[Peetwo]

Hansard out: Rural and Regional Affairs and Transport References Committee
03/03/2021 - Future of Australia's aviation sector, post COVID-19

Still sharp John Sharp - 

Well worth taking the time to watch, if for nothing else but the fact that you can watch a professional, politically astute, aviation subject matter expert spin his magic...    

Senator McDONALD: Does that support extend to regional airports?

Mr Sharp : It's an interesting question. Regional airports are now primarily owned by local councils. They were gifted to those local councils back in the 1980s, under the Keating government plan, and it was continued by the Howard government in its early period. Most of those councils were granted the airport, which was in Commonwealth ownership, and they were granted a lump of capital to go with it. This was supposed to maintain the airport into the future, but disappeared very quickly in most cases. There is an argument for governments assisting councils who own those airports in upgrading the airport, be it a new runway or a resurfacing of the runway or replacing the lights with new lights or some other upgraded capital works program.

Where you have to be careful is that some councils, not all, put the capital that has been given to them by the Commonwealth into a terminal or a runway. They use it to gold plate it. In other words, they build things that aren't necessary. They build things that people don't need, but the local council like to think looks good and makes them look good in the local community. They gold plate it. As a consequence of that, we have infrastructure which is not necessary. Somebody has to pay for the infrastructure. And so the council then uses the capital that has been given to them, that has been invested in the airport, as a reason to argue that the depreciation of that capital has to be added to the operating costs of the airport, and those operating costs of the airport therefore need to be covered by the regional airlines that operate to it.

There's one airport we fly to where the depreciation is over $2 million a year, and yet theoretically the council that owns that airport hasn't invested a cent in it—it was all given to them by governments—and yet they use the capital that's invested by grants and so forth to increase the depreciation bill, and then they run a policy of saying: 'Well, we're only trying to cover costs. If we can just recover costs that's all we want.' But those costs are indeed inflated, and that adds a considerable amount to the cost of our head taxes and that has to go into the cost of a ticket and that reduces the viability of regional airlines.

Also worth a watch, for much the same reasons, is the AIPA/ALAEA session:

Senator McDONALD: I'm interested in your experience, because it is the very story that you're telling that—I'm doing a general aviation inquiry, a separate inquiry to this one, because I'm desperately worried about how there are so few charters and mustering helicopters and planes for a whole range of reasons. And whilst that's not the big end, which is what you're a part of, you started—that was the throughput. I would imagine that it has made you a terrific pilot because you know how to fly, which is a little bit different to learning now. Anyway, that's a hobbyhorse of mine.

I do think a lot about this. I'm very, very concerned about all sectors, whether it will be engineers or pilots or GA or charter or midtiers or airlines. They all feed off each other in some way, and so it's important that, going forward, we do have a comprehensive plan for aviation. It's so important in a big country like ours. There is an aviation strategy paper that the department of infrastructure is working on. You've already said that, as the engineers, you haven't been invited to have input into that. What about the Pilots Association? Have you had input into the white paper strategy document? I just can't quite remember the exact name of it.

Capt. Jackson : Dick will talk to that.

Capt. MacKerras : Yes, we have. In fact, we attached our responses to that discussion paper as part of our contribution to this inquiry so that you had both of them.

Can I go back to your other point about incentivising people to start in aviation? I think one of the problems that has occurred, and Captain Butt has already referred to it, is that, back in the day, when I was a bit younger, pilots—and I think engineers as well—could get scholarships and other sorts of support measures, because their employers invested in their employees. What's happened now is that the employers have transferred all the costs of training to their employees, and that's why, as Captain Jackson was saying, it's becoming a rich person's game, because it's only the people who can afford to stump up that amount of money who can get into the game. We're cutting off a whole bunch of people, where, traditionally, there are some very smart, very capable and very dedicated people, who just don't have the financial resources to get into this sort of game. We've got to look at how that sort of financial support is provided. It goes to the heart of what Steve was talking about with apprentices.

The other thing that comes up is that we lobbied for years to get VET help extended into the pilot training or aviation training areas. We need to review that as well to make sure, as Teri O'Toole said, the support measures are targeted at the individual, not at rent-seeking companies who use them as a government revenue stream and get a whole bunch of people in on the basis of headcount and don't care whether they produce anything or not, so long as they've got money coming in from the government based on the number of students. I think these sorts of support payments need to be tied to the individual so that they're released to the supplier, on the basis of the person achieving a particular milestone, so that it doesn't become a free kick for people like Soar Aviation.

ACTING CHAIR ( Senator McDonald ): That's a point very well made. I'm looking at the secretariat meaningfully; we will take that on board—that, rather than it going to the company, it goes to the student. I think there are some parts there too—we've heard evidence from other places about costs of regulation amongst some of the flying schools that make the per hour cost to get through the initial stage so expensive.

Plus from yesterday's public hearing...

MTF...P2