AIRPORTS BILL 1996 & AIRPORTS (TRANSITIONAL) BILL 1996
August 1996
© Commonwealth of Australia 1996
ISSN 1038 - 2755
MEMBERS OF THE COMMITTEE
Members
Senator Winston Crane, Western Australia (Chairman)
Senator Paul Calvert, Tasmania
Senator the Hon. Bob Collins, Northern Territory
Senator Stephen Conroy, Victoria (Deputy Chairman)
Senator Julian McGauran, Victoria
Senator John Woodley, Queensland
Participating Members
Senator Eric Abetz, Tasmania
Senator Ron Boswell, Queensland
Senator Bob Brown, Tasmania
Senator David Brownhill, New South Wales
Senator Grant Chapman, South Australia
Senator the Hon. Peter Cook, Western Australia
Senator Alan Eggleston, Western Australia
Senator Brian Harradine, Tasmania
Senator Ian Macdonald, Queensland
Senator Sandy Macdonald, New South Wales
Senator Dee Margetts, Western Australia
Senator the Hon. Chris Schacht, South Australia
Senator the Hon. Grant Tambling, Northern Territory
Senator John Tierney, New South Wales
Senator Sue West, New South Wales
Committee Secretariat
Mr Andrew Snedden (Secretary to the Committee)
Mr Peter Hallahan (Principal Research Officer)
Mr John O'Keefe (Senior Research Officer)
Mr Maurice Chalmers (Research Assistant)
Ms Judith Wuest (Executive Assistant)
The Senate
Parliament House
Canberra ACT 2600
Tel: 06 277 3510
Fax: 06 277 5811
TABLE OF CONTENTS
REPORT
Referral of the Bills
Conduct of the Inquiry
Proposed Government Amendments to the Airports Bill 1996
Consideration of the Bills
Conclusion
Recommendations
CHAPTER 1: PRINCIPAL PROVISIONS OF
THE BILLS
Background to the Bills
Purposes of the Airports Bill 1996
Restriction on Ownership
Airport Land Use and Planning
Environmental management Other Provisions
Provisions of the Airports (Transitional) Bill 1996
CHAPTER 2: ISSUES ADDRESSED BY THE
AIRLINES
Introduction
Consultation
Critical national issues
Domestic terminal leases
Economic regulation
Charging principles
Dispute resolution
National Invoicing code
Impact on users
Building control
Transparency of airport operating accounts
Definition of aeronautical services
Monitoring powers
Regulations
CHAPTER 3: STATE AND LOCAL GOVERNMENT
ISSUES
Introduction
Airport ownership and control
Consultation Control of activity at airports
CHAPTER 4: GOVERNMENT RESPONSE TO ISSUES
RAISED DURING PUBLIC HEARINGS
Ownership and control
Consultation
Land Use Planning and Building Control
Economic Regulation Dispute Resolution
Dissenting Report: by Senator John
Woodley
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APPENDICES
Appendix 1: List of submissions received by the Committee
Appendix 2: List of witnesses appearing before
the Committee
Appendix 3: Correspondence received by the Committee from the Minister
for Transport and Regional Development, Hon John Sharp, MP, dated 1
August 1996
Appendix 4: Paper from Department of Transport and Regional Development,
Pricing Oversight at Leased Federal Airports
Referral of the Bills
On 30 May 1996, the Selection of Bills Committee recommended, and the Senate agreed, that the Airports Bill 1996 and the
Airports (Transitional) Bill 1996 be referred to the Rural and Regional Affairs and Transport Legislation Committee for
consideration and report by 20 August 1996.
The Bills were passed unamended by the House of Representatives on 29 May 1996.
The Bills were referred to the Committee for examination of their provisions relating to
- Sydney West Airport
- Removal of cross-ownership rules from the Airports Bill 1995
- Conferral of power on the Minister to provide exemptions from public consultation procedures
- Unresolved issues relating to airport developments in Perth and Adelaide
The Committee sought the views of State Government ministers and others with a direct interest in the Bills. The Committee
also considered the views of local government, airlines and other organisations.
A list of submissions considered by the Committee appears at Appendix 1.
Conduct of the Inquiry
The Committee held public hearings on 24 June and 6 August 1996 in Parliament House, Canberra. The Committee received
evidence from the following individuals and organisations:
- Senator the Hon Grant Tambling, Parliamentary Secretary to the Minister for Transport and Regional Development,
accompanied by officers of the Department
- Qantas Airways Ltd
- Ansett Australia
- Bankstown City Council
- South Australian Government
- West Australian Government
- Hobart Metropolitan Councils' Association
- ACT Government
A list of the witnesses who gave evidence to the inquiry appears at Appendix 2.
The Committee thanks all who provided submissions, evidence and assistance to it during the examination of the bills. The
Committee also notes that it has drawn on the excellent explanation of the bills' provisions prepared by the Parliamentary
Library.
Proposed Government Amendments to the Airports Bill 1996
During the course of the Committee's inquiry, the Minister responsible for the bills, the Hon John Sharp, MP, wrote to the
Chairman of the Committee, Senator Crane, on 1 August advising him that it was the Government's intention to move
amendment of the Bill during its consideration by the Senate.
The Minister advised Senator Crane that the Government proposed amending the Bill as follows:
- re-insert the cross-ownership provisions which had been taken out of the Airports Bill 1995; and
- amend the bill to narrow the scope of ministerial power to exempt a draft airport master plan and draft airport
environment strategy from public comment requirements.
The Minister's letter, which annexed detailed advice of the proposed amendments, is annexed as Appendix 3.
Consideration of the Bills
The Committee met in private session on 19 August to consider and to finalise its report.
Conclusion
The Committee draws to the attention of the Minister that representations to the Commitee on the Bills have stressed several
concerns with the Bills. A major concern is the need to ensure that a number of matters which the Airports Bill 1996 proposes
be dealt with by regulation should properly be dealt with in the statute itself.
Recommendations
The Bills
The Committee
recommends that the Airports Bill 1996 and the Airports (Transitional) Bill 1996 be agreed to subject to
amendments notified to the Committee by the Minister for Transport and Regional Development.
Other matters
The Committee draws the Minister's attention to comments by State, Territory and local Governments, described in Chapter
3 of the Report, expressing concern about the selection of the future airport lessees.
The Committee recommends that the Minister raise with the Minister for Finance the need to ensure selection processes take
into account the broader development and economic concerns of the States, Territories and Local Government.
Further, the Committee recommends that the Government establish clear consultative processes with the States, Territories
and Local Government.
The Committee also recommends that the Minister regulate to ensure that non-aeronautical business activities are consistent
with State, Territory and local Government planning and trading laws.
