Is Political Instability Good or Bad for Trucking?

is political instability good or bad for trucking?

After the ridiculous shenanigans in Canberra this week we have to ask ourselves the question, is political instability good or bad for trucking? It looks like the country is about to head into a free-fall situation with the Prime Minister’s job in doubt, the election date in doubt and the prospect of a good six months where nobody’s hand seems to be on the tiller.

How does this effect the trucking industry? The first thing is the trucking industry is exactly that, an industry, and business does not like any form of uncertainty. The main indicator of this is the Australian truck sales figures. In the lead up to any election, even in periods of relative stability, truck sales will back right off. 

Trucking operators delay or cancel buying decisions, because of the increase in uncertainty about the trading environment, in the short term. Buying decisions can be delayed for a few months and the final decision can be made when the picture is a lot clearer and we are looking at the prospect of a particular party being in power for a few years into the future. The normal effect is like a driver taking heir foot off the gas. Truck sales don’t just halt, but there is a dip and potential sales are put on the back boiler.

Trucking operations are high turnover and low profit enterprises, in the main, so they are particularly sensitive to anything which could affect cashflow, even for a couple of weeks. Hence the industry’s sensitivity to political uncertainty, in the short term. 

We also have to think about the current situation, and its fallout, in the longer term. All of this in-fighting in the current government is simply increasing the possibility of the next election resulting in the next government being led by Bill Shorten.

There’s nothing particularly wrong with that, as long as the government is stable and there is some certainty going forward. If the politics of the country are stable, the business community are able to plan ahead and make informed investment decisions, all of this is good for business and therefore good for trucking.

However, there is one issue which might cause concern, if Labor do take power in any election, whenever it comes. There has already been rumblings this week with the return of some form of Road Safety Remuneration Tribunal rearing its head in discussions in the media. With Labor in power, something like this is almost certain to be on some people’s agenda.

If there is a reprise of the RSRT, the trucking industry needs to start thinking about how this could play out, right now. There can be no resistance to any measure which will actually improve road safety in trucking, but there can be resistance to a measure which claims to improve outcomes without any prospect of improving the situation, in real terms.

 

is political instability good or bad for trucking?

 

The program needs to start this month with the improvements the current rules have already achieved laid out in front of the public and those who may be decision-makers in the next government. There also needs to be a road map to further improvements, and empirical data to back it up, on the table and simple to understand.

At the same time all of those representing the trucking industry need to co-ordinate the message. Any hint of squabbling between industry associations will mean the people we need to communicate with will stop listening.

The timing will be critical and the communication around the issue needs to be carefully thought out. This is a delicate situation and one which will be a moving target until the smoke clears sometime next year. The main aim needs to be coming out into the clearer air with improved safety outcomes in prospect and not a clone of the original RSRT in prospect.