Although large international civil aircraft such as the Boeing 747 have been using Adelaide Airport since its establishment as an international airport in the early 1980s, such aircraft movements have had operational restrictions placed on them because of the runway length limitations. This has adversely affected the economic viability of services using large aircraft. Compared with other international gateways in Australia, Adelaide's international traffic growth has been sluggish at best and two international airlines (British Airways and Air New Zealand) have cancelled their Adelaide international operations altogether.
In August 1995, the Commonwealth and the South Australian Governments initiated studies of a proposal to extend the main runway at Adelaide (West Beach) Airport by 572 metres to give a runway length of 3100 metres. Besides the runway work, other infrastructure investments would be required including the construction of a parallel taxiway and the diversion of Tapleys Hill Road, which runs in a north-south direction near the western boundary of the aerodrome. The State Government, which had been a long-standing advocate of the proposed upgrading works, agreed to contribute $20 million to meet the initial costs of the work and the costs of undertaking the required Environmental Impact Study (EIS).
In accordance with its election platform, the Federal Coalition Government committed itself to contributing to the cost of the runway extension in the 1996-97 Budget. The proposed funding arrangements at that time comprised $28 million to be provided to the Federal Airports Corporation for the runway extension and up to $20 million to be reimbursed to the South Australian Government to cover its development costs for off-airport works associated with the runway extension and together with the costs it had incurred in sponsoring the EIS process.
This Budget measure does not change the intent or the extent of the Commonwealth's funding commitment to the runway extension project but reflects the decision taken by the Government in the context of the 1997-98 Budget to fund the runway extension through providing its $28 million contribution as an equity injection to the FAC rather than as a direct payment to the Corporation. The runway extension is still expected to be completed in 1998 with most of the work taking place in the 1997-98 financial year.
The Budget Measures Statement (Budget Paper No 2) notes that while the impact of this measure is neutral on headline basis, the equity injection will be classified as an advance and will therefore not contribute to the underlying deficit (the underlying deficit is therefore lower as a result of the equity injection).
Roads of National Importance in Western Australia
With the untying of arterial road funding on 1 January 1994, the Commonwealth's financial responsibility for road funding became restricted solely to the National Highway System. However, since its election, the present Government has extended road funding to encompass Roads of National Importance. The most important of these is the Pacific Highway, for which the Commonwealth is providing $75 million (in 1996-97 dollars) each year for ten years. Other roads declared as Roads of National Importance are the Calder Highway (Vic.), the Kidman Way (NSW), the Summerland Way (NSW) and the Devonport port access road (Tas.). The Government has also decided to allocate $10 million per year for four years to extend the Mitchell Freeway in Western Australia.
Additional road funds were allocated to meet the Pacific Highway pledge in the 1996-97 Budget ($650 million of the total $750 million cost is 'new funding' with the remaining $100 million coming from National Highway funds). In the 1997-98 Budget, additional funds are also being made available for the Mitchell Freeway extension. The other Roads of National Importance are therefore being funded from National Highway monies. Overall, the 1997-98 allocation for Roads of National Importance is $112 million, up from $87 million in 1996-97. However, funding for the National Highway System has correspondingly fallen from $716.5 million in 1996-97 to $696.5 million in 1997-98.
Rephased Funding for the National Rail Infrastructure Authority
In order to promote competition in interstate rail operations, the Government is committed to the establishment of a body, the National Rail Infrastructure Authority, which will manage access to the interstate rail network. In this way, questions of rail network access will be divorced from railway activities undertaken by State and private rail operators.
In the 1996-97 Budget, it was announced that funding associated with the establishment of the National Rail Infrastructure Authority would commence in 1997-98. However, this measure has been deferred for a year. The Government will use this time to complete negotiations with the States re implementation of a simplified access regime for the interstate mainline rail network, to determine appropriate capital projects and funding arrangements, and to decide upon a suitable structure and functions for the Authority.
Even though the deferral of this matter will lead to savings against the forward estimates of $79.5 million over the next four years, the Government will, over the four years commencing 1998-99, be providing $175 million towards the establishment and operation of the Authority.
The National Road Transport Commission was established pursuant to an Agreement between the Commonwealth and the States made in July 1991 as part of the Special Premiers' Conference process. The Commission, which is an independent body funded by the Commonwealth and State governments, was initially given the task of formulating uniform regulations and registration charges for heavy vehicles (those in excess of 4.5 tonnes gross vehicle mass). In May 1992, a second Intergovernmental Agreement was reached which gives the Commission additional responsibility for recommending policies in relation to light vehicles. The Commission reports to, and receives references from, a Ministerial Council for Road Transport (the same Federal and State Transport Ministers who comprise the Australian Transport Council).
