Second reading- Commercial Passenger Vehicle Industry Bill 2017

22nd June 2017- Mr O'Sullivan- I rise tonight to speak on the Commercial Passenger Vehicle Industry Bill 2017. I must say right from the outset that this is bad legislation. This is terrible legislation. In fact it is probably the worst that I have seen in my short time in the Parliament. I am happy to say that I have not been here all that long, but this is the worst that I have seen. The Country Fire Authority legislation is also floating around with this. We have not got to the end of that one but we are getting to the end of this bill, and this is bad legislation.

The previous speaker talked about the fact that we have had two parliamentary inquiries. He was saying, almost as if it was a badge of honour, that because we have had two parliamentary inquiries, it makes this bill better legislation. Well, no it does not; the fact that we have had two parliamentary inquiries just shows how bad this piece of legislation is. We have had to have two inquiries to try to sort out some of the issues that have been very clearly put by others, but I am certainly going to go through some of those issues again today.

One of the profound things that I learned when I was on the Standing Committee on the Economy and Infrastructure, which conducted one of the inquiries into this piece of legislation, is the personal impact it has had on the people involved in this industry. In the hearings we heard people talk about the financial impact it is going to have, and is having, on their families, and we also heard about the personal impacts it has had on some of the families. In one of the hearings we heard suggestions that there were also a couple of suicides that might be attributable to this legislation. So we should not try and say that this is a good piece of legislation and that the inquiries have sorted out all the issues. What the inquiries have done is just highlight even more issues as to why this legislation should not be passed.

We have heard some rhetoric from those opposite in relation to this legislation, trying to justify it as revolutionary or progressive. I do not see it that way. I see this as just a way of destroying the industry and bringing about bad outcomes for everyone on every front. I am going to go through some of those outcomes and the reasons why it is bad. As part of the inquiry into this bill, which only reported a couple of weeks ago, we had the scenario where people came in and told us firsthand of some of the issues that they were facing. From the point of view of the committee, we thought we could come up with some recommendations, findings and ideas to try and help the government out. What we wanted to do was show the government that there are clearly problems here but that there are some things that they could do to make this better for the people involved. We understand that there need to be some regulations put in place in relation to Uber. I think everyone understands that and probably agrees with that. But in terms of the way this has all been put together, it has brought about an outcome that is going to bring about negative impacts rather than solving an issue with Uber that certainly needs to be solved.

The committee came up with some seven recommendations. These recommendations were put together by the committee as a whole. There were people on both sides of the parliamentary divide on the committee. What I found amazing — and I was very pleased to be a part of the committee that brought this about — is that we had a consensus report where everyone from each side of the political divide agreed on the recommendations. In terms of the coalition members on that committee, we did not try and overdo the recommendations to put the government in a position where they could not act. We did not want to paint the government into a corner where they had no option but to reject all the recommendations. Obviously we would not have had bipartisan support in relation to those recommendations if we had done that. I think the government members on that committee would also agree that from our point of view committee members came up with those recommendations in good faith to try to come up with an option, or a few options, that would actually make this a little more workable.

We saw the government response to the report come out. I must say I was somewhat disappointed with what we saw from the government in terms of its response. The first recommendation we made was to essentially suggest a scenario where a sunset clause for the levy could take effect after a period of time or after an amount of money was raised — and we gave the government options in terms of how they would want to regulate the sunset clause — but all the government have done is come back and say they will undertake a review when an amount was raised that covered the Fairness Fund and the compensation. From my point of view they did not agree to have a sunset clause, but they have agreed to undertake a review.

To my mind that does not address the issue in terms of the sunset clause, because essentially the way it is drafted in this legislation this is a new tax. That is a new tax that the Premier promised he would not introduce, so we have got a new tax of $2 on every trip, whether it be short or a long trip, without any sunset clause. I think the government has even admitted that once it has expended all the costs in terms of compensation and the Fairness Fund, the $2 fee on every trip would continue and essentially would just become a revenue measure. So the government has not addressed that issue through a sunset clause and to be fair to the crossbenchers, other people have brought up amendments to try to address that issue. So it is very clear from all sides that there needs to be some sort of a sunset clause put in place.

If you look at some of the other recommendations, what we wanted to do is make sure that any payments that were made as part of the compensation — or the Fairness Fund, but particularly the compensation — were not treated as income by the Australian Taxation Office (ATO), because one of the things we must realise is that some of these taxi proprietors or taxi licence owners paid some significant amounts of money for these licences. In some cases it got up to $521 000 — I think was about the peak — and the government is now looking to pay them the equivalent of just $100 000 for that potential cost of $521 000. What we want to ensure is that when the compensation is paid to the licence-holder that money is not treated as income, which would trigger the ATO charging them tax on that money if it was income, which would be an added blow to those people who are involved.

