Well, along with a few other people, small aviation operators aren't very happy with the changes either - especially as it appears they may have been forgotten about in the whole scheme of things.
Tax cops spray from small aerial agricultural playersSteve Creedy, Aviation writer
From: The Australian July 15, 2011 12:00AM
AVIATION operators are on the warpath over the Gillard government's decision to slug the industry with its controversial carbon tax without offering the compensation that ground-based businesses will receive.
Organisations representing regional carriers, aerial agriculture and private pilots have all warned that rises in fuel excise will make survival in a tough industry even harder.
The Regional Airlines Association of Australia has predicted it will prompt carriers to cut marginal routes, while the Aircraft Owners and Pilots Association has warned it could further diminish an already shrinking general aviation sector.
The big end of town will also be hit. Virgin Australia estimates the tax will cost it $45 million and result in an average fare increase of $3 per sector, while Qantas says it will cost up to $115m and add $3.50 per sector.
Unlike many industries, aviation will not receive compensation for the rise in the excise on aviation fuels over the next three years.
The government has estimated the excise on aviation kerosene used by jets will rise annually from the current 3.556c a litre to 10.16c a litre by 2014-15. Aviation gasoline used in piston engined planes is predicted to rise from 3.556c to 9.144c a litre.
More uncertainty looms with the planned introduction of an emissions trading scheme in 2015-16, when the aviation excise will be increased on a six-monthly basis, based on average carbon emissions over the previous six months.
The Aerial Agriculture Association of Australia yesterday wrote to Julia Gillard seeking an exemption from the tax for its members and for fire fighting aircraft.
The Prime Minister this week said the government would provide help for the Royal Flying Doctor Service, but AAAG executive director Phil Hurst noted there had been no mention of other emergency services such as flood relief, oil spill remediation and firebombing.
Firebombing was a critical emergency service that also helped to reduce carbon emissions by putting out bushfires, he said.
The AAAG earlier this week approached Agriculture Minister Joe Ludwig to see if aerial agriculture qualified for the same exemptions extended to the rest of agriculture, but received no joy.
"Despite being a major contributor to agriculture, we're not deemed an agricultural industry and we've got to pay the fuel tax," Mr Hurst said.
"It's meant to be the 500 biggest polluters and yet my members are all small businesses.
"So 130 small businesses are going to be penalised.
"And when you cast that net a bit wider and say everyone in aviation's going to pay the tax, I think there's about 730 AOC holders and, with a few notable exceptions such as Qantas and Virgin and a few others, most of them are pretty small operators."
Mr Hurst said the carbon tax was clearly poorly thought through and a complete "policy miscue".
He said one of the great problems was that Australia did not have a champion of aviation at a political level and there was a complete misunderstanding in Canberra of the industry.
"I actually think there's cultural view among some of our members of parliament that aviation is a bit elitist and therefore it's open to be taxed," he said.
The policy was also bad from the point of view of changing behaviour, Mr Hurst said.
While biofuels were being trialled for aviation use, they were not yet available and fuel and engine certification requirements meant it could be decades before they were.
"It's a long lead time before we can do anything to ameliorate the effect of the carbon tax, so it's bad policy from the behaviour change point of view," Mr Hurst said.
Regional airlines are also angry at being targeted and have warned that marginal routes could be axed and some carriers could be forced out of business.
The nation's biggest independent regional carrier, Rex, warned that the carbon tax, combined with other government measures due to come into force at the beginning of next year, would decimate regional services.
It said the tax, the removal of the enroute subsidy scheme and increased security screening at regional airports would add an estimated $6m a year to its costs.
Regional Aviation Association of Australia chief executive Paul Tyrrell said the increase in fuel excise would add millions of dollars to regional operators' costs, and that the rise would be passed on to regional travellers.
He questioned how the Gillard government had arrived at the conclusion that aviation was among the biggest 500 polluters. The industry accounted for between 1 per cent and 1.5 per cent of total emissions and regional carriers accounted for just 0.2 per cent, he said.
"To call the aviation industry and the regional aviation industry a big polluter is just a nonsense," Mr Tyrrell said.
"Since the sixties and seventies the aviation industry has been trying successfully to use fuel more and more efficiently.
"So instead of being punished for that it should rewarded, it should be encouraged further.
"And the third point is that . . . even if we agreed with every aspect of the government's carbon tax policy, we can't change our behaviour because we can't use fuel any more efficiently."
Aircraft Owners and Pilots Association president Phillip Reiss said the general aviation sector would be hit not just by the increased fuel excise but also cost increases in other areas as the cost of transporting the fuel, parts and maintenance.
He said general aviation had been in decline in recent years as a result of the global financial crisis.
"Definitely (the tax) will increase costs," he said.
"And for a lot of people in general aviation who are doing it tough now and are borderline, I'm sure this will be the straw that breaks their back. They'll step out of it."
Mr Reiss said there appeared little the industry could do to avoid the impost.
"I don't think lobbying to the government's going to do any good," Mr Reiss said.
"Obviously we will try that approach -- I think most people in general aviation will try to lobby them, but it seems their policy is pretty much in place."
A spokesman for Transport Minister Anthony Albanese said fuel exemptions for small businesses applied to operators of vehicles smaller than 4.5 tonnes.
Operators of vehicles above this limit would not pay a carbon price for the first two years, but would pay it subsequently.
"The impact on the general aviation sector as a whole will be marginal," the spokesman said.
"Like other small businesses which will be affected by the carbon price -- owner-operator truck drivers, for example -- those in general aviation will benefit from measures elsewhere in the package such as the increase to the instant asset write-off threshold.
"No small business will face additional paperwork or be required to fill out any new forms as a result of this reform."
The spokesman said the impact on domestic airfares was small and earlier Labor reforms such as domestic deregulation meant flying was five times more affordable than two decades ago.
www.theaustralian.com.au/business/aviation/tax-cops-spray-from-small-aerial-agricultural-players/story-e6frg95x-1226094894847
