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Legislative Assembly for the ACT: 2003 Week 6 Hansard (17 June) . . Page.. 1970 ..
MR WOOD
(continuing):that time, we requested the Independent Competition and Regulatory Commission to examine the state of affairs and advise on whether further reform was necessary.
The ICRC reported to the government in June 2002 and the report did not paint a very positive picture. The ICRC found that taxi hirings had been in decline over a number of years and that many who have invested in the hire car industry are unable to leave the industry. In short, these industries needed further reform to ensure their long-term viability.
The ICRC also confirmed the conclusions of another review, the Freehills review-there have been plenty of reviews around all this-commissioned by the previous government that restrictions on the number of taxi and hire car licences do not benefit the community and cannot be justified. Consistent with the finding of similar reviews in other jurisdictions, it was found that licence quota restrictions, for example, add $2.70 to the average taxi fare and $4.30 to the average hire car fare; that the restrictions reduced customer demand, that is, hirings for those services, hence the decline; and that they create barriers to entry to and exit from the industries and limit competition and innovation.
Furthermore, restrictions on the number of taxi and hire car licences do not address objectives of public safety, minimum service standards, consumer protection, universal access and public order. These objectives are achieved by measures such as accreditation, independent pricing, performance requirements, and compliance and enforcement programs.
I note that the previous government, in its response to the Freehills report, accepted that ongoing licence quota restrictions could not be justified and that government announced that these restrictions were to be removed through new transitional arrangements. I note that the former government did not refer the issue to a committee. Can I say that again? The former government now thinks that it has to go to a committee.
Mrs Cross
: But two wrongs don't make a right.MR WOOD
: I am talking to the lady over the road, actually, who, very carefully, is not listening. The former government did not propose to send it to a committee. The government initiated some action which did not work out in the end. However, by the elections, no reforms had been introduced and there was no committee. This government has been left with the task of determining how best to address the problem of licence quotas in a way that balances the needs of those in the industry-owners, operators and drivers-and the wider community.The Labor government, like its predecessor, has ruled out the immediate release of an unlimited number of licences. That would create financial hardship for some in the industry, particularly those who have purchased a licence at historically high levels. The government has also ruled out the buying back of licences at the cost of purchase, as that would cost the government something like $50 million. The only non-government option on offer-that is, the bank option-would delay the benefits to customers for at least 12 years, even if it were possible to finance such an expensive scheme. We examined that option.
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