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AIRPORTS (CONTROL OF ON-AIRPORT ACTIVITIES) AMENDMENT REGULATIONS 2000 (NO. 3) 2000 NO. 250
EXPLANATORY STATEMENTSTATUTORY RULES 2000 No. 250
Issued by the Authority of the Minister for Transport and Regional Services
Airports Act 1996
Airports (Control of On-Airport Activities) Amendment Regulations 2000 (No. 3)
Section 252 of the Airports Act 1996 (the Act) allows the Governor-General to make regulations prescribing matters:
(a) required or permitted to be prescribed; or
(b) necessary or convenient to be prescribed for carrying out or giving effect to the Act.
The purpose of the amending Regulations is to provide for the issue of interim liquor licences at the Sydney (Kingsford-Smith) Airport.
Part 11 of the Act authorises the making of regulations for the control of liquor, gambling, commercial trading, smoking and vehicle movements at certain Commonwealth-owned airports following their leasing.
Section 169 allows regulations to apply Part 11 of the Act to leased Federal airports. The Airports (Control of On-Airport Activities) Regulations 1997 (the 'On-Airport Regulations') provide the detail of the regulatory regime for liquor, commercial trading, vehicle movements, gambling and smoking on leased Federal airports. The On-Airport Regulations deal with arrangements for those airports sold as part of the Phase 1 and 2 sales including the Sydney-basin airports.
Section 170 of the Act provides that regulations may be made to prohibit or regulate the sale, supply, disposal or possession of liquor at a specified airport.
In June 1998, the On-Airport Regulations were amended to confer on the Secretary to the Department of Transport and Regional Services, power other than a judicial power (within the meaning of Chapter Ill of the Constitution), in relation to Federal Airports, which had previously been conferred on the NSW Licensing Court established by the Liquor Act 1982 (NSW). This was intended as an interim measure to enable the issue of liquor licences at Sydney Airport.
A long-term Commonwealth liquor control regime is currently being developed for these airports. However, it has been estimated that this will take at least six months to develop.
There is a need to issue interim licences to several new liquor concessionaires now preparing to move into new premises within the expanded International and Ansett terminals at Sydney (Kingsford-Smith) Airport. These interim licences will give the new concessionaires the confidence to commence trading in the lead up to and during the Olympic Games. With the establishment of the long-term regime these interim licences will be superseded.
The Regulations provide that certain specified persons (listed in the table at Regulation 13A) are deemed to have interim liquor licences and that the premises are deemed suitable, under the Liquor Act 1982 (NSW).
Four new business have been added at this time but Regulation 13A has been designed to enable further interim licences to be added by future regulatory amendment.
Section 178 of the Act requires the Minister to consult with existing airport operators before making regulations under Part 11. The Minister is required to give each airportoperator company a notice stating that there is a proposal to make regulations under Part 11 which will affect that airport, at least 30 days before the regulations are made. The notice must invite them to make a submission within 30 days of receiving the notice. The Minister is to have due regard to the submission when dealing with the proposal to make regulations. Consultation with the existing airport-operator company for Sydney Airport as required under section 178 of the Act has taken place.
Details of the Regulations are attached.
The Regulations commenced upon gazettal.
ATTACHMENT
Item 1- Name of Regulations
The Regulations are the Airports (Control of On-Airport Activities) Amendment Regulations 2000 (No. 3).
Item 2 - Commencement
The Regulations commenced on gazettal.
Item 3 - Amendment
The Airports (Control of On-Airport Activities) Regulations 1997 are amended as set out in Schedule 1 to the Regulations.
Schedule 1 - Amendments
Item 1 - Regulation 13A
Added to Table 2 after Item 1 are four additional items which allow that certain persons are deemed to have on-licences (under paragraph 18(4)(g) of the Liquor Act), and further are deemed to have certificates of suitability for the premises from which they sell liquor (under section 74A of the Liquor Act). These licences do not have effect until a copy of the premises plans have been lodged with the Liquor Administration Board.
