Budget, Road safety, Over-size permits, Tyres & icare....

11th May 2018

CEO Report


It's that time of year again, Budget. We have brought you some of the key elements of the budget that affect our members in NSW:


Budget 2018

Some key infrastructure points include the announcement of:

  • $1 billion Urban Congestion Fund.
  • $3.5 billion Roads of Strategic Importance to upgrade key freight corridors in regional Australia.
  • Continued funding for the Black Spot and Roads to Recovery programs.

Business initiatives

The $20,000 instant asset write off for businesses with a turnover of less than $10 million per year will be extended for another year to 30 June 2019.

The budget includes strong tax integrity measures. These will affect every trucking business, and include:

  • The extension of the Taxable Payments Reporting System (TPRS) to road freight transport and two other industries. Under the TPRS, businesses are required to report payments to contractors to the ATO, in line with the way wages are reported. The extension will take place from 1 July 2019. It should be noted that the TPRS has already been extended to couriers; this takes effect from 1 July 2018.
  • From 1 July 2019, businesses will no longer be able to claim deductions for payments to their employees such as wages where they have not withheld PAYG. Similarly, the Government will remove deductions for payments to contractors where withholding requirements apply and have not been met.
  • There will be reforms to combat illegal phoenixing, including new phoenix offences and rules to prevent directors from improperly backdating resignations.

National

  • Roads of Strategic Importance (ROSI) initiative: $3.5 billion, including $2.2 billion to be provided
  • to specific regions or corridors, as detailed below.
  • Urban Congestion Fund: $1 billion.
  • Major Project Business Case Fund: $250 million.

New South Wales

  • Coffs Harbour Bypass: $971 million.
  • Nowra Bridge construction: $155 million
  • Port Botany Rail Line Duplication: $400 million.
  • Western Sydney North-South rail: $50 million to joint fund a business case with the New South Wales Government
  • Barton Highway corridor: $100 million for the continued upgrade of the Highway, which is an important link between regional New South Wales and the Australian Capital Territory.

Australian Capital Territory

  • Monaro Highway Upgrade: $100 million.
  • ACT will also benefit from the increased connectivity with NSW generated through the ROSI initiative to upgrade the Barton Highway.

NHVR Industry Reference Group - Brisbane - Heavy Haulage Permits

RFNSW attended the NHVR Industry Reference Group in Brisbane on Monday last week. Permits were discussed, particularly the SA bridges department and dissatisfaction was expressed about the length of time permits were being issued for transport into and through SA. RFNSW has, and noting that we are noting that we are not taking aim at the NHVR over this issue, previously expressed angst about the length of time SA bridge department was taking to issue permits to our operators.

Many operators particularly to the North of Sydney are getting fed up with delays and find this story from ATN resonates with them:

The remaining question from RFNSW is why are there not pre-approved routes/permits in place for heavy haulage operators?

If one of our operators continues to use the same route with the same load into SA (and sometimes Victoria) month in and month out, why is that route not pre-approved or some process that builds on previous applications put in place for that carrier?

We note there is an alliance of states and territories calling for a government inquiry.

In coming editions, we will be hearing from our OSOM representative seeking your input about this issue and others affecting heavy haulage operators.

TCA Conference

Last week I spoke at the TCA Forum at Rooty Hill RSL with Chief Inspector Phil Brooks, NSW Police, Roger Weeks RMS and Chris Koniditsiotis from the TCA.

Chris welcomed all of us and spoke in detail about the value of telematics for the industry. Phil gave some context from his experience around fatigue and provided examples of truck fatigue in both video and news reports. Phil said in his view that fatigue was contributing to heavy vehicle incidents on the road and we needed to do something about it.

Phil was able to provide some figures around heavy fatal crashes which can be seen here:

Roger Weeks provided some empirical evidence from the RMS for the past 12 months which can be seen here:

And here..

Importantly, Roger also discussed one of the latest CoR prosecutions relating to speed and fatigue offences with sentencing on 13 March 2018 for a 2015 fatal crash on the Hume Highway north of Yass involving the collision of a B-double operated by the accused and two light vehicles. From what I can discern from the presentation, the operator at fault was fined 187k, Director 1 was fined 4.5k and a 6 month prohibition order and director 2 was fined 1.3k and costs were awarded against the company in the order 100k. The total financial penalties were $293k against the heavy vehicle operator.

I spoke about RFNSW and our offering and members. I made the additional points that the industry across Australia looked dimly at Operation Rolling Thunder and we believed that a 24 hour operation likely lead to less than useful outcomes and evidence and we need to examine more pro-active strategies to safety. RFNSW believes in safety on roads and the use of telematics as part of that move towards safer roads, particularly given the tragedies in January this year. However, the view from many operators was that 'Operation Rolling Thunder' was a 24-hour operation of little safety value that ensured that the court of public opinion was negatively aimed squarely at road freight operators.

