Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

I am speaking today on the Excise Tariff Amendment (Aviation Fuel) Bill 2010 and the Customs Tariff Amendment (Aviation Fuel) Bill 2010 and I move:

That all words after “That” be omitted with a view to substituting the following words: “whilst not declining to give the bill a second reading, the House:

(1)    acknowledges the importance of the role of the Civil Aviation Safety Authority (CASA) in regulating for safety in aviation;

(2)    notes that CASA’s funding from aviation fuel excise has increased from $53.96 million in 2002-03 to $78.37 million in 2008-09, and will continue to increase as the industry expands;

(3)    calls on CASA to improve its efficiency in the way it conducts its business so that it may use its existing resources more effectively in the regulation of the aviation industry;

(4)    notes that the bill proposes to increase the excise on aviation fuel from 2.854 cents per litre to 3.556 cents per litre, that is, by 25 per cent, from 1 July 2010; and

(5)    condemns the Government for introducing a 25 per cent tax increase on the aviation sector without first consulting and informing the aviation industry”.

These bills increase the excise levied on aviation gasoline and aviation kerosene sold in Australia by 25 per cent. The funds raised from this increase are to be allocated to the Civil Aviation Safety Authority to enable it to recruit 97 new staff and expand its surveillance activities. It is also intended that some of the money raised by this tax increase will be directed towards allowing CASA to clear its backlog of regulatory reforms and regulation redrafting. Aviation safety is an important issue, and the people of Australia have a right to expect that regulatory authorities like CASA are focused on ensuring that Australian skies remain safe, that our industry is well run and appropriately regulated, and that there is sufficient support for the aviation sector to be able to meet its obligations under the various regulations.

Over the years it has to be said that the relationship between CASA and the industry has not always been cordial. There has been a lot of conflict and concern within the sector that CASA is sometimes heavy-handed and unhelpful and interferes in ways that the industry considers to be inappropriate. On the other hand, I think the public do expect a competent and effective organisation that will ensure that aviation safety standards are met and that they can undertake air travel with the expectation that they will arrive safely at their destination. And those who live near an airport or, for that matter, anywhere that aviation activity occurs do not want to be innocent victims of an incident where inappropriate standards may have been practised.

CASA has a very important job—and that should never be underestimated—and it needs to have appropriate and adequate resources to be able to do its job. On the other hand, it also has an obligation to be efficient and reliable and to undertake its activities in the most cost-effective way possible. Over the years, Australia has maintained an exemplary record in the field of aviation safety and it is critical that aviation in Australia remains as safe and secure as possible.

Following the terrorist attacks of September 11 2001, the coalition government took action to improve aviation security in Australia. Since that time over $1 billion has been spent to enhance aviation security. We expanded the screening of passengers and checked baggage to ensure consistent security screening treatment of all passengers and baggage carried on jet aircraft departing anywhere in Australia. Additional funding was provided to improve security in the air cargo sector. The coalition also created the air security officer program in December 2001, which placed sky marshals on selected domestic and international flights. The sky marshal program is a valuable program and it is worth fully supporting. I was disappointed when the government downgraded the sky marshal program very early in its term. It is important that we ensure funding for this program is maintained rather than playing fast and loose with the lives of the flying public to save a few dollars. The government cannot on the one hand demand additional funds for CASA and then take a casual approach towards other elements of aviation security and border protection. I am disappointed that the government, whilst it has been keen to increase the surveillance of passengers and others entering aircraft from security perspectives, has been prepared to wind back the number of people in customs and quarantine services at airports so that inspections of not just passengers but particularly cargo have been reduced substantially. Indeed, in each budget this Australian government has cut funding to customs and quarantine services. Frankly, I think that is unsatisfactory.

However, as part of the previous government’s response to aviation security challenges, we introduced the Aviation Transport Security Act 2004, which involved aviation industry participants in maintaining aviation security and required them to develop and comply with a transport security program. That legislation also strengthened the regulatory framework surrounding aviation security and provided the flexibility necessary to respond to a rapidly changing air security environment. The coalition has a good record of ensuring safety in the aviation sector for the millions of Australians who depend on it either for their livelihood or for the ability to travel safely for work or pleasure.

