Truckies on the road to ruin

Robert Gottliebsen
MARCH 29, 2016
THE AUSTRALIAN
Business Spectator columnist
The tribunal wants to stop owner drivers from driving too long by making them charge more for their services. Picture: Matthew Sullivan
About 35,000 people, mostly men, drive their own long-haul trucks. They have borrowed about $15 billion from Australian banks and other financiers to fund their vehicles. Most of the loans are also secured on the family home.
A government body — the Road Safety Remuneration Tribunal — has made decisions that are set not only to destroy the livelihood of most of them but force them to sell the family home.
Tens of thousands of farmers around Australia rely on these efficient and safe road operators to get their produce to market and supply them with farming needs. These farmers are going to be forced to pay two and four times the present rate for transport as a result of arbitrary decisions by the same government body. It will wreck many farmers.
Overall, Australian transport costs are set to rise by between 30 per cent and 40 per cent, which will boost inflation and make the Reserve Bank look differently at interest rate adjustments. Banks don’t know it yet, but they are headed for big losses because their bad standing in the community will not allow them to sell so many houses and throw truckies on to the streets.
The big winners are the large transport companies and the Transport Workers Union. A grateful TWU will pay a proportion of its windfall gains to the ALP, which will gain funding capacity not matched by any other political party. The whole exercise is being timed for a period when parliament is in chaos, so legislative remedies look impossible.
Let me explain how this has happened. The long-haul road transport industry has three major components. First, there are the large companies such as Toll. Much of their fleet is operated by employees who are TWU members. The link between the TWU and Toll is particularly close.
Second, there are the owner drivers. They contract for majors such as Toll but they also work on their own and for a multitude of smaller transport companies that consolidate them. This mixture has given Australia one of the most efficient and safe road ­transport networks in the world and has helped make our agriculture industry world leaders.
But the third part of the industry, the TWU, has long been unhappy because too many owner drivers are not union members.
The Gillard government listened closely to the TWU. At the same time, there were concerns some owner drivers were taking drugs and driving their vehicles for long periods without a break. And so the Gillard government set up the Road Transport Remuneration Tribunal. Bill Shorten played a role in some of the appointees to the tribunal, which is now headed by a former ACTU official. Most of the other commissioners are linked to Fair Work Australia. It was a tribunal stacked with people who have backgrounds in social awareness.
The tribunal decided the best way to stop owner drivers from driving too long and taking drugs was to make them charge more for their services. But no such charging instructions were given companies using TWU employees, so they can undercut owner drivers.
Grace Collier in The Weekend Australian (March 19-20) blew the whistle on what was happening in her commentary “TWU can bring nation to its knees with ‘safe’ truckies rates”. She explained how “farmer Keith” now pays $175 for an owner driver to pick up a few head of cattle. After April 4, that owner driver is forced to charge $784 — and if he doesn’t charge $784, he can be prosecuted by the Fair Work Ombudsman and be fined up to $54,000.
But if the farmer uses a company with employed drivers, then that operator has no such restrictions and can charge $175. And this bizarre outcome applies across the whole gambit of long-haul transport in Australia. That means Toll and its TWU drivers can pick up as much business as they want.
My guess is large transport operators will use their entitlement to undercut small groups until they are driven out of business. Then prices will be increased to the levels allowed by the tribunal. Unless agriculture prices are booming farmers will not be able economically to transport their product to market once the full rates are charged.
This elimination of owner drivers will be fairly quick — and as they are forced to sell their trucks the prices of vehicles will slump, so they will be bankrupted.
The actual capital of many owner driver businesses is domestic homes, so they will be sold to cover the debt to the banks because of the fall in value of trucks. As the large operators begin to control the business owner drivers will be sent to the wall along with the small transport companies that co-ordinate them. Many of those are in South Australia.
One of the smartest politicians in the House is South Australia’s Nick Xenophon, who voted to set up the tribunal. In fairness, there was no way he could have known what the TWU and ALP were up to. Therefore, unfairly, Xenophon is going to be made aware of what he has done to his state and to the lives of 35,000 people.
Via Victoria’s RACV, Australia has been a world leader in transport technology. Cheaply, an instrument can be put into all trucks to monitor driving patterns. If that is linked to insurance, then any problem that emerges will quickly be resolved.
I believe the tribunal must be abolished, but that’s not easy given a chaotic parliament. Meanwhile, the 35,000 truckies love their trucks and their families. That is why local communities and mental health support services are bracing themselves for what might happen as these proud men are robbed of their beloved trucks and their homes.