‘Safe’ truckies rates to take heavy toll

In a $15bn disaster, 35,000 owner-drivers face losing their livelihood and homes as new rules drive transport costs higher.

22-3-16 - A convey of dozens of trucks is expected to line North Tce from 1.30pm in protest of new transport rates being applied to the industry. Picture Simon Cross

I know my readers will think there is no way what I am about to describe could happen in the Australian nation of 2016.

But it is happening.

Some 35,000 people, mostly men, drive their own long-haul trucks. They have borrowed around $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 called the Road Safety Remuneration Tribunal has made decisions that are set to not only destroy the livelihood of most of them but to force them to sell the family home.

Around Australia there are many tens of thousands of farmers who rely on these efficient and safe road operators to get their farm produce to market and supply them with farming needs. These farmers are going to be forced to pay between two and four times the current rate for their 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 between 30 and 40 per cent and that 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 current bad standing in the community will not allow them to sell so many houses and throw the truckies onto the streets.

The big winners are the large transport companies and the Transport Workers Union (TWU). 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 the Australian parliament is in chaos, so legislative remedies look impossible.

Let me explain how this has happened.

The long-haul Australian road transport industry has three major components. First there are the large companies like Toll. Much of their fleet is operated by employees who are members of the TWU. The link between the TWU and Toll is particularly close.

Second there are the owner-drivers. They contract for majors like 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 been unhappy for a long time because too many owner-drivers are not members of the union.

The Gillard government listened closely to the TWU. At the same time there were a number of people who were concerned that 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 that was 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 to companies using TWU employees, so they can undercut the owner-drivers. Grace Collier in The Weekend Australian blew the whistle on what was happening in her commentary (TWU can bring nation to its knees with ‘safe’ truckies rates, March 19-20) She explained how “farmer Keith” currently pays $175 for an owner-driver to pick up a few head of cattle. After April 4 that owner-driver is legally 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 using 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 that Toll and its TWU drivers can pick up as much business as they want.

My guess is that the large transport operators will use their entitlement to undercut the small groups until they are driven out of business and then the prices will be increased to the levels allowed by the tribunal. Unless agriculture prices are booming farmers will not be able to economically 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 not only will owner-drivers be sent to the wall but the small transport companies that co-ordinate them will go. 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 the Royal Automobile Club of Victoria (RACV), Australia has a world leader in transport technology (Surprise. RACV leads global motor technology, Feb 25).

Very cheaply, an instrument can be put into all trucks to monitor their driving patterns. If that is linked to insurance then, if there is a problem, it will be quickly solved.

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 anti-suicide bodies are bracing themselves for what might happen as these proud men are robbed of their beloved trucks and their homes.