Battle for REX subsidy

CLARENCE MP Steve Cansdell says scrapping a subsidy paid to REX by the Federal Government could be a critical factor in the airline continuing to fly out of Grafton.

The $6 million Airservices Australia Enroute Charges Payment Scheme is set to be canned by the government in July.

Mr Cansdell said stopping the subsidy, that allows regional airlines flying planes of less than 15 tonnes to claim reimbursement of the en route air traffic control charges paid to Airservices Australia, was “false economy”.

“In the big picture, nationwide $6 million is not a lot of money,” he said.

“Six million dollars is probably $6 million well spent because it saves people travelling on the highway to Coffs Harbour or Ballina.

“A false economy it is. It’s going to cost more money not having services to those outlying areas, or those areas that are not commercially viable, than not putting the $6 million up.”

Apart from his concern about increased highway traffic volumes if REX withdraws its service from Grafton, Mr Cansdell said he was worried about the impact on the local economy.

“We need to encourage locals and local government departments to use the service as much as possible and hopefully it will become commercially viable,” he said.

Mr Cansdell said he would speak to Federal Page MP Janelle Saffin.

“Hopefully Janelle will take the baton up to the Federal Government,” he said.

Ms Saffin said she was disappointed the regional subsidy of $2 a ticket would soon cease as announced in the 2008 Budget. “I want REX to continue to fly the triangulated route Grafton-Taree-Sydney as it is important to our region to have this service and am worried about their margins if the $2 per ticket subsidy is the decider,” she said.

Ms Saffin said she had asked the Minister for Regional Australia, Simon Crean, to investigate canning the subsidy.

REX did not reply to a request about how much it received annually from the subsidy, or whether canning the subsidy would influence whether it pulled out of Grafton.

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