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Bills Digest No. 200 1997-98
National Road Transport Commission Amendment Bill 1998

WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

Passage History

Date Introduced: 8 April 1998

House: House of Representatives

Portfolio: Transport and Regional Development

Commencement: On a date to be fixed by Proclamation, or if the Bill has not commenced within six months of receipt of Royal Assent, the day after that six month period.

Purpose

The major amendment proposed by the Bill:

• extend the life of the National Road Transport Commission (the Commission) until 2004;
• impose strategic planning requirements on the Commission;
• provide for New Zealand involvement in Trans-Tasman Mutual Recognition Arrangement road vehicle standards; and
• provide for Australian Defence Force exemption from uniform road transport legislation (see 'Remarks' section of this Digest).

Background

The Road Transport Industry

The Australian road transport industry accounts for approximately 2% of Australia's GDP and approximately 2.1% of total employment.(1) Based on these figures, in 1994 road freight transport has been estimated to be a $8.5 billion industry that employed over 160 000 people.(2)

Road transport is the principal means by which freight is transported in Australia. Road transport accounts for approximately three quarters of the value of the Australian freight market.(3) The share of the total quantity of freight carried by road has increased from 18% in 1975- 76 to 33% in 1990- 91.(4)

In 1992, there were approximately 17 000 road transport firms.(5) Small firms dominate the road transport industry. In 1992, firms which employed less than five people accounted for approximately three- quarters of operators.(6) The dominance of small firms is not reflected in industry share. In 1994, less than 1% of transport and storage firms accounted for more than 60% of trading profit.(7)

The Australian road transport industry is heavily regulated. Responsibility for industry regulations is largely a State and Territory matter. Substantial differences in regulations between States and Territories have existed. For example, the States and Territories have: applied different registration charges for the same type of vehicle; applied different allowable weight in respect of the same type of vehicle; applied numerous regulations which cover the design and construction standards of vehicles; and applied different regulations regulating the driving practices of road transport operators. Since 1991, the Commonwealth, States and Territories have worked, through the mechanism of the National Road Transport Commission, at establishing a national regulatory regime for road transport.

The Department of Transport and Regional Development issued a report in July 1996 examining the impact on the road transport industry of adopting a national approach to road transport regulation.(8)

Major Findings

• The reform process [the Commonwealth, State and Territory working through the mechanism of the National Road Transport Commission to adopt a national approach to road transport regulation] is expected to lead to a reduction in operating costs by providing firms with greater freedom to manage their vehicle fleets.

• The easier access to all parts of the Australian transport market provided by the reform process will lower operating costs in the longer term as firms have greater incentive to invest in more efficient vehicles.
• While a significant number of firms considered that their sales would increase, these gains are expected to be largely achieved by winning business away from other road transport firms rather than from providers of other forms of transport or from an increase in the size of the transport market.
• The reform process is expected to exert some small downward pressure on freight rates as the highly competitive nature of the road transport industry will ensure that improvements in efficiency are passed on to the consumer. However, the impact of the reform process on freight rates will be swamped by other influences such as developments in vehicle technology and changes in fuel costs.
• The costs involved in coping with regulatory differences between States/Territories fall more heavily on interstate operators than intrastate operators. As a result, State/Territory borders have, to some extent, become artificial market boundaries and provided some shelter for intrastate operators from interstate competition. Under a national approach this artificial disadvantage to interstate operators will be removed.
• Several of the reforms - such as the development of national routes for the large vehicles, the national acceptance of new vehicles and uniform vehicle design and construction standards - enable firms to make more efficient use of their existing fleets by giving them greater freedom to select the most appropriate vehicle for a given job.
• Small firms are unlikely to have fleets of sufficient number to gain significant benefits from these reforms.(9)

The National Road Transport Commission

The National Road Transport Commission (the Commission) is an independent statutory body established as a result of two Commonwealth, State and Territory agreements. The first, in 1991, was the Intergovernmental Agreement on Heavy Vehicles. The second, in 1992, was the Light Vehicles Agreement.

