Dean Smith (WA, Liberal Party, Shadow Assistant Minister for Competition, Charities and Treasury) Share this | Link to this | Hansard source

I present the explanatory memorandum relating to the bill and move:

That this bill be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

The aviation sector is one of the most concentrated in the Australian economy, around 94% controlled by QANTAS and Virgin Australia.

The result is insufficient competition relative to the requirements of Australian travellers, often leading to high ticket prices, lack of choice, and, in some instances, poor reliability and customer service.

There are also legitimate and ongoing concerns regarding the level of transparency that can exist in a duopolistic environment such as this, including the relationship between the major airlines and government—something which has attracted considerable and warranted attention in recent weeks.

Under the Competition and Consumer (Price Monitoring—Domestic Air Passenger Transport Direction 2020, the previous Coalition Government instigated an airline monitoring regime by the Australian Competition and Consumer Commission (ACCC).

This three-year regime, which ran from June 2020 to June 2023, monitored prices, costs and profits relating to the supply of domestic air passenger transport services, and of related goods and services.

The COVID-19 pandemic had a significantly negative impact on the Australian aviation sector, with Virgin Australia suspending its Tigerair services in March 2020 and entering voluntary administration the following month.

The monitoring regime was intended by the previous Coalition Government to identify anti-competitive behaviour in what was a rapidly changing sector, and one in which the interests of consumers required enhanced protection.

As Australia emerged from the pandemic, the aviation sector followed, with Virgin coming out of administration, expanded Regional Express (REX) services and the arrival of Bonza.

However, the concentrated makeup of the sector, and current issues, mean the aims of the original monitoring regime remain as current as when they were first implemented.

The ACCC noted in its final Airline Competition in Australia Report from June 2023 that "A further direction to the ACCC would provide continued transparency and scrutiny of the industry at a time when new and expanding airlines are still trying to establish themselves."

That Report also observes that "…a lack of effective competition is a key reason why the industry has generally underperformed in terms of meeting the needs of both the travelling public and the parts of the economy that rely on domestic air travel."

Despite these findings, the Albanese Government has not chosen to continue the monitoring.

The Coalition believes this decision comes at the expense of the aviation sector and those it services, which is why it is introducing the Competition and Consumer Amendment (Continuing ACCC Monitoring of Domestic Airline Competition) Bill 2023 (the Bill).

The Bill largely reproduces the 2020 Direction and resumes the monitoring regime for a further three years.

The ACCC is required to provide a monitoring report to the relevant Minister at least once a quarter, and this report is also to be published on the ACCC's website and tabled in Parliament. Commercial confidentiality will continue to be respected.

The Coalition notes there are several factors that more than justify reinstating the monitoring regime at this time.

Australian households are battling a severe cost of living crisis, with rising mortgage, rent and utilities expenses meaning cheaper ticket prices are urgently needed by many.

After some uncertainty, the Albanese Government has confirmed the aviation sector will be included in its upcoming Competition Review, but it is yet to provide details of when in the Review process it will be considered or how it will be prioritised against other sectors.

Finally, there has been a lack of transparency surrounding recent dealings between the Government and QANTAS on additional Qatar Airways flights into Australia that ultimately resulted in a beneficial decision for QANTAS at the expense of aviation sector competition.

Although this concerned international services, it nevertheless confirms the need for independent and comprehensive scrutiny of the sector by the competition watchdog.

Australian families and businesses deserve the cheapest, most flexible and reliable aviation sector in the world, and this can only be achieved if it is also the most competitive aviation sector in the world.

Resuming ACCC monitoring represents the most immediate and effective way to deliver this.

I commend the Bill to the Senate.

I seek leave to continue my remarks later.

Leave granted; debate adjourned.