Road Safety Week

Last week, I was able to join Teletrac Navman in raising awareness for Road Safety Week in Macquarie Park.

RFNSW Container Meeting

Yesterday, RFNSW put together a container meeting to discuss developments at the Port Road Taskforce, WiMS, RMS enforcement, Port Charges and recent accidents at Hutchison. If you would like to know more about, please contact simon.ohara@rfnsw.com.au

The next container meeting is in July with details to follow in coming issues.

Lastly congratulations to one of our members...

Greg Lawson from JJ Lawson for winning the TruckSafe award.

Simon O'Hara
CEO

PS: Don't forget to register for our IR Breakfast on 25 May.

Free briefing covering workplace relations issues for the Road Transport Sector - 25 May 2018

Road Freight NSW members are invited to a free Ai Group briefing covering workplace relations developments of relevance to employers in the Road Transport and Logistics sector

Topics covered will include:

  • Key legislative developments and other major workplace relations policy issues for the sector
  • The potential re-establishment of the Road Safety Remuneration Tribunal and various ACTU / Labor Party proposals to amend the Fair Work Act 2009
  • An overview of anticipated changes to award clauses dealing with:
    • Casual and part-time employment
    • The use of annual salaries to pay employees covered by the Clerks - Private Sector Award 2010
    • Arrangements for when wages will be paid
    • New award entitlements relating to domestic violence leave and now requirements relating to the provision of 'family friendly work arrangements' to employees.
  • Enterprise bargaining and wage outcomes for the sector and associated developments

Location: Ai Group's office at 51 Walker St North Sydney

Time & Date: 8.30am to 10am on Friday, 25 May 2018 (registration from 8.15am).

RSVP: Members wishing to attending must RSVP by email Cissy Fang at the Ai Group via cissy.fang@aigroup.com.au. Please provide details of the name of the Company and the number of attendees. Members should RSVP as soon as possible to secure a seat.

Road freight industry council

Road Freight NSW has a seat at the Road Freight Industry Council (RFIC) and is represented at regular meetings by Jon Luff. The meetings are attended by the Minister for Roads, Maritime and Freight, The Hon. Melinda Pavey and chaired by Ken Kanofski, CEO of RMS. The meetings are attended by a broad cross section of regulators and industry with the view of improving safety and productivity for the industry

These meetings are an important aspect of RFNSW's ongoing engagement with key stakeholders and is an opportunity to ensure members concerns and suggestions are raised at the highest levels within NSW. As an association we have been committed to this forum for a number of years and are on our fourth Minister.

The Minister has shown a great commitment to the Council. She is not only in attendance but clearly engaged, well informed and proactive. This attitude is reflected in the various representatives from RMS and Transport for NSW and this creates an environment where issues are not only raised but addressed and, in many cases, resolved.

To ensure these meetings are productive and collegiate much of the discussion is in confidence however as an association we have been able to influence strategies around a wide variety of issues such as:

  • Input into rest area strategy to ensure the needs of drivers are met
  • Influencing road upgrade priorities.
  • Dangerous Goods sub-committee representation by Leigh Smart
  • Promoting higher productivity vehicles and improved access
  • Road safety consultation by ensuring initiatives actually address safety and are not implemented for political purposes.
  • Reduce red tape for the industry including providing employers access to driver demerit point information.

There are also a number of specific issues raised by members which have been tabled and delegated to specific officers to work with us to establish a solution

The RFIC is just one avenue utilised by RFNSW to get the voices of our members heard. It is not a magic bullet and there are areas where our views conflict with other members. It is also enlightening that many of the frustrations we encounter as operators are shared by the regulators. We are, however, there to voice the concerns and issues of our members. In many cases it is incumbent upon the industry to drive initiatives that will create better, safer, more productive outcomes for operators and the community. If you have an issue you would like raised at RFIC contact the association and we will place it firmly on the agenda.

An Important Message from RMS

Did you know in the last year alone, Sydney's motorway networks have seen 83 traffic diversions and 6 accidents as a result of vehicles operating over their height limits?

"I didn't know it was me" or "My GPS said to go this way" are common responses from drivers when interviewed by Police about entering a restricted zone on the Sydney Motorway Network.

It is imperative that drivers know the height of their vehicle and plan their trip. We are encouraging all operators to check in with their drivers and make sure that they are taking all necessary steps to assess the height of their vehicle combinations before driving on the Sydney road network.

Vehicles up to 4.3 metres high have general access to the network but must obey CLEARANCE and LOW CLEARANCE signs. Vehicles over 4.3 metres high up to 4.6 metres may operate on the routes approved in the 4.6 Metre High Vehicle Notice. Vehicles over 4.6 metres high must have a specific permit to operate.

Offences for being caught with overheight loads include fines of $3,700, a loss of up to six demerit points and licence suspension for up to 3 months. Undertaking a quick 5 minute check to ensure the driver and operator know the height of the vehicle and its load is definitely worth the time.

