SUBMISSION TO THE COALITION S RED TAPE REDUCTION TASKFORCE

Transcription

1 MARCH 2013 ALC SUBMISSION SUBMISSION TO THE COALITION S RED TAPE REDUCTION TASKFORCE

2 THIS SUBMISSION HAS BEEN PREPARED WITH THE ASSISTANCE OF KM CORKE AND ASSOCIATES, CANBERRA. PO Box 20 DEAKIN WEST ACT 2600 P: F: E: admin@austlogistics.com.au Australian Logistics Council, March 2013 P2

3 MAR 2013 Summary of recommendations 1. ALC believes that given the importance of the transport and logistics industry to the Australian economy, a member of the industry should be represented on the Business Advisory Council. This should be a body recognised in statute so as to reflect the importance of having a centre of business advice within the administrative structure of government. 2. Noting the Opposition s intention in government to improve Commonwealth Government regulatory gatekeeping requirements, ALC requests an incoming government require that a regulatory impact statement estimating the cost proposed regulatory changes will have on industry be prepared in all circumstances where a legislative instrument is being made. 3. ALC requests an incoming government resource a review of the operation of the amendments made to the Navigation Act 1912 by the Coastal Trading (Revitalising Australian Shipping) Act 2012 with the intention of removing those provisions that impede the efficient operation of the coastal trade. 4. ALC requests an incoming government resource a review to consider to what extent the Road Safety Remuneration Act 2012 duplicates issues dealt with by the Heavy Vehicle National Law and workplace, health and safety legislation. The review should be carried out with a view to eliminate from the Road Safety Remuneration Act any provisions that could confer a power on the Road Safety Remuneration Tribunal to make statutory instruments covering areas dealt with by the other pieces of legislation. 5. ALC requests an incoming government places a high priority on removing regulatory duplication between different levels of government. ALC also requests an incoming government should make a priority putting in place bilateral arrangements with the states to remove duplication and overlap in relation to environmental assessment and approval processes for major infrastructure. 6. ALC believes that the NTC largely duplicates the functions of other entities and should be abolished. 7. ALC requests an incoming government adopt the policy of taxation neutrality between the transport modes. This is necessary to avoid distorting consumer choice when deciding which form of transport should be used to freight goods. P3

4 Introduction The Australian Logistics Council (ALC) is the peak industry body for the major and national companies participating in the freight transport and logistics supply chain industry. ALC appreciates the Opposition s focus on red tape reduction, which will in turn increase Australian productivity. The need to enhance productivity is borne out by figures from the Australian Bureau of Statistics and market researcher IBIS World that productivity growth in the transport sector has remained stagnant at 0% in the five years to December Furthermore, a Reserve Bank report has found productivity in the transport sector has gone backwards by 2% over the past two decades. The Bureau of Infrastructure, Transport and Regional Economics also estimates the national freight task will double to 1000 billion tonne kilometres by 2030 and to almost triple to 1400 billion tonne kilometres by In light of figures which show the transport and logistics industry: represents 14.5 percent of GDP; employs 1 million people; and involves 165,000 companies, ALC has been on the front foot advocating policies and programs that ensure the industry continues to flourish and supports continued economic growth. ALC will judge policies put forward by political parties against four fundamental principles: 1. whether the policy will enhance productivity growth; 2. whether the policy will encourage infrastructure development; 3. whether the policy reduces the red tape that adds to compliance costs and hampers innovation; and 4. whether the policy will encourage the continuation of the COAG seamless economy agenda. ALC welcomes the commitment to red tape reduction and the minimisation of duplication contained in The Coalition s Deregulation Reform Discussion Paper (the discussion paper). ALC also welcomes the establishment of a business advisory council, which will advise the next coalition government. ALC believes that given the importance of the transport and logistics industry to the Australian economy, a member of the industry should be represented on the Business Advisory Council. This should be a body recognised in statute so as to reflect the importance of having a centre of business advice within the administrative structure of government. In this context, ALC makes these further observations that, if adopted will improve Australia s productivity. P4