CASA bears much of the responsibility for ensuring that Australian skies are safe and it is appropriate that it is both adequately resourced and efficiently run. Since being founded, CASA has been funded in part by the excise on aviation fuel, which these bills propose to increase. The rate of excise has been varied from time to time when appropriate. Most recently it was cut to its current level of 2.854c per litre at the time that the location specific pricing subsidy ended in November 2005. For many years the rate of excise on aviation fuel was linked to the CPI and was often indexed twice annually for inflation. The coalition ended this practice in March 2001, along with the deindexation of petrol and diesel excise. Some would argue that this means CASA is underresourced as it is funded in part by a tax that is not indexed to inflation. But the government is not proposing to increase the excise through this bill to address increases in costs on account of inflation but rather plans to fund an expansion of CASA’s workforce and regulatory activities—and, I might add, to pay for the new board that it has introduced to control CASA’s activities. At any rate, the amount of aviation fuel sold in Australia has increased significantly in recent years. In 2003-04, 4.4 billion litres of aviation fuel were sold in Australia. By 2008-2009, this had increased to 6.3 billion litres. Not all of these sales are subject to excise. The military, for example, are not charged excise on aviation fuel, and aviation fuel used on international flights is also exempt. Still, it is clear that, as the amount of aviation fuel sold increases, the amount that CASA collects through the excise on aviation fuel and the amount it has available to spend also increases.

CASA’s annual reports indicate that in 2002-03 it received just under $54 million from aviation fuel excise. By 2008-09, this had increased to $78 million, an increase of over 45 per cent in six years. So CASA has not been starved of funds; it has received a significant increase through the growth in aviation fuel sales. The proportion of CASA’s revenue that comes from this excise has varied slightly over time but has generally been between 50 per cent and 60 per cent over the last decade. There are other revenue streams such as direct charges that also fund CASA’s activities.

There have also been increases in fees charged by CASA in recent years as a part of a move to full-cost recovery. CASA revenues from the sale of goods and services, most of which is its fees charged to the industry, have shot up from $9.8 million in 2006-07 to $19.2 million in 2008-09. This revenue stream has nearly doubled in two years. It is also worth noting that the revenue provided by the tax increase proposed in these bills is $23.1 million in the first year. Just the increase in tax will be larger than CASA’s entire cost-recovery scheme from last year. Figures from CASA’s budget estimate that CASA expects to receive nearly $80 million from aviation fuel excise in the current financial year. At the current rate of excise, this suggests that there are just under 2.8 billion litres of aviation fuel sold on which excise has been levied. The government estimates that the increase in excise proposed by these bills will mean an additional $89.9 million over four years. This would mean the government expects to charge excise on 12.8 billion litres of aviation fuel over the next four years, averaging 3.2 billion litres per year. This means that, just on increased volume, excise would be levied on an additional 400 million litres of aviation fuel every year, or an additional 1.6 billion litres of aviation fuel over four years. This would mean an increase in CASA’s budget of an average of $11.6 million per year and a total of $46.4 million over four years just by maintaining the excise at its current rate and reaping more excise from higher volumes being consumed. So there will be a considerable increase in CASA’s revenue from excise over the years ahead, and presumably also from its fee structure, even if these bills are not carried—even if we do not give them this extra 25 per cent excise increase. These bills propose to increase the excise on aviation fuel by 0.702c per litre from its current 2.854c per litre to 3.556c per litre. That 0.702c per litre may not sound like much, but it represents an increase of nearly 25 per cent on top of the increases in volume that are expected.

A media release from the minister’s office on budget night described this as ‘a small increase in the aviation fuel excise’. Well, if the minister thinks that 25 per cent is a small increase, I think that speaks volumes about his attitude and the attitude of the whole government towards taxes. Of course, this government has form when it comes to tax increases. It was this government that increased the passenger movement charges—a revenue measure—in its first budget. The Treasurer increased the passenger movement charge from $38 to $47 and attempted to apply this tax retrospectively to tickets that had already been sold. That $9 is costing airlines, travel agents, tourism operators and the flying public and it hit the aviation industry at a time when it was already struggling with rising costs and an uncertain economic environment. Even worse, the government has committed itself to its giant new tax on mining and has declared war on an entire industry, its workers and every Australian who owns shares in mining companies or has superannuation.

And who can forget the ETS—the great big new tax on everything—that this government is still holding over the head of every Australian. The tax increase proposed by these bills is significant, and it is causing concern amongst those in the aviation industry. Many aviation industry stakeholders I have spoken to have expressed concern over the lack of consultation involved in these bills. Many first heard about the proposed tax increase when my office contacted them for comment.

This tax increase will add costs to the aviation industry at a time when it is already facing difficult economic conditions. The aviation sector, which contributes over $6 billion each year to Australia’s economy and directly supports nearly 50,000 jobs, deserves to be regarded as more than a cash cow. Charter operators servicing fly-in fly-out mining operations are already facing a drop in business on account of the government’s superprofits tax on the mining sector. As mining operations are shut down, they are being hit from both sides, with business drying up at the same time as their fuel costs increase.

