Michael Keenan (Stirling, Liberal Party) Share this | Hansard source

The Civil Aviation Legislation Amendment (Mutual Recognition with New Zealand) Bill 2005 seeks to amend the Civil Aviation Act 1988 to enable the mutual recognition of aviation related safety certification between Australia and New Zealand in relation to large aircraft. It is a very sensible and rational bill dealing with an industry that operates internationally so far outside the parameters of sensible economics that it insults common sense. After listening to the member for Swan, I am quite disbelieving that the ALP would oppose even these limited measures to improve industry efficiency. It is a sad indication that they have now adopted an ‘oppose everything’ mentality. When the government comes up with a sensible bill like this, the opposition feel that they have to oppose it regardless of the obvious economic benefits and the obvious benefits that it will have to passengers travelling across the Tasman.

I find it extraordinary that an opposition that appears to want to reclaim some economic credibility would take this position on this particular bill. I note that the member for Prospect is in the House. I understand that he is one of the members charged with improving the ALP’s economic credibility, yet he sits here whilst his party takes what is such an obviously illogical view of a bill that seeks to provide some very sensible efficiencies for airlines that cross the Tasman.

Sadly, almost every nation clings to what is a very destructive notion of a national flag carrier at the expense of their own citizens’ interests. The result of this for people travelling on international airlines is that they pay too much for airfares and they suffer bad service and less convenience—all in the name of the discredited notion of economic nationalism. It seems that, no matter how appallingly some airlines perform, it is virtually impossible for an airline to go out of business. The international aviation industry is ludicrously overregulated and lacks basic flexibility. If it were to be described in one simple word, it would be ‘corrupt’.

At a time when it seems that almost everyone would concede that competition is generally a good thing, the international aviation market is a monument to the folly of wrapping up particular industries in cotton wool and the poor results that this inevitably brings for consumers. In the United States alone the US federal government has spent a staggering $15 billion to keep bankrupt airlines flying. As a result of this, the service levels on American carriers are generally regarded as very poor. Why would an American carrier strive to improve its efficiency when the government has basically said: ‘Do not worry how you perform. Do not worry about improving services. We’re never going to let you go out of business anyway’?

In the European Union—a bastion of outdated economic thinking—the individual states continue to insist on the survival of airlines that are plainly unable to compete against their international peers. Nations long ago abandoned similar practices for other industries, yet in the airline industry this remains the norm. Sadly, Australia is not immune from these protective impulses, though we are far from being the worst offender. The government recently protected Qantas from all but the meagre competition that exists on the Pacific route from eastern Australia to the United States. This policy will result in higher airfares and less convenience for consumers, though I note that the ALP did not even take a position on that. Worse still, it will translate into Australia being a less attractive destination for American tourists, and this will cost tourism operators in my electorate of Stirling extra revenue. In the aviation industry, as in most other industries, it is competition that will drive continuing service improvements and efficiency. You only need to compare the service standards and pricing on routes which many operators service, such as the kangaroo route from Australia to the UK, with the standards and pricing on routes where only one airline operates, such as between Perth and South Africa. Where is the drive to improve when you have the market all to yourself?

I will leave some of those arguments for another day because the legislation that we have before the House is actually a welcome departure from this international norm as it cements the benefits of the open skies agreement that we have with New Zealand. I think anyone would agree that this agreement is an outstanding success and it provides a wonderful model for Australia to conclude further open skies agreements with other nations. As a result of this agreement, Qantas has been able to set up and run an airline in New Zealand, and the trans-Tasman route is extremely competitive. This provides enormous benefits to consumers, who can choose from a large number of service providers, from budget airlines right through to major international carriers such as Emirates. This is not an abstract view from some pointy headed economist. The benefits that flow from the open skies agreement are easy to see and very real for anyone who flies that route. You can actually fly between Australia and New Zealand one way for as little as $150. You can choose between five different service providers who link airports that have never before been linked, such as the Gold Coast and Dunedin. You can choose between services that operate throughout the day and fly when you want to fly. If only other markets in this industry could be half as helpful for consumers.

