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Friday, 8 November 1985
Page: 1834

Senator VIGOR(11.47) —I rise to answer some of the points which have been addressed to me. I do not wish to prolong the debate for too long, but I support Senator Gietzelt's statement that the Government has been completely free, as has the Department of Transport, in providing information. That was the case with every inquiry that was made of my office. As I said during the second reading debate, my office received during the last month between 10 and 20 inquiries a day from people within the trucking industry. A number of answers from the Minister have been sent out by my office to the various organisations which represent truckies, and they will be distributing to their members. In the process, we have received about four quite lengthy sets of answers which go well beyond the answers which were given in the House of Representatives. We have studied them in detail. We do our homework before coming into this place.

If it is the wish of the Committee and leave is granted, I am prepared to have a couple of documents incorporated in Hansard. One of those documents is dated as late as 7 November and it is the result of meetings in South Australia with the very people whom Senator Vanstone has mentioned and with whom I have continued to consult. That meeting reported various problems in the Bill. With every one of those problems I went straight to the Minister for Transport (Mr Peter Morris) and I got very open and frank answers which have satisfied me. I passed them on to the people in the industry who had actually asked me questions. I refer to people including Mr Barry Lewis, who has received facsimiles of some of these documents. I seek leave to incorporate in Hansard answers given to me on 30 October 1985 by the Minister's Department to most of the questions which were raised by Senator Vanstone, because exactly the same questions were asked of me. I make these available to the Senate. I believe they were not in the document which was dealt with in the other House.

Leave granted.

The document read as follows-

Dear Senator Vigor,

Further to our telephone conversation of 30 October 1985, please find attached responses to the queries you raised concerning the fast-track package for the national road freight industry.

Should you require any further clarification please do not hesitate to contact me.

Yours sincerely,

Peter Reece

(Senior Private Secretary)

Senator Vigor

Democrat Spokesman on Transport

Parliament House




How are road maintenance costs for trucks assessed?

What payments by truck operators are taken into account in cost recovery calculations?

What cost recovery levels are trucks achieving?

On what basis did the National Road Freight Industry Inquiry recommend that vehicles registered as solely engaged in interstate trade and commerce, should pay a registration charge equal to State charges?


Most cost recovery studies undertaken in Australia, including the report prepared for the National Road Freight Industry Inquiry, are based on experiments designed to measure the effects of loaded vehicles travelling over different road surfaces. The principal study in this area was performed by the American Association of State Highway Officials (AASHO) and have been verified by a number of subsequent experiments. The most notable result of this study was the ``fourth power rule'' which relates the damage caused by a particular axle group in direct proportion to the weight on the axle raised to the fourth power (x 10,000)

These results were utilised in the report of the National Road Freight Industry Inquiry and underlie the allocation of road maintenance costs between different vehicle classes.

On the revenue side, the National Road Freight Industry Inquiry recommended that Government, classify as road user charges appropriate portions of the yields from prevailing fuel taxes, vehicle registration fees and driver licence fees.

These fees are directly related to road use and do not, in full, represent general revenue taxes. Other payments made by road users such as payroll tax or sales tax are either common to other industries, or raised for general revenue purposes. In the case of the crude oil production levy the decision is related to preventing a few oil producers gaining windfall profits from the introduction of import parity pricing for domestic crude oil production. Decisions of this nature are unrelated to transport issues.

In comparing costs and revenues, the National Road Freight Industry Inquiry found that in 1981-82 the average articulated 38 tonne vehicle caused road damage of $4,250 and made road user payments of $3,360.

However, vehicles registered as being solely engaged in interstate trade and commerce avoided the payment of full registration charges and therefore contributed less in revenue than the above quoted average.

Against this background the Road Freight Industry Inquiry recommended vehicles solely engaged in interstate trade and commerce should pay a reasonable registration charge to cover road damage costs consistent with the user pays principle. The Inquiry examined equivalent State charges for similar vehicles and recommended that a charge of $1,400 per year (excluding third party insurance) would be appropriate. This charge is broadly in line with the average State registration charge.

Treatment of Primary Producers


Will farmers get special concessions under the Federal legislation?


