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Airports Amendment Bill 2015

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2013-2014-2015

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

 

AIRPORTS AMENDMENT BILL 2015

 

 

 

 

 

 

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Infrastructure and Regional Development

the Hon Warren Truss MP)

 

 



 

AIRPORTS AMENDMENT BILL 2015

 

OUTLINE

 

The Bill amends the Airports Act 1996 (the Act) to provide for the determination of an airport plan for Sydney West Airport.  It also includes measures to increase options available to the Australian Government should Southern Cross Airports Corporation decline an offer to develop the airport.

 

Airport Plan

An airport plan for Sydney West Airport is a special planning instrument that recognises the unique circumstances of a greenfield airport development.  It is a temporary, transitional measure that authorises the initial airport development for Sydney West Airport and specifies the Australian Government’s requirements for the airport.  An airport plan may be determined by the Infrastructure Minister following completion of an Environmental Impact Statement under the Environment Protection and Biodiversity Conservation Act 1999 , and the exercise of an approval function, in relation to environmental matters, by the Environment Minister.

 

The airport plan will include a concept design for the airport (Part 2) and details of specific developments for the initial airport development (Part 3).  The airport-lessee company for Sydney West Airport will be required to complete a full master plan within five years of signing the airport lease or as approved by the Infrastructure Minister.

 

The Bill makes consequential amendments to the Airports Regulations 1997 and Airports (Building Control) Regulations 1996 as a result of the changes made in the Act.

 

Other provisions

Additionally, the Bill amends the Act to remove the requirement in section 18 that the airport-lessee companies for Sydney (Kingsford-Smith) Airport and Sydney West Airport must be subsidiaries of the same company.

 

As part of the Government’s sale of Sydney (Kingsford-Smith) Airport in 2002, the purchaser, Southern Cross Airports Corporation, was provided with a right of first refusal to develop and operate a second major airport in the Sydney region.

 

If Southern Cross Airports Corporation elects not to exercise its option to develop and operate the airport, the Sydney (Kingsford-Smith) Airport sale agreement entitles the Commonwealth to develop and operate the airport itself, or offer the development opportunity to a third party.

 

The Bill also removes the airport pair cross-ownership restrictions currently placed on Sydney West Airport.  This will help maximise the success of any market offering in the event Southern Cross Airports Corporation chooses not to exercise an option to develop and operate the airport.

 

Separately, to progress the project and prepare for the declaration of the land at Badgerys Creek as an airport site, the Bill contains some mechanical provisions to facilitate declaration of the airport site and other preparatory work.

 





Financial impact statement

 

The Bill will have no financial impact.

 

 

Regulation Impact Statement

 

A regulation impact statement was prepared for the removal of airport pair cross-ownership restrictions for Sydney West Airport.  It appears at the end of this explanatory memorandum.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Airports Amendment Bill 2014

This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Overview of the Bill

The Airports Amendment Bill 2015 amends the Airports Act 1996 (the Act) to provide for the determination of an airport plan for Sydney West Airport.  This is a temporary, transitional measure that authorises the initial airport development for Sydney West Airport and specifies the Australian Government’s requirements for the airport.

 

The Bill also includes measures to increase options available to the Australian Government should Southern Cross Airports Corporation decline an offer to develop the airport.  This is necessary to give full effect to the Commonwealth’s contractual rights in relation to Sydney West Airport.

 

Separately, to progress the project and prepare for the declaration of the land at Badgerys Creek as an airport site, the Bill deals with some miscellaneous matters.

 

Human rights implications

The amendments proposed by this Bill do not engage any of the applicable rights or freedoms.  The Bill simply creates a planning instrument applicable to a greenfield airport development and includes measures to ensure that the Commonwealth has the commercial flexibility to deal with third parties or develop the airport itself if required in the event Southern Cross Airports Corporation elects not to take up the opportunity.  It does not affect any contractual rights held by Southern Cross Airports Corporation.

 

Amendments clarifying when a lease granted on the Badgerys Creek site is intended to be an airport lease, and other preparatory amendments, are mechanical in nature only.

 

Conclusion

This Bill is compatible with human rights as it does not raise any human rights issues.

 

 

 

 

 

 

Minister for Infrastructure and Regional Development, the Hon Warren Truss MP

NOTES ON CLAUSES

 

Clause 1: Short Title

 

1.       This clause is a formal provision specifying the short title of the Bill. It provides that the Bill, once enacted, may be cited as the Airports Amendment Bill 2015 .

 

Clause 2: Commencement

 

2.       This clause sets out the commencement date of the Bill.  All sections in the Bill would commence on the day after the Act receives Royal Assent.

 

Clause 3: Schedule(s)

 

3.       This clause provides that legislation that is specified in a Schedule to the Act (as enacted) is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in the Schedule has effect according to its terms.  It also provides that the amendment of any regulation under subsection (1) does not prevent the regulation, as so amended, from being amended or repealed by the Governor-General.

 

SCHEDULE 1 -

 

Item 1-

 

This item omits ‘Sydney’ wherever is occurs in the section and substitutes it with ‘Sydney (Kingsford-Smith)’.  This is a consequential amendment due the repeal of table items in section 49 that relate to removing Sydney West Airport from the cross ownership restrictions in Part 3 of the Act - see item 9.

 

Item 2 -

 

This item inserts definitions for ‘airport plan’, ‘ancillary development’, ‘associated site for Sydney West Airport’, ‘Environment Minister’, ‘Infrastructure Minister’ and ‘Sydney West Airport completion day’.  They relate to the insertion of a new Division 4A of Part 5 of the Act - see item 30.

 

Item 3 -

 

This item amends the outline at section 11 to provide that the airport-lessee companies for Sydney (Kingsford-Smith) Airport and Sydney West Airport may be wholly-owned subsidiaries of the same holding company.  This is a consequential amendment due to the amendment of subsections 18(1) to 18(6) in item 5.

 

Item 4 -

 

This item repeals the heading for section 18 and substitutes it with the heading ‘Sydney (Kingsford-Smith) Airport and Sydney West Airport may be under common ownership’.   This is a consequential amendment due to the amendment of subsections 18(1) to 18(6) in item 5.

Item 5 -

 

This item removes the requirement that the airport-lessee companies for Sydney (Kingsford-Smith) Airport and Sydney West Airport must be wholly-owned subsidiaries of the same holding company.  It repeals subsections 18(1) to 18(6) and substitutes them with a provision that permits the airport-lessee companies for Sydney (Kingsford-Smith) Airport and Sydney West Airport to be wholly-owned subsidiaries of the same holding company.  The intent of this item is to permit the common ownership of Sydney (Kingsford-Smith) Airport and Sydney West Airport, which is contemplated by Southern Cross Airports Corporation’s contractual right of first refusal and section 248 of the Act, but not to require it.

 

The requirement for common ownership was inserted into the Act due to a regulatory imperative at the time to ensure that the two airports were under common ownership.  That regulatory imperative no longer exists, so it is considered desirable to convert the requirement into a permission (without affecting Southern Cross Airports Corporation’s contractual right of first refusal).

 

Removing the requirement for common ownership will provide the Commonwealth with the commercial flexibility to deal with third parties or develop the airport itself if required.  The measure does not affect Southern Cross Airports Corporation’s contractual right of first refusal or section 248 of the Airports Act.  See also items 72 and 73.

 

Item 6 -

 

This item repeals paragraph 24(3)(d).  This is a consequential amendment due to the amendment of subsections 18(1) to 18(6) in item 5.

 

Item 7 -

 

This item omits ‘Sydney’ wherever it occurs in the section and substitutes it with ‘Sydney (Kingsford-Smith).  This is a consequential amendment due the repeal of table items in section 49 that relate to removing Sydney West Airport from the cross-ownership restrictions in Part 3 of the Act - see item 9.

 

Item 8 -

 

This item omits ‘Sydney’ wherever is occurs in the section and substitutes it with ‘Sydney (Kingsford-Smith).  This is a consequential amendment due the repeal of table items in section 49 that relate to removing Sydney West Airport from the cross-ownership restrictions in Part 3 of the Act - see item 9.

 

Item 9 - 

 

This item repeals table items in section 49 that, to any extent, relate to Sydney West Airport. The effect of the amendment is to remove airport-pair cross-ownership restrictions that apply in relation to three pairs of airports: Sydney West and Melbourne, Sydney West and Perth, and Sydney West and Brisbane.  Following these amendments, Sydney West will be treated like the majority of airports under the Airports Act and not be subject to airport-pair cross-ownership restrictions.

 

Item 10 -

 

This amendment adds to the simplified outline in section 67 for Part 5 of the Act.  This is a consequential amendment due to the insertion of Division 4A of Part 5 at item 30.

 

Item 11 -

 

This amendment adds the words ‘(other than Division 4A and the associated provisions)’ after ‘Part’ in subsection 68(1) and is a consequential amendment due to the insertion of subsection (1A) at item 12.

 

Item 12 -

 

This item inserts subsection (1A) after subsection 68(1).  This item is consequential to the amendments in item 30 and clarifies that the new Division 4A and associated provisions (see item 14) apply to Sydney West Airport whether or not there is an airport lease for the airport.  This is contrast to subsection (1) which applies only if there an airport lease for the airport.  The effect of this provision is to provide for an airport plan, and its associated legal consequences, for Sydney West Airport before there is an airport lease.  Of course, should Sydney West Airport have an airport lease, Division 4A and the associated provisions will apply to it pursuant to subsection 68(1A), and the remainder of Part 5 would apply to it as a leased core regulated airport pursuant to subsection 68(1).

 

Item 13 -

 

This amendment omits the wording ‘subsection (1)’ and substitutes it with ‘subsections (1) and (1A)’ and is a consequential amendment due to the insertion of subsection (1A) at item 12.

 

Item 14 -

 

This item inserts subsection (3) at the end of section 68 and provides a definition of the term ‘associated provisions’ used in subsection (1A) at item 12.  It provides that ‘associated provisions’ means the provisions of Division 6, to the extent they relate to Division 4A (see item 30).  This is intended to clarify that generic provisions in Division 6 also apply, with the new airport plan provisions, to Sydney West Airport regardless of whether there is an airport lease for the airport.

