Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Tourism) Share this | Link to this | Hansard source

I rise today to speak on the Aviation Legislation Amendment (Liability and Insurance) Bill 2012. Despite the government's rhetoric we often hear regarding the opposition's negativity, the opposition will continue to hold this government to account. We will not seek to obstruct legislation when it is in the national interest, and we will propose alternatives when it is not in the national interest.

This is a bill that the coalition supports, despite having many reservations regarding the government's stewardship of the aviation sector more generally. This bill has common-sense provisions that have received wide support from the industry, for we recognise that there are some shortcomings in the current legislation that need to be rectified—some of which were highlighted in the ACQ Pty Ltd v Cook case. These shortcomings emanated from the Garuda incident in Indonesia and the Qantas flight QF72 incident near Learmouth. These incidents showed that there were gaps in relation to the compensation and assistance that airlines were obligated to provide to victims and their families.

The Aviation Legislation Amendment (Liability and Insurance) Bill 2012 therefore makes a number of amendments to the Civil Aviation Carriers (Liability and Insurance) Act 1959 and the Damage by Aircraft Act 1999. These bills form the basis for the government regulation of liability and insurance for domestic airlines. In general terms, aviation insurance can be split into three subcategories: insurance for the hull of the aircraft; liability of the carrier for passengers, crew and cargo; and liability caused to third parties. In Australia, carriers' liability for passengers and damage to third parties are regulated through legislation as opposed to hull insurance, which is not. However, many aircraft lease arrangements do require carriers to maintain insurance against all of these risks.

The bill amends the framework for liability of airlines in the event of an incident in a number of ways. Firstly, and most significantly, the bill amends the Civil Aviation Carriers (Liability and Insurance) Act 1959 to increase the cap on carriers' liabilities for domestic flights from $500,000 per passenger to $725,000 per passenger. At the same time, this bill will increase the mandatory insurance level for carriers to $725,000 per passenger.

In Australia no operator is allowed to carry passengers for hire or reward without this insurance cover. This means that any person operating either a charter flight or a scheduled transport flight that is carried out for reward or profit must have this insurance in place. The liability cap has been in place for some time. But it is interesting to note that the liability cap has not increased since 1994. The proposed increases roughly reflect the rise in inflation since the last increase, in 1994.

Carriers insurance itself has been mandatory for domestic flights since 1995, after the Monarch Airlines crash in Young, which killed all seven passengers and crew on board. Compensation and liability are not only issues of national concern. Efforts to clarify and improve consumer protections were included in the provisions of the 1999 Convention for the Unification of Certain Rules for International Carriage by Air, which is better known as the Montreal Convention. The convention amended the liabilities to be paid to families for death or injury when travelling by plane. It superseded the 1929 Warsaw Convention.

In May 2009 the government released a discussion paper on carriers liability insurance and it was subject to industry consultation. On 16 December 2009 the government released the aviation white paper, which stated the government's intention to increase the cap on liability for domestic passenger travel from $500,000 to $725,000 per passenger and increase the associated compulsory insurance level per passenger by the same amount. The Aviation Legislation Amendment (Liability and Insurance) Bill 2012 implements this commitment. The bill's proposed increase in the cap and mandatory insurance level will see the insurance costs for airlines rise. The regulatory impact statement accompanying the bill found that insurance costs represent approximately two to three per cent of total costs for smaller operators and significantly less for larger operators. The regulatory impact statement also found that for smaller aircraft operators the majority of the insurance premium costs relate to insuring the aircraft hull rather than the risk liability. For example, when insuring a Cessna 172, a three-seater plane, up to 70 per cent of the total premium may relate to insuring the aircraft hull. The regulatory impact statement suggests that the increase in the level of mandatory passenger insurance would have the following impact on total insurance premiums—covering hull, passengers and liability—for the following aircraft. For example, for a Cessna 172—three passengers: an increase of around 9.5 per cent, or less than $500 per year. For a Dash 8—36 passengers: an increase of around 13 per cent, which is around $4,200 per year. For a Boeing 737—115 passengers: an increase of around 16 per cent, or around $11,000 per aircraft per year.

On our side of the House, unlike the government, we are very reluctant to load additional costs and imposts on aviation and other businesses in our economy, particularly where they are unreasonable and punitive. We believe that the less pressure companies face from government in terms of what it puts on their bottom lines, the more companies can reinvest in their businesses and create employment and grow our economy. This is why we have opposed the carbon tax, which will cost the industry dearly by increasing fuel excise for aviation fuels. It is a tax that Alan Joyce, the CEO of Qantas, told a Senate committee will cost Qantas $115 million in this financial year. Virgin Australia has said it will cost them $45 million this financial year. For their passengers this will mean higher ticket prices than before. Qantas has said this will be equivalent to $6.80 on a flight from Sydney to Perth. Virgin Australia has said that it will average out at around $3 per ticket across their spectrum. Rex Airlines anticipates that the carbon tax, in conjunction with other government measures, will increase its costs by $6 million a year.

Like so many anomalies that resulted from the carbon tax legislation, it will only apply on those flying between cities within Australia.

So taking a holiday at home will be subject to a carbon tax, but taking a holiday in Bali or Phuket will not be impacted. How crazy is that? At a time when our tourism sector is doing it so tough, this Gillard Labor government has made it more expensive for Australians to holiday at home, which is clearly going to have an impact on leisure travellers, particularly when you take into account our already high dollar.

The regulatory impact statement indicates that this increase will be very small, estimating that the cost of the insurance component per ticket would increase by about 0.465 per cent for major airlines and around 2.8 per cent for smaller carriers. This would increase the ticket price of a $200 flight provided by a major airline by about 13c or one provided by a smaller airline by around 63c per ticket. With the industry having been heavily consulted by the government and given an opportunity to comment on the reforms through the discussion paper process, and there having been no increase in the cap for carriers liability for some time, I do not think that these imposts are unreasonable given the potential benefit to the passenger. However, as I have said, many of this government's aviation policies have been unreasonable and a burden to both passengers and carriers alike.