But perhaps the greatest source of concern arising from these bills is the lack of transparency in how the money will be used. The aviation industry understands, as do I, that aviation safety is a serious subject and that CASA needs to be adequately resourced to perform its duties. But these bills make no specification about how the $89.9 million estimated to be raised is to be spent by CASA. The combined second reading speeches on these two bills lasted for only 2½ double-spaced pages so there was not much detail provided. Is it any wonder that the industry is concerned? The bills simply replace one excise rate with another. There is no full detailed breakdown on how the additional funding is included in the bills. There is no guarantee that the money raised by this excise increase will make Australian skies any safer. There is also the question of why CASA needs to hire an additional 97 staff. What will these 97 new employees do? How will they contribute to a safer aviation environment? These are questions that deserve answers, but answers have been in short supply from this government.

After consultations with the aviation sector let me say that there has been considerable alarm about the new costs that this bill will impose on the sector. Virgin Blue, for instance, argue that CASA should look at cost savings within its own budget to fund some of its activities and reduce the burden of inefficient and inappropriate regulation. Rex Airlines—and I know that Rex is very much dear to the heart of the member for Riverina, who has just entered the chamber—is concerned about the tax increase. It pointed out that the excise tax was meant to be a growth tax that would enable CASA’s role to grow as the industry grew. As I pointed out earlier, the revenue for CASA has grown and will grow without this 25 per cent increase. Rex believes that CASA should live within its means. Alliance, the largest charter airline in Australia, with many fly-in fly-out mining operations, are also concerned about a tax increase at a time when their revenue is also threatened by the government’s supertax on mining profits. They will face increased costs at the same time as their revenue is reduced.

The Aerial Agricultural Association of Australia oppose any increase in the tax on aviation fuel that is not linked to increases in efficiency on CASA’s part. They regard reform of CASA as a very high priority and feel that the tax increase is an example of CASA treating the industry like a cash cow. The Regional Aviation Association are not happy. Although they accept that CASA may need an increase in their budget if they are going to improve performance, they are very concerned about the impact of this extra tax on what is already a hard-pressed sector.

There is no doubt that, had the government sought to consult with industry before they announced this tax, they would have got a lot of negative feedback. They would have got a lot of advice about how CASA can do the job expected of it without having a great big new tax imposed on the sector. I am disappointed that the government has not allowed for there to be greater consultation with the industry. In fact, the legislation, brought on early in the House today—for, I appreciate, organisational reasons—is supposed to take effect from 1 July, just four or five sitting days away. So there will be little opportunity for even the Senate to undertake normal, appropriate scrutiny of this legislation. It has been brought into the House and it has to be dealt with within days, and the industry will have to start picking up the cost immediately.

There are concerns about the way this funding is going to be used. We are told that there are going to be 97 additional employees in CASA as a result of this legislation. It is my understanding that the bulk of the excise increase, estimated at approximately $59.5 million, is to be spent on recruiting these 97 new staff. On rough calculations, that is about $600,000 per employee. I do not know how much safety inspectors get paid, but, even taking travel, superannuation and other ancillary costs into account, I am not sure why the cost of employing these staff reaches that sort of level. Both the aviation sector and the parliament are entitled to an explanation.

The legislation says it will enable CASA to continue random alcohol and drug testing. Alcohol and drug testing is already occurring. The airlines conduct random alcohol and drug testing at their own expense, in their own interests. They want to protect their reputations—a priceless asset for any airline operator—but they also want to ensure the protection of their employees and their property.

No key performance indicators or benchmarks to measure the effectiveness of the additional funding have been released. The government is responsible for ensuring that the aviation sector is effectively and efficiently regulated. This means ensuring that CASA is adequately resourced but it also means ensuring that any increase in the costs borne by the aviation industry is justified. They must be able to explain to those who have to pay the costs why it is necessary.

It is for these reasons that the opposition has acted in the Senate to refer these bills to the appropriate committee for examination. The committee will obtain information on why CASA needs this extra money, how it will be spent, what safety risks are involved and how this tax increase will improve aviation regulation and safety. It will also give CASA the opportunity to justify to its critics how it is managing its existing budget. I commend the amendment to the House.

Alby Schultz (Hume, Liberal Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Sussan Ley (Farrer, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I second the amendment.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Wide Bay has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.

Janelle Saffin (Page, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Excise Tariff Amendment (Aviation Fuel) Bill 2010 and the related bill. I want to respond to what the honourable member for Wide Bay, the Leader of the Nationals, has just said in the debate. One of his comments was that the government had a casual approach to the issue of safety. I reject that. Nobody in the government has a casual approach to the issue of safety. In fact, safety is the basis of these cognate bills. One could say the previous government had a bit of a casual approach to policymaking in general. I was constantly surprised at how little policy work I saw. We are talking about the machinery of government—resourcing authorities like CASA so that the machinery is there so that they can do their job.