 

Item 15 -

 

This amendment adds the word ‘and’ at the end of paragraph 75(1)(b) and is a consequential amendment due to insertion of paragraph 75(1)(ba) at item 16.

 

Item 16 -

 

This item relates to the insertion of Division 4A of Part 5 at item 30 and is consequential to the new subsection 75(1A) which is inserted by item 17.  

 

Subsection 75(1) sets the period in which a draft master plan must be provided to the Minister following the grant or transfer of an airport lease.  New subsection 75(1A) deals specifically with the requirements for a master plan for Sydney West Airport following the grant of the first airport lease and accordingly this item inserts a new paragraph 75(1)(ba) to exclude the first Sydney West Airport master plan from the general requirements in subsection 75(1). 

 

Item 17 -

 

This item relates to the insertion of Division 4A of Part 5 at item 30 and inserts a new subsection 75(1A).

 

Subsection 75(1A) provides that a draft master plan for Sydney West Airport must be provided by the airport-lessee company within five years after the grant of the first airport lease for the airport.  It also provides that the Minister may, by written notice given to the company, allow a longer period.  This five year timeframe recognises the greenfield nature of the Airport and the expectation that there will be an airport plan for Sydney West Airport covering much of the same ground that a master plan would ordinarily cover.  In this context, it would be undesirable to apply the usual 12-month requirement (subsection 75(1)) for a first master plan.

 

This change only applies to the first master plan for Sydney West Airport.  After the first master plan, the airport-lessee company will be subject to the usual five-year cycle for master plans under section 76.     

 

Item 18 -

 

This amendment inserts ‘or (1A)’ after ‘(1)’ in paragraph 75(2)(a) and is a consequential amendment due to insertion of subsection 75(1A) item 17.

 

Item 19 -

 

This item inserts a new section 81A after section 81.  Section 81A deals with the relationship between an airport plan for Sydney West Airport and a draft master plan given to the Minister by the airport-lessee company. 

 

Subsection 81A(1) provides that if an airport-lessee company for Sydney West Airport gives the Minister a written draft master plan, and an airport plan is in force, the Minister may refuse to approve the draft master plan if the Minister is satisfied the draft master plan is inconsistent with the airport plan.  This is intended to ensure that the Minister can require a master plan for Sydney West Airport to be consistent with the development objectives and other matters set out in the airport plan. 

 

Subsection (2) deals with a situation where an airport-lessee company for Sydney West Airport wishes to propose a master plan which is inconsistent with the airport plan before the Sydney West Airport completion day.  The subsection permits the Minister to approve the master plan notwithstanding the inconsistency if the draft master is accompanied by an application to vary the airport plan and the Minister is satisfied that the draft master plan (if approved) and the airport plan (as proposed to be varied) will be consistent with each other.   In practice it is only necessary for the application to vary the airport plan to deal with inconsistencies with Part 3 of the airport plan because once a final master plan is in force for the airport, the airport plan is automatically varied to remove Part 2 of the airport plan (see new section 96E inserted by item 30).

Subsection (3) provides that on or after the Sydney West Airport completion day, the Minister may approve a draft master plan even if it is inconsistent with Part 3 of the airport plan.  There is no requirement to vary the airport plan to remove inconsistencies on and after the Sydney West Airport completion day.  Accordingly, even though subsection (1) could have an indefinite operation, this does not mean that master plans must indefinitely be consistent with the original airport plan.

 

Subsections (2) and (3) recognise that while the Minister can require the master plan to be consistent with the airport plan without amendment (see subsection 81A(1)), it may in fact be desirable to permit an inconsistency.

 

Subsections (1), (2) and (3) operate independently of each other.  Subsections (2) and (3) do not limit subsection (1).  For example, this means that the Minister may refuse to approve a draft master plan that is inconsistent with the airport plan under subsection (1) even if circumstances set out in subsection (2) or (3) are applicable.

 

Subsection (4) provides that in determining whether the draft master plan is inconsistent with the airport plan, newly inserted section 96E at item 30 is to be disregarded.  Section 96E will have the effect that the airport plan is automatically varied to remove Part 2 (concept design) when the first final master plan comes into force for Sydney West Airport.  Subsection 81A(4) is included to ensure that when considering whether the draft of the first master plan for Sydney West Airport is inconsistent with the airport plan, the airport plan is considered in its entirety, including Part 2.

 

Subsection (5) provides that section 81A does not limit the powers conferred on the Minister by section 81.  This ensures that in addition to considering issues of consistency with the airport plan, the Minister can also consider all of the generally applicable matters when deciding whether or not to approve a draft master plan.

 

Item 20 -

 

This item inserts a new section 84AA after section 84.  Section 84AA deals with the relationship between an airport plan for Sydney West Airport and a draft variation to a final master plan for the airport given to the Minister by the airport-lessee company.

Subsection (1) provides that if an airport-lessee company for Sydney West Airport gives the Minister a written draft variation to a final master plan, and an airport plan is in force, the Minister may refuse to approve the variation if the Minister is satisfied that the draft variation is inconsistent with the airport plan.  This is intended to ensure that the Minister can require variations to final master plans for Sydney West Airport to be consistent with the development objectives for Sydney West airport and other matters set out in the airport plan. 

 

Subsection (2) deals with a situation where an airport-lessee company for Sydney West Airport wishes to propose a variation to a final master plan which is inconsistent with the airport plan before the Sydney West Airport completion day.  The subsection permits the Minister to approve the variation to the final master plan notwithstanding the inconsistency if the draft variation to the master plan is accompanied by an application to vary the airport plan and the Minister is satisfied that the master plan (as proposed to be varied) and the airport plan (as proposed to be varied) will be consistent with each other. 

 

Subsection (3) provides that on or after the Sydney West Airport completion day, the Minister may approve a variation to a draft master plan even if it is inconsistent with the airport plan.  There is no requirement to vary the airport plan to remove inconsistencies on and after the Sydney West Airport completion day.

 

Subsection (4) provides that section 84AA does not limit the powers conferred on the Minister by section 84.  This ensures that in addition to considering issues of consistency with the airport plan, the Minister can also consider all of the generally applicable matters when deciding whether or not to approve a draft variation of a final master plan.

 

Item 21 -

 

This item repeals the heading at section 90 and substitutes it with a new one, which retains the original wording but adds ‘etc.’ at the end.  This amendment is consequential due to the amendments to section 90 at items 22 to 27.

 

Item 22 -

 

This item inserts ‘in any case’ before ‘the carrying out’ in paragraph 90(1)(c).  This amendment is consequential to the amendment at item 23 and ensures that paragraph (c) is applicable in all cases (including where applicable at Sydney West Airport). 

 

Item 23 -

 

This item inserts a new paragraph 90(1)(ca) after paragraph 90(1)(c).  It adds another circumstance in which a major airport development may be carried out at Sydney West Airport, namely where the development is covered by Part 3 of an airport plan for the airport and the carrying out of the development is in accordance with Part 3 of the airport plan.  This recognises that the airport plan for Sydney West Airport will provide authorisation for the initial development of the airport and is intended to ensure that such developments are not subject to duplicate approval processes.

 

Developments at Sydney West Airport that are not covered by the airport plan will be subject to the generally applicable requirements including the requirements relating to major development plans.

 

Item 24 -

 

This item inserts ‘in any case’ before ‘the carrying out’ in paragraph 90(1)(d).  This amendment is consequential to the amendment at item 23 and ensures that paragraph (d) is applicable in all cases (including where applicable at Sydney West Airport). 

 

Item 25 -

 

This item inserts ‘in any case’ before ‘the carrying out’ in paragraph 90(4)(c).  This amendment is consequential to the amendment at item 26 and ensures that paragraph (c) is applicable in all cases (including where applicable at Sydney West Airport). 

 

 

 

Item 26 -

 

This item inserts a new paragraph 90(4)(ca) after paragraph 90(4)(c).  It adds another circumstance in which a major airport development may be carried out at Sydney West Airport, namely where the development is covered by Part 3 of an airport plan for the airport and the carrying out of the development is in accordance with Part 3 of the airport plan.  This recognises that the airport plan for Sydney West Airport will provide authorisation for the initial development of the airport and is intended to ensure that developments are not subject to duplicate approval processes.

 

Developments at Sydney West Airport that are not covered by the airport plan will be subject to the generally applicable requirements including the requirements relating to major development plans.

 

Item 27 -

 

This item inserts ‘in any case’ before ‘the development’ in paragraph 90(4)(d).  This amendment is consequential to the amendment at item 26 and ensures that paragraph (d) is applicable in all cases (including where applicable at Sydney West Airport). 

 

Item 28 -

 

This item inserts a new section 94AA after section 94.  Section 94AA deals with the relationship between an airport plan for Sydney West Airport and a draft major development plan given by the airport-lessee company to the Minister.

 

Subsection (1) provides that if an airport-lessee company for Sydney West Airport gives the Minister a written draft major development plan, and an airport plan is in force, the Minister may refuse to approve the draft major development plan if the Minister is satisfied the draft major development plan is inconsistent with the airport plan.  This is intended to ensure that the Minister can require any major development plan for Sydney West Airport to be consistent with the development objectives for Sydney West Airport and other matters set out in the airport plan. 

 

Subsection (2) deals with a situation where an airport-lessee company for Sydney West Airport wishes to propose a major development plan which is inconsistent with the airport plan before the Sydney West Airport completion day.  The subsection permits the Minister to approve the major development plan notwithstanding the inconsistency if the draft major development plan is accompanied by an application to vary the airport plan and the Minister is satisfied that the draft major development plan (if approved) and the airport plan (as proposed to be varied) will be consistent with each other. 

 

Subsection (3) provides that on or after the Sydney West Airport completion day, the Minister may approve a draft master plan even if it is inconsistent with the airport plan.  There is no requirement to vary the airport plan to remove inconsistencies on and after the Sydney West Airport completion day.

