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RURAL AND REGIONAL AFFAIRS AND TRANSPORT REFERENCES COMMITTEE
10/06/2010
Effectiveness of Airservices Australia's management of aircraft noise

CHAIR —Good afternoon. Would you like to make any alterations or amendments to your submission?

Mr Harnisch —No.

CHAIR —Would you like to make an opening statement before we move to questions?

Mr Harnisch —Yes. First of all, can I thank the committee for the opportunity to give evidence to this inquiry, particularly for accepting our late submission. Briefly, for the record, Master Builders represent the interests of all sectors of the building and construction industry. We have around 31,000 members around Australia. Master Builders’ submission is focused on the public policy and corporate governance aspects relating to the land use planning in the vicinity of airports and the critical importance of strengthening the evidence based approach to decision making under the current ANEF system to ensure that the interests of all key stakeholders are properly protected. We do not profess, and I do not profess, to have any technical expertise about the ANEF system itself, but our submission focuses on the public policy and corporate governance aspects of how that operates.

Master Builders supports land use planning in the vicinity of airports, in accordance with the Australian Standard AS 2021-2000, and the ANEF system. We note that the Commonwealth government policy is that this standard ensures the long-term viability of airports and protects the community from unacceptable levels of aircraft noise. The ANEF system provides certainty for planners, builders, developers and equally important airport operators. Master Builders recognise the importance of airports to communities and the significant social and economic contributions they make. It is important that airports are able to meet the needs of the community and commerce without unnecessarily being constrained by incompatible surrounding development. Conversely, the social and economic benefits of development around airports at the same time should not be excessively constrained.

If it is properly implemented the ANEF system will provide the robust framework to facilitate the provision of government policy in relation to affordable housing and urban development. This will become more important as the Australian population grows and the rate of urbanisation increases over the next decade. Master Builders accept that the ANEF system is the most stringent land use and planning standard for areas in the vicinity of airports in the world. When properly implemented, it provides certainty to airport lessees, the public and planning authorities and it provides confidence—and I think that is important. It has to provide confidence for industry to invest in the infrastructure required for development not only urban but others. The ANEF system and the Australian Standard AS 2021 have been adopted in legislation and planning policy by all relevant planning authorities around Australia.

In the recent national aviation policy white paper, it confirms the status of the ANEF system. On page 212 it states:

The Government therefore will:

> retain the current ANEF system in Airport Master Plans as a land use planning tool around leased federal airports;

Since the privatisation of airports in 1998, there has been greater scrutiny of and challenges to the ANEF system and its application to the protection of airports. That in itself is not a concern, but rather apparent lack of objectivity of the process where it is contested. Master Builders believes in contestability as best practice in pursuit of public policy where objectivity and transparencies must be paramount considerations.

The ANEF system provides for an evidence based framework for decision-making. We argue that to deviate from this would really run the risk of a very ad hoc and unscientific approach being taken with the potential for very poor policy outcomes as a result. Master Builders believes there is a significant weakness in the current process of preparing ANEF contours. Currently, as we understand it, private airport lessees have the sole responsibility for the input assumptions used to produce ANEF contours such as aircraft types, flight paths et cetera. Airservices Australia has the responsibility of endorsing the ANEF contours prepared by the airport lessees, but the endorsement process does not include an assessment of the reasonableness of the assumptions made by the airport lessees.

In the national aviation policy white paper, the Commonwealth government expressed similar concerns to Master Builders and acknowledged that the implementation of the ANEF system needs to be improved. I quote from that paper, which states on page 212 that the government will:

> improve the technical processes and independence associated with assessment and scrutiny of ANEFs;

The submissions to this inquiry by Airservices Australia and the Department of Infrastructure, Transport, Regional Development and Local Government do not deal with any of the weaknesses in ‘the technical processes and independence associated with the assessment and scrutiny of ANEFs’. Nor do they indicate how the policy in the white paper to improve these processes will be implemented. Currently ANEFs become part of state planning laws once they are endorsed by Airservices Australia. In its evidence to this inquiry on 28 May, Airservices stated that the check for reasonableness of the assumptions behind the ANEF is undertaken by the Department of Infrastructure, Transport, Regional Development and Local Government during the approval process for master plans. The department, however, has not given evidence that it checks the assumptions behind the ANEFs. The approval process for an airport master plan typically takes a further year or more following the endorsement of the ANEF by Airservices, creating a lag or a hiatus during this period. We recommend that the two processes should be combined and that the ANEF should only be endorsed at the time of approval of the master plan to create certainty.