Listening to the honourable member for Wide Bay’s contribution, it was as though all was perfect, all was well, all was working, and that is a ridiculous notion—it clearly was not. There are things that have to be done to ensure that a premium is put on our safety. The honourable member for Wide Bay also outlined how a number of people were unhappy, because we are talking about excise, which is a tax. You can always find people who are unhappy when you talk about taxes—that is not hard to do. I think it would behove the honourable member to spend less time on trawling around finding people who are unhappy and more time on working on policy options and working with communities. But the former seems to be an inbuilt trait of the National Party as to how they operate in the community and also they say one thing in here and another out in the electorate, adding to the confusion. Another comment that the honourable member made goes to the issue of mathematics. I stand to be corrected, but I was sitting here listening and I heard him say that 97 additional staff safety specialists would be hired with this additional excise- and customs-equivalent duty. Then he said that would only cost—(Quorum formed)

Roger Price (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order. The member for Forrest, who drew attention to the order of the House, left the House, which is contrary to the standing orders once you have called a quorum. I ask that you take appropriate action against that member with the conclusion of the quorum.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

I take note of the Chief Government’s Whip’s point of order. I will remind the Opposition Deputy Whip, the member for Forrest, that when a quorum is called the person calling the quorum must remain in the chamber.

Janelle Saffin (Page, Australian Labor Party) Share this | Link to this | Hansard source

I was talking about the maths. The honourable member for Wide Bay had talked about 97 staff. He was saying that it would only be a cost of about $600,000 and, I thought, that clearly means that those staff would be severely underpaid—if you do 97 into $600,000 it would not be a liveable wage. The honourable member for Wide Bay needs to revisit his mathematics given that contribution.

The Excise Tariff Amendment (Aviation Fuel) Bill 2010 and the Customs Tariff Amendment (Aviation Fuel) Bill 2010 are always dealt with together. We have a cognate debate because customs tariff bills are companion to excise tariff bills. Constituents sometimes ask about that and say, ‘What is the difference between customs and excise?’ I will put it on the record so that they would be able to read what the difference is. Excise tariff bills are about domestic tax. The general definition in the explanatory memorandum of these two bills is defined as:

Excise is a tax on certain goods produced in Australia including alcohol (other than wine), tobacco and fuel.

It goes on to explain customs duty and the context of the goods that attract excise and are imported. It says:

Imported goods comparable to those subject to excise, known as ‘excise-equivalent goods’, attract customs duty that includes a component at the same rate as the excise rate so that imports and locally-produced goods are taxed in an equivalent fashion. This component is commonly referred to as ‘excise-equivalent customs duty.’

That explains it for those constituents who ask what the difference is. The objectives of these bills are, firstly, to employ an additional 97 safety specialists, being safety analysts, airworthiness inspectors and other staff. I know that for anybody who uses the airlines—and for anybody who does not use them but cares about airline safety—that is a good thing. We do need those extra people to make sure that safety standards can be improved with the complexity of regulations that they also have to oversee. It means airlines can expand the ongoing training of their staff. That is important, because you do not train staff once and say, ‘Well, they are trained, they’ve got that. They understand it. They know all about it.’ It is an ongoing role. That requires money and investment and what better investment do we have than in human resources—to make sure that the safety of all is paramount.

It also will be able to make permanent the random alcohol and drug testing as well as a number of other programs which until now have been funded on a temporary and ad hoc basis. I listened to the honourable member for Wide Bay talk as though it has all been perfect and well. But these things have not been done. The National Party, who always carried the transport role, could have done this but did not do it. It is making permanent this ad hoc arrangement, and it should not be an ad hoc arrangement when it goes to the heart of safety.

Last week I read a letter to the editor of The Northern Star, one of my local newspapers. It was written by a local person I know who flies. It was about an officer at the Lismore airport testing people for drugs and alcohol. She did say it was a bit inconvenient, but I thought that at least they are out in the regions as well, not just in the capital cities. So there was some reassurance with that.

Another object of the bills is to make sure that the Office of Airspace Regulation continues to have the resources to properly regulate and administer Australia’s airspace, an area covering almost 11 per cent of the earth’s surface. That is a big area to cover. This additional $89.9 million will be able to cover that.

A couple of things lead to this. The honourable member for Wide Bay also talked about consultation. There was long consultation. First of all there was an issues paper and then the green paper and the white paper. The industry has been consulted and actively engaged in this. The aviation policy contained in the white paper was an Australian first. Again I remind the Leader of the Nationals that he had nearly 12 years to do this and did not choose to do it. He then comes in here and talks as though somebody is doing something that is amiss. I absolutely refute that accusation—it is not; it is making it safer.

