[Peetwo]

Submission 66 & 67 - Enough Already! 

Via McDolittle's McIrrelevant GA Inquiry webpage (administered at a price tag of -  ):

66 Mr Mark Newton (PDF 195 KB)
67 Name Withheld (PDF 3474 KB)

IMO Mark Newton's excellent but lengthy (21 page) submission provides the perfect final footnote to the McDolittle inquiry eg. :

Perverse incentives

The departmental headcount required to administer a regulation increases if the regulation is more
complex. What we have seen across the last 30 years is that the size of the airworthy Australian aircraft
fleet, the size of the industry it serves, the number of pilots, and the number of flight hours have all been
declining; And yet CASA’s budget and headcount keeps expanding. There is no reason for this, except for
the fact that the complexity of CASA’s administrative function is a direct outcome of CASA’s inability to
write clear and efficient regulations. The burgeoning size of the CASA bureaucracy needed to regulate a
declining industry is a warning sign which should be taken a lot more seriously than it is.

As an example: Both CASA and the FAA administer medical certification for private pilots.

FAA regulations have, for many years, provided a system called “BasicMed” which enables private pilots
to manage their own medical fitness in consultation with their GP without involving FAA administrators.
While CASA has paid lip service to similar principles, its “Class 2 Basic” medical certification carries
enough operational limitations to make it impractical to use, so the lion’s share of medical certification for
Part 61 RPL and PPL holders requires mandatory oversight from a burgeoning (and, ofttimes, interfering)
CASA AVMED bureaucracy.

FAA and CASA both administer pilot medical certification systems which deliver roughly equivalent levels
of safety, but the method chosen by CASA to perform that function insists on the maintenance and funding
of a staff of expensive and prescriptive administrative specialists who apply expensive and time
consuming requirements on some of their applicants of a type and magnitude that the FAA has
successfully abandoned.

Applying that principle to other regulatory realms yields similar observations: CASA, when confronted with
a plethora of different ways of attaining a public policy outcome, tends to gravitate towards ones which
create cost and administrative complexity instead of ones which serve the same outcomes but minimize
its own involvement. Which is probably why CASA in 2021 has 832 employees, which is nearly one staff
member for every ten airworthy aircraft on their Australian civil aircraft register.

I invite the committee to consider the effect on the public purse if similar ratios applied to the safety
regulation of motor vehicles, boats or forklifts, and ask themselves what makes aviation so special?

CASA’s budget

Having established that CASA’s two primary functions are writing regulations and administering the
regulations it has written, we can now turn to a question of how much it costs.

To carry out those functions, CASA’s 2021-22 budget appropriation was $217 million4. Slightly over half of
that budget is funded by a levy on aviation fuel, the other half comes out of Commonwealth general
revenue.

When you compare CASA’s annual budget to the aviation industry statistics collected by the Department
of Transport and Regional Development’s BITRE program, you can see that CASA’s regulatory activities
cost the Australian economy more than $60 per flight hour5.

For comparison: CASA spends about as much per hour to regulate each flight hour as I spend on fuel
(which is the largest share of the total cost of aircraft ownership) and about twice as much per hour as I
spend on comprehensive aircraft insurance. Over the ten years I’ve owned my airplane, CASA has spent
more to regulate it than its entire resale value.

But that isn’t even a complete picture: Many of CASA’s administration functions are supplied on a cost
recovery basis6, meaning that its budget appropriation isn’t paying for all of them, and $60 per flight hour
is therefore an underestimate.

Evaluating CASA’s performance as a regulatory agency

The aims of The Act are stated in Section 3A:

The main object of this Act is to establish a regulatory framework for maintaining, enhancing and
promoting the safety of civil aviation, with particular emphasis on preventing aviation accidents and
incidents.

Has CASA’s regulatory framework “maintained, enhanced and promoted the safety of civil aviation?”
Happily, we don’t need to leave this to a question of opinion, because the Australian Transport Safety
Bureau (ATSB) maintains aviation safety statistics, particularly those concerned with aviation accidents
and incidents.

CASA has been pursuing a program of regulatory reform for more than three decades. If the resulting
regulations had been serving the purposes of the Act, we would be able to see a concomitant
improvement in ATSB accident statistics as new regulations “... maintaining, enhancing and promoting
the safety of civil aviation...” came into force..

That is: Unlike many other areas of government regulatory activity, where the actions of a regulatory
agency are quite distant from the metrics used to measure their efficacy, we possess detailed
independently maintained statistics which measure the degree to which CASA is supporting the aims of
the Civil Aviation Act. If they’re doing a good job of enhancing and promoting safety, we should be able to
directly observe trends in the ATSB’s safety occurrence data.

