Darren Chester (Gippsland, National Party, Deputy Leader of the House) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

We all recognise the 21 Australian federal leased airports are critical infrastructure assets to our nation's productivity and economic growth. Since privatisation, airport lessee companies have invested significant capital, in the order of billions of dollars, and our airports currently directly employ over 120,000 people across Australia. This is a product of sound government policy and robust and strategic long-term planning by airport operators.

I am proud of the significant progress our airports have made since privatisation in delivering high-quality, economically beneficial investment decisions that respond positively to the current and future needs of the aviation industry and maximise the benefits to the Australian economy and communities.

I am particularly proud of the management of our airports and I recognise their efforts to better integrate and facilitate balanced and coherent planning outcomes with the state, territory and local governments who have responsibilities for planning and infrastructure provision in the areas surrounding our airports.

The government regulates planning and development on our airport sites through the Airports Act 1996. Under the Airports Act, all federal leased airports (except Mount Isa and Tenant Creek) are required to prepare a master plan every five years to establish a strategic direction for efficient and economic development at the airport as well as prepare major development plans for specific major on-airport developments.

The Airports Act sets out the required content of each plan and prescribes the public consultation process an airport lessee company must undertake prior to the plan being submitted for ministerial consideration. On average, the current legislative process requires an airport lessee company to expend significant resources and it can take the company two years on average to develop each plan.

Certain aspects of these processes are generating inefficient outcomes for industry as well as imposing unnecessary and onerous administrative and compliance costs. I also recognise on-airport developments are not immune to fluctuations in the marketplace and the economic climate.

The measures contained in this Airports Amendment Bill 2016 will fine-tune existing regulation and streamline policy intentions; it will not significantly shift policy or regulatory oversight. It reinforces the government's commitment to implement measures consistent with its deregulation and productivity agendas. The bill offers a more proportionate and efficiency based regulatory approach that reduces administrative and compliance costs for operators. It also creates regulatory certainty for industry and maintains appropriate and effective regulatory oversight.

This bill can be considered in three parts.

Part 1 proposes two key changes to the existing master plan process, the first of which is to implement a differential master plan cycle to enable federal leased airports, other than the major airports of Brisbane, Melbourne, Perth, and Sydney (Kingsford-Smith), to submit a master plan every eight years instead of every five years.

All federal leased airports are currently required to prepare a new master plan every five years irrespective of the operational, administrative, resourcing and financial capacity of individual airports or the level of impact their operations have on the community. Implementing an eight-year master plan cycle for secondary and general aviation airports, will minimise the impacts of these factors.

I also recognise that implementation time frames of various components of the master plan, including key airport infrastructure projects and other aviation and non-aviation developments, the ground transport plan and environment strategy, generally extend beyond the current five-year submission cycle. Therefore, this amendment aims to enable longer term planning at these secondary and general aviation airports.

It is worth noting that this amendment will not change the current situation for Sydney West airport; it will maintain a five-year cycle along with the other four major federal leased airports, once the airport is operational.

The second change is to mandate the inclusion of a new Australian Noise Exposure Forecast in each new master plan. While the Airports Act currently sets out an Australian Noise Exposure Forecast must be included in a master plan, it does not specify the Australian Noise Exposure Forecast must be renewed for each new plan.

The Australian Noise Exposure Forecast is a computer generated descriptor of aircraft noise widely used by state, territory, local governments and land use planning agencies for long-term planning and development arrangements around airport sites.

Therefore, the government maintains it is essential each new master plan contain the most up-to-date information to facilitate integrated, balanced and coherent planning outcomes and to inform incompatible and sensitive land uses from encroaching too close to airports.

Part 2 of the bill relates specifically to the monetary trigger for a major development plan.

Major development plans are required for each major airport development at federal leased airports, excluding Tennant Creek and Mount Isa. The Airports Act prescribes the circumstances which trigger a major development plan, including a monetary trigger, for certain development where the cost of construction exceeds $20 million.

In 2007 the Airports Act was amended to increase the monetary threshold from $10 million to $20 million due to ongoing increases in building costs since the act came into effect. Further increases to the construction activity costs and inflation since 2007 have resulted in an increased number of on-airport developments unnecessarily triggering the requirement for a major development plan.

Having regard to changes and conditions in the construction industry costs since 2007, and the economic and marketplace conditions, this bill proposes to increase the monetary threshold from $20 million to $35 million.

The bill also proposes the monetary threshold be reviewed and revised via legislative instrument every three years; having regard to changes in construction activity costs and associated indexations to ensure the monetary trigger accurately reflects and keeps pace with economic and marketplace conditions.

The bill proposes an additional legislative instrument to clarify the type of construction activities that should and should not be included when calculating if a project triggers the monetary threshold for a major development plan. For example, airports must include costs of base building fit-out in its calculations. Base building fit-out includes the internal cladding to finish off the base building prior to tenancy fit-out. However, the airport is not required to include tenant specific fit-outs and tenant supplied items. This instrument will remove any confusion for industry and ensure a consistent costing application across all federal leased airports.

Part 3 of the bill relates specifically to major development plan processes.

The first amendment imposes a new 15-business-day statutory decision time frame within which the Minister for Infrastructure and Transport must consider applications from airport lessee companies for reduced consultation periods for major development plans, with such applications deemed approved if there is no ministerial decision within this time frame.

This amendment will not impact the prescribed requirements for public consultation, however it will provide industry with certainty about the ministerial decision time frame, which could then be accounted for in the airport's planning process.

The final amendments proposed in this bill relate to substantial completion of an approved major development plan.

The Airports Act currently requires an approved major development plan to be substantially completed, unless otherwise specified in the approval, within a maximum of five years with only one option for the minister to extend the period by up to a further two years.

While the majority of approved major development plans are completed in the prescribed time frame, on rare occasions some larger or more complex developments, such as a new runway, may be subject to unforeseen delays and exceptional circumstances beyond airports' control. As a result, achieving a substantially complete status may require more than the standard seven-year time frame.

Where an airport is committed to substantially completing an approved major development plan, the airport should be given the opportunity to do so without the threat of legislative penalty. Therefore, the bill proposes to remove the restriction on the number of times the minister may extend the time frame for substantial completion.

In rare circumstances a project with an approved major development plan may become unviable due to exceptional and unforeseen circumstances beyond the airports' control. For such instances, where the project has not commenced, the bill proposes the airport can notify the minister of its intentions of not proceeding with the approved major development plan without the threat of legislative penalty.

These amendments recognise that airports would have already expended significant financial and administrative resources to have a major development plan approved. Therefore, these amendments will minimise regulatory uncertainty for airports and industry and ensure an efficient and streamlined process.

The bill also includes:

On a final note, I would like to acknowledge our airports are nationally significant infrastructure assets that keep us connected to each other and connect Australia to the world. They continue to play a major role in driving the economic development of Australia as enablers of commerce and trade, and the social and economic benefits they provide to all Australians should not be understated.

This bill is yet another example of this government consulting with and responding to the needs of industry to achieve better regulatory outcomes for all.

I commend the bill to the House.

Debate adjourned.