Finally, the Committee draws the Minister's attention to the concerns raised by the airlines, described in Chapter 2 of the
report and the submissions received by the Committee:
- Consultation;
- Critical national issues;
- Domestic terminal leases;
- Economic regulation;
- Charging principles;
- Dispute resolution;
- National invoicing code;
- Impact on users;
- Building control;
- Transparency of airport operating accounts;
- Definition of aeronautical services;
- Monitoring powers; and
- Regulations
Senator Winston Crane
Chairman, Legislation Committee
August 1996
PRINCIPAL PROVISIONS OF THE BILLS
Background to the Bills
1.1 Possible sale of Federal airports was announced in the 1994-95 Budget. The proposed sale was on the basis that
competition in the management of airports would lead to efficiency gains.
1.2 Following consideration of the proposal to sell airports, the government's proposal altered to long term leases of major
airports, with 99 year leases being suggested as the most likely option.
1.3 It was announced in the 199596 Budget that airports would be leased in two stages, with Sydney (including Sydney
West), Melbourne, Brisbane and Perth airports being leased in the first stage which was expected to be completed in
199697. The remaining airports were planned to be leased in 199798.
1.4 The measures were contained in the Airports Bill 1995 which was introduced in the House of Representatives on 27
September 1995 and lapsed on the dissolution of Parliament for the 1996 General Election.
1.5 Government policy, announced prior to the 1996 General Election, was that 22 Federal airports controlled by the FAC
would be leased on the following conditions:
- that Adelaide airport would be leased in the first stage; and
- that Sydney and Sydney West airports would not be leased until there was a satisfactory solution to the airport noise
problem in Sydney and that before they were leased two conditions must be met: the reopening of the eastwest runway
(which has occurred) and the completion of a genuine environmental impact statement for Sydney West.
Purposes of the Airports Bill 1996
1.6 The principal purposes of the Airports Bill 1996 are set out in clause 3 of the Bill, and include the following :
- to establish a system for the regulation of airports that has due regard to the interests of airport users and the general
community;
- to promote the efficient and economic development and operation of airports;
- to ensure majority Australian ownership and control of airports; and
- to limit the ownership and control of airports by airlines.
1.7 'Core regulated airport' includes the airports listed in clause 7 of the Bill. It includes all major airports, including
Coolangatta, Launceston and Townsville airports. The list also includes Sydney West Airport and other Commonwealth
airports specified in the regulations.
Leasing of Airports
1.8 Division 3 of the Bill provides for the grant of leases to airports, and the conditions that can attach to such leases.
1.9 Power to grant an airport lease is given to the Commonwealth, provided the conditions contained in subclause 14(5) of
the Bill are complied with. (Subclause 14(4) provides that if a lease breaches the clause, including the conditions, it will be of
no effect.) The conditions are:
- there is to be single lessee which is to be a company over which the Commonwealth has Constitutional power;
- leases are to be for a maximum of 50 years and may contain an option for renewal for a maximum of 49 years;
- except for joint use airports, that is, those used for both civil and military purposes Canberra, Darwin and Townsville
airports and Sydney West Airport, the lease provides that the area is to be used as an airport;
- for a joint use airport, the lease provides for the area leased to be used for prescribed purposes;
- for Sydney West Airport, the lease provides that a condition of the lease is to develop the site as an airport or use the
area as an airport; and
- the lease provides for access to the airport for interstate and/or international traffic.
Restrictions on leases
1.10 A company is to only hold an interest in one airport lease and any transfer or grant of lease in breach of this requirement
will have no effect (clause 16).
1.11 Leases for Sydney (KingsfordSmith) and Sydney West Airports are to be held by subsidiaries of the same company. If
the lease for Sydney West is granted to a Commonwealth owned company, as provided for in the Airports (Transitional) Bill
1996, the Commonwealth is to ensure that if it disposes of the company the disposal is to be to a company that is a subsidiary
of the same company as the holder of the KingsfordSmith Airport lease (clause 18).
1.12 Subclause 18(6) provides that a lease for KingsfordSmith or Sydney West Airport is to terminate if an 'unacceptable
leasing situation' exists. This will be where the lease holders for those airports are not subsidiaries of the same company. (The
situation where the Sydney West Airport lease is held by a Commonwealth owned company is not addressed in this
provision.)
1.13 There is to be only one lease in respect of an airport at any time and any lease that breaches this requirement will be of
no effect (clause 19).
1.14 A lease is not to be granted if it would breach foreign or airline ownership rules (see below) and a lease granted in
breach of this condition will be of no effect (clause 21).
Restriction on Ownership
Foreign ownership of a lease
1.15 Foreign ownership of an airport lease will be restricted to a maximum of 49% (clause 40). It will be an offence for a
person or persons to acquire shares in a company if they knew, or were reckless to the effect of the acquisition, that it would
result in foreign ownership exceeding this amount (clause 41). An airport operator is to take reasonable steps to assure that
the 49% limit is not exceeded (clause 42). If the foreign ownership limit is exceeded, the Minister may apply to the Federal
Court for an order to remedy the situation, including orders that shares be disposed of, that payments relating to shares held
be deferred or prohibited, or that rights in relation to shares not be exercised (clause 43).
Airline ownership of a lease
1.16 An airline and its associates will be restricted to a maximum ownership of 5% of a company that holds an airport lease
(see clause 44). Clauses 45, 46 and 47 of the Bill contain similar provisions as clauses 41, 42 and 43.
Airport Land Use and Planning
1.17 Part 5 of the Bill governs the manner in which land use, planning, building controls will apply to core airports, or airports
specified in regulations.
1.18 A simplified outline of the part of the Bill dealing with land use is as follows:
- For each airport, there is to be an airport master plan;
- Major development plans will be required for significant developments at airports;
- Building activities on airport sites will require approval; and
- Buildings and structures on airport sites must be certified as fit for occupancy or use.
1.19 Draft and final airport master plans (a final plan will be one approved by the Minister) are to deal with matters relating to
the development and operation of an airport. Plans are to deal with the matters specified in clause 61, which include:
- matters prescribed by regulation;
- the development objectives of the lessee;
- the lessee's assessment of the future needs of the airport; and
- forecast noise level exposure due to the operation of the airport.
1.20 In relation to joint use airports, the requirements are substantially the same but apply only to the area of the airport that
has been leased to the airport operator.
1.21 Plans will continue in force when a lease is transferred (clause 64) and airport lessees will be given 12 months, or such
longer period as the Minister allows, from the granting or acquisition of a lease to prepare a draft plan (clause 65).
1.22 Plans will have effect for 5 years or until a new plan is prepared (clause 67), although an airport operator will be
required to submit a new draft plan to the Minister before the expiration of the current plan (clause 66).
Building control
1.23 'Building activities', which are to be controlled, is given a wide definition in clause 89 and includes work involving the
construction and demolition of structures, earth works, engineering works, electrical works and hydraulic works.
1.24 A holder of an airport lease is not to conduct, or allow to be conducted, building activities unless they are carried out in
accordance with approval granted under the regulations or the activity has been declared to be exempt by the regulations and
is consistent with a final master plan or major development plan if such a plan is in force (clause 90).
