CASA ‘cost’ recovery

Inconsistent decision-making, intimidation and simple bastardry are part of the modus operandi of CASA and its predecessors.

The very structure of CASA’s fee schedule invites sloth and inefficiency. The overwhelming number of fees that matter are on an hourly basis. Where is the incentive for CASA and its staff to be efficient? Without a fixed fee for a known deliverable there is no incentive to be efficient. The industry abounds with examples of the same simple task being costed at several thousands of dollars in one area office and less than one hundred in another.

So wrote my predecessor, Brian Candler, in 2005 in an article for Australian Aviation on the introduction of “user pays” for CASA regulatory services.

Looking at CASA’s latest round of consultation on regulatory services cost recovery, it is only too apparent that little has changed within CASA in the time since then. Far from introducing measures to promote efficiency gains, CASA still seems content with its “the industry owes us a living” mentality and has merely fiddled with hourly rates in order to recover its already unnecessarily high regulatory services costs.

This is not acceptable.

The economics of providing air services (scheduled airline, charter, freight and air ambulance) to rural and remote Australia are currently cause for serious concern, with many communities losing air services each year.

The imposition on industry of additional and unnecessarily high costs can only place more pressure on the viability of many more routes. This is hardly desirable from a national interest perspective, and is a course of action one would have thought should particularly be avoided in an election year.

The RAAA accepts that the Howard government has a mandate, granted by the electorate, to manage the budget effectively. While it would prefer that government funded regulatory services, it has no serious objection to a degree of cost recovery for regulatory services where there is value in the services provided.

However it strongly objects to its members being forced to pay for unnecessary, value-less and often counter-productive “regulatory services”.

In this case, it seems to us that government, by implementing a degree of cost recovery for regulatory services, may have been intending to try to force efficiency gains from CASA, which could then be expected to flow over into the publicly funded areas of CASA activity, with consequent savings to the public purse. The RAAA could agree with such an intent, but if this was, in fact, the government’s intention in this case, it appears that the strategy has failed.

Despite the sound safety outcome focused policies espoused by the CEO of CASA, it seems that CASA lacks the management structure and leadership skills needed to ensure that those policies are actually implemented down to district office level. In the case of this latest round of consultation on cost recovery, CASA appears to be merely fiddling with its former and very simplistic proposal based almost exclusively on fixed hourly rates, possibly in order to appear to be consulting, while doing little or nothing to meet the government’s actual expectations. The old story of rearranging the deck chairs while the Titanic sinks comes to mind.

The RAAA believes that this is not acceptable, and that industry has a right to expect a much more serious effort from CASA, involving a fundamental review of what CASA does and why, and some serious work on forcing a more realistic and efficient allocation of resources throughout the organisation.

This is after all what our members have had to do in their own businesses in order to survive. The ‘business as usual’ approach being taken by CASA in relation to regulatory services cost recovery is not, or should not be, an option in today’s difficult economic circumstances.

What is clearly required is a fundamental review of all regulatory services for cost/safety benefit and the removal of all unjustifiable “services”, followed by the determination of a set of fixed fees and delivery times for the remaining services.

Incentives in the form of additional fees and/or penalties should be provided to encourage efficiency within industry when applying for regulatory services, with similar incentives, in the form of penalties payable by CASA to operators, also provided to encourage CASA to deliver those services in a timely and cost effective manner.

This will not be an easy task, but it is an essential one if cost recovery is to remain a government objective.

Anything less is neither fair nor reasonable, and is not in the national interest. If CASA lacks either the will or the capability to make its regulatory service delivery safety outcome focused, fair, reasonable and cost effective, then clearly it is up to government to appoint an external agency to undertake the task. o Australian Aviation is proud to be the official supporting journal of the Regional Aviation Association of Australia. The views in this column are those of the RAAA, and not necessarily Australian Aviation’s.