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Small livestock transporters could be victims of new price regulation

Beef Central, 14/03/2016

A new regulation set to be introduced Australia-wide on April 4 will have a significant impact on owner transport drivers and all business that rely on their services, according to Australian Livestock and Rural Transporters Association president Kevin Keenan.

The Contractor Driver Minimum Payments Road Safety Remuneration Order 2016, due to take effect from April 4, will impose minimum rates on owner drivers.

Their representatives say the rule will price many owner drivers out of the market, and will force them to lose their regular contracts in favour of larger transport operators that employ drivers.
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The ALRTA has joined with the National Farmers Federation (NFF) and the Council of Small Business Associations (COSBOA) to write to the Road Safety Remuneration Tribunal calling for the implementation of the order to be to be suspended indefinitely or delayed for at least six months, so businesses can better understand and adjust to the new requirements.

“There is no doubt that the 2016 Order is the most significant regulatory change in decades to impact on owner drivers and all business that rely on their services,” said President Keenan.

“The imposition of minimum rates from 4 April 2016 will immediately price many owner drivers out of the market.

“They will lose their regular contracts and find it much harder to pick up small jobs.

“These businesses need more time to work out what the Order means for them, and if necessary, exit the industry with some dignity and a chance of avoiding financial ruin.

“So many elements of the Order remain unexplained, including who is covered and how to charge for part loads or loads with multiple hirers.

“Despite our efforts, these questions remain unanswered with less than 1 month now remaining until the Order commences.  Until last week, parties negotiating new transport contracts couldn’t even access the online rates calculator.”

NFF President Brent Finlay said that most farmers using professional transport services remain unaware of the existence of the Road Safety Remuneration Tribunal or its 2014 or 2016 Orders.

“Farmers are likely to be significantly affected by these Orders when using contracted transport services.  We are very concerned that there has been no serious attempt by either the Tribunal or the Fair Work Ombudsman to understand the needs of rural and regional Australia or to provide clear information about what these significant new obligations mean,” said President Finlay.

“From 4 April 2016, new minimum rates for owner drivers will drive up freight rates for smaller consignments of livestock or other rural commodities by as much as 350 percent.”

“The only way to avoid these costs is to use larger transport companies with employee drivers.  This means less choice, less flexibility and huge flow on effects for small rural businesses around the country,” he said.

CEO of COSBOA Peter Strong said that it is against core Australian values for the Road Safety Remuneration Tribunal to make a law which deliberately places smaller companies at a competitive disadvantage.

“The minimum rates will apply to owner drivers but larger competitors using employee drivers will remain free to set their own rates,” said Mr Strong.

“Small businesses are already at the mercy of their larger competitors.  Larger transport businesses have economies of scale and a return on capital investment that single truck owner drivers can only dream of.  I am flabbergasted that a government tribunal could discriminate so blatantly against small businesses that just want a fair go.”

“This Tribunal is clearly seeking to extend the reach of unions and industrial relations laws into independent contracting businesses where they have no place.  The laws appear to be designed to force a structural shift towards larger fleets and a unionised workforce.”

“The current state of play is a sure recipe for a regulatory and economic disaster,” said Mr Strong.

ALRTA, NFF and COSBOA have also jointly called for clear advice about the effect of the 2016 Order to be provided without delay by the Road Safety Remuneration Tribunal or Fair Work Ombudsman.

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Comments

  1. Ron Shaw, 16/03/2016

    Perhaps I’m only getting one side of the story here, but it seems mindbogglingly anti-competitive to regulate the minimum charge of owner/driver cattle freighters!!
    “Who” is this piece of rubbish regulation supposed to be protecting?
    I thought the strength and stability of our economy is supposed to be built on competition, that competition kept prices in check.
    This regulation would appear to be anti-competitive. This type of “price fixing definitely will not be helping the smaller cattle producer that sends a few body truck loads to the works/sales each season.
    What does Barnaby Joyce think of this regulation? Did he fight against it or was he asleep at the wheel!?!

  2. Alan Smith, 15/03/2016

    I wonder if the Tribunal or those proposing this regulated pricing have given much thought to how they intend to enforce it in practise?

  3. Mark Bryant, 14/03/2016

    Surely this is unconstitutional. This is a prime example of price fixing. How can one sector of an industry be forced to adopt a minimum rate and competitors in the same industry competing for the same work are not restricted? Who has the ear of this Tribunal? the large operators? The Federal Minister for Transport should look very hard at this Regulation. These government quangos should be called to heel. The NTC has over the years reeked havoc on the transport industry with many of its decisions which have been rubber stamped by State and Federal ministers without any real thought of the repercussions The RSRT should be made to front a Parliamentary inquiry to explain this absurdity and justify its very existence.

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