Tag: Australian Government

The Transport Sector Shakedown Has Real Consequences

In less than a week (4 April 2016), transport costs could rise significantly, thanks to  the Road Safety Remuneration Tribunal (RSRT) order which implements a minimum rate for contractor drivers through the Contractor Driver Minimum Payments Road Safety Remuneration Order. This sets a national minimum payments for contractor drivers in the road transport industry. A few key points about the order:

  • You will not be allowed to trade as either a sole trader or partnership you must use a company.
  • The company that owns the truck cannot be owned by either yourself, a family member or friend.
  • Driver rates from the RSRT apply only to “owner operators” not ASX listed transport operators, so an OO will have to charge a lot more.
  • Freight rates will have to go up at least 40% which will flow through to the entire economy.
  • The Road Safety Remuneration Tribunal (RSRT) will be around for 3 years before undergoing a review.

Many are saying that if the changes to minimum rates proceed, it will price smaller operators out of the industry, though the Transport Workers Union (TWU) is a vocal supporter of the Order. It says an increase in minimum rates will make the industry safer, and that’s worth paying for.

However, according to Business Spectator, some 35,000 people, mostly men, drive their own long-haul trucks. They have borrowed around $15 billion from Australian banks and other financiers to fund their vehicles. Most of the loans are also secured on the family home.

So, consider the implications.  First, the average cost of a truck is ~200k. The Personal Property Securities Register regime means that lenders would have the power to sell the asset at once – and if they cannot on-sell the vehicle, then its scrap value of ~$23 a tonne is the going rate. Then they can turn to the borrowers other assets.  We could see a spate of forced home sales.

Second, the finance sector has dedicated resources servicing the truck finance and insurance sector, plus there is a network of dealers, repairers, accommodation providers, and other services which will be impacted as demand falls for their services.

Third, who will still be on the road to provide transport services – the big guys, of course. But will they want to provide the range of services currently available? Possibly not. So will there be significant transport disruption?

At very least, what was an invisible cost is certainly going to become visible, but we wonder if the knock-on effects have really be thought through.

 

Australia to Launch A “Digital Transformation Office”, But With No Budget

The Commonwealth Government will establish a Digital Transformation Office (DTO) within the Department of Communications so that government services can be delivered digitally from start to finish and better serve the needs of citizens and businesses according to a joint statement from the Prime minister Tony Abbott and communications minister Malcolm Turnbul.

The DTO will comprise a small team of developers, designers, researchers and content specialists working across government to develop and coordinate the delivery of digital services. The DTO will operate more like a start-up than a traditional government agency, focussing on end-user needs in developing digital services.

The DTO will use technology to make services simpler, clearer and faster for Australian families and businesses.

People need to be able to transact services and access information anytime, anywhere. Like any other service industry, government should design its services in the most user friendly way. Interacting with government should be as easy as Internet banking or ordering a taxi through an app.

One of the DTO’s first tasks will be to ensure people no longer have to complete separate log on processes for each government service.  Instead, people should have a ‘digital identity’, which they can use to log in to each of their services across the government.

The DTO will also work closely with State and Territory Governments to identify opportunities for collaboration, including ways to make better use of myGov.

By designing digital services that are consistent and simple to use, fewer people will need to come into a shopfront or make a phone call.

The Government is committed to protecting the personal information it holds about individuals and businesses. Maintaining the security and privacy of personal information is a vital consideration for the DTO.

It is worth noting that there is no new budget for the DTO, “the government already has significant expenditure on service delivery and it is anticipated that much of the DTO’s work will be funded through existing expenditure”.