 

Subsection (2) and (3) recognise that while the Minister can require a major development plan to be consistent with the airport plan without amendment (see subsection (1)), it may in fact be desirable to permit an inconsistency in some cases.

Subsections (1), (2) and (3) operate independently of each other.  Subsections (2) and (3) do not limit subsection (1).  For example, this means that the Minister may refuse to approve a draft major development plan that is inconsistent with the airport plan even if the circumstances set out in subsection (2) or (3) are applicable.

 

Subsection (4) provides that section 94AA does not limit the powers conferred on the Minister by section 94.  This ensures that in addition to considering issues of consistency with the airport plan, the Minister can also consider all of the generally applicable matters when deciding whether or not to approve a draft major development plan.

 

Item 29 -

 

This item inserts a new section 95AA after section 95.  Section 95AA deals with the relationship between an airport plan for Sydney West Airport and a draft variation to a major development plan for the airport given to the Minister by the airport-lessee company.

 

Subsection (1) provides that if an airport-lessee company for Sydney West Airport gives the Minister a written draft variation to a major development plan, and an airport plan is in force, the Minister may refuse to approve the variation if the Minister is satisfied that the draft variation is inconsistent with the airport plan.  This is intended to ensure that the Minister can require variations to major development plans for Sydney West Airport to be consistent with the development objectives for Sydney West airport and other matters set out in the airport plan. 

 

Subsection (2) deals with a situation where an airport-lessee company for Sydney West Airport wishes to propose a variation to a major development plan which is inconsistent with the airport plan before the Sydney West Airport completion day.  The subsection permits the Minister to approve the variation to the major development plan notwithstanding the inconsistency if the draft variation to the major development plan is accompanied by an application to vary the airport plan and the Minister is satisfied that the major development plan (as proposed to be varied) and the airport plan (as proposed to be varied) will be consistent with each other. 

 

Subsection (3) provides that on or after the Sydney West Airport completion day, the Minister may approve a variation to a draft major development plan even if it is inconsistent with the airport plan.  There is no requirement to vary the airport plan to remove inconsistencies on and after the Sydney West Airport completion day.

 

Subsection (4) provides that section 95AA does not limit the powers conferred on the Minister by section 95.  This ensures that in addition to considering issues of consistency with the airport plan, the Minister can also consider all of the generally applicable matters when deciding whether or not to approve a draft variation of a major development plan.

 

Airport Plan amendments

 

Item 30 inserts new Division 4A of Part 5 after Division 4.  The heading of the new Division is ‘Airport plan for Sydney West Airport’.  The Division provides for the determination of an airport plan for Sydney West Airport.

 

An airport plan for Sydney West Airport is a special planning instrument that recognises the unique circumstances of a greenfield airport development.  It is a temporary, transitional measure that authorises the initial airport development for Sydney West Airport and specifies the Australian Government’s requirements for the airport.

 

Following privatisation of the existing Airports Act airports, the Act implemented a planning scheme under which airport-lessee companies were required to submit master plans within one year of being granted an airport lease and to update them every five years after that.  In addition, approval from the Infrastructure Minister was required for all major developments on the airport site through a major development plan process.  Major development plan processes are adapted to the circumstances and planning cycle of an established airport.  These processes do not recognise the unique circumstances of a greenfield airport development where the Australian Government is undertaking an environmental assessment and establishing the key development objectives for the airport.

 

The Bill addresses these concerns by creating a single, streamlined process to authorise the initial development of the airport.  The culmination of that process is an ‘airport plan’ for Sydney West Airport.

 

As the airport plan sets out the Australian Government’s requirements for the initial airport development, the Infrastructure Minister is responsible for determining the plan.  The airport plan will include a concept design (Part 2) and details of specific developments (Part 3). 

 

Once the plan has been determined no further planning or development approvals will be required for the developments covered by Part 3 of the airport plan (other than the standard building approvals under the Airports Act).  This will enable detailed design and construction planning for the initial airport development to commence as soon as possible. 

 

The airport plan process in the Bill ensures that relevant environmental considerations are taken into account before the plan is determined.  It recognises the environmental impact assessment process that commenced in December 2014 for a Western Sydney Airport at Badgerys Creek and requires the environmental impact statement to be finalised before the plan can be determined.  The airport plan process also requires the input of the Environment Minister, who has the capacity, for environmental reasons, to prevent the determination of an airport plan or to require specified conditions or other provisions to be included in the plan. 

 

There will be consultation on the airport plan as part of the environmental impact statement consultation, given that the environmental impact statement is assessing implementation of the airport plan and its impacts on the environment.  

 

As with master plans and major development plans, building activities at the airport will be required to be consistent with the airport plan.

 

As a transitional measure designed to authorise the initial stage of development for Sydney West Airport, the airport plan is temporary.  Within five years of signing the airport lease, or in such time as approved by the Infrastructure Minister, the airport-lessee company for Sydney West Airport will be required to complete a full master plan.  At this point the regulatory framework applicable to Sydney West Airport will revert to the usual master plan process and the airport plan will be automatically varied to remove Part 2 (Concept design).

 

The Infrastructure Minister will also declare a ‘Sydney West Airport completion day’ having regard to progress on implementing the specific developments covered by Part 3 of the airport plan and any agreements with the airport-lessee company about the Part 3 developments.  After the Sydney West Airport completion day, while the airport plan will continue to authorise the existing developments, the regime for planning and building approvals for all new building and development activities will revert to the standard regime applicable at existing airports. 

 

Item 30 -

 

Section 96A

Section 96A provides a simplified outline of the Division.

 

Section 96B

Section 96B relates to the determination of an airport plan for Sydney West Airport. Subsection (1) provides that the Infrastructure Minister, being the Minister who administers the Airports Act and defined as such in item 2, may by writing determine an airport plan for Sydney West Airport.  The determination of the airport plan means that it is in force; there is nothing else that must be done to trigger the legal operation of the plan. 

Under subsection (2), the Infrastructure Minister is required to give a draft of the airport plan to the Environment Minister.  This is a mandatory precondition to the determination of the airport plan.

 

The function of the Environment Minister, under subsection (3), is to consider the draft airport plan from an environmental perspective (‘environment’ here has the same meaning as in the Environment Protection and Biodiversity Act 1999 ) and having regard to the Sydney West Airport environmental impact statement (subsection (5)).  Having considered the draft airport plan, the Environment Minister then gives a notice to the Infrastructure Minister.  The notice can say one of three things.

 

First, the notice can say that the Environment Minister considers that the airport plan should not be determined, for example, because it is unacceptable from an environmental perspective and that there are no conditions or other provisions that could mitigate the unacceptability.  If the Environment Minister gives this notice, the Infrastructure Minister is prohibited from determining the airport plan without giving a new draft to the Environment Minister (subsection (8)).

 

The second option is for the notice to say that the Environment Minister considers that one or more specified conditions or other provisions should be included in the airport plan (as determined) for the purpose of protecting the environment.  A condition or provision must relate to a development covered by Part 3 (Specific Developments) of a draft airport plan (subsection (4)).  In practice, Part 3 of a draft airport plan given to the Environment Minister could contain a number of different kinds of conditions or provisions, dealing with construction, aeronautical, environmental or other matters.  The Environment Minister may only specify environmental conditions or provisions.  The environmental conditions or provisions that the Environment Minister specifies could be ones that are already included in the draft plan (i.e. if the Minister considers that those conditions are necessary and appropriate); alternatively or additionally, the Environment Minister may specify other conditions.  In either case, those specified conditions or provisions must be carried through into Part 3 of the final airport plan (subsection (9)), no inconsistent conditions or provisions may be included (subsection 96C(8)), and the Environment Minister’s agreement will be required for any subsequent and inconsistent variations (subsection 96D(3)).

 

The third option is for the notice to say that the Environment Minister is satisfied with the plan.

                                                                                                              

There is a time limit of 30 business days between when the Environment Minister receives a draft airport plan from the Infrastructure Minister and when the Environment Minister returns a notice under subsection (3).  Naturally, the Infrastructure Minister must wait for the Environment Minister’s notice to be given before determining the airport plan (subsection (7)).

 

Subsection (10) makes it clear that, save for anything in a notice from the Environment Minister, the determination of an airport plan for Sydney West Airport is in the Infrastructure Minister’s discretion.

 

Subsection (11) provides that an airport plan for Sydney West Airport is not a legislative instrument. The status of an airport plan is therefore consistent with major development plans and master plans, which are also not legislative instruments.  This is appropriate because, like master plans and major development plans, an airport plan does not determine the content of the law; it just triggers particular legal effects such as an authorisation to implement the airport plan and a sanction for not complying with its conditions.  It is the Act, and not the plan, that creates these legal effects.  For this reason it is highly likely that, even in the absence of subsection (11), an airport plan would not be a legislative instrument: it is of an administrative character. Subsection (11) is thus declaratory and is designed to make the legal status of the airport plan clear to a reader of the legislation.

 

Subsection (12) provides a definition of ‘Sydney West Airport environmental impact statement’ for the purposes of the section. Paragraphs (a), (b) and (c) provide that the environmental impact statement is the ‘Sydney West Airport environmental impact statement’ if in December 2014, proposed action consisted of the construction and operation of a Western Sydney Airport at Badgerys Creek, New South Wales and the proposed action was referred to the Environment Minister and the Environment Minister decided under section 87 of the Environment Protection and Biodiversity Conservation Act that the relevant impacts of the action must be assessed by an environmental impact statement under Division 6 of Part 8 of that Act. 

 

Subsection (13) provides that for the purposes of paragraph (12)(b) it is immaterial whether the referral occurred before, at or after commencement. Similarly, subsection (14) provides that for the purposes of paragraph (12)(c) it is immaterial whether the referral occurred before, at or after commencement.  While a referral was made in December 2014 and the Environment Minister decided that an environmental impact statement must be undertaken under Division 6 of Part 8 of the Environment Protection and Biodiversity Conservation Act, these provisions recognise the possibility of additional referrals or variations that may be required prior to the environmental impact statement being finalised.

