Chapter 3 - Key issues
3.1
This chapter examines the main issues and concerns raised in the course
of the committee's inquiry. The chapter starts by looking at issues in relation
to specific provisions in the Bill and then moves on to cover general concerns
raised in relation to the Bill and airport development.
Specific issues with the Bill
3.2
A wide range of views were expressed on the amendments contained in the Bill.
General support for some aspects of the Bill was received while some proposed
amendments raised overall concern and others were clearly not supported.
Airline ownership
3.3
Virgin Blue Airlines Pty Ltd (Virgin Blue) raised concerns regarding the
removal of the 5% restriction on airline ownership of airport-operating
companies of non-core regulated airports. Virgin Blue expressed reservations
about vertical integration and stated 'We do not mind that five per cent as
long as it is limited to those airports. We see those as secondary airports,
not main RPT [regular public transport] operators, so we do not see that that
is going to have a significant impact on the aviation market in Australia'.[1]
Master plans and the Australian
Noise Exposure Forecast
3.4
Some witnesses and submitters expressed concern on the use of Australian
Noise Exposure Forecast (ANEF) to forecast airport noise and suggested
shortcomings exist within the ANEF system. Some witnesses suggested that using
an 'ultimate capacity ANEF' would be more appropriate.[2]
Beyond the 20 year planning period
3.5
The Queanbeyan City Council (QCC) stated that 'the Airports Act should
not be amended to enable any master plan or associated ANEF to extend beyond
the 20-year planning period'. Two reasons were provided which included 'the
imposition of costs that may never be necessary' and the 'uncertainty of
planning beyond the 20-year period for critical factors such as the future
availability and costs of fossil fuels, the future of the airline industry,
technological advancements.'[3]
Replacement of the master plan and
new ANEF
3.6
The Australian Airports Association (AAA) did not support this provision
in the Bill as the ANEF for an airport could be changed by the actions of a
third party, such as Airservices Australia changing a flight path, or changes
to airline operating procedures. The AAA further explained:
It is not considered reasonable to require an airport to develop
a whole new master plan just because a third party instigates a change to an
ANEF. This proposed amendment should be either removed from the bill or
amended, so that only a variation to that part of that master plan that is
affected by a change to an ANEF is required, or the master planning process and
the ANEF system should be separated.[4]
Public comment
General issues with the
consultation process
3.7
Witnesses and submitters were broadly supportive of the Bill's
requirements that airport-lessee companies publish advice on their website
including the provision of copies of their proposals free of charge to
interested parties throughout the consultation period.[5]
However, the main issues of concern related to:
- the ability of a newspaper and/or internet advertisement to sufficiently
raise the awareness of interested stakeholders and the community;
- the airport-lessee company's control of the consultation process
and reporting to the Minister; and
- impact assessments not always being undertaken and if they were
undertaken, not being made available to stakeholders and the public.
3.8
Mr David Carswell, Manager of Strategic Planning at the QCC, suggested
that the website advertising was not going far enough and that airport-lessee
companies should be required to notify interested parties. QCC suggested:
...there should be a change to the bill requiring airports to
notify in writing those persons identified under the various provisions
labelled ‘consultation’, which list local government and state and territory
governments, in relation to major development plans, master plans and
environment strategies. Of course, in this day and age that can be done electronically.[6]
3.9
The absence of an independent third party to manage and report the
outcome of the consultation process to the Minister[7]
and the subsequent control of the process by the airport-lessee company in
reporting to the Minister is a source of concern. Mr Peter Fitzgerald,
Executive Director of the Australian Mayoral Aviation Council (AMAC), gave an
example of the consultation process for the brickworks development in Perth:
While there was much consultation about the brickworks, the real
problem was that the person who gave the consent was the person leasing land to
the brickworks. There was no independent third party, and that is the real
difficulty.[8]
3.10
Hobart City Council (HCC) suggested that the current system where there
is no clear separation of the roles of the assessor and the proponent 'is open
to perceptions of bias' and proposed that:
...all submissions received on a proposal should go directly to
the responsible Australian government department for consideration in the same
way that the public lodge submissions with the appropriate local government
authority across Australia.[9]
3.11
The Department responded to concerns on the role of the airport-lessee
company in communicating the public consultation outcomes to the Minister:
At the end of the day it comes down to our [the Department's]
assessment of, firstly, whether any changes have been made to the proposal to
reflect some form of change to try to do that. Have they made additional
studies which may run counter to that?...they are required under the current
arrangements to give us a legal statement to the effect that they have
considered all the submissions...Where there is a contentious project people
making a submission often copy their submission to the minister or to us to
ensure that we are aware of the issues. We become aware of the issues through
media comment and public comment around the project. So we often do go back and
have those discussions.[10]
3.12
Witnesses also raised the issue of impact assessments (economic,
social and environmental) of proposed developments undertaken by airport-lessee
companies and the availability of these assessments.[11]
3.13
In response to requests for clarity regarding consultation processes as
well as in response to a recommendation contained in a Senate Committee Report,[12]
the Federal Government released new Airport Development Consultation Guidelines
(Guidelines) in December 2006. The Hon. Mark Vaile, MP, Minister for Transport
and Regional Services commented:
The Australian Government will retain control over the
arrangements for airport planning, but the Guidelines will ensure all
parties are engaged in the consultation process. They make it clear the
expectation that State, Territory and local Governments in the area of
development will be included in the planning process from the early stages of
any project.'[13]
Reduction in number of days
3.14
There was much discussion on the proposed reduction to the number of
days available for public comment. The majority of witnesses, particularly state
and local council authorities, objected to the reduction in the number of days.