Deputy Speaker, you may remember what I referred to in this House before as the 'triple whammy' the aviation sector was hit with on 1 July this year. After the carbon tax, the second of these imposts will be the cost of the new fees to cover the cost of airport security measures. Alarmingly, in this case no cost impact assessment was carried out by the government to determine how much this regulation change would cost regional airports, airlines or the communities they serve. There have been reports that, in addition to the capital cost of the security upgrades, some airports will now see maintenance bills increase by $1 million per annum. If this is not enough, they are also facing the loss of the $6 million en route subsidy scheme.

Brindabella's CEO, Jeff Boyd, has said that all of these imposts will amount to an increase in the cost of an airline ticket because companies have already introduced all of the environmental cost saving measures they possibly can and new, more fuel-efficient aircraft are not currently available. So we are loading up the industry with costs imposts yet, particularly for small carriers, more efficient aircraft are not available. This triple whammy will therefore simply have the effect of reducing regional aviation's competitiveness against the automobile in a very pricepoint-sensitive market.

Not content with that anomaly, they thought it would be a great idea to punish the tourism and aviation sectors by making it more expensive for overseas travellers to take a holiday in Australia. The 2012 budget saw the passenger movement charge, or the PMC, increase from $47 to $55. They then wanted to increase it annually by linking it to the CPI. This was the final straw for the tourism industry, which is why the coalition opposed it. The indexation alone would have cost the tourism industry $156.6 million over the forward estimates.

Indeed, we opposed the CPI indexation because we listened to the aviation and tourism industries. It was the powerful arguments and the campaign put together by the tourism peak bodies, led by John Lee of the Transport and Tourism Forum and Jayson Westbury of the Australian Federation of Travel Agents, which included full-page advertisements in national newspapers, that left us in no doubt that we were right in preventing this indexation. This record of tax imposts on the aviation and tourism sectors is why the coalition is so carefully considering the aspects of the bill that are expected to see increases in insurance premiums flow through to passengers through a very small increase in ticket prices.

This legislation also takes us further towards aligning Australian law with the Convention for the Unification of Certain Rules for International Carriage by Air, better known as the Montreal convention, as I said before. It also amends the Civil Aviation (Carriers' Liability) Act 1959 to exclude compensation for purely mental injuries arising on domestic flights, in accordance with the benchmark set by this convention, which was signed on 28 May 1999. This will harmonise liabilities for Australian domestic carriers with those of Australian international carriers which have, in accordance with the 1999 Montreal convention, been limited to liability for bodily injury only.

In addition, the bill amends the Damage by Aircraft Act 1999 to exclude claims for compensation for mental injuries where the claimant has not suffered additional damage to their person or property. This will exclude accident witnesses who have not suffered additional damage to person or property. In effect, the amendment will limit claims to those with a relatively direct link to the air crash who have suffered loss of life, bodily injury and/or property damage.

Finally, the bill amends the Damage by Aircraft Act 1999 to allow for compensation payments to be reduced in circumstances where the victim was partially responsible for the damage. This amendment addresses a shortcoming in the current legislation which was identified in ACQ Pty Ltd v Cook [2008] NSWCA 161, which held that a partial defence of contributory negligence is unavailable under the Damage by Aircraft Act 1999. In Cook's case, a wire cable conducting 22,000 volts was dislodged from one of its support poles when the pole was struck by an AT400 air tractor which was conducting aerial spraying of a cotton field close by. The claimant, Mr Cook, and a colleague were sent by Northpower to assess the situation. Mr Cook was seriously injured after he received an electric shock from the wire cable. Mr Cook brought the proceedings against ACQ Pty Ltd, the owner of the air tractor, who argued that Mr Cook's injury was not as a direct result of the accident and that Mr Cook had partially contributed to his injury. The High Court found that this partial defence was unavailable under the Damage by Aircraft Act 1999.

Under the amendments contained in the bill, in order to demonstrate that the victim was partially negligent and contributed to the loss, the airline must show that the claimant did not act in accordance with the common-law reasonable-person standard to avoid or prevent loss or damage they suffered. The bill also inserts an express provision that enables defendants to seek contribution from other parties who may have contributed to the damage suffered by the claimant.

The aviation sector is a major part of the lifeblood of our economy, perhaps more so than in any other country, not only transporting Australians to visit their friends, families and relatives across our continent and overseas but also ensuring that our mines and related businesses have workers that are sourced from elsewhere. The government often uses the mining boom to argue that the airline industry is in robust health. However, with the coalition recognising that the mining boom may well have peaked and the Minister for Resources and Energy and Minister for Tourism even stating on ABC radio that it is over, it is clear that other challenges facing the aviation industry will come to the fore.

The airline industry is a challenging one at the best of times. Our national carrier, Qantas, recently announced a $245 million annual loss—the first since it was privatised in 1994. In order to meet the challenges of an increasingly competitive global market, both Virgin and Qantas have announced alliance partnerships with overseas carriers. These are developments that we welcome, where travellers have a greater choice of Australian destinations to fly to and where the ACCC deems that competition has not been impeded.

The airline industry is different to most other service industries in that one airline cannot buy an airline from another country without immediately jeopardising the service or the air traffic rights that the airline it is purchasing operates. That is the anomaly in an industry that has made the most of globalisation where possible but is still being dominated by national carriers or at least alliances of national carriers.

It is also different in that it spectacularly fails to make profits, with most analysts believing that the industry as a whole has made a cumulative loss since its inception. The US losses amount to around $60 billion since the industry was deregulated in 1978. In recent times, this has been exacerbated by increased fuel costs. However, in the Asia-Pacific, at least carriers are expected to record a profit of $2 billion this year compared to a forecast of $2.3 billion.

