Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

I am pleased to be able to speak to the Airports Amendment Bill 2015 on behalf of the Labor opposition. I am pleased to do so because it clears the way to progress the plan to build a second Sydney airport. The bill seeks to clear up deficiencies in aspects of the Airports Act 1996, which create uncertainty and confusion about the process for establishing a second Sydney airport. I make it clear that the inadequacies of the existing legislation I do not blame the current government for but former governments, I think, deserve some legitimate criticism for the fact that that this bill was necessary to clean up, frankly, what was very bad legislation in a couple of aspects.

In that context, Labor will support this bill that is before the parliament. That is because we believe Sydney needs a second airport sooner rather than later. It is inconceivable that the economic development of Australia's largest city should be held back by inadequate aviation facilities. That makes it critical that this parliament ensures that existing airport related legislation be fit for purpose.

We must ensure that the processes surrounding the development of a second airport are rigorous and comprehensive. In particular, we need to ensure that there is proper consultation with affected communities and that there be proper assessment of environmental impacts. This bill seeks to remove obstacles to the completion of these essential processes. It will help to ensure that the government gets the planning right, something vital for a piece of infrastructure as big and as important as a new airport. A new airport can drive employment and economic activity in Western Sydney. Indeed, the airport needs to be an airtropolis—something that is not just about planes going in and out but something that drives economic activity in job creation through the logistics sector, through the tourism sector and through the business sector for people in Western Sydney.

The Airports Act 1996 relates to existing federally leased airports. It is focused on regulating ownership, planning and development of those airports. Currently there are 21 federally leased airports including all of the main capital city airports around Australia. The act was put in place to manage the ongoing ownership and operation of our major airports following a process of privatisation of operations that occurred from the early 1990s through for more than a decade. One of those privatisations was the release of Sydney's Kingsford Smith Airport, a transaction that occurred in 2002 during the period of the Howard government. I have had cause to speak of the Kingsford Smith Airport privatisation in this place before. I have been critical of the process surrounding that transaction because I do not believe that the deal represented the best possible outcome for taxpayers. That is why it is not surprising that the legislation before us today seeks to deal with some of the unintended consequences of that flawed transaction.

This bill also addresses the fact that Sydney's airport is a greenfields development, something not contemplated by the regulatory structure of the current act. It also envisages the mandatory adoption of environmental conditions in any airport approval. The opposition welcomes this move because we believe that Sydney's second airport must be developed in accordance with environmental best practice. We strongly believe that our national infrastructure—roads, railway lines, ports and intermodal facilities—must have the capacity to handle the requirements of the 21st century.

But we also believe that when we deliver this infrastructure we should do so with the utmost consideration of the environment as well as the legitimate interests of residents living in the vicinity of such facilities. Our community needs top-quality infrastructure to maintain community expectations and to underpin the economic growth that will provide jobs for this and future generations. But we also need top-quality processes surrounding the delivery of that infrastructure. With a project of this size and scale, there is little margin for error in planning. This bill will improve the government's ability to get the planning right.

There is absolutely no doubt that the City of Sydney requires a second airport sooner rather than later. Those who believe otherwise are kidding themselves. Sydney is a global city. Its efficient operation is central to the economic productivity not just of New South Wales but of the entire nation. It is our major aviation hub. A delay at Sydney Airport has a knock-on impact around the nation because four out of every 10 aircraft pass through Sydney. When Sydney sneezes, aviation across the nation catches a cold.

The site of the existing airport is also problematic. Limited space and bottlenecks in the traffic networks surrounding the facility reduce the city's economic productivity. In terms of space, it is less than either a half or one-third the size of Brisbane and Melbourne airports. Its geography, surrounded by the most heavily densely populated area of Australia with a bay to the south, means that there is a problem with capacity at the airport.

To those who say that Sydney Airport can take more flights, I suggest that they talk to people who have regularly landed at Sydney Airport late but have still been unable to get access to a gate, simply because of its size and the constraints due to the land that Sydney Airport has been built on. These inordinate delays are a handbrake on national infrastructure, and when there is a delay in Sydney it impacts right around the network. Indeed, there are many Sydney based parliamentarians, colleagues, who drive to Canberra rather than fly, simply because they can be certain of what time they will get to their destination. Many business travellers complain about missing interstate meetings due to delays, and many families have had their interstate or international holiday plans disrupted by delays.

