Sydney – The
International Air Transport Association (IATA) has called for urgent policy
attention to infrastructure and taxation issues to ensure the continued
development of aviation connectivity in Australia.
“Aviation has always played a key role in Australia. It binds the continent
together and connects the island to its major trading partners. Combined
with tourism, aviation supports over 6% of Australia’s GDP and 7.4% of the
workforce. That’s A$75 billion in business and 800,000 jobs. There is a lot at
stake and we need to get the policies right. Infrastructure and taxation are at
the top of the list,” said Tony Tyler, IATA’s Director General and CEO, in an
address to the National Aviation Press Club in Sydney.
Infrastructure
IATA urged the government to bring clarity to the future development of Australia’s hub capacity by making a decision on
the construction of a second airport for Sydney.
“At some point, Sydney
airport will reach its maximum potential. Even Sydney Airport’s
draft master plan acknowledges that. We have about two decades to select a
site, sort out all of the necessary approvals, acquire the land, upgrade
surface transport, get the airport built, and, of course figure out how to pay
for it all. That is not a lot of time for such a mammoth and important
project,” said Tyler.
Sydney Airport had published its draft master
plan which shows that it can accommodate a doubling of traffic by 2033. Sydney is Australia’s
major aviation hub and the busiest airport in the Southern hemisphere.
“Australia needs to do
business with Asia. But that’s going to be
difficult if it does not have the airport hub capacity to facilitate the needed
connectivity,” said Tyler.
He noted that major new aviation infrastructure developments have taken place
across Asia in the last two decades - new terminals in Singapore and Taipei,
new runways and terminals in Tokyo and Delhi; and whole new airports in
Seoul, Osaka, Nagoya, Hong Kong, Bangkok and Kuala Lumpur—and a massive airport
construction program across China.
“Further procrastination will only lead to missed opportunities for economic
growth. The challenge is to break out of the endless cycle of studies, make a
decision and get on with it,” said Tyler.
IATA also expressed concern for plans to pre-finance capacity expansion at Brisbane. “We would not
consider pre-financing for other major infrastructure projects. Imagine trying
to charge users of an existing secondary road for a super highway the benefit
of which others will eventually enjoy. You couldn’t do it. Not only is this
common-sense, but the concept is embedded in principles for infrastructure
development agreed through the International Civil Aviation Organization
(ICAO). The government needs to take a firmer stance in encouraging the airport
to align its plans with ICAO principles,” said Tyler.
Taxation
Tyler also
called on the government to reconsider the economic damage being done by the
Passenger Movement Charge (PMC). The PMC was originally designed to fund Australia’s
border agencies, including customs and border protection, quarantine and
immigration. Last year, it was increased to A$55 per passenger which
exceed the cost of funding these agencies. It is estimated that about
A$800 million will be collected in the 2012-2013 fiscal year.
“The PMC is effectively a tax that adds about 3.5% to the cost of travel from Australia. If
it were removed we would expect a 2.5% boost to traffic. That would add A$1.7
billion to the Australian economy and generate some 17,000 jobs. So the
Australian economy has more to gain from removing the PMC than from keeping it
in place,” said Tyler, who referred to a new IATA study on the economic
benefits of abolishing the PMC.
“This illustrates the critical importance of thorough cost-benefit analysis for
all policy decisions. I urge the government to re-evaluate the overall economic
impact of making connectivity more expensive than it needs to be,” said Tyler.
