then that's subsidising other services, if you like, cost for services for the travelling public?

Mr Logan : It is probably closer to 50, off the top of my head.

Senator STERLE: Senator Patrick just told me that you broke it up into three areas of cost.

Mr Harfield : Three charges.

Senator STERLE: What did you say about firefighting?

Mr Harfield : That we now have a charge for firefighting for the locations—

Senator PATRICK: That is the area where you are not breaking even at this point in time?

CHAIR: They are using profits or surpluses from one or the other two charges in other areas to subsidise firefighting.

Senator STERLE: Is that a problem?

CHAIR: It is to me if I happen to be a really remote airline where I am paying for charges over here and I am subsidising firefighting services over there, and I don't get firefighting services.

Senator STERLE: I understand that.

CHAIR: Anyway we can, I am looking for relief for air services into regional and remote parts of Australia, and it would seem there is a possibility there.

Mr Logan : That is what is already holding the charges at the current level. When we are looking at the totality, I guess that is why the prices at the regional locations aren't necessarily fully covering their costs.

Senator STERLE: I am just saying that you wouldn't hold a hammer over the head of firefighting services in the bigger ports to try and say to the remote ports that we need to get rid of firefighters so you don't in the regional areas you don't cop a burden. You wouldn't dare think that?

Mr Logan : No.

Mr Harfield : That is why we go to a network charge at that base price across all of our firefighting network facilities. So when Proserpine or the Whitsunday Coast airport comes online next year, there will be a charge associated with that facility coming online—the cat 6 price, which is the same as the cat 6 price everywhere. And then the capital cities, where they have the larger aircraft that pay the higher category price, that helps maintain that across the entire service.

CHAIR: Yes, but on the test of fairness and equity, if I'm paying a charge for freight into Longreach, for example, and that is going into the more profitable tin, I am not paying for firefighting services because I don't have any. But a bit of my freight money—I am paying 90c for whatever I'm doing—if it were full cost recovery, on the basis of what we have just talked about, I would be paying 70c—I'm making this up as I go—but I'm paying 90c and 20c of money paid by a passenger going into Cloncurry or Longreach or Mount Isa then goes to subsidise the fire services at Proserpine and other places—we get that; we understand it—as opposed to the cost recovery model, where the passengers who fly to where there are fire services should be paying a tad more through whatever formula you have, and for the passengers who fly into Longreach or wherever, the charges should be a tad less. I understand why you wouldn't do that; that is a proverbial nightmare. You would have a million charges for different things. But I think it is important that it is out there. I loathe to use the term 'cross subsidisation', but, in effect, where fire services are concerned, there is a slight cross subsidisation occurring from our regional and remote air services on the Proserpine type places and above. Is that correct? It is not unreasonable statement to make.

Mr Harfield : There is an element of cross subsidisation from our en route charge covering the firefighting.

CHAIR: That is correct.

Senator PATRICK: The burden of Senator Sterle's question is that an area of loss you have is firefighting across the total portfolio, whether or not that is one of the motives for some of these cuts to firefighting teams.

Mr Harfield : Can you explain what cuts? Because there are no cuts. In actual fact, we have continued to maintain services at many locations, where, under the current regulations, we could actually disestablish, but we haven't because we have decided to continue to maintain.

Senator PATRICK: There is a plan to cut services in Adelaide. Is that correct, Senator Sterle?

Senator STERLE: Yes.

Mr Harfield : That's not correct. We're doing a staffing review during the curfew as to whether there would need to be seven staff or five staff during the curfew period. That's on a national basis that we're reviewing the staffing levels as part of a task resource analysis. But there's no cutting services.

Senator PATRICK: Just on that, we heard evidence in Adelaide—it didn't seem to me that the changes you're proposing in that space were subject to a task analysis review, or it's only been very late in the piece that that review has commenced.

Mr Harfield : I'll hand to Mr Porter, but we mentioned at briefing of this committee in December that we were undertaking it and Adelaide was caught up in that task resource analysis. So that information saying that it wasn't is not correct.

Senator PATRICK: Okay.

CHAIR: But CASA sets the criteria, if that's the term, that you need to meet with respect to this? You don't set it for yourselves.

Mr Porter : Airservices, through safety analysis, sets the staffing number. The category number, or the category provision, is provided by CASA in terms of the—

CHAIR: Yes, but you're guided by the category provision as to what the number is. You don't arbitrarily—so, CASA says, 'Here's a category, and if your airport is determined to be that category, you'll provide a service equal to this.' And maybe you can do it a number of ways. Correct?

Mr Porter : Correct.

