BOYLE, Mr Anthony, Executive Director, Australian Livestock and Rural Transporters Association CLARK, Mr Warren, Chief Executive Officer, National Road Transport Association DUNNING, Ms Sarah, Strategic Adviser, National Road Transport Association HACKING, Mr Todd, Chief Executive Officer, Heavy Vehicle Industry Australia [by video link] JOHNSTONE, Mr Aaron, Chief Advocacy Officer, Heavy Vehicle Industry Australia [by video link] MACKINNON, Mr Ashley, General Manager, Policy and Strategy, Australian Livestock and Rural Transporters Association MUNRO, Mr Mathew, Chief Executive Officer, Australian Trucking Association ACTING CHAIR ( Senator Grogan ): Welcome. I understand that you've all been given information on parliamentary privilege and the protection of witnesses giving evidence to Senate committees. Do you have opening statements that you would like to make? Mr Boyle : We represent the operators who connect farms, processors and ports, keeping Australia's $100 billion agricultural supply chain moving. Our submission focused on three reforms, not because they're small but because it represents what our members so urgently need and because we believe these reforms will have an immediate impact on productivity. Before moving onto our own reforms, I just want to say that we actually support very much the position on higher productivity vehicles from the ATA. Modern, safe and more efficient vehicles with access to a truly national network, including a regionally focused one, are fundamental to lifting productivity. Our point is that even the most productive vehicles cannot deliver if the system is broken. Our first reform is infrastructure. In agriculture freight, Australia has a gap in washdown and agricultural biowaste management systems. Right now, operators are losing time from having to drive out of their way just to find a wash to clean waste from their trucks. We are treating biowaste as a cost and a burden to our businesses. We now need to actually move this into a resource. Currently, the ALRTA is submitting an application for a cooperative research centre project initiative. This project is working with industry to map biowaste across the freight corridors and deliver a fully costed circular economy solution and a national infrastructure strategy for government and private sector implementation. I'll give you a couple examples of why we need these. We still sweep fertiliser out of trucks with a broom, and then we load grain on it to go to export. There are 10,000 head of cattle a day going out of feedlots in South-East Queensland into processing facilities in Brisbane, and there is not one dump point or one wash facility that works on that network. To keep trucks moving, we need three things working together: good infrastructure, reliable workforce and fuel. If any of these fail, the system stops. Regional fuel security is part of that equation because, if fuel is not available where the journey starts, the system cannot move. We need it in the regions—the same place where your food comes from. That is food security, and we're working on a national strategy. Our second reform is regulatory friction. We're still asking operators to prove and provide the same information to multiple agencies and road managers. Operators are also investing millions of dollars into higher productivity vehicles and are often only granted a permit for three years. You can't expect someone to spend millions on equipment and not have certainty for the operation of the life of that vehicle. We also don't have a truly national network. Vehicles can operate in one state but not seamlessly into the next. Queensland is home of the NHVR, but it doesn't have an approved PBS network, and we have six different livestock loading schemes in Australia. In this digital age, why can't we get instant approvals for vehicles that already are proven and operate every day? This becomes an issue in the regional areas. Some farms are on an approved network, and others are not. This creates a last-mile access problem and a loss in productivity. Western Australia has just introduced a last-mile network approach to ensure productivity can reach its final destination. This is the sort of thing we actually want to see as a national concept. Our third reform is workforce resilience. In regional Australia, operators have historically delivered training to the next generation in the same way that a builder does to an apprentice—on the job. But we don't have a system to actually recognise that or support that pathway. We actually need to recognise skills that are learnt on the job. We need to support regional people who actually deliver the training and pass on their knowledge and experience to the next ones, and we need a clear pathway for the industry for young people to enter. At the moment, by the time they can get a truck licence they've chosen a different pathway. If you remove the friction, you can lift output, build resilience and deliver measurable economic gains. Our reforms are simple and practical. ACTING CHAIR: Mr Munro. Mr Munro : Thank you for the opportunity to be here today. I've just got a short oral submission. We've lodged a written submission, as you'd be aware, and we really appreciate the invitation to be here today to talk about that. While productivity growth in the road freight sector did increase sixfold between 1975 and 2009, it has effectively slowed to zero. This is despite significant reforms either recently implemented or underway. I'll just list some of those, because they're all pretty big: the Heavy Vehicle National Law, implementing it and then reviewing it; performance based standards; road user charging; the National Automated Access System; the National Freight and Supply Chain Strategy; and driver licensing and competencies, just to name a few. We've spent many years on these reforms, but they are yet to deliver. That is why this inquiry and the separate Productivity Commission inquiry are so important. In our submissions, the ATA has recommended that the government should make national competition payments to the states that achieve the milestones for delivering the National Automated Access System; increase the use of high-productivity vehicles; eliminate bottlenecks on the road network, which includes making the network more resilient to natural disasters; adopt the UN light vehicle standards to give vehicle purchasers more choice, reducing compliance costs and enabling the government to focus on maintaining our quite unique heavy vehicle standards; improve landside port productivity by regulating stevedoring