Master Builders also recommends this inquiry closely examine and recommend how to introduce objective tests to give effect to the national aviation policy white paper to:

> improve the technical processes and independence associated with assessment and scrutiny of ANEFs;

Master Builders certainly supports the initiative of the national aviation policy white paper to establish an aircraft noise ombudsman. We further recommend that the ombudsman have the scope to investigate all matters relating to aircraft noise. Further to ensure complete transparency in objectivity, the ombudsman should be independent of Airservices and the department and report directly to parliament, as would be the case with other similar ombudsmen. Master Builders contend that to improve the public policy decision-making process other industry and community input be allowed relating to flight, operational aircraft type assumptions and that these assumptions be opened to proper testing by the aircraft noise ombudsman in the preparation for airport master plan .

In conclusion, I will go over our recommendations: one, that the AS 2021-2000 be continued as well as the ANEF for land use planning in the vicinity of airports; two, that the technical processes of independents associated with the assessment and scrutiny of the ANEF be improved, as recommended in the national aviation policy white paper; three, that a new ANEF should only be endorsed at the time of approval of an airport master plan; four, that the aircraft noise ombudsman will have the scope to investigate all matters relating to aircraft noise, and, further, to ensure complete transparency, the ombudsman should be fully independent of the department and report directly to the parliament; and, five, Master Builders believes that all government agencies should be acutely aware of the government’s broader housing affordability policy objective and the need to pursue objective and transparent processes to ensure that the government’s housing affordability policy objectives are not unduly compromised.

CHAIR —Thank you very much for your opening statement, Mr Harnisch. It has touched on some areas that the committee has been following with some interest. With regard to the ANEF process and that there does not appear to be an assessment of the reasonableness of the assumptions—and I think we had said that the department had not indicated what they do—the department indicated to the committee that they do not assess the reasonableness of the assumptions and that they assume that the airports have taken the appropriate measures to get their assumptions correct. We certainly will be following that up and appreciate your input on that. What would be the appropriate process for the assessment of those assumptions in an independent manner?

Mr Harnisch —The emphasis is about independence. Our view would be that independence is No. 1. There have to be some objective tests and it has to be transparent. Part of that requires that the assumptions that are put are open to public scrutiny and are tested. As to the appropriate structure for that in terms of corporate governance, we certainly recommend an ombudsman as one way of overcoming what we see as the current weakness.

CHAIR —We have been discussing with various witnesses how the ombudsman would operate. There has been some thought from witnesses that it certainly needs to be independent and transparent. Airservices believes that the appropriate process may well be that the ombudsman just reports to the board of Airservices and that would be independent enough. I think you indicated that the ombudsman in your view should report to parliament and it should be more transparent than just having the ombudsman report back to the board.

Mr Harnisch —As I understand it, all ombudsmen in Australia report to parliament. I believe that should be the practice to be continued. If there is an acceptance that there needs to be independence and transparency, I cannot see what the opposition would be to reporting directly to parliament. That is not to say that the ombudsman cannot and should not or should be prohibited from dealing back to the department. Ultimately, the responsibility in a corporate governance sense is that it must go back to parliament.

CHAIR —Do you believe the ombudsman could perform the role of the assessment of the assumptions when it comes to the ANEFs?

Mr Harnisch —It can be an independent forum whereby assumptions and other matters can be contested in an unbiased environment.

Senator O’BRIEN —Mr Harnisch, thank you for your evidence. We have before us a letter from the Department of Infrastructure, Transport, Regional Development and Local Government which touches on the issue of ANEF development. Amongst other things, it says:

The Department would not encourage airports to make cautious forecasts of future growth which raises risks that the real potential for aircraft noise would be understated. We have welcomed the adoption by some airports of long-range or ‘ultimate practical capacity’ ANEFs which reflect a long-term view of the growth of traffic and noise.

What is your organisation’s view of that approach?

Mr Harnisch —The problem with assumptions is that as an economist obviously you have to make assumptions in any forecast, and it is a hazard that I faced when I did do forecasts which were made public. At least my assumptions were made public and, given the importance of this in terms of aircraft noise and given that as our population increases and the rate of urbanisation increases, and therefore the intersection between the successful operation of airports and this increased urbanisation, this is an area which is obviously, in some cases, highly controversial. The point that we would make is that by all means have those assumptions put on the table, but then we come back to our proposition, which is: let us have those assumptions made public and then an assessment of reasonableness ruler be put across—

Senator O’BRIEN —That goes to the first of those two sentences, which was about ‘cautious forecasts’, but the second sentence talks about a concept of ‘ultimate practical capacity’, which would reflect a ‘long-term view of the growth of traffic and noise’. In other words, if this airport reaches its capacity, what can we expect and what should the noise exposure forecasts say? What do you say about that?

