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Section 4 : Other Reporting Requirements

  • 4.1 Purchaser-provider arrangements
  • 4.2 Cost recovery arrangements
  • 4.3 Australian Government Indigenous Expenditure (AGIE)
  • 4.1 Purchaser-provider arrangements

    CASA does not have any purchaser-provider arrangements.

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    4.2 Cost recovery arrangements

    Cost Recovery forms part of CASA's Long Term Funding Strategy (LTFS), as approved by the Government during the 2005-06 Budget process.

    In October 2005, CASA issued a draft Cost Recovery Impact Statement (CRIS) on the proposed cost recovery of its regulatory services in line with the Australian Government Cost Recovery Guidelines. Fees apply to more than 180 regulatory services provided by CASA and include services such as licences and ratings, examinations, medicals, aircraft registration, certificates, permits, exemptions, approvals and authorities. Fees are charged in several different ways, such as hourly rates, fixed fees and annual fees. Approximately two thirds of fees are charged at an hourly rate. The hourly rate charges that came into effect from 1 January 2006 for regulatory services are mostly $130 per hour but some may be charged at $150 per hour depending on the level of staff required to provide the service. Fixed fees also correspond to the average time needed to provide the service using good practice. Annual fees that depend on operator type and size are proposed to apply from 1 July 2007.

    Legislative Authority

    The Civil Aviation (Fees) Regulations 1995, made under authority of subsection 98(1) of the Civil Aviation Act 1988, permit CASA to charge fees for regulatory services.

    Costs

    CASA developed a model for estimating the hourly rate for regulatory services. Inputs to the model are salary costs, hours and amount of overhead to be recovered via the hourly rate charge. CASA calculated two hourly rates, differentiating between services which can be provided by trained employees (for example simple renewals) and those that require specialist technical skills (for example complex aircraft inspections). Most hourly rate fees will be charged for the processing and assessment of an application for a service. Fixed rates reflect both the average mix of labour used to provide a particular service and the average time taken.

    Annual fees take into account operator type, as measured by their AOC. Fees would be higher for regular public transport operators, taking account of air safety benefits that fare paying passengers receive as a result of CASA's industry oversight. In addition, the fees vary with operator size, as measured by the number and size of aircraft. Fees would be higher for larger, more complex aircraft, taking account of the need for higher cost staff to oversight such aircraft.

    The fee structure ties CASA's regulatory revenue more directly to the numbers of aircraft, operators, pilots and aerodromes for which it has safety responsibility.

    Revenues

    The estimated revenue from cost recovery are as follows:

     
    2005-06
    2006-07
    2007-08
    2008-09
    Cost recovery revenue
    $10.5m
    $10.5m
    $15.0m
    $20.0m

    Consultation

    To ensure that the Cost Recovery process included industry involvement, a high-level consultation process was undertaken with the Aviation Safety Forum (ASF). The ASF is a special consultative body helping the aviation community and CASA work effectively together to improve aviation safety in Australia. CASA presented updates to ASF meetings and invited a sub committee to provide recommendations on CASA's Cost Recovery. The report documented a number of issues that not only reflect the nature of the industry, but also the impact of cost recovery.

    CASA also ran two major industry forums and provided dedicated communication vehicles for industry input. The first forum, in Brisbane, enabled representatives from industry to provide feedback on some principles of cost recovery as they relate to the aviation industry. Industry representatives provided weightings to the principles in terms of their importance on how costs should be recovered. A discussion paper was then presented and made available both to the industry bodies that attended the forum and those who were unable to attend. Dedicated feedback email addresses were established and industry bodies were invited to respond to this discussion paper. After collation of the various views from industry, issues raised were considered in the determination of the pricing model.

    A second forum was held in Melbourne in which the outcomes of the feedback and the development of the pricing model were discussed in more detail. Participants stressed the importance of broadening the base for cost recovery for CASA regulatory services. In particular, participants noted that a 'passenger safety levy' would rate more highly against the cost recovery principles than a fuel levy.

    In October 2005, CASA placed a draft of the proposed fee schedule on its website to enable further industry feedback and comment. As a result of feedback, the first draft of the list of fees posted on the CASA website was amended.

    Areas of significant change are:

    • AME licence fees have been reduced significantly; and
    • Annual fees for aerodromes, which now take into account of aerodrome size, as measured by passenger movements. These fees are not included in the schedule to take effect from 1 January 2006, but are proposed to be charged from 1 July 2007.

    Annual fees will be addressed in a subsequent CRIS and legal advice will be sought on the nature of these fees.

    CASA also consulted with relevant government agencies.

    Review

    It is proposed that CASA will review its cost recovery arrangements in accordance with the Australian Government Cost Recovery Guidelines and its obligations under the Commonwealth Authorities and Companies Act 1997.

    This review will be undertaken (annually) and presented to industry through the ASF Forums for discussion. Any amendments to the arrangements will be considered in good faith and implemented through consultation with industry.

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    4.3 Australian Government Indigenous Expenditure (AGIE)

    Table 4.1: Australian Government Indigenous Expenditure

    CASA has no Australian Government Indigenous Expenditures.

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    budget

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