Paul Fletcher MP

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The Australian - Badgerys Creek airport is finally cleared for takeoff

Paul in the Media Thursday, 04 May 2017

The construction of a second major airport in the Sydney area is imperative not just for the nation’s premier city but for the economic development of the entire country.

The existing KingsfordSmith Airport at Mascot accounts for one in every five aircraft movements in Australia and almost half of the nation’s international arrivals. Demand for aviation services continues to increase.

Passenger movements through Kingsford-Smith are projected to rise from 35 million annually now to 77 million by 2035, which would almost double plane movements to 460,000 a year. Under existing legislative and infrastructure constraints all flight slots from 6am until midday and 4pm until 7pm will be filled within three years, and within 10 years there will be no slots available at all, meaning additional capacity can be generated only by allocating larger aircraft. The consequences of this congestion are substantial, ranging from insatiable demands on road and rail transport servicing the airport to higher airfares, increased delays and lost economic opportunities.

This is why the joint study into the airport conducted in 2012 by the Gillard federal Labor government and O’Farrell NSW Coalition government found that even with reforms at Kingsford-Smith and greater use of airports at Newcastle, Canberra, Richmond and Bankstown another major airport was needed. The site at Badgerys Creek stood out as the “best location” after being put aside for that purpose and protected from encroaching development since the late 1980s.

The airport has been a political saga in which infrastructure vision and electoral timidity have had their moments and governments of both stripes at both levels have had their share of both. But in a planning and transport development that will help shape the greater Sydney metropolitan area and the national economy for decades, the right decision eventually has been made.

The crucial resource — the land — wisely has been preserved. Badgerys Creek is sufficiently distant from major urban areas to reduce noise and traffic problems yet close enough to the city and major transport links to be viable in commercial and practical terms. It can enhance the job prospects and economic development of the western Sydney region while servicing the needs of national tourism, interstate commuting and airfreight demand in a curfew-free environment.

The joint study found the cost of not proceeding with this development would be to reduce the nation’s gross domestic product by about $35 billion in today’s dollars across 50 years while reducing prospective job opportunities by about 78,000 nationally. For these reasons it is high time and the right decision by Malcolm Turnbull and his government to get cracking on this project. Having announced their decision last year, they gave Sydney Airports Group their contractual right of first refusal, which was declined on the basis that it did not provide adequate return for shareholders.

Canberra will now proceed with construction itself, most likely funding it through an off-budget corporation operated on a commercial basis with details to be announced in Scott Morrison’s budget speech. Given the amount of money involved (at least $6bn), a gradual start-up, the expected delay before a profitable return is likely and the airport’s importance for national development, the case for government carriage is strong. Where possible The Australian would like to see infrastructure delivered by private capital, but most of Australia’s airports have been built by governments before being privatised so this model is not new.

Public financing will guarantee the development is not delayed any longer and it will ensure the bonus of creating clear competition between Kingsford-Smith and the new airport during its start-up phase and eventually when it is sold or leased to another operator. In other crowded markets such as Britain, competition authorities have forced the breakup of airport monopolies with resultant benefits in traveller costs, transport efficiency and infrastructure investment. So, while Kingsford-Smith will dominate the Sydney and national aviation market for decades to come, we can be assured that from at least 2026 there will be growing competitive pressure in the market, especially for airfreight and budget tourism. We await next week’s budget for more details; and no government should be given a blank cheque on any infrastructure project, let alone one of this scope.

But we welcome the decision to proceed — at last — and recognise that government financing will deliver benefits. Eventually we expect to see a return for taxpayers and advantages for travellers and residents, as well as economic benefits for western Sydney and the nation as a whole. Initially identified three decades ago, Badgerys Creeks is finally cleared for takeoff.

Authorised by Paul Fletcher MP, Level 2, 280 Pacific Highway Lindfield NSW 2070.

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