From our perspective, we believe that shortening it makes it
difficult for our councils to have adequate time to formally consider the
process. Councils meet on a regular basis but to shorten the time frame to 45
days would restrict their ability to have a formal council meeting to consider proposals.[14]
3.15
The Planning Institute of Australia supported 'the current amendments
which seek to improve the consultation regime, although we understand there
were some concerns with the time frames for some local governments'.[15]
3.16
The Department responded to concerns and stated:
The current 90 days in this airports legislation is, in our
analysis, now the longest public consultation period in Australia. Public
consultation arrangements in the states and territories can generally range
from 15 to 60 calendar days. The proposal to provide for 45 business days,
which equates to around 63 calendar days, still places us at the top end of
state and territory consultation requirements.[16]
3.17
The committee notes that further amendments to the Bill have been
circulated since it was referred for investigation to the committee. These
amendments increase the proposed 45 business day consultation period to 60
business days. The consultation period for variations remains at 15 business
days instead of 30 calendar days.
Demonstrate due regard
3.18
The majority of witnesses supported the intent of this amendment and
discussion concentrated on what was meant by 'demonstrate due regard' and how
this would work in practice.[17]
3.19
Mr Milton Cockburn, Executive Director of the Shopping Centre Council of
Australia, commented that this provision was an improvement on the current
requirements of the Act, but added:
We hope that the change in wording will mean that DOTARS will
now take a much more rigorous approach to ensuring that they have in fact taken
into account those sorts of submissions. In other words, questions will go back
to the airport lessee about the submissions, asking them to point to areas
where they have taken those submissions into account and perhaps to change
their MDP as a result of those submissions. Like all these things, it will
depend upon the degree of rigour of the bureaucrats in DOTARS. Nevertheless, we
do see that as a welcome change.[18]
Stop the clock
3.20
The majority of the evidence received during the inquiry expressed support
for the proposed 'stop the clock' provision in the Bill, particularly given the
'deemed approval' clause in the Act.[19]
However, the AAA expressed concern that the use of this provision may
potentially delay or compromise developments and would need to be monitored.
The stop-the-clock provisions as proposed in the bill to allow a
minister to request further information will need to be heavily regulated to
prevent inappropriate use or even politically motivated misuses of those
powers.[20]
Approval by Minister
3.21
Concerns were raised regarding the 'deemed approval' of the development
if the Minister has not made a decision to approve or not to approve the
development within the legislated time-frame. This power resides in the Act and
is not contained within the Bill.[21]
3.22
Mr Simon Corbell, MLA, Minister for Planning, Australian Capital
Territory (ACT) expressed concern on the absence of safeguards in the approval
process and commented:
In the instance that is proposed in the amendments, it is a
deemed approval, which is highly unusual and is particularly concerning in the
context where there is no opportunity to independently review such a
decision...For example, in the ACT there are set time limits for consideration of
development applications. If the planning authority refuses or does not make a
decision within those set time limits, it is a deemed refusal and the
proponent, the applicant, has the opportunity to seek a review of that refusal
in the Administrative Appeals Tribunal. So there are mechanisms to safeguard the
authority simply sitting on an application and not making a decision one way or
the other.[22]
3.23
The Department explained that the 'deemed approval' provision within the
Act has been in place since 1996 and 'we have never had an issue of a minister
not making a decision'. This provision was specifically placed into the Act to
'provide some surety for development on airports'.[23]
3.24
Concern was also raised on the overall approval statistics of
development plans on airports land by the Minister.