Several studies have shown that a second Sydney Airport is needed and that what you need is good evidence based policy. The evidence that Sydney needs a second airport is in. The policy response is to get on with the business of building it, and this legislation will facilitate just that. As minister I commissioned an aviation green paper and white paper process. Arising out of that, one of the recommendations was that there be a study into Sydney's aviation needs. This was funded as a joint New South Wales and federal study, commenced and completed under the former government.

The joint study reported on 2 March 2012. It was headed by the Secretary of the federal Department of Infrastructure and Transport, Mike Mrdak, and the head of New South Wales Planning, Sam Haddad. The study team also included the former Howard government minister Warwick Smith and Jennifer Westacott from the Business Council of Australia. The study found that air passenger demand in the Sydney region was forecast to more than double by 2035 to 87,000,000 passengers, and then double again by 2060. It recommended the adoption of a long-term strategy to meet this growth. It warned that the economic consequences of inaction would be dire, including a $6 billion loss in national GDP by 2035. New South Wales would be the hardest hit, with a loss of $2.3 billion in gross state product over the same period.

The 3,000-page comprehensive report made a range of recommendations and the key one was to support a second Sydney Airport. Sydney is full at peak hours now but the peak period is lengthening; pretty soon it will exist from between 7 am in the morning right through to 7 pm in the evening, with just a short period in between. This has an impact; because Sydney Airport is at peak for most of the day, a delay that occurs anywhere in the network takes longer and longer to get back into an on-time performance schedule. It is why, in terms of a response to this report, as transport minister I did everything possible to advance planning for a second Sydney Airport, including looking carefully at the options for the location of a second airport. It is also why, since a change of government in 2013, Labor has strongly supported the current government's actions to progress the proposal. A second airport for Sydney did not just require government action; it also required opposition support to make it a reality. If not, the impasse that has existed for far too long would have continued.

I make it clear today that my constructive approach to these issues will continue. The truth about major infrastructure projects is that sometimes a decision by the government of the day is not enough to achieve what is required. When it comes to nation-building infrastructure I believe that this parliament has a responsibility to take decisions that will benefit this generation and future generations. It requires political parties to put aside politics and work together in the national interest. It is about our economy, our productivity and our ability to grow as a nation.

Handled properly, a second airport can provide opportunity—jobs for tens of thousands of people in Western Sydney. Airports are job generators. The joint study found that, in the absence of a second airport in Sydney, the total number of jobs that will not be created is estimated to grow over time as unmet demand increases. This is averaged to be 12,700 in New South Wales and 17,300 nationally over the period from 2011. In 2060 alone the annual estimate of forgone jobs is approximately 57,000 in New South Wales and 77,900 nationally. Further, the jobs around airports are well-paid jobs.

The Grattan Institute undertook detailed research across Australia's capital cities last year looking at where the high-paying, high-productivity jobs are located. It found that CBDs were by far the largest centres of high-paying jobs. But it also noted that inner-city areas and secondary commercial hubs, such as those around large cities' airports, also tend to be more productive than other locations. A new airport not only brings jobs; it has the potential over time to bring higher paying, productivity-driving jobs to a location other than a CBD.

Airports, like universities, are one of the key attractors of related industries to their precincts. The importance of this cannot be overstated at this stage of Australia's economic development. As the 2013 State of Australian cities report—the last one that was actually published—made clear, our nation is undergoing a shift under which jobs growth is moving from the suburbs to the inner city. At the same time, housing remains affordable in suburban areas. This means that many Australians have to commute from homes in the outer suburbs to the inner city. This has given rise to the phenomenon of drive-in drive-out suburbs, where housing is affordable but jobs are scarce.

The social consequences of this trend are significant. It is indeed a tragedy that many Australian parents spend more time commuting in their cars than they spend at home playing with their children. There is also a risk that a lack of jobs close to where people live will entrench social disadvantage. One way that governments can address this trend is to invest in public transport. Regrettably, of course, the current government have cut public transport spending and do not believe in investing in it, although I note that they are very happy to come to openings of projects that have been funded by previous governments.

