National transport regulatory reform

I, Josh Frydenberg, Treasurer, pursuant to Parts 2 and 3 of the Productivity Commission Act 1998, hereby request that the Productivity Commission undertake an inquiry into national transport regulatory reform.

Background

Australian governments have been working collaboratively towards safer and more integrated national markets in transport arrangements for a number of years, with the aim of improved outcomes in freight and passenger transport markets.

In 2008-09, the Council of Australian Governments (COAG) agreed national transport reforms for heavy vehicles, rail safety, and domestic commercial vessels. Inter-Governmental Agreements (IGA) were agreed in 2011, specifying objectives for reform in each area. The IGAs provided for the establishment of national laws for each area, administered by newly established national regulators, the National Heavy Vehicle Regulator (NHVR), the Office of the National Rail Safety Regulator (ONRSR), and the National Marine Safety Regulator (NMSR). To help ensure that reforms progress as intended, COAG agreed in 2011 that the Productivity Commission would undertake an assessment of the economic benefits of reform once there had been progress with implementation.

Complementing earlier transport reforms, in July 2018, the Council of Australian Governments' Transport and Infrastructure Council agreed a framework for developing a 20-year national Freight and Supply Chain Strategy, which is being informed by the outcomes of the Inquiry into National Freight and Supply Chain Priorities.

Scope of the inquiry

The Productivity Commission is to investigate the long-run economic impacts of transport regulatory reforms agreed by COAG in 2008-09 relating to heavy vehicle safety and productivity, rail safety and maritime safety and to make recommendations for further reforms towards a more integrated national market for transport services.

In undertaking the inquiry, the Commission should examine:

1. the benefits accrued from each reform stream (heavy vehicle, rail safety and maritime safety). In assessing the economy-wide impacts, the Commission should consider:
   1. the benefits derived directly to the transport industry
   2. the benefits derived for the community from consistent national safety regulation
   3. the benefits derived through the transport industry's role as an input to other industries
   4. the impact of cross border consistency for industry and governments
   5. relevant global or domestic changes impacting the transport economy since 2008
   6. the most important contributors to the benefits of transport reforms.
2. the implementation and development of the three national regulators (heavy vehicle, rail safety, and maritime safety), and the delivery against agreed objectives as set out in the IGAs and COAG priorities for transport. The Commission should also consider the capacity of local governments in supporting the implementation.
3. opportunities for reform to further integrate and harmonise the regulation of the national freight market, and the current focus and remit of ONRSR, NMSR and NHVR.

The Commission should also take into account the broader reform objectives and goals identified in the COAG Communiqués of 2008-09 and associated intergovernmental agreements, as well as in relevant IGAs implemented since.

The Commission should have regard to work being undertaken by the Commonwealth, States and Territories on complementary reforms including (but not limited to) rail standards harmonisation and interoperability, improved network access for higher productivity vehicles and the development of the National Freight and Supply Chain Strategy.

In undertaking its analysis, the Commission should exclude reform measures being progressed separately, such as cost reflective heavy vehicle pricing, as far as is practicable.

Process

The Commission is to undertake an appropriate public consultation process including holding hearings, inviting public submissions and releasing a draft report to the public.

The Commission should complete the inquiry within 12 months of its commencement.

The Hon Josh Frydenberg MP
Treasurer

[Received 5 April 2019]