REGULATION IMPACT STATEMENT
1. ISSUE IDENTIFICATION
In 1997 and 1998, airports previously operated by the Federal Airports Corporation (FAC) were leased by the Commonwealth to private airport operators. New laws through the Airports Act 1996 (the Act) were put in place to ensure that the public interest continued to. be protected at the leased Federal airports. These airports are Adelaide, Alice Springs, Archerfield, Brisbane, Canberra, Coolangatta, Darwin, Essendon, Hobart, Jandakot, Launceston, Melbourne, Moorabbin, Mt Isa, Parafield Perth, Sydney-basin, Tennant Creek and Townsville airports.
Part 11 of the Act allows State and Territory laws to control a range of existing onairport activities (liquor, commercial trading, vehicle movements, gambling and smoking) unless excluded or modified by regulations made pursuant to the Act. The Airports (Control of On-Airport Activities) Regulations (the On-Airport Regulations), which modify State law, were made under Part 11 of the Act to provide an interim regime, while the States and Territories adjusted their existing laws to accommodate the special needs of airports.
Pursuant to s.52 of the Australian Constitution, States are not able to modify their laws to allow different conditions to apply at leased Federal airports, as opposed to State airports, as this would be discriminating against Commonwealth sites. Under Commonwealth jurisdictions, pursuant to s.77 of the Constitution, the principle of the separation of powers requires that a Court (including a State Court applying Commonwealth laws) must only undertake judicial functions; in practice this is not always the case. For example, the Licensing Court of NSW, under the Liquor Act 1982 (NSW), undertakes both judicial (eg convicting and imposing fines and/or jail sentences) and administrative (eg issuing/suspending/cancelling liquor licences) functions, which is not permitted under the constitution at Commonwealth Places. These and other constitutional issues create the need, in some instances, for Commonwealth regulations to be made more robust to provide a long-term regime that ensures the airports' special needs are met.
Particular problems with the On-Airport Regulations that must be addressed now are:
* the management of vehicle parking under Divisions 11 and 12; and
* control of liquor sales under Part 2.
Management of Vehicle Parking
The issue that is most pressing is parking management. Currently, under Part 4 of the On-Airport Regulations, the Commonwealth only provides a kerbside control and enforcement regime for Sydney, Brisbane, Melbourne and Perth airports. Arrangements have been made with these four airport operators for them to be reimbursed their kerbside enforcement costs. In effect this creates an uneven playing field amongst the 22 leased Federal airports.
The Commonwealth has made considerable efforts to hand over responsibility of parking management at Sydney and Melbourne airports to the Victorian and NSW governments. In doing so a number of significant difficulties have been identified.
To put these difficulties in perspective it is necessary to consider the requirements of the Commonwealth Places (Application of Laws) Act 1970. Section 4(1) of this Act deems that State laws apply at Commonwealth places as Commonwealth law. As the State laws are applied as Commonwealth laws any fine money collected for offences under these laws becomes Commonwealth money. Under the Constitution all revenue from Commonwealth fines must be deposited into the Commonwealth's Consolidated Revenue Fund. Section 20(1) of the Act provides (if there is an agreement in place between the Governor General and the Governor of the State involved) a mechanism for automatic appropriation and ensures that the Commonwealth will pay the State an amount equal to the revenue received. However, States do not have corresponding mechanisms to ensure the money can be returned to a third party (ie. the party conducting the enforcement). It is possible for these States to take appropriation action but this is cumbersome for them and thus there is not a will to do so.
Therefore, when a local council receives a fine for a parking infringement at a Federal airport, the money becomes Commonwealth money. The Commonwealth then has the mechanism in place to return this money to the State. But then it becomes very difficult to return the money to the local council. Thus, local councils may be enforcing parking management but theoretically cannot be reimbursed for its cost.
These problems are also encountered at other leased Federal airports. Adelaide, Coolangatta and Canberra airport operators pay for enforcement of parking management under State or Territory law but the local councils (or in the case of Canberra, the ACT Government) conduct the enforcement and keep the revenue. In keeping the fine revenue the councils are operating without legal cover.
