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Wednesday, 28 November 1973
Page: 4030

Mr CHARLES JONES (Newcastle) (Minister for Civil Aviation) - in reply - Several members asked me to reply to a number of questions and I shall do it as quickly as I can. The honourable member for Gippsland (Mr Nixon) asked me to clarify a number of points. I think the first one he raised was the matter of the agreement and whether we would consult the airlines. I assure him that we will consult the airlines. Already I have asked Ansett Transport Industries Ltd to give me an opinion, which it has done, on whether $62,000 should be spent at Carnarvon airport for the purpose of enlarging the apron. The Department has informed me that it is a safety issue and as far as aircraft are concerned, there is no need for it. In actual fact, what we said in the agreement is already in operation. We are consulting with them and I propose to continue to consult with them.

Mr Nixon - What about Western Australia?

Mr CHARLES JONES - I am talking about Western Australia. This was in Carnarvon, Western Australia.

Mr Nixon - Is the $5m in it?

Mr CHARLES JONES - No. You have asked me whether there was an economic evaluation and the answer is yes but I shall give you a reply on that in a moment.

Mr Nixon - What about the consultations?

Mr CHARLES JONES - Let us be clear on it. So far as ATI is concerned, it would do anything to stop TAA operating in Western Australia. Let us face the facts of life. Allow me to say quickly why TAA should be allowed to operate the intrastate services in Western Australia and between Perth and Darwin and which will show clearly that there is great advantage and value to the people of Western Australia. Some of the extensions and strengthening of aerodrome pavements at the intermediate ports will be necessary if TAA is to use the DC9. The cost of the works is estimated at $1.3m. This represents an annual cost of about $180m allowing for amortisation of the investment over the life of the asset together with recurrent maintenance. DCA revenue will increase by about $50,000 per annum as a result of the operation of the DC9. This will partly offset increased costs. On the other hand, there will be great benefits to the traveller which will amount to about $800,000, representing a fare reduction for economy class passengers who at the present time are travelling under economy class conditions but paying first class fares.

TAA is proposing that the DCS will have first class and economy class accommodation, which we believe will represent a considerable saving to travellers on that route. It will represent an immediate reduction of 20 per cent in respect of fares for those who wish to travel economy. The DC9 is set up on the basis of approximately one-quarter accommodation for first class and three-quarters for economy class. So it does represent a very substantial and major saving. A further saving is in respect of air freight. What the honourable member said in regard to the F28 is not 100 per cent correct, because the F28 is leaving behind a considerable amount of freight each trip. This was one of the major complaints that was made to me - that whereas the rest of Australia could send freight at the average freight rate, in Western Australia in order to ensure delivery it has to be sent as express freight, which means an increased charge. This is as a result of the F28 not being big enough and not providing a service for the people of Western Australia. The DC9 aircraft will provide them with a service.

For these few reasons that I have mentioned I believe there is any amount of justification for the cost, which will be roughly $1.3m to upgrade the airports, but the annual saving to the people of Western Australia will be the equivalent of about $800,000. So I believe one has to look at all aspects and not just whether it will mean that Ansett will have to cut down expenditure or services by half. What the former Minister, Senator Sir William Spooner, had to say was that TAA could come in provided it did not cost the Government any more. The increased revenue from the use of the DC9 aircraft plus the great saving to the people of Western Australia more than balances out the increased cost.

Mr Nixon - Very strange economics I must say.

Mr CHARLES JONES - To me it appears to be pretty good economics.

Mr Nixon - You cut out the service to Queensland.

Mr CHARLES JONES - Do not change the subject. We are talking about Western Australia and you are jumping to Queensland. You are flying too fast; I cannot keep up with you. You have asked me for the Government's attitude and I have answered your inquiry. We think that the Western Australian people will obtain a saving of something like $800,000 a year if TAA is to come into operation on the Perth to Darwin service and the intrastate services in Western Australia.