Another remedy is to focus on job creation closer to where people live. The construction of a second airport in Western Sydney will bring thousands of well-paid jobs to the region, not just in aviation but also in associated industries. A properly developed second Sydney airport will not only spark economic growth but also literally improve life for tens of thousands of people who will be able to live much closer to their workplaces. That means less time on the road, more time for family and friends and a better quality of life. The case for a second Sydney airport is therefore compelling, but, with the Commonwealth having chosen the site and already working on associated road infrastructure, it is important that we get the detailed planning right. We also need to ensure that the community has its say on the concept plan and that there is a proper and transparent analysis of environmental impacts.

Considerations like jobs and economic development, not to mention the meeting of economic need, do make the case for a second Sydney airport compelling. Still, there are those in parliament whose rigid ideology blinds them to the needs of a growing nation. I am somewhat disappointed, if not surprised, that the Greens political party in New South Wales have a formal policy that Sydney should not have a second airport. What is more, they also have a position that says they do not support Sydney's first airport, Kingsford Smith—that is, the Greens political party argue that a global city such as Sydney should not have an aviation facility. It is an absurd proposition, in which people could get into Sydney by parachuting out of planes as they fly over, but it is unclear how they could actually leave Sydney. It is an absurd proposition that goes to their irresponsible behaviour in economic policy, where they are prepared to say to any particular group what that group wants to hear.

The truth is that nation-building infrastructure, including airports, is vital for our quality of life and our standard of living. Constituents in my electorate are adversely affected by Kingsford Smith airport, but I accept that that is a by-product of a piece of infrastructure that is vital for not just Sydney but New South Wales and Australia, as a generator of economic activity and jobs. The Greens political party, of course, say that you can have no airport in Sydney or in Western Sydney but a high-speed rail line to a mythical location somewhere else. The problem with that is, of course, that a high-speed rail line would include 67 kilometres of tunnel through Sydney, which the study that I commissioned as minister showed would also in practice be likely to be opposed by the Greens political party, just like the Greens in the UK opposed the high-speed rail proposals that had the support at the last election in Britain of the UK Conservatives, the Liberal Democrats and the Labour Party. The fact is that they should not be allowed to have this absurd proposition whereby in inner Sydney they argue that they want to close Kingsford Smith, but they also argue against any location for a second airport.

The Labor Party will adopt a constructive approach to this. We understand that construction of a major project like a new airport is difficult to handle politically. We also realise that the imperative for action requires us to work in a constructive way with the government, and I believe I have done that. I do think, though, that part of building that community confidence is making sure that the environmental protections are very much there, and that is why we very much welcome the strengthening that is in this legislation.

One problem with the existing Airports Act is that it was designed to deal with existing federally leased airports, including in our other capital cities. The bill before us seeks to address the development of an airport on a greenfield site. It brings two existing processes together to address the initial development of a brand-new airport: the development of a master plan, which is more strategic and conceptual in nature, and the initial major development plans, which are in effect development applications that require Commonwealth consent. After the initial development is complete, the new airport will revert to the regular five-year approval arrangements that exist for all other federally leased airports.

Labor welcomes the bill's proposed strengthened role for the environment minister in making mandatory environmental conditions rather than, as is currently the case for other airports, making non-binding recommendations to the infrastructure and transport minister. Labor emphasises that the EIS process, which is being conducted under the Environment Protection and Biodiversity Conservation Act 1999, needs to be thorough, evidence based and transparent, with conditions that address environmental amenity as required.

We note that the minister has committed to allowing a full process of concurrent community input into both the airport plan and the EIS later this year. This is important. It is inevitable that not everyone will be pleased about the construction of a second Sydney airport. That is the nature of development. But it is essential that the community have its input, that community views are taken into account and that the government considers the community views in a responsible way.

The fact that this legislation is required now to address drafting issues highlights the inadequacy of the original legislation. For example, a condition on the sale of the Kingsford Smith airport was that the existing owner be given first right of refusal for the development of any second airport. In retrospect, it is clear that this condition included no additional revenue benefit for the Commonwealth and has reduced potential for competition in the sector. It is not a proposal that I believe is ideal.

This bill moves to emphasise that changed options for operation of the two Sydney airports continue to protect the lessee from exposure to the application of National Competition Law. It does so by exempting possible Sydney Airport Corporation Limited operation of both Kingsford Smith airport and the second airport from the 'substantial lessening of competition' rule in Competition Law.

We may well wonder what the ACCC would actually think about an arrangement for construction of a second airport that gives the inside running to the operator of the existing airport. There are competing views perhaps, but an open tender that included Sydney airport as an equal bidder would almost certainly have allowed more innovation, interest and, dare I say, sale proceeds to the Commonwealth than the closed process that begins in the first stage of this process.

