N.Z. transport too highly regulated?

Press, 8 June 1982, Page 10

N.Z. transport too highly regulated?

PA Wellington New’ Zealand transport systems are at the “highly regulated” end of the spectrum, the Minister of Transport (Mr Gair) told the Road Transport Association's owner-driver convention at Wairakei on Saturday. "A move towards the deregulated end could be beneficial." he said. But Mr Gair said that any changes would be introduced in accordance with a timetable that had been established in consultation with the paced to allow adjustments to be made with as' little disruption as possible. Mr Gair said that a review of transport licensing had been instituted earlier this year, and that he acknow'ledged that R.T.A.'s policy was essentially a reaffirmation of present policy. But he said that he would like to open out the debate to include areas that had previously been considered to be the domain of the Government rather than the industry itself. “The very use of the word review implies the existence of shortcomings in the present system," Mr Gair said. He referred to the present strict entry requirements which, he said, resulted in a

curtailment of the amount of real competition in the industry. This led to the potentially restrictive practice of “tagged licences.” where a licence holder was tied to one company or one type of company as a condition of his licence, Mr Gair said.

This acted as a damper on improved efficiency and the assimilation of new technology.

Mr Gair said he was not blaming the transport industry for excessive costs. "■What I am suggesting is that these things may be endemic to our licensing system and if this is the case I will be making strenuous efforts to ensure that the situation is improved." A freeing-up of licensing could remove the restrictions on tagged licences, converting them into general, goods licenses. ¥-’• ' ■ ■

“This would mean that both the licensee and the parent company would enter any business arrangement on an equal basis, with neither party having an inherent advantage." A second advantage of freeing up the system would be to allow operators to be more responsive to the market in terms of avoiding-the present commodity carrying restrictions, said Mr Gair.

Also, said Mr Gair.. a free-ing-up of regulations would enable backloading to take place which would result in' reduced rates, with mutual benefits to both operators and users. The present system allowed those able to backload to charge out at a level below the normal rate, Mr Gair said that though it may well be that the industry was over-capitalised, this was because of, rather than in spittf of transport licensing. Present vehicle use, with company, local body,, and Government vehicles repre-. senting almost 70 per cent of the heavy vehicle fleet, meant that parts of the industry were over-capitalised. A loosening of licensing regulations would mean that while there could be some lumps in the investment pattern initially, over a longer period these would smooth out.

With closer economic relations with Australia imminent, it was- essential that local transport industry costs be competitive. “It would be wrong of me to claim that change is never painful,” Mr Gair said. “But my own instinct is that mere tinkering will not suffice in this case and that a major revision may be needed.”