Finance brokers ring alarm over RSRO impact on economy

By: Rob McKay


Equipment spending at risk as small firms and owner-drivers express fears over debts, CAFBA says

Finance brokers ring alarm over RSRO impact on economy
CAFBA believes a delay is needed to gauge impact on rest of economy.

 

Concern about the ‘safe rates’ Road Safety Remuneration Order’s (RSRO’s) expected impact now stretches to the commercial finance broking sector, with its industry body fielding reports from members.

The Commercial Asset Finance Brokers Association of Australia (CAFBA) had been aware that issue was becoming a live one for customers in December when the order was made, vice president Kathryn Bordonaro tells ATN.

Her organisation fielded reports in bulk from early February reflecting widespread client concern about their vehicle and other loan situations in future.

Of the members approached by their owner-driver and small transport firm clients, the feedback centred on "concern, frustration and lack of information".

This spurred CAFBA, which represents nearly 150 full members and hundreds of associates, to present a Road Safety Remuneration Tribunal (RSRT) submission urging an indefinite delay in the RSRO start date until "all issues and ramifications" are considered.

"It is possible that the larger transport companies will simply acquire additional trucks and put on employee drivers to replace the sub-contractors who will then be left with a loan to service but no income to service it with.

CAFBA has also passed the RSRT submission on to the federal ministers of transport and agriculture as well as to the newly formed Office of the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), raising the likely flow-on effects to the economy of wholesale defaults on equipment loans.

"This will be the first real government-instigated matter that that position will be looking into and I encourage any small business transport operator businesses out there to put their concerns in writing to her office because the more voices and the more feedback she gets, the more it empowers that office to act on the issue," Bordonaro says.

While CAFBA has not liaised with transport vehicle or equipment manufacturers, the possible impact there is a worry it is raising, as difficulty in financing means sales fail to be made.

"We understand the connection between appropriate remuneration and the chain of responsibility in transport operations, and we certainly don’t want anything that impacts [negatively] on road safety but we think that rushed legislation and unintended consequences always need to be considered when making changes like this," Bordonaro says, adding "you can have a good safe business and still be able to set your own market rates".

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