We know that the ACCC is wary of the lack of regulation surrounding current port sales, as are many shippers and port lessees. At first glance, airports are not dissimilar. Sydney airport is one of four airports currently monitored by the ACCC in terms of service levels and prices.

The Howard government had a record of lazy privatisations. Look at the mess that followed the unreconstructed sale of Telstra, both the monopoly and contestable elements, with little regard to the consequences for Australian consumers and businesses. The coming into existence of the NBN was in part related to the legacy left to a future Labor government arising from that lazy sell-off process. The inclusion of the right of first refusal to the buyer of Kingsford Smith airport by the Howard government was done late in the process, and with little apparent regard to the interests of future users of airport facilities in Sydney.

This bill does not take away the contracted right of first refusal, but it clears the way for real contestability should Sydney airport not take up the government's offer. It is important to recognise that Sydney airport has the right of first refusal, not the right of veto—as I continually put to the former chairman of the Sydney airport, the now departed Max Moore-Wilton; I made clear my views about the conflicts that occurred with Mr Moore-Wilton. Specifically, this is done by providing for the possibility of unrelated owners operating Kingsford Smith and the second airport.

At the moment, it is extraordinary: if you had someone other than Kingsford Smith airport operating the second Sydney airport in terms of owning it then Kingsford Smith would still have to have the right to operate the second Sydney airport; therefore, completely vetoing in practice the ability of anyone other than Sydney airport to bid. That is just outrageous legislation that occurred. The former government that presided over that in 2002 should really stand condemned for the fact that this government is having to fix up that absurd proposition.

Of course, it also had in the legislation caps on cross-ownership of Sydney's second airport by the owners of Melbourne, Brisbane and Perth airports. Under the existing legislation, not only did you have that Sydney's second airport had to be operated by Kingsford Smith airport whether it owned it or not; you had ownership restrictions on what would be natural bidders for a second Sydney airport—that is, airports in other capital cities that are well run and with the experience of operating airports. This legislation fixes that up. It improves the negotiating position of the Commonwealth with the Sydney Airport Corporation, implementing what common sense tells you should have been the case from the very beginning.

While the opposition will be supporting this legislation as a means to ensure that we get the planning right, I do want to raise the fact that the rail connection needs to be built just as the roads need to be built. It makes no sense to go back after an airport is built and a runway is in place to build a railway line.

As much as an airport is a piece of economic infrastructure, it is also a public asset. To facilitate its efficient use, it should be connected to the existing public transport network. A rail link that connects the existing south-west line—that has been extended thanks to the decision of the former Rees government in New South Wales—to the western line should be part of the initial development. That would ensure it was built into the price when the airport is leased as well.

This would mean benefit for the people of Western and south-western Sydney regardless of whether they are going to airport or not. That is an example of what can drive public support for this proposal. I think very strongly that this should occur. During the New South Wales election, I did a press conference with the New South Wales Labor leader Luke Foley to express our view there. I would urge the government to have a close look at the propositions that we have put forward in a constructive way and get on with ensuring that this occurs.

The fact is that no airport, without public transport access, operates as well as an airport once it has that public transport access. Look at Melbourne: decades after the new airport was opened, they still do not have rail access, and it is still an issue. It is far harder once the airport has been built to go back and deal with those issues.

In conclusion, one of the key responsibilities of elected office is to think about the future. One of the reasons I am attracted to the infrastructure portfolio is that you can make a difference, not for a year or a political term but for generations to come. Western Sydney has a population now of over two million people. Think of Adelaide not having any airport at all. That is a relevant factor here. This is about provision of infrastructure, provision of highly paid jobs and driving that economic reform.

After working in government to lay the groundwork for a decision about the second airport, Labor will continue to play a constructive role in making the project a reality, but in doing so we insist on proper process. I acknowledge the fact that the minister and Assistant Minister Briggs have been available for consultation and have ensured that this project has moved forward in a way that is above politics. That is necessary. We also need though to bring the public with the government on this proposition. That is why a proper assessment of the environmental impact, ensuring that there is value for public money in this process and ensuring that we maximise the job creation and the public benefit that can come out of a second airport are so important. I commend this bill to the House.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Airports Amendment Bill 2015. It is a very rare circumstance that I get to follow the member for Grayndler and actually agree with the vast majority of what he said, especially the attack that the member for Grayndler made on his coalition partner, the Greens, and their hysterical plans or discussions on the Sydney airport issue.