These amendments are to apply from 1 July 2010. The financial modelling shows that $89.9 million will be raised over the four years. This will go to the Civil Aviation Safety Authority, CASA, to make us safer. I commend the bills to the House.

Sussan Ley (Farrer, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I rise today to register my very strong protest against the Excise Tariff Amendment (Aviation Fuel) Bill 2010 and the Customs Tariff Amendment (Aviation Fuel) Bill 2010, which have been introduced by the government. This is nothing more than a sneaky cash grab. There is no way that excise for fuel in motor vehicles would have been increased in the last budget, because the government knew that the eyes of the Australian motorists were upon them. They obviously thought they could get away with adding 25 per cent to the cost of aviation fuel by using what I think is a very slim excuse about CASA needing more cops on the beat.

If you ask people what they expect in aviation safety and what aviation safety means to them, they will point to the disastrous crashes that we often have in the light aircraft sector—and there was one yesterday. When they get on an aircraft, whether it be a light aircraft, a charter plane, a RPT or an international airline, they want to feel safe. How do we get from there to needing to have a force of drug and alcohol police marching around, as the previous speaker said, regional airports, city airports and bush airstrips? The business case has not been made for the problem that is supposed to exist here.

I come back to what people want to see in aviation safety and what it means to them. Yes, there are human factors in aircraft accidents. In the literature there is a range of what those human factors are, but they are not drug and alcohol problems on the part of pilots. I speak as a commercial pilot myself, and that is why I have an interest and a passion in this subject. That is not the reason why we have issues in aviation safety today. I believe there is no record that CASA can point to that demonstrates the need for 90 extra cops on the beat to drug and alcohol test Australia’s pilots.

I very strongly support the second reading amendment moved by the member for Wide Bay. I remind the House that we do acknowledge the importance of the role of CASA in regulating for safety in aviation. We do note that CASA’s funding from aviation fuel excise increased from $53.96 million in 2002-03 to $78.37 million in 2008-09 and will continue to increase as the industry expands. There is a natural increase in the volume of excise that CASA is receiving because of increased usage of fuel. It is not as if CASA can make the argument that it needs to do more with less. Its revenue from fuel excise is continually increasing.

The opposition calls on CASA to improve its efficiency in the way it conducts its business so that it may use its existing resources more effectively in the regulation of the aviation industry. The member for Wide Bay talked about the range of stakeholders who have expressed concern to the opposition—and I am sure to the government—about where this has come from. If there is to be an additional take from aviation excise of this dimension—some $90 million—what other uses could it be put to within CASA? There are many. The regulation rewrite that has been underway for years does not appear to be anywhere near completion. I am told that to get a medical through CASA—and if you do not have a medical you do not fly—can take up to six weeks.

The other transactions that small regional operators go through with CASA on a daily basis are time consuming, costly, highly intensive and often very unrewarding. Members in this place who represent regional areas have heard time and again of the volume of red tape that the small regional operators have to go through. The impression they get from CASA is that it does not really want them there at all and they are a bit of a nuisance and that CASA is focusing on the big end of town.

The opposition notes that this bill proposes to increase the excise on aviation fuel from 2.854c per litre to 3.556c per litre. That is a whopping 25 per cent increase from 1 July 2010. As I said, this is a sneaky tax cash grab that has been slipped into the budget; it was not talked about. As we heard, the second reading speech on the bill by the minister for aviation was the shortest ever. Of course, the issue of safety was held up as being the reason that we have to do these things. Sure, if a good safety case is made then additional resources have to be allocated to it and maybe that means an increase in aviation excise—but a case has to be made.

We condemn the government for introducing this 25 per cent tax increase on the aviation sector without first consulting with or informing the aviation industry about it and without demonstrating that this additional tax being taken from the industry will be put to good use within an organisation that is already running a budget surplus. It is not as if the organisation needs the money. I have not done the sums but I remain to be convinced that a 25 per cent increase in aviation fuel excise will add to the money that the government will allocate to its safety inspectors. In fact, I think it will add up to a lot more money. So many more dollars will go in the door of CASA but there is no real accountability for the use of that money, other than 100 new cops on the beat.

In conclusion: where is the problem? Demonstrate the case. Please recognise that general aviation and the airlines in this country do not need further regulation from CASA. The average private pilot probably wants to be able to sit in the hangar at the end of the day when all flying is concluded and have a couple of beers, without somebody coming past with a clipboard, a breathalyser and a reason to do a drug test. It is beyond a joke. I strongly oppose this bill. I look forward to the government making the necessary amendments.

Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

I rise briefly to speak in support of the Excise Tariff Amendment (Aviation Fuel) Bill 2010 and the Customs Tariff Amendment (Aviation Fuel) Bill 2010. As other speakers have already said, these bills will increase the excise on aviation fuel from $0.02854 to $0.03556 per litre and will generate around $89.9 million of additional revenue over the next four years. Notably, fuel excise has not been increased since 2005 and has not been indexed since 2001. Importantly, all of the additional revenue raised will be allocated to the Civil Aviation Safety Authority to allow the authority to more effectively carry out its core regulatory responsibilities, including maintenance inspections and standards compliance. I repeat: all of the money raised will go to the Civil Aviation Safety Authority. It is not a tax grab by the government; it is a case where the additional revenue will go into the specific operations of a particular agency of government.

The Civil Aviation Safety Authority is Australia’s air safety regulator. It reports to the Australian government’s Minister for Infrastructure, Transport, Regional Development and Local Government and is accountable to the Australian parliament. In response to the member for Wide Bay and the member for Farrer, who are wondering where all of the additional money will go, can I just remind them of some of CASA’s main functions, because its responsibilities and functions are extensive. CASA’s main functions are: developing and disseminating clear and concise aviation safety standards; developing effective enforcement strategies to secure compliance with the safety standards; conducting comprehensive surveillance of the aviation industry; conducting regular reviews of safety to monitor the aviation industry’s performance and to identify safety trends and risks; issuing operational certificates to aviation organisations; issuing licences, aircraft registrations and other permits; carrying out timely assessments of international safety developments; encouraging the aviation industry to maintain high safety standards through education, training and advice; promoting full and effective consultation and communication with all people and organisations that have an interest in aviation safety. I could go on, but I highlight those core responsibilities of CASA to demonstrate the range of responsibilities that the Australian people through its government expect of CASA—and quite rightly so. The Australian people expect the Australian government to ensure that we have the safest airlines possible within Australia. Airline safety is of paramount importance to travellers—(Quorum formed)

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

I acknowledge students from Boulia State School up in the south gallery—the home of the min min light.

Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

I also welcome them to the House. As I was saying, this government considers airline safety to be of paramount importance, as I am sure do all air travellers. Compared with alternative transport modes, air travel has a very low accident rate and that is undoubtedly because of the high aviation standards set and the high level of compliance with those standards. Of course, that is no reason to become complacent because we know that with increased air traffic and increasing passenger numbers comes increased risks. To respond to something raised earlier by the member for Wide Bay in his contribution to this bill when he talked about the increasing number of people using airlines, the increasing number of flights and the increasing revenue which the government may raise as a result, in the last two decades air travel within Australia has trebled. Equally in the last two decades air travel overseas from Australia and into Australia has also trebled. Undoubtedly, that increases the work load on CASA.

The most effective way we can minimise these risks to air travellers is to better resource CASA and allow it to thoroughly do its job. The airlines are likely to pass on the additional costs to passengers. Based on current numbers of 50 million travellers on domestic airlines every year and around 23 million overseas travellers to and from Australia each year, I work out the additional revenue amounts to be of the order of 30c to 40c per traveller per trip. It is an amount that I believe most air travellers would gladly pay if they knew the money was being spent to improve their safety.

Regrettably, increased air travel numbers also increases the risk to travellers for several unrelated reasons. Firstly, with increased aircraft numbers CASA staff, without additional resources and support, will themselves be stretched to thoroughly carry out their inspections and regulatory tasks. The obvious fallout from that will be that non-compliance matters may be missed and aircraft operators will themselves begin to take shortcuts and risks. Secondly, with increased air passengers comes more congestion, tighter schedules and more flying time for each aircraft. The likelihood of shortcuts being taken or safety precautions being rushed again increases. Thirdly, as we have seen in recent years, the intensity of competition between carriers has lead to much lower prices and even budget airlines. Lower pricing leads to cost cutting and inevitably all sections of the carrier’s operations are cut to the bone, including areas such as maintenance, inspections and training. CASA therefore becomes more critical. It is only with a properly resourced CASA that operators will not take shortcuts or ignore the safety responsibilities of their service.