 

Section 96C

Section 96C relates to the contents of an airport plan.  Subsection (1) provides that an airport plan for Sydney West Airport must be divided into three parts, as set out in paragraphs (a), (b) and (c).  As per paragraph (a) the first part is known as ‘Part 1 - Title’.  As per paragraph (b) the second part is to be known as ‘Part 2 - Concept design’.  As per paragraph (c) the third part is to be known at ‘Part 3 - Specific developments’.  This division does not prevent an airport plan from containing material outside the three parts: see subsection (8).  For example, the airport plan could include introductory or explanatory text either within one of the three parts or outside of the three parts.

 

Part 1 of the airport plan must include a title for the airport plan.  For example, the title could be ‘Airport Plan for Sydney West Airport’.

 

Subsection (2) relates to Part 2 of the plan, being the concept design.  It provides that Part 2 of the airport plan for Sydney West Airport may specify any of the things in paragraphs (a) through to (e).  This includes for example the development objectives for the airport, indicative flight paths, and such other matters as are specified in the regulations.  Other matters can be included in Part 2 outside those matters specified: see subsection (8).

 

Subsection (3) relates to Part 3 of airport plan, concerning specific developments.  It provides that Part 3 of an airport plan for Sydney West Airport may set out, as per paragraph (a), the details of one or more developments that may be carried out at the airport site for Sydney West Airport and are consistent with Part 2 of the airport plan.  The consistency requirement is to ensure that only developments that are consistent with the concept design for the airport as set out in Part 2 of the plan are included in Part 3 of the plan.  Paragraph (b) provides that subject to other relevant provisions in the Airports Act (for example the need for building approvals), Part 3 of the airport plan authorises the carrying out of those developments.  This provision expressly provides development approval for those developments specified in Part 3 of the airport plan.

 

Subsection (4) provides that Part 3 of an airport plan for Sydney West Airport may set out the details of one or more ancillary developments that may be carried out on an associated site for Sydney West Airport.  Subject to the Act, Part 3 of the airport plan for Sydney West Airport authorises the carrying out of those developments.  Consistent with the definitions of ‘associated site for Sydney West Airport’ and ‘ancillary development’ this subsection authorises development to be carried out an area of land outside the airport site for Sydney West Airport, that the Commonwealth has a right to carry out on the area, that may reasonably be regarded as ancillary or incidental to Sydney West Airport (see new section 96L).  These provisions are intended to support developments such as runway lighting or instrumentation that may be located outside of the airport site on land over which the Commonwealth has rights such as an easement or a licence permitting the development.

 

Subsection (5) provides that Part 3 of an airport plan for Sydney West Airport may set out conditions to be complied with in relation to a development covered by that Part.  Conditions have binding effect through the new section 96J.  Conditions could extend to any aspect of the developments, such as their aeronautical, construction or environmental aspects.  Conditions might, for example, regulate the manner in which development is to take place in relation to a particular subject matter, and could, for example, provide for a development activity to comply with standards set out in a particular regulatory regime, including a regime that would not otherwise apply.

 

Subsection (6) provides that without limiting subsection (5), the kinds of conditions in paragraphs (a), (b) and (c) may be set out under that subsection.  The kinds of conditions are conditions relating to the ongoing operation of a development covered by Part 3 of the airport plan, conditions associated with developing a plan to manage the impact of a development, and conditions relating to the manner in which a development is carried out.  Subsection (7) provides that a condition can be expressed to apply to the airport-lessee company for the airport even if there is no airport lease for Sydney West Airport when the airport plan is determined.

 

Subsection (8), discussed in relation to s 96B above, guarantees the effect of an environmental condition or provision notified by the Environment Minister.  Such a condition is not only mandatory (s 96B(9)), it overrides any inconsistent condition or provision of the airport plan.  The only exception to this inconsistency rule is if the Environment Minister agrees to a variation of the airport plan under subsection 96D(3).

 

While the core function of Part 3 is to set out details of developments and conditions, the part may contain other material: subsection (9).  Subsection (9) also provides that Part 1 and Part 2 can contain other material.  The plan itself is also not limited to Parts 1, 2 and 3: it may contain material that sits outside the three parts.

 

Subsections (10) to (12) deal with interests in land that the Commonwealth does not own at the time the airport plan is determined.  There are some areas that the Commonwealth may intend to be part of the airport site; because the areas are not yet owned by the Commonwealth, they cannot be declared to be part of the airport site.  Subsection (10) provides that the airport plan may cover these areas.  The plan will have effect in relation to the areas when they become part of the airport site (subsection (12)).

 

Subsection (11) deals with land that might become either part of the airport site or an associated site: for such land, the Commonwealth might either acquire it as freehold and bring it into the airport site or acquire a right over the land, such as an easement, and make the land an associated site pursuant to section 96L.  In such a case, the airport plan is permitted to cover the land or the development, but does not take effect in relation to the land or development until it actually becomes part of the airport site or an associated site (subsection (12)).

 

Section 96D

This section relates to the variation of an airport plan for Sydney West Airport.  Subsection (1) provides that if an airport plan for Sydney West Airport is in force, the Infrastructure Minister may, by writing, vary the plan.  As per subsection (2) this power can be exercised on the Infrastructure Minister’s own initiative if there is no airport lease for Sydney West Airport.  If there is an airport lease the plan may be varied on the application of the airport-lessee company for airport.

 

Subsection (3), discussed in relation to s 96B above, guarantees the effect of an environmental condition or provision notified by the Environment Minister before the determination of an initial airport plan.  It protects such a condition or provision from variation (either directly or through inconsistency) without the agreement of the Environment Minister.

 

Subsection (4) provides that a variation under subsection (1) is not a legislative instrument.

This approach is consistent with variations to master plans, which are not legislative instruments either.  Similar to the reasoning provided for why the airport plan itself is not a legislative instrument, as per explanatory text for subsection 96B(11), any variations to the airport plan will be of an administrative character and will not, of their own force, determine the content of the law.  Subsection (4) is therefore designed to be declaratory and to assist a reader of the legislation.

 

Subsection (5) provides that the Commonwealth and an airport-lessee company for Sydney West Airport may enter into an agreement that restricts or limits the circumstances in which the company may make an application under subsection (2) or that requires the company to make an application under that same subsection.  Subsection (6) provides that a restriction or limitation as referred to in paragraph (5)(a) may require the airport-lessee company to obtain the approval of the Infrastructure Minister before making an application under subsection (2). The purpose of subsections (5) and (6) is to permit the execution of contractual provisions for any transaction for Sydney West Airport that would limit or affect the capacity of an airport-lessee company to seek a variation.

 

Subsection (7) provides that the Environment Protection and Biodiversity Conservation Act has effect as if a variation of an airport plan for Sydney West Airport were an authorisation of an action described in subsection 160(2) of that Act.  This means that the Environment Minister’s advice would need to be sought on the variation before it was made, as is currently the case for major development plans.  It is intended to ensure that relevant environmental considerations are factored into any variation in the same way they are considered for major development plans.

 

Subsection (8) provides that if an airport plan for Sydney West Airport is in force then Part 3 of the airport plan must not be varied under subsection (1) after the Sydney West Airport completion day so as to set out the details of any additional developments.  This recognises that after the Sydney West airport completion date all new development activity must be undertaken in accordance with the standard requirements of the Act, which include the requirement for a major development plan for certain developments.

 

Section 96E

This section provides that if an airport plan for Sydney West Airport is in force and a final master plan for Sydney West Airport comes into force, then the airport plan is automatically varied by omitting Part 2 and the Act has effect in relation to the airport plan as if paragraph 96C(1)(b), subsection 96C(2) and subparagraph 96C(3)(a)(ii) had not been enacted.  Each of these provisions sets out matters relating to Part 2 of the airport plan.  This provision is intended to clarify that once an airport plan is varied by omitting Part 2 consistent with the section, the Part is redundant and is no longer a part of the airport plan.

 

Subsection (2) relates to the publication requirements for an airport plan for Sydney West Airport varied under subsection (1).  It provides that in such circumstances, the airport-lessee company must cause a notice of the variation to be published on its website.  This is intended to provide consistency with existing publication requirements for master plans and major development plans.

                             

Section 96F

This section sets out the publication obligations for airport plans and variations to airport plans.  Until there is an airport-lessee company, the Minister is responsible for ensuring that the airport plan, any variations to the airport plan and up-to-date copies of the airport plan are published on the Department’s website (subsections (1) and (2)).  Once an airport lease is granted, the airport-lessee company takes responsibility for publication requirements (subsections (3) and (4)).

 

Section 96G

Section 96G provides an exemption from Parts 3 and 9 of the Environment Protection and Biodiversity Conservation Act.  It provides that Parts 3 and 9 of that Act do not apply to the determination, variation or implementation of an airport plan for Sydney West Airport.  This means that, once determined, the developments outlined in Part 3 of an airport plan can be undertaken without the need for further approval under the Environment Protection and Biodiversity Conservation Act.

 

This provision mirrors existing provisions for major development plans.  Major development plans are approved following an environmental assessment process under the Environment Protection and Biodiversity Conservation Act.  It follows that the implementation of a major development plan is thus excluded from each of the offence provisions in Part 3 of the Environment Protection and Biodiversity Conservation Act.  An airport plan for Sydney West Airport will undertake an equivalent Environment Protection and Biodiversity Conservation Act assessment process.  Accordingly, its implementation - the undertaking of the developments outlined in Part 3 of the plan - should not be subject to the offence provisions in Part 3 or the approval process in Part 9.  Of course, failing to comply with an environmental condition set out in Part 3 of an airport plan will be an offence: section 96J.

 

Section 96H

Section 96H clarifies that the new Division 4A does not, by implication, prevent the approval of a major development plan that relates to a major airport development that is not covered by Part 3 of an airport plan for Sydney West Airport.

 

This is intended to preserve flexibility for the airport-lessee company for Sydney West Airport by permitting major development plans to be submitted for developments not covered in the airport plan.  As the airport plan is only expected to cover the initial airport development, the airport-lessee company may wish to propose other developments for the airport site that are not covered by the airport plan.  This could include, for example, the development of a business park or hotel.  In such circumstances the development would be subject to the usual provisions in the Act, including that major airport developments are subject to major development plans and an environmental assessment process.

