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Tuesday, 26 November 1974
Page: 2802

Senator CAVANAGH (South AustraliaMinister for Aboriginal Affairs) - I move:

That the Bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

The ACTING DEPUTY PRESIDENT (Senator Devitt)- Is leave granted? There being no objection, leave is granted. (The document read as follows)-

The Air Navigation (Charges) Act imposes charges on the operators of aircraft for the use of aerodromes, airways facilities, meteorological services and search and rescue services provided, operated and maintained by the Australian Government. The purpose of this Bill is to increase the rates of Air Navigation Charges, and to make other changes in the Act which the Government feels to be desirable.

In 1973-74, the cost of providing, operating and maintaining air navigation facilities and services throughout Australia amounted to $140m. Revenue received from the users of those facilities and services totalled $75 m. Of this amount, $33 m came from air navigation charges paid by aircraft operators, $11.5m from hangar and building rentals and terminal concession charges and the like, and $30.5m from aviation fuel taxes. This left a deficit between revenue and expenditure of $65 m, a deficit which the Australian taxpayer was called upon to bear. Put another way, the Australian taxpayer was asked to pay more than $6 for each passenger who travelled by air within, to or from Australia.

In 1960, the then Liberal-Country Party Government adopted as a long-term objective the eventual full recovery of the cost of air transport facilities provided by the Government. That Government set no target date for achieving its objective, either in full or in part. Last year, this Government decided to accelerate the cost recovery program. It decided on a policy aimed at raising the then unsatisfactory rate of recovery- something like 49 per cent- to 80 per cent by 1978. This, despite recent speculation that the timetable has been stepped up to achieve the recovery aim by next year or the year after, is the Government's clearly defined 5-year target. In progressively increasing these we are not being unfair. In the marine field we have a total cost recovery policy on navigation aids. Last year, this Government succeeded in raising the recovery rate to 54 per cent. There is still a long way to go.

Basic to this approach, and equally applicable to all transport modes, is that the user and the beneficiary should pay. The Government cannot accept that the general taxpayer must subsidise people who travel. To this end, the Bill provides for an increase of 15 per cent in air navigation charges. These higher charges will become effective from 1 December 1974. They are payable across the board', that is, by all operators, domestic and international, making use of our facili-.ties and services. General aviation makes heavy demands on aviation facilities and on the funds to provide and maintain them. Special aerodromes for general aviation aircraft, Archerfield, Bankstown, Cambridge, Essendon, Jandakot, Moorabbin and Parafield, have been provided in all capital cities- by the taxpayer. Last year, these aerodromes alone cost $10m to operate and maintain. In addition, facilities have been provided at other airports largely for general aviation aircraft, things like light aircraft aprons and taxiways, traffic control and flight service units, communications and fire' units.

In 1954, there were 168 airline aircraft in Australia. By 1974, this number had fallen to 138. In sharp contrast, in the same period, the number of general aviation aircraft increased from 677 to 4,012. The. airlines flew some 265,000 hours iti 1954, and the same in 1974-a reflection of greatly increased productivity through the operation of larger and faster aircraft. But hours flown in general aviation increased almost ninefold, from 145,000 to 1954 to 1.3 million in 1974. About 30 per cent of this represents private and business flying. Light aircraft movements at most airports throughout Australia have increased more rapidly in the last 20 years than airline movements. Last year, Tamworth had about 7,000 airline movements, and 30,000 light aircraft movements, Canberra had 21,000 airline movements and 42,000 light aircraft movements. General aviation places an exceptionally heavy demand on our airways and airport facilities. The Government believes that the contribution which general aviation makes towards the cost of those facilities should be more closely related to the demands which this section of the aviation industry places upon them.

Honourable senators might be surprised to learn that at Sydney Airport, for instance, an estimated cost allocation for 1973-74 shows that the domestic airlines contributed some 77 per cent- $9.7m- of the costs attributable to their own operations, international airlines also contributed some 77 per cent- $1 1.1m- towards the cost of their own operations; whereas general aviation only contributed some 0.4 per cent towards the cost of their own operations at that centre. I might add that the general aviation cost in this context was calculated on the basis that it was the minimum unavoidable increment to cater for these aircraft at Sydney airport- such things as general runway costs and interest and depreciation were not included.

Accordingly, the cost was the lowest cost that could reasonably be calculated. Despite the large expenditure on facilities for general aviation, all the Government recovered last year from general aviation operators was about $5m- just half of what it cost to operate and maintain the general aviation airports at the capital cities alone.

It is proposed, therefore, to increase the charges payable by general aviation operators. The charges in respect to general aviation aircraft weighing less than 9,000 kilograms will be increased by an additional 50 per cent over and above the basic 15 per cent increase in air navigation charges. Aircraft above 9,000 kilograms on which higher additional charges were imposed last year, will not be subject to this increase. At the same time, the amount of remission granted on aircraft not ordinarily kept at government aerodromes, or aerodromes in receipt of government financial assistance, will be increased from one-third to one-half of the charges payable. A small but active element is emerging in general aviation which places few demands on the aviation infrastructure. I refer to aircraft enthusiasts who have a hobby concerned with historical aircraft. Owners of private aircraft of an historical nature, used for pleasure and not for the purpose of personal transportation may apply to the Department for special consideration in regard to the level of their charges. I am referring to those few historical aircraft that are kept on the register from time to time and which would only fly some 20 to 30 hours in any year.