charges; address the industry's driver shortage with better licensing and training, including national competition payments for progress on that front; and add articulated truck and tanker truck driving to the occupational list for skilled migration. As the committee is likely aware, in March this year the Productivity Commission released an interim report into the impacts of heavy vehicle reform. The report has strongly supported many of the ATA recommendations relating to accelerating the National Automated Access System, rapidly progressing heavy vehicle driver training and licensing reforms, and improving as-of-right access to the road network for safer and more productive vehicles, specifically our performance based standards vehicles. It also specifically recommends nationally consistent concessional mass limits for electric zero-emission heavy vehicles—there are states doing different things on that front at the moment and removing curfews for heavy zero-emission vehicles as well—while also acknowledging the issues with the current road funding system that can disincentivise access and investment to the network. While we're generally supportive of these findings, we must also exercise a word of caution against some of the Productivity Commission's separate recommendations, one of those being to phase out fuel tax credits for heavy vehicles. As we've seen in recent months, the heavy vehicle sector is highly sensitive to changes in fuel input costs. Higher fuel costs mean higher road freight costs for everyone, including Australian businesses and households and potentially reducing our productivity and competitiveness because those input costs will go up. Further, a fuel tax credit phase-out is wholly incompatible with current government plans to reform road user charging and infrastructure provision, which we think is a better pathway to fairer charging and more productive supply chains. Thank you for the opportunity. I'm happy to take questions. ACTING CHAIR: Mr Clark. Mr Clark : We're one of the largest associations in the country; our membership is across the country. We're all in the same sort of sector here, so I'm not going to go over the same thing. I'll try to pick out something slightly different. Senator McKENZIE: Thank you, Mr Clark. I want to get to questions. Mr Clark : I think we need to set it that the freight task will increase by 77 per cent by the year 2050. We've got a driver shortage now of roughly 28,000. That's expected to increase to 78,000. And, sadly, the importance of road freight transport is forgotten except in times of pandemic and war. When we talk about war—this is not in our submission because this has come after our submission—we really want to highlight the importance of fuel sovereignty and adequate supply for the industry. The reason I say that is that if we've got businesses that are looking at how they can even stay in business—from day to day, week to week—how the hell can they improve productivity and get better vehicles et cetera? The road freight sector itself is undermeasured, overregulated and underinvested. NatRoad would like to see road freight transport recognised and measured as a discrete sector in national productivity accounts as well as the creation of a national road freight data framework and a national road freight benchmarking framework. These guys have talked about a national automated access system. I won't go into that, but, to me, it's a no-brainer; it's essential. The other thing that we've talked about, as an industry, for many years is a crash investigator similar to what they have in aviation, rail and maritime. I don't know why we can't get it, but it seems to be very difficult. The other thing that we struggle with—Matt touched on this—is road user charge. We want greater transparency on road user charge. We want to ensure that our members, our industry, are not subsidising other road users like, let's say, electric vehicle drivers. It shallows the industry's capital—I talked about that with fuel—and they can't invest in new technology and productivity. That brings us to the next major scourge in our industry, and that's sham contracting. It drives everyone into sham contracting. Probably the only thing I'll touch on on training and licencing is the national apprenticeship for truck driving. The average age of a truck driver is 49. Women are 6.4 per cent of our industry. We've got a real problem with young people coming into our industry. I'm probably going to leave it there because a lot of the stuff is in our submission and has also been discussed by the other guys. ACTING CHAIR: Mr Johnstone, do you have anything? Mr Hacking. Mr Hacking : We're a little bit different to the three guys in the room in that we represent the heavy vehicle suppliers and the supply chain, the manufacturers, the distributors and the importers of vehicles. This inquiry comes at a critical moment and it's greatly welcome. It presents a tremendous opportunity to advance productivity in one of the nation's most important economic arteries. It's also timely, in the context of the Middle East conflict and subsequent fuel insecurity, and it coincides with the release of the Productivity Commission's Impacts of heavy vehicle reform: interim report, which observed that—despite major advances in vehicle design, safety systems and emissions performance—road freight productivity has stalled for more than a decade. This report confirms it's not a technology problem but a failure of the regulatory framework which is stifling the industry In the context of the budgetary and macroeconomic challenges facing our country, HVIA argues that now is the time to seize the moment. A step change is needed on road freight productivity, especially given the anticipated 77 per cent growth in road freight by 2050, which has just been spoken about. There have been recent glimmers of hope. In fact, level 2 of the National Fuel Security Plan has temporarily relaxed the regulations to encourage greater access for higher productivity vehicles. This temporary relief needs to be turned into systemised, consistent and permanent policy responses to improve productivity. It's a national freight task, and it needs a national, holistic policy response. Too often, the current regulatory system prioritises asset preservation over freight productivity, and this proliferates nimbyism. Unlocking productivity is a win for everyone. It's a win for manufacturers, operators and fleets. It lowers costs for consumers and it helps transport-reliant industries. And, of course, the community benefits as