Judith Sloan, 06 April 2016

Don’t you just hate those columnists who tell everyone that “I told you so”? Well, I’m about to join that clan because — along with Grace Collier and Robert Gottliebsen of this newspaper — I told you so about the Road Safety Remuneration Tribunal.

The RSRT was a regulatory gift to the Transport Workers Union granted by Labor prime minister Julia Gillard and put into effect by then workplace relations minister Bill Shorten. It began operation in July 2012.

From the start, the intent of this regulatory intervention was as plain as day: to increase TWU membership and banish owner- drivers from the road transport industry. All that stuff about promoting road safety was a ruse for Labor granting an almighty favour to one of its union mates.

And don’t you just love the hypocrisy of having a separate tribunal? One of the unions’ complaints about the Australian Building and Construction Commission is that it applies only to building workers; there should be one law for all. But when it comes to drivers, they have no objections to a special tribunal.

We are hearing about the RSRT now because the tribunal members have not had the sense to hasten slowly in handing over the ultimate gift to the TWU — the destruction of the livelihood of owner-drivers — but have rushed the task so much there has been a massive backlash.

As a result, the Contractor Driver Minimum Payments order has been stayed by the Federal Court. These payments, which apply only to long-haul owner- drivers and owner-drivers who service the big supermarket chains (employees are exempt), are so out of line with market rates that owner-drivers would very quickly find themselves without any work.

But here’s the rub: the highly paid members of the RSRT contracted out the work of determining these rates to KPMG, which used a one-size-fits-all model to work out the hourly rate based on an assumption of annual hours.

But as this hired-gun outfit notes: “The annual hours worked assumption is used to convert annual fixed cost estimates into an hourly payment. Note, the use of this assumption means if a road transport contractor driver works more hours than assumed, they will be overcompensated for fixed costs incurred. Conversely, if the driver works fewer hours than assumed, they will be under-compensated for fixed costs.”

In other words, KPMG is not making any claim that minimum hourly payments will influence hours and, by inference, road safety. Indeed, there is an argument that if owner-drivers can get higher payments by dint of regulation, they may actually drive longer hours to make more money. (Economics 101: income and substitution effects.)

There is no definitive research to link minimum payments with road safety, and the TWU knows it. Road safety is handled by state authorities and monitoring systems such as GPS is the way forward if there are deficiencies.

The Abbott-Turnbull government has been asleep at the wheel. It should have moved early to have the RSRT abolished.

The government intends to delay the Contractor Driver Minimum Payments order until early next year. For the life of me, I can’t understand why Employment Minister Michaelia Cash is not simply gunning to abolish the tribunal.

Extracted in full from The Australian.