I said earlier that in reality aircraft travel is relatively safe, but when an accident does occur it is generally a major disaster. I take a moment to extend my sincere condolences to the families of the two people killed in the crash only yesterday in the Canley Vale area after their plane took off from Bankstown Airport. Because when an accident does occur it can be a major disaster, it has also been the case in recent years that we have seen aircraft become the target of terrorist attacks. Terrorists use aircraft because they know that it is one way of getting their message heard loud and clear. Quite often an airline will be carrying hundreds of passengers and, if the terrorists are successful, it truly is a major disaster. We saw another attempt at that not long ago on a US aircraft. Aircraft safety will inevitably be improved if carriers comply with all relevant safety provisions because if, for example, an aircraft is sabotaged before take-off, a thorough inspection is likely to detect the sabotage. Furthermore, general security of aircraft whilst they are on the ground is likely to be stepped up if CASA provides a more thorough regulatory role. That again comes down to resources.

If we better resource CASA then we clearly ensure that air travel is made much safer. I live in an electorate which has an airport adjacent to it—the Parafield Airport. I know that safety is of major concern to the people I represent. I am frequently contacted about safety matters relating to the airport and that is not to say in any sense that the airport is unsafe but the fears exist whenever planes are flying around you or taking off and landing in relatively close proximity. The best way we can allay those concerns is to ensure that we have a properly resourced government agency to ensure that all of the safety provisions which carriers are expected to comply with, and the airport itself is expected to comply with, are met. If they are, it is my view that the airline industry will continue to be a safe industry. I commend the bills to the House.

Kay Hull (Riverina, National Party) Share this | Link to this | Hansard source

I rise to speak in opposition to the 25 per cent increase that is being imposed upon the aviation industry at this time through the Excise Tariff Amendment (Aviation Fuel) Bill 2010 and the Customs Tariff Amendment (Aviation Fuel) Bill 2010. I believe that no research has been provided to us to determine why it is a 25 per cent increase. I entirely support the excise tariff amendments that have been put forward by the Leader of the Nationals and the shadow minister for transport simply because we have not been given any understanding as to what constitutes this 25 per cent increase and what was put into the mix to have the minister and the department determine that it should be 25 per cent.

It seems to me that the speakers on the government side of the House have totally missed the point. There is no objection to making the Civil Aviation Safety Authority efficient; there is no intention at all to reduce their importance in regulating airlines and aviation in general for safety purposes. The fact is that CASA’s funding from the aviation fuel excise has increased from $53.96 million in 2002-03 to $78.37 million in 2008-09 and will continue to increase as the industry expands, and the industry is expanding in a dramatic way. There needs to be accountability on CASA’s behalf as to why they seek this type of increase. It seems that there is a view on the government side of the House that CASA are entitled to get whatever they want and that they do not have to be accountable for the expenditure or live within their means as they should.

I am here in support of the aviation industries, particularly Regional Express, which I believe is a home-grown airline that has demonstrated its worth and its value. Unlike the former speaker has indicated, Regional Express simply does not cut costs, does not scrimp on maintenance and would never jeopardise its passengers. It is the same with QantasLink and any airline that is serving regional Australia. The fact that you have such an increase means that companies like Regional Express have to find an additional $200,000 or $300,000 per year from their bottom lines to be able to pay for this increase so that CASA can build their ranks. But the salt in the wound for airlines such as Regional Express, which are the very operations that will bear the cost of this 25 per cent increase, is that they are already paying CASA significant money. There is full cost recovery every time CASA walks into their hangars, every time a safety inspection occurs and every time CASA wants to undertake an operation and comes into the business of, say, Regional Express. There is then a full cost recovery and the CASA officials are being paid significantly for coming into these hangars and into the industry.

In my view, it is like a double bite at the cherry. The fact is they are already being paid by this aviation industry for everything that CASA does within their facilities and on their aircraft, yet now they are expected to bear the cost of a 25 per cent increase on top of that. Obviously, you will find that this will have to be passed on to the consumer. The speaker before indicated that we have seen competition amongst airlines and thus reductions in air fares, cuts and shortcuts on maintenance and a whole host of things. I have seen no evidence of that and I am sure the airline operators would object to that kind of statement. I believe our aviation history speaks for itself and I look at the benefits we have from regional Australia being served by regional airlines. I am sure they would feel offended if anyone suggested they were cutting costs, reducing maintenance and endangering the lives of their passengers because that would be far from the truth.

The issue here is also the consultation process that was not undertaken. Normally you would have a stakeholders meeting where you would explain the reasons and the formula behind the increase that has been struck—in this case a 25 per cent increase that will be met by aviation carriers—and you would try to get some feedback from the airlines as to how that will affect them and the impact that may have on the way in which they can service the regions. If we want to call on regional aviation to provide health and medical services into regional communities, to provide opportunities for business growth and the establishment of industries in regional areas and to service our regions to give an equality of life to those who live in rural and regional Australia—and we expect those airlines to expand their operations and make losses, and maybe be marginal on routes and have some routes make little profit—we have to understand what makes up the airline industry and that company. I look at QantasLink and Regional Express and I say what a great job they do in providing us with the facilities and the access to medical specialists in city areas from which we have not been able to attract them. Surely that has to get some recognition.