well, from reduced road congestion and cleaner air, HVIA has argued for reforming the Australian Design Rules, which do not keep pace with technology and innovation; for fast-tracking the NAAS, which was spoken about earlier; for ensuring that PBS access decisions are published, giving operators the confidence to invest in newer, more productive combinations; for requiring road managers to consider and weigh productivity when assessing access permits for local roads; and for sharing data across a vehicle's life. Currently, all of the data is siloed in government, and we miss a really important opportunity to capture that data to advance reform. A world-leading regulatory system incentivises productivity through the uptake of newer, safer, more efficient heavy vehicles. The current system, unfortunately, penalises innovation and rewards bureaucratic status quo. The policy solutions are known, and we believe now is the time to act. Thank you, and I'm open to questions. ACTING CHAIR: Thank you. We'll go to Senator McKenzie. Senator McKENZIE: Thank you, gents and Sarah, for being here. I'm super excited about the work that's already been done across the road transport industry in identifying areas of productivity gain. You all speak about them. We speak about them a lot when we're all together and separately. What is the hold-up? Is it political will? Is it money? You've all been banging this drum for a long time. These are not new ideas. That's why I'm so excited about this select committee, because we're really serious across the political spectrum about actually coming up with some recommendations to help our country long term. Very quickly—given your experience, you'll know where the hold-up is. Just be honest. Well, you have to be. It's a Senate inquiry, and we can throw you in jail if we like. ACTING CHAIR: That's harsh! Senator McKENZIE: You actually can. ACTING CHAIR: I'm well aware. Senator McKENZIE: Two people were jailed; that was in the forties. Let's not go down that track. Then I want to go to the road user charge, to unpack that a bit. Why are we still talking about the same things? What is the actual hold-up? Mr Clark— Mr Clark : Can I have a go at that, Bridget? Senator McKENZIE: is leaning into the mic. Mr Clark : Over history, I don't think the transport industry's been taken seriously, right back to Federation. This is a big, big industry. We need someone in this place driving it and driving industry hard. We've got a few senators, like you and others on both sides, who are doing a great job. But—we've talked about this many times—NatRoad believes we need a designated transport minister who is really going to take freight transport and actually drive it. Senator McKENZIE: Yes. I struggled with this when I was ag minister—whether it should actually be food because it's from the paddock to the plate, and food would have a more holistic view of what's required. You're suggesting, rather than a having a transport minister who has silos of aviation, rail, trucks— Mr Clark : It's a big portfolio. Senator McKENZIE: that you actually should be looking—Dr Hermione Parsons was in—around the freight supply chain. Mr Boyle, you're nodding. Mr Boyle : Yes. Warren's right, and Todd probably nailed it in his opening statement. It's bureaucracy. The time it takes to actually get to someone like you with a message—it's so hard getting through these departments. We spoke about this in a meeting just recently, Senator McKenzie. Senator McKENZIE: Yes. Mr Boyle : We need the actual departments to have a focus. Todd spoke about local governments being forced to have a productivity requirement and focus. At the moment, they don't want big trucks on their networks because they do damage and they can't get money to repair it. That's instead of saying, 'We'll take productivity and it'll drive us.' Where's the incentive there? That's what Todd was saying before, about incentivising productivity. We've got a federated system, a state system and a local government system, and the three don't talk. At least in Western Australia the roads are all controlled by the state government. They've taken away one level. Senator McKENZIE: So you've got someone to blame! Mr Boyle : But, on the east coast, you've got local government, state government, federal and cross-border issues. For our livestock loading scheme, we've got six of them. Senator McKENZIE: That brings me quite neatly—Mr Munro, if you don't have any— Mr Munro : I feel I could add to that, if you don't mind. Senator McKENZIE: Absolutely. If it's not bureaucrats and it's not— Mr Munro : It's levels of government. If we look at— Senator McKENZIE: But that's not going to disappear. Mr Munro : It won't, but if you look at the previous regulatory impact statements into the reforms that we've got now, the big areas that we were going deliver all the benefits in were access and fatigue. We've kind of solved fatigue somewhat, and we've got a sort of national law. However, the outer limits for fatigue are still basically set by the states. You've got one body that can now administer it, but the rules are still set, really, at the state level. However, access is pretty much a basket case at the moment, because, depending upon who owns the road, they'll make the final decision about whether you can access it or not. Senator McKENZIE: And, to Mr Boyle's point, you use a heavy gear and, if you're also responsible for maintaining that road, you don't want it damaged. Mr Munro : That's right. We've got an envelope. If you fit within the envelope, you're pretty well good to go. Anything that's innovative, that really delivers those productivity benefits, is going to fall outside the envelope, and that's where the bureaucracy really kills it. Senator McKENZIE: Todd, do you have anything to add? Mr Hacking : Yes, I do. Thanks, Senator McKenzie. I think that that's the case. It is a politically challenging environment. There are lots of tiers of government involved, and I think it is a lack of will to rock the apple cart. The reality, as Matt was just explaining, with PBS is that a road manager has got 28 days to make a decision. There's no precedent required in that decision, so one application can be approved one day and the exact same vehicle combination can be not approved the next day. It's even worse. They don't have to put reasons up, the decisions aren't published, there's no transparency and this happens every single day. It's not only that. Once your permit is approved, I think—if I'm not mistaken—in the heavy vehicle national law there's a three-year review of that permit