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Tuesday, 4 October 1983
Page: 1291

Mr BEAZLEY (Minister for Aviation)(8.43) —I wish to respond very briefly to some of the points raised. The honourable member for Denison (Mr Hodgman), who has just spoken, referred to aviation developments in Tasmania, particularly in relation to Hobart. He would be aware that included in the recent package of measures for Tasmania is an amount of some $3m to be spent on the upgrading of Hobart Aerodrome to full 727 standard. I did address at one point of time the general questions that the honourable member raised. He has raised them again so I will look at them and review the answer I gave to one of his colleagues on that matter, I think a month or so ago.

The honourable member would be aware that in the aviation program we always have to be very careful, when we undertake civil works, to stick pretty close to well assessed genuine aviation needs. Sometimes we tend to get a little too emphatic about the tourism and job creation aspects of particular projects. Important as those areas are, we need to recollect that the aviation budget, particularly the civil works side of the aviation budget, is one of those very rare instances of any major government program which is predicated on the assumption of, as near as possible, total cost recovery from the industry. That of course can have very substantial effects on, among other things, air fares. As anyone from Tasmania and Western Australia would know, air fares also have a fair bit to do with tourism.

The honourable member for North Sydney (Mr Spender) raised a number of more general matters relating to the aviation budget. This year our budget is $620m. This represents the largest budget for the aviation civil works program. The honourable member mentioned a couple of instances in which projects were announced after a Budget by the previous Government. I suppose, if I wanted to do the same sort of thing, I could add to the $620m a billion dollars or so for a second Sydney airport. Until those projects actually get off the ground and reach a design stage and program I do not think it is legitimate to include them in the forward Estimates. What we have done in the case of both Darwin and Perth is to take promises from a stage of being promises through to design stage which is suitable to go before the Parliamentary Standing Committee on Public Works and which is suitable for commencement at the end of this financial year. That is really the point at which one can legitimately claim for oneself a degree of credit in these areas.

The honourable member for North Sydney went on to discuss the question of air fares and the recent announcement by the Independent Air Fares Committee of an increase in air fares. He drew attention to the undeniable fact that air fares in this country have risen dramatically above average increases in costs and that this has had a very deleterious effect on the industry. I could not agree with him more. One of the problems which this Government confronts in this area is that we are bound by legislation, passed in the previous Parliament, which established the Independent Air Fares Committee. More importantly-I think there is a lot going for having an Independent Air Fares Committee about the place-it set the terms of reference on which the Independent Air Fares Committee must operate. We did point out when those matters were introduced into the Parliament that we believed the Independent Air Fares Committee had inadequate provisions within its charter to take into account the question of public interest when considering air fare rises. As a result, the Independent Air Fares Committee is capable of doing a great deal of work in making sure that the airlines justify their increases, but it must still conform to the basic cost-plus arrangements of the pricing processes which are included in its charter.

The Independent Air Fares Committee acts principally on the initiative of the airlines. It is the airlines in the first instance which go to the Committee with propositions for air fare increases. To this point of time I have been impressed by an acceptance on the part of the two airlines that there is no great value to them in substantial increases in air fares because, as is quite evident from the figures which the honourable member cited and which I have cited in other places, people are beginning to vote with their feet, so to speak , and are starting to not use air travel. Unquestionably, one of the factors in their decision is the price of the product. That is why it was with some disappointment that I saw the airlines approach the Independent Air Fares Committee for that rise in air fares. I had hoped, as a result of the indication which the airlines gave a month or so earlier when they introduced a 45 per cent air fare reduction-in a number of areas in Australia, although not in all areas, this is working very well-that this indicated a change of heart on their part. The airlines must really begin to address seriously this question of the price of the product and their role in public transport. These factors will undeniably play a substantial part in public and private submissions by a variety of interested parties when we start our review of the two airlines agreement in the middle of next year.

Other matters that have been raised in relation to aviation include ones raised by the honourable member for the Northern Territory (Mr Reeves) on Darwin Airport. I take note of the comments he raised. I also thank him for the very constructive role-he is no longer in the chamber-he played in the Party's, the Cabinet's and the Ministry's deliberations on the provision of a terminal for Darwin. He was extremely helpful in putting forward the Northern Territory's perspective on this very important matter.