1.25 Regulations relating to building activities may deal with:
- the granting of approval for building activities;
- conditions relating to an approval;
- the variation or removal of approval;
- fees in respect of approvals; and
- the transfer of approvals to new lease holders (clause 91).
Approval is only to be given if consistent with any final master plan and major development plan in force (clause 92).
1.26 Where work is carried out without approval or a condition of approval is breached, the Minister may order that remedial
work, including demolition, be carried out. This will not apply where the work is exempt under the regulations and, if there is a
final master plan or major development plan in force, the work is consistent with the relevant plan (clause 94).
Environmental management
1.27 Part 6 of the bill deals with environmental management of airports. A simplified outline of the Part is as follows:
- For each airport there is to be a final environment strategy;
- A final environment strategy is a draft environment strategy that has been approved by the Minister;
- A draft environment strategy is prepared by an airport-lessee company after taking into account public comment; and
- The regulations may deal with environmental standards at airport sites.
1.28 The requirement for an environment strategy applies to the same airports as the requirement for a airport master plan.
1.29 A draft or final environment strategy is to relate to a five year period and must specify:
- the objectives of the environmental management of the airport;
- the source of environmental impacts;
- the proposed studies, reviews and monitoring of environmental impacts from the operation of the airport;
- the measures to be carried out to prevent, control or reduce environmental impacts;
- details of the consultations involved in the preparation of the strategy; and
- such other matters as specified in the regulations (clause 107).
1.30 In determining whether to approve a draft strategy, the Minister is to have regard to the effect the implementation of the
strategy would have on air, water and soil quality; the effect on noise levels; and details of the consultations entered into in
developing the strategy. If the Minister refuses to approve a strategy, the Minister may require the company holding the airport
lease to submit a new draft plan within a minimum of 180 days of being notified of the requirement (clause 118).
1.31 Clause 124 allows regulations to be made establishing environmental standards relating to environmental pollution, noise
generated at an airport (other than noise generated by aircraft in flight) or the disposal or storage of waste at an airport. It will
be an offence to knowingly or recklessly breach the standards. Regulations may be made for monitoring any breaches of the
standards and for remedial action to be taken to rectify the breach (clause 125). If a person breaches the standards and an
airport operator incurs cost in rectifying the breach, the costs incurred may be recovered from the person who breached the
standards by the airport operator. A similar provision will apply if the Commonwealth incurs costs in rectifying a breach
(clauses 126 and 127).
1.32 Where a person is alleged to have breached the environmental management rules contained in the Bill, or regulations
made under clause 125, they may opt to pay a penalty, equal to one fifth of the maximum fine that could be imposed by a
court if the person was convicted (clause 130).
1.33 Part 18 of the Bill (clauses 224 to 232) provides for the monitoring of land use, planning, building control and
environmental requirements. Authorised officers will be able to search premises either with the occupier's consent (clause
227) or under a monitoring warrant, which is to be issued by a magistrate if satisfied that it is reasonably necessary for the
officer to have access to the airport premises to ensure compliance with the requirements (clause 228). An officer may
require a person in premises subject to a consensual search or a monitoring warrant to answer questions and/or produce
documents. It will be an offence, with a maximum penalty of 6 months imprisonment, to fail to comply with such a requirement
without reasonable excuse (clause 229).
Other Provisions
1.34 Other provisions of the Bill which were subject of discussion during the Committee's hearings related to:
- control of activities at airports (Part 11); and
- demand management (also Part 11).
Control of activities at Airports
1.35 Part 11 of the Bill (clauses 160 to 170) provides for regulations to be made in relation to leased airports regarding:
- the sale, supply and possession of liquor;
- the control of the supply of goods and services;
- the parking or use of vehicles within the airport site; and
- the control of gambling and smoking.
1.36 At least 30 days before such regulations are made in respect of an airport, operators at the airport are to be given a
notice inviting submissions on the proposed regulations (clause 170).
1.37 The Part also provides that operation of the Part will not exclude the operation of State or Territory laws that are
capable of operating with these measures (clause 169).
Demand Management
1.38 The Minister may declare the capacity of an airport, based on the maximum number of aircraft movements that the
airport is capable of handling during a specified period of time (clause 187). Before making such a declaration, the Minister is
to prepare a draft declaration and allow public comment on the draft (clause 188). Before calling for public comment on a
draft, the Minister is to offer the airport operator, aircraft operators who use the airport, Air services Australia and the Civil
Aviation Safety Authority an opportunity to make submissions on the capacity of the airport (clause 189).
1.39 If a declaration relating to the capacity of an airport is in force, the Minister may declare that the airport is subject to
statutory demand management (clause 190). In determining whether to make such a declaration, the Minister is to have
regard to the matters listed in clause 191, which include:
- whether demand exceeds capacity;
- the effectiveness of the self management and self regulation of the capacity;
- the effect of pricing arrangements on demand;
- the extent or likely extent of congestion at the airport;
- existing or proposed laws or other controls relating to environmental matters, including noise; and
- Australia's international obligations.
1.40 A demand management scheme may be:
- a category exclusion scheme, that is, a scheme that excludes certain categories of aircraft at certain times or all the time;
- a slot allocation scheme a scheme based on the allocation of take off and landing slots;
- a movement limitation scheme a scheme that limits the total movements or limits the number of movements for certain
categories of aircraft movements during a period; or
- a scheme not covered by one of the above categories.
1.41 A demand management scheme for an airport may be a combination of the above schemes (clauses 193 to 199).
1.42 The demand management plans will have effect in addition to the Sydney Airport Curfew Act 1995 and the air
navigation regulations (clauses 202 and 203).
Provisions of the Airports (Transitional) Bill 1996
Main Provisions
1.43 'Sale time' for a Commonwealth owned company is defined as the particular time, in the opinion of the Minister for
Finance, on which a majority of the voting shares in the company are acquired by a person or persons other than the
Commonwealth or a nominee of the Commonwealth. The Minister of Finance must then declare the time to be sale time by a
notice in the Gazette (clause 6)
1.44 Sydney West Airport is defined as an airport even if it is still a development site (clause 5).
Transfers from the Federal Airport Corporation to the Commonwealth (Part 2)
1.45 Airport land and certain FAC assets and liabilities are to be transferred from the FAC to the Commonwealth. The
mechanism for the transfer of land is statutory vesting and clause 11 provides that specified land in which the FAC has any
right, title or interest will vest in the Commonwealth upon the publication in the Gazette by the Minister for Finance of a notice
to that effect, without any conveyance, transfer or assignment.
1.46 Other FAC assets can be vested in the Commonwealth by the same procedure (clause 12), as can the liabilities of the
FAC, other than contractual liabilities. The transfer of contractual rights and obligations is dealt with in clause 13, which
provides that in relation to contracts, other than contracts of employment, the Minister for Finance may declare that the rights
and obligations entered into by the FAC become rights and obligations applying to the Commonwealth.