The situation at other regular public transport airports varies. Darwin and Alice Springs airport operators are operating under Northern Territory law that allows them to enforce, collect and keep revenue. Townsville, Launceston and Hobart airport operators have no enforcement mechanisms in place and have been unable to enter into any suitable arrangements. There are no arrangements in place for general aviation airports.
The revenue collected at Brisbane, Sydney, Melbourne and Perth airports (under the Commonwealth's enforcement regime) has been steadily rising. It has reached the point where revenue collected from parking infringement notices is in excess of the airport operators' enforcement costs and is likely to continue to increase. There is now a need to apply a control on the airport operators' reimbursement claims to ensure that they, as private operators, are not making a profit out of parking enforcement.
The introduction of the Australian Road Rules on 1 December 1999 means the OnAirport Regulations need to be updated anyway. As the new road rules represent a national approach and all States and Territories have agreed to adopting them, it is imperative that the Commonwealth implements these rules at Commonwealth sites.
As the landside parking regulations are mirrored in the airside parking regulations, the airside parking provisions will also need to reflect the Australian Road Rules.
The current parking regulations also have a few further shortfalls. For one, there is currently no allowance made for the cancellation of infringement notices that have been issued, nor to write-off the balance of partially paid fines. Further, there is only one fine ($66) for all parking infringements, although the severity of these infringements varies considerably. A tiered system of fines is required to reflect the severity of different infringements.
Control of Liquor Sales
Part 2 of the On-Airport Regulations modifies relevant State and Territory laws to meet the special needs of airports in relation to the supply and consumption of liquor. This Part was required because at the time the On-Airport Regulations were made the States were either reluctant or unable to adjust their laws to meet airport needs. All States and Territories (except NSW) are responsible for day-to-day administration of liquor control matters, including the application for new licences.
Part 2 was designed to be an interim arrangement, to be in place until the States and Territories adjusted their laws. Queensland has introduced a Special Facilities Licence, which is used for large facilities, particularly those involved in international tourism such as South Bank on the Brisbane River. The State has recognised that such facilities need greater flexibility (including 24 hour trading) to provide the necessary service levels expected by such travellers. Under the Special Facilities Licence, the State licences the controlling body, but also authorises that body to issue sub-licences to business within its area without seeking the approval of the State Liquor Authorities, merely notifying them.
A recent amendment was made to the On-Airport Regulations to allow Queensland law, in relation to the supply and consumption of liquor, to apply directly at Brisbane Airport. The special facilities licence for the airport site offers the businesses terms that are at least equal to those available under the interim regulations, but allows flexibility for new businesses and changes to existing authorisations to occur. It is simpler and easier for businesses to amend their conditions of operation under this special facilities licence, while also offering advantages for the Queensland Liquor Licensing Division in only having to deal with one organisation at Brisbane Airport (ie the airport operator). As the Queensland Government is willing to directly control the supply and consumption of liquor at all leased Federal airports in the State, the Commonwealth proposes to withdraw its regulations for Coolangatta and Townsville airports. State law will then apply of its own force and a Special Facilities Licence will be issued for both airports. All airport operators and their liquor tenants have been consulted and agree with the proposal.
The situation in NSW is markedly different. The State has a Liquor Licensing Court that has a mix of administrative and judicial powers, creating fundamental problems in applying the NSW Liquor Act via the On-Airport Regulations due to the constitutional requirement for separation of powers. A temporary fix is currently in place whereby the Secretary of the Department is responsible for administrative matters (eg. under the On-Airport Regulations issuing new licences, approving managers and suspending/cancelling licences) and NSW is responsible for judicial matters (eg. convicting and imposing fines and/or jail sentences). This fix, however, requires NSW liquor officials to undertake the necessary investigation and research prior to the issue of new licenses. The State is not prepared to perform this role.
Added to this constitutional problem there is little flexibility in the NSW liquor regime. This has created problems for businesses operating on-airport. For example, Airport Fine Foods wish to promote Australian food and wine at Sydney International Terminal. Under the NSW system, they require an hotelier's licence, which could cost several hundred thousand dollars. The archaic nature of the NSW Liquor Act also makes it difficult for the Commonwealth to meet its obligations (from FAC commitments) to the Burmah Fuel outlets at Bankstown and Hoxton Park and the Vicarys Winery.
