Legislative Council

GREENS BILL: Ending the $1 Passenger Transport Tax

May 31st, 2017

On the 31st of May, Mark introduced the Greens Bill - Passenger Transport (Miscellaneous) Amendment Bill 2017 into the Legislative Council.

Introduction and First Reading

The Hon. M.C. PARNELL: Obtained leave and introduced a bill for an act to amend the Passenger Transport Act 1994. Read a first time.

Second Reading
The Hon. M.C. PARNELL: I move:

That this bill be now read a second time.

This bill deals with a number of amendments to the Passenger Transport Act. As members would know, this bill deals with a whole range of passenger transport issues: trains, trams, buses, taxis and some of the new entrants to the passenger transport market, such as ride sharing schemes. The bill before us contains a number of measures, some of which, I appreciate, relate to money. I thank the Clerk and parliamentary counsel for assisting me to ensure that this bill complies with the constitution.

The point-to-point transport service transaction levy of $1 per trip applying to all taxi, ride sharing and chauffeur car trips in the Adelaide metropolitan area came into operation on 1 May. The new levy was part of last year's budget and it was introduced to raise money to compensate the taxi industry for losing their monopoly rights to provide certain transport services. The compensation package was mostly in response to the commencement of new ride sharing operators such as Uber, which had commenced operations in South Australia.

The debate over whether compensation of incumbent taxi licence holders and operators was necessary or justified has been a vexed one, but the government proceeded down that path and the compensation is now locked in. To pay for it, the government introduced the levy. But is it really a levy? Is it hypothecated to specific purposes? Is it time-limited to the period necessary to raise the funds required for its stated purpose?

The answer to all these questions is no. It is not a levy: it is a tax. It is not hypothecated: it can be spent on anything. It is not time-limited: it is open-ended. It is permanent: the tax does not end when its job is done. It may never end. This is the wrong that at least one or two of the clauses of my bill seek to overcome. The bill ensures, through a sunset clause, that the tax will come to an end when sufficient funds have been raised to satisfy the government's compensation package.

There is a certain amount of guesswork involved in calculating how long it will take to raise the amount required to compensate the taxi industry at $30,000 per licence plate and $50 per week for lessees for up to 11 months. At briefings last year, we were advised that the money could be raised in four years. Since then, further estimates have been provided that suggest that it might take longer, especially given the considerable compliance and administrative costs.

The length of time will also obviously depend on how many trips are taken, which could vary according to prevailing economic conditions. A worst-case scenario is six years, so that is the sunset period I have adopted in this bill. The $1 per trip tax will end in six years. That will certainly be welcomed by the taxi industry, the chauffeur car industry and Uber. I have received communication from the CEO of Suburban Taxis, Mr Vince Mazzone, who welcomed this bill because it ensured that this would not be an ongoing new tax on their industry.

I have also had discussions with Uber and they are very keen to see this tax come to an end as soon as possible. The taxi industry and Uber do not always see eye to eye, but on this issue they are in furious agreement. They do not like the new tax and they want to see it go as soon as possible. The question I posed before—is it a tax or is it a levy?—raises the question of whether the money raised might be used for other good things in the transport area. The answer of course is yes, but those good things could be funded in other ways as well, through other taxes or through general revenue.

It is worth teasing this out because the government, in its attempt to convince the public of the merits of this new tax, has identified some other good things that it is proposing to do with the money and these include fee reductions to chauffeur vehicle operators, taxi drivers and owner-drivers and improvements to access cabs, but there is no legal link between these programs and the new tax. The government might as well have promised to spend the money on police, hospitals, teachers or even cute baby animals. However, the fact remains that it is a new tax and it can be spent on anything.

In trying to sell the tax to the travelling public, the government has pointed out that passengers will be no worse off because the government has now capped credit card surcharge fees charged by taxis, which were formerly 10 per cent, at 5 per cent. On an average taxi fare of $20, the surcharge will drop from $2 to $1. The new tax is only $1, so passengers are no worse off, or so the argument goes. But should we accept that? Should we be grateful that the extravagant credit card surcharge fees are now being reduced? I welcome the reduction, but I do not think it goes far enough. Taxi passengers are still being ripped off because, even at 5 per cent, the taxi industry is raising more money than it costs them to administer credit card payments.

According to Choice magazine, the true cost of collecting payment by credit card is only 1 or 2 per cent, not 5 per cent and certainly not 10 per cent. In fact, I booked a flight recently and the credit card surcharge was 1.3 per cent. That I think does reflect the real costs to the operators. In fact, taxis along with airlines have been mentioned in the media over many years as topping the list of rip-off merchants. Customers are still being ripped off and you cannot offset the government's credit card surcharge savings with the new tax. I think passengers deserve better treatment and they deserve fairer treatment.

