Chapter 2
Key provisions
2.1
The amendments proposed by the bill are a result of consultation that
commenced in July 2014, with the release of a discussion paper by the
Department of Infrastructure and Regional Development (DIRD).[1] The paper sought stakeholder views on options to streamline the administrative
arrangements for MPs and MDPs.
2.2
After a second discussion paper was released in 2015, DIRD found that
airport lessees 'favoured proposed reductions in regulation while other stakeholders
largely supported the status quo or a tightening of existing regulatory
provisions'. The bill therefore 'seeks to strike a balance between these
competing views'.[2]
2.3
During the presentation of the bill to the House of Representatives, the
Minister noted that the bill could be considered in three parts. The three key
areas of the bill involve:
- amending the existing MP process;
- changing the monetary trigger for an MDP; and
- amending regulatory processes involved with MDPs.[3]
2.4
This chapter provides detail on the amendments made by these three parts
of the bill and the consequences of these changes.
The Master Plan process
Airport Master Plans
2.5
An airport MP provides for the future coordinated development of an
airport and should 'establish the strategic vision for the economic and
efficient use of the airport over the planning period'.[4]
2.6
The Act sets out the required content of each airport MP. MPs contain
information about, among other things, development objectives, land use
intentions, the ANEF, flight paths and environmental issues.[5]
2.7
The MP covers a forward period of 20 years, and must be renewed every
five years. The MP also incorporates an Environment Strategy, detailing the
airport's plans to manage environmental issues in the next five years, and
beyond.[6]
2.8
The Minister noted that the five year MP process can be burdensome on
airport lessees, as 'the current legislative process requires an airport lessee
company to expend significant resources and it can take the company two years
on average to develop each plan'.[7]
2.9
Further, DIRD advised that since the MP process was introduced, the cost
of compliance had increased significantly and, depending on the airport, was
estimated at between $500 000 and $2.5 million for each MP.[8]
2.10
To address these concerns, Item 9 of the bill amends section 76(1)(a) of
the Act to extend the five year MP renewal period to eight years, for those
airports listed in Table 1.1. The bill makes a number of consequential
amendments throughout the Act to implement the eight year timeframe for
applicable airports. The Brisbane, Melbourne, Perth, Sydney (Kingsford Smith)
and Sydney West airports will continue to require a new MP every five years.[9]
2.11
The amendment acknowledges the long-term implementation timeframes of
many airport infrastructure projects, with the Minister stating that MPs are currently
required:
irrespective of the operational, administrative, resourcing
and financial capacity of individual airports or the level of impact their
operations have on the community. Implementing an eight-year master plan cycle
for secondary and general aviation airports, will minimise the impact of these
factors.[10]
2.12
The five year timeframe for major airports was retained in recognition
of the higher level of activity at these airports, their forecast passenger
numbers, and their impact on the environment, economy and surrounding
communities.[11]
Australian Noise Exposure Forecast
(ANEF)
2.13
An ANEF is defined as:
a contour map showing the forecast of aircraft noise levels
that is expected to exist in the future. It is based on expected aircraft
movement numbers, type of aircraft and forecast route structures, daily
distribution by time period of arrivals and departures, configuration of
runways, air traffic control procedures and flight paths, etc.[12]
2.14
An ANEF must be included in all MPs, and be prepared by airports prior
to the release of the draft MP for public consultation. ANEFs are produced with
a forecast of 20 or more years, or the ultimate practical capacity of the
airport. ANEFs are endorsed by Airservices Australia.[13]
2.15
ANEFs are used by governments and land use planning agencies for long‑term
planning of developments around airport sites. However, as noted by DIRD,
predictions in an ANEF are limited by the data available at the time the forecast
is prepared and do not incorporate, for example, technological improvements to
aircraft.[14]