CHAIR: What I'm trying to do is: if our committee thinks that Adelaide's going to have less personnel than they should have, than is prudent, and we're satisfied that you've interpreted the guidelines from CASA correctly, we need to be going after CASA with our argument, not you. Is that a fair comment?

Mr Porter : We provide the fire service in accordance with the CASA regulations.

CHAIR: Is that the equivalent of a 'yes'?

Mr Porter : Yes.

Senator PATRICK: On Proserpine, basically in 2016-17 a trigger was met in that the number of passenger arrivals, people arriving at the airport, hit 350,000.

Mr Harfield : I forget the exact date that we got the information.

Senator PATRICK: So, that's the trigger for the need to stand up a service. It's now up to 460,000 passengers there. And you mentioned earlier a second quarter, or 2020, before we get a service stood up. I just wonder—and no-one really could answer this question in Adelaide: why does it take so long, when you've hit a legal requirement, presumably on the last day of 2016-17, the financial year? You've now got that there's above 350,000, yet it becomes four years later before we get the fire service stood up? I'm just wondering what the delay is there.

Mr Harfield : It depends on when they were received. We have to take the figures from the BITRE—transport unit when the figures come out. In the couple of years—we've been watching Proserpine for a while, and it would actually hover just below 300,000 for a number of years. It would spike and then seasonally go down. So, we were preparing to at some stage have to put in a service. Once we actually got to the 350,000 mark, we put a safety case to CASA saying, 'This is how we're going to establish the service'—and in bringing it up to the full regulated service level—'and this is how we are going to manage the risk between now and then,' and that was approved. And we go through the cycle of now building a fire station.

Senator PATRICK: But even if you received that in late 2017, that's still sort of three years before you stand up a service.

Mr Harfield : We'd be happy to take it on notice and go through the steps that we took right from the word go to understand the actual process that was—

Senator PATRICK: Well, I'm happy if you want to lay that out to the committee—what you've done prior to that point of hitting the mark, and then what's happened in terms of milestones, things that you've done getting you to the point where you can provide a fire service. So someone's made a determination that 350,000 is the right number. One would expect that when it hits that number that Airservices would react relatively quickly to stand up a service now that you've reached the legal threshold. The time frame seems to have been quite long.

CHAIR: How long do you think it was yourselves? The alarm went off out in the tea room. We've hit the number. We're now obliged, or prescriptively obliged, to go ahead and stand up the service. From that day until you turn the lights on, how long do you think it is?

Mr Harfield : Off the top of my head I think the period that we've got is about three years.

CHAIR: Does that not seem to you to be a long time to do that?

Senator PATRICK: Particularly when safety's the name of the game. We always hear people talking about safety. We've now got an airport with a fairly significant number of passenger movements but no fire services.

Mr Harfield : I need to outlay the alternative work on not just building the fire station but the work that we've done with the local fire brigade and the work that we've done ensuring that we try to manage—

CHAIR: I think we can all imagine what needs to happen. I mean it's not an easy thing. You have got to design a building and find a space at the airport. It's got to meet all the criteria. You've got to find expert people to go and occupy it—we get all of that, and no-one's suggesting that you can blow it out on Tuesday over the weekend.

Senator PATRICK: But it's reasonable to assume, Chair, that they would have done it before. It's not new to them.

CHAIR: That's right. You haven't been caught short, but three years? That seems to me to be an inordinately long period of time, particularly for Proserpine. It's not as if you're building the Taj Mahal to house 100 trucks or something. And I come from this world: I know how long it takes from an idea until you go and get some approvals, build a building and buy a truck and park it in there with a competent driver. I'll leave it up to Senator Patrick to pursue it, and I don't know whether I speak for the committee but you need to go and have a real reflection on this. This is too long in my view.

Senator PATRICK: Can you also look back at the previous, say, two or three fire stations that you set up. I just want to get a comparison of what you've done previously. Because I'll tell you: it was put to us that there was a review underway about what that number should be—whether or not it should go to 500,000—before the trigger commenced; I'm pretty sure that was right, wasn't it?

Mr Harfield : There was talk about going to 500,000 as risk based.

Senator PATRICK: That's right, and so I just wonder how much people held off for the fact that we might just wait for this review to kick in and that maybe we don't have to do it.

Mr Harfield : I can say that that's not the case because the regulations were 350,000.

Senator PATRICK: No, and I made the point at the hearing: you don't have a choice—you don't get to sit and say, 'I've heard the speed limit might be going down to whatever, therefore I'll drive at this speed.'

Mr Harfield : Correct. We have to deal with the rules and regulations that are in front of us.

Senator PATRICK: But there are times when government can act really quickly and times when government can act quite slowly. Can you provide a comparison of the previous three fire stations that you stood up; when it hit the trigger; and how long it took to stand up the service.

