Sky News live

Interview

PFI004/2017

17 February 2017

Topics: Western Sydney Airport

Ashleigh Gillon: Welcome back to NewsDay. We’re returning now to federal politics, and joining me live from Sydney is the Minister for Urban Infrastructure, Paul Fletcher. Mr Fletcher, good to speak with you, thank you for joining us. Firstly, I’m keen for your thoughts on your Coalition colleague George Christensen. He’s threatening again to leave the Government and go out on his own as an independent. A Nationals MP I spoke with earlier today described him as the boy who cries wolf—would you agree with that analysis, or could Mr Christensen be serious this time?

Paul Fletcher: Look, George Christensen is a valued colleague. He’s an effective advocate for the people of Dawson, the seat that he represents in the House of Representatives. As Christopher Pyne, Leader of the House, said this morning, this story is just a beat up.

Ashleigh Gillon: Is it really a beat up, though? Because Mr Christensen hasn’t denied that he actually wrote a resignation letter, he just hasn’t sent it.

Paul Fletcher: George is a valued member of the team, he’s doing a good job of representing the people of Dawson in the House of Representatives, and this story is really a bit of a beat up.

Ashleigh Gillon: Well again, we’re pretty sure that this story is very accurate in terms of he actually sat down and wrote a resignation letter, so I think it’s a bit unfair to be labelling it as a beat up. Is it compounding, do you think, the view that there is this weakness within the Coalition? After all, we saw the loss of Cory Bernardi last week, again George Christensen; it’s not the first time he’s threatened this, he did it over the backpacker tax last year. Last week he did threaten over this sugar issue as well, and it’s come up again today.

Paul Fletcher: Ashleigh, you talk about weakness; I’ll tell you where there’s a weakness—it’s on the Labor side. You’ve got a leader in Bill Shorten who says one thing in Melbourne, another thing in Canberra. You’ve got Labor talking about a renewable energy target of 50 per cent. They’ve got no idea how they deliver on it. We’ve seen in South Australia with the South Australian Labor Government the consequences when you don’t manage energy policy. And they can’t keep the lights on, and yet federal Labor seems to be planning to go down the same path. So we in the Coalition are focussed on policy outcomes for the Australian people, including making sure that energy is reliable and affordable, something that Labor seems to have completely lost the plot on.

Ashleigh Gillon: Okay, well it’s clear that you don’t want to talk about George Christensen, pivoting from a question about him and Cory Bernardi to the renewable energy target, so let’s just move on and look at your portfolio. I am keen to get your reaction to Sydney Airport’s declaration yesterday that the second airport is commercially unviable without substantial Government support. What, if any, material support is the Government offering Sydney Airport to get this project off the ground?

Paul Fletcher: Well maybe if I can start with a bit of context, Ashleigh. As you know, the Coalition Government in 2014 committed to proceeding with a second Sydney airport—Western Sydney Airport at Badgerys Creek. After more than 30 years of indecision a decision has been taken. There’s 1700 hectares of land at Badgerys Creek, and we are getting on with building this airport so it will be ready to open in 2026. Now, there’s a number of steps that have to happen, including regulatory approval through the declaration of the airport plan, getting an environmental impact statement. All of that was done late last year, so some important steps achieved.

We also issued what’s called a notice of intention to Sydney Airport Corporation. Now, Sydney Airport Corporation is the parent of Kingsford Smith Airport; as the company that operates that airport it has what’s called a right of first refusal. That means they’ve got a legal right to be given the first opportunity to build Western Sydney Airport, and so the terms that the Federal Government has offered to Sydney Airport Corporation are set out in that 1000 page plus notice of intention that was issued to Sydney Airport Corporation just before Christmas. It’s now a matter for them. The ball’s in their court. They need to consider the terms of that offer and decide whether they want to take it up, in which case they will build and operate it. It’s very clear, very straightforward.

The legal position is very straightforward. But if they choose not to take up that offer, then the Commonwealth is free to build the airport itself, or the Commonwealth Government can go to another private sector operator on the same terms as were offered to Sydney Airport Corporation. Now, Sydney Airport Corporation has until 8 May to decide how it wants to respond to the notice of intention, and I was pleased to see the chief executive of Sydney Airport Corporation, Kerrie Mather, say yesterday that the company is seeking to meet that timetable that the Commonwealth Government has set.

Ashleigh Gillon: Okay, so if you do need to go to plan B and Sydney Airport decides not to go ahead with this, would that actually be your preferred outcome? Would you rather the Government had the opportunity to develop and operate the airport itself?

