Airservices disputes claims of $135m taxpayer bill for ARFF proposal

“At a time when the Federal Government is cutting budgets and raising taxes, taking an option that is financially worse for taxpayers to deliver a poorer standard of aviation safety seems completely nonsensical,” said branch secretary Wes Garrett.

“The reality is that this is a short-term budget fix that creates long-term pain for taxpayers. It might move the upfront cost off the government’s books, but it does not make that cost disappear.

“It simply pushes the cost into the future so a private investor can make a profit. For taxpayers and air travellers, it’s a lose-lose scenario.”

At issue is the plan to engage a sovereign wealth fund – Queensland Investment Corporation (QIC), reportedly the preferred bidder – as a “strategic partner” to help foot the bill for needed equipment upgrades.

According to Garrett, the report shows direct public funding would be “$135 million cheaper, more transparent and more consistent with Airservices’ role as a public safety provider”, as the government can borrow at lower rates than private investors without adding “profit pressure”.

“That profit pressure has to be paid for somehow. That means pressure to cut resources, delay maintenance, squeeze investment and undermine operational readiness,” he said.

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“In aviation firefighting, readiness and response time are everything. Passengers have just 3 minutes to live before fire penetrates the aircraft cabin. If vehicles, equipment, stations and maintenance are compromised, passengers and firefighters are the ones who pay the price.”

Airservices is funded through charging fees to the industry for its services rather than directly by the taxpayer, and a spokesperson told Australian Aviation that it has “undertaken a comprehensive value-for-money assessment on the strategic partnership proposal in line with government procurement requirements”.

“This analysis is subject to appropriate independent probity and assurance processes,” the spokesperson said.

“The assessment considers a range of factors beyond financing costs alone, including whole-of-life cost, operational resilience, service reliability, safety outcomes, industry growth, regional connectivity and long-term benefits to the Australian economy.

“Airservices is funded by industry for the air traffic management and aviation rescue firefighting services it provides. Recently, Airservices received equity support from the government to be able to maintain providing these critical services.

“Consultation with employees, unions and industry stakeholders on the proposal continues. No decision has yet been made to proceed with any proposal.”

Airservices at Senate Estimates last month flagged a potential 12 per cent annual fee increase over five years. The government-owned company provides ARFF services at 27 of the country’s busiest airports and operates a fleet of more than 100 firefighting vehicles.