A major factor for this is the increasing number of middle-class Asians who are seeking to travel overseas, many for the first time. The coalition is excited by the future opportunities that our Asian neighbours can generate for the Australian aviation and tourism industries.

Due to the phenomenal growth in China, India and Indonesia, a high proportion of the population is now moving from poverty into the middle class. Increasing wealth increases the desire to travel. The coalition is determined to pursue a strategy that seeks to take advantage of these opportunities by ensuring that Australia becomes Asia's recreation and vocational playground.

However, this will not happen by accident. We need a policy framework that increases the incentives to invest in tourism and increases aviation capacity while removing the government's policies which hinder generation of profits. Unlike other aviation measures the government has recently introduced, this bill is a common-sense measure that has received wide industry support and will be supported by the coalition.

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the Aviation Legislation Amendment (Liability and Insurance) Bill 2012 and the additional protections that it will give to members of the public. I start off by saying that, despite the constant doom and gloom from the opposition, aviation has a bright future here in Australia. Australian aviation is projected to grow at four per cent per annum over the next 20 years. It is a very different story to what we have just heard.

We have had mandatory airline insurance in this country for a considerable time, and it is certainly nothing new. I believe all concerned, or potentially concerned, recognise the need for such requirements, and would expect that their settings be appropriate over time. There has been an approach to airline insurance applied around the world since the 1929 Warsaw convention, which strived to strike a balance between an appropriate level of coverage for the public, accessed smoothly and simply without discomfort for the members of the public concerned, and the affordable premiums for the airlines.

A decision was made at that time to balance the amount of compensation potentially available to members of the public and the ability of airlines to be able to afford the insurance premiums. At that time, the industry was only just getting off the ground, so to speak. A very real compromise was made: lower payouts and lower premiums; affordable premiums. But, in the interests of passengers, it was determined that the policies and systems should be such that making claims and receiving payouts should be as simple and straightforward as possible. This was the benefit to the public of this compromise.

The airline industry has done well since that time. Circumstances have changed; but not the comparative ease and simplicity of the system and the accessibility of compensation by members of the public. The most recent world standard or benchmark was established in 1999, the Montreal convention, which imposes unlimited liability on airlines. Liability is strict up to a threshold of approximately $175,000 per passenger. Beyond that, the onus is on airlines to prove that they were not at fault. It is meant that there is no requirement for the victim to prove fault. They do not have to argue their case for compensation.

Australia has implemented that convention, becoming operational in 2009. The matter of insurance was addressed in the government's 2009 aviation white paper, the first aviation white paper in this nation's history. The white paper noted that the government also conducted a comprehensive review of Australian carriers' liability and insurance framework, examining the following: liability arrangements for both passengers and third-party victims; the associated minimum insurance standard for each; the international development; and the specific requirements for Australian domestic operations.

The government received submissions in response to a discussion paper that was released to progress the review. So the white paper made clear that the government would act on the findings, taking into account the feedback received through consultations, and would move forward with modernising the carriers' liability and insurance framework.

We see the outcome of that modernisation process before us today in this bill. The government is raising mandatory passenger insurance payouts from $500,000 to $725,000 per passenger, an increase of approximately 45 per cent. The amount of $500,000, set in 1994, has not been changed in almost 20 years and would have to be seen as having lost its real value over that time. It is therefore necessary, I am sure we would all agree, to address this matter and ensure that the this mandated passenger insurance scheme is set at appropriate levels.

This bill also brings the definition of 'injury' within our domestic insurance framework into line with the international framework as set out by the Montreal convention of 1999, which withdrew coverage for mental injury—that is, non-physical injury. Just to be clear on this point, we are aligning our domestic definition with our current international definition, which was set out by the Montreal convention. This is just one area in which the aviation industry and, more to the point, the public are benefiting from the government's aviation white paper.

We have seen tremendous change and improvement in the experience of flying around much of Australia since the then Labor government reformed the industry some 20 years ago and enabled private investment to renew ageing infrastructure at our nation's airports. We have seen a tremendous amount of capital invested in modernising our airports around Australia. We have seen the community's interests amplified in discussions of matters of common interest between the public and airports. I have seen this firsthand, having the Adelaide Airport in the middle of my electorate.

This government's 2009 aviation white paper has broadened the positive experiences that some of us have enjoyed for some time. In Adelaide we have benefited from the Adelaide Airport Consultative Committee, which was created about a decade ago and which has seen members of the community, council representatives, neighbourhood group representatives, state government representatives, Airservices Australia and other representatives participate in quarterly meetings every three months with Adelaide Airport Ltd. A great deal of the business of the airport and the effect of the airport on surrounding interest groups is freely and openly discussed, with goals towards solutions. It is a really healthy working relationship, and that has developed over time. It is a great model that is being used around Australia. Neighbourhood groups raise their concerns, whether it be noise or environmental concerns, directly with Adelaide Airport Ltd, and their environment officers and others address noise mitigation strategies and other issues. Local councillors raise issues concerning planning in the airport vicinity and work cooperatively with the airport to resolve outstanding matters. It has been a very positive experience, so I was particularly pleased that the 2009 aviation white paper put forward the introduction of similar groups around the nation. I commend this government's preparation of the 2009 aviation white paper and the many, many positive elements it has within it. I will just mention one as an example that is particularly meaningful to me: the ability of the community to discuss concerns and seek resolutions to issues through the consultative committees.

We have been speaking on the modernisation of the insurance framework as dealt with in this bill. The subject of this bill is in accord with our international approach and addresses the potential loss of value available to members of the public who suffer in airline accidents through no fault of their own. I commend the bill to the House.

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

Flying is possibly the safest mode of transport yet developed, though we have records of aviation crashes and it is critical that we create a framework which meets the needs of modern aviation.