Paul Fletcher: Well let me make one thing very clear: Sydney Airport Corporation has the legal right to build and operate this airport if it chooses to take up that role.

Ashleigh Gillon: Sure, but if it doesn’t choose to take up that, would the Government be happy then to take this on itself, or do you think that the more likely outcome would be that other companies in the private sector would come forward and be keen to develop the airport?

Paul Fletcher: Well the Government certainly has the right to, and we stand ready to in the circumstances where Sydney Airport Corporation chooses not to take up this right.

Ashleigh Gillon: Sure, but is that a desirable outcome though for the Government?

Paul Fletcher: We absolutely stand ready to do that. We absolutely stand ready to do that, but the point I make again is it’s in the hands of Sydney Airport Corporation. If it chooses to take up the right, it will build and operate. If it doesn’t, then we stand ready to do so, and of course we do have the right to go out to the private sector to put the same terms to other parties. But what is important is that we have an airport that can be open and operating by 2026. It will deliver some 9000 jobs by 2031; it will be closer for about two million people to go to Badgerys Creek, to go to Western Sydney Airport than to go to Kingsford Smith Airport.

So as Sydney grows, it’s very important that we have additional aviation capacity. Indeed, that was the finding of the 2012 study commissioned under the previous Government into the aviation needs of Sydney, which said that by 2027 Kingsford Smith Airport will run out of available slots, and by the late 2030s it will run out of capacity, even if you engage in what’s called upgauging, which is where you put a bigger aircraft into a slot presently used by smaller aircraft. So it is very important that we provide this additional aviation capacity for Sydney and for Western Sydney. It’s very important for jobs and economic growth in Western Sydney, because what’s clear from around the world is that airports are major job generators and major attractors of other businesses to come and locate near to the airport.

Ashleigh Gillon: Sure, okay. So you’re saying that this is going to be built by 2026 one way or the other?

Paul Fletcher: Absolutely it will be.

Ashleigh Gillon: Has there been any interest at this stage from any other private sector companies who are actually wanting to go down that path?

Paul Fletcher: Look, certainly there is wide awareness of this opportunity. The Government has discussions with a range of players, but I should also say that we absolutely stand ready to do it ourselves.

Ashleigh Gillon: Sure, so has there been any formal expressions of interest in doing this if Sydney Airport bows out?

Paul Fletcher: Well it’s really premature for there to be such formal expressions of interest, because at this stage the ball is in Sydney Airport’s court. The ball is in Sydney Airport’s court. If it chooses to take up its right of first refusal, if it chooses to accept the notice of intention, Sydney Airport Corporation will build and operate this airport. If it chooses not to, the Government stands ready to do it, and of course we do have the right to go to other private sector players.

Ashleigh Gillon: So when you say the Government’s ready to do that, and standing by ready to do this, is that actually your preference? What is the best thing for the country here? Is this something that should be in the Government’s hands, or do you think we would be better served to have a private sector take over the reins?

Paul Fletcher: Look, my preference, the Government’s preference, is to get an airport built and operating by 2026 and to comply with the legal obligations on the Government under the contract between the Government and Sydney Airport Corporation where it has a right of first refusal. So we’ve been very thorough, very precise about engaging with Sydney Airport Corporation. We’ve consulted with them extensively over the last couple of years. A thousand page plus of notice of intention was served on Sydney Airport Corporation just before Christmas; it is now with Sydney Airport Corporation to decide whether or not it wants to take up its right, whether or not it wants to accept the notice of intention. Kerrie Mather, the chief executive of Sydney Airport Corporation, made some comments about that yesterday, and I was pleased to see her say that Sydney Airport Corporation intends to be responding by 8 May, which is when the Government has said we want to see a response under the terms of the right of first refusal.

If Sydney Airport Corporation is substantially familiar with the terms that are being put to it, then it does have a period of four months, expiring on 8 May, to respond to us. And because of the two years of consultation, many, many meetings, many successive drafts of the documentation provided to Sydney Airport Corporation, they are substantially familiar with the terms that we’ve put to them in a formal sense just before Christmas. And so certainly the Government looks forward to the response from Sydney Airport Corporation. If they choose to take up their right, they will build and operate; if not, the Government is ready to do it ourselves. We have the capacity to do it. We are also free to offer the same terms to other private sector players, and there will be an airport built and operating by 2026—a lot of work going on in the Government to achieve that outcome.

Ashleigh Gillon: Alright, well we’re going to have to watch that space and see what Sydney Airport decides on that big decision in May. We’ll be watching that very closely. Paul Fletcher, appreciate your time. Thank you.

Paul Fletcher: Thanks Ashleigh.