It is an inefficient tax as well. There are millions of transactions that have to be documented. The levy is also not being levied statewide, and that means that there are problems, especially in the outer metropolitan area, the border of country and metropolitan. Certainly the Greens support governments raising money for essential community services and programs, but this is the wrong tax.

It is a bad tax for a number of reasons. Certainly people choose to use taxies, ride sharing or other point-to-point services for many and varied reasons. For example, many people simply physically cannot drive through disability or for some other reason. You have other people who prefer not to drive, especially if people are being responsible when they are out drinking—they prefer and choose not to drive and so use point-to-point transport.

Some people have realised that the expensive standing costs associated with a car can be avoided, especially in relation to a second car, if those additional trips are taken by public transport or by taxi. But, the bottom line is that anything that adversely skews the relative price of private car travel to other forms of public transport, including taxis and ride-sharing services, is bad.

I opposed this measure last year when the budget was being debated, and the opposition chose not to support the Greens at that stage. The grounds offered were that it was a budget measure and that they don't block budget measures. I raised the point at the time that the opposition did in fact have form in blocking budget measures, such as the car park tax. The explanation I was given was that, whilst that was a budget measure, it was something they took to the election, and somehow that made it all right.

So, I would remind members, especially members of the opposition: we have another state election in 10 months' time, and I expect that pressure will be put on the Liberals and on all other parties by the thousands of South Australians who are impacted by this new tax. If the Liberals support a sunset clause, they need to support this bill. If they don't, then it will be clear that they want this tax to remain permanent, so if they do get into power eventually they will have the benefit of this extra general untied revenue.

On the other hand, if the Liberal Party announces support for a sunset clause, then by their own standards it is now an election issue, and they are free to vote for it. So, I want to see the opposition come clean on their true position.

I want briefly to raise some of the other provisions in this bill. Clause 4 of the bill deals with the Metropolitan Taxicab Industry Research and Development Fund. Members will be excused for not ever having heard of that fund or not knowing anything about it, because there is nowhere in the act where there is any accountability in relation to that fund.

When you look at the annual reports each year, there is no indication of how much money is in it or how the money is being spent. It is, in fact, a mystery fund. One of the things that the taxi industry has asked me to look at is some of the details of what is in that fund and how it is being spent. So, my bill provides for an accountability mechanism, where those two key issues—how much is in the fund and how is it being spent—will be reported, because currently they are not being reported.

One of the other amendments relates to the Passenger Transport Standards Committee. Members may have heard of this committee, because clearly when you have a system of accrediting drivers, for example, you need to have a body of people who will do that work. In South Australia it is the Passenger Transport Standards Committee. What struck me when looking at the Passenger Transport Act is how that committee is brought into existence and how independent is it in relation to the important accreditation and disciplinary powers it has.

I was shocked to find that the Passenger Transport Standards Committee is basically comprised of any persons that the minister thinks fit can be appointed, effectively on any terms and conditions determined by the minister. There is no expertise base used to determine who is appropriate, there is no tenure, there is no ability, for example, for the appointment for a fixed term. The minister basically has carte blanche to appoint whoever and under whatever circumstances they want to this committee. This committee has extensive powers to determine the livelihoods of thousands of South Australians, so I think that it needs to be a little more accountable.

The amendment that I have brought forward in this bill is pretty straightforward. It simply takes the general statutory body appointment mechanisms used in dozens and dozens of other acts of parliament and replicates them in this bill. For example, my bill provides for tenure—in other words, terms of office—in this case, for periods of two years with the right to be reappointed. There is a list of the circumstances in which a position becomes vacant, and that is the standard list: a person dies, completes a term of office, resigns, is convicted of an indictable offence, etc.

These are the provisions we are all familiar with. They apply to many statutory bodies in dozens of pieces of legislation. I think the Passenger Transport Standards Committee should also comply with that standard. Most importantly, I want to make sure that there is at least one person on that committee who represents the interests of consumers of passenger transport services. I am not saying it needs to be a person who is nominated by any particular body. I am just saying that given that this body is all about standards, at least one of the people on it should in some way be able to represent the interests of consumers rather than just, for example, the interests of industry or the interests of government departments or regulators. I think it is a very modest reform and I urge all members to support it.

With those words, I look forward to further debate on this bill. I appreciate that there are some aspects of it that we will not be debating in committee, and if the bill passes, we will be making recommendations to the lower house in relation to those aspects that relate to money. I urge all honourable members to take this bill seriously, to look at all parts of it, whether they involve money or the other measures I have raised. I hope that it can have a speedy passage through this chamber in the next few months.

For more information see a copy of the Bill

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