The international terminal at Sydney airport is being expanded in anticipation of the Olympics. As a result new liquor licences will be required over the coming months. It is expected that it will take at least six months to set in place a robust regulatory regime and the appropriate administrative procedures to implement it. Therefore an interim solution is required to allow new businesses to become licensed in the intervening period.
In applying the South Australian, Western Australian and Victorian liquor acts via the On-Airport Regulations there are also some separation of powers issues. For Victoria, these are of a minor nature. South Australia and Western Australia are currently preparing legal advice on this matter. However, as these States embrace the opportunity to regulate liquor matters at their leased airports, they would be reluctant to hand back control to the Commonwealth and are willing to work to overcome the separation of powers issue, the Commonwealth expects to make relatively simple amendments to the On-Airport Regulations to separate powers where necessary.
There is no separation of powers issue with the application of Tasmanian and Territory liquor laws via the On-Airport Regulations.
Other issues
Elements of the On-Airport Regulations that are subject to further review, but that do not require change at this time are:
* Part 3 which ensures trading hours are not restricted;
* Part 4 Division 13 which covers airside vehicle operations;
* Part 5 which prohibits gambling; and
* Part 6 which ensures terminals are non-smoking environments.
2. DESIRED OBJECTIVES
To introduce a sound sustainable regime to replace the interim arrangements of the On-Airport Regulations aimed at satisfying the special needs of airports and continuing to protect the public interest.
Consistent with the above objectives, the Commonwealth has further specific policy j objectives for parking management and liquor as outlined below.
Management of Vehicle Parking
* Ensure that the new Australian Road Rules apply to airports to provide a seamless national system; and
* Implement a sustainable regime that allows for the enforcement of parking management and the collection of fines associated with this management;
Control of Liquor Sales
* Ensure that the liquor regime in place in all States and Territories is flexible enough to meet the special needs of airports; and
* Remove constitutional problems present with existing State liquor regimes applied at leased Federal airports in NSW, Victoria, SA and WA.
3. IDENTIFICATION OF OPTIONS
Management of Vehicle Parking
Option 1: Status Quo.
Constitutionally, this is not a valid option and it creates inequities between the airports.
Option 2: National Commonwealth Regime.
The only feasible option to solve the current problems with parking management is to amend the On-Airport Regulations. The Commonwealth must adopt those parts of the new Australian Road Rules relating to parking at Commonwealth sites such as airports. If this were not done, the Commonwealth would be acting contrary to the model national road rules it has developed with the States and Territories.
Option 3: State/Council-Based Regime. This has proven unviable for of a number of reasons, including:
* constitutional problems associated with returning the money via the Commonwealth Places (Application of Laws) Act 1970;
* one Council recently threatened to remove the parking authorisation from the Airport Operator because of local politics; and
* most Councils have simply refused to enter into any arrangement or enforce parking themselves.
Control of Liquor Sales
Queensland
Of all the State/Territory liquor control systems, Queensland has the most flexible and appropriate system, specifically designed to cater for major tourist venues and there are no constitutional problems in applying Queensland law to leased Federal airports. A recent amendment to the Regulations enabled the Special Facilities Licence to apply at Brisbane Airport.
It is now proposed to amend the On-Airport Regulations to allow Queensland liquor laws to apply in a direct sense at Coolangatta and Townsville airports. Doing so will allow special facilities licences to apply at these airports.
There are no meaningful alternatives to making the proposed amendments. This amendment to withdraw from regulating control of liquor in Queensland is consistent with the original intention of the interim regulations.
New South Wales
Option 1: Status Quo.
The Commonwealth cannot allow liquor control under the NSW Liquor Act because of the separation of powers issue (ie it would be constitutionally invalid). Modifying the NSW Liquor Act would be an administrative nightmare given the archaic nature of the Liquor Act, the lack of flexibility for licensees and the State's reluctance to alter its liquor regime to accommodate the special needs of airport sites. Currently no new licences can be issued at airports in NSW.
Option 2: Commonwealth Special Facilities Licence Regime.