1.47 Clause 14 provides that rights and obligations of the FAC, other than contract rights and obligations, may be transferred
to the Commonwealth by the Minister for Finance.
1.48 Once the FAC's interest in airport land vests in the Commonwealth, the airport ceases to be a Federal airport for the
purposes of the FAC Act (clause 15).
Original grants of airport leases to companies (Part 3)
1.49 This Part applies to Kingsford Smith, Sydney West, Tullamarine, Brisbane, Perth and other airports specified in the
regulations where the site is owned by the Commonwealth (clause 20).
1.50 Clauses 21 and 22 permit the Commonwealth to grant an airport lease to a company if all of the company shares are
beneficially owned by the Commonwealth (clause 21) or if none of the company shares are beneficially owned by the
Commonwealth (clause 22). The Commonwealth cannot grant an airport lease to a company if some of the company shares
are beneficially owned by the Commonwealth.
1.51 Where land or other assets has been transferred to the Commonwealth from the FAC under clauses 11 or 12, the
Minister for Finance may declare that those assets vest in the relevant company granted a lease under clauses 21 or 22
(clause 23).
1.52 Similarly, clause 24 provides for any contractual rights or obligations transferred to the Commonwealth under clause 13
to be transferred by the Minister for Finance to a company granted an airport lease, and clause 25 provides that any relevant
liabilities undertaken by the Commonwealth under clause 14 may be transferred to the company granted an airport lease.
1.53 Under clause 26, an airport lease granted under clause 21 or 22 is subject to all existing leases in relation to the land
and subject to all other existing interests in the land.
Transfer of the FAC's assets or contracts to airport lessee companies; Transfer of the FAC's
liabilities to airport lessee companies (Parts 4 & 5)
1.54 Those assets and contractual rights and obligations of the FAC which are not vested in the Commonwealth under the
above provisions may be transferred from the FAC to airport lessee companies pursuant to clauses 30 to 33.
1.55 Other important provisions of the Airports (Transitional) Bill deal with the position of the FAC.
Transfer of Staff from the FAC to Airport Lessee Companies (Part 9)
1.56 When an airport lease is granted to a company, those employees of the FAC that are specified by notice in the Gazette,
cease to be employed by the FAC and are engaged as employees of the company (clause 58). The terms and conditions of
employees are safeguarded (clause 59) but can later be varied by law, award, determination or agreement (clause 60).
FAC's debts (Part 10)
1.57 Division 2 applies to loans to the FAC by the Commonwealth and Division 3 applies to non Commonwealth loans to
the FAC. In Division 2, clause 68, the Treasurer may declare the principal and interest of a loan due and payable at a
specified time. If an amount becomes due and payable, the Minister for Finance can determine that the Commonwealth is
liable to pay the FAC an amount equal to that amount.
1.58 Clause 70 contains a standing appropriation power without statutory cap.
In relation to non Commonwealth loans, the Treasurer can declare, by
notice in the Gazette, that a FAC obligation becomes a Commonwealth obligation,
and authorise the payment of money by the Commonwealth to discharge the
loan (clause 73). Alternatively, the Treasurer may enter into an
agreement with the FAC for the Commonwealth to take over FAC's obligations
under a loan and authorise payment to discharge the obligation (clause
74). Finally, the Minister for Finance may determine that there is
payable to FAC an amount that the FAC is to use to discharge a loan obligation
(clause 77). Clause 78 contains a standing appropriation power
without statutory cap.
ISSUES ADDRESSED BY THE AIRLINES
Introduction
2.1 The Committee received evidence concerning the provisions of the Bills that falls two distinct and largely discrete
categories:
- Airlines' views; and
- State and local government views
2.2 QANTAS and Ansett both made submissions to the Committee and gave evidence at a public hearing. The Committee
subsequently received correspondence from the Australian Air Transport Association (AATA) and the Board of Airline
Representatives of Australia Inc (BARA) endorsing the views put forward by Ansett and QANTAS.
2.3 The airlines indicated that they do not oppose privatisation and welcome a number of aspects of privatisation, in particular,
the abandonment of cross subsidisation between profitable and unprofitable airports. However, the airlines raised a number of
concerns about the Bills. Many of these concerns were in respect of provisions not included in the Bills but which were
included in the current legislation and in equivalent United Kingdom legislation. The airlines raised the following areas of
concern:
- Consultation;
- Critical national issues
- Domestic terminal leases;
- Economic regulation;
- Charging principles;
- Dispute resolution;
- National Invoicing code;
- Impact on users;
- Building control;
- Transparency of airport operating accounts;
- Definition of aeronautical services;
- Monitoring powers; and
- Regulations
Consultation
2.4 QANTAS, Ansett and the AATA expressed concerns about the absence of provisions relating to consultation with the
airlines. The AATA noted that the airlines are the major users and tenants of airports and submitted that accordingly, the
airlines must be adequately consulted and their interests taken into account if privatisation is to work effectively. Representing
QANTAS, Mr Richard Davis, Partner, Middletons, Moore and Bevins, told the Committee that "consultation is remarkable
by its absence from this legislation".
2.5 Areas that the airlines identified as requiring specific consultation include master plans, major development plans,
environmental plans and demand management plans.
2.6 Mr Davis drew the Committee's attention to both the current legislation, the FAC Act, and to the United Kingdom
legislation, which he said had been used as a basic model for the Australian legislation. Mr Davis noted that both these
examples provided for consultation. However, "the new legislation fails to address it altogether". Mr Davis said that the airlines
saw this as "an omission in the legislation - and a serious omission".
2.7 Mr Davis acknowledged that there are sections in the legislation that refer to consultation. However, he considered these
to be "illusory", and that essentially, there was no obligation to consult.
2.8 The airlines also submitted that the legislation should require the Minister to consult more extensively with the industry
about proposed regulations, such consultation to take place before the Minister circulated the draft regulations. Mr Davis
contended that the airlines were generally not consulted about regulations until it was too late:
Our experience has been that notwithstanding the opportunity that has been afforded to us to comment on
legislation and draft regulations as a practical matter, it is usually too late, or certainly it puts us in a very
difficult situation to provide meaningful comment.
2.9 The airlines sought a change of approach to ensure that the industry had adequate opportunity to comment on proposals
and decisions:
We feel that the relationship that the government ought to be fostering through this legislation is one where
there are obligations on the minister, the regulator and the industry to consult at all levels, including proposed
regulations. So that, when draft regulations are circulated for comment by the industry, they are regulations
which have actually been the subject of some industry input to start with. That way there will be more
meaningful dialogue between the industry and the airport operating companies.