I grew up in Peakhurst opposite the old tip at Gannons Park. We were right under the old east-west flight path. Every afternoon we would come home from school and sit and watch the aircraft roll in from the west over the top of our house on their way to land at Kingsford Smith. I remember my old Peakhurst high school economics teacher, Mr Simpson, saying when we had discussions about Sydney's second airport back in the 1970s that he thought that there would never be a decision about Sydney's second airport in our lifetime. We discussed back in the 1970s the difficulty of making a decision about where Sydney's second airport would be.

Of course there were studies and studies. There was the possibility of Bankstown and Holsworthy. There were various places mentioned for Sydney's second airport. It took the current Prime Minister, Tony Abbott, to have the courage to make that decision that is best not only for Sydney's future but for Western Sydney's future and the nation's future. He made the decision back on 15 April that Badgerys Creek would be the site of Sydney's second airport. But I say that this will not be Sydney's second airport; I say this will be the first airport for Sydney west. Western Sydney today is a large, economically powerful entity by itself. It deserves and needs its own airport. That is what Badgerys Creek will give us. It will be a major boost for the local economy. It will create thousands of jobs. It will be a catalyst for investment in education, science, research and aeronautical industries. This will be the catalyst that will kick off Western Sydney.

Already we are seeing roads under construction. We saw as part of the $3.6 billion Western Sydney Infrastructure Plan the Prime Minister break ground on Bringelly Road on 20 January this year. The construction of the Northern Road is expected to begin in late 2015. The construction of the new motorway connecting the M7 to the northern motorway is expected to commence in 2019. The $5 million upgrade of the Ross Street intersection at Glenbrook was added on 5 March this year, with planning for the project to begin this year.

These things are all very important, especially to increase our nation's tourism. Tourism is an area where we in this country have great future prospects. The recent ABS numbers show that there has been a four per cent increase on the previous year. We will see that increase continue. As China, India and other Asian countries become economically stronger more of their population will want to travel to Australia, so we need to make sure we have an efficient airport network so they can come to visit Sydney, especially Western Sydney.

There is one issue, and this is where I am in some agreeance with the member for Grayndler. It would have been far better if we had not sold Sydney (Kingsford Smith) Airport and had that clause providing Sydney Airport Corporation, the successful bidder, with the first right of refusal, but we need to remember those times. The previous coalition government may be criticised for that, but let us not forget that they had to pay back $96 billion worth of the previous Labor government's debt. As well as that $96 billion, they had a $54 billion interest bill that had to be paid. So it is very easy to criticise them here in 2015, but we know back then they had the onerous task of paying back the previous Labor government's debt, which they did so successfully.

I would like to see—and I think it would be best for Sydney, for Western Sydney and for our nation—Sydney west airport and Kingsford Smith airport owned by separate identities so that they are in vigorous competition with each other. That would be best for the nation. I can remember when Sydney Airport Corporation first took over Sydney airport going to the airport with a load of samples and getting a trolley, which you used to pay a few dollars for. I remember the charge was originally $1 or $2. Normally I would carry my bag and not worry about it, but when I walked up to the trolley I found they had put the cost up to $5. I can remember another time seeing in the arrival hall that some bright spark had decided it would be a good idea to charge the incoming passengers money to take a trolley to put their bag on. People coming off international flights were meant to have $5 in Australian currency. These are the issues we get if we do not have effective competition in this area. That is what this bill actually does. It helps address those issues.

Yes, Sydney Airport Corporation still has the first right of refusal to develop any second airport within 100 kilometres of Sydney's centre and the Airports Act currently prohibits the Commonwealth from taking either of the actions that we want to to enable another entity to take ownership of this airport in the event that the Sydney airport group decline to accept the offer. Section 18 of the Airports Act requires that the airport lessee companies of Sydney—which is Kingsford Smith—and the airport site declared to be Sydney West Airport, as it is referred to in the Airports Act, must be subsidiaries of the same company. This is the legacy provision from 1996 which I discussed previously. This bill removes the requirement of common ownership, providing the Commonwealth with the commercial flexibility to deal with third parties and to develop the airport itself. So we are sending a clear message to Sydney Airport's corporation that we in this government are very serious and that, if they do not accept the terms that are put together, we would like to see competition between those two airports.