There are 22 leased airports around Australia, all of which I
think have now lodged their master plans and had them approved and many of
which have lodged major development plans and had them approved. We are talking
about 30-odd master plans or major development plans. We are not aware of one
single instance where the minister has rejected a master plan or an MDP. That
is the sort of strike rate that a private commercial developer could only dream
about.[24]
3.25
The Department, in response to questions placed on notice during the
public hearing, provided a table which details a number of master plans, major
development plans and environment strategies which were initially rejected.[25]
In all of these instances, bar one, the respective plans were revised and
subsequently approved.
Meaning of major airport
development
Threshold increase
3.26
The Southern Sydney Regional Organisation of Councils commented that the
'proposed increase of this threshold...may result in less opportunity for
community involvement rather than more'.[26]
3.27
The AAA supported the proposed increase to the monetary threshold
trigger and stated:
The proposal to increase the amount to $20 million reflects
commercial reality and the increases in construction costs over a 10-year
period. In addition, the act now requires airport lessee companies to include
site work costs and site preparation costs in their total project assessment,
which was not included in the original $10 million. Hence, if these two factors
are considered, the increase from $10 million to $20 million is fair and will
only remain fair as long as a recognised inflator is included in regulation to
adjust the figure regularly going forward and not to have a 10-year review
period as has happened since 1996.[27]
3.28
The Department outlined that the increase to the monetary threshold
amount is 'consistent with the current changes being made to the Public Works
Committee Amendment Act 2006' and added:
In New South Wales’s state significant projects, the thresholds
for those types of developments are $30 million for most developments. In the
case of major commercial and retail, the threshold is $50 million.[28]
Consecutive projects
3.29
The extension of the Minister's power to aggregate developments and
determine that individual building developments or proposals constitute a major
airport development was supported by the majority of witnesses and submitters.
Under the bill, if you seek to break up what is otherwise a
unitary development into little bits that are each less than $20 million the
minister will have a capacity to say, ‘No, that is all going to be aggregated
into one and you require a major development plan.’ That is certainly a
strengthening of the minister’s hand.[29]
Exclusion of National Capital Plan
3.30
Canberra International Airport (CIA) stated that they are 'the only
airport that is subject to two sets of planning authorities' which means they
have to 'pay two sets of application fees and get two sets of approvals'. CIA
further commented:
What is particularly peculiar in a red-tape sense is not just
the stupidity of having to do everything twice and pay twice, but that there
are two Commonwealth agencies. The taxpayers are funding two sets of
Commonwealth planners to give us the work-over...The improvement in this
legislation should mean that we have to deal with only one set of planners.[30]
3.31
The Minister for Planning ACT, Mr Simon Corbell MLA, responded to
comments that the removal of the National Capital Plan would represent a
windfall gain for the Canberra International Airport operator in terms of value
not paid for. Mr Corbell commented:
There is no doubt in my mind that that is the case. The
purchasers of the Canberra International Airport were aware of what regulatory
scheme applied when they purchased the site, and they knew that the National
Capital Plan applied as well as the requirements of the department of transport
under the Airports Act. The fact that they are now lobbying for the removal of
that level of regulatory control means that they achieve a level of windfall
gain in terms of ease of development, which they have not previously had to the
same level, and that has to improve the value of the site. That is not a value
that has been captured for the taxpayer in any way. Indeed, when the airport
was sold, the Commonwealth itself said that it was sold knowing that there was
an additional layer of regulatory control in place because it was the airport
of the national capital.[31]
ACCC monitoring
3.32
Virgin Blue expressed concern over the proposed change to section 155 (items
152 and 153) and stated:
The existing provisions of the act require the ACCC to subject
core regulated airports to regulator monitoring, evaluation and reporting of
quality of airport services and facilities. However, Virgin Blue contends that
the provisions contained within item 152 of this bill may be used to exclude
some or all core regulated airports from future ACCC monitoring and reporting.
