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Monday, 29 August 1994
Page: 468

Senator HARRADINE —My question on the same subject is also directed to the Minister representing the Treasurer. I draw the minister's attention to the numerous questions that I asked Treasury in the estimates committee about this matter. One question was whether there was a natural monopoly element to the provision of airports and whether it was compatible with competition policy for there to be privatisation of a natural monopoly. Treasury responded by stating, amongst other things, that competition can occur between airports in different cities and instanced Hobart and Launceston as potentially competing airports. Treasury also stated that the sale of airports was being `carried out with a view to increasing economic efficiency rather than simply maximising sale receipts for budgetary reasons'. I therefore ask the minister: firstly, will he buy a map for the Treasury officials to show them that Hobart and Launceston are not interchangeable destinations? Secondly, if it is not all about money, why does not the government just hand the Tasmanian airports over to local authorities so as to protect Tasmanians from the whims of monopolists? (Time expired)

Senator COOK —I am not aware of all the questions Senator Harradine asked in estimates, but I will become familiar with them. If there is anything in this answer that omits something that he raised in those estimates processes, I will add to this answer in due course. There are numerous ways in which airports can be competitive. Certainly, airports in Australia can be competitive by trying to attract air traffic to their point of destination. There can be a greater degree of competitiveness between airports in Australia than there currently is in respect of destination attraction.

  Whether the example of Launceston and Hobart is a good one is in the eye of the beholder. What makes that competitiveness real is other modes of transport. The existence of very fast, on-surface transport at competitive cost between the eastern seaboard capital cities would mean that there would be a real choice as to the point of entry to Australia as an international destination. It is certainly the government's intention to create that type of competitive environment.

  Secondly, airports can be competitive in respect of non-aviation income. Many airports derive a greater degree of their income from activities other than the aviation activity. They are a major point of tourist contact as well as a major point of other activities. So there are various ways to derive income. These are things that have to be kept in contemplation, if I understand what Senator Harradine's line of questioning was to the Treasury officials at that estimates committee.

  However, as I said at the beginning of this answer, if there are things in Senator Harradine's question, in particular, the questioning he conducted in the estimates committee, I will supplement the answer in due course.