Australian Trucking Association Convention
17th May, 2012
ATA Chairman, David Simon, ATA board members and councillors, delegates, ladies and gentlemen.Thank you for the opportunity to address your convention today.
Australia's trucking industry is an incredibly important part of our economy, providing a vital logistical link between the community and Australian businesses and export markets.
The doubling of our national freight task by 2030 - trebling along the eastern seaboard over the same period - and with local demand for total freight movements increasing by as much as 60% by 2020, we cannot afford under-investment in our national freight network.
Today I would like to touch on the implications of the 2012-13 Budget, Road Pricing, the progress towards the National Heavy Vehicle Regulator, as well as the Coalition's plan to support the trucking industry.
The 2012-2013 Budget
Just over a week ago the Treasurer handed down the 2012 Federal Budget, complete with a fudged wafer-thin surplus of $1.5 billion.
$10 billion in road funding fiddles alone are enough to wipe it out.
This micro-surplus represents just 0.4% of revenue so if the Government has over-estimated income by just 0.4% or overspends by 0.4% their prized surplus disappears.
Given that Labor's original deficit for the current financial year was $12 billion, and then it was revised up $22.5 billion and then up again to $37 billion and now sits at $44 billion, it's hardly surprising that the community is suspicious about whether the surplus will last the week, let alone the year.
Budget: road expenditure
In relation to my portfolio of Infrastructure and Transport, there was not one single dollar of new expenditure on road or rail announced for the 2012-13 financial year.
In fact, the budget boasts savings from the Nation Building Programme. Savings is what this government calls it when they cut funding.
Overall expenditure on roads is down $3.6 billion or 58% in 2012-13 compared to 2011-12.
Road funding next year will be less than under the last Howard budget in 2007-08 and it ispredicted to be lower at the end of the forward estimate period in 2015-16.
Total road expenditure as a proportion of GDP is lower than it was in the first year of the AusLink programme in 2004.
As noted by the NRMA in their budget night media release:
"NSW motorists will be shocked by a Federal Budget that slashes spending on the state's roads by almost half to an alarmingly low $1.2 billion.'
The Government and the Minister made much of its announcement on the Pacific Highway in the Budget.
A $3.5 billion commitment to the Pacific Highway.
However, there's not even $3.5 billion in the budget. Almost $1 billion in funding will be allocated beyond the forward estimates.
The funding is conditional upon matching funding, a 50:50 split, from the NSW State Government.
The Minister has been repeatedly blaming the NSW State Government in public for the fact that his 2016 deadline, repeated earlier this year in Question Time the prime Minister, for the completion of the Pacific Highway duplication will not be met.
The Minister, and even the Prime Minister, have stated that the agreement between the NSW State Government and the Commonwealth has always been that funding for the Pacific Highway would be 50:50.
That is simply not true.
The current agreement signed by both governments has, effectively, an 80-20 split.
If you look at the funding for the Pacific Highway, when the Labor state government was in power in New South Wales the split was actually 86 per cent to the Commonwealth and only 14 per cent to New South Wales.
It is only since the election of the state coalition government and a $468 million infusion made by that state government that the figures got to 80-20. So, talk about there being some kind of a deal on 50-50 is simply dishonest, and the Prime Minister must know that.
Federal Labor had one policy when there was a state Labor government - but has changed the rules now there is a Coalition government in NSW.
As for other important road projects, it should be noted that there is not a single extra dollar for upgrades to the Bruce Highway in Queensland, especially the Cooroy to Curra section, despite this being acknowledged as the most dangerous road in Queensland by the RACQ.
The RACQ condemned the lack of funding in the budget noting that the Cooroy to Curra section of the Bruce Highway accounts for one-in-six deaths on the national highways.
Labor took $100 million off the Cooroy to Curra upgrade in last year's budget and it has not be restored.
Under Labor's agenda, there will be no money to commence any new work on the remaining 50kms of the four lanes from Cooroy to Curra before at least 2016.
The objective of completing the upgrade by 2020 is now unachievable.