The Commission's genesis can be traced to the desire for economic restructuring in Australia as a way of improving long term competitiveness. The Commission's first Annual Report states:

The Commission's functions include developing national policies and laws on road transport and making recommendations to the Ministerial Council on Road Transport. The 1991 Agreement on Heavy Vehicles provided that there would be an agreement between the Commonwealth and the ACT:

What is called the 'new national Road Transport Law' is being developed in six modules: road transport charges, vehicles and traffic, dangerous goods, registration, driver licensing, and compliance and enforcement. So far, the Commonwealth Parliament has enacted the Road Transport Charges (Australian Capital Territory) Act 1993, the Road Transport Reform (Vehicles and Traffic) Act 1993, the Road Transport Reform (Dangerous Goods) Act 1995 and the Road Transport Reform (Heavy Vehicles Registration) Act 1996.

The life of the National Road Transport Commission was extended from six years to seven years by the National Road Transport Commission Amendment Act 1997. As the National Road Transport Commission Act 1991 commenced on 15 January 1992, the one year extension means that the Act will cease to have effect on 14 January 1999. The rationale given by the Government for extending the life of the National Road Transport Commission was to give effect to a recommendation flowing from a section 47 review. Basically, section 47 of the National Road Transport Commission Act 1991 requires the National Road Transport Commission to conduct an internal review of its operations and make a recommendation as to whether the Principal Act should cease to have effect or be re-enacted. According to the Second Reading Speech to the National Road Transport Commission Amendment Bill 1997 the Review found:

The Government also signalled in the Second Reading to the National Road Transport Commission Amendment Bill 1997 that it intended to introduce a Bill to put the substantive recommendations of the Review into effect.

The Commission is funded by the Commonwealth, States and Territories. For the 1997- 98 financial year the Nation Road Transport Commission received $3.539 million.(12)

Rationale for amendments

The rationale given by the Government in the Second Reading Speech to the Bill for the proposed amendments are to:

The reference to the 'major review' is a reference to the section 47 review referred to above.

It is unclear from both the Second Reading Speech and the Explanatory Memorandum to the Bill whether the amendments relating to the Australian Defence Force originate from the section 47 review.

Main Provisions

Schedule 1 - Amendments to the National Road Transport Commission Act 1991

Item 1 of Schedule 1 inserts a definition of 'Australian Transport Council' in the National Road Transport Commission Act 1991 (the Principal Act). The Australian Transport Council (ATC), which is replacing the Ministerial Council, is defined to mean the council of Commonwealth, New Zealand, State and Territory Ministers known as the ATC established for the purposes of this Act and Agreements such that each of those jurisdictions is represented by one Minister. The definition of 'Ministerial Council' is repealed by item 6 of Schedule 1.

Subsection 5(1) of the Principal Act provides for the National Road Transport Commission (the Commission) to consist of 3 members. Item 12 of Schedule 1 substitutes a proposed subsection 5(1) in the Principal Act providing that the Commission consists of the Chief Executive Officer and 5 ordinary members.

Item 18 of the Schedule repeals subsection 6(3) of the Principal Act, which provides that a person must not me appointed as a member of the Commission if they have been appointed as such twice before, and inserts proposed subsections 6(3)-6(7). The major proposed subsections provide that the Commission:

• must nominate a person for appointment as an ordinary member if there is a proposed subsection 6(4) declaration in force (ie. the Commission, on request by New Zealand (NZ), declares NZ entitled to have a representative on the Commission); NZ requests the ATC to nominate the person; the person will fill a vacancy in the Commission's membership; and the nomination will not result in there being more than one appointment attributable to a NZ request; and
• may, if it declares NZ entitled to have a representative on the Commission, have regard to any undertakings given by NZ that it will pay money to the Commission.

A new section 10A is inserted in the Principal Act by item 32 of the Schedule providing that in the performance and exercise of its functions and powers the Commission must have regard to the principles and objectives set out in Heavy and Light Vehicles Agreement.

