Cutting red tape

The legislation currently specifies that the affected federally-leased airports are to submit a new master plan every five years, which is arguably an unreasonable imposition on industry. The AAA recommended that the current master plan submission cycle be extended to 10 years, with an option provided for the airport to conduct a review and update of the master plan at the five year point to reflect any substantial variations in circumstances.

Extending the requirement to submit a master plan every 10 years would be more reflective of the fact that airports are critical pieces of infrastructure, requiring substantial investment. The planning for development at airports usually extends beyond a five year period, which is evident at both major and smaller regional airports. Increasing the time between submitting master plans would also recognise the fact that many master plans (particularly those of capital city airports) can take up to two years to complete – effectively resulting in a three-year gap rather than five years. Moving to a 10-year master plan submission cycle would also more closely align the airport planning process with those of many local and state government planning authorities. Removing this unnecessary red tape will also result in millions of dollars of cost and resource savings for airports, with a single master plan for a major capital city airport often costing over $2 million.

In moving to a 10-year master plan submission process, the AAA and its members recognise the importance of continuity with each airport’s long-term planning objectivesand the importance of stakeholder engagement. It is for this reason that the AAA has recommended that airports be provided with an option to conduct a review and update of their master plan at the five-year point in the master plan cycle. The intention of this review would be to allow the airport an opportunity to update their master plan to reflect any significant unforeseen developments or changes in circumstances. This process of updating the master plan would also involve similar levels of community, government and stakeholder engagement, but it would not require the development of an entirely new master plan as is currently the case.

In relation to MDPs, consultation with our membership has revealed that the current monetary trigger of $20 million is not appropriate when taking into consideration the size and nature of the projects commonly undertaken at the federally-leased airports.

For example, five MDPs were submitted by one capital cityairport over the last four years to the Minister for consideration, with values ranging from $27 million to $100 million. If the monetary trigger was raised to $50 million, there would still only have been one major development that would not have had to seek Ministerial approval. Taking this into consideration, in conjunction with the additional provisions requiring an MDP for any development likely to have a significant environmental or community impact, there would appear to be little reason not to substantially increase the monetary trigger. It is also important to note that the financial impost on airports of preparing an MDP can be quite considerable (and varied – $200,000 to $1 million) depending on the size and nature of the project.

The AAA recommends that at a minimum the monetary trigger for major development plans must be increased to $50 million. In conjunction with the revised monetary trigger, the AAA also recommends that an annual indexation be applied to account for inflation and increases in construction costs, similar to the Building and Construction Cost Index.

Additionally, in circumstances where a substantial development may no longer be able to proceed due to any number of factors, including unforeseen changes in financial, operational or market circumstances, the AAA recommends the introduction of a MDP retraction provision to facilitate the withdrawal of an approved MDP project in the event of changed circumstances.

The AAA understands that the Department is currently considering the submissions from industry and will make a determination on next steps in due course. The AAA looks forward to continuing to work with the Department on its regulatory streamlining package and is hopeful that we can continue to remove unnecessary and costly red tape impediments impacting upon the airport sector.