at a maximum— Senator McKENZIE: You're getting a thumbs up from Mr Boyle. Mr Hacking : and I think some of them are reviewed annually. So, if you've invested millions of dollars on this brand new, highly efficient, high-productivity vehicle and you get approval, that approval can be removed in either one, two or three years, even though you've got access or got approval before. So why would you spend that money? Senator McKENZIE: Correct. Mr Hacking : Then you're on a limb without being able to recoup your investment. I think the system is broken from start to finish, and we need someone in Canberra to bring the states on the journey and to bring local government on a journey and to really start to unlock productivity and make that the centrepiece of transport regulation in this country. Senator McKENZIE: Yes, I think that's a neat way, between the lot of you, of unlocking the access piece. Mr Boyle : Could I add a little piece to that too. That's one concern I have with the NAAS. The NAAS is a good idea—and we've all said that it needs to happen—but we need that framework right because the NAAS is only going to be as good as the information that goes into it. If you've got negative information from local road users and managers and things like that, the system is still broken. We've actually got to get the system right to make that a fully functioning and operative outcome for us. Senator McKENZIE: But I think what I also hear is there's no-one responsible. When everyone's responsible, no-one's responsible. And, to Todd's point, if you can be approved to take a cart of something down X configuration and the next day have that exact same configuration of road network be not approved, there's no confidence to plan and no-one's responsible. So I think the transparency piece would also be really important. If you haven't put a recommendation to us on that, on notice, I'd like that unpacked a bit. To my next series of questions, a couple of you mentioned the road user charge, and I know it's something we've all spoken a lot about—how that credit is accessed et cetera. I would like to understand whether, if you had a blank page, you would be putting your members—and your clients, Todd—through a system where they have to buy the fuel then carry that cost until they get their credits et cetera. If you had a blank page, how would you construct a road user charge that appropriately asks the heavy vehicle sector to pay their fair share? Right now, it's not hypothecated to roads at a state or a federal level. There's no equity in the system when you talk about electric trucks and passenger vehicles not paying their fair share—not paying anything. Has somebody thought about this? I'm looking at Matt, but I'm assuming a few of you would have thought, 'If only.' This is the committee to actually have that conversation with. Mr Munro : There might be a few opinions on this. This has been talked about for at least the last 15 years. We've been close to reforms in the past, and they've always gone down in flames at the last minute. We'd start the process again. What's currently proposed is that we move away from fuel based charging to something that's a bit more fuel agnostic, some kind of distance based charging model. The way that charge would be calculated in the first place would be based on a forward-looking cost model. At the moment, government spend money. They collect all the receipts, put it in a bucket, mix it up and then divide that by the number of vehicles in the fleet. And that's basically your charge. Some of that goes on the rego. Some of it goes on the fuel. A better system moving forward would enable governments to not be competing for that money with having to pay nurses and police and things like that and to say: 'I've got a dedicated revenue stream that is hypothecated to this industry. I can make a forward decision to build infrastructure that's going to last 20, 50 or 100 years, and I can be guaranteed that that money will come back.' The cost will be shared over generations, if you like. It's not just the operators paying for it now. It's the operators who are using it in the future who will also pay for it. Some sort of distance-based charge would be the way to do that across the fleet, but it'd have to also be mass based as well. Senator McKENZIE: I was going to say. Weight has to pay, given the bridge network et cetera. Mr Munro : That's right, and that's where this often falls over. There'll be winners and losers in any transition from the current system we've got now to a new system, but it would be more or less future proof. It's how you collect the information, and we just want one system. Senator McKENZIE: One system for all roads. Mr Munro : One system for all. Some states have tried to break away and have their own systems. That would be the worst thing in the world for us. You'd be going to different states being charged different rates for different roads, potentially driving out of that state but being registered in that state and still being charged by that state for roads they don't even own. The integrity measures in that particular proposal were that you would take a photograph of your odometer and send it in to them. Given the billions at stake, I don't think that's acceptable. The High Court has struck down that proposal. There's a role here for the Commonwealth to fill. That's where it has to be. It has to be a nice simple system that applies to everyone uniformly, and it needs to capture light vehicles as well because, as Warren said earlier, we've got electric vehicles that are escaping the charging system at the moment. We do want to incentivise them onto the road, but not charging them anything is probably not the way to do it, because others then have to pick up that cost. Senator McKENZIE: And there are potholes in Kooyong! I've seen them! Mr Clark : Can I add something on the road user charge. As we've all talked about, to change anything in this industry takes a period of time, but the road user charge was brought in many years ago back in the 1950s or 1960s or something. They were very conscious that the road user charge wasn't a tax on productivity, and that's what it's turning into. This road user charge was increasing, until the government stopped it, by six per cent each year. Pretty soon, any productivity gain is gone. Fuel excise is 52c a litre. Full transparency on how that was spent on roads would be a start, but I think Matt's right. You're going to have to move away to a system. Until we do that, can we get that bit right? Senator McKENZIE: So you want