Address to the Australian Airports Association National Conference
13 November 2018
Michael McCormack:…And to Guy Thompson and Caroline Wilkie at AAA, I acknowledge you too. I acknowledge also that we are on traditional country and Shannon, that would be the best welcome to country that I think I’ve ever heard and I’ve heard a lot of them. I’m sure that you would probably readily agree that that was just fantastic and certainly got a couple of [indistinct]. I think had they just gone straight to me, the insomniacs association would be ringing up for a copy of my speech so they could give it to their members. But Shannon, well done mate, that was just tremendous.
It is an absolute pleasure and a delight to be here this morning. I want to urge and encourage you to - I appreciate that the sponsors have been acknowledged, Brisbane Airport, CASA and Fulton Hogan - but I would really think that it would be well worth your while to go in the exhibition hall and to take advantage of those exhibitors. They come here at great expense, they help put on these conferences and you can learn a lot from what’s in and around the exhibition hall. They, like you, want a bigger and better and brighter industry. They, like you, want to make sure that aviation, that airports go ahead in the way that they should and they’re there to help you. They’re there to serve you and they’re there to make sure that this four day conference succeeds. And so please, give them your attention, see how they can help you and indeed, there might even be ways and means which you can help them as well.
I know an old mate of mine Bill, haven’t seen from newspaper days - he and I both know that probably most of the learnings at these sorts of conferences are done around the coffee stands, are done around the water cooler. The learnings that you take home from these conferences - most of it’s done outside and talking to somebody you may not know. So if there’s somebody there that you don’t know, reach out to them, swap business cards; that’s what these conferences are all about.
Later on today, I’ll become Acting Prime Minister with Scott Morrison going overseas. I’m going to be the Prime Minister the whole time through your four day conference, so feel safe and secure.
But look, it’s been 21 years since the Howard Government privatised Melbourne, Brisbane and Perth Airports and that was the first batch of federal airports to be privatised. You all recall what it was like back then, prior to that; I know most of you, if I look around, probably are younger than me, but I certainly recall going to some of those airports and some of the airports around the countryside, and really, the airport terminals were nothing more than old tin shacks. They were. I mean, that’s probably embellishing the story, but hey, I’m a politician, I’m allowed to embellish things. But certainly, they have changed for the better. Airports are new, big, bright, modern, clean. They are what we would expect. They are providing that customer service, that level of detail that we all expect as travellers, as commuters, as clients.
Passenger numbers are growing and they’re growing rapidly. Since privatisation in 1997 we’ve seen domestic and international passenger’s numbers grow in Australia from about 42 million to nearly 100 million in 2017-18 and that’s a remarkable achievement. So well done. Well done to you people for making that possible, for making that happen.
Airports are not just about the experience, they are vital to our Australian economy and to our wellbeing. The airport terminal is the gateway to Australia for those people who are visiting our country and for those of us who are coming home. And sometimes there’s nothing better than coming home, your trip overseas, and you really get to understand how great Australia is, how clean Australia is and how much our airports mean to us.
Through the movement of goods and people domestically and internationally, Australia’s aviation network added $15.9 billion to the national economy in 2017. The level of investment in airport infrastructure currently underway in Australia illustrates the benefit of fostering a competitive marketplace. The Liberal and Nationals Government strongly supports competition and growth in the aviation sector and we understand the importance of doing so for the community and for our economy. Indeed, we want to see this industry grow even further, running more efficiently and more effectively. And we know, with your help, with your entrepreneurial spirit, with your can-do attitude, that will happen.
Our airports are vital for regional economies. I’m an MP from a regional area, from Wagga Wagga. I know how important, how vital our airport is. I know how important it is, going way back when unfortunately Ansett went under and it looked as though we weren’t going to have a regional airline coming into our town. It was only through Regional Express, their establishment - that airline got going and it’s made for such a great difference to our town.
Airports allow Australia to benefit from the massive free trade agreements we’ve got with China, with South Korea, with Japan, more recently with Peru and of course, then there’s the Trans Pacific Partnership-11 with the $13 trillion opportunity for Australian business, for Australian farmers. And it’s helped made possible by having a good, efficient, aviation sector. Of course there’s more to come in the trade story.
Airports are a critical artery of connection to these markets. You know that, I know that and we need efficient airports, effective airports to make sure that we continue to have good trade relations with our near neighbours, and those not so near. The Australian Government understands the importance of these connections. One of the ways of ensuring that our airports are well positioned to best serve their market has been a policy of deregulation and private ownership. This process started way back, indeed in the 1950s, with the commencement of the Aerodrome Local Ownership Plan which over subsequent decades eventually led to the transfer of ownership and full financial responsibility for more than 240 airports to the local authorities. It culminated in the 1990s with the start of the long term leases for the then 21 airports owned and operated by the Australian Government.