2.16
The current law provides that an ANEF must be included in an MP, but it
does not specify that the ANEF must be renewed for each new plan.[15] Item 11 of the bill inserts a new subsection 76(1A) into the Act,
requiring airports to obtain a new ANEF for each renewal of its MP, and to
include this in the draft MP given to the Minister for approval. Further, the
provision provides that the ANEF must be endorsed within the last 180 days of
the period specified by section 76(1) of the Act, relating to draft MP
timeframes. As detailed in the EM:
This amendment will ensure each final master plan comprises
an up‑to‑date representation of the potential noise impacts of
airport operations. The amendment also facilitates integrated and coherent land
use planning outcomes; in particular, to manage incompatible and sensitive land
uses from encroaching too close to airports.[16]
Monetary triggers for Major Development Plans
2.17
The Act provides a number of circumstances whereby the requirement for
an MDP is triggered, for example, constructing a new runway or extending an
existing one, constructing new passenger terminals, or if the development is
likely to have a significant environmental or community impact.[17]
2.18
In some instances an MDP will be required where the major development
reaches a monetary trigger, determined since 2007 as $20 million. Examples
of major developments with a monetary trigger include construction of new
access roads, buildings or taxiways.[18]
2.19
DIRD noted that the monetary trigger is ancillary to the existing
triggers in the Act for an MDP. As a consequence, the monetary trigger is only
considered after the other triggers are considered first.[19]
2.20
The bill, at Items 18 and 19, makes amendments to section 89 of the Act
to increase the monetary trigger threshold amount for an MDP to
$35 million, with the increase based on 'changes and conditions
in...construction industry costs' and 'economic and marketplace conditions'. The new
threshold will only apply to MDPs given to the Minister after commencement of
the bill.[20]
2.21
In addition, the bill determines that the threshold can be reviewed and
increased via legislative instrument, every three years. If a new threshold is
determined this way it:
- must remain the same or be higher than the previous determined
amount;
- must take into account changes in construction activity costs
since the last determination to keep pace with economic conditions; and
- may take into account changes in an index on construction activity
costs as published by the Australian Statistician.[21]
Cost of construction
2.22
The bill further legislates that the Minister can determine, through
legislative instrument, what should be included or excluded in determining the
'cost of construction' when airport lessees prepare an MDP. This would include,
for example, the cost of the base building fit-out, such as internal cladding.[22]
2.23
As detailed by the EM, the instrument will set out:
the costs that must be included and excluded in an
airport-lessee company's calculations when determining if the construction cost
of a major airport development triggers the requirement for a major development
plan. This amendment is necessary to remove any confusion for industry and
ensure a consistent costing application across all federal leased airports.[23]
MDP processes
2.24
While an MDP must include development objectives and show its
consistency with the MP, it must also take into account public comments. The
Act prescribes the public consultation process that an airport lessee must
undertake before an MP and MDP plan is submitted for ministerial consideration.[24]
Consultation periods
2.25
Airport lessees are required to engage in ongoing and regular
consultation with 'airport users, state/territory governments, local
authorities, and the community to improve information sharing and strengthen
planning and development outcomes'.[25]
2.26
Before giving an MDP to the Minister for approval, the airport lessee is
required by the Act to consult on the draft with the relevant state Minister.
The airport lessee must also notify the public that a draft MDP has been
prepared and is available for inspection. Copies of any comments received by
the public must be provided to the Minister when submitting the draft for approval.[26]
2.27
The consultation period for public comment on a draft MDP is 60 days (or
a lesser period approved by the Minister, of not less than 15 business days).