2.10 Mr James Kimpton, Manager, Aviation Policy, Ansett Australia, indicated his support for this view. He told the
Committee:
...a lot of what the airlines are talking about is the need to be informed and be consulted and to know
what decisions are in the offing relative to the airports in a way that absolutely ensures that we do
have the opportunity, as of right, to put in a view. At the moment the bill does not explicitly provide
for that. There is a real risk in the absence of that explicit provision that the airlines, notwithstanding
the fact that their vital interests are at stake, will be left out of the process.
Critical national issues
2.11 QANTAS argued that there should be national standards for:
- charging principles;
- consultation;
- dispute resolution;
- invoicing for airport charges;
- service standards;
- rental paid by government authorities; and
- security charges.
2.12 QANTAS told the Committee that if the airport operating companies adopted differing approaches to these issues,
chaos would result.
Domestic terminal leases
2.13 The airlines expressed concerns about the future of their domestic terminal leases under the provisions of the legislation.
The airlines major concerns about this aspect of the legislation apparently centre on the unknown financial status of the new
airport lessees and the consequences of a lessee becoming insolvent. Accordingly, QANTAS sought a Government guarantee
protecting their investment.
2.14 Mr Davis told the Committee that under the current leases, the Commonwealth has an obligation to buy back facilities
from the major domestic operators. However, Mr Davis implied that the Commonwealth sought to rescind its responsibilities
to the airlines:
What the government is proposing to do with this legislation is to simply legislate away the
Commonwealth's obligation under its contracts with the major domestic operators; this is
unprecedented and unsatisfactory.
2.15 Mr Davis described this possibility as "a serious matter of concern for the major domestic operators."
Economic regulation
2.16 The airlines expressed surprise at the absence of economic regulation in the legislation. Mr Davis told the Committee that
the airlines did not know what constraints would be placed on the charges levied by the new airport operators or what
mechanisms would be put in place to protect the airport users.
2.17 Mr Davis again compared the Australian legislation with the equivalent U.K. legislation, noting that the UK Act does
enshrine the source of power for economic regulation.
Charging principles
2.18 QANTAS argued that there was a need for consistent charging principles at each airport. Mr Davis argued that the new
legislation provided "an opportunity to enshrine these principles at the very outset". He considered that if consistent principles
were not applied, this could act as a disincentive to international airline operators coming to Australia:
...international operators are going to find themselves in a similar chaotic state to the domestic
operators with different principles operating at different airports.
Dispute resolution
2.19 QANTAS argued that the legislation should include an obligation for the Minister or a regulatory authority to establish a
"code of dispute resolution", together with an obligation for airport operator companies and major users to comply with that
code in relation to specified areas of dispute.
National Invoicing code
2.20 QANTAS representatives contended that dealing with several different airport operators with different invoicing systems
would significantly increase internal operating costs for themselves and other airlines, resulting in increases elsewhere.
Impact on users
2.21 QANTAS argued that the Bill should be amended to require the airport operating companies and the Minister to take
account of the effect that plans, strategies, declarations and schemes will have on the operations of users or increases in user
costs.
Building control
2.22 Airlines identified a lack of certainty in the legislation concerning procedures for processing building approvals in their
terminals. Mr Davis told the Committee that the new legislation establishes a procedure for the Minister to approve an
application for building works lodged by an airport operating company but does not address the approvals process for airlines
operating within the leased airports.
Transparency of airport operating accounts
2.23 The airlines submitted that the airline operating company accounts should be "transparent" to the airport users. They
maintained that this was necessary so that airport users could assess whether the charges levied by the operating companies
were fair and reasonable. Further, they contended that "it is recognised in international conventions that there should be
transparency to users".
2.24 Mr Davis indicated that he was aware that the operating companies were required to submit accounts to the regulatory
authority, the Australian Competition and Consumer Commission (ACCC). However, the airlines apparently do not accept
that this safeguard is adequate. Mr Davis told the Committee:
It is all very well for the airport operating company to submit those accounts to the regulator which is
prescribed by the legislation, but again, this is one of these international problems that anyone in the
industry will be aware of, users of airports are in the dark as to what the airport operator's costs are.
...Not every company has to publish for consumers what its costs are and therefore how its profits can
be obtained. However, we have got a monopoly situation here.
Definition of aeronautical services
2.25 QANTAS argued that the legislation should include a definition of aeronautical services. Mr Davis contended that this
was necessary because the quality of service monitoring provisions in part 8 of the legislation deal with quality of service
monitoring and reporting in relation to aeronautical services and facilities.
2.26 Mr Davis acknowledged that the Government may choose to deal with this issue by regulation and indicated that this
would be satisfactory. However he stressed that the airlines considered this to be an issue that required resolution:
we believe this is one of those critical issues that the government should deal with right up front in the
legislation to give certainty to the entirety of the industry and to give direction then to the minister and
to the regulator in how it is to be dealt with.
Monitoring powers
2.27 QANTAS expressed concern about the extent of monitoring powers, stating that these are unreasonably wide. They
contended that there are no measures built into part 18 of the Bill to ensure the protection of confidential or commercially
sensitive information. QANTAS also described the powers of authorised officers under Section 229 to require persons to
answer questions as "draconian". Mr Davis told the Committee that the monitoring powers are extensive and that there is the
possibility of them being "open to abuse".
Regulations
2.28 QANTAS submitted that the Bill should contain a requirement for the Minister
to consult with major users prior to ar while drafting regulations. This
issue is covered more fully in Paragraphs 2.18 - 2.10.
STATE AND LOCAL GOVERNMENT ISSUES
Introduction
3.1 The Committee received submissions from three State Governments, the ACT government and three local government
organisations. The submissions and evidence received supported the Government's proposals to lease the airports in principle.
For example, the Victorian Government described the leasing proposals as "an extremely positive step".
3.2 However, the State and local Government submissions and evidence raised a number of significant concerns about
aspects of the legislation. These concerns may be broadly categorised as follows:
- Airport ownership and control;
- Consultation; and
- Control of activity at airports
Airport ownership and control
3.3 All of the State and Local Government organisations that gave evidence to the Committee emphasised the importance of
airports in their local economies and the potential adverse impact that common ownership of various national airports might
have.
3.4 For example, the Victorian Government advised the Committee that:
...it is vital that Melbourne airport, which is the key tourism and trading gateway to this state, is
operated in the best interests of the Victorian economy.
3.5 The Victorian Government argued that there should be separate leasing of airports and minimum cross ownership of
airports by Australian and foreign equity holders to ensure true independent competition between airports. The Government
considered that failure to prevent grouped ownership would have several undesirable consequences and identified these in its
submission. Accordingly, it sought Committee support for the previous 15 per cent cross ownership limitation.
3.6 The Commonwealth Government's decision to re-instate the cross ownership provisions in the same form as the 1995
Bills goes some way towards alleviating the concerns of some state governments. However, the South Australian and Western
Australian Governments also expressed concerns about the potential effects of cross ownership. As the Government's
announcement addresses the ownership of Sydney, Melbourne and Brisbane airports only, the concerns of the South
Australian and Western Australian governments are still current.