In the time remaining, there are a couple of other issues involving airports and competition. Firstly, airports and competition show some of the complete inadequacies of our competition law that the recent Harper review failed to address. I am referring to the issue of price discrimination. While the US has the Robinson-Patman Anti-Price Discrimination Act, in the EU they have a thing called article 82, which also is an effective provision against anticompetitive price discrimination. Article 82(c) provides that abuse by a company with a dominant position may, in particular, consist of:

…applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage …

We have no such provisions in our competition laws. The Harper review makes no recommendations that we have such provisions in our competition laws.

I can give an example of how this can apply to airports and why it is very important. In July 2000, there was a decision by the European Commission called the Spanish airports decision. What happened in that case was that they found that the airports in Spain were operating what they called a discount structure, or charging smaller airlines a higher price. If you were an airline and you made one to 50 landings a month, you paid the rack price; if you made 51 to 100 landings, you got a nine per cent discount; with 101 to 150 landings per month, you got a 17 per cent discount; with 151 to 200 landings, you got a 26 per cent discount; and with more than 200 you got a 35 per cent discount. So, if you were a large airline operator with a lot of flights and a lot of planes, you were able to get a 35 per cent discount on your landing fees in airports in Spain against a smaller operator. This had the potential to destroy competition. It prevented new operators that were coming into the airline industry in Europe and landing in Spain from being able to compete on a level playing field. What the EU found was that that structure of charging those smaller competitors a higher price was anticompetitive, and they banned it. They said:

The existence of economies of scale, the aim of reducing air traffic noise or air congestion, for example, could be regarded as objective reasons—

for such discrimination.

However, in the case of landing and take-off services such economies of scale do not exist. The services provided do not depend on the individual owner of the aircraft or whether they are rendered to the first or the tenth aircraft of the same airline.

They found that the fact that an airport:

… has applied dissimilar conditions to its commercial customers for the provision of equivalent services, thereby placing some of them at a competitive disadvantage, constitutes an abuse of a dominant position within the meaning of … Article 82.

We have no such provisions in our competition laws, and that threatens effective competition in our airline industry.

The other issue I would like to talk about quickly is that I fear that we are making a terrible mistake involving the Moorebank Intermodal. By having an intermodal at Moorebank instead of at Badgerys Creek, we are losing one of our abilities to fund the railway line into Badgerys Creek. The member for Grayndler emphasised the importance of building that railway line, but our funding is not unlimited. By investing in Moorebank—by pouring Commonwealth money down the toilet in Moorebank—we are simply making it harder and harder. That money should have been put into the rail link to get it set up at Badgerys Creek.

That draws me to an article that I came across after reading an article by Nick Cater today. This article is called 'Policy and planning for large infrastructure projects: problems, causes, cures'. It is a World Bank working policy from December 2005, and it talks about the exact problem that we have with Badgerys Creek, the 'planning fallacy'. It says:

… a major problem in the planning of large infrastructure projects is the high level of misinformation about costs and benefits that decision makers face in deciding whether to build, and the high risks such misinformation generates.

This is exactly what we have at Moorebank. It goes on, and it cites examples of how forecasts for rail projects have failed. It does a study across different continents, and for rail transportation infrastructure projects it finds the cost overruns, averaged across more than 50 projects, are 44.7 per cent measured in prices. It finds not only that the cost is more than 40 per cent higher but that the actual passage of traffic is 51 per cent lower than predicted. We have seen this in Sydney with our planning debacles: the Cross City Tunnel and the Lane Cove Tunnel. We have seen this in Brisbane. The article goes on:

Again, this is what we are at risk of seeing at Moorebank. It goes on to ask why this is happening, and it says:

In the grip of the planning fallacy, planners and project promoters make decisions based on delusional optimism rather than on a rational weighting of gains, losses, and probabilities. They overestimate benefits and underestimate costs. They involuntarily spin scenarios of success and overlook the potential for mistakes and miscalculations.

That sums up the Moorebank Intermodal to a tee. It also gives a warning about how to overcome this. It says:

The key weapons in the war on … waste are accountability and critical questioning.

That is again the problem that we have with Moorebank. There is simply no answering of the critical questions. There are three completely failed premises: it takes trucks off the road, it reduces air pollution and it saves costs. Any critical analysis of those three premises shows that they are completely faulty. In the Moorebank Intermodal, we have another complete planning fallacy. This should be combined with the airport at Badgerys Creek.