The Commission has the objectives of developing a nationally consistent set of vehicle regulations, supporting the development of a safe and competitive road transport industry, periodically reviewing the national system of heavy vehicle charges, and developing national standards on motor vehicle emissions, noise, safety and design.
The Commission's enabling legislation is subject to a 'sunset' provision which terminates the Commission as of 15 January 1998. In an as yet unpublished report, an independent review of the Commission (undertaken by a consultant reporting to a Steering Committee of Commonwealth, State and industry representatives) has recommended the continuation of the Commission beyond that date. While Heads of Government through the COAG process have not formally agreed to this recommendation, it has been strongly endorsed by the Ministerial Council for Road Transport. Provision is therefore made in this Budget for continued funding for the latter half of 1997-98, with the full year effect appearing in the forward estimates for the out-years. To date, the Commonwealth has funded 35% of the Commission's budget, with the States subscribing the remaining 65%.
On 24 November 1996, the Government announced its Rail Reform Package, involving the sale of Australian National Railways and the National Rail Corporation. In order to restructure AN for sale, the Government provided, in its 1996-97 Additional Estimates, $103.7 million to fund redundancies, $90 million to cover unfunded employee provisions (leave, insurance claims, workers' compensation, etc.) and $125.7 million to meet the cost of outstanding contracts. As a result, estimated outlays for 1996-97 are $324.5 million. With the bulk of the restructuring having occurred, outlays for 1997-98 will amount to only $24.1 million.
It might be noted that the Government is also providing funding for regions adversely affected by the decision to restructure the Australian National Railways Commission. These arrangements, which were announced in November 1996, include transitional funding of $20 million ($10 million in each of 1996-97 and 1997-98) to assist regional economies in Tasmania and South Australia adjust to the impact of reforms to the rail system. Funding for this purpose is found in Program 15.4, Regional Development.
The Tasmanian Freight Equalisation Scheme (TFES) commenced in 1976-77 and is designed to offset the transport disability faced by Tasmanian shippers in moving non-bulk cargoes between Tasmania and the mainland. Under the Scheme, a subsidy is paid to the shippers of goods, with assistance being provided to a significant number of companies involved in shipping such commodities as newsprint, paper and paper products, frozen and processed vegetables, confectionery, aluminium, timber and timber products. Around 80% of the assistance is paid to the consignors of northbound cargoes, while the remainder is paid on cargoes in the southbound trade. In 1996-97, payments under the Scheme are estimated to be $41.2 million.
The Tasmanian Freight Equalisation Scheme has not been reviewed since the mid-1980s, when the former Inter-State Commission conducted an inquiry into it. Since that time, the only change to TFES rates occurred in 1993-94 when, as part of the Budget negotiations between the Treasurer, Mr Dawkins, and the minority parties, an agreement was made with Senator Harradine for the provision of a further $2 million per year for four years to alleviate Bass Strait shipping costs. This resulted in a 5% increase in TFES rates of assistance, an amount which is still reflected in current assistance rates.
In the 1996-97 Budget, the Government announced that the Tasmanian Freight Equalisation Scheme Review Authority would conduct a review of the Scheme, especially in the light of reduced freight rates in the Bass Strait trades and alleged anomalies in the scheme. The 1996-97 Budget anticipated part-year savings stemming from this review in 1996-97 to be $1.8 million, with full-year savings of $3.8 million per annum in the out-years.
The Review Authority has reported to the Government, which has not yet implemented policy on this issue. However, in this Budget, the Government is anticipating making savings against the forward estimates of $3 million per year for the 1997-98 Budget year and the out-years. These announced savings are additional to those announced in the 1996-97 Budget. Payments of TFES assistance in 1997-98 are estimated to be $35.2 million.
As with last year's Budget, the decline in outlays for this Program results primarily from the expiry of commitments made under former urban and regional programs. In July 1996 the Government announced that the regional development and urban programs within the Department of Transport and Regional Development would be terminated. Although four programs will cease in 1996-97-the National Urban Development Program, Integrated Local Area Planning, Better Cities Mark 1 and Better Cities Mark 2-some were already scheduled for completion.
While there are no new budget measures for this Program, funding for regions adversely affected by the decision to restructure the Australian National Railways Commission is included here. These arrangements, which were announced in November 1996, include transitional funding of $20 million-$10 million in each of 1996-97 and 1997-98-to assist regional economies in Tasmania and South Australia adjust to the impact of reforms to the rail system.
With the winding down of expenditures under this program, its main function now is the provision of policy advice on a whole-of-government basis on issues impacting on regional Australia. Priority issues are improved coordination across portfolios and service delivery in regional Australia.
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