May 29, 2017

Australia’s Taxi & Hire Car Industry Hardship Speech – 29 May 2017

I rise to speak on Appropriation Bill (No. 1) 2017-18 tonight. Obviously I will raise concerns relating to the Turnbull government’s budget for 2017. In overview, this budget has failed to support industries in transition and has failed to invest in the outer suburbs of Australia’s major cities, in particular the south-eastern region of Melbourne and my electorate of Holt.

In a broader sense though, I wanted to talk about the failure of governments, both state and federal governments, to deal with the issue of what I call ‘disruptive technology’; the havoc that it wreaks on good people who have made investments in good faith, who then have those investments taken away from them by these disruptive technologies that are not regulated in the same way; the impact it has had on industries, and on one particular industry that I am going to mention; the fact that governments of all persuasions are allowing these disruptive technologies to come in without appropriate regulation and oversight; and what the long-term consequences of that are going to be for our community and our society.

The primary example I want to talk about tonight is the ongoing plight of Australia’s taxi and hire car industries. The taxi and hire car industries throughout the world have been going through a global transition that has been brought about by the digital revolution, and by the new economy. However, rather than receiving the needed support that happens when new industries come in through transition, the federal government, the Turnbull government, and, unfortunately, state governments have completely neglected the industry and the ongoing suffering that is being experienced in dealing with this transition.

Many of my constituents and others would have read about the term ‘global disruption’ to various industries. One of the first prime examples of this has been the global disruption to the taxi and hire car industries. This occurred due to changes in the way people can order a taxi and/or other transportation services, such as Uber. Governments around the world have responded in different ways to technologies and new industries like Uber. For example, Denmark, France, Bulgaria and Finland have all stood up and banned Uber, while Uber has in the main been allowed to exist in the USA and is trying to spread into 82 other countries around the world. It is now interesting that, because of some of the concerns about Uber, there is some unionisation occurring of the Uber workforce in the United States.

In Victoria, the previous Baillieu and Napthine Liberal Victorian government between 2010 and 2014 failed to take any action to address the disruption of this industry when it first came in. What happened was they allowed Uber to exist in Victoria, effectively unregulated. As a result, taxi licence values dropped by half, from about $500,000 on average to about $250,000 during the four years of the previous Liberal state government. During that period, not one cent of financial assistance was paid.

In light of this legislative mess, the Andrews Labor government brought in reforms to attempt to compensate those who were affected; however, I would say they are not ideal. They provided $494 million to those affected. Through this package, perpetual metropolitan licence holders will receive $100,000 for their first licence and $50,000 per licence for up to three more, while additional financial support can be provided under the hardship funding. It sounds good, but let us see what the ramifications of that are. Rather than supporting the need to provide much-needed financial support to this industry, the Liberal opposition in Victoria is blocking the bill in parliament—that compensation bill. Because the bill is now stuck in parliament—it is being debated in committee—it is denying families vital funds that they need now. In addition, if we look at the Turnbull government, it is still planning to tax the payments the Andrews government will be making to those taxi cab and hire car owners and drivers that are in need.

Despite this taxi and hire car assistance package being provided, the families involved in this industry are under a great deal of stress. The value of their licences is now zero, and their income has been radically reduced. In many cases the value of their taxi or hire car plate was superannuation for these families. That was their investment. As a result of the establishment of Uber, these families have nothing. They have no superannuation, just a substantial debt.

Over the last two years our office has been working closely with Victorian Taxi & Hire Car Families. We have been assisting roughly 3,000 families who individually own or operate taxis or hire cars. To those who do not know each of these 3,000 families are suffering to varying degrees as a result of very comprehensive changes to the taxi and hire car industry. For example, in one case a family bought a taxi licence in 2011 for $513,000. In Victoria this taxi licence is now worth nothing. The family is clearly now in severe financial hardship. The family still owes $350,430 on the taxi licence. It will receive only $100,000 of financial assistance from the state government. This means the family is left with a debt of $250,430 to deal with for the rest of their lives. This is but one example of how taxis and hire car families have been affected and of the financial hardship they are experiencing.

Let me talk about that in a more graphic way. Since August 2016 Victorian Taxi & Hire Car Families has compiled statistics from among their members. They have attribute to the hardship experienced by this transition, the death of three members due to ongoing stress, 11 families having had to sell their family homes, six families having gone through a divorce, five members having suffered a heart attack, four members suffering other severe health issues and four members now suffering from cancer. This situation could be mitigated if the state Labor government were to fully fund and provide additional financial support to those families that are struggling to cope at present. I call on the Turnbull government also to commit to not taxing the payments the Andrews Labor government is wishing to make as this financial assistance.

The Victorian taxi and hire car industry wants a long-term future, and it is vital that Australian governments consider assisting the taxi industry. There is a reason why I would do that Uber has failed to fulfil its tax obligations, infringed workers’ rights and failed to provide insurance protection for customers injured in a crash in Australia in all cases. That does not apply to the taxi industry.