5 GATEKEEPING REQUIREMENTS ALC agrees with the observations made in pages of the Discussion Paper that: Regulations are often created simply because too little critical consideration is given to both the necessity for regulations and the impact of these regulations on individuals, business and society as a whole. There needs to be a strengthening of the regulatory gatekeeping requirements. In concert with better incentive mechanisms to curb unnecessary new regulations, the role of regulatory impact statements (RIS ) should once again be made more purposeful and effective. The Commonwealth Government via the Office of Best Practice Regulation (OPBR) requires government departments and agencies to prepare RISs for regulatory proposals that are likely to have a regulatory impact on business or the notfor-profit sector, unless that impact is of a minor or machinery nature and does not substantially alter existing arrangements. However since the OBPR was transferred out of the Productivity Commission to the Department of Finance by the current Labor Government there is a widespread view that RIS have become more pro forma and less responsive to the legitimate concerns of affected parties. It has also become commonplace for the RIS process to be waived altogether for key regulatory changes. In a submission to the Productivity Commission on benchmarking regulatory impact analysis, ALC recommended regulatory impact statements contain a business impact statement estimating the cost the proposed regulatory change will impose on industry in all circumstances where a legislative instrument is made. 1 The ALC view was favourably recorded in the final report from the Productivity Commission when it referred to the ALC observation that, Australian Logistics Council: what constitutes a minor or machinery amendment to regulation is a question of fact and degree. In many circumstances, what is regarded as a minor change can have significant effect on business and flow-on effects on the supply chain. 2 The attached article from the Australian Financial Review dated 26 March 2013 illustrates the practical reasons why ALC maintains this position. ALC commends this proposal as a practice to be adopted by an incoming government. The standard of RIS s prepared by government must also improve. In the Productivity Commission submission referred to above, ALC gave the following example: In particular, the Coastal Trading (Revitalising Australian Shipping) Bill 2012 provides for a new licensing framework comprising a three tier licensing regime. The RIS noted: shippers support an effective, efficient and internationally competitive domestic shipping industry, but are concerned that Government intervention could increase freight rates and make some currently marginal trades uneconomic; more specifically shippers fear that restricting the use of Continuing Voyage Permits and Single Voyage Permits could lead to different modal choices (from maritime to land-based transport) or in particular cases, to the relocation of production offshore depending on the increase in transport costs; and flexibility is also about having access to the ships which best suit shippers needs; for example, being forced to use only Australian flagged vessels may mean entrenching ballast voyages with subsequent significant cost increases but made no attempt is made to quantify the additional costs shippers face. 1 ALC Submission to the Productivity Commission s study into Regulatory Impact Analysis submissions-2012/ 2 Productivity Commission Regulatory Impact Analysis: Benchmarking (2012):117 P5

6 More generally, the Government reform proposes (amongst other things) a reduction in the use of single voyage permits, moving Australia from having one of the world s more liberal cabotage regimes to one of the more restrictive models, thus restricting competition in the Australian domestic sea freight market, giving rise to a concern that the flexibility of being able to send freight by sea is not lost through either a scarcity or unavailability of ships available to consistently provide the service. ALC requests a review of the operation of the amendments made to the Navigation Act 1912 by the Coastal Trading (Revitalising Australian Shipping) Act 2012 be resourced with the intention of removing those provisions that impede the efficient operation of the coastal trade. In a similar vein, the Parliament last year passed the Road Safety Remuneration Act Despite the title of the legislation, ALC notes that a road safety remuneration order made under the Act can govern not only remuneration matters, but also related conditions. It would therefore be open for the Road Safety Remuneration Tribunal (effectively a division of Fair Work Australia) to make a decision relating to, for instance how trucks should be loaded and unloaded as well as managing fatigue, without necessarily referring to remuneration. There is a direct collision between the philosophy of this Bill, which raises the spectre of inserting command/control regulation in an area where other laws require safety to be managed according to As Low As Reasonably Practicable (ALARP) principles. This is the concept imposed by workplace health and safety (formally occupational health and safety) laws (WHS) in all circumstances, which implicitly requires implementation of best practice and continuous improvement. It should also be noted the Heavy Vehicle National Law (HVNL) was passed earlier this year by the Queensland Parliament and will subsequently be implemented around Australia. It is expected the Law will commence full operation in July It specifically manages speeding and fatigue management the areas of greatest safety concern in the sector. ALC has strongly argued that safety issues are best dealt with by specialist laws in the case of heavy vehicles the HVNL. This law should be administered by specialist regulators the National Heavy Vehicle Regulator. It is particularly noted the Road Safety Remuneration Act will prevail over all other laws. 3 That would mean that a road operator would have to follow any road safety remuneration order made by the Road Safety Remuneration Tribunal specifically dealing with (for instance) truck loading or fatigue, notwithstanding the obligations of operators under nationally consistent heavy vehicle and WHS/OHS laws. This is a recipe for inefficiency, derived from duplication of statutory obligations that will impact on productivity without commensurate safety outcomes. ALC requests an incoming government resource a review to consider to what extent the Road Safety Remuneration Act 2012 duplicates issues dealt with by the Heavy Vehicle National Law and workplace, health and safety legislation. The review should be carried out with a view to eliminate from the Road Safety Remuneration Act any provisions that could confer a power on the Road Safety Remuneration Tribunal to make statutory instruments covering areas dealt with by the other pieces of legislation. It should be noted ALC members support the ALARP principles contained in WHS law. 3 Subdivision A of Division 3 of Part 1 of the Road Safety Remuneration Act 2012 P6

