Review disputes need for RSRT; recommends major changes

By: Brad Gardner


Government-commissioned review of tribunal wants major changes made.

Review disputes need for RSRT; recommends major changes
Julia Gillard's government established the RSRT in 2012.

 

The Road Safety Remuneration Tribunal (RSRT) should be stripped of its power to set pay rates for owner-drivers and reduced to a shell of its current form, according to a long-buried review of the body.

A government-commissioned review of the tribunal completed in 2014 has recommended sweeping changes to the structure of the agency.

The Federal Government today finally released the review after keeping it under lock and key since receiving the document from consultant Rex Deighton-Smith more than two years ago.

The review examines the link between low rates of pay and safety and whether the tribunal is effective at improving safety – and Deighton-Smith’s findings are scathing.

He says the evidence used to justify the link – and therefore support the RSRT’s existence and the introduction of minimum rates – is flimsy at best and that existing measures such as chain of responsibility (COR) and the National Heavy Vehicle Regulator (NHVR) can be relied upon to improve safety in the trucking industry.

Deighton-Smith’s primary recommendations are blunt and will effectively neuter the RSRT, if not kill it off altogether, if introduced.

His first recommendation states: "That the Road Safety Remuneration System [RSRS] should not continue in its current form."

The second recommendation states: "That, accordingly, the provisions of the Road Safety Remuneration Act 2012 authorising the Tribunal to set mandatory rates should be repealed."

If the Government decides to keep the tribunal’s rate-setting powers in place, Deighton-Smith says coverage should be limited to owner-drivers and to matters directly relating to remuneration.

He goes on to recommend that if the Federal Government retains the RSRT then it should require it to work with the NHVR to avoid duplication and overlap, and possibly look at replacing it with the non-regulatory models used in Victoria and Western Australia.

Both states do have systems in place to help owner-drivers secure viable rates, but both are non-interventionist and do not have the rate-setting powers of the RSRT.

"As neither of the Victorian or Western Australian legislative interventions have yet been reviewed, no firm conclusions can be drawn as to their effectiveness," Deighton-Smith says.

"However, some industry stakeholders expressed a view that they have the potential to address specific problems without giving rise to the risk of significant distortions or imposing unduly complex and costly regulatory compliance burdens.

"This gives rise to the possibility of replacing the current RSRS with a lighter-handed and more targeted system along the lines of those currently in place in Victoria and Western Australia."

Deighton-Smith adds that work needs to be done to assess the effectiveness of the WA and Victorian models, including consultations with industry, before any decision is made to adopt either model.

His review was undertaken in the wake of then Opposition leader Tony Abbott’s pledge to scrutinise the practices of the RSRT if he won office.

While the review was conducted within months of Abbott being named prime minister, his government chose not to release its findings.

Former employment minister Eric Abetz repeatedly brushed off requests to announce when the review would be released.

Employment minister Michaelia Cash made the call to finally release the review, and she says the Government will now begin consultations with the industry about its findings.

"I encourage all interested stakeholders to participate in the consultation process so that a diversity of views is represented, to inform the consideration by the Government of the reform options going forward," she says.

 

SETTING RATES A HARD TASK

While Deighton-Smith completed his work well before the RSRT set minimum rates for owner-drivers, his review acts a prescient warning about the consequences of fiddling with payment structures in the trucking industry.

"It is also apparent that the task of setting appropriate minimum rates for the industry is an extremely challenging one…Significant differences exist between the guideline rates published under the Western Australian and Victorian legislation, the rates contained in various determinations of the NSW Industrial Relations Commission and the rates proposed by the Tribunal by parties including the Transport Workers’ Union," the review states.

"Moreover, several stakeholders highlighted the multi-faceted nature of the industry and the highly sector-specific nature of both service requirements and remuneration arrangements as factors that would render decision-making by the Tribunal on remuneration issues exceptionally complex and challenging."

Indeed, the tribunal has faced strong criticism for the way it has developed its proposed payment structure because it effectively outlaws backloading or split load rates.

Furthermore, some owner-drivers believe the rates are so high that they will be priced out of the market for work, while others say the rates are lower than they currently receive and will encourage their customers to lower existing payments as a result

 

EVIDENCE NOT THERE TO SUPPORT RSRT

Deighton-Smith is critical of the Federal Government for introducing the RSRT in light of his claim there is a lack of strong evidence showing low rates of pay contribute to poor safety. Former prime minister Julia Gillard introduced the RSRT in 2012.

"The Road Safety Remuneration Act 2012 (RSR Act) was adopted despite explicit acknowledgment of the lack of a strong evidence base for the purported link between remuneration and safety performance," Deighton-Smith writes in his review.

He adds that research shows owner-drivers have either low levels of accident involvement or similar accident involvement levels to employee drivers.

Supporters of the RSRT and minimum rates cite poor safety standards among owner-drivers as a core justification for reforming rates, but Deighton-Smith believes the safety performance of owner-drivers may be better than employee drivers.

"In sum, the evidence for the existence of linkages between remuneration levels and road safety performance is relatively limited, while there are difficulties in interpreting the specific nature and significance of any such links," Deighton-Smith says.

"In any case, employee drivers in Australia are relatively well remunerated and, while often less well remunerated, owner drivers do not appear to have poorer safety performance than employee drivers, and may even have superior safety performance."

The review also points to statistics showing a fall in the rate of fatal crashes involving heavy vehicles.

Deighton-Smith says reviews of the industry’s safety performance as a whole and in comparison to other countries have returned positive results.

"The performance of the heavy vehicle sector is generally favourable when measured against both of these benchmarks," he says.

"Australia’s strong overall safety performance has occurred in the context of a substantial program of regulatory reform, as well as other policy initiatives including significant programs of expenditure on road upgrades. This conjunction invites the conclusion that the regulatory reforms pursued have been important contributors to the observed major improvements in safety performance."

Deighton-Smith’s review is one of two the Government released today. The most recent one was carried out this year and it too does not support the RSRT.

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

The RSRT today decided to stick with its original plan to mandate minimum hourly and kilometre payments for owner-drivers from April 4.

The TWU, Linfox and Toll recommended delaying payments until October 1 and phasing them in over one year, while NatRoad called for the new payments system to be held off until January 1, 2017.

 

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