CHAIR: Do you agree with the observations, Mr Harfield, because right now I don't get a sense from the three of you as to whether you think that we're being unreasonable with this reflection on three years. And if you go away from here thinking, 'Oh, they just don't understand. It's tough, and it'll always be three years,' that doesn't help. We're asking you to defend the three years if you want to. You must know what's involved. You must know what takes that long. You've done it frequently enough. Or give us some positive indication that: 'We might go and look at this. We may have to change our task register so we start to get some things done at the one time.' Do you find three years an inordinate amount of time?

Mr Harfield : Senator, yes I do. The point you just made is that we'll go back and look at the safety case that we submitted and was approved by CASA which outlined the time frames of putting in this particular service. We'll have a look to see whether we can make it—

Senator PATRICK: And if you have a safety case, can you table that as well?

Mr Harfield : Yes, we can do that.

Senator PATRICK: Thank you.

Mr Harfield : Because that's what we've been working on: the case that's been approved.

Senator PATRICK: Just to be clear, perhaps go back to the previous three fire stations that were stood up and the time frame and sequences associated with those three: when it hit the trigger, what happened and when do they get the first fire truck ready to operate in the event of an accident.

Mr Harfield : Yes.

CHAIR: Mr Porter, how long have you been in the gig?

Mr Porter : Three months.

CHAIR: Right, you won't be able to help us. Does anyone at the table have a memory of the last one from the get go?

Mr Harfield : Not as to the full time frame. Off the top of my head, I think it would have been Gladstone and it would have been four years.

CHAIR: Cripes. It's lucky you're not trying to defend that one. That's a long time. An entire government comes and goes in that time.

Senator STERLE: Is there any outside of Queensland that you can give us as an example of?

Mr Harfield : Newman would be one.

Senator STERLE: And how long would it be?

Mr Harfield : I really would be—

Senator STERLE: I'm not going to nail you, but is it around the same time?

Mr Harfield : It would be around the same time, because—over the last, I'll call it, eight years—we've particularly been driven by the resource boom into Western Australia. We had an influx. We've put in, I think, five fire stations during that time. Maybe this one is our sixth one. As a result of not putting in a fire station for a long time, the build-up in actually getting that—Each fire station we've put in has actually been faster than the previous one. We've improved over time. It's whether the current time frame is appropriate.

CHAIR: How many people are there? Do you have a section on that? Is there a we're-going-to-build-a-new-fire-station section?

Mr Harfield : Yes, we do.

CHAIR: How many personnel are in that?

Mr Porter : We have a procurement team. I'll take the exact number on notice, but there are about six people currently physically located in Canberra who support the procurement of trucks and fire stations.

CHAIR: I wouldn't have thought that's what the delay would be. The delay is not putting a tender out to get a building built or to buy a truck. You could order a truck today. Even though they're specialist trucks, in six, seven or eight months they'd be ready to turn out, wouldn't they? Is that your experience, Mr Porter?

Mr Porter : My experience is that it takes much longer than that to procure these specialist types of vehicles. The regulations are very prescriptive in the type of vehicle and that has been our challenge with procuring fire vehicles in the past.

CHAIR: Well, make it a year. What would you like so that we can toss it out the window—a year?

Mr Porter : The procurement process for full fire vehicles is longer than a year.

CHAIR: Give me a number so that we don't keep dancing.

Mr Porter : Sure, it's within three years.

Senator STERLE: To build that truck?

Mr Porter : To procure fire trucks, because they're not readily made here in this country.

CHAIR: You're saying that from the get-go that it's three years before someone can turn a key in a truck and drive it out of a workshop somewhere, have it welded on and put this and that on it. It takes three years?

Mr Porter : That's the advice I have from my procurement team.

CHAIR: You better check on that advice, because we have the Heart of Australia truck in Queensland. We have the latest diagnostic equipment, which is cutting edge around the world for checking whether you're going to have a heart attack or not. That's nine months from when they get the funding to when they drive it out of the factory, ready to go down the road. It would be 10 times the sophistication of your fire trucks. You need to have a hard look inside, Mr Harfield. That's ridiculous. Three years—there wouldn't be another vehicle in the country that would take that long. How long are the submarines taking to do?

Senator PATRICK: Don't go there!

CHAIR: Well, they might be able to—but it is ridiculous.

Mr Harfield : That's understood, Chair.

Senator STERLE: If I can ask the officers at the table, is there only one manufacturer of these fire trucks in Australia that you purchase from or does it go to tender?

