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Thursday, 6 December 1973
Page: 2610

The PRESIDENT - Is it the wish of the Senate that we take the Bills together as a cognate debate? There being no objection, it is so ordered.

Senator WITHERS -The Opposition is not opposed to either the Airlines Agreements Bill 1973 or the Air Navigation (Charges) Bill 1973. We support the policy of full recovery of operating costs, but we do believe that the proposed recovery rate of 80 per cent within the next 5 years will prove too high. We agree that it is essential that a 'reasonable proportion' of costs is recovered. I would point out that Mr Charles Jones, now the Minister for Transport, as Labor spokesman on civil aviation prior to December 1972 criticised the liberal-Country Parties' civil aviation policies and repeatedly stated that if the Labor Party ever got into Government, it would ensure that lower air fare were introduced. However, the proposed increases in the air navigation charges will mean that the increases will be passed on to the man in the street in the form of higher fares.

According to my calculations, within the next 5 years', there will be at least a 50 per cent increase, in air fares if the 80 per cent recovery is met. The return economy fare from Sydney to Melbourne rose from $54.60 to $60.00 in October of this year, and on the above reckoning will rise to $90.00 within 5 years. The return fare from Melbourne to Canberra rose to $53.00 in October and will rise to $79.50 within 5 years. These figures, high as they are, could well go higher if the airlines find they have to pass on a higher percentage of the increases to the passengers and they take no account of the present 14 per cent inflation rate. If this should continue, the air fares could be astronomical at the end of the 5-year period.

One point to' remember is that the .increased air fares could permanently harm the Australian tourist industry. The level of fares which will inevitably result from these Bills will put our internal tourist industry at a competitive disadvantage with countries such as New Zealand and Fiji. The only way to promote the tourist industry is to keep prices as low as possible. One factor which brings this about is that .domestic airlines pay a fuel tax which, I understand, at the moment amounts to almost 18c a gallon whereas the international companies pay none.

As I said in my opening remarks, the Opposition is not opposing these Bills but merely wants to point out the pitfalls it sees in them. We, are pleased that the international operators will be treated in the same way as the domestic airlines in respect to air navigation charges; that is, the Government will increase the rate of air navigation charges to the international operators by the same percentage as that applied from time to time in respect of Trans- Australia Airlines and Ansett Transport Industries Ltd.

One area which does concern the Opposition is how the increases will affect the general aviation industry. We ask: Can the economic state of the domestic general aviation industry withstand these increases? We do not want this sector of\the industry put into jeopardy. However, the Bills provide for an increase of 15 per cent in air navigation charges, and other costs associated with, the operation of aircraft in the general aviation field will be doubled on some activities, and increased by 66-2/3 per cent for charter aircraft.

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