New operators providing transportation services should be treated like taxis and hire cars and not be allowed to get away with not paying tax and with disobeying Australian laws. Yet that is what is actually happening. The people involved in the taxi and hire car industry have done nothing wrong. They pay their taxes and provide an essential service to Australians. In contrast, the families involved in Victorian Taxi & Hire Car Families believe existing laws are not being enforced to properly regulate Uber. So there is a situation where there is a disruptive industry, a technology, a grouping and a major conglomerate worth $60 billion that comes into this country and does not abide by the law of the country. It does not pay tax. Yet it is rewarded by governments bending to its will by allowing this lack of regulation to occur. That sets a very undesirable precedent for other industries where that will occur. We are seeing the thin edge of the wedge. It will not be just taxi and hire car families; it will be other industries. This plan of deregulation and disruptive technology will not stop with taxis and hire cars. It will progress through all sorts of industries. We are seeing the canary in the coalmine. It is the taxi and hire car families that are having to pay the price at this point in time.

Victorian Taxi & Hire Car Families also wanted to remind the chamber that a taxi driver in Manchester, AJ Singh, decided to turn off his meter and offer free lifts to people who were caught up in the atrocity committed last week in Manchester. During the Bourke Street tragedy in Melbourne in January 2017, taxi driver Lou Bougias intervened and immediately went to the aid of multiple victims and provided direction to others who joined in to help. His actions became one of the most inspirational acts to emerge in the aftermath of this terrible tragedy. In contrast—and we know this because we have looked at it—during the Lindt cafe siege in Martin Place in December 2014, according to Ben Grubb in an article in The Sydney Morning Herald, Uber decided to charge passengers four times the usual rate under its surge pricing scheme. In times of need we see taxi drivers—the regulated industry—stepping in and showing compassion. I believe compassion should be extended to those in the taxi and hire car industry in their time of need.

According to Elizabeth Knight’s article in The Sydney Morning Herald last week, one of Australia’s wealthiest and most high-profile investors, Hamish Douglass, has called Uber ‘a Ponzi scheme and one that will be broke in 10 years’. Thus, it might be a good idea for the Australian government and some of our state governments to question their ongoing support for Uber and look at whether it is leading to ongoing hardship for those in the taxi and hire car industry in Australia. They are seeing a regulated industry being wiped out for an industry that might not be around in the next five to 10 years.

I and my colleagues the member for Wills and the member for Batman have worked assiduously to ensure the taxi and hire car industry is supported. I would certainly urge the Turnbull government to intervene in some way to take some action to address the unfolding human tragedy that is occurring within an industry in transition in Australia. There are 3,000 families in the Victorian taxi and hire car industry group that need urgent financial assistance right now. I would also make that call to the Andrews Labor government. It needs to step in and provide additional financial support as soon as possible.

Rather than just talking about the taxi and high car industry, I would like to point out this budget’s neglect of the outer suburbs like those in my region. I note that the Turnbull government has a plan for the new airport at Badgerys Creek in Sydney, but there is certainly no commensurate plan for the outer suburbs in Melbourne and, in particular, in the south-east of Melbourne in my electorate of Holt. In light of the decline of Australia’s automotive manufacturing capability and the closure of Victoria’s Hazelwood power station, it is vital that we set a new renewable energy manufacturing jobs plan for the south-east of Melbourne.

If you look at the scale of the contribution that the south-eastern suburbs of Melbourne make, they generate 44 per cent of Victoria’s manufactured product. That is according to the South East Melbourne Manufacturers Alliance, or SEMMA. Industry provides 17 per cent of south-east Melbourne’s 549,000 jobs. There are more than 300 exporters located in this region. The question is: what support was provided in the budget for Australian manufacturing, especially as the automotive sector is winding down? One of the key priorities is to continue to invest in this manufacturing hub of the south-east of Melbourne so we can keep jobs in our local area.

Another important point that can be made is in respect of the lack of funding for road congestion in my electorate. This is a substantial issue. We deal with congestion on the Monash Freeway, the South Gippsland Highway, Clyde Road and Thompsons Road, to name just a few roads, and congestion, particularly on Thompsons Road, is a substantial issue for people in my constituency. The priority is to fully fund the completion of Thompsons Road in Cranbourne. During the 2016 campaign I was delighted that Labor committed to investing $85 million in funding for Thompsons Road, which would duplicate high-volume sections of Thompsons Road, making it six lanes wide, build a full grade separation at Western Port Highway intersection and upgrade the intersections with Frankston-Dandenong Road and Narre Warren-Cranbourne Road. The grade separation, if it is not funded, becomes a self-defeating enterprise. There are funds available, we know there are funds available, and we have certainly seen those funds committed by the Prime Minister to other states and territories. I would call upon the federal Turnbull government to make a commitment to fund this grade separation, in particular at the intersection of Thompsons Road and Western Port Highway. It is essential work that needs to be done. It should not just be left to the state government to fund this. The Turnbull government should be doing this. We made that commitment, and we would expect to see that matched by the Turnbull government.

I would like to finish where I started and remember those taxi families and hire car families. They continue to need our support. They are the canary in the coalmine: where goes the taxi and hire car industry, we will see other industries doing the same fairly soon.


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