Aviation Consumer Protection Levy Bill 2026: how the new passenger protection system will be funded

The short answer

Aviation Consumer Protection Levy Bill 2026: how the new passenger protection system will be funded

The Aviation Consumer Protection Levy Bill 2026 is part of a four-bill package that creates Australia's first comprehensive aviation consumer protection framework. It imposes an annual levy on certain airlines and airport operators to fund the new Aviation Consumer Protection Authority (ACPA). The bill passed the House of Representatives on 29 June 2026 and is now before the Senate. It is a government bill under the Infrastructure and Transport portfolio, and if passed would take effect as drafted.

This is a federal system guide. State constitutions, parliaments and local-government laws can allocate comparable functions differently.

The useful question is not only “what is the rule?” but also “who administers it, which document controls it, and when might it change?” That distinction prevents an accurate general explanation from becoming wrong advice in a particular election, chamber or policy setting.

Evidence review

The four-bill aviation consumer protection package

The Aviation Consumer Protection Levy Bill 2026 does not operate alone. It is one of four linked bills: the Aviation Consumer Protection Bill 2026 (the main substantive bill establishing the new regulatory framework); this levy bill (imposing the charge on industry); the Aviation Consumer Protection Levy (Collection) Bill 2026 (providing collection machinery, late penalties and debt recovery); and the Aviation Consumer Protection (Consequential Amendments and Transitional Provisions) Bill 2026 (amending the Air Navigation Act 1920 and other legislation).

Together the package implements commitments from the government's 2024 Aviation White Paper. It replaces the industry-funded Airline Customer Advocate, established in 2012, which was widely criticised as ineffective — lacking enforcement powers and independence from the airlines it was meant to oversee.

The package does not include a mandatory compensation scheme equivalent to the EU, UK or Canadian models. A 2024 Coalition private senator's bill proposing "pay on delay" compensation lapsed. The government explicitly chose a regulatory-and-ombudsman model rather than a compensation model.

Evidence review

How the levy works

The bill imposes an annual general levy on "regulated entities" — airlines operating domestically or internationally to or from Australia, and airport operators. The levy amount for each entity is not set in the bill itself. It will be set by regulation, giving the government flexibility to adjust it over time.

Before making levy regulations, the Minister must consider two statutory objectives: the total levy collected must reflect the "administration costs" of the Aviation Consumer Protection Authority, determined by the Secretary through a legislative instrument; and each entity's levy must represent a "fair proportion" of the total. The Minister may exempt specified entities or classes from the levy.

The government has announced an intention to exempt airports with fewer than one million passengers per year, which would exclude most regional and council-owned airports. Fourteen major airports capturing approximately 90% of passenger movements would bear the airport share of the levy.

Evidence review

What the levy funds: the ACPA, Ombudsperson and Charter

The levy funds the Aviation Consumer Protection Authority, a regulatory function within the Department of Infrastructure. The ACPA will oversee compliance with a new Aviation Consumer Protections Charter, to be set in subordinate legislation. Proposed protections include prompt and fair remedies for cancellations, delays and disruptions, and safe and timely baggage handling.

Civil penalties for non-compliance with the Charter can reach the greater of 30,300 penalty units (approximately $9.999 million), three times the benefit obtained, or 30% of the entity's adjusted turnover — penalties designed to be commercially meaningful for large airlines.

The package also establishes an Aviation Consumer Ombudsperson, operated by a company limited by guarantee. All regulated entities must be members. The service is free for complainants. The Ombudsperson can join parties to a dispute, require attendance at conciliation, issue notices, and make binding determinations enforceable through the Federal Court. A separate Aircraft Noise Ombudsperson replaces the existing Aircraft Noise Ombudsman.

Evidence review

Parliamentary scrutiny and concerns

The bill has been scrutinised more than most in this shard. The Senate Rural and Regional Affairs and Transport Legislation Committee reported on 19 June 2026 after an inquiry that began on 1 April. The Senate Standing Committee for the Scrutiny of Bills published Scrutiny Digest 6 of 2026 on 6 May, raising concerns about the delegation of significant matters to regulation (including the levy amounts themselves and the Charter content), the abrogation of the privilege against self-incrimination, privacy impacts, and broad administrative powers.

The Parliamentary Library's Bills Digest No. 62, published 18 May 2026, provided detailed analysis. It noted that no Impact Analysis was published despite the significance of the reform, flagged potential regulatory duplication with the ACCC, and raised the question of cost pass-through — whether airlines would pass the levy cost to passengers through higher fares. The EU experience with compensation schemes saw ticket price increases of approximately $4 to $16 per ticket.

The bill passed the House on 29 June 2026 after debate on 25 and 29 June. It was introduced into the Senate on 30 June and the second reading was moved.

Evidence review

Who pays and what remains unknown

The levy will be paid by airlines and major airports. Passengers are not directly charged, but the cost may be passed through in ticket prices. The government has not published modelled cost impacts or a detailed cost-recovery framework.

Key unknowns include: the total annual levy amount; how the "fair proportion" is calculated between airlines and airports, and between different airlines; whether the levy will be sufficient to fund an effective ACPA without being so high that it materially affects domestic airfares; and how the system will interact with ACCC enforcement of Australian Consumer Law in aviation.

The bill represents a shift from industry self-regulation to statutory regulation. Whether it delivers better outcomes for passengers will depend on the Charter's content, the ACPA's resourcing and independence, and the Ombudsperson's willingness to make binding determinations against powerful industry players.

Common questions

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