Questions were asked concerning general aviation revenue. In my second reading speech, I set out the facts fairly clearly. The cost of running the 6 major general aviation airports in Australia - that is one in each of the State capital cities - is $8.25m. I am taking into consideration not the expenditure on the hundreds of small general aviation airports but the expenditure on the 6 major city airports only. The cost of operating those 6 airports is $8.25m annually, yet the total annual revenue from general aviation is only $3.6m. General aviation provides a service for the community as a whole. It is a means of recreation or a hobby for some people. I think that at the same time this factor should be taken into consideration: The Australian taxpayer should not be required in some cases to subsidise heavily the provision of these facilities.

Mr Donald Cameron (GRIFFITH, QUEENSLAND) - The taxpayer also subsidises some of the bludgers who get social service benefits from time to time.

Mr CHARLES JONES - One can pick on all sorts of things which are subsidised. We view aviation as a whole. Take for example a comparison of the figures showing the numbers of people who use general aviation services. Last year, general aviation services were subsidised by $69m yet only about 160,000 people a week used them. The former Government made no contribution to public transport which is used now by 23 million people each week. We must determine where our priorities will lie. This is what we are trying to do. We think that the airline industry and the general aviation industry should make a greater contribution to their costs.

I have given an assurance to a number of organisations associated with general aviation that I am prepared to confer with them before the next Budget is introduced to see what economies can be achieved by suggestions which they wish to put forward. In the same way as I have agreed that my Department should confer with the airlines, I am prepared also to confer with recognised organisations in general aviation. In fact, some organisations have put to me a number of suggestions already to which I have been seeking answers by feeding them into the system. We want to see whether economies can be achieved so that we may reduce some of our expenditure on general aviation. I do not want to see these matters blown up unnecessarily. I do not want to see too great an expenditure and, in many cases, unnecessary expenditure. The Government is prepared to act and prepared to confer with the people involved.

Mr Nixon - What about the question of the Treasurer's economic survey?

Mr CHARLES JONES - We are conducting economic surveys at present on the Townsville Airport project, Brisbane Airport, the second Sydney Airport and Melbourne. Major expenditures are involved in those surveys. In the figures which I quoted to honourable members earlier in my remarks on the upgrading of Western Australian airports to DC9 capacity, I established that there is a clear and good case on reasonable grounds to carry out the improvements that we suggest. The Bureau of Transport Economics has not made an economic evaluation of this proposal, but my Department has made an evaluation which shows that the expenditure and the revenue, spread over the lifetime of the asset, will indeed pay for this upgrading. My friend, the honourable member for Swan (Mr Bennett), referred to the possible introduction of a curfew at Perth Airport. From his point of view, the present situation is unfortunate. By reason of the time difference between Western Australian standard time and eastern standard time or eastern daylight saving time international aircraft operate through Perth. I would like to see a curfew introduced at the Perth airport, as would the honourable member for Swan, but I am afraid that at this stage he is the odd man out. The State authorities, city councils and the like in Western Australia, with the exception of the Belmont City Council, do not give him any support. Because of the time lapse between Western Australian standard time and eastern standard time or eastern daylight saving time I am afraid that I cannot help him by instituting a curfew. He raised the question of American Service aircraft using our airports free of charge. A reciprocal agreement exists between countries whereby charges are not imposed on Service aircraft.

The honourable member for Corangamite (Mr Street) raised the question of the possibility that the Government may increase general aviation charges by 100 per cent. The answer to that question is no. We will not increase charges for general aviation by 100 per cent. The Government will examine the figures before the next Budget and we will continue to examine them bexfore each Budget. We will continue to confer with the people in the industry to see where economies can be achieved, always subject to the condition that there is no reduction in the degree of safety. We are not prepared to reduce expenditure at the expense of safety. I make that one positive qualification with which, I believe, honourable members on the other side of the House will agree.

The only point I make in conclusion is that the honourable member for Maranoa (Mr Corbett) once again referred to the problems of people living in the Gulf country. When the honourable member for Maranoa first drew attention to this matter the honourable member for Leichhardt (Mr Fulton) and Senator Keeffe were also raising it with me; I was being blasted from 3 sides at that time. As my time to speak in this debate has almost expired, 1 seek leave to incorporate in

Hansard the text of a letter similar to those which I wrote to the 3 honourable gentlemen who raised this matter.