3.7 The Western Australian Government advised the Committee that the cross ownership provisions "are a major concern".
The Western Australian views were based on similar concerns as to those identified by the Victorian Government:
...it is considered that the incentive to develop Perth airport in a manner which promotes the
development of the local economy and which is consistent with the State's objectives for aviation
services is likely to be greatest if Perth is owned separately from other airports.
3.8 The Western Australian Government was also concerned about regional development issues and advanced similar
arguments to those put forward by the other states. Mr Gary Hodge, Manager, Aviation Policy, Department of Transport,
told the Committee:
So my simple message...is that the Airports Bill 1996 and the Airports (Transitional) Bill must enshrine
state involvement in the airport regulatory framework, leasing process, land use planning and
selection of operators. It is most important that we actually bring those broad principles forward...
There must be recognition of the state's objectives if we are contributing as partners to the
Commonwealth to the type of aviation sector we are going to need in the future.
3.9 Mr Hodge emphasised that aviation technologies were changing and Perth competed directly with airports in the eastern
States. He said that if the same operator owned Sydney and Perth, the airport operator could favour one over the other.
3.10 Mr Hodge submitted that common ownership was potentially anti-competitive:
The spirit of the legislation is to encourage competition between the airports, and we believe that that
should be carried through and be consistent. If competition is an objective of this particular piece of
legislation, then we would want to see that carried through.
3.11 The South Australian Government also indicated that it was concerned about the impact of airport ownership on regional
development, advising that it considered the common ownership of airports to be undesirable.
3.12 The South Australian Government did not seek to have Adelaide airport included in the cross ownership rules. Rather, it
argued that there should be a specific inclusion within the legislation that allows for "proper" consultation with the states prior
to the final selection of lessees of the airport. The Government argued that as part of the process of assessing the various bids
for the airports, the States should have the opportunity to ensure sufficient weighting is assigned to regional economic
development issues.
3.13 In the South Australian Government's submission, the Minister for Industry, Manufacturing, Small Business and Regional
Development and Minister for Infrastructure, the Hon. John Olsen, FNIA, MP, expressed concern that price was apparently
the only matter being taken into consideration by the Airports Sales Task Force in the process of selecting lessees for the
airports. Mr Olsen stated that the South Australian Government "is concerned that this is contrary to what has been discussed
with the Commonwealth to date". He said that such a strategy "seems to be inconsistent with the Commonwealth's policy
aimed at ensuring that the airports effectively support the development of the regions they serve."
3.14 The Hobart Metropolitan Councils Association (HMCA) also emphasised the importance of airports to the Tasmanian
economy, for example the tourism industry, which it characterised as "extremely price sensitive".
3.15 The HMCA expressed concern about the introduction of full cost recovery when Hobart airport is leased. The
Association advised the Committee that a study conducted for the FAC in 1993 for the Institute of Industry and Economic
Research showed that with full cost recovery, Hobart landing charges would rise by 194 per cent, cutting tourist numbers by
between 11 200 and 21 200. The loss of tourism revenue to the State would be $11-22 million.
3.16 The Association advised the Committee that it was "vital that the Hobart airport is operated in the best interests of all
users of the airport and the community".
3.17 The Association informed the Committee that HMCA had proposed to its member councils that it form a joint authority
of councils to submit a proposal to the Commonwealth asking that the joint authority be granted the lease over Hobart airport.
3.18 The ACT Government's position was similar to that of other witnesses. Ms Annabelle Pegrum, Executive Director,
Cabinet and Policy Coordination Office, Chief Minister's Department, advised the Committee that:
We do obviously want to work with the Commonwealth government to ensure that any potential
bidders for Canberra airport will seek to expand the economic basis of Canberra and the region...the
Commonwealth should not solely concentrate on the sale price but also on an operator who would be
able to work cooperatively and productively with the region that it serves...
...There would be some concern that, were the lessee to have a controlling interest in another airport,
the Canberra airport would merely be treated as an ancillary facility.
Consultation
3.19 In common with the airlines, the State and Local Government submissions criticised the lack of consultation provisions in
the legislation.
3.20 In the South Australian Government's submission, the Hon John Olsen, FNIA, MP, drew the Committee's attention to
the second reading speech of the Bill which states:
leasing of airports will facilitate...greater local involvement and input into decisions on their
development and input...there will be opportunities for greater autonomy of individual airports post
leasing and for airports to cater better for the particular markets which they serve and therefore meet
the needs of local and regional economies.
3.21 Mr Olsen noted that it was "somewhat disappointing that the Airports Bill as it stands does not clearly reflect these
considerations." He contended that objectives in the second reading speech could be more readily achieved if the States were
more closely involved in the planning and development decisions about the airport. Mr Olsen said that as an example, a
requirement for State consultation on the airport master plans "would ensure that the airport is better integrated in the state's
economic strategy".
3.22 Similarly, the Victorian Government noted that the legislation only provides for consultation with the states in respect of
master plans and major development plans after the plans have been prepared. The Government considered that consultation
with the States should be part of the preparation of the master plan.
3.33 The Victorian Government raised similar concerns about a lack of consultation in respect of draft environmental plans,
the making of regulations concerning on-airport activities, category exclusion or demand management schemes and variation
or closure of airport sites.
3.34 The Western Australian Government was also concerned about consultation issues. The Government advised that its
principal concern is that the Bills do not provide for adequate State input into future airport operations, planning and
development as well as the selection of operators. The Government said that this deficiency was likely to lead to conflicts
between commercial developments at the airports and State land use planning objectives as well as the conflicts with the
State's transport and tourism objectives.
3.25 The Bankstown City Council considered that there were insufficient provisions in the Bill to require the airport operating
companies to consult with interested parties such as local government and community organisations with an interest in the
operation of the airports.
Control of activity at airports
3.26 All State and local governments that gave evidence to the committee expressed concern about regulation of
non-aeronautical activity and the lack of State and local jurisdiction over organisations operating at airports.
3.27 A common theme in the evidence was that the Bill effectively exempts private industry from:
- land use approvals;
- building controls;
- environmental regulations; and
- local rates and taxes.
3.28 For example, the Mayor of Bankstown City Council, Counsellor Grant Lee, told the Committee that:
...there could well be brothels set up on airports; there could well be any of those sorts of activities in
the community that are finding it hard to get approved by a local authority passed on a local site. They
could be concrete crushing plants. They could be toxic waste storage. They could be any of these
provisions.
3.29 The Bankstown Council distinguished between exemption of Commonwealth Government agencies and private
companies, arguing that it was inappropriate for private companies operating at airports to be exempt from local planning
restrictions. The council submitted that:
... The fact that the private sector is assuming a role once undertaken by government should not
exempt them from abiding from relevant state and local government laws and regulations.