So: Can we?



The chart above depicts 7 ATSB incident, serious incident and accident statistics, including injuries and
deaths, for the ten years to year end 2019.

The ATSB report containing the infographic notes, in its Safety Summary section, that “... the number of
[general aviation] operational-related accidents and serious incidents, per year, increased over the period,”
with instructional flying as the main contributor. It should be noted that GA instructional flying is one of
the most heavily regulated activities in the aviation industry, with CASA involvement required at almost
every turn. CASR Part 61 flight crew licensing rules were launched during this timeframe, with new
Manuals of Standards and new CASA oversight.

The report also notes, later in the same section, “The accident rate for recreational flying decreased
between 2014 and 2018, with Recreational Aviation Australia (RAAus) registered aircraft having the
greatest contribution to this reduction.” RAAus aircraft over this timeframe were operating under the
auspices of their own operational manual via CASR exemptions, with virtually no CASA involvement or
oversight whatsoever.

Correlation is not causation, and we should recognize that one of the reasons these statistics are “noisy”
is because they rely on self-reporting obligations, but it can’t escape attention that the ATSB has observed
that the worst reduction in safety has occurred in places where CASA is involved the most, and the best
improvement in safety is in places where CASA is involved the least.

Putting that observation to one side: The other thing we can extract from ten years of ATSB data is that
there has been no notable improvement. The decade depicted here has included some of CASA’s most
significant regulatory reforms, including the culmination of more than 28 years of regulatory development
to deliver the redrafted CASR Part 61. The same timeframe featured the implementation of almost the
entire suite of maintenance regulations in the form of CASR Parts 42, 66, 145 and 147 in June 2011, under
development since 1988.

CASA has consumed uncounted hundreds of millions of dollars worth of Commonwealth funds over more
than three decades to produce those regulations, and the result is no obviously discernible improvement in
Australia’s aviation safety.

But it is actually worse than that, because the replacement regulations arising from their regulatory
reform program place a heavier burden on the industry they’re regulating.

As a consequence of Part 61 reform, I now require (and must pay for) two biannual flight reviews, where
previously I only needed one, because Part 61 treats day-VFR and night-VFR separately. This doubling of
compliance costs has added nothing to safety -- otherwise it’d be reflected in the infographic above -- but
it has obviously increased my cost of operations.

As a consequence of CASA’s CASR Part 66 airworthiness regulation reform, it is more difficult for me to
find LAMEs who can maintain my aircraft. I fly it from Sydney to Adelaide every year for its annual
inspection, because that’s how far I must travel to find appropriately qualified and experienced
maintenance personnel who specialize on my aircraft type. The population of LAMEs is ageing, with few
apprenticeships to provide for generational refresh, partly due to the overabundance of regulation and
licensing requirements. It’s notable that CASR Part 66 is arguably one of CASA’s most successful
regulatory reforms, but has nevertheless contributed to the steady decline of the entire industry.
Long-time CASA observers find this unsurprising.

CASA’s unceasing regulatory churn creates safety deficiencies. For example, if you gather any five pilots
into a room, you’ll get three different opinions on which is the correct radio frequency to use in the circuit
area of an uncharted airport in regional Australia because CASA has had three different positions on what
the right answer is over the last ten years, even though the underlying regulations have not changed. It’s
critically important that aircraft operating in the vicinity of each other can maintain radio communications
on the same frequency to facilitate “Alerted See and Avoid,” the primary means of mid-air collision
avoidance for VFR aircraft. It is baffling that a safety regulator should promote so much confusion about
such a fundamental requirement.

I find myself drawn to the inescapable conclusion that CASA simply isn’t very good at safety. This
shouldn’t be surprising, because their primary role isn’t safety, it’s regulatory drafting. That is what they do.

Given the extraordinary investment of money and talent into CASA’s regulatory reform program, it should
be possible to point to beneficial outcomes that serve the purpose of The Act. The fact that a safety
regulator can draw a $217 million budget appropriation and produce safety outcomes that aren’t
meaningfully different from those of ten years ago qualifies, in the opinion of the author, as an horrific
governance failure. It’s even worse if you go back further than ten years, and note accident trends in
Australia’s aviation industry have barely improved for half a century.

To summarize: If we’re paying CASA more than $60 per flight hour to regulate aviation safety, we should
see an improvement in aviation safety. That simply isn’t happening, and I’d like to know why we would be
any worse off if we wound the clock back to when CASA was less well funded: If pouring money and
expertise into CASA’s maw yields no identifiable safety improvements, shouldn’t we stop doing it?

MTF...P2