Lyn Allison (Victoria, Australian Democrats) Share this | Hansard source

I rise to speak on the Civil Aviation Legislation Amendment (Mutual Recognition with New Zealand) Bill 2005 [2006]. This is an important piece of legislation that deals with the safety of the aviation industry, the safety of those working in the industry and the safety of the travelling public in general. Because of Australia’s geographic size and its distance from many countries, Australians are heavily dependent on having a safe and efficient aviation industry. The safety of air travel has become even more of a focus in the wake of the tragic events of 11 September 2001.

This is the second time the government has attempted to bring in mutual recognition provisions for the aviation industry and the second time that the sector has raised concerns about what is being proposed. It is also the second time that this government has decided to ignore those concerns. In broad terms, mutual recognition will mean that aviation safety certificates issued to eligible aviation organisations in one country will be recognised for use in the other. On the face of it, this seems like a sensible decision to reduce administrative costs but in reality what this legislation will do is make airlines compete on safety costs, and that means that we will see a race to the bottom in terms of safety standards, in our view. It will be a race in which the travelling public and those working on planes will be the losers as their lives are put at higher risk due to cost-cutting measures.

The government has argued that the New Zealand and Australian safety legislation is equivalent and therefore there is no risk in allowing mutual recognition. The government has suggested that because both countries have consistently met the International Civil Aviation Organisation safety standards there is no difference in safety standards. But, as the Australian Federation of Air Pilots points out:

ICAO provides a minimum position—in effect, the lowest common safety benchmark on a global basis. Aviation safety in Australia traditionally has been about establishing and maintaining margins of safety over and above the minimum standards.

What the government is implicitly suggesting is that Australia no longer has to maintain these higher standards, that the lower standards, the minimum standards, are in fact good enough.

As was pointed out during the inquiry into this bill, Australia and New Zealand have different standards in some very important areas. One that has been highlighted is the very different requirements in the area of the required ratio of cabin crew to passengers, and this is a very important element of aircraft safety. Research undertaken by Professor Galea at the Fire Safety Research Faculty at Greenwich University’s School of Numerical Modelling has shown a clear correlation between higher crew ratios and more effective—that is, safer—aircraft evacuations. As was pointed out by the Flight Attendants Association of Australia, airline operators go to great lengths to compare Australia’s one to 36 crew to passenger ratio with that of America, Europe and New Zealand, which is one to 50 crew to seat ratio, to suggest that Australia’s ratio is too high.

Apart from the fact that they are actually comparing fundamentally different ratios, it is clear that airline management feel that a ratio of one to 36 crew to passengers is not necessary. In evidence presented to the inquiry, the head of safety systems from Virgin Blue airlines indicated that as far as the airline management was concerned, four flight attendants on all of its aircraft was all that was necessary for safety. He went on to say:

The presence of extra flight attendants carried to meet the required ratio of one to 36 is not considered from a safety perspective.

Once airlines are operating in Australia that are able to carry fewer staff, how long will it be before other airlines with attitudes like that start pushing for fewer staff on their flights? When a New Zealand company can operate an identical aircraft to an Australian company but have one fewer cabin crew member, why would the Australian company not push to be able to do the same? The acting manager of corporate relations at CASA told the committee looking into the bill:

We have received word from the airlines that at some time they will be looking to come to CASA with a safety case to demonstrate whether changes—

in relation to cabin crew to passenger ratios—

are required. CASA has responded by saying that, while at this stage we have not made any moves to change the 1:36 ratio, we will look at safety cases if they are presented to us.

How long after this legislation comes in will it be before the airlines are bringing forward their calls for changes, and how long will the government resist the argument that will inevitably be put by Australian companies that New Zealand companies have a commercial advantage so Australian standards should be lowered to allow us to compete on an equal playing field? Virgin Blue acknowledges that the difference in cabin crew ratios between the two countries:

... does result, potentially, in a less than level playing field in both countries, with operators in Australia exposed to a significant cost penalty.

Cabin to crew ratios are not the only difference between the two countries that has the potential to impact on safety. The Flight Attendants Association noted that New Zealand does not have cabin safety specialists within the standards division of their equivalent of CASA—CAANZ—or specialist cabin safety auditors within the CAANZ compliance division. Surely this diminishes the New Zealand regulator’s ability to provide an equivalent level of oversight to that currently undertaken in Australia by CASA.

