Getting rid of RSRT ‘significant net benefit’: review

By: Brad Gardner


New review finds the trucking industry is better off without the Road Safety Remuneration Tribunal.

 

The Road Safety Remuneration Tribunal’s (RSRT) opponents have been handed the ammunition they need to demand the agency be abolished, with a review claiming the trucking industry is better off without it.

The Federal Government today released the findings of PricewaterhouseCoopers’ (PwC) 2016 examination of the RSRT and its decisions to date, including setting minimum rates for owner-drivers. For supporters of the RSRT, the news is not good.

It paints an unflattering assessment of the tribunal, including arguing its actions are doing more harm than good and that it should be axed.

"We consider that the abolition of the System would result in significant net benefit to the economy and community at large," the report states.

It claims the RSRT’s two rulings to date – the 2014 road safety remuneration order and minimum payments for owner-drivers – will cost the economy more than $2 billion over 15 years but deliver nothing close in terms of benefits.

"The benefit cost ratio (BCR) associated with the orders is less than one in all cases," PwC says.

The review adds that the money spent on the RSRT since it opened its doors in 2012 has not been worth it.

"Regardless of how efficient any regulatory system is, when considered in terms of the net cost to the economy associated with the Tribunal’s orders, the $13.4 million expended over three years (2012-13 to 2014-15) on the System cannot be seen as anything other than an additional ‘inefficient’ cost," the report states.

PwC, which authored a regulatory impact statement on the RSRT prior to its introduction, says in its 2016 review it cannot "substantiate the ongoing need for the System".

"Moreover, the estimated net cost of the System calculated by PwC during this review s eight times the net cost estimated in the 2011 Regulation Impact Statement, when the calculation is adjusted to be over the ten year period 2012 to 2021," it says.

Similar to a 2014 review of the RSRT conducted by Rex Deighton-Smith, PwC finds that there is significant overlap with other bodies such as the National Heavy Vehicle Regulator (NHVR), state authorities and workplace safety agencies.

"The System has the flexibility to avoid such overlap yet consultations suggest the Tribunal has not adequately considered existing regulatory systems when making orders," PwC writes.

Furthermore, it believes the Fair Work Ombudsman (FWO) is not equipped to enforce the tribunal’s orders. The agency is responsible for ensuring compliance with the RSRT’s rulings and educating the industry about its obligations.

"Relative to other road safety agencies, such as the National Heavy Vehicle Regulator, the Ombudsman appears to be considerably under resourced," PwC says.

The 2014 review of the RSRT believes the evidence to justify the tribunal is not there and that the Federal Government should strip it of its rate-setting powers.

The RSRT today decided to stick with its original plan to introduce minimum rates for owner-drivers on April 4, despite owner-drivers, transport companies, lobby groups and even the Transport Workers Union (TWU) recommending a delay.  

 

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