In many cases, regional Australians have to have access to a low-cost carrier in order to access health and other facilities in major capital cities for chemotherapy, radiotherapy, ongoing cancer services and many other things that affect regional Australians. By the very nature of the way in which this has been imposed, it will have an impact on the consumer. The consumer does not want CASA cutting costs in order to ensure that they are able to fly safely. But surely the consumer expects to have an understanding of what formula goes into the increases in prices of air tickets that are passed onto them. They will soon find that affordable air travel will become almost out of the question.

I am disturbed about the issues with the aviation industry and the lack of consultation. I oppose what the government is trying to do. What should have happened is a major consultation process with all of those in the industry. Then there should have been consideration as to what benefit and what value regional aviation provides to the lives of regional Australians who do not have a major metropolitan hospital parked next door to them or do not have public transport access on trains, ferries, buses or such like to get them to and from their medical facilities. There has been a lack of recognition of just how significant aviation is to regional Australia. The smaller of these airlines will most definitely be the hardest hit.

I note that just recently the minister was in the chamber and indicated his great delight—and I join with him in that great delight—in welcoming and congratulating Regional Express on taking the initiative to establish the Australian Airline Pilot Academy. They put in their own $20 million, with no money from government—not a dollar. They are going to see students graduating. The dreams and aspirations of young people right across Australia to become pilots are now able to be realised through a loan program, with Regional Express providing loans to students. When they are pilots, they are then contracted to stay within the company for a period of time. Regional Express were congratulated. I am sure that the minister will join with me on this.

Over 50 per cent of Regional Express’s workforce was poached in 2008. They said: ‘Well, we can go out backward. We’re certainly not going to cut our costs or cut corners on the maintenance’—which is what the previous Labor government speaker seemed to say would happen or has happened or will happen. They said, ‘No, we’re going to invest $20 million of our own money in pilot training, such is our commitment to rural and regional Australia.’ The mere fact that they have undertaken this huge expenditure on an academy that the minister opened just a few short weeks ago and congratulated them on means that these aviation providers should have been consulted with further. On the back of trying to ensure that Australian pilots are trained in the very best of facilities and trained to the very highest of standards, before their excise costs are increased by 25 per cent they surely deserve some discussion. I support the amendment and I oppose the government’s legislation.

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

The Excise Tariff Amendment (Aviation Fuel) Bill 2010 and the Customs Tariff Amendment (Aviation Fuel) Bill 2010 will see the excise in customs duty on aviation gasoline and kerosene rise from 2.854c per litre to 3.556c per litre. It is expected that this will result in an additional $89.9 million of revenue over the next four years. I want to make this clear to the Leader of the Opposition: all of these funds will go to the Civil Aviation Safety Authority, Australia’s aviation safety regulator.

If there has ever been legislation before this House that should not be a source of political partisanship, it is this legislation. Every single cent of money derived as a result of this legislation will go to funding important safety surveillance, safety analysis and safety inspections. For those opposite to come in here and seek to make this a partisan issue is, frankly, a disgrace. It is one thing to be an opposition that is committed to opposition for opposition’s sake; it is one thing to oppose regulations that would provide restrictions on entries into cockpits of aircraft; but it is another thing to come in here and oppose legislation aimed at increasing the number of aviation safety inspectors. It is an absolute disgrace.

The aviation industry is changing. We are seeing a considerable increase in general aviation. We are seeing a considerable increase in the use of helicopters. We are seeing a considerable increase in the use of private aircraft. Therefore, CASA and the safety regime must change with it. We must put our safety inspectors—CASA, our agency—on a sustainable financial footing. It is what the industry has asked for and it is what the travelling public deserve. We have seen in very recent times that it is not just the travelling public who can be affected by these issues.

The fact that this has been made into a partisan issue by those opposite is, frankly, a disgrace. They have question time to think about where they stand on these issues, because there has been proper consultation on these bills. There has been appropriate consultation over two years—over two years—on this legislation, but those opposite come in here and move an amendment and declare their opposition to the bill. The comments by the member for Farrer, undermining the drug and alcohol testing regime that CASA has in place for pilots, are just extraordinary, simply extraordinary. It shows how out of touch this opposition is. They have a couple of hours to think about where they stand on these issues; but, if they vote against this legislation, they will be held to account.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! It being 2 pm, the debate is interrupted in accordance with standing order 97. The debate may be resumed at a later hour and the member will have leave to continue speaking when the debate is resumed.