Meanwhile, there has been a massive increase in the number of fatalities north of Curra over recent years and no improvements are in sight.
Budget: Heavy Vehicle Industry
Specifically in relation to the heavy vehicle industry, you will notice in the budget that the Heavy Vehicle Safety and Productivity Programme has been extended for a further 7 years. Much of this funding is to come in years beyond the budget forward estimates which is an ominous sign as to whether these commitments will ever be realised.
However, it is clear that more money needs to be spent on ensuring that truck drivers have access to the rest stops when they need them.
Adequate roadside rest points are not only important to facilitate compliance with fatigue laws but are incredibly important to ensure the safety of truck drivers and providing a safe environment for them to work in.
As you would be aware the National Transport Commission has guidelines for the distance between rest stops on our national highways but the network isn't up to code.
That is why the Coalition promised at the last election to build an additional 500 road side stops over the next ten years at an approximate cost of $300 million to bring the 22,500km of Australia's national highways into broad compliance with NTC guidelines.
But the government's investment in rest stops comes at a cost.
The Budget confirms what we already knew. That the Road User Charge is going up - the biggest increase ever.
From 1 July 2012 the Road User Charge will rise from 23.1 to 25.5 cents per litre, an increase of over 10%.
This budget predicts an extra $700 million over four years.
As you would be aware this increase was based on the recommendation of the National Transport Commission (NTC) based on their formula of industry's road usage.
This increase was confirmed, but reportedly not unanimously, at the Standing Council on Transport and Infrastructure Meeting of State, Territory and the Commonwealth on Ministers 21 March this year.
I am concerned to hear reports from your industry that the NTC is using outdated and inaccurate figures in its calculations which have led to an over-recovery from industry.
I understand that the ATA has estimated that in 2012-13 alone this over-recovery will result in an overcharge of $1.1 billion.
This measure has to be implemented by a regulation which has now been tabled in Parliament.
I am writing to Minister Albanese to request an explanation of the apparent discrepancy between the NTC's calculations and the estimate provided by the ATA.
If I am not satisfied with the Minister's explanation, the Coalition will move to disallow the regulation in the House of Representatives.
I am also concerned that the promised detailed consultation on the setting of the road user charge has been compromised in setting this year's charge.
We have rejected earlier NTC determinations and passed earlier year's determinations on the promise of better consultation in the future. If the commitment has not been honoured, we will not be so lenient again.
As you would be aware the Coalition introduced Fuel Tax Credits in 2006 to give a better deal to the Australian trucking industry and other businesses that make heavy use of fuel.
We are well aware of the impact that higher global fuel prices, not to mention the carbon tax, will have on your bottom lines.
It should be noted here that in the carbon tax's first year of application to the heavy vehicle industry, it will cost the industry an extra $510 million, and it will just go up from there.
High registration fees faced by truck operators
At this same Ministers' meeting in March, a decision was taken to increase many truck and trailer registration charges including prime movers, rigid trucks and semi-trailers.
I recognise that A-trailer charges will fall by 50% as a result of the changes and registration for many b-doubles will also fall.
As you may be aware, in 2006 the Coalition blocked moves by the Australian Transport Council and State Labor Government's to increase registration charges for truck operators.
Again, I was concerned to learn that the use of inaccurate figures is leading to an over-charge on the industry. This overcharge has been estimated by the ATA at $419 million.
In general the Coalition is committed to lower, simpler and fairer taxes that are fit for purpose. In this case, the taxes and charges should be designed to recover the cost of the industry's use of the road system and not as a revenue raising measure to fund other projects.
Safe Rates
The so-called safe rates issue troubles me and puts in place another heavy layer of regulation on the industry.
If there was a clear way to reduce the road toll I would grasp it immediately. The Coalition would not hesitate to legislate if there was a law that could eliminate tragedies on our roads.
I have read the reports that have led to the introduction of this legislation and I cannot find any evidence that can link higher pay for truck drivers will deliver safer roads.
In fact, the government's own regulatory impact statement attached to the legislation questioned any link at all between remuneration and road safety.