 

Section 96J

This section creates an offence regarding non-compliance with a condition set out in an airport plan.

 

Subsection (1) provides that if an airport plan for Sydney West Airport is in force, Part 3 of the plan sets out a condition to be complied with in relation to a development covered by that Part, and the condition applies to the airport-lessee company for the airport, the company must comply with the condition.  As per subsection (2) a company will commit an office if, being subject to the requirement in subsection (1), the company engages in conduct and that conduct contravenes the requirement.  The penalty for this offence is 2000 penalty units. Subsection (3) provides that strict liability applies to paragraph 2(a).

 

Subsections (4), (5) and (6) replicate this offence and apply it to a situation where the condition applies to a person, other than the airport-lessee company for the airport.  A lower penalty of 400 penalty units applies.

 

These offences, penalties and application of strict liability to them mirrors those currently in section 90 of the Act regarding non-compliance with a condition set out in a major development plan.  This is intended to ensure consistency across relevant offence provisions of the Act and ensure, as with major development plans, that airport-lessee companies and others comply with any and all conditions set out by the Infrastructure Minister.  This latter aspect is necessary to ensure the integrity of the regulatory regime as applicable to the airport plan for Sydney West Airport.

 

Section 96K

Section 96K provides that, to avoid doubt, the Commonwealth may take steps to implement an airport plan for Sydney West Airport or authorise another person to take steps to do so even if there is no airport lease for Sydney West Airport.  This is intended to clarify that the absence of an airport lease for Sydney West Airport does not prevent steps being taken to implement the airport plan.  This would include preparing for, or undertaking, developments outlined in Part 3 of an airport plan.  This provision is not intended to affect any contractual obligations.

 

Section 96L

This section provides definitions of the terms ‘associated site for Sydney West Airport’ and ‘ancillary development’.

 

Section 96M

This is a definition provision that provides, for the purposes of the Division, ‘development’ includes but is not limited to a major airport development, a building activity or an activity of a kind prescribed in the regulations.  This is intended to clarify that the development or developments set out in Part 3 of the airport plan may comprise a range of activities.

 

Item 31 -

Section 98 of the Act sets out a definition of building activities.  This item adds paragraph (g) to subsection 98(1) to provide that for the purposes of the Act, an activity of a kind prescribed in the regulations is a building activity.  It is included to provide flexibility to in the event that a particular type of activity is required to be covered by the building control regime of the Act and is not currently specified in section 98.  It applies generally to all airports but is principally intended to recognise that a greenfield airport may have particular requirements not currently covered by the existing provision. 

 

Item 32 -

 

This item inserts additional words before ‘all of’ and in doing so modifies the application of subsection 99(1) having regard to Sydney West Airport.  It clarifies that in the case of a building activity on the airport site for an airport other than Sydney West Airport, building activity as outlined in subsection (1) cannot be carried out or caused or permitted to be carried out by an airport-lessee company unless the conditions in paragraph (d) are satisfied.  This amendment is consequential due the amendment at item 33.

Item 33 -

 

This item is consequential to the amendments introducing the ‘airport plan’ for Sydney West Airport in Division 4A of Part 5.  The item inserts paragraph (e) into subsection 99(1) and sets out the circumstances in which for Sydney West Airport a building activity may be carried out or caused or permitted to be carried out by an airport-lessee company.  It provides that such activity may be carried or caused or permitted to be carried out if all of the conditions specified in paragraph (e) are met.  Those conditions generally mirror the conditions in paragraph (d) save that they are adapted to cater for the circumstances of an airport plan Sydney West Airport.

 

Existing subsection (2), which contains an offence for conduct by a company that contravenes a requirement under subsection (1), applies to paragraph (e).  It is reasonable that the corresponding offence provision relates to this paragraph to ensure integrity of the regulatory regime as applicable to Sydney West Airport and consistency across the broader regulatory framework established by the Act.

 

Item 34 -

 

This item inserts additional words before ‘all of’ and in doing so modifies the application of subsection 99(3) having regard to Sydney West Airport.  It clarifies that in the case of a building activity on the airport site for an airport other than Sydney West Airport, building activity as outlined in subsection (1) cannot be carried out or caused or permitted to be carried out by a person unless the conditions in paragraph (d) are satisfied.  This amendment is consequential due the amendment at item 35.

 

Item 35 -

 

This item inserts paragraph (e) into subsection 99(3) and sets out the circumstances in which for Sydney West Airport a building activity may be carried out or caused or permitted to be carried out by a person.  It provides that such activity may be carried or caused or permitted to be carried out if all of the conditions specified in paragraph (e) are met.  Generally speaking those conditions mirror the conditions in paragraph (d) save that they are adapted to cater for the peculiarities of an airport plan Sydney West Airport.

 

Existing subsection (4), which contains an offence for conduct by a company that contravenes a requirement under subsection (3) applies to paragraph (e).  It is reasonable that the corresponding offence provision relates to this paragraph to ensure integrity of the regulatory regime as applicable to Sydney West Airport and consistency across the broader regulatory framework established by the Act.

 

Item 36 -

 

This item repeals the heading at section 101 and substitutes it with a new one, which retains the original wording but adds ‘etc.’ at the end.  This amendment is consequential due to the amendments to subsection 101(3) at items 37 and 39.

 

 

 

 

Item 37 -

 

This item is consequential to the amendments introducing the airport plan for Sydney West Airport in Division 4A of Part 5.  The item amends subsection 101(3) by omitting all the words after ‘granted’ and substituting them with ‘unless:’ following by new paragraphs (a) and (b).  The effect of these amendments is to clarify that if a building activity is an element of a major airport development, approval for that activity must not be granted unless one of two requirements are met.  In the case of an airport other than Sydney West Airport the activity must be consistent with a major development plan approved under Division 4.  In the case of a building activity on the airport site for Sydney West Airport, the activity must be consistent with a designated SWA instrument that covers the development.  The term ‘designated SWA instrument’ is defined in section 103A at item 43 and encompasses, where applicable, an airport plan. 

 

Item 38 -

 

This item inserts a note at the end of subsection 101(3) and is consequential due to amendment at item 37.

 

Item 39 -

 

This item is consequential to the amendments introducing the ‘airport plan’ for Sydney West Airport.  The item adds subsections (4) and (5) to section 101.  The new subsections add further consistency requirements for building activity approvals in the case of Sydney West Airport.

 

Subsection (4) provides that if the building activity is carried out on the Sydney West Airport site and Part 2 of the airport plan is in force, the approval must not be granted unless the activity is consistent with Part 2 of the plan.

 

Subsection (5) provides that if the building activity is carried out on the airport site for Sydney West Airport and the building activity is not an element of a major airport development but is, or comprises part of, a development covered by Part 3 of the airport plan and the building activity occurs wholly or partly before the Sydney West Airport completion day then the approval must not be granted unless the activity is consistent with Part 3 of the airport plan.

 

Item 40 -

 

This item omits the wording ‘subsection (4) does’ in paragraph 103(1)(b) and substitutes it with ‘subsections (4) and (4A) do’.  This amendment is consequential due to the amendment at item 42.

 

Item 41 -

 

This item amends subsection 103(4) by inserting new words after the words ‘building activity’.  This amendment is consequential due to the amendment at item 42. 

 

 

 

Item 42 -

 

This item is essentially consequential to the amendments introducing the ‘airport plan’ for Sydney West Airport.  The item inserts a new subsection (4A) after subsection 103(4).  The subsection applies to a building activity on the airport site for Sydney West Airport if all of the conditions set out in paragraphs (a) through (e) are satisfied.   Generally speaking those conditions mirror the conditions for other airports (subsection (4)) save that they are adapted to cater for the peculiarities of an airport plan Sydney West Airport.

 

Item 43 -

 

This item inserts a new section 103A - a definition provision consequential to the preceding items - at the end of Subdivision C of Division 5 of Part 5.  The new section defines ‘designated SWA instrument’.  It provides that for the purposes of the application of the Subdivision to a building activity that is an element of a major development on the airport site for Sydney West Airport, if an airport plan for the airport is in force and the major airport development is covered by Part 3 of the airport plan, and the building activity wholly or partly occurs before the Sydney West Airport completion day, then Part 3 of the airport plan is a designated SWA instrument that covers the development.  If there is a major development plan approved under Division 4 for the major airport development, the major development plan is a designated SWA instrument that covers the development.

 

The item also inserts a new section 103B.  This provision is intended to clarify that for the purposes of the Subdivision, if a building activity is, or comprises part of, an ancillary development on an associated site for Sydney West Airport, the activity is taken to be a building activity on the airport site for Sydney West Airport.  This is consequential to the provisions of Division 4A of Part 5 that will allow an airport plan to cover certain off-site developments.

 

Item 44 -

 

This item adds section 112B - a definition provision - at the end of Division 6 of Part 5.  It provides that the Minister may, by writing, declare that a specified day is the ‘Sydney West Airport completion day’ for the purposes of the Act.  The Minister must cause a copy of a declaration under subsection (1) to be published on the Department’s website.  Subsection (4) provides that a declaration is not a legislative instrument .  This is declaratory and designed to assist the reader: a declaration is of an administrative, not a legislative, character because it does not determine the content of the law; it merely triggers certain effects provided for by the new Division 4A of Part 5 at item 30. 

 

Part 3 of the Airport Plan remains in force after the Sydney West Airport completion day.

The Sydney West Airport completion day marks the point after which Part 3 of the airport plan can no longer be varied to include new developments or ancillary developments (see section 96D(8)).  It is also relevant to the consideration of future master plans (sections 81A and 84AA) and major development plans (sections 94AA and 95AA) and consideration of building approvals. 