3.30 Several submissions contended that companies operating within airport boundaries that were not subject to state laws
and charges could enjoy an unfair advantage over similar companies not on crown land. For example, the Western Australian
Government noted that:
In being exempt from State laws and charges, the businesses located at the airports will have unfair
advantages which contravene the very basis of the Hilmer competition principles.
3.31 The South Australian government raised similar concerns. Mr Michael Milln, Senior Adviser, Aviation, South Australian
Department of Transport, told the Committee that the State recognised the need for the Commonwealth to continue to control
aeronautic activities on an airport. However, the state considered that non aeronautical commercial activities should be
controlled under state planning statutes. Mr Milln advanced two reasons for this view:
- the state needs to integrate those sorts of activities with its forward planning strategies; and
- there needs to be a consistent regime both on airport and off airport for non aeronautical commercial activities.
3.32 Representing the Government of Western Australia, Mr Gary Hodge, reiterated the position put by the Bankstown
Council and by the South Australian Government. Mr Hodge said that the State's position is that the Government must be able
to have some say and influence over the land plan issues, issues related to gambling and so on. He acknowledged that the
legislation does address these issues but considered it does not go far enough.
3.33 Mr Hodge informed the committee of a situation which had arisen in the recent past in Western Australia that illustrated
the State Government's concerns. This was a proposed development of a "Toys R Us" complex on Federal Airport
Commission land in Perth. Mr Hodge said that such a development would have decimated every small business within a radius
of five kilometres that was in the same business as the development would have been exempt from restrictions on other local
businesses, such as constraints on trading hours. Mr Hodge told the Committee that the FAC withdrew that development
"because they were good neighbours". He said, however, that he could foresee a situation where a totally private operator
would say "we are a Commonwealth place, we will do what we like".
3.34 Similar concerns were expressed by the ACT Government. Mr Gary Prattley, Chief Planner, Executive Director,
Planning and Land Management, Department of Urban Services told the Committee:
...we certainly would not want to suggest that there should not be the capacity to develop related uses
on airports. That can be an extremely important site for areas of economic activity. The point would
be that that should not be capable of being determined solely by the lessee of the airport, but it must
be able to be addressed within a state or local government strategic planning framework to make sure
it does not compromise the whole future of the town or city.
3.35 Similarly, the Victorian government advised the committee that:
...it would be viewed as intolerable by the state and local governments,
the business community and surrounding residents for a private company
leasing the airport to carry out a range of airport and non airport
related business and not subject to land use and environmental assessment
and building control regulations applicable elsewhere in the state.
GOVERNMENT RESPONSE TO ISSUES RAISED DURING PUBLIC HEARINGS
4.1 At the conclusion of the public hearing conducted on Tuesday, 6 August, Senator the Hon Grant Tambling, Parliamentary
Secretary to the Minister for Transport and Regional Development and officers of the Department of Transport and Regional
Development addressed a number of the issues that were raised during the hearing and in submissions.
Ownership and control
4.2 Several of the State governments that gave evidence to the Committee sought further dilution of the cross ownership rules
beyond those proposed by the government in its amendment. Mr Ivon Hardham, Deputy Chairman, Airport Sales Task
Force, indicated that this proposal raised a number of considerations. He said that there is a reasonably limited market for
airports given the size of financial institutions who would have to bid for them and tightening the cross ownership rules further
could dilute the market for the airports:
If we have a process where you separate the airports out so that each one is to be separately owned or
controlled, you can end up in a situation where, in fact, you do not have any bidding process at all
because you could have a situation where every bidder is earmarking for himself a particular airport.
The reason I raised that, in a sense, it is eliminating that tension we are trying to create in the bidding
process through the sale by tender in parallel.
4.3 Senator Tambling also responded to the Hobart Metropolitan Council Association proposal that sought control of the
Hobart Airport outside of the tendering process. Senator Tambling indicated that the government would welcome local
ownership of airports, however, this was only the case as long as an open tender process applied.
Consultation
4.4 Both the airlines and the state and local government representatives made strong representations to the Committee
concerning the lack of consultation provisions in the legislation.
4.5 The Parliamentary Secretary, Senator Tambling, told the Committee that this issue had been raised repeatedly over a
number of years. He said that a "creative tension" existed because the airports were Commonwealth places and therefore
outside the States' jurisdictions. There was an "apprehension and fear" that the Commonwealth would "flex the legislative
muscle that is often required".
4.6 However, Senator Tambling expressed the view that the apparent concerns were unfounded. He said that any critical
issues had been properly resolved by negotiation:
I think the record would show,Mr Harris can correct me if I am not right,that, through negotiation and
cooperation which necessarily has to accompany this type of thing, the record has usually been that
any flashpoints or issues that have been raised have been properly and adequately resolved.
As far as I am aware, there have not been any long-term or major issues, either in finance or in the
controls that apply to the Commonwealth, that have not been resolved through appropriate and
proper negotiation. Whilst the states, local government and others may well flag the issue that they are
fearful that Canberra might have too much legislative control in this area, I think history proves that
generally all the issues that have come on the table have been properly resolved.
4.7 Mr Peter Harris, First Assistant Secretary, Aviation Policy, also cast doubt on the effectiveness of adding any further
consultative provisions to the bills. Mr Harris told the Committtee that:
...a legislative provision for consultation seems to me to not necessarily achieve for state governments
as much as could be achieved by the client or partnership arrangement at some stage have begun to
develop with their local airport ownership even now with the FAC involved.
4.8 Mr Harris indicated that the department intended raising with the Minister, Mr Sharp, that the states may be consulted in
advance of plans being released by the Minister under statutory requirements in this legislation. However, Mr Harris qualified
this statement by indicating that the Minister had not endorsed this proposal.
4.9 Mr Harris indicated that the statutory requirements to consult could in themselves cause problems to arise. He stated that:
With respect to the statutory obligations to consult, I think I referred earlier to consultation being the
sort of thing that is arguable in different entities' minds as to whether they were effectively consulted.
Ultimately, it can lead to litigation over whether they were consulted. It does not give you the same
necessary input or access to the process of development of an airport.
Land Use Planning and Building Control
4.10 Senator Tambling advised the Committee that the Government recognised the importance of state and local government
views on proposed airport developments, particularly those developments of a non aeronautical nature. Senator Tambling
indicated that the Commonwealth was unwilling to concede control of land use planning and building developments on its land
to the state and local government authorities. However, Commonwealth regulatory control of planning and building would
allow a consistent regulatory regime to be applied at the major airports.
4.11 Mr Peter Harris added to Senator Tambling's answer. Mr Harris indicated that the basic intention of the Bill was that
State law would apply unless extinguished by Commonwealth law. He said that State law in regard to issues such as liquor
licensing and operating hours of retail outlets would be covered under such an arrangement.
4.12 Committee members questioned the departmental officials regarding some of the examples that had been given about
possible unfair advantage that would be given to developments on airports outside of state or local government control. For
example, Senator Calvert raised the issue of what would happen if a developer sought to build a casino on airport land and
whether such a casino would be subject to the rules of a state government.
