July 2008

IT COULD BE SHOCKING

By the time this edition of Taxi Talk is released, the VTA will have responded to the draft report of the Essential Services Commission (ESC) into taxi fares for the next three to five years.

The VTA response will have expert input from Professor Clarke and Dr Shannon of the La Trobe University School of Economics, as well as from taxi operators who provided the VTA with operating cost information. The VTA project manager for this matter is David Samuel, and he would welcome comments from taxi operators and drivers.

Apart from the level and structure of fares, the ESC terms of reference required them to report on a range of issues including licence assignment fees, driver bailment, the MPTP, and WAT services.

Three draft recommendations made by the ESC to address the perceived deficiency in MPTP and WAT services were to increase several fold the annual cap on MPTP usage, increase the trip cap subsidy to $50, and issue 330 WAT licences in Melbourne to bring the proportion of WATs up to 15 percent of the fleet.

Other draft recommendations were to reduce the flag fall and increase the booking fee, and to apply the 20 percent late night loading across the whole State and remove fixed surcharges. Both these recommendations will (if adopted) have a significant negative impact on drivers and operators who service taxi ranks and operate in country towns.

But enough on the ESC draft report for now as most readers will be more interested in the final outcome rather than the path taken towards it, noting though that the ESC has indicated that there probably shouldn’t be a fare increase in September this year.

Whilst not related to the current fare review, but a matter that will most certainly have an impact on taxi operating costs and hence fares going forward, is the hot topic of the proposed Emissions Trading Scheme (ETS).

When ETS is introduced (planned by 2010), it will add to the price of most things. How much will depend upon what price is set for carbon and whether or not energy is included in the scheme. It has been suggested to the VTA that fuel prices alone could increase by 10 percent or even more.

Whatever change ETS brings, one thing is for certain – the very nature and structure of Australia’s economy and industry will be changed forever. This change could be so extreme that there will probably be years of restructuring and readjustment and through this period Australia’s economy could well go into recession.

You might be thinking; then why introduce ETS if it’s going to be so shocking.

The answer given is simply that CO2 emissions are making our planet sick and the sicker it gets the worse it will be for future generations. Then there is the other answer; that is, we need to design and build for the future when fossil fuels run out.

Whether you or I understand it or not or whether we agree or not, the fact is that a new era of economic and industrial change is about to engulf us, and there is no escape.

Neil Sach
VTA CEO