Kim Wilkie (Swan, Australian Labor Party) Share this | Link to this | Hansard source

Last Monday I tabled two petitions: one from 2½ thousand residents and ratepayers of the City of Belmont and one from the council itself, signed by the Mayor of the City of Belmont, Mrs Glenys Godfrey, and the Chief Executive Officer, Shane Sillcox. I spoke at the time on the petition signed by residents and their anger over the rate-dodging tactics of the Westralia Airports Corporation, who are the leaseholders of Perth Airport.

I revealed on Monday that the chair of the Westralia Airports Corporation is Mr David Crawford, Acting President of the National Competition Council, which is responsible for enforcing the government policy of competitive neutrality. Mr Crawford obviously believes in one set of rules for some companies and another set of rules for the business he is involved in. Let me explain this in the words of the petition I have received from Mayor Godfrey on behalf of the council:

• The Westralia Airports Corporation (“WAC”) leases the Perth Airport from the Commonwealth Government under a 50 year lease with an option to renew for a further 49 years.
• The WAC must make “rates equivalent payments” to the City under clause 24.2 of the lease. The reason for this is the Federal Government’s commitment to the principles of competitive neutrality, which in this instance ensures that the WAC does not have a competitive advantage over other commercial operators who must make annual rate payments to their relevant local government authority.
• In accordance with the lease, the City issued a notice to the WAC for a rates equivalent payment in the 2005/6 Financial Year of $2.1 million. The WAC has advised the City that it will not pay the full amount of the rates equivalent payment and will only make a $1.691 million rates equivalent payment.
• The underpayment of rates by $409,000 leaves the City with a substantial budget shortfall. The impact of this will be a significant decrease of works and services in the local community and may result in an increase in the amount of rates that other ratepayers in the Belmont community will have to pay.
• The City is not in a position to negotiate down rate equivalent payments as this is unfair to all the other ratepayers in Belmont who promptly pay their rates on time. Any such negotiation is in breach of competitive neutrality principles and the City does not want to engage in anti-competitive behaviour by providing the WAC with an advantage over other commercial operators.
• If the Perth Airport was privately owned land then the WAC would be required to make full payments of rates. The lease already contains a number of exemptions that would not be available if the Perth Airport was privately owned. The WAC’s ability to make further reductions exists only because the land is owned by the Commonwealth. The WAC is hiding behind the Crown to avoid paying rates.
• The Department of Transport and Regional Services (“DOTARS”) is responsible for administering the Perth Airport lease. DOTARS has not obtained legal advice on the correct interpretation of the lease clause yet continues to advise the WAC that it can negotiate a lesser amount of rates payments with the City. DOTARS is refusing to enforce the lease against the WAC to the detriment of the City and the Belmont community.
• At the time of negotiating the lease, DOTARS’ role may have been to implement Government policy but its role changed when the lease was signed and since then its responsibility has been to manage the terms of the lease.
• DOTARS has a conflict of interest between a responsibility to manage the lease and its apparent desire to advise the WAC how to reduce their rates or how other airports may have achieved a reduction …
• Any reduction in rates payments by the WAC will result in an increase in profits. These profits will be subject to Company Tax payable to the Commonwealth Government. This is a form of tax shifting whereby a reduction in rates payments to the City results in an increase in tax income to the Commonwealth Government and imposes an additional burden upon local government to fund its operations.

The petitioner:

... requests the House to require the Minister for Transport and Regional Services, who is responsible for administering the lease, to enforce the lease and ensure that the WAC pays, and continues to pay, full rates equivalent payments to the City of Belmont.

It is not as though the airport cannot afford to pay this amount. In a recent article in the Southern Gazette on 30 May, the airport is reported to have had one of its busiest Aprils on record, with 452,000 passengers having travelled through the domestic terminal alone, which was an 11.9 per cent increase on the same month last year. Clearly the airport corporation can afford to pay; it is just a matter of it not wanting to, on advice from DOTARS. There are comments also in the community news by manager Neil Kidd, who said, ‘It is about time the federal member Kim Wilkie and the mayor spent more time negotiating and less time grandstanding.’ I say to Mr Kidd: it is about time that the airport corporation got off its backside and started honouring its commitment to the local people and started paying its rates like other ratepayers in the City of Belmont.