More work needed to unlock efficiency gains: Productivity Commission report

commission report

The Productivity Commission (PC) has given road transport regulators a pass in some areas but a rebuke for not doing more to unlock efficiency gains for heavy vehicle operators.

In its just-released inquiry report on National Transport Regulatory Reform,  the PC found that while some gains have been made, there is a lot more that can be done to reduce bottlenecks on major freight corridors.

“Some road managers have made progress in improving heavy vehicle access by using gazetted as‑of‑right access, as well as permit pre‑approvals that allow access without referral to asset managers. This has led some heavy vehicle operators to invest in larger (and safer) vehicles,” said the inquiry report.

“However, there have been few changes in access on key freight routes and the increase in the number of more productive vehicles is small relative to the size of the whole truck fleet.

“Overall, the changes appear to have had a limited effect on heavy vehicle performance. Several indicators suggest sluggish productivity growth in road transport over the past decade. Long term historical trends show the amount of freight carried per heavy vehicle has increased while freight prices have decreased; however, these trends have both plateaued in recent years.”

The PC goes on to say there remains significant bottlenecks to further productivity growth, due to both unfinished aspects of the 2009 Council of Australian Government (COAG) reforms and issues beyond the remit of those reforms.

“Some of these issues occur on major corridors, such as the Hume Highway between Melbourne and Sydney, where operators continue to face inconsistent access when crossing state borders and are limited in their ability to implement productivity‑enhancing technology.”

The report also recommends that the Heavy Vehicle National Law be amended to remove unnecessarily rigid elements from the legislation and to support greater use of ‘deemed to comply’ provisions.

The PC finds that the HVNL should be amended to provide the NHVR with sufficient powers to give effect to a tiered system, in which relatively prescriptive regulation operates alongside outcomes‑based options.

The amendments should establish clear roles and responsibilities for the NHVR, including adequate discretion, decision‑making frameworks, and requirements for monitoring, compliance and enforcement activity.

The PC also found that heavy vehicle safety has improved significantly over the past decade. The number of heavy vehicle crashes involving injury or death per kilometre travelled fell by about 40 per cent between 2009 and 2019.

“The fall in crash rates is likely to be due to factors affecting all vehicle types (for example, improvements in road infrastructure and new safety technologies).”

Deputy Prime Minister, Minister for Infrastructure, Transport and Regional Development Michael McCormack welcomed the report and said it showed the transport industry was heading in the right direction.

“The transport reforms were agreed by all levels of government over a decade ago to make transport safer while making it easier for industry to do business – and it’s great to know they’re working,” he said.

“We are absolutely committed to supporting a thriving national transport industry now and into the future, which is why we asked the Productivity Commission to undertake a comprehensive review, including to see what we can do better.

“I am pleased to hear they found the reforms have delivered broad safety and productivity gains for our national transport industry.

“This is particularly reassuring in these difficult times, as the ongoing COVID-19 crisis highlights how vital a safe and efficient transport network is to our way of life.”

More information on the commission inquiry and a full copy of the report can be found here.

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