Mr DEPUTY SPEAKER (Mr Scholes)Order!Is leave granted? There being no objection, leave is granted. (The document read as follows) -

I refer to your letter of 28 October in which you asked me to outline the situation which exists in relation to the possible reduction of subsidies to some Australian inland air services, particularly those in areas of Queensland, including the Channel and Gulf Country.

Since taking office this Government has carried out a thorough review of the policies relating to the provision of subsidies for uneconomic air services and has made a number of decisions on the subsidy schemes. With relation to essential rural subsidies, the Government has confirmed the decision of the previous Government to terminate the essential rural schemes as from 30 June, 1974.

With developmental subsidies, it was decided, in principle, to phase out payments for the operation of this form of uneconomic air service, other than those conducted by Connair Pty Ltd, over a four year period. The Government also decided to take immediate action to reduce its commitment in this area by asking the two major domestic airlines to submit plans for the transfer of their developmental services to light aircraft operators by December 31, 1973, or to the withdrawal of subsidy effective from that date.

The Australian National Airlines Commission (TAA) has since submitted a comprehensive proposal for the restructuring of the Gulf Channel networks.

TAA has given careful consideration to the circumstances existing and forecast in relation to these services and in the knowledge that TAA does not own or operate the type of light aircraft that would be required to substantially reduce subsidy requirements, the decision has been taken to terminate all TAA Twin Otter operations in the Channel and Gulf areas wilh effect from Monday, December 31, 1973.

The accompanying route map (attachment 1) indicates the names and locations of the 37 ports of call embraced by this decision, which will, unless other arrangements are made, be without air services as from December 31, 1973.

I might say that TAA has genuine concern for the welfare of the people who will be affected by the necessity to withdraw Twin Otter aircraft from the Channel and Gulf areas which currently absorb 3000 hours flying per annum, serve 45 ports of call (37 of which will be eliminated) and costs the Commonwealth in excess of $300,000 per annum in subsidy.

An alternative route pattern and operational program has therefore been prepared and is- illustrated in attachment 2 which envisages the following arrangement:

(1)   TAA will withdraw all Twin Otter operations from the Channel and Gulf area as previously mentioned.

(2)   A commuter operator will be encouraged to take over the three times weekly Gulf services, the once weekly Gulf station run and the once weekly Channel Route 1 restructured as illustrated (attachment 2) and extending to Windorah where it could connect with the F27 service mentioned below.

(3)   TAA is prepared to upgrade the service to the Central Channel area by operating a once weekly F27 Fokker Friendship Mk II aircraft Brisbane-Alice Springs and return calling at Charleville, Quilpie, Windorah and Birdsville in each direction. This service would place in excess of 40 homesteads and IS previous ports of call within a radius of 100 miles driving distance from an airport serviced by a modern airconditioned aircraft offering hostess, bar and meal services. It would also offer connections at Alice Springs to Adelaide and Darwin and at Brisbane to points north and south and on the east coast.

(4)   A commuter operator would be approached to operate a once weekly service from Broken Hill north to Birdsville landing at 7 station homesteads en route in each direction as required. Connections could be made with the Fokker Friendship at Birdsville both westbound and eastbound if a demand existed.

It is estimated that these services could be performed at a total annual cost in subsidy to the Commonwealth of $88,000. This figure includes a contingency amount of $15,000 for flood relief operations with light aircraft operating from Charleville, Windorah and Birdsville as may be necessary during periods when the channels are flooded and an amount of $55,000 payable to TAA as a contribution towards the cost of establishing the F27 operation from Brisbane to Alice Springs in the first year only. TAA estimates a probable loss in excess of $100,000 on this service in the first year of operation, but the airline believes it has a potential for development as a unique tourist route and is, therefore, prepared to make this financial contribution in the developmental stage of the service.

In essence, however, I would like to conclude that these plans for the re-arrangement of the Channel and Gulf Country services are the same as plans under final study by the previous Government _ in 1972 but which were shelved due to the approaching elections.

Yours sincerely,


Question put -

That the words proposed to be omitted (Mir Nixon's amendment) stand part of the question.

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