If I can take the House through some figures from the Aviation Safety Network through the services of the Flight Safety Foundation, they show that worldwide the number of casualties from aircraft accidents declined from 12,082 in the 1990s to just 9,668 in the 2000s. From those two decades we saw an increase in overall airline passenger numbers but a decrease in fatalities.

Australia, of course, leads the way in aviation safety. It was an Australian who invented the black box which has done so much to help us learn from past accidents to make sure future accidents do not occur. As anyone who has watched Rain Man will be aware, the Australian national carrier has an exemplary record. Overall, according to the Aviation Safety Network, since 1945, 318 Australians have died in civil airliner accidents. But most of those accidents occurred in the period closer to 1945 than today. For example, the 1940s saw at least five fatal airline crashes and in the 1960s there were another four. Thankfully, such disasters are becoming rarer and rarer. Knowledge is being shared globally in order to reduce the danger of flying. Anyone who is fearful about flying should, of course, reflect on the fact that their trip to the airport will be far more dangerous than the flight itself. If you are worried about the danger of flying, take care as you drive and do not worry once you clip your seatbelt on board.

The Aviation Legislation Amendment (Liability and Insurance) Bill 2012 is updating the payout available to air accident victims on domestic flights. It is very rare that in legislation we set an amount of damages which comes in the form of strict liability, no requirement to prove fault, with a fixed sum. We do that in the context of aviation disasters because of the trauma that such accidents cause to victims and in order to recognise that the requirement to prove fault would be particularly onerous. It means that victims of airline disasters are able to obtain compensation swiftly and that they do not have to fritter away some of their compensation on legal fees.

This bill significantly increases the payout available. It was set in 1994 under the Keating government at half a million dollars and will now increase to $725,000—a 45 per cent increase. As the previous speaker noted—yourself, Mr Deputy Speaker Georganas—the real value of the payout has been diminishing over this period. This bill now brings the payout back roughly, in real terms, to where it was when it was originally set. We do that because we recognise that strict liability in a context like this is the right approach.

The bill also responds to recent litigation under the Damage by Aircraft Act 1999. The Cook and Aircare Moree case looked at the issues of contributory negligence and the right of contribution under the Damage by Aircraft Act. In that case the victim was employed by an electricity company and was electrocuted while repairing power lines that had been dislodged by an aircraft. The court found that the partial defence of contributory negligence was unavailable for claims brought under the DBA Act. The defendants are also prevented from seeking contributions from other parties who might have contributed to the victim's loss. These reforms seek to address the shortcomings of the act by allowing the defendant the opportunity to now claim contributory negligence or a right of contribution. Those provisions are very important in the context of a liability regime that is both strict in its requirement for a fixed amount payout and unlimited in terms of the number of victims who may claim. That is aiming to foster a strong airline industry and making sure that airline travel is more affordable.

One of the great benefits of economic growth over recent decades has been the increase in air travel.

We now have record numbers of Australians travelling domestically and overseas, and that means that more and more Australians have the eye-opening experience of a first trip overseas or visiting relatives interstate. That is one of the great benefits of a more affluent Australia. So these reforms are making sure that airlines can move quickly to a fair settlement with victims and their families in the horrendous event of an air accident.

Mr Deputy Speaker, I note—as the previous speaker, your good self, did—that my own electorate contains an airport, Canberra Airport. I am possibly one of the lightest users of Canberra Airport in the parliament, but I am a frequent visitor there. I have appreciated visits to Canberra Airport to meet with the airports corporation to discuss issues about their planned expansion there to better serve the needs of Canberra and the region.

I am also constantly speaking with them about their vigilance on issues of risk. Safety is a top priority for Canberra Airport and the airlines using that airport. I pay tribute to the hard work of those at Canberra Airport involved in its expansion and spruce-up. I think any recent user of Canberra Airport would agree that it is an even better airport than it was a decade ago, and it is now very much an airport that is ready to accept international visitors, once we have airlines who are keen to use its capacity. I would encourage airlines to consider using Canberra Airport as a hub. It does not face the same congestion challenges that are currently faced by Kingsford-Smith Airport. It is able to quickly serve the needs of a growing region.

I am very proud to have Canberra Airport in my electorate; I am very pleased about the conversations about safety, about aircraft noise and about traffic implications of Canberra Airport that I am able to have with the Canberra Airport management.

This bill is part of the government's commitment to making sure that our aviation legislation is brought up to the purpose for which it is required. We recognise how quickly aviation has developed when we look at the Commonwealth Constitution and realise that it makes no provision for aviation. Many of the advances in aviation which will occur over coming decades need to be anticipated through updated legislation. This is one bill that does just that, and I am proud to commend it to the House.

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

I rise to speak in support of the Aviation Legislation Amendment (Liability and Insurance) Bill 2012. This bill essentially gives expression to actions agreed to arising out of the 2009 national aviation policy white paper. That paper, from memory, was the first comprehensive aviation review in some time. It was useful in guiding reforms and measures that are required.

This bill is an amending bill and will amend the Damage by Aircraft Act 1999—or DBA Act, as it is known—and the Civil Aviation (Carriers' Liability) Act 1959, CA(CL) Act. It will also harmonise and modernise provisions to be in step with the Convention for the Unification of Certain Rules for International Carriage by Air 1999, commonly called the Montreal convention. Thank goodness it has a common name.

I understand that over 100 states have acceded to the Montreal convention and implemented it—including of course Australia. That is absolutely necessary to give consistency, to give a whole range of things that are necessary, to the aviation industry.

Further to amending the two acts and the convention cited, the bill also gives expression to case law that has turned on the issue of contributory negligence. I will talk a little bit about that in my contribution. The specific changes are as follows. It will increase the current domestic passenger liability cap and mandatory insurance requirements—the payout for someone who is injured will be raised from $500,000 to $725,000. I understand this increase reflects CPI changes. I also understand that this amount has not been changed since about 1994. It will also limit mental injuries compensation to the definition contained in the Montreal convention by making the provisions consistent in international and domestic frameworks. Article 17 of the Montreal convention carries the definition, and that revolves around mental injuries and death or bodily injury. I understand courts have interpreted bodily injury as excluding claims for mental injury, but domestically it does not sit like that—it is interpreted differently, and this change will bring those interpretations into synchronicity. The bill will limit the liability of carriers domestically to the bodily injury definition. It will deal with those two areas.