The bill deepens this successful agreement. It was first introduced into the parliament in June 2003 and, after being examined by the Senate Rural and Regional Affairs and Transport Legislation Committee, failed to pass before the expiration of the last parliament. The bill has been reintroduced into this parliament in a slightly amended form. The previous bill established a framework for the recognition of other safety certificates, such as maintenance, to be made via regulations without further legislative amendment. In response to the report from the Senate committee the ability for mutual recognition to be extended beyond AOCs, or air operator certificates, by regulation has been taken into account in this bill.

The committee report also recommended that, 12 months after the commencement of the mutual recognition of AOCs, the Civil Aviation Safety Authority, CASA, should conduct a comparative assessment of the safety records of airlines operating in Australia under both Australian and New Zealand AOCs. CASA will report the findings to the Commonwealth parliament within a further six months. I note that New Zealand has already implemented the minor amendments that it needs to its Civil Aviation Act to implement the measures that are contained in this bill. The bill is not a large one, but it does contain some very technical aspects, which I do not intend to go into today in anything but a general way.

Under the current circumstances, airlines must satisfy both Australian and New Zealand aviation requirements. These frameworks are set by the Civil Aviation Safety Authority in Australia under the Civil Aviation Act 1988 and by the Civil Aviation Authority of New Zealand in New Zealand under their Civil Aviation Act 1990. The problem with this situation is that it results in unnecessary duplication, complexity and added administrative and financial burdens on operators. This in turn deters operators from establishing air services in the other country. This is inconsistent with the intent of the current open skies air services agreement, which aims to promote competition amongst Australian and New Zealand operators, including on domestic routes.

The Civil Aviation Legislation Amendment (Mutual Recognition with New Zealand) Bill 2005 will allow CASA to recognise certain forms of safety certification issued by its New Zealand counterpart for the purposes of satisfying Australian safety requirements. The first form of safety certification to be mutually recognised will be the air operator certificates. In essence, an AOC certifies that an airline or aviation company is capable of providing flight services safely. There has been substantial activity by the Australian and New Zealand governments in recent years in relation to trans-Tasman aviation regulation. As I outlined earlier, this has provided very real and tangible benefits to anyone who flies this route.

The initial agreement, signed in 1996, is known as a single aviation market arrangement. In November 2000, an open skies air services agreement was initiated. That agreement lifted various restrictions on Australian and New Zealand airlines in operating some domestic, trans-Tasman and international flights. A memorandum of understanding signed at the time of the agreement foreshadowed the measures that are contained in this bill, and it is good that this MOU is now given effect in this bill. It is a bill that builds on the already successful arrangements that I have outlined.

Mutual recognition will enable airlines to operate to, from and within either country on the basis of their home certification. This will enable Australian and New Zealand airlines to integrate their fleets and to make these airlines more efficient and competitive—and, of course, that results in lower airfares and generally better conditions for consumers. I can only hope that our government and other much worse offenders in governments around the world heed the lessons for the benefit of their citizens that have resulted from this open skies agreement with New Zealand and take urgent measures to liberalise international aviation markets. I am sure that the member for Cook, who is apparently speaking after me, will endorse those comments.

I was not going to say too much more on this bill, but since the member for Cook is not in the chamber yet, I re-emphasise that I am astonished by the ALP’s opposition to these very sensible measures. It beggars belief that they believe that the Australian government would take measures that would somehow endanger passengers travelling on Australian airlines. That is clearly a ridiculous claim. Where is any evidence that the safety regime established by the New Zealand government is dangerous for Australian consumers? The reality is that this is an incredibly important bill that gives effect to the final part of what is a true open skies agreement that has been immensely beneficial for Australian and New Zealand consumers—or indeed anyone who flies that trans-Tasman route. I commend the bill wholeheartedly to the House.

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