I want to acknowledge the investments that you, the airports, have made to your sector, to your airports, to your infrastructure, to your communities, your cities, states, and to the nation. Airports are responding to the rapid growth in passenger numbers and passenger expectations by developing infrastructure now to meet the passenger demands of the future. Of course, the Australian Government continues to facilitate many of the investments that airports are indeed making. We’re doing this because we know that strategic infrastructure investment makes such a difference to our nation.
I just want to touch on a few:
Brisbane’s new runway project: Construction of the new parallel runway is underway and the new runway is expected to be operational in 2020. I was on ABC Radio this morning and they were excited about it; I was excited about it. I know you’re going to be excited about it, as we all should. It’s a $1.3 billion project which will deliver a 3.3 kilometre runway with 12 kilometres of associated taxiways. It’s exciting, it’s innovative; it shows Brisbane backing itself. Importantly, this project will provide around 675 jobs, 90 per cent of which are from South East Queensland. And if you didn’t really know it, one in seven Australians live in South East Queensland; one in seven. It’s a big stat, so that’s why it’s so important to make sure that Brisbane continues to be one of our greatest gateways to this nation.
In Victoria, Melbourne Airport proposed in its mid-2013 master plan the development of a new runway to meet predicted passenger growth from 64 million passengers by 2033 including the new parallel East West runway and extension of the existing East West runway. Now, we’re working with Melbourne Airport to acquire a number of land parcels required for the project. In June 2018, the Commonwealth acquired an additional 183 hectares of land from Melbourne Airport and immediately leased it back as part of the Melbourne Airport site. And we’re proceeding with the compulsory acquisition of the remaining road parcels to get that job done; it’s exciting too.
And of course, then there’s Perth new runway project. Perth Airport is another one expanding for the future and we welcome that. We’ve got that long haul trip to London being now undertaken by Qantas on the Dreamliner. But, moreover Perth Airport recently finished public consultation on its preliminary draft major development plan for a proposed 3,000 metre parallel runway that will allow simultaneous operation with the existing main runway; and that’s fantastic too.
And of course, a little closer to home, Sunshine Coast - the airport expansion project there. Sunshine Coast is booming. It is absolutely booming. We’ve identified that. We’re investing in rail to make sure that people have that experience where they can live on the Sunshine Coast and work in Brisbane and cut their travelling time by rail. It’s also important that we provide the aviation facilities as well, and support the Sunshine Coast Regional Council in delivering the $347 million Sunshine Coast Airport Expansion project. And a new wider runway is going to accommodate aircraft operating longer international routes. It’s a fantastic investment in their region. They’ve got that leap of faith, they’re taking it, and I say: well done to them.
Sydney Gateways: Of course the investment that you, the airports, make in infrastructure allows the Australian Government to better connect, make infrastructure - the sort of infrastructure that we need, want, expect and demand to and from airports…but making those airport investments work so much better. One example of this, a great example of this, is the $2.6 billion Sydney Gateway project. Sydney Gateway is an Australian and New South Wales Government initiative to improve road and rail access to Sydney Airport, to Mascot and the Port Botany area. It will give local roads back to the local community and ease congestion. I know congestion is a big, big factor in all our capital cities but certainly in Brisbane, Melbourne, and Sydney. We want to ease congestion and make journeys to and from Mascot easier, faster and safer. And I’m sure that it will make life easy for 31,000 people who work at Sydney Airport. The Gateway will pass through Sydney Airport land to the north of the airport and create direct motorway access for the domestic and international terminal precincts. So, that’s fantastic. And of course, not to mention the new airport in Western Sydney that we’re getting on: Talked about it for decades; we’re now getting on with building it.
The Hobart International Airport runway extension is an exciting initiative. In Tassie, we’ve invested $38 million in funding assistance for the extension of the Hobart International Airport runway and associated works. The investment is part of a $100 million redevelopment of the Hobart Airport Precinct. Tassie is going ahead. The last four years under the Will Hodgman Government…it’s been amazing, the transformation Tasmania has taken. And if you haven’t had the opportunity to visit there in recent times, I’d recommend that you do so and fly in to Hobart Airport. There’s things really, really happening there. So, well done and we look forward to seeing that progress as time goes on.
