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How many aircraft owners will be able to afford to keep their aircraft onLine with an aero club when the new aircraft registration tax is brought in on July 1, 1992?
New Taxes for Aircraft Owners
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New Tax on Aircraft Owners Another Blow to Aviation
Following on from the Government’s reneging on its agreement with the CAA to fund the so called Safety Contract, discussions have been taking place with industry to determine just how the shortfall should be funded.
The original agreement was that the Government would fully fund the cost of setting and monitoring compliance with safety standards, until 1995/6. This agreement was unilaterally scrapped by the Government in August 1990 when it announced that it would commence progressive cost recovery from November 1 1991 (subsequently amended to July 1 1992).
The full costs per annum are conjectured as being $74m although the CAA cannot substantiate this figure; $17m is understood to cover standing corporate overheads leaving something over $46m as the actual cost. The long and short of it is that a third of this amount ($15m) has to be recovered in 1992/93; all owners of aircraft on the Australian register will have to foot the bill. Of major significance though is that this amount will double the following year and treble the year after.
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A working party was set up last year chaired by the CAA, with representatives from the airlines, GA and the RFACA to try and determine an equitable formula for the imposition of the new tax on the three main areas, RPT, GA and the private owner. After the usual bids and counter bids the working party agreed to recommend the following charges:
Expected revenue $13. 5m pa.
In an interesting twist, privately owned ultralightsnot VH registered, balloons, and gliders will be exempt from this latest impost. Perhaps it was too hard and the return not worth while!
The new tax is in addition to increased operating charges already imposed by the CAA (aeronautical charts up from $2. 50 to $8. 50 as just one example) and the charges imposed by the FAC when that organisation was set up several years ago. As has been previously reported, challenges are being mounted to the FAC charges on the basis that they are not consitutional, unfair and discriminatory; however the matter is yet to be tested in court. Articles focusing on the legal aspects of this will be featured in coming issues of AA.
The immediate effects of the new aircraft registration tax will be another increase in costs right across the board. In the case of the airlines, this will be passed on to the fare paying customer who will have no option but to pay the higher fare. However, in the case of smaller operators, one cannot help but wonder whether this will be the final straw for some of them as the added costs deter those passengers who decide to opt for cheaper travel.
Finally, there is no question that there will be a drastic effect on those private owners who keep their aircraft “on line” with an aero club or flying school. They will be liable for $650pa as opposed to $250pa and in addition will have to carry the costs of a 100 hourly inspection instead of an annual maintenance check. The immediate effect of this will be a marked increase in the cost of private flying an possibly a reduction in the availability of training and hire aircraft.
On another tack, also simmering away is a proposal understood to be presently under consideration, that responsibility for the Australian aviation maintenance system should be devolved from the CAA to the individual airlines. C oncern is felt by theAustralian Licenced Aircraft Engineers Association that the CAN. s ability to monitor any suchchange to the present system is in serious doubt following drastic cuts in staff numbers. This particular matter will be followed with interest as the proposal becomes clearer and will be updated in future editions of this magazine.
In conclusion, one can’t help but feel that the “economic rationalists” are busy at work in the CAA trying to meet the Government’s demands to make the aviation industry carry all the costs of the country’s aviation infrastructure. What is being lost sight of is the fact that the wider community benefits from our aviation system, not just the owners of aircraft. The load should be borne by the community as well.
It is perhaps time to call a halt to the mad rush to achieve “affordable safety”; it would be wise to remember that in times of change, the pendulum never stops in the middle but often swings to the other side. The question must be put, does anyone in the Government/CAA have a real feel for just how far the system can be pushed down the present path before serious damage is done to the industry?
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