Mr Porter : We're currently in the market with an expression of who's available to provide those vehicles. We're currently in the market. We don't have the answer at this point in time.

Senator STERLE: Okay, previously?

Senator PATRICK: When did you go to tender for that one?

Mr Porter : Just recently, in the last few weeks.

Senator PATRICK: For Proserpine?

Mr Porter : No, for future planning for fire vehicles. We're in the market to determine where the fire vehicles may come from. Historically, the fire vehicles have come from overseas.

Senator STERLE: They've all come from overseas? They haven't been built here in Australia?

Mr Porter : There has been a generation of fire vehicles that were built here. They have since left the service.

Senator STERLE: And we offshored it, did we?

Mr Porter : Since the local product had ceased, we have had to source our fire vehicles from international markets.

CHAIR: You are kidding me. You're saying we don't have the capacity in this great nation to be able to build a fire truck?

Senator STERLE: We don't want to pay for it.

Mr Harfield : Senator, the current fleet of fire trucks was procured in 2003. That's the one that we've had with the 100 vehicles, the Mk8 vehicles. We're actually going out again for the next generation of vehicles. We're going out to market to see what's available here in the country. At that stage, Rosenbauer was selected in 2003, or whenever it was, for the current fleet of fire trucks.

CHAIR: We're now starting to answer the question as to why this has taken so long, Mr Harfield. It's not an engineering capacity, is it? It's about finding someone who can and will do it.

Mr Porter : That's correct. The current fleet of vehicles, the Mk8 and the Mk9, have had their production line ceased. We need to source the new organisation who can produce the fire vehicles.

Senator STERLE: What about the metropolitan fire brigades? Do you talk to them? Who makes their trucks, to the best of your knowledge? You'd have to talk to them. Are their trucks built in China or are they built here?

Mr Porter : We absolutely do talk to the local brigades. These are very specialised vehicles.

Senator STERLE: Yours are different to theirs?

Mr Porter : Absolutely, yes.

Senator STERLE: How much different?

CHAIR: But they're specialised not because they've got some miracle science in it but because they have to pump some foam, they have to pump some water and they have to have everything in the right order. They're a different challenge to going and putting a house out or a building out; I get that. There's all sorts of secondary things with air crashes, such as secondary explosions, the distance that you have to work from for it to be safe and all of that. I get all of that. But these are mechanical solutions. There's no special, bloody thing in there that takes 100 people 100 days to make. This is all hardware pumped together. It is a process engineer who has designed the specs on this, is it not?

Mr Porter : It's an international standard—

CHAIR: No, no, but listen—please, Mr Porter, listen to my question. There's two parts to these things operating. One is made of tin and rubber. People join things together and do up a bolt. They put a stopcock in, and they make a tank that meets a certain pressure. We'll call them the engineering components. They are the engineering components. Imagine the truck itself: the cab and chassis is going to come off the shelf somewhere. I imagine that we're capable of sourcing that in Australia. We put all of the engineering components on it. Spanners are now hands down; spanners are finished. What is so sophisticated about them that is not involved with the engineering of putting these elements and components together to make a bright red fire truck?

Mr Porter : There are two pieces. It is a highly prescriptive regulation. It is a highly engineered piece of kit. The second part of that is that the demand for these vehicles worldwide is very small. It is a very highly engineered piece of kit that's required that does not have a great supply. You end up with a very small number of suppliers who can supply a very small number of vehicles. They become highly engineered, and supply is low.

CHAIR: Now we're getting to one of the sources of the time problem. That's to do with the truck, not to do with approvals, not to do with building a building and not to do with getting a truck driver or a firefighter. It's to do with the truck. What you're saying is that we don't have an oversupply, if you like, of engineering capacity within this country to be able to build these trucks. It's not as if you're going to go out tomorrow and be inundated with seven tenders from seven qualifying companies. How many qualifying companies are there?

Can I just make this point—I'm sorry, Senator Patrick, to take your time. We want to hope that no-one flies over the top of Darwin and drops a bomb on us again, and we have to wake up and be able to manufacture this capacity in our own nation in difficult circumstances. Shouldn't we be considering—as a whole-of-government issue, and maybe Dr Kennedy needs to turn one ear to this—whether we don't, somehow, promote this capacity within our own nation? You're not the only one who wants these red trucks.

Mr Porter : We are the only ones who want this specific type of truck.

CHAIR: But 80 per cent of your mule looks like a horse. We've got red trucks that run around the city and put things out. They've got other specs that they require. There would be a lot in common, would there not?

Mr Porter : No.

CHAIR: There's not?

Mr Porter : No.

Senator PATRICK: Can I ask how many companies around the world supply these sorts of trucks?