4.13 Mr Joc White, Assistant Secretary, Airport Regulation, advised the Committee that part 11 of the Airports Bill 1996
contains provisions which allowed the Commonwealth to control certain on-airport activities such as liquor, commercial
trading, vehicle movements, gambling and smoking. Mr White indicated that the Commonwealth had the power to displace
straight law if it chose to issue regulations. However, if the Commonwealth did not issue regulations in this area, state law
would apply.
4.14 Mr White advised that final decisions have not yet been taken about whether the Commonwealth would issue regulations
in this area. Mr White indicated that the Government intended to consult with the States and given them the opportunity to put
their views as to whether state law should apply or not. With respect to the issue of gambling and casinos, he emphasised that
if no regulations are issued under this part of the Bill, then State laws in relation to gambling would apply.
4.15 Mr White also addressed the question of liability of private companies operating at airports for local rates and charges.
He advised the Committee that for legal reasons, it is not open to the Commonwealth to require any direct payment of rates
by airport lessees. However, there has been a long standing government policy based on equity grounds.
4.16 Mr White tabled a letter dated 20 November 1987 from the then Minister, Senator the Hon Gareth Evans to the
Chairman of the Federal Airports Corporation which set out the Commonwealth's policy in this area. The letter stated that:
...notwithstanding the Commonwealth's exemption from state taxes, it is a long standing government
policy based on equity grounds to make payments equivalent to rates to local authorities in certain
circumstances.
4.17 Mr Harris concluded by advising the Committee that although the Commonwealth was unable to compel airport
operators to make direct payment of rates to local government and state government authorities in the legislation, it was
possible to insert requirements in the individual airport leases to require airport operators to meet the government's
requirements in this area.
Economic Regulation
4.18 Senator Grant Tambling clarified the price control arrangements that will apply after the airport leases have been granted
to private operators. He stated that a price cap will apply to all charges for aeronautical services as covered by definition in
the Federal Airport's Corporation Act. He said that the Australian Competition and Consumer Commission (ACCC) would
administer the price cap at major leased federal airports.
4.19 Senator Tambling advised the Committee that the department has sent out a consultation paper outlining the proposed
arrangements. This paper was tabled in the Committee and is attached at Appendix IV. Mr Tambling concluded that the price
control arrangements are designed to protect users from potential abuse of market power by airport operators and their
customers. Comments on the intended arrangements are being sought by 30 August.
Dispute Resolution
4.20 During the hearing the airlines had sought to have provisions inserted in the legislation which would deal with matters such
as dispute resolution.
4.21 Mr Peter Harris indicated that the government did not intend to mediate in disputes. He advised that:
The basic process the government is trying to put in place here as a result of this move to private
leasehold airports is one in which airlines and airports are encouraged to develop contractual
relationships between each other rather then expecting the government to mediate in disputes.
4.22 Mr Harris indicated that other suggestions put forth by the airlines concerning matters such as consultation and
obligations which enshrine principles would be resolved in a similar fashion through negotiation between the airport operators
and the airlines themselves.
4.23 Mr Harris indicated that there was an obvious and clear exception
to the government's position on dispute resolutions. This was in a situation
where a lessee was able to deal in a anti-competitive manner with an airline.
He said there are specific provisions in the legislation and the pricing
paper to allow the ACCC to play a role in resolving disputes where it
is clear that either the price cap arrangements have been breached or
where otherwise there is an exercise of market power by an airport operator.
Senator John Woodley
The Australian Democrats believe the Report of the Committee and its recommendations reflect the evidence given to the
Committee at the special hearings. However, the Democrats believe that the privatisation of Australian airports is against the
national interest for the following reasons:
- There is no comparable international precedent for the leasing or sale of a nation's airports.
- Airports are a natural monopoly therefore on public interest grounds they should not be privatised as their sale will
convert a natural, public monopoly into a private monopoly.
- The breaking up of the Federal Airports Corporation network will lead to an end of cross subsidisation between larger
airports and smaller airports.
- Airports are critically and strategically important public assets. They are profitably, efficiently and effectively run.
- The management and ownership of airports is a sensitive political, economic and environmental issue. These concerns
can only be given proper consideration if the airports remain in public hands.
Senator John Woodley
Australian Democrat Senator for Queensland
LIST OF SUBMISSIONS RECEIVED BY THE COMMITTEE
- QANTAS Airways Limited.
- Ansett Australia.
- Bankstown City Council.
- Government of South Australia.
- Government of Victoria.
- Hobart Metropolitan Councils Association (including the Hobart and
Launceston Airport Studies).
- Port of Launceston Authority.
- Sutherland Shire Council.
- Australian Air Transport Association.
LIST OF WITNESSES APPEARING BEFORE THE COMMITTEE
Department of Transport and Regional Development
- Senator the Hon. Grant Tambling, Parliamentary Secretary to the Minister for Transport and Regional Development.
- Mr Peter Harris, First Assistant Secretary, Aviation Policy.
- Mr Henry Lis, Director, Aviation Legal Section.
- Mr Paul Merner, First Assistant Secretary, Aviation Operations.
- Dr Hugh Milloy, Assistant Secretary, Sydney West Airport Taskforce.
- Mr Raymond Warren, Acting Assistant Secretary, Aviation Environment.
- Mr Joc White, Assistant Secretary, Airport Regulation.
- Mr James Wolfe, Director, Airport Policy.
Department of Finance
- Mr Ivon Hardham, Deputy Chairman, Airport Sales Taskforce.
ACT Government
- Ms Annabelle Pegrum, Executive Director, Cabinet & Policy Coordination, Chief Ministers Department.
- Mr Gary Prattley, Executive Director, Planning and Land Management, Department of Urban Services.
- Ms Meredith Whitten, Portfolio Liaison Manager, Chief Ministers Department.
Government of South Australia
- Mr Jeremy Johnson, Manager, Infrastructure Investment.
- Mr Michael Milln, Senior Adviser, Aviation.
Government of Western Australia
- Mr Gary Hodge, Manager, Aviation Policy.
Bankstown City Council
- Mr Ray Ashton, Executive Officer.
- Councillor Grant Lee, Mayor.
Hobart Metropolitan Councils Association
- Mr Greg Alomes, Executive Director, HMCA.
- Mr Michael Catchpole, Executive Director, Southern Tasmanian Development Board.
- Mr Terence Martin, Chairman, HMCA.
Ansett Australia
- Mr James Kimpton, Manager, Aviation Policy.
QANTAS Airways Ltd.
- Mr Richard Davis, Partner, Middletons, Moore and Bevins.
- Ms Philippa Hannay, Corporate Lawyer.
- Mr David Hawes, Group General Manager, Government and International Relations.
- Mr Barry Phair, Group Manager, Finance Projects.
- Mr Ian Robinson, General Manager, Airport Operations.