OUR SAY: When markets fail, intervention cannot be dismissed

The trucking lobby's response to the NTC safe rates report was entirely predictable. But where markets fail governments must intervene

By Jason Whittaker

The National Transport Commission’s (NTC) review into truck driver safety and the link to pay schemes has delivered an "expected outcome", according to one industry representative. The report’s findings were "somewhat predictable", another says.

Not as predictable, perhaps, as industry’s quietly stubborn response to this new report. That could be seen coming from many miles up the road.

It would be quite brave, if not altogether foolish, to dismiss such an important Federal Government-commissioned report that now stands as the basis for a comprehensive re-examination of the commercial cross-border transport market. Particularly when the same report ridicules transport groups for turning a blind eye to the problem in the first place.

Make no mistake: the report from Professor Michael Quinlan and Lance Wright QC is a public and embarrassing rebuke to the trucking lobby. Industry groups united over a baseless argument that driver remuneration had no impact on road safety, with no evidence to rebut significant academic research pointing to an inextricable link, and in the wilful rejection of any regulatory intervention into an increasingly inequitable and worryingly dangerous workplace.

Even the peak Australian Trucking Association (ATA), which for so long had a firm ‘no comment’ policy on industrial relations matters, waded in to prop up a feeble case. Its submission, along with the others from those who represent the bigger end of town, were treated with the contempt they deserved.

And that’s not even the point. The NTC has handed to the Federal Government a report that ignites a worthy and timely debate about how the contract transport market operates in this country, about the relationship between prime and sub-contractors and, most importantly, why too many owner-drivers and smaller operators are running at a loss and endangering the lives of themselves and other motorists.

This report cannot gather dust in a departmental drawer.

Which doesn’t mean the Federal Government should mandate a trip rate. Let’s be clear: the recommendations from Quinlan and Wright would see a radical and unprecedented intervention by government into a business environment; a fundamentally flawed model that just might create more problems than it solves.

But the response to what is a carefully-considered, thoroughly-consultative, disturbingly sober report into the state of the trucking market and the inherent problems in traditional ‘survival of the fittest’ structures cannot simply be: do nothing. The debate has now moved on.

The markets-rule principle is sound. But as we have seen around an economically-unstable world, when markets fail governments must intervene to protect them.

In too many ways, trucking is a failed market. To read the NTC report and think otherwise is simply naïve.

There are a number of market levers that should be considered.

Perhaps legislation now in place in Victoria and Western Australia – which models rates and provides efficient, low-cost means for operators to report bad practice and recover legitimate costs via a statutory tribunal – could be taken nationally. It has the support of both the employer groups and the union and remains the best example of a government safety net without market manipulation.

The Victorian Transport Association (VTA), to its credit, has long lobbied for a nationalised system like it won in Victoria. It has engaged more constructively than any industry representative to recognise the problem and find a workable solution.

Those not prepared to do the same should simply get out of the way. Those that don’t will once again stand condemned, culpable even, for deluding governments into thinking a problem doesn’t really exist.

Has the trucking market failed? How far should governments go to provide a safety net for employed drivers and sub-contracted operators? Have your say via the discussion board below…

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