Primary producers are eligible for a rebate of excise on fuel used for off road purposes. With regard to registration charges the Federal legislation does not provide for any special concessions for any class of road user, including primary producers.

The Interstate vehicle registration charge is designed to recover road damage costs and it would not be appropriate to distinguish between vehicles on the basis of the purpose for which they were used.

However there are provisions to allow federal vehicle registration to be surrendered with an entitlement to a rebate for the period for which the registration would not be used. So if a farmer surrendered the vehicle registration half way through its registered period he would be entitled to a refund of half the registration fee.

Constitutional Issues


Does Section 92 of the Constitution or legal precedence require two methods of collecting interstate vehicle registration charges?


The Interstate road transport legislation before the Senate has been drafted following advice of Federal law officers and is consistent with principles laid down by the High Court in interpreting Section 92. However, these principles could be met in a number of ways.

The advantage of the present approach is that it offers a flat annual registration charge which minimises administrative complexity and allows interstate vehicles to be treated in the same fashion as vehicles on full State registration. At the same time the existence of an option for a vehicle owner to pay a charge based on the actual distance travelled ensures that the legislation conforms with the principle that the charge should be calculated with reference to the distance travelled by the vehicle.

Our understanding is that the actual distance charging mechanism could operate without the flat fee charging mechanism but that the flat fee could not be the only method of charging.

Road Trains


What would it cost to register an interstate road train?


The schedule of charges set out in the attachment to the Second Reading Speech on the Interstate Road Transport Charge Bill cuts out at 38 tonnes at a fee of $1400 which is the maximum weight permitted for a semi-trailer in the eastern States.

For a multi-unit vehicle, such as a road train, with a mass in excess of 38 tonnes the prime mover and each of the trailers would, in essence, be charged separately.

On this basis the fee for a typical triple bottom road train would be of the order of $2600. The actual level of fees would depend on the load carrying capacity of each of the trailers.

Rate Setting


How are rates between owner-drivers and prime contractors determined?

What role is played by Rate Regulation Tribunals in NSW?

What did the National Road Freight Industry Inquiry recommend?


There are a variety of mechanisms through which rates for owner-drivers are determined. In the main, interstate freight rates for owner-drivers are settled as a result of negotiations between either the ultimate customers or an intermediary such as a freight forwarder, and individual owner-drivers. These negotiations take place in the context of an agreement on interstate owner-driver freight rates between the Australian Road Transport Federation and Transport Workers Union of Australia which has been authorised by the Trade Practices Commission.

However, these negotiations also take place within an environment where there are significant variations between States. In NSW, the Industrial Commission through Rate Regulation Tribunals determines owner-driver freight rates between places in NSW and other major centres in Australia. Other State industrial relations systems do not generally cover long distance owner-drivers.

The National Road Freight Industry Inquiry strongly recommended against any form of rate regulation. It argued that owner-drivers would not benefit from administratively determined freight rates because they would either be difficult to enforce effectively, or would be capitalised into the value of a truck and thereby impose an additional burden on the owner-driver and the general community. It concluded rate regulation would offer little benefit to the owner-driver.

Rather, the National Road Freight Industry Inquiry recommended a series of measures which would improve working conditions in the industry including operator licensing, graduated truck driver licences, improvement in finance and in insurance arrangements, and improved railway cost recovery (all measures included in the fast-track package). The Road Freight Inquiry concluded that such measures would benefit both owner-drivers and the general community.

Industry Consultation


What specific steps have been taken to inform industry of the fast-track package.


The Federal Government has a longstanding program of consultation with the road freight industry which has focussed on:

maintaining contact with industry associations and unions concerned with the road freight industry

developing contacts with individuals in the industry at every opportunity

participation in seminars, workshops and other forums

distribution of information at appropriate locations

operation of toll free phones and inviting all interested parties to ring in and discuss their queries.

Associations and unions were consulted on the terms of reference for the National Road Freight Industry Inquiry. These groups generally made submissions to the Inquiry and have also provided continuing comment to the Federal Government on the implementation of the Report's recommendations.

In an unusual step, the major associations and unions were also consulted on the text of the Interstate Road Transport Bill, currently before the Parliament.

