South Australian Road Transport Association says proposed minimum rates for sub-contractors could make them extinct
The Road Safety Remuneration Tribunal’s (RSRT’s) draft order for contract drivers is too high, too complex, and fails to reward efficient practice, the South Australian Road Transport Association (SARTA) has warned.
The organisation’s executive director, Steve Shearer, says the order could spell the end of sub-contractors, with large transport groups incentivised to take on more work in-house.
The end result, he says, will be higher prices for consumers without any real improvement in road safety.
“The overwhelming and considered view of our membership is that sub-contractors will be priced out of the market by the excessive rates proposed by the RSRT in its draft order,” Shearer says.
He is not suggesting sub-contractors should not be paid appropriately, but says some contracting parties have been able to develop commercial advantages through more efficient processes that have no impact on safety.
Such sub-contractors are able to work at a lower rate – safely and legally – at present.
But if implemented, the draft order would standardise rates regardless of each individual sub-contractor’s efficiencies.
“This is a typical outcome when governments start to try to legislate commercial rates, in any industry,” Shearer says.
“It stifles innovation and removes freedom of choice and market forces.”
Shearer also says the order is “absurdly” complex and “most certainly will not be understood by the great bulk of people to whom it is intended to apply”.
This will make it difficult to enforce, which could result in some contractors and sub-contractors simply ignoring its rules.
“It contains a number of ambiguities and would create various operational and contractual obligations, which will not be effectively enforced,” he says.
“[This will leave] the good and responsible operators to carry the financial and administrative burden whilst competitors cheat with impunity.”