which bit right? Not the six per cent truckie tax. Mr Clark : I don't believe the road user charge should be increasing any more than inflation. We've got it going to inflation times two at the current time—except it's been stopped because of the fuel crisis. So it's a tax on productivity. This whole thing's about productivity. Senator McKENZIE: Yes. I'm looking across the group—would it be a recommendation to this committee that the road user charge, as it stands, wouldn't be more than inflation? Mr Clark : One hundred per cent. And I'd like to see it at zero. Senator McKENZIE: And that's on Hansard. NatRoad wants it at zero, just like the EV drivers—well played! Mr Munro : Ideally, that'd be right. That would require the governments to be very, very efficient in their infrastructure provision to be able to keep it at inflation. But, as we know, in those projects we have cost blowouts and things like that, and, if we're actually paying the direct cost of the project, it's going to be higher than inflation, in all likelihood. But, given this is about productivity— Senator McKENZIE: But it's not hypothecated, Mr Munro. Mr Munro : I think there would be a willingness, from industry, to pay a little bit more if the productivity gains were there and demonstrable—the transparency—so you could actually see them. People will pay a small road toll to save them driving through congested traffic for an hour when they could get there in 15 minutes—if the price is set at the right level. That's the challenge. It is possible, under a system like that, that you could do it, but it's about making sure we get something in return. Senator McKENZIE: So NatRoad is saying zero, or at least inflation. You're saying you've upped the price. Mr Munro : We're saying it needs a strong link to productivity. Senator McKENZIE: Mr Boyle, what about the rural livestock industry? Mr Boyle : Our submission to the NTC was to align it with inflation. But it's one thing to talk about the road user charge and the modelling and different things like that. I've been around this business and things like it all my life, and mass-distance-location was 30 years ago. It's not recent. It's been around for a long time. The system and the transparency and the incentivisation have been raised here before. If what we pay is actually going into incentivising, if there's a transparency mechanism—we've called for this in submissions, too: having a dashboard where our money goes in and we can see where the money goes into road users, so they get a return on it. The local governments can actually see that, if they open up productivity and let the bigger, more productive trucks through, they'll get the funding aligned with it. We put telematics in our trucks because we were asked to, because the government wanted to understand where we were moving so they could invest in this sort of stuff. We've heard it. There's no actual delivery of that happening. So, while we can talk about the road user charge and all that, there's got to be some incentivising the other way, where the money actually goes to driving productivity. That's what Warren's just been talking about. To me, there are two parts of this conversation. There is that mass-distance-location. I think it's got a place in the future. But we've got to see where the money goes and incentivise the productivity first. Senator McKENZIE: Todd, modern trucks have an amazing ability to collect data—probably too much data. I'd like to know where it all goes. Is a modern road-user charge for the heavy-vehicle sector that could also be transferable to the passenger-vehicle sector possible with the type of tech that your members develop? Mr Hacking : Yes, I believe it is. The data's there. The technology's there. Again, it just comes down to the political will, and probably the sensitive bit is that, as Matt was explaining, there are winners and losers. When you base the charge on how much you carry and where you go, you're always going to have some people that end up paying more than what they currently are, and that's a difficult conversation for people. So that's probably been the challenge. But, from a technology point of view, from a modern vehicle point of view, the data is available and could assist in designing a system. We all agree that the system, as it currently is, is broken. Heavy vehicles pay above their fair share in terms of road funding, and that's always been a bugbear of the industry. Senator McKENZIE: Thank you. ACTING CHAIR: We'll go to Senator Ananda-Rajah. Senator ANANDA-RAJAH: I might go to Todd first. Full disclosure, I am a fan of zero-emission vehicles. I want to break free from this fuel chaos, and I don't want to be shackled to foreign oil. That's the bottom line. I know we're a diesel-dependent economy, and it's going to take a very long time before it becomes a reality that we aren't handcuffed to another country. But, in the interim, could you talk us through what kind of regulatory certainty and infrastructure investment would be needed to scale up the adoption of zero-emission heavy vehicles in Australia. Mr Hacking : Let's start with context. Eighty per cent of the trucks on the road at the moment are light- and medium-duty trucks, but they do 20 per cent of the kilometres driven and produce 20 per cent of the emissions as a result. The other 20 per cent of the fleet are the interstate, big trucks, and they do 80 per cent of the kilometres and they emit 80 per cent of the emissions. So, if you really, really want to fix emissions, then that's the sector you've got to tackle. But it's also the hardest sector to tackle. We think, in the interim, one of the most immediate things you can do is tackle productivity, because that's reducing fuel burn. You can fit aerodynamic kits and you can use telematics. You can do all these things right now which are relatively affordable and immediate. The other thing you can do is invest in low-carbon liquid fuels. I know the current government has done that to some description. They've put in some seed funding, but we think that could be accelerated. These are drop-in fuels for your existing tank right now. So, instead of putting in diesel, you put in renewable diesel, whatever blend you want. That's taking real emissions out right now, and that can be done. In terms of the light- and medium-duty trucks, one of the biggest inhibitors is the inconsistency of the regulations and the complexity. A lot of the states have trials at the moment, but a trial is no good for someone that's got to invest $400,000, $500,000, $600,000 or $700,000 to buy a new