We have had the warning also from Infrastructure New South Wales. They have warned that the case has not been proven for Sydney for intracity intermodals. They have said that Enfield is a test case. Enfield has already been delayed by two years. We would be far better off if, instead of keeping that money down the toilet in the Moorebank Intermodal, we invested it in getting the rail infrastructure into Badgerys Creek, which will be a fantastic development for Western Sydney. Having said that, this is a good bill and I commend it to the House.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Link to this | Hansard source

I support the passage of the Airports Amendment Bill 2015. As someone who has lived within five kilometres of Kingsford Smith Airport for my whole life, it is a welcome development to see the Commonwealth parliament making progress on the development of a second airport for Sydney's west. I recall that, when I used to live in Botany, I could walk out into my backyard and count the number of rivets on the undercarriage of a jumbo as it flew over our backyard. So it is nice to see that progress is being made on a second Sydney airport.

This bill will amend the Airports Act to provide for the determination of an airport plan for Sydney West Airport. This is a temporary, transitional measure which authorises the initial airport development for Sydney West Airport and specifies the Australian government's requirements for the airport. The bill also includes some measures that increase the options available to the Australian government in respect of who operates the airport should Southern Cross Airports Corporation decline a contractual offer that they have to develop the airport. This is necessary to give full effect to the Commonwealth's contractual rights in relation to Sydney West Airport. Separately, to progress the project and prepare for the declaration of the land at Badgerys Creek as an airport site, the bill deals with some of the environmental matters.

I represent the community which has Sydney's airport in its electorate. Our community experiences the advantages of this vital piece of infrastructure through proximity to the country's No. 1 airport and the economic opportunities that that creates. Quite simply, airports are economic powerhouses. They create many, many jobs, and many of the friends that I went to school with have jobs that relate to the airport. Indeed, my father spent 37 years working for Qantas in an airport related job. So I know and understand the economic benefits that flow not only to direct jobs but also ancillary industries, in logistics and other services, around airports.

But of course with airports come challenges, most notably through traffic congestion and airport noise. Sydney's airport is among Australia's most significant pieces of transport infrastructure but it is located, very, very close to quite a dense residential area and it is probably one of the closest international airports to a CBD in the world. It facilitates the movement of more than 36 million passengers and 395,000 tonnes of international air freight annually.

The economic impact of Sydney Airport which emanates from the 800 businesses that operate within the airport precinct, and associated with tourism and trade and capital expenditure, is huge. In 2012, businesses operating within the airport's precinct contributed an estimated $9.3 billion in value added, with associated employment of close to 50,000 full-time equivalent jobs. The contribution of tourism and freight facilitated by the airport represented a further $18.3 billion in value added and generated an estimated 230,000 full-time jobs.

Sydney Airport is vital to the nation's productivity and prosperity. Studies have shown that a second airport will also be a huge benefit and will deal with an emerging need in respect of air services in the Sydney Basin. The Grattan Institute's Mapping Australia's economy report of July 2014 undertook detailed research across Australia's capital cities looking at where the high-paying, high-productivity jobs were located. It found:

The intense economic contribution of CBDs occurs partly because of the concentration of jobs in these areas. But CBD businesses are also much more productive on average than those in other areas. Inner city areas and secondary commercial hubs, such as those around large cities' airports, also tend to be more productive than other locations.

So a new airport will not only bring jobs; it also has the potential, over time, to bring higher paying, higher productivity jobs to a location other than the CBD. Airports, like universities, are key attracters of related businesses in such precincts.

This bill is an initial stage in facilitating the plan for the second airport in Sydney. It proposes to amend the Airports Act to improve some of the environmental processes associated with planning for Sydney's second airport and to address issues arising from unintended consequences of the act relating to the privatisation of Sydney Airport. It will also strengthen the environmental assessment process around the second airport, by combining the initial concept and major development plan into one consolidated airport plan and requiring the environment minister's decision arising from an EIS on the plan. This will be mandated rather than just a source of advice to the infrastructure minister. In that respect, Labor welcomes the bill's proposed strengthening of the role for the environment minister when it comes to the EIS.

