Kerry O'Brien (Tasmania, Australian Labor Party, Shadow Minister for Transport) Share this | Hansard source

I will take that interjection from the senator even though he is not sitting in his place. I would not be surprised that the government does not know what it is doing from time to time. I would not be surprised that the Manager of Government Business has got things so wrong that we are dealing with a bill that was not on the red. The difficulty is, apparently, that there is nothing else that the government wishes to do. So we are dealing with the Civil Aviation Legislation Amendment (Mutual Recognition with New Zealand) Bill 2005 [2006], which is a bill that the Labor Party does not support and will not be giving its support to in this chamber.

We oppose the introduction of a new aviation regulatory regime in the absence of an assessment of the likely safety and economic outcomes. This is a foolhardy measure that may have serious consequences for safety in our skies and may cost Australian jobs. Labor’s principal objection to this bill is that we believe it has the potential to undermine aviation safety standards in this country.

The bill would permit the holder of an air operator’s certificate issued in New Zealand for the operation of an aircraft of more than 30 seats or 15,000 kilograms to conduct operations in Australia, without having to obtain an Australian issued air operating certificate; and vice versa, for that matter. It is a matter of great concern to Labor that the Howard government has pursued the mutual recognition of Australian and New Zealand aviation safety certification without first establishing that aviation safety regulations in our countries are in fact equivalent. It is because the government has not done that work that Labor is so firmly opposed to this bill.

The Howard government first attempted to legislate for mutual recognition of air operating certificates through the Civil Aviation Legislation Amendment (Mutual Recognition with New Zealand and Other Matters) Bill 2003, which was introduced into the parliament in June 2003. At the time, the government claimed that mutual recognition was consistent with the open skies air services agreement between Australia and New Zealand, signed in August 2002. The provisions in the current bill comprise the first phase of such mutual recognition.

Labor referred the original legislation to the Senate Rural and Regional Affairs and Transport Legislation Committee for inquiry and report. What the committee established in the course of its inquiry spoke volumes about the Howard government’s mishandling of the move to mutual recognition. First, the committee established that Australian and New Zealand regulators have entirely contradictory views on the impact of mutual recognition. The Civil Aviation Safety Authority of New Zealand gave evidence that mutual recognition would lead to the harmonisation of safety standards; the Department of Transport and Regional Services firmly repudiated that view. This left the committee questioning, not unreasonably, the inconsistency between Australia and New Zealand on this critical issue.

Second, the committee established that Australian and New Zealand aviation safety standards are not directly comparable. A number of submissions to the committee highlighted this issue, including the Australian and International Pilots Association submission, which said:

New Zealand’s aviation safety system may well comply with the standards required by ICAO and still offer a lesser standard of aviation safety than Australia’s system.

Mr Guy Maclean made a submissions that stated:

... compliance with ICAO benchmark standards does not comparatively rank the Australian and New Zealand aviation systems against each other. Rather, such audit findings only indicate that both systems meet or exceed a minimum required ICAO standard.

One of the key differences between the Australian and New Zealand aviation safety regimes considered by the committee related to flight attendant to passenger ratios being one to 36 passengers—that is, actual passengers—in Australia and one to 50 seats—that is, the seats available in the aircraft—in New Zealand. A number of submissions made to the committee expressed concern, with respect to safety standards and security, about New Zealand’s lower ratios.

We all know the important role flight attendants have played in past incidents involving passengers who present a risk to other passengers or, in some cases, pose a risk to the flight itself. None of us in the parliament are strangers to the inside of an aircraft. Like other air travellers, we have reason to be grateful for the role that flight attendants play in keeping our skies safe. That the Howard government should be prepared to so blithely accept a lower flight attendant ratio on aircraft operating in Australia is surprising.

A related matter considered by the committee was the impact of the competitive advantage to be enjoyed by airlines operating with a New Zealand issued air operating certificate. According to the Flight Attendants Association of Australia International Division this competitive advantage favouring New Zealand registered aircraft would create pressure to reduce operational standards applying to aircraft registered in Australia. This is the sort of harmonisation forecast by the New Zealand regulator—a harmonisation that could see Australian standards reduced.

Anecdotally, some airline operators expect that upon the implementation of this legislation there will be a review of Australian standards that exceed New Zealand standards, particularly cabin crew standards, for the purpose of harmonisation. That is an industry expectation; it is not a statement from CASA. But I will not be surprised if that occurs. We shall see in the course of time. Of course, in the event that a harmonisation of standards does not occur, the bill provides the airlines with, in the words of the FAAA, ‘an economic incentive to register aircraft in New Zealand’. Either way, the bill has the potential to deliver Australia lower safety standards.

The wider issue of whether the bill would permit airlines to operate domestically in Australia on a regular basis while remaining on a New Zealand issued AOC was also considered by the committee. The committee found that there may be some hurdles preventing an Australian airline transferring its whole operation to New Zealand while continuing to operate domestically in this country. However, no such prohibition would be imposed on the subsidiary of an Australian airline based across the Tasman.

In its submission to the inquiry, Virgin Blue suggested that carriers may take an opportunistic approach that will result in ‘a race towards the cheapest regulatory option’. That is not what a government that cares about aviation safety should be encouraging or, in terms of the bill before us, actively facilitating. Of course, it is not just about safety; it is also about jobs. This bill would facilitate the movement of some jobs across the Tasman.

Let me now return to the committee inquiry into the first incarnation of this bill. Not surprisingly, government members recommended the passage of the bill, albeit with two important caveats. The first was that a comparative safety assessment should be undertaken after the introduction of the new rules, and the second was that mutual recognition should not be extended without further legislative amendment—that is, the government should abandon its plan to extend mutual recognition by regulation. Labor senators delivered a dissenting report that recommended that the bill be opposed in the absence of a comparative assessment of safety systems, a full regulatory analysis of the two systems and a detailed analysis of the costs and benefits of the proposed regime. The dissenting report supported the minority report’s opposition to an extension of mutual recognition by regulation.