7 A seamless national economy A high priority should be given, consistent with the Coalition s Deregulation Reform Discussion Paper, to removing regulatory duplication between different levels of government. In relation to transport and safety regulation, the establishment of the NHVR and the National Rail Safety Regulator offer the potential for a nationally consistent approach to regulation. The potential benefits will be lost, however, if state governments do not fully adopt these arrangements in place of state based regulation. This is because regulatory duplication adds to costs and reduces productivity. The removal of state government transport and safety regulations that duplicate federal arrangements should be one of the most important objectives of an incoming Coalition Government. As a priority, an incoming Coalition Government should put in place bilateral arrangements with the states to remove duplication and overlap in relation to environmental assessment and approval processes for major infrastructure. There should also be a focus on removing prescriptive regulations, and encouraging and supporting industry led approaches to addressing externality issues whenever it is practical to do so. In relation to the economic regulation of infrastructure, as a general rule, light touch regulation should be favoured by economic regulators over approaches that involve increased interventions in infrastructure markets. The focus should be on whether reasonable outcomes from commercial negotiations are achieved within an open access regime. National Transport Commission What is now the National Transport Commission (NTC) grew out of the microeconomic reform process commenced during the special premiers conferences of 1990 and 1991, which established what was called national competition policy that had as a major goal uniformity and consistency in road transport regulation. 4 Clause 5 of the 2002 Inter-governmental Agreement for Regulatory and Operational Reform in Road, Rail and Intermodal Transport subsequently set out the modern functions of NTC. Responsibilities conferred under this agreement include (amongst other things) the development of uniform or nationally consistent regulatory and operational arrangements for road, rail and intermodal transport. It also confers on the NTC the responsibility to develop road use charging principles, until such a time as the (then existing) Australian Transport Council decides that another organisation should undertake the function. 5 Since then: a. the Council of Australian Government (COAG) has adopted the Intergovernmental Agreement on Rail Safety and Investigation Reform. The South Australian Parliament has passed the Rail Safety National Law (South Australia) Act that will give relevant effect to the agreement. The National Law will be administered by the National Rail Safety Regulator (the NRSR); b. COAG also adopted the Intergovernmental Agreement on Heavy Vehicle Regulatory Reform. The Queensland Parliament has passed the HVNL, commencing the process that will lead to a single set of laws governing the heavy vehicle sector. The National Law will be administered by the NHVR; and 4 Discussed generally in Moore and Starrs Road Transport Reform in a Federal System presented at 18th Australasian Transport Research Forum, 29 September 1 October See particularly paragraphs 5(1)(a) and 5(1)(c)(i) of the intergovernmental agreement. 6 Act 14, 2012 P7

8 c. the COAG Road Reform Plan (CRRP) feasibility study has been considered by COAG. It has established the Heavy Vehicle Charging and Investment Reform to develop a road pricing mechanism. The Reform is being developed by an independent secretariat overseen by a Board with representatives from industry and all areas of government. This illustrates the development of a sophisticated system of decision making at the intergovernmental level, overseen by the Standing Council on Transport and Infrastructure (SCOTI), which has been established under the modern COAG structure. As spelt out in detail in the Council s terms of reference, SCOTI s objective is to achieve a coordinated and integrated national transport and infrastructure system that is efficient, safe, sustainable, accessible and competitive. 7 Finally, all Australian transport ministers are represented on SCOTI, who are supported by advice from the relevant jurisdiction s transport department. It follows that the Australian federation is on the cusp of a truly cooperative federalism model of administering heavy vehicles and rail. To that extent, there is a view held by some that the NTC has run its course. SCOTI commissioned a report called the 2012 Review of the National Transport Commission and other relevant bodies which appears to have postponed consideration of the issue until the next statutory review of the organisation. This was both a disappointment and a surprise to ALC, which believes the NTC, a generalist body of administrators, should be abolished, with those functions not currently undertaken by other entities allocated to the most appropriate specialist body. ALC believes that the NTC largely duplicates the functions of other entities and should be abolished. Carbon tax Finally, ALC has a policy of taxation neutrality between transport modes, because of the possibility of distorting customer choice as to the mode of transport to be used to freight goods. The carbon tax breaches this principle because some transport modalities are taxed by the overall carbon tax mechanism, but not others. The broader principle of taxation neutrality between transport modes is also a policy the Coalition should adopt in Government. Australian Logistics Council March The terms of reference can be found at: P8