For more information on Sydney tunnel heights visit :

http://www.rms.nsw.gov.au/roads/using-roads/sydney-tunnels/index.html

How icare are able to support injured workers over decades

Every year about 60,000 people in NSW are injured at work. Thankfully, most get better quickly and get back to work in a few weeks. For those who don't, icare is there to give them support while they recover, in some cases for many years. So how much money is needed to be able to support these injured workers? And how do we work out how much we will need to support them in coming months and years?

Let's start with an overview of how insurance works. People pay to insurance companies, money (called a 'premium') so that if something unfortunate happens, such as an injury at work, they will receive some money to help them through this difficult time.

This premium does not simply sit in an insurance company's bank account. Some of it is used to run the organisation but most of it is paid out to people who have made claims (claimants) or invested to be able to make future payments to claimants, sometimes over many years.

In workers compensation insurance, working out how much money needs to be put aside to support these future payments involves complex calculations that are performed by an expert (an actuary). The main part of these calculations is an estimate of amounts that are yet to be paid on claims already made. This is illustrated in Figure 1.

The actuary considers many different things in estimating future payments, including modelling complex interactions and making assumptions that span decades into the future. These include, but are not limited to:

  • the types of injuries workers have or will experience;
  • the types of medical care and treatment that will be needed;
  • how much the medical care and treatment will cost and how this will increase each year;
  • how likely it is for the injured worker to find work in the years to come;
  • future investment returns on the funds set aside for meeting future payments; and
  • future economic factors such as interest and inflation rates.

Because these are all impossible to work out exactly, it is sensible to hold more funds than the estimate of future payments, just to make sure there is enough to support injured workers and that the funds won't fall short. This is why we target a solvency ratio.

For example, in the 2016/17-year icare paid $1.8bn in income support, treatment and care for injured workers in NSW.

$400m of this amount paid related to claims that occurred in the 2016/17 year with $1.4bn covering injured workers from earlier years. Importantly, a small difference between an estimate and what happens in the future, such as an increase in medical cost, can have a significant impact on whether there is sufficient funds in the future

Because the future is unknown and hard to predict, it's impossible to know for certain how much money icare will need to look after injured workers for years to come. Therefore, we must always be careful with how we manage and track our finances to ensure the workforce of NSW are protected well into the future.

Fuel Tax Credit Scheme Administration Issues?

Ahead of the 2018 meeting of the ATO's Fuel Schemes Stakeholder Group, could you please advise if you have any fuel tax credit scheme administration issues that you would like RFNSW to raise with the ATA?

As the ATO is not responsible for policy development, any comments for this meeting should be restricted to the administration of fuel tax credits.

Please let RFNSW know by COB Thursday 17 May 2018.

Tyres and CoR
By Adam Gosling

Tyres; everyone knows what they are, everyone knows what they do but how many people actually know how they work and what influence they have on our transport system.

Tyres form the foundation of the modern transport vehicle. This is acknowledged succinctly within the PBS Rules to wit;

"all the forces needed to both support and guide a vehicle ultimately arise in the area of contact between the tyre and the roadway. These forces are generated at the road surface in response to the deformation of the tyre structure." The deformation of a tyre is the result of the applied loads AND PRIMARILY THE INFLATION PRESSURE.

It is well accepted that a flat tyre supports no load. A tyre that is under inflated by 10% (say 90 instead of 100 psi) has a reduced load capacity. If the same load is applied to the under-inflated tyre then it will overheat and wear considerably faster. The poor outcomes don’t stop just with tyres. A major axle manufacturer study reported that dual tyres unmatched by just 5 psi yields decreased bearing life of 10%, 10 psi yields a 20% reduction. How many dual tyres in your fleet are this closely matched? The poor outcomes from under-inflated tyres continue with increased fuel burn rates. Where does the heat in the tyres comes from other than the fuel tank? Why are you throwing profits away? What does it cost to inflate tyres appropriately?

The following series of photos shows a steer tyre inflated to the working pressure of 120 psi, being deflated in 10 psi steps.

When can you determine that the tyre is under inflated? At what level is an underinflated tyre dangerous?

A simple comparison to make is oil to an engine, blood to a human, air to a tyre, it's all the same. Without the right oil level an engine will over heat, wear out faster at best, it could fail catastrophically. Without enough blood a human, yes we know. But not enough air in a tyre it seems that few actually care. Why?

How do you as a manager/director meet your responsibilities under the CoR when tyres are considered? Can you evidence this?

Tyres; one of the last low hanging fruit in a loss reduction strategy. How do you profit?

Adam Gosling
www.tyresafe.com.au

Road Works and Closures


Road Freight NSW contact details
Image
56 Fitzroy Street
Marrickville NSW 2204

Tel: (02) 9557 1205

info@rfnsw.com.au

www.roadfreightnsw.com.au

The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.

Please click here to unsubscribe from our mail list.