piece of equipment. No-one wants a trial. If the state government then turn around and say, 'The trial's no good, and we're not going to proceed,' then you've done your dough. I think, if you really want to make some meaningful change, we've got to get the consistency, and national leadership is really important in that. One of the greatest inhibitors is the electricity grid, to be honest. There's really not a lot of information out there for our industry on how many electrons are in the system and whether there are going to be enough electrons in the system to ensure that the grid has the stability to recharge the network. There is a total-cost-of-ownership gap, so we do need to incentivise and put some money in for operators to bridge that gap. But we also need to ensure that the recharging infrastructure is available too. Whilst I think a broad based system is the best way to go forward—in terms of recharging, we can't forget that—we've got to provide more information about the stability of the grid. Of course, we're competing with data centres and the like for those electrons. So I think that's a really important thing. We need a really clear road map. Business needs certainty; it wants confidence. At the moment there are these ad hoc decisions being played out with no overarching strategy, and that's really inhibiting the uptake of heavy zero-emission vehicles in this country. Senator ANANDA-RAJAH: Can you talk us through—very briefly, because I want to go on to the others—what the productivity gains would be in terms of reduced freight costs with zero-emission heavy vehicles, should we put some investment into this. And how would that impact on goods and services that are delivered to the Australian people? Mr Hacking : The reduced costs—I'd have to take that on notice. As I understand it, if you look at the total cost of ownership, there is still a gap, so there is probably an increased cost. Government would need to plug the gap. Having said that, the technology is evolving all the time. I try and explain it to people as if it's a mobile phone or a flat-screen TV; they once were these big, bulky, heavy mobile phones, and now we've all got one in our back pocket. The technology improves, and, as the technology improves, the cost comes down. The private sector will get there. It'll just get there at a timeframe that works in terms of supply and demand. The only way that that can be expedited is if government swings in and puts some money on the table. Otherwise, the private sector will get there, but it'll be on a timeline that's probably a little bit longer than what people who are advocating for this would like. Senator ANANDA-RAJAH: Do you have any thoughts—and anyone can chime in here—on what kind of mechanisms government should look at in terms of, say, instant asset write-off, accelerated depreciation or grants to incentivise adoption of these vehicles? You're right—the capex is high. The opex is low; the capex is high. Mr Boyle : There's no use incentivising something that can't charge when we haven't got the infrastructure out there. About five years ago, Deakin University down in Victoria got a $50 million grant to do a study and run a centre on internal combustion hydrogen motors. It's a beautiful shed sitting down at that university. The money has been chewed up, and not one actual study has been done on it. An internal combustion engine running on hydrogen is actually only a head change on the current motor. It still runs on the same driveline. It becomes like a LPG system, but, instead of LPG, you're moving hydrogen around. How can we have $50 million burned up in a shed and no-one having done anything? There was a truck brought out from America. It's sitting in Kenworth in Melbourne. It hasn't even gone to the university to be studied and things like that. You know who gave that money, too, don't you? But why are we talking electric vehicles when we've got something that could work? The infrastructure is already there for the fuel systems and things like that. We just seem to have this whole electric vehicle focus. If you really want to talk about renewables, that's fine. If you want to talk about low emissions diesel, that comes from our food bowl. Canola is one of our biggest exports and one of our prime food productions, and yet you're going to turn it into fuel. Senator ANANDA-RAJAH: We send it to the EU, which will turn it into biodiesel. We might as well make it here. That's the whole point. But let me move on to NatRoad. You estimate that the current regulatory environment costs of households is about $452 per year in avoidable freight costs. Do you have a figure on the benefits provided to the community and to workers by those regulations? Mr Clark : Could you just say the question again, please? Senator ANANDA-RAJAH: You estimated in your submission that the current regulatory environment costs to households are around $452 per year in avoidable freight costs. Do you have a figure on the benefits provided to the community and workers by these regulations? Presumably these are environmental regulations designed to mitigate pollution and maybe other types of harms. Mr Clark : To be honest, the answer is no. One of the things that we raised in our submission is the lack of data and the need to get more data, so, to take it down that far, the short answer is no. Senator ANANDA-RAJAH: To the ATA: your submission called for the regulation of stevedoring charges. Can you describe to the committee the evidence that current stevedoring charges exceed competitive market rates. Mr Munro : There were some ACCC reports that looked into the productivity of the stevedoring industry. They found that productivity in the stevedoring sector has been relatively stable over the past five years. I'll just back that up with some numbers there. The stevedoring industry reported the same average container turnaround time on the landside ports between 2019-20 and 2024-25 as 18.8 minutes, so that didn't change in that time. They didn't provide any additional benefit to persons who were actually using that facility. They're just doing the same job in the same way and over the same time. However, about half of the revenue they raise from their operations actually comes from landside port charges, mostly charged on transport operators. In that same period, they upped those charges dramatically—far in excess of inflation or wage growth. And those fees were imposed unilaterally, without any consultation at all, so they basically have a monopoly. Senator ANANDA-RAJAH: Was that across the board, or was it one