| February 28, 2018

Interstate Road Transport Legislation Repeal Bill

 I move:

That this bill be now read a second time.

In 1987, the Australian government introduced the Federal Interstate Registration Scheme (FIRS) as a voluntary, alternative national registration scheme for heavy vehicles weighing more than 4.5 tonnes solely involved in interstate trade or commerce.

FIRS was a response to industry concerns about state and territory registration schemes that, at the time, deterred and restricted interstate road transport.

It was also designed to promote safer interstate trade and greater use of high-productivity vehicles through an exemption for FIRS registered vehicles from standard state and territory stamp duties for newly purchased vehicles.

At the time, it provided a mechanism that made sure long-haul heavy vehicles made an appropriate contribution to road maintenance through their registration.

FIRS represented the first comprehensive land transport strategy for this nation—a tangible, collective commitment to improve the transportation of freight across the country by addressing challenges arising from a lack of uniformity in state and territory registration schemes.

In the thirty years since FIRS's introduction, a lot has changed. Heavy vehicles have grown in size, and the national road freight task has nearly tripled in that time.

Articulated trucks now take on nearly 80 per cent of the freight task, with the use of B-double trucks, and with a notable shift by operators toward other higher productivity vehicles, such as road trains.

The lack of coordination between states and territories that resulted in a haphazard regulatory environment no longer exists, through ongoing efforts by jurisdictions to harmonise heavy vehicle arrangements.

Initiatives such as uniform registration charging agreements and increased ongoing communication between states and territories have made FIRS redundant.

The numbers bear this out. The numbers of FIRS-registered vehicles have declined steadily for nearly a decade after peaking at nearly 22,000 vehicles.

As at 30 June 2017, there were 13,927 FIRS-registered vehicles (including trailers) in Australia, representing only 1.6 per cent of the Australian fleet.

Independent modelling suggests that the size of the FIRS fleet will continue to fall, reducing to approximately one per cent of the total fleet by 2022.

An independent program evaluation (known as the evaluation) in 2016 revealed the stamp duty exemption afforded by FIRS had not improved safety outcomes nor reduced fleet age, with industry figures showing the average fleet age to be around 14 years—a figure that has not reduced since the introduction of FIRS.

Continuation of FIRS perpetuates an unfair situation where relatively few operators can access a financial benefit that around 98 per cent of heavy vehicle operators cannot.

The decline of FIRS registrations, combined with the evaluation report finding no evidence of FIRS achieving its policy objectives, supports the Australian government's conclusion that a tax exemption for a minority of operators is not sufficient reason to retain an ineffective regulatory program.

Transport companies today require the flexibility to adjust their operations to suit changing customer requirements and market opportunities. Consistent feedback from industry has highlighted that flexibility is essential to being competitive and responsive to market changes.

It's not possible for many small businesses in the road transport industry, where around 70 per cent of operators have only one vehicle, to take advantage of FIRS.

It is imperative that we protect Australian small businesses and remove policies that may impede the growth of a sector so crucial to preserving our standard of living.

FIRS was established as one mechanism to provide funding for road maintenance, but this remains a challenge. The Australian government is pursuing reforms with states and territories through the Heavy Vehicle Road Reform mechanism, independent from FIRS, as this approach will be far more effective than the current reliance on FIRS' shrinking base.

This bill is the first step in the delivery of a new system that better serves the needs of today's transport industry.

Consistent with the stance of Australian governments since 2009 and affirmed by the COAG Transport and Infrastructure Council in May 2017, this bill will progressively close FIRS and make way for the progress of national heavy vehicle reforms, beginning with a modern national registration system for heavy vehicles.

The national registration system will be open to all operators in states and territories participating in the Heavy Vehicle National Law reforms, and is scheduled to commence on 1 July 2018. This bill seeks to facilitate this transition.

From 1 July 2018, existing FIRS operators will seamlessly move to the new registration system once their current FIRS registration period concludes, and will immediately be able to access benefits associated with the new system.

Full closure will take place on 30 June 2019. Existing FIRS operators moving to the national registration system by this date will be eligible for a one-off stamp duty exemption, as well as immediate access to the benefits of the new system.

Australia has changed in the last 30 years. Our needs are different, our priorities have changed and our collective regulatory capabilities have also improved.

The closure of FIRS is the next logical step in moving Australia towards a more productive and effective heavy vehicle registration policy. I commend this bill to the House.

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