Annette Hurley (SA, Australian Labor Party) Share this | Hansard source

My colleagues have done a very good job of pointing out the problems that have arisen in the planning and development stage of airport development. State governments are unhappy about aspects of it, as are local governments. My colleagues have outlined very well the instances of that occurring right around Australia. It is certainly a large problem. In my home state of South Australia, it has been no less a problem.

The Premier of South Australia, Mike Rann, took a lead through the Council for the Australian Federation. As chair of that council, he wrote a letter to the Prime Minister asking for concerns about master-planning issues to be addressed. It highlights the fact that once again we have the federal government not seriously consulting with state governments. The federal government say they recognise state government issues; they say they recognise that state governments should have an input and yet it appears, as these problems have developed over the past years, that they have not really sat down and talked to them. Mike Rann’s letter states:

In 1997 the Council of Australian Governments signed a Heads of Agreement on Commonwealth/State Roles and Responsibilities for the Environment. The Agreement provides that tenants and persons undertaking activities on Commonwealth land would be subject to State environment and planning laws. Under the terms of the Agreement the only exception, in relation to airports, is aviation airspace management and on-ground airport management. The Council for the Australian Federation maintains that the Australian Government has not regulated the planning of non-aviation airport developments in a manner consistent with State Government planning regimes as required by the COAG Agreement. Departure from the Agreement has potential consequences for the States and Territories.

Once again, we see this problem between the federal government’s understanding of an agreement and the collective state governments’ understanding of an agreement. There is slippage between the federal government and the Commonwealth. There has been an understanding that there is a good reason for the Commonwealth government to have some control of what happens at our national airports, but it has been in the implementation—in the way that the federal government has handled representation—that problems have arisen.

Of course, it is not only about planning and development issues; there is also concern by state governments that the development of non-aviation uses in airports in the future may limit aviation uses. I know that this is one of the concerns in South Australia. If you are crowded in by non-aviation uses of airports then, when airports and airlines want to expand for aviation uses, there is no room left and no capacity within the airport. At an airport such as Adelaide airport this is a problem because it is a city airport surrounded by suburbs, crowded in by the development which exists currently, with very little room for expansion. Sydney would have exactly the same kind of problem.

The state government is very concerned that, if its tourism or freight opportunities expand to any extent, airport users may find themselves limited by other lessees. I happen to think that there has been some justification for greater use of airport land where that is appropriate. Where you have large tracts of land, and many of our airports are located within valuable city property, there is some justification for the use of that land for commercial and retail purposes. I have no great difficulty with that but it must be with the caveat that it is important that local and state governments should be reasonably comfortable with that development and that it should not impinge on future aviation uses of that airport.

Probably the third major problem that has arisen since privatisation of the airports has been pricing issues. These have been a matter of great concern in the past for users of airports, and the ACCC regularly monitors and reports on them. A report was done by the Productivity Commission on fees charged by airport lease owners for airport users. It was completed in December 2006 but has not yet been publicly released by the government. While not an issue for the Airports Amendment Bill 2006, pricing may be a matter of future concern.

There are two issues here. One is that airport owners now derive a significant part of their income from non-airport related activities—that is, from leasing and developing their land assets. As we further have the situation where the airport lessees derive a great deal of income from non-aviation uses, it is going to be harder and harder to achieve changes if there have been any decisions that non-aviation usage should be limited or reduced. The tourism industry, for example, is reportedly very happy with the latest results of privatisation in terms of the usage numbers being up and so on but again expresses concerns about non-aviation related uses.

Those three issues illustrate very well one of the problems of privatisation. It may well be justified but then we have the issue of how much control of these essential services government retains or loses versus how much certainty a business would have in leasing that business. The current lessees of those airports signed the contract under a certain number of conditions with a reasonable expectation of being able to go into the future with those conditions and to develop their business as they saw fit. If parliament is constantly making changes to their operating conditions then that becomes a severe problem for them, and one that would not have been envisaged under the privatisation process. I do not imagine that when the government privatised the airports it quite imagined the airport lessees would be as innovative and entrepreneurial in the leasing of the land as they have in fact been.

There is a lot of discussion about whether regulation should be heavy-handed or light-handed. In fact, I think it is much more easily perceived as complicated regulation versus clear regulation. Every time we come back into this parliament and pass another bill which puts on another layer of regulation or modifies regulation, it becomes a much more complicated form of regulation rather than clear regulation that is logical, consistent and persistent.

This is one of the clear problems of privatisation and one of the reasons the Labor Party at least enter into it very warily. It is not only for ideological reasons but because we see exactly these sorts of problems arising time after time. The government’s specifications do not always clearly see well into the future and lessees might develop more competition and innovation. There might be great advantages on the business side of the equation but there are things not envisaged by the government in the privatisation which need to be redressed. Then we run into this issue of how much the government should be interfering in the running of a business by a company which took out a contract at the time of the privatisation.

Certainly, we cannot talk about competition here because, as has been pointed out in previous speeches, most of the airports are monopolies. This may be another factor that is driving this debate. State governments, local governments and business competitors see this as a monopoly in terms of both the business that runs it and Commonwealth control. Therefore there is a perception that there is very little ability to influence the way the business operates.

I am fairly certain that the government’s amendments will not see the end of this criticism of planning and development regulations, noise issues and non-aviation development issues. That is a great pity because it means that the lessees of those airports will not have certainty in their businesses in the future. We may well come back into the parliament on this. Certainly, the state government bodies, as demonstrated by the letter from the Chair of the Council for the Australian Federation, Mike Rann, have some very clear concerns about problems into the future, and we have not seen the end of non-aviation airport development. Clearly, airports are crucial infrastructure in our country and it is important that the government get it right this time. Unfortunately, it appears that they have not found the solution to it in this instance.