Mr Porter : We're currently in the market asking that exact question. It is our belief, our experience, that there's probably three.

Senator PATRICK: Three, okay.

Mr Porter : Potentially.

Senator PATRICK: You got three tender responses?

Mr Porter : We don't have any as yet. We're asking the market who could provide these fire vehicles.

Senator PATRICK: So you're doing an RFI rather than an RFT?

Mr Porter : That's correct.

Senator PATRICK: Because this happens all the time. Is there any special Australian requirement that then burdens these potential suppliers from responding?

Mr Porter : The vehicles have to comply with the Australian Design Rules, because they will be required to go onto our roads. So, yes, you have to take an international vehicle that must comply with the Australian Design Rules. Back in 2003, when the Mark 8s were purchased, we kept them going for such a long time because it is very difficult to get a vehicle that meets one standard and also meets the Australian Design Rules. So, there are some complex issues that sit below this very simple truck. That's what takes the time. There is no truck that we know of at this point in time that may comply with the design rules. We will assess that as we identify those vehicle providers.

Senator PATRICK: Is it the case that we end up spending twice as much money just so that the truck can get a tick to drive on a road? How often would these trucks drive on a road?

Mr Porter : They are called to respond very frequently.

CHAIR: What does 'very frequently' mean? They go from the airport and put out a house fire?

Mr Porter : They will be called to provide mutual aid support in the event of a bushfire, a large factory fire, as we had at Footscray recently. The fire vehicles, being specialist—large amounts of water, large amounts of foam—do get called for assistance to provide support to our urban and local fire brigades.

Senator PATRICK: But when the trucks go out, they've got these lights on top that allow them to break a whole bunch of rules—road rules and so forth. I'll give you an example. Sometimes you have people in the Navy say that they want a ship to do 30 knots, and there's a supplier out there that can make a ship that does 29 knots. To get that one knot difference in speed costs you four times the amount of money. That might be an exaggeration, but it is a considerable amount of extra money just to get the one knot, whereas if you went back to the naval officer and asked what difference the one knot makes they may say that they like to round numbers off. That's not important. This is a value-for-money question. What drives the cost of these things can be putting requirements on them that maybe, in the circumstances, where you've got an airport fire-fighting truck, you could simply waive yourself from those design rules, because most of the time they're going to spend their time on an airport and for the other remainder of the time they are going to an emergency. Has anyone talked about maybe having those design rules waived?

Senator STERLE: Can we ask what they are. It's very easy to say: 'Nothing to see here. Move along.' What are those ADRs? What are the differences? I know our ADRs can be quite archaic in this nation. Fill me in?

Mr Porter : Until such time as we choose the next vehicle or until we understand what vehicles are available, we won't know where the gap is between the ADR—

CHAIR: Tell us about the historical ones—ones that have prevented you, historically—upon which you relied to make the statement you did?

Mr Porter : I'm not familiar with the exact design rule—

Senator STERLE: Well, you mentioned them.

Mr Porter : I'm happy to take that on notice.

Senator STERLE: No, you used that as a defence for why it takes so long. Currently, they're built in China. Correct? And they've been built in China since—

Mr Porter : Austria.

Senator STERLE: Since 2003. So, their design rules meet Australian standards. Correct?

Mr Porter : Rosenbauer had a vehicle—it didn't comply. Therefore, Airservices had to take a position that effectively would influence the supply chain—the construction line of this vehicle—to ensure the vehicle produced off the construction line was compliant.

Senator STERLE: What is that compliance? An extra mirror, or what?

Mr Porter : I'm not exactly familiar with the—

Senator STERLE: You make it sound like it's millions and millions of dollars of research and development and changes. I'm not convinced. What is it?

Mr Porter : I can't—

CHAIR: I've got a low tolerance for this—almost zero tolerance. We've got someone here who is in charge of a division but cannot rely upon their answers to offset questions from this. Mr Harfield, where are you guys based?

Mr Harfield : Here.

CHAIR: I'll tell you what where going to do. We're going to stand you down while you go out the back and make some phone calls and bring someone here who can answer these questions. I don't care if you have to wait here until 11 o'clock tonight. Bring someone back who can answer these questions. And we'll move through our witness list and come back to you. How's that?

Mr Harfield : No worries.

CHAIR: Thank you for your time so far. We look forward to all the success you'll no doubt get by bringing someone in here who can answer our questions. Colleagues, there has been a document tendered by Airservices—the contract for the provision of aviation facilities and services. Are there any objections to that document being tabled? There being no objection, it is so ordered.

Senator PATRICK: I might come back to questions on this as well. It will also give me time to have a look at this.

CHAIR: These are fundamental questions.