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Don't skyjack the taxpayer

By Jonathan J. Ariel - posted Tuesday, 20 November 2012


Despite opportunists howling yet again for a second Sydney airport - the latest sound bite coming last week from a lobbyist for Western Sydney, former NSW Minister for Roads, David Borger confidently asserting that a great number of jobs would be created by building another airport - surprisingly both the Commonwealth and NSW Governments remain unmoved about the alleged future inability of Macquarie Bank's Kingsford Smith Airport (KSA) to meet travelers' demands.

In the running to operate as Sydney's #2, four alternatives are more likely than most: building an airport in western Sydney, in an area called "Badgery's Creek"; building in an area south west of Sydney called "Wilton"; renovating RAAF Base Williamtown near Newcastle or adding more runways to KSA. At least that's what the "Joint Study on Aviation Capacity for the Sydney Region" released by the Minister for Infrastructure and Transport, Anthony Albanese in March 2012 claims.

With the votes from Western Sydney clearly on their minds, both the Commonwealth Government and the Opposition have ruled out Badgery's Creek and both are (to a greater or lesser degree) championing Wilton.

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Given Anthony Albanese's inner Sydney electorate of Granyndler is a stone's throw from the runways in inner Sydney, he has (surprise, surprise) nixed proposals to add more runways to the existing KSA.

For what it's worth, NSW Premier Barry O'Farrell doesn't want another airport anywhere near Sydney. The closest he comes to agreeing to more airport capacity is when he spruiks the expansion of Canberra's airport – linked by a very fast train - to serve Sydney's travelling public.

Advocates for a second airport bicker about government inactivity on the matter and fling about extremely rubbery figures to scare the Commonwealth into over riding NSW and getting "on with the job":

According to the Joint Study, if Sydney's future aviation needs cannot be met by 2060, the economy-wide impacts across the Australian economy could total $59.5 billion (in 2010 dollars) in foregone expenditure and $34 billion in foregone gross domestic product. The report warns of thousands of lost jobs and major traffic and train congestion if a second airport is not built.

It also intones that in 15 years' time, all flight slots at KSA will be allocated. That is, no new entrants could be accommodated. And just 8 years later, there will be no scope for further growth at the airport.

Clearly, tourism industry in general and the airlines in particular are the major beneficiaries when it comes to building a new airport. If an airport is at full capacity and airlines want to boost the number of seats on offer, then their bottom line is likely to suffer.

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Champions for a second Sydney airport include Qantas Chairman, Leigh Clifford, who last Wednesday clashed with the Chairman of Macquarie Bank's Sydney Airport (or what looks more like the Millionaires Hanger?), Max Moore-Wilton over the need for such a facility.

Clifford quarrelled, "it was essential to press ahead because the infrastructure was vital to Sydney. We have got to get on with it and make a decision, and I recognise not everyone is going to love the decision. The important thing is, get on with it''.

He charged that in the context of infrastructure, Sydney in the same league as Britain, "which took decades to build Terminal 5" at Heathrow and compared that (unfavourably) to China, which is building an airport every month.

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About the Author

Jonathan J. Ariel is an economist and financial analyst. He holds a MBA from the Australian Graduate School of Management. He can be contacted at jonathan@chinamail.com.

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