The DBA Act creates a very tough system of liability for air operators and the liability, as we have heard from most of the contributions here, is both strict and unlimited. It would be inappropriate to require airlines to provide uncapped compensation for the pure mental injury without reference to whether the airline was at fault. A large audience who witnessed an air crash could expose aircraft carriers to a potentially very wide group of claimants on the basis of strict and unlimited liability, thereby imposing incalculable risks on the industry. As a solicitor I get a bit of heartburn when I come in here to talk about caps and strict liability and changes and bringing in contributory negligence, but I am here as a legislator, as a lawmaker, with a different role and I understand that these changes are absolutely necessary for the system to work. In considering them I have thought of all the possibilities, all the arguments, that can be raised and I accept that it is necessary to introduce these changes.

I was reading all of this material on the plane yesterday. I fly with Rex a lot because I fly from Lismore to Sydney and then I change over at Sydney Airport. Essentially we are talking about accidents, and I wondered whether I should have been reading it while I was flying. I did not share with the other passengers what I was reading—I smiled to myself and thought, 'Don't be silly; just read it and get it done'. Essentially we are talking about accidents, although we have such a safe aviation industry. We are very fortunate, but it is not just a matter of being lucky—it is making sure that we have the proper legal and policy frameworks and also the enforcement mechanisms to make sure that we maintain such a safe industry in Australia. It is something we can all pride ourselves on, and we do.

I turn now to contributory negligence. Case law has been mentioned by other speakers. It was found in the 2008 New South Wales case of Crook v Aircare Moree Pty Ltd that the partial defence of contributory negligence was unavailable for claims brought under the DBA Act. I have also cogitated on where contributory negligence could be a factor, and it would rarely be brought into play. This change at least allows that to be raised by way of defence and argued through, but I countenance it would rarely be a factor. The things I was thinking about were some common things. We put our seatbelts on in planes and we get told to keep them on at all times except when we have to move around, so I was thinking through all the possibilities where things could be raised and I thought no, it would be rare where the courts would bring that into play with the changes to the act. That is an important consideration. It needs to be there so it can be raised. That is one of the essential changes

Another point is that mandatory passenger insurance legislation was only introduced in 1995. That is not that long ago. That was in response to the tragic Monarch Airlines fatal accident. This accident led to a requirement that our domestic airlines insure against the full extent of potential liability under the CA(CL) Act, and this bill proposes an increase in the level of mandatory passenger insurance that is proportionate to the proposed increase in the cap on carriers' liability. It is important that that be there; it is important for consumer protection and it is important for us. It is important for the public, otherwise we would not be doing it. While Australia does have a proud aviation safety record, it is important that we continue to strengthen these protections. It is an ongoing process so it is not like 'Okay, that is done; that is finished'—things have to be monitored and reviewed continually. Changes come in, and they have to be bedded down and then we see how they go. This legislation is the right thing to ensure that victims of aircraft accidents and their families—God willing, there will be few—are adequately compensated.

I wanted to speak briefly about the possible price increases resulting from this legislation—because I have been asked about it and because I know I will be asked about it on the radio as well. How much will it cost? The information I have is that, for a major airline carrier, the increase might be 13c and, for a smaller regional carrier, it might be 63c. Since I fly in the regions, I always look at estimates like that and wonder why the impact is higher in the regions. I do know why. It is a mathematical thing—number of passengers et cetera. I get that. But those estimated price increases are small and they represent a very small price to pay for an increase in the cap and to have our safety better protected.

Given that I fly a lot with Regional Express, or Rex as we call it, I know that regional airlines will always say, 'Why do we have these extra costs?' But, in a media release from 31 August 2012, the executive chairman of Rex, Mr Lim Kim Hai, said:

Even as almost every blue-ribbon legacy airline in the world, be it Singapore Airlines, Air France, Lufthansa, Emirates or Qantas, reported profits plunging more than 60 per cent or even losses, I feel humbled and blessed that Rex was able to increase its profit by 45.6 per cent to end the financial year with a record profit.

I think a lot of airlines would like to be saying that and to have the health that Rex has. I am very fortunate that my regional airline—the one I fly with—is such a great airline and is doing so well. The small cost issue associated with this legislation will not affect how well Rex is doing. In closing my contribution, I thank the Minister for Infrastructure and Transport for bringing these provisions into line—for modernising and harmonising them—and making sure that we have better consumer protection and better payouts in the event of injury.

Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Link to this | Hansard source

The Aviation Legislation Amendment (Liability and Insurance Bill) 2012, which I also support, will modernise Australia's arrangements for our air carriers' liability under the Civil Aviation (Carriers' Liability) Act 1959 and the Damage by Aircraft Act 1999. It implements a number of measures committed to in Flight path to the future, the federal government's 2009 national aviation policy white paper. The 2009 national aviation policy white paper is a comprehensive piece of work and I commend Minister Albanese for it. It brought together all the strands of aviation policy into a single forward-looking document and provided planning, regulatory and investment certainty for the aviation industry out to 2020 and beyond.

I have had a longstanding interest in the aviation industry, particularly with Avalon, down in my part of the world, providing a second tier airport option to Victorians and to those travelling to Victoria. The white paper set out a number of government commitments to Australia's excellent aviation industry, an industry with a very proud and praiseworthy safety record. It builds on current aviation industry security systems to ensure that Australians can continue to enjoy a very safe aviation industry. Australia's aviation sector is, if not the safest, certainly one of the safest in the world. It has a long history of providing safe travel for Australians and for those who come to our shores. I think it is a testament to all Australians that we have such a strong aviation history. The aviation industry is also a strong contributor to the Australian economy. Its annual contribution to our country has been estimated to be some $5.2 billion.

