Clarence Valley Council (CVC) has agreed to REX’s (Regional Express Airlines) request for a 50 per cent cut to head tax charges incurred during the months of February and March, 2020.
Seven of the valley’s nine councillors voted in favour of 50 per cent credit ($8,908.90), “as further support for the airline during the COVID-19 crisis” – councillors Clancy and Novak were opposed.
“Rex Airlines currently owe Council $17,817.80 in outstanding head tax charges,” the report to the May 26 CVC meeting stated.
On March 23, REX announced that air services to Grafton would cease from April 6 “unless the federal and state governments are willing to underwrite the [airline’s] losses”.
The federal government subsequently announced a $298 million bailout for regional aviation.
At the March 24 CVC meeting, councillors unanimously supported waiving head tax charges for REX Airlines from April 1 to December 31, 2020, and authorised the general manager to extend the period by up to six months, “should the COVID-19 pandemic not be resolved by then”.
In March, councillors were responding to a letter from REX that stated granting of the 50 per cent cut “will be critical to the survival of REX”.
“REX has been faithfully serving your community in the last 13 years and we believe we have contributed significantly to the socio-economic well-being of your community,” the letter stated.
“…Should this reduction not be possible, the route may not be commercially viable with the sharp reduction in passenger numbers.”
At the May 26 CVC meeting, Cr Greg Clancy said that CVC had “already given a good concession to REX … if they have problems it should be the state government’s [problem]”.
Cr Karen Toms said she saw the “bigger picture”.
“It’s important we support REX because they travel across the state … to outback towns and no one else goes there,” she said.
“It’s important we keep people coming to Grafton … it’s not a tourism destination airport … but we need to do all we can to assist REX to keep them going.”
Cr Deborah Novak said she didn’t “believe our ratepayers should underpin a national business … our job is to look after our ratepayers”.
“We are being held to ransom … if this business is good as it says it is … they shouldn’t be relying on community welfare,” she said.
Mayor Jim Simmons said he “could easily speak against” REX’s request.
“It’s getting down to fairly low amount … however, I do not want to put the airline at risk at the moment; I’d rather address the head works charges when it returns to normal.”
Cr Jason Kingsley said “REX has said on numerous occasions they are supporting the Clarence Valley with no financial benefit to them”.
“If we do not support REX in this manner, frankly, we are snookered; the major airlines did not want a piece of us – so we are at [REX’s] mercy,” he said.
Staff wrote in the report to council: “From the March resolution … [CVC] is not expecting any income from REX for head tax charges for the period 1 April to 31 December 2020.
“Council’s 2019/20 Budget for landing fees is $133,308, with income received to 31 March 2020 being $98,705, which does not include any income from the Section 44 Bushfire emergency, which occurred during the latter half of 2019.”
Normally, REX pays a $7 head tax per passenger up to 15,000 and $5 per passenger thereafter.
Correction
In last week’s Independent it was incorrectly stated in the story titled, CVC grants further concessions to REX: “At the March 24 CVC meeting, councillors unanimously supported a 50 per cent cut in head tax from April 1 to December 31 and authorised the general manager to extend the period by up to six months, “should the COVID-19 pandemic not be resolved by then”.
It should have stated: At the March 24 CVC meeting, councillors unanimously supported waiving head tax charges for REX Airlines from April 1 to December 31, 2020, and authorised the general manager to extend the period by up to six months, “should the COVID-19 pandemic not be resolved by then”.