Virgin Blue strongly believes that the current quality-monitoring regime for
core regulated airports should continue and that no attempt should be made to
change the existing arrangements.[32]
3.33
The Department responded to these concerns and stated 'it is certainly
not an attempt to exclude airports from ACCC monitoring' and this amendment
'simply gives us flexibility...it does not remove the ACCC price monitoring or
the normal provisions of the Trade Practices Act'.[33]
Extension to a broad range of
service providers
3.34
The committee questioned the intent of the amendments contained in items
161 to 164. These amendments have two purposes. Firstly, to permit a greater
range of service providers to provide air traffic services and rescue and fire
fighting services and secondly, to clarify the requirement for CASA approval.
The Department provided the following explanation of the intent of the
amendments to section 216 of the Bill:
The change has been that Airservices is required to be licensed
and its activities as an air traffic service provider and an AFTS provider is
regulated by CASA. This makes it clear that the air service at these airports
is subject to that – so it cleans that up- and at the same time it provides
some flexibility.
It [also] provides the flexibility for that if the government in
the future was to decide to provide contestability for the provision of rescue
and fire fighting services and air traffic services at those airports. That has
not been decided at this time.[34]
3.35
The committee upon receiving evidence from the Department expressed
concern that the flexibility portion of the amendment to section 216 appears
speculative and is based on prospective change rather than a policy decision.[35]
However, the committee notes that on 4 November 1999, the then Minister for
Transport and Regional Services, The Hon. John Anderson, MP, issued a Media
Release detailing the Federal Government's new policy statement on aviation
safety reform which stated:
'The new regulatory framework will make it possible for new
operators to provide control tower and rescue and fire fighting services in
competition with Airservices Australia. We will phase in competition for these
services, to make absolutely certain the new operators carry out their
functions to the same high standards. Airservices will continue to provide
tower services at Sydney Airport for years to come'.[36]
General Issues
3.36
Evidence received continued to highlight conflicts resulting from:
- the lack of coordination and integration between Commonwealth and
state and local planning regimes;
- the non-aeronautical commercial use of airport lands; and
- the authority of the Federal Government in non-aviation
development.
Lack of coordination and integration
between planning regimes
3.37
A number of witnesses and submissions expressed concern about
difficulties potentially resulting from developments on airport land not being
subject to the same planning and approval regimes as similar developments on
non-airport land.[37]
The Australian Local Government Association (ALGA) noted that:
Generally, as part of a development approval, councils and
states take into account the impact of a new development on existing residents
and businesses. Our concern is that developments on airports are not subject to
such a process.[38]
3.38
This may be problematic where developments on airport land have a direct
impact on infrastructure in the surrounding area, but developers are not
required to contribute to the costs of maintaining and renewing that
infrastructure. Witnesses from the City of West Torrens in South Australia
explained that:
The six million people who go through Adelaide Airport each year
travel through the city of West Torrens – they do not have any other choice –
and the infrastructure and roads system is grinding to a halt...Access for the
building of the airport terminal took place via Richmond Road, a council road.
That road was cut to ribbons by the heavy vehicles using that. The council will
pick up the tab for that - $1 to $2 million. [39]
3.39
However, in that context, the Department stated that approval of plans
for a development on airport land does involve an assessment of consistency
between the proposed development and state planning regimes, and that '[a]
great deal of effort is being made to connect airport developments with
off-airport infrastructure requirements'.[40]
3.40
Evidence provided some examples of situations where airport corporations
or developers using airport land make contributions to building and maintaining
infrastructure impacted by their developments, although these are not mandatory[41]
and appeared to be inconsistent between different developments. The Brisbane
Airport Corporation (BAC) expressed a position shared by several witnesses in
explaining that:
In fact, BAC does make payments to the local authority in lieu
of rates. This is a negotiated agreement. BAC has a formal agreement with the
Brisbane City Council to limit the delivery of certain commercial facilities at
No. 1 Airport Drive, staging them in harmony with regional infrastructure
systems.[42]
Commercial use of airport lands
3.41
The majority of witnesses raised the issue of unfair commercial
advantage[43]
where developments on airport land are not subject to the same financial and
regulatory regimes as similar developments not on airport land. Discussion also
considered that the commercial use of airport lands may influence the valuation
of airport lands overall.