Whilst on the subject of special groups, I should add that the 1 5 per cent across the board increase that I mentioned earlier does not apply to very small aircraft with weights less than 500 kilograms. However, the 50 per cent increase does apply. It is proposed to impose additional charges on foreign-registered aircraft used for private or aerial work purposes in Australia. These aircraft will be subject to an additional charge, over and above the basic 15 per cent increase in air navigation charges, of 50 per cent and 25 per cent respectively. No additional charges are proposed for aircraft in the international charter category.

The proposed increases in air navigation charges are expected to yield an additional revenue of $3m in the remainder of the current financial year, and $6m in a full 12 months. This estimate takes no account of traffic growth, which may be expected to result in a higher additional revenue. Certain other changes in the Air Navigation (Charges) Act are proposed. They will have no significant effect on revenue, but are desirable to facilitate the administration of the charging system.

It has been suggested that the Government's cost recovery program, and its effect on air navigation charges, is forcing domestic air fares upward. While this could be true to some extent, it should be noted that increases in air navigation charges have been no more than 1 5 per cent at the most a year. In any case, only 2.8 per cent of the recent domestic fare increase can be attributed to increases in air navigation charges and 7.5 per cent to fuel tax. Some 78 per cent of the latest fare increase represented nothing more than a response to the significant wage increases affecting the airlines.

We should not exaggerate the cost burden of air navigation charges on air travel, domestic or international. Air navigation charges paid by

Trans-Australia Airlines amounted to about $6.7m in 1973-74; its total costs exceed $150m. In percentage terms, air navigation charges represented some 4 per cent only of the airline's total cost. Perhaps the following simple illustration will place these charges in their proper perspective. If air navigation charges were reduced by half, the cost of a journey between Sydney and Melbourne could be reduced at the most by about 70c, and of a journey between Sydney and San Francisco by $9- at a cost to the taxpayer of $ 16m.

It is often claimed that Australian air navigation charges are amongst the highest in the world. Let there be absolute clarity about this: Our charges are all-inclusive. Charges in many countries are not. Landing charges are only one of several charges and taxes, payable by the airlines and their passengers, which affect the cost of operating to and from other countries. For example, on top of the landing charge for a Boeing 747 of $A449 at Honolulu there is a communications charge of $53 Australian, a passenger holding area charge of $25, a baggage claim area charge of $13, a Customs overtime charge of $48, plus a United States transportation charge (paid by passenger) of $3 per head. These costs could total $1,096. At San Francisco where the landing fee for a Boeing 747 is $216, the communications charge is $3 1, passenger holding area charge is $109 plus amortisation and interest on capital expenditure made there by Qantas of $193, a baggage claim area charge of $41, Customs overtime $137, United States transportation tax of $3 per head plus a San Mateo County Property tax of $ 1 34. These costs could total $1,369. This compares with an airline terminating in Sydney which is charged a total of $2,9 12.

May I say that Australian air navigation charges are based on a consistent pricing structure for both domestic and international airlines. Further, there is absolutely no discrimination between the treatment given to our own international airline and any other international airline, or between any international airlines. The increased charges for which this Bill provides are a further step towards the eventual recovery of 80 per cent of the costs involved in maintaining our aviation infrastructure. But increased revenue is not the Government's sole concentration in this area. The Government is rigorously pruning every cost associated with that infrastructure. The Department of Transport is critically reviewing all of its Air Transport activities with a view to effecting economies wherever they can be made in consultation with the airlines, the general aviation industry and representatives of the various employee organisations concerned. In addition the provision of services at the less busy provincial centres is being examined in order to effect further cost savings. As an example, flight service units have been withdrawn from Flinders Island, Woomera and Mangalore at a saving of about $60,000 a year. In addition fire services have been withdrawn from Mangalore, Derby, Narromine and Broken Hill at a saving of $ 1 00,000.

The Department of Transport believes that to justify the retention of these costly facilities, the airports where they are located should cater for certain minimum traffic demands. In the case of fire services and rescue facilities, it believes that, as a minimum, aerodromes should be served by F27 aircraft, should handle at least eight regular movements a day and cater to at least 25,000 passengers a year. In the case of flight service units, the aerodrome should accommodate at least 12,000 aircraft movements a year. Naturally there are other factors which will influence any decision to withdraw such existing facilities at aerodromes that do not meet these basic minimum requirements. The gap is being narrowed from the cost side. The Australian community will no longer have to bear the cost of inefficient allocation of resources.

The Government will achieve a balanced, coordinated transport system with proper allocation of resources based on demonstrated community needs. It will achieve a system in which every transport method performs the role for which it is best suited, to provide the maximum benefit to the nation. I commend the Bill.

Debate (on motion by Senator Cotton) adjourned.

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