company? Mr Munro : We're talking about Port Botany, primarily. They're in New South Wales. They're providing the same service. They're not providing any additional productivity, but they have been grossly increasing their charges, not based on anything other than the fact they can do so. Our submission is calling for intervention. There was an agreement by Australian transport ministers to establish a working group to explore options and recommend next steps in response to the ACCC's price monitoring report. I'm not aware that that's occurred. In any case, we think that it hasn't gone far enough. I think, when you are using Australian ports that basically would otherwise belong to Australians, and you're granting someone a monopoly over that facility, there needs to be some reasonable regulation that prevents them from increasing charges to unsustainable levels, particularly without consultation and particularly if there's no productivity gain to be demonstrated. Senator ANANDA-RAJAH: Thank you. This is to the ALRTA. Your submission proposes a scorecard measuring compliance time, facility availability and workforce conversion time. What do you see as the benefits of this, and how would it work in practice? Do you have a view on which government body should own this and publish it? Mr Boyle : I touched on this a little bit earlier about benchmarking. We've actually called for this a couple of times now in relation to where our road user charge goes. If there's no transparency in that, and no benchmarking showing that the money that we're investing in fuel tax is going to give us an actual road to drive on, then how can we actually talk about increases in productivity? The benchmarking needs to be actually in the delivery of the money we're already paying and—Mr Munro just spoke about the efficiencies in the port system—the efficiency in the money going back into paying for roads and developing infrastructure and things like that. If we can have that sort of reporting and transparency—in our businesses, we have to do that every day as part of being a responsible person employing someone. We have to have health and safety reports. We have to have accreditation to drive for advanced fatigue hours, and things like that. We're being transparent in our businesses. But the billions of dollars we're actually paying out—there's no scorecard on that. Senator ANANDA-RAJAH: Do you have a sense of which agency should be responsible for this kind of scorecard? It does make sense. It just sounds like it would be quite complex to develop. But maybe I've got that wrong. Mr Boyle : No, you're right. Realistically, it's probably got to be a federal government implemented project. The first place it would go would obviously be the NTC. Considering they take seven years to give us an extra metre on a truck, it's going to be a very long process, isn't it? Senator ANANDA-RAJAH: I might stop there and hand back to Senator McKenzie. CHAIR: Senator McKenzie. Senator McKENZIE: I feel like I've hogged the call for 20 minutes, so if there are any other senators who have questions—no? I can keep going. Mr Boyle, can you explain why washdown and biowaste infrastructure is a productivity issue rather than just an industry compliance issue, which is the critique? Mr Boyle : Yes, you're right; it is compliance, because, at the end of the day, our job is to make sure that we don't spread disease, so our compliance is to ensure that we're respecting our biosecurity requirements. But how do you comply when you haven't got the infrastructure in the first place? Senator McKENZIE: Is it only in Queensland that this is a problem? Mr Boyle : No. This is a nationwide problem. This is why we're actually asking to do the CRC project ourselves to actually bring the proper data. We know the problem. No-one's ever owned it. It's actually not our crap; it's somebody else's, but we're stuck with it. We are now taking the lead, and I welcome support from the senators for our project. We've got to get the data for you. We talked about a lot of data here today. We actually don't have the proper data to show where the bottlenecks are. I gave you one classic example, but that's Australia-wide. We've actually got to get the research. Part of the project that we're undertaking has circular-economy solutions. We've got the Australian Gas Infrastructure Group under this project as a key partner. They want to take our biowaste and turn it into energy. We're looking at actually bringing the solution. As I said earlier, local governments aren't able to invest in things because they're worried about the cost and the ongoing cost because they can't get funding. We're actually bringing that to the solution of the program too so that things like cattle transaction levies can go into that. The grain industry, when you've got that cross contamination— Senator McKENZIE: I understand. I've got some questions about the fuel crisis and the fuel security plan. Has the government confirmed whether the road transport industry will be classified as a critical sector under level 4 fuel rationing arrangements? Mr Clark : Not that I've heard of, no. Mr Munro : No. I've not heard that either. Mr Boyle : No. Senator McKENZIE: Fascinating. Let's hope we don't get there. Has the government given you any assurance that your industry will not be impacted by fuel disruptions or restrictions if level 4 rationing is introduced? Mr Munro : No. Mr Boyle : I think it's probably more the commodity that we're transporting that's going to come into play there. For us to actually be told whether our industries can or can't work—I think, when it comes to that level, it'll come down to the actual commodity first. There'll be, obviously, the medical, as was put earlier— Senator McKENZIE: You're saying 'obviously', but I don't think anything is obvious. Having gone through a global crisis as a minister before, having clear guidelines about who's in and who's out at what stage is critically important to confidence. Have you raised concerns with the minister regarding fuel supply risks? How would you characterise the response given? Mr Clark : We certainly have raised it, and we've sung it from the rooftop. We've done a lot of media on it. The biggest issue that we have is that there wasn't enough fuel in the country—not enough supply, demand and price goes up. When you're talking about categorising industry into what is critical and what is not, I don't believe you can do it across freight, because it's all going to be critical to someone. Senator McKENZIE: I think heart transplants are more critical