 



 

Item 45 -

 

This amendment deals with the application of section 242, concerning decisions under the Act that are reviewable by the Administrative Appeals Tribunal, to decisions made in relation to the airport plan in new Division 4A of Part 5.  Paragraph (f) provides that a decision to determine an airport plan for Sydney West Airport is not a reviewable decision.  Paragraph (fa) provides that a decision to vary an airport plan for Sydney West Airport is not a reviewable decision.  Paragraph (fb) provides that decision to declare that a specified day is the Sydney West Airport completion day for the purposes of the Act is not a reviewable decision.

 

The economic and national significance of the Western Sydney Airport project mean that any decision to approve a plan that would provide for the development of an international airport or any variations to that plan, is such as to make them unsuitable for ordinary merits review processes.

 

Although decisions regarding master plans and major development plans are reviewable by the Administrative Appeals Tribunal, there are a number of clear points of distinction in regard to an airport plan.  Major development plans and master plans are submitted for Ministerial approval by an existing private airport-lessee.  A lessee should be able to seek merits review of the Minister’s decision on such a plan.  The airport plan for Sydney West Airport would be different.  It will be prepared and determined by the Commonwealth itself, and will be developed in a way as to ensure the Commonwealth’s policy objectives for the proposed airport - economic, social and aviation - are achieved.  The airport-lessee company that is granted the airport lease for Sydney West Airport will have entered into a contract with the Commonwealth that will require the lessee to implement that plan.  Subjecting the plan to independent merits review would cut across the commercial relationship between the Commonwealth and the airport-lessee company and would jeopardise the capacity of the plan to deliver the Government's objectives.  It could also result in substantial delays to the project timeframes: susceptibility to litigation in a no-cost jurisdiction would almost certainly mean that construction of the airport could not commence in accordance with the government’s preferred timeframes.

 

The usual courses of judicial review would be available for the Infrastructure Minister’s determination of an airport plan or a decision in relation to its variation.

 

The declaration of a day as the Sydney West Airport completion day will not be a reviewable decision.  The effectiveness of the Act requires that once such a decision is made, there is certainty as to its operation.  Further, the kinds of considerations that underlie the making of such a decision are uniquely adapted to assessment by a Commonwealth Minister as opposed to an independent tribunal.

 

Item 46 -

 

This item inserts a new section that provides for miscellaneous provisions in relation to Sydney West Airport.  Subsections (1) to (3) relate to leases other than airport leases.  Subsections (1) and (2) clarify that leases granted under the executive power of the Commonwealth are not airport leases for the purposes of the Act or the Airports (Transitional) Act 1996 .  These could include, for example, preliminary leases designed to facilitate the development of Sydney West Airport before an airport lease is granted. Subsection (3) is intended to ensure the declaration of the Badgerys Creek site as an airport site for the purposes of the Act would not cause any unintended consequences in relation to pre-existing leases (such that pre-existing residential and agricultural leases might be treated as airport leases).  Subsections (4) and (5) provide that the Commonwealth may do anything necessary or convenient for the development or use of Sydney West Airport.  This is a facilitative provision to enable, for example, the Commonwealth to form a company should this be desirable for the purposes of a transaction for the airport.

 

This item also inserts a new section 251B.  Enacted for the avoidance of doubt, the section applies if subregulation 1.03(1) of the Airports Regulations 1997 declares a place specified in a paragraph of that subregulation (to the extent that it is a Commonwealth place) to be an airport site.  It provides that a regulation may amend that subregulation by inserting a paragraph that specifies a place even if, at the time the regulation commences, a part of the place is not a Commonwealth place.  While this will apply to any places for any airports specified in 1.03(1), it is principally intended to clarify that a parcel or parcels of land may be declared part of an airport site for the purposes of the Act even if, at the time of declaration, the Commonwealth does not own the land.  Upon acquisition of the relevant land it would then automatically become part of the airport site.

 

Item 47 -

 

This item amends paragraph 2.04(1)(b) in the Airports (Building Control) Regulations 1996 by inserting paragraph (ba) after paragraph 2.04(1)(b).  It provides that in the case of Sydney West Airport an airport-lessee company must not refuse to consent to an application for building approval unless the proposed building activity is inconsistent with Part 2 of the airport plan for Sydney West Airport (if it is in force) or if the building activity wholly or partly occurs before the Sydney West Airport completion day, an airport plan for the airport is in force, and the proposed building activity is, or comprises part of, a development covered by Part 3 of the airport plan, Part 3 of the airport plan.

 

This is a consequential amendment due to the amendments to the Act in relation to building activities in the case of Sydney West Airport.

 

Item 48 -

 

This item amends the note following subregulation (1) and omits ‘(a) and (b)’ and substitutes it with ‘(a), (b) and (ba)’.  It is consequential due to the amendment at item 47.

 

Item 49 -

 

This item adds paragraph (c) at the end of subregulation 2.04(2).  It clarifies the application of the subregulation to Sydney West Airport and provides that for this airport an airport-lessee company must not refuse to consent to an application for building approval if, to do so, would be inconsistent with an obligation of the company, relating directly or indirectly to approval of the building activity under a contract with the Commonwealth that relates to the airport.

 

This is a consequential amendment due to the amendments to the Act in relation to building activities in the case of Sydney West Airport and recognises that a contract with the Commonwealth that relates to the airport, for example, the sale contract for the airport entered into with an airport-lessee company, will impose certain obligations on the company and any decisions made by the company regarding an application for a building activity cannot be inconsistent with those obligations.

 

Item 50 -

 

This item inserts ‘(ba)’ after ‘(b)’ and is consequential to the amendment at item 47. 

 

Item 51 -

 

This item inserts paragraph (ba) after paragraph 2.05(1)(b).  This is a consequential amendment due to the amendments to the Act in relation to building activities in the case of Sydney West Airport.  It provides, in the case of Sydney West Airport, what an application for building approval must include.  

 

Item 52 -

 

This item inserts ‘and paragraph (caa) does not apply’ after ‘Act)’ in paragraph 2.05(1)(b).  This amendment is consequential to the amendment in item 53.

 

Item 53 -

 

This item inserts paragraph (caa) after paragraph 2.05(1)(c).

 

Regulation 2.05 deals with the requirement to provide an airport building controller with information about a building activity.  The existing provisions include obligations to provide information about consistency of a building activity with a major development plan.  The insertion of new paragraph (caa) is a consequential amendment due to the amendments to the Act in relation to building activities in the case of Sydney West Airport.  It provides that if the building activity is covered by Part 3 of the airport plan and will occur wholly or partly before the Sydney West Airport completion day, an application for building approval must include a statement describing how the building activity is consistent with Part 3 of the airport plan.  Note that Part 3 of the airport plan includes not only details of developments but development conditions imposed by the Infrastructure Minister.

 

Item 54 -

 

This amendment omits the words ‘The declaration’ and substitutes them with ‘A declaration under subregulation (2)’ in subregulation 2.05(3).  It is a consequential amendment due to the amendment at item 55.

 

Item 55 -

 

This item adds subregulation (4) at the end of regulation 2.05 before the note.  This is a consequential amendment due to the amendments to the Act in relation to building activities in the case of Sydney West Airport.

 



 

Item 56 -

 

This item adds a note at the end of subregulation 2.11(1A).  The note is consequential due to the amendments at item 62.

 

Item 57 -

 

This item adds a note at the end of subregulation 2.11(1B).  The note is consequential due to the amendments at item 62.

 

Item 58 -

 

This item adds a note at the end of subregulation 2.11(1C).  The note is consequential due to the amendments at item 62.

 

Item 59 -

 

This item adds a note at the end of subregulation 2.11(2A).  The note is consequential due to the amendments at item 62.

 

Item 60 -

 

This item adds a note at the end of subregulation 2.11(6).  The note is consequential due to the amendments at item 62.

 

Item 61 -

 

Regulation 2.11 deals amongst other things with when an airport building controller is required to make or is taken to have made a decision about an application for a building approval.  This item inserts subregulation (7A) after subregulation 2.11(7).  This is a consequential amendment due to the amendments to the Act in relation to building activities in the case of Sydney West Airport and clarifies the timeframes about when an airport building controller is taken to have refused to approve a building activity that is or comprises part of a development covered by Part 3 of an airport plan for Sydney West Airport and will occur wholly or partly before the Sydney West Airport completion day.

 

Item 62 -

 

This item inserts subregulation (9) at the end of regulation 2.11 before the notes.  It disapplies subregulations (1A), (1B), (1C), (2A), (6) and (8) to a building activity that is carried out on the airport site for Sydney West Airport and is, or comprises part of, a development covered by Part 3 of an airport plan for the airport that will occur wholly or partly before the Sydney West Airport completion day as the new subregulation (7A) at item 61 deals specifically with this.

 



 

Item 63 -

 

This item inserts additional words before ‘the variation’ in paragraph 2.16(2)(b) and is a consequential amendment due to the amendments to the Act in relation to building activities in the case of Sydney West Airport set out in new regulation 2.16(2)(c) at item 64.

 

Item 64 -

 

This item adds subregulation (c) at the end of subregulation 2.16(2).  This is a consequential amendment due to the amendments to the Act in relation to building activities in the case of Sydney West Airport.  Regulation 2.16(2) provides amongst other things that the airport building controller must not approve a variation to a building approval if the variation relates to a major airport development and there is no major development plan approved for the development.  This amendment along with the amendment in item 63 has the effect that if an application for a variation of a building approval relates to a major development at Sydney West Airport, it must be covered by an approved major development plan or Part 3 of the airport plan (if the building activity will occur wholly or partly before the Sydney West Airport completion day). 

 

Item 65 -

 

This item amends paragraph 2.19(1)(a) by omitting ‘3 years’ and substituting it with ‘the applicable period’.  This amendment is consequential due to the amendment at item 67.

 

Item 66 -

 

This item amends paragraph 2.19(1)(b) by omitting ‘3 years’ and substituting it with ‘the applicable period’.  This amendment is consequential due to the amendment at item 67.

 

Item 67 -

 

This item inserts subregulation (7) at the end of regulation 2.19.  Building approvals under the regulations are generally valid for 3 years unless a shorter period is set when the approval is granted or an extension is allowed.  Because of the greenfield nature of the development of Sydney West Airport, a period of 5 years rather than 3 years is considered more appropriate.  A concept of ‘applicable period has been introduced into regulation 2.19.  ‘Applicable period’ period’ means 3 years except in the case of a building activity on the airport site for Sydney West Airport that is, or comprises part of, a development covered by Part 3 of an airport plan for the airport and wholly or partly occurs before the Sydney West Airport completion day, in which case it is five years.