Mr Harnisch —I did say that I do not have any particular expertise in this area, but I would have thought that in terms of public policy those tensions will arise, and I can only reiterate that we need to have a robust process where that sort of stress testing and risk management can be properly undertaken in an objective and transparent way. I do not have an easy solution to that because, inevitably, with the rate of urbanisation and as airports perhaps reach capacity these problems will arise. For instance, taking some overseas examples, where airports reach capacity they rebuild an airport somewhere else, even offshore, which takes away those noise pressures, and that may well be an option.

Senator O’BRIEN —Good luck with the environmental approvals for an equivalent airport to the Tokyo airport in Sydney!

Mr Harnisch —I understand that. I recognise the tensions but I think our proposition is this: we recognise those tensions can only increase over time and we just need a robust process where those tensions between a community, the airport and, in this case, urban developers, can be properly managed and tested.

Senator O’BRIEN —It is too late for Sydney in terms of managing development around the airport, but for an airport which is not surrounded by residential areas, shouldn’t we take the ultimate practical capacity approach to make sure that the capacity of an airport—a very valuable asset for a community—isn’t constrained by unrestricted development without regard to the future potential for noise?

Mr Harnisch —Certainly, Master Builders has no objection to airports, but in terms of the question you are posing, I can only just go back and say again that our concern is about the process for dealing with, as opposed to making judgments about, what the outcomes may be should those circumstances—

Senator O’BRIEN —Even if you have got a process, you have got to have a policy approach in that process.

Mr Harnisch —Correct, and that is what our focus has been. This is only going to be an increasing community concern and there needs to be an open, transparent and accountable process where these differences can be contested and properly resolved.

Senator O’BRIEN —But shouldn’t we take the approach that if there is likely to be a contest between residential areas and noise we should avoid that contest?

Mr Harnisch —In an ideal world that would be good. I cannot see how those contests can be avoided. I think with increased urbanisation those pressures—

Senator O’BRIEN —It depends on the airport, doesn’t it?

Mr Harnisch —I do not know if you are putting the proposition that there should be a blanket, for instance, prohibition on any development whether it be residential or commercial—

Senator O’BRIEN —No, I am not putting that proposition but, given that residential is the most sensitive, shouldn’t we plan to avoid what is the most sensitive development in areas that you can forecast would have a noise impact?

Mr Harnisch —As a proposition, I thought that was what the ANEF system is trying to do—that in fact it is looking at the land-use planning standard for areas in the vicinity of airports. My understanding is that the ANEF system as a technical instrument has proved to be reasonably robust but its weakness would appear to be the assumptions underlying the contours that are derived from it and hence the controversy that has arisen from that.

Senator O’BRIEN —Indeed, and if you are talking about, on the one hand, predictions of use as against capacity—if we made a decision that every ANEF would be based upon ultimate practical capacity, which is what is in the department’s letter to us about the issue, isn’t that easier to arrive at rather than guessing what the use of the airport might be in five, 10, 15 and 50 years?

Mr Harnisch —I certainly would not support a guessing exercise. The point that we are making is that the assumptions obviously should be on the table. They should be able to be contested. They should be properly tested as to the efficacy of those assumptions and all the risks that go with it and whether those assumptions about airport capacity can come to fruition. Our point is that we need to have a robust process.

Senator O’BRIEN —I hear what you say. In conclusion, all I would say is we had placed before us this morning from Airservices Australia a time line of events for the Perth airport which shows that the number of movements grew by 130 per cent in seven years. We probably would not have accepted those predictions as valid assumptions seven years ago. Thanks very much.

Senator BACK —Thanks very much for the submission. You made the observation in speaking to us and you again emphasised it in 5.5 of your recommendations that currently ANEFs become part of state planning law once they become endorsed. They also as a consequence become the basis of local government planning guidelines as well.

You also made the point that the department actually has a role in endorsing or invalidating the assumptions or claims made by the airport operator. We just had the department here before lunch and they were at some pains to inform us that they really do not undertake that role. Airservices Australia has told us with emphasis that their role is to endorse or validate the technical aspects of the ANEF as prepared by the airport operator. Therefore, at the moment, it becomes the role really of the airport operator to prepare the whole ANEF and present it for endorsement or change or whatever. Do you believe that the development of the ANEF should actually be by another independent agency, possibly an agency of government, to which the airport operator contributes, rather than the airport operator being the originator of it?

