Page 1181 - Week 04 - Thursday, 17 March 2005
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licensing hire cars will be changed from complete private ownership of licences to the government’s leasing licences to the people who actually operate the services.
In redesigning the regulation of the industry, the government has indicated that its focus is ensuring that the industry meets the community objectives of safety, consumer protection and choice, and transport efficiency, without the constraint of needing to protect licence holders’ investments.
For more than 25 years there have been 22 privately owned hire car licences in Canberra. Due to the scarcity of licences, their value has escalated, imposing unnecessary costs on people entering the industry. It is also the case that many people who have no other connection with the industry have acquired licences as investments. Shortly the government will offer to buy back the 22 licences, with about half the licence owners receiving $100,000 and the remainder receiving up to $120,000 each.
From July 2005, new hire car licences will be leased on an annual basis, with the government’s lease costs at around half what operators are currently required to pay licence owners. Operators will be able to charge less for trips and people entering the industry will not need to make a large investment on top of the cost of the vehicle.
The government wishes to encourage new participants into the industry and has therefore placed no limits on the number of licences that will be available. Service standards will be maintained, as licence applicants must be accredited with the Road Transport Authority.
The hire car industry has been the subject of three reviews, beginning in 2000 with the Freehill’s report. I note for the record that the previous Liberal government accepted that report, and then promptly proceeded to gut the industry. I am pleased that an Assembly committee stopped it. The Freehill’s report was followed by a previous Assembly committee review and an investigation by the Independent Competition and Regulatory Commission.
A range of proposals has been developed and considered by governments and previous Assemblies. I acknowledge the contribution of Ms Dundas and Mrs Cross on our committee to what I consider to be a good resolution to this. The government is making the most significant change to the regulation of the hire car industry in more than 30 years in a way that balances the needs of taxpayers, consumers and licence holders.
MS PORTER: Can the minister please inform the Assembly of the response from the industry to these reports?
MR HARGREAVES: Thank you, Ms Porter. Hire car licence owners have faced years of uncertainty about the future of the hire care industry and are relieved that this difficult period is over. I have received emails and telephone calls from operators and they are, at least, relieved that certainty has been returned. The buy-back pricing arrangements have been welcomed by licence owners as fairly and reasonably addressing their need. Naturally, they would like more, but they understand that the price being offered is a fair one.
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