 

Item 68 -

 

This item inserts regulation 2.26 at the end of Part 2 of the Airports (Building Control) Regulations 1996 .  It clarifies that for the purposes of these regulations, if a building activity is, or comprises part of, an ancillary development on an associated site for Sydney West Airport, and is covered by Part 3 of an airport plan, the activity is taken to be a building activity on the airport site for Sydney West Airport (see new section 96L inserted by item 30). This mirrors the new section 103B in the Act inserted by item 39.  The effect of this provision is that the building control regime contained in the regulations is applicable to ancillary developments on associated sites for Sydney West Airport.

 

Item 69 -

 

This item inserts ‘7A’ after ‘7’ in item 1 of the table in regulation 6.01.  It provides that a decision mentioned in the subregulation 2.11(7A) (which relates to the airport building controller being taken to have refused to approve a building activity that is or comprises part of a development covered by Part 3 of an airport plan for Sydney West Airport - inserted by item 57) is reviewable by the Administrative Appeals Tribunal.

 

 

Item 70 -

 

This item repeals paragraph 2.04(1)(a) of the Airports Regulations 1997 and substitutes it with a new one.  This amendment is consequential due to the amendment to the Act at item 30 that inserts new Division 4A of Part 5.  It provides that a kind of sublease that is prohibited for subsection 34(1) of the Act is one for a purpose inconsistent with the use as an airport of the airport site concerned, as set out in whichever of two subparagraphs is applicable.  The first is, if there is a final master plan for the airport site, the final master plan.  The second is, if the airport is Sydney West Airport, and Part of an airport plan is in force, Part 2 of the airport plan.  This recognises that Part 2 of the airport plan will regulate land use planning and related matters for Sydney West Airport until a final master plan is in force.

 

Item 71 -

 

This item repeals paragraph 2.12(1)(a) of the Airports Regulations 1997 and substitutes it with a new one.  This amendment is consequential due to the amendment to the Act at item 30 that inserts new Division 4A of Part 5.  It provides that a kind of licence that is prohibited for subsection 35(1) of the Act is one for a purpose inconsistent with the use as an airport of the airport site concerned, as set out in whichever of two subparagraphs is applicable.  The first is, if there is a final master plan for the airport site, the final master plan.  The second is, if the airport is Sydney West Airport, and Part of an airport plan is in force, Part 2 of the airport plan.  This recognises that Part 2 of the airport plan will regulate land use planning and related matters for Sydney West Airport until a final master plan is in force.

 

Item 72 -

 

This item inserts a new provision to ensure the amendments in item 5 do not affect any existing contractual rights or the application of any law in relation to those rights.  This item is principally designed to make it clear, to avoid any possible doubt, that the amendments to section 18 do not affect Southern Cross Airports Corporation’s contractual right of first refusal.  The item also makes it clear any laws that apply in relation to that right (e.g. competition laws) are unaffected by the amendment to section 18.

 

Paragraph (d) provides that the amendments made to section 18 of the Airports Act by items 4 and 5 of Schedule 1 do not affect the application of a law to a pre-existing right that a person has under a contract with the Commonwealth, so as to disadvantage the person.  The amendments made to section 18 by item 5 provide that co-ownership of Sydney (Kingsford-Smith) Airport and Sydney West Airport is permitted, but not required.  It is not intended that this change should affect a person’s rights under a contract with the Commonwealth in a manner that disadvantages the person.  The effect of paragraph (d) is therefore that this change in section 18, from mandating to merely permitting co-ownership of the two airports, does not affect the application of a law to such a pre-existing contractual right so as to disadvantage the holder.

 

The effect of item 72(2) is to clarify that the amendments made to section 18 by items 4 and 5 do not affect the operation of section 248, and in particular subsection 248(2) of the Act.

 

Subsection 248(2) of the Act provides that where a person acquires shares in the airport-lessee company for Sydney West Airport or Sydney (Kingsford-Smith) Airport, and the acquisition has the effect that the two airports become co-owned (i.e. become subsidiaries of another company), then that effect, when considered in isolation from any other effect of the acquisition, does not, and is not likely to, substantially lessen competition in any market, for the purposes of section 50 of the Competition and Consumer Act 2010.  Subsection 248(2) in effect operates as a deeming provision, so that the fact that an acquisition results in co-ownership of the two airports will not (of its own) mean that the acquisition contravenes section 50 of the Competition and Consumer Act.

 

Section 50 of the Competition and Consumer Act, in turn, prohibits acquisitions that have the effect, or are likely to have the effect, of substantially lessening competition in any market.

 

The effect of item 72(2) is therefore to ensure that the amendment made to section 18, to permit rather than require, co-ownership of the two airports, does not affect the application of subsection 248(2) in the context of section 50 of the Competition and Consumer Act.  The amendments made to section 18, and the change from requiring to permitting co-ownership, are not intended to have any bearing on the application of those provisions to an acquisition of the type described in subsection 248(2) (i.e. an acquisition of shares in an airport-lessee company for Sydney West Airport or Sydney (Kingsford-Smith) Airport).

 

Item 73 -

 

This item provides for compensation to be payable in case the amendments to section 18 effect an acquisition of property.  The amendments do not acquire any proprietary rights.  For example, Southern Cross Airports Corporation’s contractual right of first refusal is not affected by the amendment and is explicitly preserved by item 72.

 

Item 74 -

 

This item ensures that Division 6 of Part 8 (other than section 105) of the Environment Protection and Biodiversity Conservation Act applies to the preparation and finalisation of the environment impact statement for Sydney West Airport.  Once the environment impact statement is finalised, it is then considered in accordance with Division 4A of Part 5 of the Airports Act as inserted by item 30.  This results in a similar process applying to the preparation and finalisation of the environmental impact statement as would apply for finalisation of an environmental impact statement that is prepared in relation to a major development for one of the existing airports.

 

 

 

Regulation Impact Statement

 

Western Sydney Airport - Market Access Facilitation

 

Introduction

Context

As part of the Government’s sale of Sydney (Kingsford-Smith) Airport (KSA) in 2002, the purchaser Southern Cross Airports Corporation Pty Ltd (SCAC) was provided with the opportunity to develop and operate any second major airport in the Sydney region, within 100 kilometres of the Sydney GPO. By virtue of the Government’s 15 April 2014 announcement that the site for Western Sydney’s airport will be Badgerys Creek, this right has been activated.

Contractual provisions associated with this right articulate a strict process and tight timeframes in which the Government must consult with SCAC regarding its right to develop and operate the airport. The Prime Minister has indicated he expects construction to commence next year. 

 

Overview of problem and rationale for Government intervention

The share sale agreement for KSA provides that if SCAC does not exercise an option to develop and operate WSA, the Commonwealth may offer the opportunity to a third party. To enable the possibility of this to occur, amendments are currently being considered that would remove the requirement in section 18 of the Airports Act 1996 (the Act) that KSA and WSA be under common ownership. Although this would enable an operator other than SCAC to own WSA, current airport cross-ownership restrictions in the Act would restrict access of some airport operators and their investors to any market transaction.

The Act provides that airport-operator companies are subject to a 15 percent limit on cross-ownership of certain airports (section 50). In relation to WSA (or Sydney West Airport as it is referred to in the Act), the 15 percent limit on cross-ownership is stated to apply to the following pairs of airport-operator companies (section 49):

·          WSA and Brisbane Airport;

·          WSA and Melbourne (Tullamarine) Airport; and

·          WSA and Perth Airport.

These restrictions were originally introduced to ensure that no one person or group of persons could have ownership and or control of WSA and Brisbane, Perth or Melbourne Airports. Although the restrictions currently have no effect (given WSA has not yet been declared an airport for the purposes of the Act), once the airport was declared certain experienced airport operators and investors holding more than 15 percent equity in Brisbane, Perth or Melbourne Airports would be restricted from owning more than 15 percent in WSA.

If SCAC did not exercise an option to develop and operate WSA, and an offer was then made to the market, the cross-ownership restrictions would unnecessarily restrict the pool of experienced and local investors available to take part in any market transaction and would unreasonably restrict the ability of the market to source capital to deliver the project. To help address these concerns this RIS reviews the ongoing need for the WSA cross-ownership restrictions.

 

This issue affects businesses only; it does not directly concern community organisations or individuals and as such they have been excluded from further consideration.

 

Policy options

Three policy options have been examined.

Option 1―Status quo

There would be no change to legislated cross-ownership limits for WSA. If offered an opportunity to develop and operate the airport, third parties would need to ensure they complied with the cross-ownership limits.

 

Option 2― Vary the threshold

Cross-ownership restrictions would be kept, but the 15 percent threshold would be relaxed.

 

Option 3 ― Remove cross-ownership restrictions applying to WSA

Cross-ownership restrictions as they relate to WSA would be removed. This would enable experienced airport investors with investments in Melbourne, Perth and Brisbane airports, and the airports themselves, to invest more than 15 percent in WSA should SCAC elect not to exercise an opportunity to develop and operate the airport.

 

Analysis of options

Option 1 - Status quo

Under this option there would be no change to cross-ownership limits for WSA. If offered an opportunity to develop and operate the airport, third party operators and investors would need to ensure they complied with the cross-ownership limits.

This could be expected to limit the willingness of parties who would be caught by this restriction to invest and could result in experienced airport operators and investors electing not to participate in any market transaction for the airport. Alternatively, if affected third parties wanted to take up an opportunity in WSA of more than 15 percent they would need to divest the stakes they currently hold in other relevant airports. The more likely scenario however is that only a small pool of less-experienced investors (those with minor or no holdings in other relevant airports) would consider investing in WSA. This could create risks for the project ranging from delays to cessation of the project altogether. It is difficult to articulate the likelihood of these risks occurring however if they did the consequences would be high.

