No Delay on the Order

The trucking industry is bracing for some stormy weather as the Road Safety Remuneration Tribunal has handed down its decision to go ahead with the implementation of the Contractor Driver Order on Monday April 4. This announcement has seen a major reaction on the part of the trucking industry. There has also been a call to arms on the part of the national industry associations, with both the ATA and the ALC announcing major campaigns to abolish the RSRT.


“For the foregoing reasons and as indicated, we have decided not to vary the commencement date of the 2016 RSRO or to add to it a transitional provision in respect of its minimum payments clauses,” read the statement released this afternoon by the RSRT. “The 2016 RSRO remains as made on 18 December 2015, with a commencement date of 4 April 2016.”


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This means the full force of the RSRT’s Contractor Driver Order will come into effect on Monday. Rates paid to owner drivers or small subcontracting operators will have a minimum set by the RSRT and it will be illegal to pay contractors below this set rate. At the same time, rates charged by larger companies, with employee drivers, will not be controlled and can be set lower than the prescribed minimum for owner drivers.


The reverberations of this Order by the RSRT, will be felt right across the trucking industry. The confusion and disruption which will be caused by this Order is beginning to unsettle people in government circles, as we could well see large numbers of small operations in the trucking industry going out of business.


Also made public today were two damning independent reports, which have analysed the detrimental effect of the RSRT Orders on the Australian economy. The two reports, by Price Waterhouse Coopers and Jaguar Consulting are being used as proof the RSRT should be abolished.


The Jaguar report was released today, but was commissioned back in 2014. Its first two recommendations are:

  • That the Road Safety Remuneration System should not continue in its current form.
  • That, accordingly, the provisions of the Road Safety Remuneration Act 2012 authorising the Tribunal to set mandatory rates should be repealed.


PWC’s report is equally as damning, “Our analysis of the costs and benefits of the System suggest that there will be a significant cost to the economy when both Road Safety Remuneration Orders are in effect, with any potential safety benefits significantly outweighed by the associated costs.”


It even puts a price on the damage which will be caused, “Our analysis shows that the Road Transport Order and Payments Order will result in a net cost to the economy in excess of $2 billion in net present value terms over fifteen years from 2012.”


In direct response to these reports, the Australian Trucking Association’s Board held an emergency meeting today before unanimously agreeing to mount a campaign to abolish the RSRT.


“Until now, the ATA has had no mandate to be involved in the tribunal,” Noelene Watson, ATA Chair in a statement. “However, the definitive findings of today’s reports make it clear that the Act and tribunal are a threat to the viability of more than 20,000 small trucking operators, and to our economy generally.


“The tribunal has now become involved in business to business transactions. The ATA has a duty to protect its small business members from this regulation of how they run their businesses. It is essential that operators and drivers are paid fairly. The Act and tribunal are the wrong solution to the problem; the ATA is committed to finding better solutions in a timely manner.


“Many smaller operators, particularly those in rural and regional areas, will be out of business as a result of the devastating impact of the RSRT and its orders. It’s essential for the Government to respond to these recommendations as a matter of urgency and abolish this threat to Australia’s trucking operators.”


The Australian Logistics Council also came out strongly in the wake of the two reports being released this morning by Sen. Michaelia Cash, Minister for Employment.


“The Report’s finding that the cost of the Tribunal’s orders would be in the vicinity of $2.3 billion is damning, and underscores why ALC has consistently called for the abolition of the Road Safety Remuneration Tribunal,” said Michael Kilgariff, ALC CEO. “Of particular note is the finding that ‘We consider that the abolition of the System would result in significant net benefit to the economy and community at large’.”


NatRoad, who have been leading the charge against the RSRT in the last few months have come out strongly after the announcement of the decision today.


“The decision comes despite more than 800 submissions and three days of hearings over Easter when hirers and owner drivers, summonsed under threat of 6 months imprisonment to give evidence, told the Tribunal that the Order spelled ruin for their small businesses, loss of their homes and devastation of rural communities,” said Warren Clark NatRoad CEO.

“Rather than pay heed to vast numbers of submissions criticising the ambiguities in the Order and the catastrophic and unfair consequences of imposing a two tiered rate system on the transport industry, the Tribunal has sought to blame industry associations and the Fair Work Ombudsman for any uncertainty and confusion.”

When informing the the members of the Livestock and Bulk Carriers Association of NSW, its CEO Robert Gunning summed up industry feeling, characterising the RSRT’s decision as a ‘Declaration of War!’