The bill will also amend the act to remove the current provisions that would mean that the operators of Kingsford Smith airport, SACL, or Sydney Airport Corporation Limited, are mandated to also operate the second airport, regardless of ownership, and it will amend the act to allow other airports to bid for the second airport, should Sydney Airport Corporation not take up the initial option of the first right of refusal on the airport.

This is a very important reform and something that probably should have been done initially. I think most people probably recognise that is now the case. We all know about the costs of setting foot in Sydney airport, for parking and other services that are provided, and they primarily relate to the fact that there is no competition around the airport in terms of the provision of services. This amendment will go some of the way to perhaps providing additional competition by making it possible for operators of other airports—or, indeed, new operators—to come in, should SACL not take up the initial offer. In some respects, this rectifies what I think was a huge error on behalf of the Howard government in respect of the initial sale of Sydney airport. The first right of refusal was tacked on, at the 11th hour, to those sale negotiations without any real additional revenue associated with its inclusion. It also reduces the potential for competition in the sector and has no regard to the interests of future users of airport facilities in Sydney.

Although the bill does not take away that contractual right that Sydney Airport Corporation Limited has in respect to first right of refusal, it clears the way for some contestability should Sydney airport not take up that initial offer. That is done specifically by allowing the Commonwealth to take a refused offer to other bidders and by removing the existing 15 per cent caps on cross ownership of Sydney's second airport by the owners of Melbourne, Brisbane and Perth airports. This will improve the negotiating position of the Commonwealth with Sydney Airport Corporation, implementing what was presumably intended at the time of the contract.

Proper planning for the second airport also means building rail links as part of an original development. It is very important, if we are going to undertake such a major infrastructure development, that we get the planning right, particularly in respect of transport in and out of the facility and indeed around the area. That must include a public transport plan for the second airport. Unfortunately, the refusal of the Abbott government to fund urban passenger rail projects means that there is a real possibility that a rail link will not be built at the same time as the airport. A rail link that connects the existing south-west rail line to the western line via the airport and related developments should be part of an initial development proposal and not delayed because of the government's approach to public transport.

In conclusion, I am very pleased to see this bill which has been brought to the House. It is progress being made on the development of a second airport for Sydney. It tidies up some of the contractual deficiencies that have existed in respect of the development of a second airport, and it will streamline and improve the environmental assessment process. On that basis, I commend the bill to the House.

Jamie Briggs (Mayo, Liberal Party, Assistant Minister for Infrastructure and Regional Development) Share this | Link to this | Hansard source

I would like to thank all members, particularly the members for Kingsford Smith and Grayndler for their support. I just need to correct one issue: the Abbott government is contributing to public transport projects through Asset Recycling Initiative. In fact, we will arguably be the biggest contributor to public transport rail projects in the Commonwealth's history. But other than that small factual error from the members for Grayndler and Kingsford Smith, we welcome their support and their contributions to the debate.

The Western Sydney airport development is an incredibly exciting project for Western Sydney. It is not a second airport in Sydney; it is the first airport for Western Sydney. The airport will be a key driver for economic development in Western Sydney and will be a catalyst for investment into the future in the education, science research and aeronautical industries. On top of this, the Abbott government, in partnership with the New South Wales government, is investing $3.6 billion in local infrastructure through the Western Sydney infrastructure package, and those projects are underway. The Bringelly Road project began in January, when the Prime Minister and Premier Baird turned the first sod, and more projects are shortly to begin.

The Airports Amendment Bill 2015 amends the Airports Act 1996 to provide for the creation of an airport plan for the proposed Western Sydney airport, in recognition of the different requirements the airport has as a greenfield development. Importantly, the bill recognises that the environmental assessment process currently underway for the airport is a key part of the approvals processes and confers an approval function on the environment minister in relation to environmental matters. In this way, the bill will require the Minister for Infrastructure and Regional Development and Deputy Prime Minister to incorporate in the plan any environmental conditions imposed by the Minister for the Environment, following completion of the environmental impact statement. Preparation of a new and robust EIS is underway, and the community will have their opportunity to have a say on the draft EIS later this year.

The bill also includes measures that would help the government consider alternative operators, should Sydney airport group turn down an offer to develop and operate the proposed airport under the first right of refusal process, and it also removes cross-ownership restrictions currently placed on the Western Sydney airport. The bill contains some mechanical provisions to facilitate declaration of the airport site and other preparatory works. Again, I thank all members for their contributions to the debate and commend the bill to the House.

Question agreed to.

Bill read a second time.