It states:
'Speed and fatigue are often identified as the primary cause for a crash but it is a much harder task to prove that drivers were speeding because of the manner or quantum of their remuneration...'
It goes on to say:
'...data at this point in time is limited and being definitive around the causal link between rates and safety is difficult.'
It is of course true that a driver who is under pressure - whether it be because of troubles at home, financial problems, timetable issues - is not going to be as safe as somebody who is actually paying attention to the road and to the wheel.
A strong culture of safe practice is what's needed. And the industry is making progress on that.
According to the Bureau of Infrastructure, Transport and Regional Economics, over the 12 months to the end of June 2011, 185 people died from crashes involving articulated and heavy rigid trucks.
For articulated trucks there has been a decrease by an average of 3.5% over three years. For heavy rigid trucks, there was a fall of 14.7%.
This is in spite of the ever-increasing number of trucks on the road travelling further and further.
In addition, NSW RTA research shows that the heavy vehicle driver was at fault in just 31% of fatal crashes.
So even if you think pay might somehow be an accident factor, driver remuneration is completely irrelevant in 69% of accidents.
New national initiatives, such as the National Vehicle Regulator and the National Heavy Vehicle Law, the National Fatigue Management Rules, and the National Chain-of-Responsibility provisions are far more likely to deliver safer roads than the remuneration tribunal established under this legislation - and should have been given a chance to work.
In truth, Labor's 'safe rates' legislation is more about increasing union power than safer roads.
The government's actual agenda was exposed when it took carriage of the legislation away from Transport Minister Anthony Albanese and gave it to Workplace Relations Minister Bill Shorten.
Yet, according to Transport Workers Union National Secretary Tony Sheldon, there are other things the Gillard government can do to make a real difference. He said:
'Under the carbon tax, drivers will be forced to do longer hours, sweat their trucks further, have less maintenance, and that means more deaths.' (Ten News, 11 July 2011)
Mr Sheldon also said in a media release in July last year that changes in fuel tax credits and excise levels:
'... will result in more truck driver deaths and related harm unless drivers can fully recover their costs. Truck drivers are approaching the union and asking how they can ensure the tax will not just be another hit on running costs that they won't be compensated for. I reckon that's a pretty good question'.
On top of the $510 million the carbon tax will add to costs in the trucking industry in 2014-15 alone, all this makes the Gillard government's crocodile tears in preaching road safety in the face of cost pressures on drivers very hard to swallow.
National Heavy Vehicle Regulator and National Truck Laws
Finally, in relation to the National Heavy Vehicle regulator, the Coalition acknowledges the benefit of harmonising the many conflicting and contradictory regulations in the heavy vehicle industry.
As you would no doubt be aware, it has been estimated that harmonising regulations in this area can deliver a potential productivity gain of $12.4 billion.
Over the years, State Government's have failed to respond to industry needs and improve efficiencies by implementing nationally consistent transport regulations, even when they have signed agreements at COAG to do so.
I understand that the NHVR legislation was introduced into the Queensland Parliament prior to the state election and a committee inquiry had commenced. With the election and change in government, this process will have to be restarted before the reforms can be rolled out nationally.
I can confirm that a Coalition Government will continue to pursue regulatory harmonisation to build a truly national and seamless road freight sector. We understand the great importance of this task to the productivity of the Australian economy.
Determining the appropriate parameters of such a detailed and overarching scheme that is intended to have such a broad scope is extremely difficult and because of this, extensive consultation is a necessity to ensure that the right scheme is implemented and unintended consequences are avoided.
Conclusion
In conclusion, can I again thank you for the opportunity to address your Convention today.
Let me assure you that the Coalition is keenly aware of your concerns, particularly the higher costs facing your industry as the global price of fuel increases, the carbon tax comes into effect and higher registration fees and fuel taxes are implemented.
Not only is the trucking industry a very important part of our freight network, but it is an important part of our economy. Any additional costs you face will invariably affect all Australians - our international competitiveness, our cost of living and the quality of our lifestyle.
What is good for you is good for our country and I look forward to continuing to work with the ATA well into the future.
Thank you.
[ENDS]