Item 32 of the Schedule also provides that the Commission may only develop a noise or emission standard in relation to motor vehicles in conjunction with the National Environment Protection Council.

Section 18 of the Principal Act deals with the termination of appointment of Commission members. Item 51 of the Schedule provides that the Governor-General may terminate the appointment of the NZ member where they are absent without approval from 3 consecutive trans-Tasman Mutual Recognition Arrangement road vehicle standard meetings, or fail to disclose a direct or indirect pecuniary interest in a matter being considered, or about to be considered, without reasonable excuse.

The Governor-General must terminate the appointment of the NZ member where NZ requests the Commission to do so (item 53 of the Schedule).

Item 78 of the Schedule inserts a new Part 6A in the Principal Act dealing with strategic plans. The major features of the new Part 6A include:

• a requirement that the Commission prepare at least once a financial year a draft strategic plan and give it to the ATC;
• the Commission consult the National Environment Protection Council in relation to the draft strategic plan; and
• the ATC is accorded power to approve, reject and direct the Commission to alter the draft strategic plan as directed.

Item 79 of the Schedule inserts a new Part 6B (proposed sections 41B-41G) into the Principal Act dealing with exemptions for defence related purposes from uniform road transport laws.

The Minister, alone, is accorded the power under proposed subsection 41B(1) to declare that the Australian Defence Force (ADF), and members thereof, are exempt from all, or specified, uniform road transport legislation in respect of anything done or omitted to be done in connection with one or more specified defence-related purposes. An exemption can be unconditional, or subject to specified conditions (proposed subsection 41B(2)).

The term 'uniform road transport legislation' is defined by proposed section 41G to include: the Road Transport Reform (Dangerous Goods) Act 1995; the Road Transport Reform (Heavy Vehicles Registration) Act 1997; the Road Transport Reform (Vehicles and Traffic) Act 1993; and an Act relating to road transport which declares this proposed section applies.

The term 'defence-related purpose' is defined by proposed subsection 41B(6) to mean any of the following purposes:

• the security of Australia;
• the operation of the ADF in connection with the defence of Australia;
• the operation of the ADF in connection with the security of Australia;
• the defence of Australia;
• the management of an emergency or disaster (whether natural or otherwise), where it involves the ADF;
• the operation of the ADF in connection with United Nations activities; and
• the operation of the ADF in connection with the protection of a State or Territory from domestic violence, where the State or Territory has applied for that protection.

The Minister's power under proposed subsection 41B(1) can only be exercised where he or she is satisfied that:

• because of special circumstances, it is in the interests of security, defence or international relations of Australia; or
• a State or Territory has applied for protection against domestic violence, and the Minister's declaration is likely to help the ADF in providing protection; or
• there is an emergency or disaster (natural or otherwise), and the Ministers declaration is likely to help the ADF in the management of the emergency or disaster (proposed subsection 41B(3)).

Where the ADF has completed an activity or series of activities subject to an exemption from State or Territory law, the Chief of the ADF, where satisfied that if the particular State or Territory were notified it would not compromise the defence, security or international relations of Australia, he or she must notify the State or Territory (ie. notification is not mandatory) (proposed subsection 41B(5)).

Proposed section 41C deals with exemptions from uniform road transport legislation for armed forces of foreign countries. The Minister, alone, is accorded the power under proposed subsection 41C(1) to declare that the armed forces of a specified foreign country, and members of that armed force, are exempt from all, or specified, uniform road transport legislation in respect of anything done or omitted to be done in connection with operations of that armed force that are in accordance with an approved ADF arrangement. An exemption can be unconditional, or subject to specified conditions (proposed subsection 41C(2)).

The Minister must not make a declaration unless satisfied that, because of special circumstances, it is in the interests of the security, defence or international relations of Australia (proposed subsection 41C(3)).