What the government has committed to do is to write to the commonwealth Treasurer and to the Australian Taxation Office to point out that any payments made as a result of the government's reform should not be considered as assessment of income for tax purposes. I am sorry, but that is not good enough. What the government needed to do is structure the payments in a way that they would not be classed as income. Do not write to the tax office and point out that it should not be. That is putting the emphasis back on the tax office to structure the payments. They do not structure the payments. They structure what is in front of them, and those rules are determined by the Treasurer here in Victoria and the government here in Victoria, so I do not think the government has addressed that very well at all.

Another recommendation that they have not addressed is reducing the rate of levy for rural and regional areas. Where the compensation is paid to regional taxis at a rate of about $50 000 per taxi, we have heard reports that in some smaller regional centres the actual amount of money raised through the $2 levy on every trip would cover the compensation and Fairness Fund payments in under a year. Yet the tax would continue to be charged on those regional customers after all that money was raised to cover the cost of the Fairness Fund and the compensation. So once that was paid out, essentially those regional fares that were paid — short trips by people on fixed incomes or lower incomes — would essentially just be revenue that would go back to consolidated Treasury pots of money, and it is unacceptable that country people would essentially have to subsidise the payments in the city. That is not fair, and I cannot support that. Also we have seen the government in its response say that it was replacing licence costs with a per-trip levy consistent across all of Victoria, which shows that it is not prepared to support that recommendation.

Also if you look at other recommendations the committee went through, we were talking about the sunset clause, and the government said that they would review that. That is not good enough. Also the government made a comment here that it believes the replacement of licence costs with a levy will lead to reduced fares. I am not quite sure how the government could possibly say that with a straight face, knowing full well that they are actually adding $2 to every trip that is taken in an Uber or in a taxi. It is only a government like the one we have in front of us right now that would believe it could reduce fares by adding an extra tax. I am not sure how it came up with that, but that seems to be the way that Labor governments operate, the way they twist words and spin an argument to suit their own purposes. They absolutely have not addressed that provision.

In terms of the $50 million cap on the Fairness Fund, we suggested that the cap should be abolished because more money than that may be needed to cover the requirements. The government has said it will address each application on a case-by-case basis, so it has taken notice of that recommendation, which is a positive.

We also asked the government to increase the compensation to primary and subsequent licence-holders and have an independent and clearly articulated, transparent and equitable non-arbitrary model for the valuation of perpetual licences. The government has had a look at that recommendation and has said that it will remain with the process it currently has, which is $100 000 for the first licence and $50 000 for three subsequent licences, so it has not taken up the recommendation from the committee in relation to increasing the compensation.

We also asked the government to have a look at when the payments would be made. We asked them to look at and consider up-front payments in terms of that compensation so that the people who were impacted could at least get the money up front, which would help them in terms of knowing exactly what they have got to deal with. The government has committed to making the payments as soon as possible, which is a positive.

Other recommendations relate to concessions for multipurpose taxis being extended to all commercial passenger vehicle trips. The government has gone some way towards looking at this in terms of trying to roll it into the national disability insurance scheme that will be rolled out sometime in the future. They also said they will ensure that passengers benefit from the reforms. I am not sure how passengers will be able to benefit from reforms when they will still have to pay the $2 levy on every trip that they take, so I am not satisfied with the way the government has dealt with that recommendation.

In terms of reducing the $2 levy to $1, basically the government has said that the only way that can be done is by supporting this legislation, and then the government in the future can consider reducing that fee because the legislation does allow for the amount to be less than $2. I do not see how that can possibly be the case when there is a $2 levy up-front, which is indexed every year. I am not sure how supporting this legislation will result in a lower levy when that levy is actually going to be indexed and the bill does not have a sunset clause.

For the reasons I have just outlined, the government has failed to deal with the concerted effort from the committee to bring about better options and better recommendations and to give the government somewhere to go in terms of trying to make this legislation better. There have been two inquiries in terms of understanding this legislation, and both times the government has let the taxi industry down, has let Uber down and has let the consumers who use those services down. It has not fully understood and realised that this is bad legislation and that it needs to change it if it wants to make it somewhat workable into the future. That is the reason that I certainly cannot and will not support this legislation.

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