In 1995 it was the Keating Labor government that “paved the way” and put forward bills into Federal Parliament for the privatisation of the Federal Airports. Prime Minister Keating liked it as he regarded it as the Clayton's sell-off of Federal Airports being a sell-off you are having when you are not having a sell-off because, instead of selling the airports outright, what was being sold was a right to run airports for 50 years.
It was the Howard Government however that implemented nearly the same Labor legislation to privatise the Airports. The Howard Government reasons given for the sale in press releases related to sales was they were sold to pay for Labor’s debt.
Senator Woodley during the second reading debate stated the obvious question “why is the privatisation of airports necessary? The answer, of course, is that privatisation is not necessary”.
“Virtually all major airports overseas have been publicly owned and operated. That is a fact. Australians should be asking why we are deviating from this principle. The Democrats would argue that little, if any, micro-economic benefit will flow from the new airports regulatory regime.
We are told that competition will force down airport usage prices. The reality, in the case of airports, is that scope for competition between Sydney and Melbourne, for example, or between Sydney and Perth airports is very remote. In fact, it is a ridiculous proposition. Not only is disaggregation against the world best practice of keeping airports together in a network, it is also against the advice of the FAC.
It is hard to see how anyone could seriously believe that there could be significant competition between airports in Australia. Just to state it makes obvious how ridiculous such a proposition is. Clearly, people fly to destinations because of location attractions not just because of the airport. They are not going to fly to Melbourne in preference to Sydney because they like the airport lounge in Melbourne better. They fly to the destination because that is where they want to go. The proposition just leaves me speechless and that is unusual for me.
The merit for breaking up the very profitable FAC into a string of single airport companies is also not immediately evident. The FAC, and many industry observers, are not convinced. Like many other decisions of the previous government and even more so of this government this so-called reform is likely to impact even more negatively on regional Australia. Senator Collins was more eloquent than I could be about the effect on regional Australia.
As a monopoly, the consumer benefits of the private sector running airports are only as good as the regulator overseeing them. We need to ask some fundamental questions, beginning with: are our airports now inefficient? Will the private sector run them so much better that the regulators might be able to force them to deliver lower costs? The Democrats believe the answer is no.
Senator Woodley summarised the proposed regulatory environment “The Commonwealth will retain responsibility for land use, planning and building controls at the major airports. The Commonwealth will retain reserve powers to deal with demand management issues that may arise during the 50-year leases. The Airports Bill also sets out details of the post-leasing regulatory arrangements to apply to the airports.
The running of an airport every day requires a long string of decisions made in the public interest. It is impossible to divorce the commercial aspect of running an airport from the public policy aspect. For more than almost any other utility, the Democrats believe this is the case. In short, there is a good, long list of reasons why airports should stay in public hands and few reasons why they should be in private sector hands.
Despite the privatisation wave across the world, virtually no other country outside the lunacy of Margaret Thatcher's Great Britain has sold its airports, because other governments throughout the world realise that to do so is to get rid of a utility that is too vital to a community, to its commerce, to its quality of life and to its environment to be trusted to private sector hands. That is not to disparage the private sector, but it is to point out a few obvious things. There are no market forces to constrain the private sector on airports. Competition will be at the margins only
It is evident from a review of Hansard in relation to the introduction and passage of the Airports Bill 1996 and the Airports Transitional Bill 1996 that there was no parliamentary discussion about the Secondary Airports and barely a mention of General Aviation.
Copyright © 2023 General Aviation & Airports Association Incorporated - All Rights Reserved.
In Unity
We use cookies to analyze website traffic and optimize your website experience. By accepting our use of cookies, your data will be aggregated with all other user data.