The government could not win the support of this chamber when it operated as a genuine house of review, and the 2003 bill lapsed with the last parliament. The Civil Aviation Legislation Amendment (Mutual Recognition with New Zealand) Bill 2005 was introduced into the Senate in June last year. It substantially replicates its precursor bill, with the exception that it does not contain a provision for the extension of mutual recognition, beyond AOCs, by way of regulation. This is a welcome concession by the government, but it does not ameliorate the substantive damage likely to be wrought overall.

This bill was also referred to the Senate Rural and Regional Affairs and Transport Legislation Committee for inquiry and report. In the report, tabled on 5 September 2005, the government dominated committee again recommended passage of the bill, notwithstanding ongoing concerns about the movement of Australian aviation operations to New Zealand and the government’s continuing failure to undertake a comparative safety assessment. Labor senators again opposed the passage of the bill on these same grounds. We said:

It defies logic to undertake this basic research after the change has been made.

Labor’s key objection to this bill is our concern that it will serve to diminish Australia’s rigorous aviation safety standards. Despite the passage of three years and two Senate inquiries, the government has failed to acknowledge concerns about the safety implications of the proposed mutual recognition regime. The government has ignored the opposition of pilots and flight attendants, and today we again urge the government to think again and do the work that must be done before we head down the proposed path.

One would have thought that by now the government could have at least initiated a comparative assessment of the safety systems in a public inquiry. A full regulatory analysis of the two systems should have been able to have been completed by now. No such information has been conveyed to the opposition. A detailed analysis of the costs and benefits of the proposed regime should have been done by now and ought to be available. As I said, this bill was introduced in June last year. We are now in May, almost 12 months later, but the government has no intention of commissioning such work because it has no concern about the impact of this bill on aviation safety, on the industry, on jobs in the industry or on anything other than a compliance with what it has agreed to do with New Zealand. So much for the national interest.

Labor’s key objection to this bill is our concern that it will serve to diminish Australia’s rigorous aviation safety standards. We say again that the government has failed to acknowledge that concern and has ignored other concerns. I do not understand why the government has not already done the work which I believe is necessary in relation to the passage of this bill. We believe that this legislation will have a dramatic effect on aviation operations in this country.

The government has taken a decision in relation to other air routes and international operations to decline the carrier Singapore Airlines access to the Pacific route, and as a result may well have damaged Australia’s relationship with Singapore. I wonder what the impact would be if one of the carriers operating in Australia now, Virgin Blue, were to establish operations in New Zealand as an international carrier. They already have Pacific Blue as one of their operators in New Zealand. It flies certain routes in the near Pacific region. If they were to seek to base such an operation in New Zealand, would the government give consideration to such a New Zealand based carrier having access to the Pacific route if it was a subsidiary of the Virgin Blue operation in Australia? What if it was also flying on certain domestic routes in this country? What would the government do in those circumstances? These are questions that I have asked myself in relation to the possibilities for aviation operation in this country.

Particularly given the current state of the majority owner of Virgin Blue, Patrick, and the takeover discussions which now seem to be coming to a conclusion—and I understand that Friday is the final day for shareholders in Patrick to accept the offer of Toll and to transfer their shares to Toll for the arrangements currently on the table—one wonders what may happen with that carrier. I would not want to make any reflection on Virgin Blue in terms of its operation here in Australia. It is a very professional operation. I regularly fly in their aircraft from Launceston and from other parts of the country as their service from time to time provides the best option. I merely highlight the circumstances of Virgin Blue, their arrangements with Pacific Blue, the Pacific route arrangements and what might occur there, and the possibility that airlines based in New Zealand and connected with Australian based airlines will take advantage of these arrangements and of what the government has suggested they might do—give a Virgin Blue owned operation access to the Pacific route when they have refused access by the Singapore Airlines operation. The Pacific route is Australia to Los Angeles from one of the eastern Australian ports. Sydney was the port of preference rather than the port of Adelaide—it was certainly not Perth.

I wonder what would occur were the government confronted with that option after the passage of this legislation and what impact that would have on the nature of aviation operations in this country. How many jobs that the government expects to remain here would actually migrate to New Zealand if it cost less for a carrier to operate in New Zealand? Who knows what airlines will seek to operate in this country in the future? More importantly, who knows what airlines will seek to register in New Zealand and then seek under these arrangements to be able to operate in Australia?

If we pass this legislation, what we are saying is that the awarding of an air operation certificate to an airline in New Zealand will be accepted as effectively the awarding of the same certificate by the Civil Aviation Safety Authority in Australia and that the airline will be able to fly here. That potentially will mean that certain aircraft based in New Zealand will be able to operate in Australia without having gone through any of the regulatory checks that we require. I do not know that there is anything in this legislation that requires New Zealand to harmonise its operations with Australia, despite what the New Zealand Civil Aviation Safety Authority had to say. That will be a matter for their parliament and for their executive government.

It also does not, as I understand it, oblige the New Zealand government to not change the existing arrangement. I suspect that if there were a change and we wanted to modify the arrangements with New Zealand then that would require us to change this legislation, although there may be some regulation under this legislation that would allow us to do so without changing the legislation. Those matters are also matters of concern which this parliament should give consideration to when it is considering passing this legislation. We are very concerned about this legislation. We believe that this is legislation which should not pass this parliament. If it does, we are very concerned about the impact on Australia’s aviation safety regime for the future.