Having a safe, secure and strong aviation sector is very important. Australia is a very large country and many of us have to travel by air to visit family or friends in different parts of the country, to enjoy a holiday or even to get to other parts of the country to earn our incomes. The aviation sector is critical for domestic and international tourism. In my part of the world, the Corangamite electorate, we are very fortunate to have some very iconic locations—the Great Ocean Road, the Surf Coast and the like. We certainly welcome people travelling to our region to enjoy these beautiful, fantastic tourist locations. But, in order for that to happen, we need a strong aviation industry. We need one which has a first-class safety record, as the Australian aviation industry does have. I think that is very important.

This bill will increase the domestic passenger liability cap from $500,000 to $725,000. This does represent a significant increase on the current arrangements, which have been in place for some time. The cap has not been increased since 1994, and I think it is an appropriate time to lift the liability cap. I paid attention to the previous speaker, the member for Page, who in some detail spelt out what that means. She made the very salient point that, for those travelling on Qantas or Virgin, for instance, that would mean a 13c increase in the price of a ticket and, for those travelling on a smaller regional airline, it might mean 64c, I think was the figure she used. As someone who travels a lot, as all parliamentarians do, and of course the many Australians who travel for work or leisure, I am sure none of them would dispute having a small, modest increase in the price of a ticket to cover off the insurance arrangements if indeed an aircraft should get into trouble for whatever reason, resulting in death or injury.

This bill also achieves a number of other matters in line and consistent with the aviation white paper that Minister Albanese had carriage of back in 2009. The bill will ensure consistency with the 1999 Montreal convention concerning international flight by removing references to 'personal injury' and replacing them with another definition. The Montreal convention has been implemented across some 100 nations worldwide, and I think it is appropriate that in an industry such as this, which operates not only in a domestic environment but obviously also in an international environment, we do align ourselves with best practice and aim for consistency with overseas practice.

The bill amends the Damage by Aircraft Act to allow defendants the right to seek contributions from other parties who may have contributed to the damage suffered by a person bringing a claim. The bill will also preclude claims for compensation for mental injuries where the claimant has not suffered additional personal or property damage. As I said, this bill will help implement the government's white paper on aviation, and it will ensure that all of us continue to enjoy the services of a very safe airline industry.

I would like to make some comments on Avalon Airport, an airport in my region. It is a second-tier airport, on land that is currently owned by Defence, and it provides opportunities for tourism in our region. Our region has a long-term ambition to increase the services available out of Avalon as well as, importantly, to harness the potential opportunities that would come from converting it to an international airport, providing a second-tier opportunity for Victorians to travel overseas and for those overseas, potentially, to come directly to our region.

Avalon Airport is a strategic asset in our region. The member for Corio and I have been working diligently with stakeholders locally and with the government to recognise any potential that Avalon has. If you compare our circumstances in Victoria with those in New South Wales, you could say we are blessed; we have, I think, much stronger opportunities not only to grow our main airport, Tullamarine, but also to harness the possibilities that having a second airport provides. I look forward to continuing to work with my government colleagues and with important local stakeholders to take advantage of the strategic opportunities that Avalon Airport presents to our region, and I very much look forward to Avalon providing a second-tier airport option to not only my region but of course all of Victoria. We are very fortunate to have those options, and I look forward to working with the sector in the years to come to secure opportunities for our region.

Australia has a very safe airline industry, and we need to continue to make the necessary changes to ensure that Australia remains a very safe place for people to travel. I will continue to work with the sector to ensure we keep our very safe airline industry so that Australians can continue to travel safely for work and pleasure. As Australians we ought to be very proud of our airline industry. I commend the bill to the House.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak to the Aviation Legislation Amendment (Liability and Insurance) Bill 2012. Like the member for Corangamite, I have a general aviation airport in my electorate, the Archerfield Airport. Also, with Moreton being very close to the start of the noisy part of the Brisbane flight path, aviation is certainly a topic that I continue to have a great deal of interest in.

The bill before the chamber implements a number of measures committed to in the 2009 national aviation policy white paper. Firstly and most significantly it will increase the cap on the payout available to air accident victims on domestic flights from $500,000 to $725,000, representing a 45 per cent increase on the current arrangements. Obviously we would hope that nobody, anywhere, ever has to access such a payout. Nevertheless, being a prudent government means that we have that contingency just in case.

As noted by other speakers, Australia has a very proud aviation safety record, but it is important we continue to strengthen protections for people flying domestically and that is what this bill will achieve. This cap has not been changed since 1994 and that is going back a while. Forrest Gump was the No.1 movie at the box office. Seinfeld was the No. 1 show on television. In Queensland, Wayne Goss was Premier, before the National Party took government. Pete Sampras had won Wimbledon. And, taking us right back, Tomorrow, by Silverchair was one of the No. 1 songs. The guy who wrote that song, Daniel Johns, is now only 33, even though it was 18 years ago—he was 15 at the time. That just shows you how time flies.

The increase in the cap ensures that victims of air accidents and their families are adequately compensated. It brings the cap into the 21st century to reflect current costs, rather than those of nearly two decades ago. The level of mandatory insurance for airlines is also being increased by the same amount to ensure that adequate funds are available. Although compensation for domestic flights is capped, it should be noted that the liability of the airline is strict. There is no requirement for the victim to prove fault. This means that accident victims are able to obtain compensation swiftly, with minimal legal fees, irrespective of whether the airline was in any way to blame for the injuries. This not good news for lawyers, but it is one of the aspects of the legislation that is to be commended.