Contact has also been developed with individuals in the road freight industry through:

extensive reporting of the results of the National Road Freight Transport Industry Inquiry through general press and industry media

acceptance of invitations by the Minister and Department to talk at numerous seminars, conferences and public meetings throughout Australia and to travel major highways talking to all who are interested at truck stops etc.

production of fact sheets summarising the fast-track package which have been distributed to most truck stops in Australia

continued operation of a toll free telephone number to answer queries.

Road Investment and Industry Consultation


How can the road transport industry influence road funding priorities and programs?


The National Road Freight Industry Inquiry saw a prime role for the proposed Australian Road Freight Transport Advisory Committee (ARTAC) in this area and recommended that, amongst other things, this representative body should:

`comment on and propose road expenditure priorities'.

The Federal Government has announced that it will establish ARTAC and it is anticipated that this will provide an effective arrangement for industry to comment on road funding issues. ARTAC will also be able to bring to the attention of the Federal Minister road construction and maintenance needs where it believes priority should be accorded.

At the same time, application of the user pays principle will encourage industry at all levels to actively seek to put their views forward on expenditure priorities and road construction techniques.

Senator VIGOR —There were two queries about the last area: One was about the bond system for operators that was proposed in the report of the National Road Freight Industry Inquiry chaired by Mr May. There was extreme worry that the bonding system would be used as a method of raising revenue by the Government and that enormous bonds could be imposed which would put operators out of business. I have obtained from the Minister an undertaking that no bonding system in which the bond is more than $10,000 will be introduced. I have communicated this fact to Mr Lewis. Senator Vanstone also raised the problems of what would happen if charging devices were tampered with and this resulted in disqualification from the industry. That matter was raised earlier--

Senator Vanstone —Not by me.

Senator VIGOR —This is a question which we have looked at; the honourable senator may not have looked at it but I believe it was raised by someone in the Opposition. The answer from the Minister was that if charging devices are tampered with the penalty will be a fine rather than disqualification. I seek leave to incorporate this letter from the Minister in Hansard.

Leave granted.

The letter read as follows-


Parliament House,


Dear Senator Vigor,

During recent discussions concerning the Interstate Road Transport Legislation you asked what the situation was with respect to the establishment of bonds for agents and brokers and penalties for tampering with monitoring devices on trailers.

The National Road Freight Industry Inquiry recommended that freight forwarders, agents and brokers be required to post bonds of not less than $10,000 with a suitable Government agency where they wished to engage in the long distance interstate transport business. The Inquiry saw such action as being appropriate to deal with ``fly-by-night'' operators and others who can leave the industry whilst still owing considerable sums to sub-contracting owner drivers, etc.

This recommendation was not one that was included in the fast track package announced in March 1985 and endorsed at the June 1985 meeting of the Australian Transport Advisory Council (ATAC). Consequently, there are no provisions relating to that recommendation contained in the legislation currently before the Senate.

Those National Road Freight Industry Inquiry recommendations not contained in the fast track package are to be further considered by ATAC. However I can assure you that in the event it is agreed that a system of bonding should be introduced, I would not see a bond in excess of the initial level identified by the Inquiry, that is $10,000, being introduced.

With respect to monitoring devices fitted to trailers, the situation is not different from that relating to monitoring devices used elsewhere. Penalties relating to tampering with such devices on a trailer would not enable an application to be made for disqualification under Section 27 of the Bill unless the actions were related to matters of safety.

If the tampering was undertaken to try to avoid payment of the registration fee then Section 27 does not apply. Under Section 42 provision is made for a court to impose a fine and a further penalty of up to twice the registration fee that would have been payable. Therefore under these circumstances the penalty would be purely financial and not involve consideration of whether an operator could be disqualified from the industry.

I trust this advice provides the clarification that you sought on this matter.

Yours sincerely,


Senator VIGOR —I believe that letter answers the last of the industry's queries. I hope that over the next few months we will be able to get that information to people in the industry and that it will allow them to start lobbying State governments and State Oppositions in order to get the complementary parts of the fast track package into place as fast as possible so that we can start saving lives.