Now, of course, we’ve got the Western Sydney Airport, as I previously mentioned, and the airport’s CEO Graham Millett has described it as Australia’s first digital airport. It’s a greenfield project; there are significant opportunities to incorporate the latest technology in the design of that new facility. The use of smart technology will streamline a passenger’s journey from kerb to gate, for example through remote bag drop and automated passport control, such as the SmartGate system. This high-tech airport’s going to transform the region through some $20 billion of public investment in delivering infrastructure that will shape a third new city in Sydney dependent on the airport as an economic hub and aerotropolis.
It’s exciting times. Certainly the Federal Government is backing it all the way. As I say, it’s been talked about for decades - we’re getting on and we’re now doing it.
Capital investment in regional airports: My colleague Andrew Broad I know is going to address the conference and talk to you more about regional aviation but it would be remiss of me not to mention what the Australian Government is doing to support regional and remote aerodromes. Since the Government was elected in 2013 the Remote Airstrip Upgrade Programme has provided more than $30 million for 174 upgrade projects. Now, that mightn’t seem so much in the scheme of things, it mightn’t seem so much import when you talk the new Western Sydney Airport, when you talk about the Hobart, Brisbane, and exciting things we’re doing in Perth and Melbourne and elsewhere, but let me tell you: for those rural, regional, and particularly remote communities, it’s their lifeblood. The Royal Flying Doctor Service, I know, is especially thrilled at what we’re doing as far as that funding is concerned. But it can mean the difference between life and death for somebody in one of those communities. You can’t stress enough just how important that is for regional connectivity. I’m a big supporter, big believer of when our regions are strong, so too is our nation and whilst ever I have the breath in me I will continue to fight hard for better services for regional Australians but particularly for those regional communities which rely so heavily on those sorts of upgrades to their aerodromes.
Air service arrangements: There’s an unprecedented increase in capacity at major airports and it fits hand in glove with our Government’s objective in seeing the aviation industry’s market access expanded. It’s terrific news for the Australian economy; it’s particularly relevant to our trade and tourism interests. Our bilateral air services arrangements are the regulatory building blocks we need in place to facilitate international air services and ensure that we can continue future growth in those sectors. We now have air services arrangements in place with more than 100 economies. We continue to pursue further liberalisation with existing partners and establish arrangements with new markets because that’s important - if you don’t expand, you don’t grow as far as being an international destination.
Our efforts continue to bear fruit. In the wake of the open skies-style arrangements with China in December 2016, passenger numbers are booming and that means good things for our economy, good things for our local businesses - particularly our local small businesses. With 46 per cent of inbound tourism actually visiting a regional area - and it’s an interesting statistic - that means that those small businesses in those regional communities can benefit too. We’ve just updated air service arrangements with India, which were negotiated in June this year. These enable Australian airlines to operate unlimited services between Australia and the six major metropolitan airports in India, and for Indian airlines to operate unlimited services between India and six airports in Australia. Recent negotiations have also seen additional capacity entitlements agreed with The Philippines and with Fiji.
The Productivity Commission inquiry. The Australian Government wants the whole aviation industry to prosper for the benefit of all Australians and that’s why we have a Productivity Commission inquiry underway focused on the economic regulation of major airports. Whilst the aviation market has enjoyed considerable success, especially in recent years, recent negotiations between airports and airlines have proven, to say the least, challenging. Whilst of course the focus of the PC review is federally-leased airports, we do encourage all airports and airlines to continue to work closely together to achieve the best possible outcomes for all.
And one of those ways we can achieve efficiencies is by cutting red tape. I’d be delighted to receive an email from anybody in the room who thinks they have a way that we could even cut further through on red tape. As a Government, we like to tell the story that we’ve cut $5.8 billion worth of red tape from the Australian economy, but there’s more work to do - I acknowledge that - and if you’ve got ideas that could help, I’d love to see them.
In summary, we’ve seen new regulation and privatisation of the aviation sector. It has been and continues to be a good news story. It’s important that we test our assumptions in relation to how the sector is regulated through the Productivity Commission inquiry. We believe that airport privatisation has allowed greater investment from industry. I acknowledge the role that each and every one of you - from wherever you come, whether it’s overseas, whether it’s domestic - but I appreciate the work - the Government, moreover, appreciates the work that you do on behalf of airports, on behalf the aviation sector in general. I applaud your efforts; I acknowledge what you do.
Have a great conference and I’m sure that you will very much enjoy Brisbane and all that it has to offer.
Thank you very much.