The bill also amends the Damage by Aircraft Act 1999 to reflect the principle of contributory negligence, allowing defendants to seek a right of contribution from other parties who may have contributed to the damage suffered by the person bringing the claim. These provisions are very important in the context of a liability regime that is both strict and unlimited.

The bill seeks to foster a strong and sustainable aviation industry, including affordable air travel, by providing an equitable balance between the interests of airlines, victims and insurers. Together, these important reforms will ensure that airlines move quickly to a fair settlement with victims and their families in the event of an air accident. The bill also includes important changes to the system of compensating domestic passengers who suffer mental injuries, so that domestic carriers will no longer be liable for mental injuries irrespective of whether other 'physical injuries' have also been incurred. This amendment responds to one of the main objectives of the recent review of the CA(CL) Act, which was to ensure greater consistency between the Australian domestic liability framework and the international liability framework created by the new 1999 Montreal convention. By amending references in the CA(CL) Act concerning 'personal injury' and substituting it with 'bodily injury', we will bring our domestic liability arrangements regarding compensation for mental injuries into line with the international framework established under the benchmark Montreal convention. A similar amendment to the Damage by Aircraft Act 1999 will also limit the eligibility for mental injuries, with the objective of ensuring that there is an appropriate balance between the interests of aircraft operators and the interests of air crash victims.

The bill is pivotal to improving the rights of air accident victims flying domestically in Australia and will go a long way to ensuring a fair and reasonable balance is struck between the interests of airlines, victims and insurers. Airlines play an important role in Australia. As a Queenslander, I know full well how important tourism is to Australia. We can look at some parts of Queensland where unemployment is two per cent and mining companies are booming and we can look at other parts of Queensland where unemployment is as high as 14 per cent because of some of the problems associated with the high dollar and tourism. It is important that we look after our airlines wherever possible. Obviously the costs are something they need to be aware of. This legislation will incur minimal cost and will achieve a great outcome.

I commend the bill to the House.

Stephen Jones (Throsby, Australian Labor Party) Share this | Link to this | Hansard source

It is my great pleasure to follow my friend the member for Moreton in this debate about an important piece of legislation, the Aviation Legislation Amendment (Liability and Insurance) Bill 2012. At its heart, the bill is about the insurance arrangements for aviation travel in this country. That, in essence, is about how we put in place a framework which creates security and peace of mind and manages the small albeit important risk of aviation travel for the air-travelling public. The bill implements a number of measures that were committed to in the 2009 national aviation white paper and is part of our overall reform not only of the aviation industry but of transport, communications and infrastructure in this country. It does that by increasing the domestic passenger liability cap and mandatory insurance requirements from $500,000 to $725,000. It will ensure consistency with the 1999 Montreal convention concerning international flights by removing references to 'personal injury' and replacing it with 'bodily injury'. It will amend the Damage by Aircraft Act 1999, the DBA Act, to reflect the principle of contributory negligence and it will amend the DBA Act to allow defendants to seek a right of contribution from other parties who may have contributed to the damage suffered by the person bringing about the claim. It precludes potential claimants from claiming compensation for purely mental injuries where that person has not suffered additional personal or property damage. And finally it replaces the reference in the Civil Aviation (Carriers Liability) Act 1959 to the Montreal Protocol No. 4 with a reference to the 1999 Montreal convention.

While Australia has a proud aviation safety record, it is important that we continue to strengthen protections for people who fly domestically. We seek to do so in this legislation in an even-handed way. We propose to significantly increase the payout available to crash victims on domestic flights and to make it easier for them to access payouts. We propose to increase the cap on payouts from $500,000 to $725,000. The increase in the cap is the right thing to do to ensure that victims of aircraft accidents and their families are adequately compensated. It is important to note that the cap has not been increased since 1994, and it is time that we brought it into the 21st century to reflect current costs.

We propose to increase mandatory insurance for airlines to ensure that adequate funds are available for proper compensation of air crash victims and their families. It would make absolutely no sense to shift the cap on payments if there was inadequate insurance available—thus the importance of ensuring that airlines have a mandatory insurance arrangement. The arrangements in the legislation will help airlines move quickly to a fair settlement with victims and their families in the event of an aircraft accident. Such changes to the compensation laws will bring Australia closer into line with international practice.

The bill contains the government's comprehensive overhaul of consumer protection announced in Australia's first-ever aviation white paper. The impact that this overhaul will have on ticket prices is minimal, and, though we have to be upfront with the travelling public about increases to ticket prices, such increases pale into insignificance when compared to the amount of compensation that will thereby be made available to a consumer if something goes wrong in the air. We estimate that the price of a flight now costing $200 on a major airline may increase by about 13c, while the price of a flight provided by a regional carrier may increase by about 63c per ticket. We do not hide from the fact that there may be some pass-through of costs if the insurance cover for aviation travel is increased, but such a pass-through pales into insignificance when compared to the damage wrought upon an individual traveller if something goes wrong in the air. We all touch wood and hope that it does not occur.

A vast island nation like ours requires an aviation industry. Indeed, aviation lies at the heart of our economic activity. As set out in the aviation white paper, the government's aim is to provide policies that support investment and initiative while protecting safety and security. We also support the freedom of operators to be innovative. Earlier this year the Minister for Infrastructure and Transport released a report by the Bureau of Infrastructure, Transport and Regional Economics on air transport trends in regional Australia. This provided a snapshot of regional aviation. Passenger movements at regional airports—and I know that this is a matter dear to your heart, Deputy Speaker Scott—have risen by more than six per cent. Meanwhile, there has been growth of more than 5.7 per cent in passenger movements through our major city airports. Between 2005 and 2010 there was an increase in passenger movements from 16.8 million to 22.5 million, and that is a significant increase indeed. No doubt the increase of fly-in fly-out work in electorates such as my own—and, I dare say, yours, Mr Deputy Speaker—has increased usage of regional airlines and, therefore, increased passenger movements in and out of regional airports. Passenger kilometres and the number of flights are also well up.