In the short term we will have a two-tiered safety system. Those people who can afford the higher prices that will be associated with the airlines with the higher safety standards will get the high standards, and those who can only afford the cheaper tickets will have to accept the higher level of risk. In the words of the flight attendants:

What we could have ... is an institutionalised system with one level of safety for lower cost foreign operators operating within our country ... Secondly, you would have a higher level of safety if you chose to fly with a main line Australian carrier operating to Australian standards.

But in the long term, all Australians will have to accept a high level of risk within the Australian aviation industry because of the downward pressure on standards in order to save costs.

The explanatory memorandum estimates the value of mutual recognition to be $1,000 for every average Australian family. Given the choice, I think that these families would prefer to maintain the higher levels of safety. It is not only safety that will be compromised under the new system, however. This legislation simplifies the ability of airline operators to transfer aircraft operations between Australia and New Zealand and this may well encourage operators to shift business to whichever country provides greater cost-saving measures, with a potential job loss from the Australian airline industry.

The aviation market is highly competitive. There have been dramatic changes in the nature of the industry since September 11, with a range of companies going bankrupt, collapsing—such as occurred with Ansett—or merging. That means that airlines now operate in a very tough competitive environment not only domestically but also internationally. Of course, airlines have experienced additional costs as a result of new regulations governing airline security since September 11. It is not surprising then that airlines will look for ways to reduce costs and save money. The flight attendants pointed out that this legislation may act to encourage operators to shift businesses to the country that has more viable cost-saving measures. They said:

The airlines now have started employing overseas. Qantas has a base in New Zealand of international flight attendants who operate under vastly lower conditions than their Australian counterparts. They have set up subsidiary airlines in New Zealand, such as Jetconnect, and there is evidence that jobs that would normally have gone to young Australians are now moving overseas and particularly to New Zealand.

The Australian Federation of Air Pilots also pointed out that Virgin Blue established its own company within New Zealand called Pacific Blue. Pacific Blue engages its pilots through a contractor at a substantially lower rate of pay than Virgin Blue. So this bill will not only risk the flying public’s safety but also risk jobs. The report by the committee itself recognises this. The report says:

... it is inevitable that the proposed legislation will encourage Australian operators to either reduce standards of employment or employment opportunities for cabin crew and pilots or encourage operators to move offshore. The Committee believes that this may not be in the best interests of the industry or the travelling public, particularly if it results in the reduction of standards of safety Australian passengers enjoy.

So I think that it is not enough for the government to say, as they did in the report into the earlier version of this bill, that after 12 months of operation of the new system an assessment of the safety standards of airlines operating in Australia should be conducted. The Democrats say that the government has a duty of care to prove that the new system will not reduce safety levels before they introduce change, not wait and see how it all goes. If a privately owned company said that they were going to introduce a new safety system without investigating impacts on safety prior to introducing it, the Australian community would be rightly outraged. Yet that is exactly what the government is proposing to do with this legislation. The explanatory memorandum for the bill states:

CASA has advised that an analysis of the safety systems has been conducted and both sides are confident that aviation can inter-operate safely in the form being considered.

It goes on to say:

There has been no detailed analysis of accidents or incidents, however as noted above, the two countries are considered to have comparable records, particularly in relation to larger capacity aircraft.

Unfortunately, details of CASA’s analysis have not been made publicly available so it is not possible for anyone to examine their processes or conclusions to determine whether this is a reliable assessment of the situation. All we know about that examination is that it did not look at accidents or incidents. I would ask: how can any examination of the safety impact of mutual recognition not look at airline accidents and incidents? How can the public possibly be confident that CASA’s assessment is reliable when it is not open to evaluation or critique? And, of course, there has been no examination of the possible job losses that might result from the introduction of the legislation despite calls for this in the dissenting report when the earlier version of the bill was considered by the committee in 2004.

We have now had two inquiries that have heard evidence from the aviation industry professionals that there are serious concerns about the impact of this legislation. But the government is powering ahead regardless without undertaking any research into the likely outcomes of introducing the new regime. The government botched the National Airspace System back in 2004. That was another example where the government ignored industry warnings about the inadequacies of the system from the start and it is a great pity that the government has not learned from that mistake. The Democrats will not be supporting the bill but we will be moving an amendment that delays the bill coming into effect until the government has conducted a comparative assessment of the airline safety systems operating in Australia and in New Zealand.

Debate interrupted.