The most feasible long-term solution to the constitutional problems with liquor licensing in NSW is for the Commonwealth to regulate via the issuing of special facilities licenses (SFL) modelled on those used in Queensland. While in Queensland one SFL has been issued to the airport operator to cover all liquor outlets in the passenger terminal buildings, it is envisaged that three SFL would be issued for Kingsford Smith Airport. This is because of the significantly greater size of the airport and the number of outlets, as well as the nature of the domestic terminal leases held by Ansett and Qantas. Both Qantas and Ansett would be issued SFL in respect of their domestic terminal buildings, while the airport operator would be issued a SFL in respect of the international terminal and any smaller domestic passenger terminal operations. Doing so would provide greater flexibility for licensees and sub-licensees than is currently available under the NSW Liquor Act.
Option 3: Commonwealth Individual Licence Regime.
Another alternative that would also address the constitutional problems is individual licensing between the Commonwealth and tenants. This option offers no advantages over the special facilities licence approach but creates a large administrative burden for the Commonwealth and would also be difficult to police.
Interim Arrangements.
To enable new businesses to establish resulting from the expansion of the international terminal at Sydney Airport an interim fix is required. To facilitate this it is proposed that the Secretary be authorised to deem up to eight new on-licences under the Liquor Act 1982 (NSW) either as:
* an on-licence under section 18(4)(g) and deem that a certificate of suitability had been issued under section 74A for these premises; or
* an off licence (retail) under section 74A. This would be an extension of the transitional provisions already contained in the OnAirport Regulations.
Other States and Territories
It is appropriate to continue with the interim arrangements for other States, modifying State law where necessary to overcome the separation of powers issue, with the view to moving to direct State regulation in future. Application of Territories' law is working smoothly and this should continue.
[The Commonwealth could regulate leased Federal airports, in all States and Territories, in the manner proposed for NSW. However there would be a significant administrative burden for the Commonwealth. Most States and Territories are willing to control the supply and consumption of liquor at leased Federal airports and some have already put in substantial work to adjust their current systems. Therefore, it would be inappropriate to remove this function from the States, especially as liquor licensing is an important area of State social planning responsibility.]
4. IMPACT ANALYSIS
This section is only assessing the costs and benefits of the preferred option and only for those areas where changes to the existing arrangements are being proposed.
There are a number of parties that could potentially be affected by the proposed amendments, including airport operators, businesses operating at airports, businesses operating off airport (competitive neutrality issues), the three levels of government and the public (travellers, those accompanying travellers and those on airport for commercial/business reasons).
Management of Vehicle Parking
* Airport operators
All Operators of leased Federal airports will be put on an equal footing in relation to parking management.
* Businesses
As the better parking management will allow for improved flow through of traffic and easier access to areas required, business should welcome the changes.
* Government
The introduction of the proposed Commonwealth system will allow any local council that may be involved in enforcement of parking management to be reimbursed for the enforcement costs in a legal manner. The Commonwealth's financial reporting requirements will also be able to be met.
* The public
The proposed system (including the tiered fine system) should allow for more efficient management of parking, which will provide for better traffic flow. The public will face parking rules and penalties that are consistent on and off airports.
Control of Liquor Sales
* Airport operators
Airport operators will be able to undertake commercial development with greater certainty.
* Businesses
Businesses operating at airports in NSW will be provided with a better liquor regime than is currently available which is also more equitable with other airports.
The proposed special facilities licence for Coolangatta and Townsville airports offers the businesses terms that are at least equal to those available under the current regulations, but allow flexibility for new businesses and changes to existing authorisations to occur. It will be simpler and easier for businesses to amend their conditions of operations under this special facilities licence. If the Commonwealth does not remove its regulations at Coolangatta and Townsville airports, the new Special Facilities Licence cannot be granted.
The proposed amendments to remove the separation of powers issues in Victoria, South Australia and Western Australian should have little if any impact on businesses which sell or supply liquor at leased Federal airports in these States.