Section 92(2B) of the Act allows the Minister to approve a shorter consultation
period if a written request is made by the airport lessee.[27]
2.28
A shorter consultation period can only be approved if the Minister is
satisfied that the draft MDP aligns with the details of the proposed
development set out in the final MP, and does not raise any issues likely to
have a significant impact on the airport community.[28]
2.29
Currently, there is no legislated timeframe within which the Minister
must determine a request for shorter consultation. Item 22 of the bill will
insert a new subsection 92(2BA) into the Act to provide a 15-business-day
statutory timeframe for the Minister to consider a request for a reduced
consultation period. If no Ministerial decision is made within this period, the
request will be considered approved. The EM argues that this:
will not impact the prescribed requirements for public
consultation, however it will provide industry with certainty regarding the
Ministerial decision timeframe, which could then be accounted for in the
airport's planning process.[29]
Substantial completion of an MDP
2.30
The Act allows the Minister to approve (or refuse) an MDP. Unless an
approval states otherwise, the development proposed by the MDP must be
substantially completed no more than five years after the approval. The Act
currently allows the Minister to extend this five-year period only once, for up
to two years.[30]
2.31
The bill, at Item 23, substitutes section 94(7B) and proposes
to amend the extension approval process by removing restrictions and allowing
the Minister to extend the completion date as many times as required. An
extension is only possible if the initial five year period, or the further
extended period, has not expired. As is currently the case, the Minister can
impose conditions on an approval.[31]
2.32
In presenting the bill, the Minister argued that:
on rare occasions some larger or more complex developments,
such as a new runway, may be subject to unforeseen delays and exceptional
circumstances beyond airports' control. As a result, achieving a substantially
complete status may require more than the standard seven‑year time frame.
Where an airport is committed to substantially completing an
approved major development plan, the airport should be given the opportunity to
do so without penalty.[32]
2.33
DIRD submitted that circumstances beyond an airport's control could include
a change in economic conditions or market circumstances, or other 'exceptional
or unforeseen circumstances' beyond the airport lessee's control that impact on
the viability of the development.[33]
Ceasing an MDP approval
2.34
Item 24 of the bill inserts a new section 96AA into the Act, allowing an
airport lessee to withdraw from an approved MDP, in exceptional circumstances
beyond its control. Withdrawal can only occur if there are no building
approvals in place (that is, the project has not commenced). The airport lessee
must provide the Minister with a withdrawal notice, at least 50 business days
before the statutory date of substantial completion, detailing the exceptional
circumstances and why the development is no longer viable.[34]
2.35
The Minister must acknowledge the withdrawal notice, and the MDP ceases
from the date the Minister makes this acknowledgement. The airport lessee must
then, within 20 business days, publish a notification with information about
the exceptional circumstances, and why it is unviable for the development to
proceed. This aims to ensure that stakeholders remain informed.[35]
2.36
The Minister noted these amendments 'recognise that airports would have
already expended significant financial and administrative resources to have a
major development plan approved'. The new provisions are expected to reduce
regulatory uncertainty, and 'ensure an efficient and streamlined process'.[36]
2.37
DIRD emphasised that airport lessees were unlikely to seek a withdrawal
from an MDP, given that an MDP approval was likely to cost approximately
$300 000 to $1 million per project.[37]
Appeal rights
2.38
As the bill introduces new Ministerial decisions it also, at Item 25, determines whether some of these decisions should be subject to review by
the Administrative Appeals Tribunal (AAT).
2.39
The new legislative instruments in relation to MDPs which determine cost
of construction, and the monetary trigger threshold, are not subject to AAT
review. Likewise, a decision of the Minister in ceasing an MDP (under new
section 96AA) is not a reviewable decision.[38]
Transitional provisions
2.40
The bill contains a number of transitional provisions, in acknowledgement
of the various stages that airports may be at in the MP or MDP process, prior
to commencement of the bill.
2.41
In relation to MPs, the EM explains that the amendments to the MP
timeframe 'only apply to draft master plans given to the Minister on or after
commencement' so that 'any master plan approved prior to commencement will
expire five years from the day on which it was approved'.[39]
2.42
However, the EM notes the transitional provisions recognise:
there is typically a significant consultation process leading
up to the lodgement of a master plan. Where a master plan is submitted and
consultation notice is published within 12 months of commencement [of the
bill], the airport-lessee company can elect to not have the amendments apply to
that master plan without penalty. Therefore, an airport...may elect to submit a 5
year master plan within 12 months of commencement.[40]
2.43
Beyond this 12-month period after commencement, it appears all new draft
MPs will be subject to the new eight year timeframe.
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