Weekly News – Overcharging continues, CoR law changes

MINISTERS DETERMINED TO CONTINUE OVERCHARGING

On Friday 6 November 2015, Australian Transport Ministers have agreed to continue over-charging the heavy vehicle sector by more than half a billion dollars over the next two years.

This comes in addition to the $400m in over-charging during the past two years.

The decision was made by the Transport and Infrastructure Council which meets twice annually.

ALRTA National President Kevin Keenan observed the meeting and afterwards said that he was bitterly disappointed in the decision.

“Ministers had a chance to return to fair cost recovery principles but have instead ignored the advice of their own statutory authority and opted to continue the blatant opportunistic tax grab”, said President Keenan.

“Not one of the Ministers present was prepared to do the right thing by industry”, he said.

In 2014, the NTC discovered flaws in the PAYGO model and recommended that Ministers decrease registration charges by 6.3% and the fuel levy by 1.14cpl from 1 July 2014.  Instead, Ministers agreed to delay implementation of the new charging methodology until 1 July 2016.

“Ministers have pitched this decision as a step towards implementing the new charging methodology, but this is not the case”, President Keenan said.

“Revenue is being frozen at a level calculated under a flawed model.   Governments will now collect $3.2b no matter how much they spend on roads.  Given that government expenditure on road infrastructure actually decreased during the past two years of over-charging, we can now expect to see further deferment of road spending”.

“I have lost confidence that Governments will ever fix this problem.  We have already had a two year delay and that has just been followed by yet another two year delay”.

“It is no secret that Governments are actively working on a mass-distance-location charging system and moving to a forward looking cost base.  The persistent over-charging will just be used as leverage to push us into a more complex charging scheme.”

“How can we trust them to get that right and charge us fairly if they can’t, or more correctly won’t, fix the agreed PAYGO model”, he said.

Ministers have also directed the NTC to do some further work to identify potential improvements to the charges methodology to better balance heavy vehicle charges and government revenues. This sounds awfully a lot like ‘fiddling with the agreed formula’ so that expenditure and revenue can be equalised – without dropping charges.

This whole exercise just illustrates just how important it will be to have a truly independent charges determination process when we inevitably move to some form of user-pay charging mechanism.

Here are some links to a few media reports about the decision:

http://www.fullyloaded.com.au/industry-news/1511/industry-fury-on-lack-of-action-on-overcharging/

http://www.ownerdriver.com.au/industry-news/1511/trucking-has-lost-confidence-in-governments-over-heavy-vehicle-charges/

http://www.dieselnews.com.au/overcharging-may-continue/

CHANGES TO CHAIN OF RESPONSIBILITY LAWS

Australian Transport Ministers have agreed to a package of changes to chain of responsibility laws that will be introduced next year.  The main changes are:

  • Introduction of a ‘primary duty of care’ on ALL chain parties to ensure the safety of road transport operations;
  • Due diligence obligations for executive officers;
  • Replacement of the ‘reasonable steps’ defence with a ‘reasonably practicable’ test;
  • Enforcement powers extended to reach parties further up the chain; and
  • Increased penalties for serious safety breaches.

In effect, this means that the chain of responsibility laws will look and feel a whole lot more like workplace health and safety laws.  It means a move away from a prescriptive ‘tick the box’ approach to more of a flexible proactive approach where individual businesses will need to assess, identify and address safety risks specific to their operation.

The new approach also means that authorities won’t need to wait for an accident to occur before taking action.  All parties must demonstrate at all times how they are dealing with safety risks.

The ALRTA has been pushing for these changes for several years and we are happy to see a package agreed.  Current chain of responsibility laws are proving ineffective and we believe these changes will give operators a lot more leverage over parties further up the chain.

Enabling legislation will be developed by the NTC and considered by Ministers in May 2016.  Changes will then need to be enacted in all state legislatures.

NEXT STEPS AGREED FOR IMPROVING VEHICLE ROADWORTHINESS

Last week Australian Transport Ministers endorsed the NTC / NHVR heavy vehicle roadworthiness program recommendations that focus on four key areas:

  • National consistency;
  • Compliance;
  • Vehicle Inspections; and
  • Improvements to NHVAS.

The ALRTA understands that Ministers have agreed to extend chain of responsibility laws to include vehicle maintenance.  This will be a significant change likely to be introduced with the other chain of responsibility reforms next year.

One very welcome development is that Ministers have agreed to expand the use of formal warnings for minor defects which should also translate into better processes for self-clearing of minor defects.

In addition, the NHVR will also be empowered to enter into agreements with companies for ‘enforceable undertakings’ as an alternative to stiff penalties for serious systematic safety breaches.  Under this arrangement a company can submit a proposal to the NHVR to address roadworthiness issues (e.g. a proposal for more frequent maintenance checking of all vehicles with reporting to NHVR).

Another very significant development is the ‘in principle’ endorsement of a risk-based inspection regime to be introduced as part of a national registration system from 1 July 2018.

The ALRTA has been highly supportive of such an approach because inspection regimes currently vary greatly across the jurisdictions without rhyme or reason.  We will never achieve a truly national approach unless heavy vehicles are treated the same in all states and territories and there are real problems with public perception when vehicles registered in some jurisdictions are simply not inspected at all.

A risk-based approach will mean that the inspection effort can be directed towards the areas where it is most needed, while at the same time low risk sectors can be freed up from the red-tape burden associated with the inspection process.

NHVR FUNDING LIFTED

The ALRTA understands that Minsters have agreed to lift NHVR funding by $2.5m annually so it can better deal with progressing the national roadworthiness project.  This is important so that the new responsibilities do not negatively impact on other NHVR programs.  Another $10m has also been approved for payment to state service providers.

This will not immediately impact on heavy vehicle charges because of the decision to freeze charges for the next two years.  However, these costs will become a factor in the event that there is a return to cost recovery principles sometime in the future.

NATIONAL REMOTE AND REGIONAL TRANSPORT STRATEGY

The ALRTA is pleased that Ministers have endorsed the National Remote and Regional Transport Strategy and agreed to a public release.

The ALRTA has participated in the development of the strategy via stakeholder workshops and submissions.  Improving transport service and infrastructure in remote and regional Australia is of great interest to rural transport operators and their communities. We understand that the strategy will complement the Federal Government’s White Papers on Northern Australia and Agricultural Competitiveness.

There will however be some difficult funding challenges associated with executing key elements of the strategy.  The ALRTA will be asking all Governments to favourably consider ongoing financial support for the strategy to ensure that proposed actions become a reality – it will be no good if it is just another well-meaning document that gathers dust on a shelf.

RED TAPE CUT FOR DANGEROUS GOODS

Ministers have agreed ‘in principle’ to reduce paper work for the land transport of dangerous goods, including those who move limited quantities of pest control substances (e.g. part of a larger load).

It is estimated that the change will save operators $33m annually.

NTC will now consult with industry over the next 12 months to agree suitable changes to the Dangerous Goods Code.

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