One variation to the status quo option could be a ‘wait and see’ approach. This would involve only addressing cross-ownership restrictions should SCAC turn down any opportunity to develop and operate the airport. However, contractual timings stipulated in the KSA share shale agreement mean the Commonwealth would only have a small window of time to approach the market if SCAC turned down any offer.

Retaining the status quo and the ‘wait and see’ variation would have a nil cost under the Regulatory Burden Measurement (RBM) framework - see the Regulatory Burden and Cost Offsets section for further details.

 

Option 2 - Vary the threshold

Under this option restrictions would be kept but the 15 percent threshold would be relaxed to permit a higher level of investment. 

Although the threshold could be varied across a spectrum ranging from a modest to a more significant increase, which could increase the possibility of a successful market offering, it would still maintain barriers to investment. Airports and investors affected by the cross-ownership restrictions would continue to be prevented from owning 100 percent of the airport, while SCAC would not be. Should SCAC decline to exercise an option to develop and operate the airport, other operators would be disadvantaged by being prevented from taking the same level of ownership as SCAC would have been able to.

Further, given the importance of capital availability to a greenfield airport development, any percentage restrictions (however big or small) have the potential to restrict capital flow and therefore be counterproductive to the delivery of an important infrastructure project.

This option would have a nil cost under the RBM framework - see the Regulatory Burden and Cost Offsets section for further details.

 

Option 3 - Remove cross-ownership restrictions applying to WSA

This would see cross-ownership restrictions as they relate to WSA being removed. It would remove barriers to investment for certain experienced and currently committed domestic investors. It would maximise the possibility of a successful market offering in the event SCAC elected not to exercise an option to develop and operate the airport. It would also be broadly deregulatory in that it would involve removal of investment restrictions.

Removing the restrictions relating to WSA would help mitigate any risks (such as those highlighted in Option 1) associated with only a small pool of less-experienced airport investors being available to access any market transaction for the airport.

It would do this by creating an environment in which experienced airport operators and investors could take a greater than 15 percent share of the airport if the opportunity emerged without them having to divest their holdings in other airports. It would not prevent any other investor from participating in any market transaction for the airport.

This option would enable the estimated economic and social benefits of an airport in Western Sydney to be realised in the most expeditious timeframe taking into account potential outcomes of the right of first refusal process.

Removing the cross-ownership restrictions for WSA would have a nil cost under the RBM framework - see the Regulatory Burden and Cost Offsets section for further details.

 

Regulatory Burden and Cost Offsets

Regulatory costs and cost offsets have been considered for the options identified.

Having regard to regulatory costs, whether under the status quo or other options, as the cross-ownership restrictions for WSA are not yet in force they do not currently impose any administrative or compliance costs on businesses. It follows therefore that removing the restrictions altogether, as per Option 3, would also have a nil regulatory cost impact.

Removing the cross-ownership restrictions would increase the extent to which certain third parties could invest in the airport and the attractiveness of such a proposition, but it would not change their ability to do so. As this change would not impact the number of entities that could participate, no regulatory burden would be created. It mirrors the current (status quo) situation whereby any market participant could participate in a market transaction for WSA, except that certain operators and investors would not be restricted to owning only up to 15 percent where they own more than 15 percent in another specified airport.

All that would change is that these affected airport operators and investors would not be required to monitor their compliance with the 15 percent rule. In practice, the costs of doing so would be negligible and would be a business-as-usual cost, given that reporting on company structures and composition is already produced for annual reporting and standard corporate governance purposes.

The following Regulatory Burden and Cost Offset Estimate table applies to Options 1-3.

 

Regulatory Burden and Cost Offset Estimate Table - Options 1-3

Average annual regulatory costs (from business as usual)           

Change in costs ($million)

Business

Community organisations

Individuals

Total change in cost

Total by sector

0

0

0

0

Cost offset ($ million)

Business

Community organisations

Individuals

Total by source

Agency*

0

0

0

0

Total by Sector

0

0

0

0

Are all new costs offset?   ☐ Yes, costs are offset         ☐ No, costs are not offset         ☒   Deregulatory, no offsets required

Total (i.e. change in costs less cost offsets, in $ million)         

$0 million

 

 

Consultation

Stakeholders were consulted on issues and options raised in this RIS via a short discussion paper that was published on the Department’s website on 12 December 2014. The paper requested submissions by 9 January 2015. A copy of the paper is still available on the website [1] .

Airport stakeholders to which the SWA cross-ownership restrictions currently apply (Brisbane, Perth and Melbourne Airports), the Australian Airports Association (the peak body representing the interests of Australian airports) and SCAC were specifically notified and invited to provide any comments they might have. Any other interested party was also able to provide comments. Prior discussions had also been held with SCAC about this issue in the context of broader contractual consultations with the Commonwealth.

The paper invited stakeholders to provide comments on any aspect covered in the paper and also on matters not raised but which were considered relevant to the issue. In addition, the paper posed four questions that stakeholders were invited to consider:

  1. Three options have been examined in response to the issue of market access facilitation for the WSA project. What are your views on these options?

 

2.       The Department considers Option 3 would be the most effective to maximise the possibility of a successful market offering. What are you views on this?

3.       Do you consider that any of the options would have an adverse competitive impact on the Australian aviation industry?

4.       Removing the cross-ownership restrictions for WSA has been assessed as having a nil regulatory cost impact on affected industry stakeholders. What are your views on this?

No submissions were made by stakeholders in response to the consultation paper.

 

Recommended option

Recommendation

The Department recommends Option 3 be adopted to increase market access to the WSA project within the context of SCAC’s contractual right of first refusal to develop and operate the airport. It is the most effective option to address the problem as outlined.

 

Discussion

Option 1, retaining the status quo, is not considered to be an effective or appropriate option. Retaining the status quo would continue to restrict access of some airport operators and their investors to any market transaction for the project. This would unnecessarily restrict the pool of experienced and local investors available to take part in any market transaction and would unreasonably restrict the ability of the market to source capital to deliver the project. This could have negative implications for the project in the event that SCAC declined an opportunity to develop and operate the airport. This has broader economic and social implications for developing a vital piece of infrastructure for Western Sydney. Out of the three options considered this option has the lowest net benefit.

Option 2, retaining the restrictions but relaxing the threshold, is also not a desirable option given it would still maintain barriers to investment. Should SCAC decline to exercise an option to develop and operate the airport, other operators would be disadvantaged by being prevented from taking the same level of ownership as SCAC would have been able to. Given the importance of capital availability to a greenfield airport development, any percentage restrictions (however big or small) have the potential to restrict capital flow and therefore be counterproductive to the delivery of an important infrastructure project.

Although this option would likely have a higher net benefit than that considered by Option 1, it would still be relatively low in the context of the policy aims as outlined and is therefore also not recommended as an option.

Option 3 is the most effective, appropriate and efficient option available to achieve the goal of increasing market access to the WSA project. It would maximise the possibility of a successful market offering in the event SCAC elected not to exercise an option to develop and operate the airport. This option has the highest net benefit to the community as it would enable the estimated economic and social benefits of an airport at Badgerys Creek to be realised in the most expeditious timeframe taking into account potential outcomes of the right of first refusal process. Although it involves legislative amendment, and could therefore be characterized as having a regulatory impact, it should be considered broadly deregulatory as it involves the removal of legislative provisions.

As no stakeholders provided submissions on the consultation paper, no opposition to the Department’s position that Option 3 would be the most effective to maximise the possibility of a successful market offering if one was required has been identified. There is also no opposition to the proposition that removing the cross-ownership restrictions for WSA will have a nil regulatory cost impact on affected industry stakeholders.

From a competition perspective, it is the Department’s position that the recommended option will not have any adverse impacts on the Australian aviation industry. This position was not been contradicted in the consultation process. Airports operate in their own distinct geographic markets. Therefore removing airport cross-ownership restrictions to enable Brisbane Perth and or Melbourne Airports to take a greater than 15 percent stake in WSA would not alter the competition dynamic in the Australian aviation sector.

The recommended option is expected to increase the possibility of a successful market offering if one was required, and this would have positive flow on effects for the creation of competition between airport operators within the Sydney basin. From this perspective while Options 1 and 2 may also achieve the same outcome (i.e. creation of competition in the Sydney basin), given they would not prevent an alternative entity or group of entities owning WSA, these options are still not preferred given they would still maintain barriers to investment and impact the range of participants who could access the project.

While SCAC has provided some comments on the proposal, such comments are commercially sensitive within the context of its right of first refusal and are therefore not appropriate for disclosure. The Commonwealth continues to consult with SCAC in good faith consistent with its responsibilities under the contractual right of first refusal provisions.

 

Implementation and evaluation

Implementation

Option 3 will be implemented via legislative amendment. With Government’s approval a bill would be introduced to Parliament to make this change. Beyond the Parliament’s approval there are no significant implementation challenges associated with this. Timeframes associated with implementation would be contingent on the Parliamentary Sittings schedule. The amendment process would not involve any additional resourcing to manage and would not require any special governance or transitional arrangements to be developed.

Affected industry stakeholders would be notified once the changes were agreed to by Parliament and provided relevant supporting information to clarify what the changes would mean for them.

 

Evaluation

The removal of cross-ownership restrictions for WSA will be evaluated in the context of whether SCAC elects to exercise its right of first refusal to develop and operate WSA (if it is offered such an opportunity). If SCAC accepts an offer to develop and operate the airport then there is no need to evaluate the proposed changes as they will not be utilised. This would only occur in the event SCAC declined an offer to develop and operate WSA and the Government then offered the opportunity to the wider market. In this instance a post contract evaluation could be conducted to evaluate the performance of the policy against its objectives.

Although in such a situation it would be inherently difficulty to assess the counterfactual (ie, how a market offering with the WSA cross-ownership restrictions in place would progress), a qualitative approach could be taken relying on clearly articulated assumptions. However, regardless of the perceived success or otherwise following any evaluation, it would not be appropriate to reinstate the cross-ownership restrictions given the change is broadly deregulatory and there would be nothing to gain at that point in time by doing so.