Mr Harnisch —As I understand the question, I think the answer would be yes. The proposition we put in our submission was that the weakness in the current approach in terms of the ANEF is that it simply relies on the assumptions put by the airport operator. It looks at what contours come out of that and, if it fits within the ANEF guidelines, it either approves or does not approve. What we are saying is that the assumptions need to be publicly tested in terms of their efficacy to ensure that the interests of the community and others are properly taken into account.

Senator BACK —That is what I am coming to. I am just trying to work out administratively the best process by which that could actually happen.

Mr Harnisch —We have made a recommendation that it could be a role for the aircraft noise ombudsman—

Senator BACK —But it is more than just aircraft noise, isn’t it? Obviously aircraft noise is a key element, but it is not the only element in the building blocks that go to form the ANEF. We had a very good presentation from the airport operator in Sydney in which they advised us of the independent expertise that they bring to bear in preparing the ANEF. My question to you is: would it be more transparent to all parties if in fact that process was directed and coordinated by a party other than the operator—possibly by the ombudsman as you say—who would obviously make a contribution, but it would make a contribution to an independent arbiter or umpire rather than being the developer of the draft ANEF?

Mr Harnisch —I think I would support the proposition. As to what the best corporate governance structure to do that is, I will largely rely on the wisdom of this Senate inquiry.

Senator BACK —The ombudsman in a sense is the person whose role it becomes subsequent to the process to actually hear the complaints of complainants. My fear is that, if the ombudsman was also the umpire in the first instance, the ombudsman might not be quite as independent when afterwards assessing how successful or otherwise the outcome of the ANEF was as measured by numbers of complaints.

Mr Harnisch —I accept that proposition, but I would emphasise that there needs to be an independent body where the assumptions and other matters, as you talked about, can be properly tested and contested. I have no problems with the proposition that perhaps we might be compromising the ombudsman as a mechanism for complaints and perhaps the ombudsman cannot wear the two hats that you are alluding to. Certainly we would support the proposition of having an independent body outside Airservices Australia and the department for testing the assumptions not only of airport lessees but of others.

Senator BACK —It picks up 5.5 where your point is that the master plan and processing the ANEF could actually be conducted concurrently. I also do not see that one needs to be consequent on the other. It would appear that a process, once templated, would actually have application in all jurisdictions around Australia. Indeed, should a new airport be planned, you would think that that process would actually form the framework around which that planning could take place.

Mr Harnisch —I agree with that proposition. I think our point is really about certainty and fairness in terms of the whole process. I think the complaints that we are getting from our members are that there is, primarily, uncertainty about the process and that assumptions cannot be tested for reasonableness.

Senator BACK —It is one that you would expect could have an input by state and local government. It seems that state and local government picked this up after its conclusion. I know there is a line in the exercise that says that state and local government have an opportunity to be consulted or have input, but it seems to me that the ANEF, once approved, becomes a pivotal document for planning by both state and, particularly, local governments around the environs of an airport.

Mr Harnisch —Yes. It then becomes a document that is inflexible.

Senator BACK —Yes, I think that is right; it does. It seems to me that we need to give some thought to the type of mechanism to put in place to do that most effectively and fairly for all parties. We heard evidence this morning in Canberra, which you would say was almost an ambit claim by the airport operator, predicting well into future with aircraft movements that, should they come to pass, would have a profound impact not only on the approaches to Canberra but to almost the entire city.

Mr Harnisch —Yes. Those are the sorts of pressures I have talked about. A lot of our airports were built 60 or more years ago, when cities and towns were obviously of a much smaller size and the airports at that point in time were, so-called, ‘well away’ from the urban centres. But with the increase in population and the increased rate of urbanisation, for good or bad reasons, airports are becoming more encroached upon.

Senator BACK —Among your membership, are you aware of cases where those who have purchased developments that may have been constructed by your members have afterwards come back with some sort of legal claim as a result of misrepresentation occasioned from an ANEF? Have you any experience or knowledge of that?

Mr Harnisch —No, I do not.

Senator BACK —Thank you.

CHAIR —There being no further questions, Mr Harnisch, thank you very much for your time today. We do appreciate it; it has been very useful.

[1.23 pm]