Proposed section 41D deals with exemptions from uniform road transport legislation in relation to defence or security of Australia. The Minister, alone, is accorded the power under proposed subsection 41D(1) to declare that the ADF, or members thereof, are exempt from specified provisions of uniform transport legislation in respect of anything done or omitted to be done in connection with the operation of the ADF in relation to the defence or security of Australia. An exemption can be unconditional, or subject to specified conditions (proposed subsection 41D(2)). The Minister must not make a declaration unless satisfied it is in the interests of the defence or security of Australia (proposed subsection 41C(3)). Ministerial declarations are subject to ATC approval and disallowance by Parliament (proposed subsections 41D(5)-(6)).

The Minister is accorded a power by proposed section 41E to delegate all or any his or her powers under proposed sections 41B and 41C to the Chief of the Defence Force. The Chief of the Defence Force in exercising such delegated powers is subject to Ministerial directions.

Item 93 of the Schedule extends the life of the Principal Act from seven years to 12 years. Effectively, the Principal Act will cease to have effect on 14 January 2004.

Concluding Comments

Exemptions from uniform road transport legislation for defence related purposes

The rationale given by the Government in the Second Reading Speech for the amendments providing exemptions from uniform road transport legislation for defence related purposes is that:

In light of this rationale one might assume that the amendments are of little legal or political interest. However, it should be recognised that these amendments could be used to assist the ADF in acting as strike-breakers, or running essential services and maintaining law and order in a State or Territory. It is axiomatic that legislation which may facilitate Federal troop action in running essential services and maintaining law and order in a State or Territory does not sit well with developed notions of democracy.

Mr. Justice Hope observed:

While it is not within the scope of this Bills Digest to examine the legal basis for the Commonwealth using the ADF for defence and non-external threat purposes(14), the proposed amendments do raise a number of questions, not uncommon to national security type legislation, which lie at the heart of the legal and political debate of ADF involvement in non-defence matters.

1. Could the amendments be used to assist the ADF in acting as strike-breakers?
2. What is meant by the term 'special circumstances' in proposed subparagraph 41B(3)(a)?
3. Why include subparagraph 41B(3)(i) when the Bowral call-out of 1978 illustrated that a requirement for an application by a State for protection against domestic violence may not necessarily be condition precedent for Commonwealth use of ADF personnel ?(15)
4. What is meant by the term 'domestic violence' in proposed subparagraph 41B(3)(b)(i)?
5. Should the mere fact that the power accorded under proposed subsection 41B(1) to the Minister is exercisable in the circumstances specified in proposed subsection 41B(3) be enough to justify an unfettered power being accorded?
6. Should the power accorded under proposed section 41B be one exercisable by the Governor-General in council rather than the Minister?
7. Is it appropriate that an unelected individual, the Chief of the ADF, be accorded the power under proposed subsection 41B(5) to determine whether a State or Territory should not be notified that there laws have been overridden?
8. Should the substantial powers accorded under proposed sections 41B - 41D be delegable under proposed section 41E?

Endnotes

1. Department of Transport and Regional Development, A National Approach to Road Transport Regulation, July 1996, 5.
2. Ibid.
3. Ibid.
4. Ibid., at p. 6..
5. Ibid., at p. 7.
6. Ibid.
7. Ibid.
8. Department of Transport and Regional Development, A National Approach to Road Transport Regulation, July 1996.
9. Ibid., pp. vi and vii.
10. National Road Transport Commission, Annual Report 1992, 2.
11. National Road Transport Commission Act 1991 (Cth), Schedule.
12. National Road Transport Commission, Annual Report 1997, 27.
13. R. M. Hope, 'Protective Security Review', Parliamentary Paper No. 397/1979, 142, quoting Edmund Burke..
14. For a comprehensive examination of the legal basis for ADF involvement in non-defence matters see: E. Ward, 'Call out the troops: an examination of the legal basis for Australian Defence Force involvement in non-defence matters', Background Paper, Parliamentary Research Service, Department of the Parliamentary Library, September 1991.
15. Ibid.

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ISSN 1328-8091
© Commonwealth of Australia 1998

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