It is important that we continually seek to adjust our aviation policy and ensure that we have not only the regulation but also the infrastructure in place to ensure that this island nation continues to have a viable and vibrant aviation industry. Nowhere will this be more important than in paying attention to the urgent need for a second international airport for Sydney. The current owners of Sydney Airport argue against this necessity—and it is obvious why they might do so—but, if you talk to the airline operators, you will find that they know that, unless governments make a decision on the building of a second airport for Sydney, we will stand condemned by future generations. With the growth in passenger airline movements we are very quickly reaching the point where we exceed the air traffic capacity at Sydney Airport.

It strikes me and everybody at the serious end of the industry as passing strange that the Premier of New South Wales can seriously suggest that the best location for a second airport for Sydney might be Canberra. This is a ridiculous suggestion indeed. I have made it quite clear that the site at Wilton, which is adjacent to my own electorate, were it able to pass the test of the appropriate environmental and social impact studies, would be a very good site for a second airport for Sydney. The building of a new airport there would be a boon indeed for jobs and infrastructure for the Illawarra region, particularly considering the downturn that we face in other areas of the economy, principally manufacturing. Having an airport in the region and the capacity to link it with new rail and road transport would mean thousands of jobs close to our major city and great economic opportunities for the region.

So I support that, and I support all moves to continue to ensure that we have in place not only the regulations, such as those provided for in this legislation, but also the infrastructure to ensure that as an island nation—a nation that relies on tourism and a nation that relies on our aviation infrastructure to support the economy—we are continuing to do everything we can to upgrade the regulation and the infrastructure itself. That runs hand in hand with the government's nation-building mission. It is an unambiguous mission to ensure that, over our term in office, we backfill the infrastructure deficit we inherited.

I pause to note that we are very close to the 100-year anniversary of the Labor government of Andrew Fisher beginning work on the transcontinental railway. Our aviation policy—indeed, our entire infrastructure policy—is the successor to the visionary program of that first Labor government of Andrew Fisher, who understood it as the job of federal governments and federal Labor to put in place a nation-building infrastructure and to build a just and equitable economic future for this country. This 'great nation work', as he called it, was an urgent necessity for reasons of economy, transport and effective defence. In the 100 years since, other critical infrastructure projects have followed at the initiative of Labor governments: the Snowy Mountains scheme, the ABC, the Sydney Opera House and now the National Broadband Network.

Indeed, since coming into office in 2007 the Labor government has engaged in a dynamic and significant reform agenda. I have spoken of the chronic infrastructure deficit we inherited. The work we are undertaking is significant indeed. We have rebuilt over one-third of the national freight network. We are investing in ports. We have invested more money in the urban rail system than any other government since federation. We are investing more money in roads, as was a matter of debate during private members' business this morning. I saw the member for Herbert acknowledge the fact that this Labor government has invested more money in roads in regional Australia than any other government in living memory—something he is obviously embarrassed about but that those of us on our side of the House are very, very proud of.

As I said, it is important not only that we invest in the regulation to ensure that we retain the trust of the travelling public when they purchase an airline ticket and jump on an aeroplane but also that we have the vision for five, 10, 15 and 20 years out to ensure that our infrastructure is up to the task that is required. It has been remarked in the past that, when we came into office, rail investment was virtually zero. More than $2 billion had been slashed from the federal roads budget before we came into office, and there had been nine or 10 plans around building a broadband network. It took the election of a Labor government to get the job done.

These are important areas of public policy. We are in the middle of an important nation-building program—$36 billion has been invested by this Labor government to ensure that never again will we be in a position where we cannot get our products from mine head to port and to ensure that we do not let our rail freight network fall into disrepair. It will ensure that, whether you are a business in Western Sydney, a school student in Northern Queensland or a medical patient in Western Australia—or indeed in the electorate of my friend the member for Lyons in Launceston—you will have access to a fast, reliable and affordable broadband network. These are important initiatives of which we are very proud. As I said, they are all a part of a whole, of which this legislation is an important part and which implements the commitments we gave in the 2009 national aviation policy white paper. We are ensuring that, over the course of our time in office, aviation transportation will become faster, safer and— (Time expired)

Ed Husic (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

I am grateful for the opportunity to follow on from the thorough and expansive contribution from the member for Throsby and appreciate the breadth of ground he was able to cover during his contribution.

Alan Tudge (Aston, Liberal Party) Share this | Link to this | Hansard source

Not even you believe that!

Ed Husic (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

The member for Aston is awake! That is good to see; it is good to be in the chamber when he is paying attention to this vital bit of legislation, the Aviation Legislation Amendment (Liability and Insurance) Bill 2012.

One of the great things about aviation in this country is the fact that so many families now have the ability to travel both domestically and overseas and that the number of destinations they have the opportunity to travel to has also increased quite a great deal. What that does in broadening people's perspectives as they travel to different destinations is a truly great thing for this country, as the member for Throsby indicated. For a continent like ours, aviation plays such a big role.

It has been amazing to see the growth of aviation in spite of some of the best efforts of the industry—in particular, Sydney Airport. When you look at the way they charge for simple things such as parking and you compare it with airports in other parts of the world, you are staggered to see the differential that people are forced to pay. Ever since it was privatised by the Howard government, Sydney Airport Corporation has pretty much seen Mascot as a massive treasure chest from which it can continually extract more and more from the flying public, in spite of the fact that more and more people want to be able to fly and to travel overseas.

It is no wonder that Sydney Airport consistently ranks as one where consumers are quite frustrated by the level of gouging that is extended to them by Sydney Airport Corporation. If you compare long-term car parking in Sydney with any other major destination in the world you would be astounded by how much you are forced to pay. As I said, it is great to see the number of people who have an opportunity to fly, and to see families being able to take up that opportunity, and it would be hoped that some would go back—

Debate interrupted.