* Government
If NSW law is to no longer apply for the supply or consumption of liquor, NSW will lose control of an area that is traditionally a State planning responsibility. However, as NSW is reluctant to rectify the significant problems with the existing regime, there is no alternative but for the Commonwealth to regulate this area.
The Commonwealth will have some additional administrative functions. However the annual fees paid by licensees will offset these.
Introducing the proposed special facilities licence for Coolangatta and Townsville airports will offer advantages for the Queensland Liquor Licensing Division in only having to deal with one organisation at each airport.
* The public
Consumers will not be affected by any of the proposed amendments to the control and supply of liquor at leased Federal airports, nor the proposed refinements envisaged with the current proposal. As far as the general public is concerned, liquor operations will continue in a seamless manner.
5. CONSULTATION
In preparing the proposed amendments, the Department has consulted thoroughly on the impacts with all relevant State government departments, airport-operators, major airlines and some local authorities. The outlined proposals have been developed from these consultations taking into consideration the comments and suggestions made during the consultations.
These outlined proposals were then informally presented to State officials and airportoperators. All affected parties have endorsed the proposed regimes and indicated strong support for the proposed regulatory amendments.
Section 178 of the Airports Act requires that at least 30 days before regulations are made, the Minister must give affected airport-operator companies a notice:
* stating that there is a proposal to make regulations; and
* inviting the company to give the Minister a submission about the proposed regulation within 30. days after receiving the notice.
In addition to this notice, the Minister will also write to his counterpart in each State and Territory formally seeking their views on the proposed amendments.
6. CONCLUSION AND RECOMMENDED OPTION
Management of Vehicle Parking
Amending the On-Airport Regulations to incorporate the relevant parts of the new Australian Road Rules is necessary to ensure a consistent national system is put in place.
Currently enforcement is being performed illegally at some airports and it is necessary to facilitate parking enforcement at all airports in a consistent manner. The best way to achieve this is to amend the On-Airport Regulations.
Control of Liquor Sales
Amending the On-Airport Regulations to allow the Commonwealth to regulate, via issuing special facilities licences, the supply and consumption of liquor at airports in NSW is necessary to overcome significant constitutional problems.
Allowing Queensland law to apply in a direct sense for the supply and consumption of liquor at Coolangatta and Townsville airports is administratively sound for the Commonwealth, State airport operators and liquor tenants. The public will be unaffected by the change.
Victoria, South Australia and Western Australia embrace the opportunity to regulate liquor matters at their leased airports. They would be reluctant to hand back control to the Commonwealth and are willing to work to overcome the separation of powers issue. The Commonwealth expects to make relatively simple amendments to the OnAirport Regulations to separate powers where necessary.
7. IMPLEMENTATION AND REVIEW
Arrangements have already been made for the review of the Airports Act regulatory regime, within the first 5 years of its introduction, and the proposed amendments to the Regulations will be reviewed as part of that regulatory regime.
Management of Vehicle Parking
Each airport will be required to lodge a signage plan for the airport with the Department (for approval), a map identifying all parking zones. This will then serve the basis on which parking can be enforced. If the airport wants to change their parking zones they must put in an application to be approved by the Department. For temporary changes, airport staff will be authorised to approve these changes.
Abuse of their enforcement role by airport operators will be avoided through the Commonwealth setting fixed price contracts for the reimbursement of legitimate enforcement costs.
Control of Liquor Sales
New South Wales
The airport operator SACL, Qantas and Ansett will each be issued with special facilities licences for their terminal buildings after receiving State approval for managers as a "fit and proper" persons. These three organisations could then issue sub-licences. The sub-licences could be on or off licences or a combination of the two for tenants within the terminals. Each new sub-licence will be required to be registered with the Department.
Any proposal for a hotel or tavern outside the terminals would be considered separately rather than under the airport operator's special facilities licence. If a licence were granted it would be a separate off-terminal licence.
With licence (and sub-licence) applications, the applicant will be required to submit a floor plan to the Department. Any alterations to the areas in which liquor is to be sold or consumed will also need to be submitted.
All Other States and Territories
The proposed amendments will ensure existing commercial activities continue to remain lawful at these airports and that the unique operating characteristics of the airports are recognised.