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
National Road Transport Commission Amendment Bill
Date Introduced: 25 September 1997
House: House of Representatives
Portfolio: Transport and Regional
Commencement: Royal Assent
The major amendment proposed by the Bill extends the life of the
National Road Transport Commission by one year.
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 1900-91.(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
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
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
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
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
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
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:
Road transport typically accounts for 5-10 per cent of the costs
of Australia's primary products and 2-7 per cent of the costs of
manufactures. Future economic prosperity will depend substantially
on our ability to contain and reduce the cost shares of traded
commodities against our competitors.
The variety of regulatory frameworks under which Australia's
road transport industry is required to operate is anathema to the
very idea of competitiveness.(10)
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:
under which the former, with the consent of the latter, will
seek to enact or make the Commonwealth Act and the Commonwealth
Road Transport Legislation for the Australian Capital Territory
which law will be the model on which the pertinent law of the
Parties to this Agreement, other than the Commonwealth and the
Australian Capital Territory will be based.(11)
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 Commission is funded by the Commonwealth, States and
Territories. For the 1997-98 financial year the NRTC received
$3.605 million, with the Commonwealth contributing approximately
35% of funds.(12)
Rationale for amendments
The rationale given in the Second Reading Speech to the Bill by
the Government for extending the life of the Commission is to give
effect to a recommendation flowing from a section 47 review.
Basically, section 47 of the National Road Transport Commission
Act 1991 (Cth) requires the 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 the Review found:
that the Commission should continue through an amendment to its
enabling legislation, but that several improvements needed to be
made to improve its functioning and effectiveness.
The Government has signalled in the Second Reading Speech to the
Bill that it intends to introduce a Bill to put the substantive
recommendations of the Review into effect.
The effect of item 1 of Schedule 1 is to allow
members of the Commission to be appointed for more than two terms.
The stated rationale for this amendment to allow the reappointment
of existing members to preserve the continuity of the Commission
prior to the enactment of substantive new legislation.(13)
The effect of item 2 of Schedule 1 of the Bill
is to extend the life of the National Road Transport Commission
Act 1991 (the Principal Act) from six years to seven years. As
the Principal Act commenced on 15 January 1992, the proposed one
year extension means that the Principal Act will cease to have
effect on 14 January 1999.
- Department of Transport and Regional Development, A National
Approach to Road Transport Regulation, July 1996, p. 5.
- Ibid., at p. 6.
- Ibid., at p. 7.
- Department of Transport and Regional Development, A National
Approach to Road Transport Regulation, July 1996.
- Ibid., pp. vi & vii.
- National Road Transport Commission, Annual Report 1992, p.
- National Road Transport Commission Act 1991 (Cth),
- National Road Transport Commission Amendment Bill 1997,
Explanatory Memorandum, p. 3.
- Ibid., at p. 4.
3 October 1997
Bills Digest Service
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© Commonwealth of Australia 1997
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Last updated: 3 October 1997
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