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Thursday, 29 November 1973
Page: 2356

The PRESIDENT - Is leave granted? There being no objection, leave is granted. (The speech read as follows)-

In his speech on the 1973-74 Budget, the Treasurer (Mr Crean) referred to the difference between the annual cost of providing and operating airport and airway facilities and the


revenues derived from their use. He indicated certain steps which the Government proposed to take to narrow this gap between revenue and expenditure, and this Bill is designed to implement one of these measures, namely, to increase the rates of air navigation charges payable by aircraft operators.

The report of the working group appointed by a previous Minister for Civil Aviation to study the costs and revenues of the Department of Civil Aviation was recently tabled in the Senate. Using the basis of calculation proposed by the working group, the costs attributable to the maintenance and operation of civil aviation airports and airways facilities in Australia and Papua New Guinea during 1972-73 exceeded the relevant revenues by some $69m.

As I mentioned when presenting the Airlines Agreements Bill 1973 to the Senate, this deficit has to be looked at against the background that it represents a subsidy for each user of the air transport system, and this burden is borne by the general taxpayers, many of whom do not avail


themselves of the civil aviation facilities provided at their expense; the deficit is calculated by including aviation fuel tax as a revenue item, and this places the aviation industry in a favoured position compared with road transport; and only about 160,000 people use domestic airline services each week, whereas some 23 million people use urban transport services in the same period.

The shortfall of recovery of the operating costs has, in absolute terms, increased each year. The limitation of any increase of the charges to Trans-Australia Airlines and Ansett Transport Industries Ltd to 10 per cent in any year as provided in the Airlines Agreements Act did not permit the policy of full recovery to be effectively implemented and the position only got worse as time went by. This was compounded by the action of the previous Government in not increasing the rates in 1971-72 and by raising them by only 5 per cent last year. Clearly this situation cannot be allowed to continue and the aviation industry must face up to the fact that it must contribute more to the cost of operating the facilities upon which its existence depends. The Government has decided therefore to raise the limit on the rate of increase in charges to 15 per cent and the Parliament currently is being asked to approve an agreement between the Government, ATI and TAA which enables this to be done. Further the Government has set the target of 80 per cent recovery of costs over five years.

The Bill provides for the 1 5 per cent increase in respect of the airline services from 1 December 1973 and the resultant additional revenue during the current financial year is estimated to be $2.25m. This increase of 15 per cent in air navigation charges represents only about one half of 1 per cent out of the recent 1 1.5 per cent increase in air fares and freight rates granted to the airlines, the major part- some 8 per cent- being the direct result of increases in wages and salaries and the remaining 3 per cent being due to the higher fuel taxes included in the Budget.

The revenue received from the operators of general aviation aircraft is far below the costs of operating and maintaining the special aerodromes provided for their use. General aviation aircraft are those in the private, aerial work and charter categories, and last year it cost the Government about $8.25m to operate the six special general aviation aerodromes at Moorabbin, Parafield, Bankstown, Archerfield, Cambridge and Jandakot. However, the total revenue including fuel tax received from the general aviation industry was only some $3.6m.

There are also disguised costs at other aerodromes which are incurred largely because of the activities of general aviation aircraft. The Department of Civil Aviation has to upgrade its air traffic control, flight service and fire service units as the numbers of aircraft movements at particular aerodromes increase, regardless of whether the additional movements consist of light or heavy aircraft.

As an example of the type of problem which can be attributed to the general aviation industry, the Department has to decide whether to provide a flight service unit at Dampier in Western Australia because the number of aircraft movements at the airport has exceeded the normal criterion of 12,000 per annum. However, only about 3,000 of these movements are airline aircraft, the balance being general aviation movements. The capital cost of the additional facilities would be some $400,000 while annual operating costs would be $150,000. There would be no compensating increase in air navigation charges because charges for general aviation aircraft are paid on an annual basis.

Again corrective action is required. The Bill therefore increases the rates of charges for general aviation aircraft by 15 per cent while the weekly charge payable for private and aerial work aircraft will be doubled and that for charter aircraft will rise by two-thirds. However, a rebate of one-third of the higher charges payable from 1 December 1 973 will be made in respect of such aircraft as are not normally based at a Government aerodrome or at an aerodrome which is subject to Government financial assistance under the aerodrome local ownership scheme.

Some heavy general aviation aircraft load the civil aviation and airway facilities almost to the same extent as airline aircraft, and it is proposed that these aircraft, namely those weighing more than 9,000 kilograms, will be subject to double the normal rates of charge. These measures affecting general aviation are expected to yield approximately an additional $300,000 in the current financial year.

The Bill contains other provisions which are designed to clarify the liability of aircraft operators for charges when they operate aircraft on demonstration flights, ferry flights and positioning flights, and it also makes it clear that all flights operated by the holders of an international airline licence are to be subject to charges under the First Schedule rather than the Third Schedule. These are provisions designed to improve the administration of the Act and they have no significant effect on revenue. I commend the Bill.

Debate (on motion by Senator Laucke) adjourned.

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