than your Amazon packages. Sorry, Mr Clark! Mr Clark : Indeed, they are! You're right, Senator. The government has done a lot to help us in the industry out. But what are we going to do to actually make sure that we have fuel sovereignty? This is a real problem in this country. To us, that's crucial. We can talk about electric vehicles until the cows come home, but we know the average age of our fleet is 15 years. Todd will tell you that to turn over our entire fleet is going to take some time and some supplier trucks. Senator McKENZIE: Yes, and I hope that's in writing in your submissions. Does anyone have anything different to say? Mr Munro : I'd only say that this issue predates the current situation. Senator McKENZIE: Fuel sovereignty. Mr Munro : Correct. I think the ATA and other member associations of ours have raised the criticality of fuel supply with not just the current government but previous governments. There have been consultation papers on this in the past. Recommendations have been made. We have international obligations to keep 90 days of fuel, which we just aren't doing. We were underprepared when the crisis hit, and I think we need to cop that on the chin now and have a good hard think about how we fix this so we don't wind up in the same situation again. That could be a whole combination of measures, not necessarily just imports. It could also be exploration, refining and biofuels. Senator McKENZIE: NatRoad, I heard it reported that, with the financial pressures that industry's currently under, up to 70 per cent of transport businesses may not survive the next six months. Is that correct? Mr Clark : Yes. We did a survey which went out to our membership and general industry. The rate depended on the size; the smaller was higher than the larger. It's all based around uncertainty of fuel prices and fuel supply. In our industry it's cash flow and working capital. One of the big things, which people are not talking about in this crisis, is that people are still not getting paid on time. Senator McKENZIE: That's right. Mr Clark : If they don't get paid, they don't have the money to fill their trucks, the trucks stop and the freight supply chain breaks. That's the worst-case scenario. But, yes, those figures are correct. Senator McKENZIE: Todd, I just want to move to the concessional loans. On 2 April the government announced $1 billion in concessional loans for truckies and for fuel and fertiliser producers. How many people have been able to access these loans? Mr Hacking : I believe that the details, about applying for those loans, came out earlier this week. That's the zero interest loans, I think, under the Economic Resilience Program. Senator McKENZIE: Yes. Mr Hacking : I believe the details were released either Monday or Tuesday this week. Senator McKENZIE: So no-one's been able to apply for them yet? Mr Hacking : I think you can apply. I'm not sure whether the money's actually flowed. From a HVIA point of view, we were just a little bit concerned about the eligibility for that program. The eligibility is by ANZSIC codes, the industry codes, and it looked like heavy vehicle manufacturers, automotive transport manufacturing, had been left off. Whilst our immediacy isn't the same as that of the trucking operators and the fleets, who are obviously facing this right now, I've got members who haven't had an order taken for eight weeks. If they're not making money, they're not buying trucks, trailers, equipment or componentry. So if what Warren is saying comes to fruition—and a lot of those fleets and operators stop operating, can't operate or go into liquidation—my sector is going to shortly follow, because no-one's getting orders right now. And it was already tough. We were already 15 or 20 per cent down from last year. Our industry survives on confidence, and confidence right now is shot. CHAIR: Okay. Senator McKENZIE: I'm conscious of time. By 2 pm Monday I'd received correspondence from a small New South Wales based transport operator. His application for one of the new concessional loans had been rejected on the spot by his bank. Have you had feedback from other truckies that they've been rejected on the spot as well? Mr Clark : We have, yes. We've had direct feedback. Senator McKENZIE: What do you do with that information? Mr Clark : We feed it back to the guys who are running the program, to NFF—NRF. Sorry, there are so many acronyms. It's mostly small ones that have been knocked back on the spot though. We don't get involved in the credit process, obviously. Senator McKENZIE: Of course, but it's just giving that feedback. Mr Munro, you were nodding too. Mr Munro : I've only heard through the media and through members; I've not had anyone ring directly. But I guess what I can say is that, given the way this is being rolled out through the banks, the banks are going to have their own lending criteria, which may actually be different for each bank. It's concerning that people might apply for this and have a different experience but be otherwise in the same circumstance. I'm also a bit concerned that the credit will be assessed as if there wasn't a crisis. We'd like to see that a trucking business that would be otherwise viable, if not for the crisis, would be credit worthy. If they're making decisions that are different from that, then we need to look at the program and its eligibility criteria, at how it's assessed. It also has to be paid back in two years, and maybe that's a problem. Will the operator have the capacity to do that within two years? Picking up a pretty high debt load and having to service it within two years is a pretty significant obligation. So that could be factoring in. On a positive note, when we've had discussions with the National Reconstruction Fund, they've said: 'Look, we understand we've rushed this.. There may be problems with it. We are happy to change it on the fly if those problems become evident.' So the door is open. We're only in the first four days of the program, so we need to— Senator McKENZIE: It was a program announced on 2 April. Mr Munro : Yes. Senator McKENZIE: Were you consulted? Mr Munro : I was consulted once last week. Senator McKENZIE: About the design. Mr Munro : About elements of the design, but nothing— Senator McKENZIE: Last week, not prior to its announcement? Mr Munro : Not prior to its announcement, no. Senator McKENZIE: Thank you. Sorry, Chair. I know you want the call back. CHAIR: No worries. I think we're perfectly at time. Thank you very much for your evidence. We would appreciate receiving your responses on notice by 7 May..