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Legislative Assembly for the ACT: 2004 Week 10 Hansard (Tuesday, 24 August 2004) . . Page.. 4091 ..

There seems to be a prevailing attitude that if the price of the plates can be reduced then all the taxi industry problems will be solved. This obsession with competition policy appears to be the biggest stumbling block in the debate. Until the government can move beyond viewing competition as the sole issue, then we will not be able to move further.

We are also not acknowledging the historical development behind the acquisition of these plates. Many have invested in buying a plate in good faith. Obviously the value of the plate was directly related to the regime that was in place at the time. However, we are faced with a situation where the little guys will be paying for the big problems. The people we are talking about are not rolling in cash. For some, the ability to sell their taxi plates at some point in the future is their investment in their superannuation. They are, in some cases, living close to the edge.

So it is particularly of concern that the government has sought to address the same problem in two different ways. The buy-back of limousine plates is welcomed—and the Democrats have supported that—but it is inconsistent to buy back one set of plates for the hire car industry but refuse to do the same for the taxi industry. The competition issue is one that needs to be addressed in both industries; yet the government has chosen two different solutions for these industries. One allows those who hold hire care plates to be compensated for their plates, while those who hold taxi plates will see the value of their investment being slowly eroded by the government’s policy.

It is clear that perpetual licenses are not a good regulatory method. Providing more of them simply propagates a poor system and will continue to cause problems into the future. It is also an unfair and inconsistent policy decision which requires taxi plate owners to shoulder all losses of past government mistakes. For this reason, the Democrats will not be supporting the sale of additional taxi plates.

When looking at industry reform, we need to remember that industries inhabit a particular economic environment. It is clear that there are considerable economies of scale in the taxi industry as well as informational asymmetries, which means that the industry will probably always need some form of regulation in order to function with some degree of efficiency.

The small size of this city further contributes to the problem. It is time we started to realise that it may be neither possible nor desirable to try to make the taxi industry perfectly competitive. Instead, we should refocus on the particular outcomes the people of the territory need to see addressed in the industry and, where appropriate, legislation or other regulation for these areas could be improved. Competition is not always going to produce the best outcomes and it is likely the ACT taxi industry is such a case.

The committee heard of the demise of a network that was established in Canberra’s past to rival the main taxi system and how that taxi company did not actually function. We note there is nothing currently in the law that would stop a new network being established. So this whole focus on competition policy in relation to taxis is also almost a null and void argument.

The issues that I actually see out there in the community are not about outrage or inefficiencies associated with the price of the actual taxi plates; they are about service

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