'Fundamentally flawed' safe rates not the answer

A safe rates tribunal is unwarranted and will not work, ALC boss Michael Kilgariff argues

By Michael Kilgariff, Managing Director of the Australian Logistics Council | March 1, 2012

Before the Federal Government made seat belts mandatory in 1970, policy makers were able to draw upon the results of more than 20 international studies that had carefully examined the initiative’s likely safety benefits.

Similar levels of research have accompanied the introduction of drink driving laws and speed limits, not to mention new safety requirements for vehicles.

Having this evidence available is a critical step in the policy making process, as it helps to ensure laws are appropriately tailored to the conditions and designed in such a way that will achieve their intended result.

And having a body of evidence builds public confidence in new ideas and policy proposals, as evidenced now by the public’s acceptance of seat belts, drink driving and speeding.

It is this sort of evidence that encouraged all governments and industry to invest years of time and resources into the creation of the National Heavy Vehicle Regulator, as well as national marine and rail safety regulators, all of which are due to commence in January 2013.

It’s a much needed reform in the context of sagging productivity levels in the transport sector, which, according to the Australian Bureau of Statistics, increased by only 0.6 percent per annum in the five years to June 2011.

It is of great concern therefore that this ‘evidence based’ approach to policy making appears to have been abandoned in the haste to pass the Road Safety Remuneration Bill 2011.

This haste was on show in the Federal Parliament on February 29, where members are currently debating the legislation despite the fact the House of Representatives Standing Committee on Infrastructure and Communications has yet to finalise its report on the Bill.

ALC is concerned that the Federal Government’s rushing of the Bill through parliament will leave industry with a fundamentally flawed piece of legislation.

The Bill establishes a road safety remuneration tribunal from July 1, 2012, which will be tasked with setting remuneration in the heavy vehicle industry. It is poor policy and will not achieve its aim of improving safety in the industry.

Ultimately, it will stifle industry’s efforts to increase productivity levels, as it will limit their ability to run their businesses in a commercially efficient manner.

Making this ‘heavy-handed’ regulatory intervention even more puzzling to industry is that it is already subject to numerous regulations and legislation at both the federal and state level relating to safety.

These include a heavy vehicle national law due to commence on January 1, 2013, (which will include national chain of responsibility provisions), independent contractor legislation and model workplace health and safety legislation.

Of further concern is that the Transport Workers Union (TWU) has played no constructive role alongside industry to craft and develop the heavy vehicle national law to promote safety, efficiency and productivity in the heavy vehicle industry.

Instead, the TWU has chosen to advocate the creation of a tribunal, which would be empowered to make road safety remuneration orders which could override a Fair Work Australia Award, an enterprise agreement, or even a contractual agreement between two companies.

But according to the regulatory impact statement attached to the Road Safety Remuneration Bill 2011, there is limited data demonstrating that drivers’ rates of pay is a factor in safety outcomes.

Unlike policies to introduce compulsory seat belts, speed limits and drink driving laws, there simply isn’t the research to support the implementation of such an excessive and unwarranted reform.

Not only is it highly questionable whether a centralised wage setting system will actually achieve its intended aim of improving driver safety, it is also likely to restrict competiveness in the industry which is the last thing needed at this time of poor productivity levels.

What the legislation will achieve is a significant increase in the power of the TWU to limit the extent to which management will be able to make decisions in the best interests of the company, such as the use of independent contractors.

And it remains to be seen how the scheme can be implemented in practice when millions of trips are carried out each year across countless routes, in a range of conditions and in an array of vehicles carrying so many different loads.

ALC believes the scheme is unworkable in the long distance sector, because pay rates in the marketplace vary all the time, and there is no such thing as a ‘safe rate’ at which safety applies. Furthermore, a company cannot know what a ‘safe rate’ of pay is when a truck driver is carrying for more than one customer.

As an alternative, ALC believes the National Heavy Vehicle Regulator (NHVR) should be tasked with identifying ways to improve safety in the heavy vehicle industry which is in the interests of all Australians.

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