3.42
In particular, the committee heard that some airlines including both
Qantas and Virgin Blue are concerned that increases in airport land valuation
resulting from commercial activity may lead to higher overall aviation costs:
If we start looking at commercial precincts going in and all of
a sudden the price of land generally around that precinct and within the
airport itself goes up, or is seen to go up, then that could have an impact on
our aviation charges. If aviation charges were to go up, then that could have a
direct impact on the aviation market and would be a deadweight loss to society.[44]
3.43
In contrast, however, the AAA noted that fluctuations in
aviation-generated revenues, related to, for example, terrorist events or
changes in oil prices, may mean financiers will be reluctant to provide funds
for investment in aviation infrastructure, so airport operators need other
forms of revenue, such as non-aviation investment, to keep the aviation
infrastructure growing and maintained.[45]
3.44
However, it was also noted that there could be a danger in commercial
use of airport land constraining future aeronautical development where there is
a finite amount of land available.[46]
3.45
The committee noted that the Productivity Commission is currently
conducting an inquiry into the basis for valuation of airport land. A draft
report has been issued and the committee awaits the finalisation of the report
on this matter.
Authority of the Federal Government
in non-aviation development
3.46
Some witnesses suggested that there may be legal constraints on the
scope of the Federal Government to make determinations relating to non-aviation
developments, even where these are on airport land. ALGA stated that:
We accept that the aviation elements of airports are key parts
of the nation's infrastructure and that planning is a matter for the Australian
Government. The extensive non-aviation commercial developments of recent years,
however, do not, in ALGA's view, constitute key national infrastructure.[47]
3.47
The City of Sydney, who had sought the advice of an expert in
constitutional law, further commented:
Our legal opinion, I should add, is that this is an
unconstitutional process...Does the Constitution allow the Commonwealth
government to become involved in developments which are not essentially of an
aviation nature? There is no doubt that, if the aviation context is correct,
then yes the Commonwealth has a role. But if it is outside that role, then it
is our opinion—which we obtained not that long ago, I might add—that this is a
questionable constitutional process.[48]
Committee view
3.48
The committee welcomes the evidence and debate, which occurred on airport
developments throughout Australia, during the inquiry for this Bill. The
committee acknowledges that major issues persist, between airport developers,
state and local planning and council organisations and members of the public,
which continue to result in much conflict.
3.49
The committee notes that developments on airport land may have
significant impacts on surrounding infrastructure, and further noted that while
some developers recognise this and make rates-equivalent payments to local
authorities in line with Federal Government policy,[49]
this practice appears not to apply consistently. The committee also notes that
local government authorities may consequently experience financial pressure in
some cases as a result of non-aeronautical development on airports land.
3.50
The committee acknowledges concerns that the proposed decrease in the
length of time for public consultation may constrain certain stakeholders' ability
to contribute to the planning process, and welcomes the amendments circulated which
increase these time frames. The committee notes that the proposed time period
remains longer than that in many other jurisdictional planning regimes, and
considers it to be sufficient. However, the committee agrees that the
consultation process will be most effective where stakeholders are properly informed
and equipped to contribute their views, and makes specific recommendations to
this effect below.
3.51
The committee welcomes the release of the Airport Development
Consultation Guidelines and appreciates their intent but remains concerned that
these Guidelines are non-binding on airport lessee companies and can not be
enforced.
3.52
The committee considers that, in view of the concerns that
airport-lessee companies control and communicate the outcomes of public
consultation processes to the Minister, airport-lessee companies, in excess of
their current reporting requirements, should provide the Minister with full
copies of submissions received to provide a transparent account of public
comment before the Minister makes the decision.
3.53
In relation to ministerial approval, the committee notes concerns
expressed in submissions and during the hearings about the 'deemed approval'
provisions of the Act. It is the view of the committee that this practice has
been in place for more than a decade and while it is not congruent with typical
practice in other planning regimes, it does not appear to constitute a problem.
The committee is also satisfied that the proposed stop the clock provisions
allow the Minister to request more information if required before making a
decision.
Recommendation 1
3.54
The committee recommends that the Bill be amended to add the requirement
that airport-lessee companies advise state/territory and local government
organisations of the commencement of public consultation processes so that they
have full awareness and the opportunity to comment and be engaged early in the
process.
Recommendation 2
3.55
The committee also recommends that the Bill be amended to provide for all
public consultation submissions received by the airport-lessee company to be forwarded
to the Minister as the decision maker, together with the written statement
already required.
Recommendation 3
3.56
Subject to the preceding recommendations, the committee recommends that
the Senate pass the Bill.
Senator the Hon.
Bill Heffernan
Chair
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