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10 Australian Financial Review Matthew Stevens Safety go-slow pleas a paradox PUBLISHED: 26 Mar 2013 The confrontation between Australia s stevedores and Safe Work Australia over a draft industry code of practice continues to foment, with DP World and the Australian Logistics Council separately inviting Workplace Relations Minister Bill Shorten to intervene. There is a delightful paradox in the industry s entreaties first because the industry believes the minister and his department have actually been overengaged in the preparation of the contentious safety code and, second, because the appeal might well have bought a relatively instant result. Outside the content of a code that the stevedores think has developed into a prescriptive, unwieldy and potential unsafe beast, one of the key points of consistent complaint has been purely procedural. The stevedores and their agents of agitation, ALC and Shipping Australia, are extremely concerned that there was no plan to put the code through the regulatory impact analysis that they imagined its outcomes would require. In the letter sent to Bill Shorten earlier this month, the ALC noted that the failure to formally review the impact of the proposed safety code was its most significant concern about the process. ALC does not agree with the assessment of the Office of Best Practice Regulation that the costs associated with the Stevedoring Code of Practice will be minor and asks on what basis was this assessment made, ALC managing director Michael Kilgariff wrote. ALC believes the Code in its current form has the potential to impose significant new costs to industry, without commensurate safety outcomes. ALC has long argued for Regulatory Impact Statements to be prepared for all legislative instruments that may impact business. This is a clear case where an RIS is required to assess the potential costs and benefits of the reform. Following reports in The Australian Financial Review that just one key element of the code under preparation the requirement to have an extra safety official on every crane serving every ship could add at least $15 million to our national stevedores labour costs, there seems to have been a change of heart by the government. Shorten s office has confirmed that the OBPR will review the code and that the decision will be announced with this week s release of a final draft of the code into its community consultation phase.

11 This is a good start. Whether Shorten will be as open to addressing the industry s core criticisms of the code under construction, well, time will tell. Certainly, though, the minister was left in no doubt about the nature of the concerns. ALC shares the position of DP World, as communicated to you in their letter of 1 March 2013, that a number of outstanding issues need to be urgently addressed before the Code can be released for public comment. These issues relate to the Code s scope, which needs to be amended to ensure it does not conflict with current workplace health and safety legislation and international maritime safety legislation. Another significant issue is the proposed requirement to have in place a mandatory Safety Observer. Industry believes this could potentially have a perverse safety outcome whereby safety outcomes are actually reduced as a result of this requirement rather than enhancing them through reliance on the observer, rather than taking all reasonably practicable steps to ensure safety. Shorten received this correspondence from ALC a day ahead of Safe Work Australia s decision to send the draft code to public consultation. The decision to force an RIS on the code is not expected to delay this timetable. In the wake of the March 14 decision by Safe Work, the ALC wrote requesting a meeting with the agency s new chairwoman, Ann Sherry. Sherry is chief executive of Australia s largest cruise ship operator, Carnival Australia, and so one might imagine she is well enough aware of the issues being raised by her stevedoring cousins. But, so far at least, the industry s seeds of ill-content have fallen on stony ground. The ALC introduced Friday s request for a meeting with Sherry with a reminder that its members included Asciano, DP World, Qube and Toll. The letter went on to state: ALC is... concerned that Safe Work Australia has agreed to release the Code of Practice... without due consideration being given to the significant concerns expressed by industry. It is disappointing that industry s comments on the draft Code have not been reflected in the final draft, despite repeated attempts to raise these with Safe Work Australia. These concerns heighten the need for a Regulatory Impact Statement to be prepared for the Code to assess the costs and potential safety outcomes were this Code to be implemented. This lack of genuine consultation undermines industry s confidence in the Code of Practice and is unfortunate given the stevedores commitment to implementing a Code which is performance and risk-based and is in line with the Work Health and Safety legislative framework.

12 MEMBERS ASSOCIATE MEMBERS NATIONAL SPONSORS PO Box 20 DEAKIN WEST ACT 2600 P: F: E: admin@austlogistics.com.au P9