FOLLOWING the vote in the Senate on April 18, the Road Safety Remuneration Tribunal (RSRT) will be abolished and the Road Safety Remuneration Act 2012 (Cth) repealed.

Legal specialists in the transport industry, Cooper Grace Ward, have reported the Bill abolishing the RSRT and repealing the Act is expected to receive Royal Assent on April 19, which means the RSRT and all orders of the RSRT will cease to take effect from the start of April 21, 2016. 

Cooper Grace Ward have provided the following background brief on this complex issue in  the transport industry:

The Contractor Driver Minimum Payments Road Safety Remuneration Order 2016

On December 18, 2015, the Road Safety Remuneration Tribunal (Tribunal) published its Contractor Driver Minimum Payments Order (2016 RSRO). The 2016 RSRO was to commence on April 4 2016 for a term of four years. It requires the payment of minimum hourly and kilometre payments for contractor drivers involved in the provision of distribution or long distance transport services. The term ‘contractor driver’ includes individual owner drivers and small companies where all vehicles are driven by family members of directors or shareholders. The 2016 RSRO also imposes compliance and audit obligations on parties in the supply chain.

Full details of the 2016 RSRO are discussed in Cooper Grace Ward’s legal alert dated February 4, 2016.

Applications to vary the Order

In March 2016, the Tribunal received 38 applications to vary the 2016 RSRO on various grounds including that:

• parts of the 2016 RSRO are ambiguous and not adequately defined;
• businesses would be unable to comply with the 2016 RSRO by April 4, 2016; and
• a delay in the commencement of the 2016 RSRO and the inclusion of transitional minimum rates would give the transport industry time to interpret, understand and comply with the Order.

On March 15 2016, the Tribunal heard the applications to the extent that they sought to vary the commencement date or to include transitional provisions in respect of its minimum payments. Consistent with the Road Safety Remuneration Act 2012 (RSR Act), the Tribunal prepared a draft variation of the 2016 RSRO for consultation. The draft variation included provisions:

• delaying the commencement date until January 1 2017; and
• allowing hirers to pay owner drivers ‘transitional amounts’ that periodically increase 12 months, 24 months and 36 months after the commencement date of the 2016 RSRO.

The Tribunal gave interested parties until March 21 2016 to make written submissions on the draft variation of the 2016 RSRO.

Altogether the Tribunal received approximately 800 submissions from owner drivers, hirers and industry associations, the majority of which supported delaying the commencement date of the 2016 RSRO until January 1 2017. The Tribunal scheduled three days of hearings over the Easter long-weekend.

Just days before the hearing, the Tribunal issued orders to more than 30 people requiring them to produce documents and attend the hearing in order to respond to questions arising from their submissions. The Transport Workers’ Union also required various witnesses to be available for cross‑examination.

Over three days of the Easter weekend, various applicants participated in the hearing and those who received summons were cross-examined in relation to those submissions. Cooper Grace Ward represented the National Road Transport Association (NatRoad), which was one of the applicants.

At the conclusion of the hearing, the Tribunal sought final submissions on a compromise position proposed by some of the applicants and reserved its decision in respect of the draft variation to the 2016 RSRO.

The decision

On April 1 2016, the Tribunal handed down its decision not to vary the 2016 RSRO. The 2016 RSRO would commence on April 4, 2016, as originally planned.

The Tribunal asserted that there was "significant support" for the making of the 2016 RSRO and suggested that there are a number of myths surrounding its application and operation. The Tribunal acknowledged that this confusion and uncertainty was in part due to the Fair Work Ombudsman inadequately performing its duties, but suggested that certain bodies and individuals had sought to "create and perpetuate myths" about the 2016 RSRO.

In deciding not to vary the commencement date, the Tribunal emphasised that the road transport industry has already benefitted from the three and a half month period between the making of the 2016 RSRO and its commencement date. This period provided affected parties with an opportunity to obtain sound advice and education about the 2016 RSRO.

The Tribunal also decided against adding transitional provisions to phase in its minimum payments clauses, arguing that this would only increase the compliance burden and complexity, making the 2016 RSRO less simple and easy to understand.

Stay

On Friday evening, April 1, 2016, following an application by NatRoad, the Federal Court in Brisbane handed down an Order in the following terms:

1.         Pursuant to section 39B of the Judiciary Act 1993 (Cth):

• (a) the order of the Road Safety Remuneration Tribunal of 18 December 2015 entitled ‘Contractor Driver Minimum Road Safety Remuneration Order 2016’; and
• (b) the order of the Road Safety Remuneration Tribunal of 1 April 2016, being the refusal to vary the order of 18 December 2015,
  be stayed until further order of the Court.

2.         All affected parties have liberty to apply to the Court on two days’ notice in writing.

3.         Costs be reserved.

4.         The matter be reviewed by the Court on a date to be fixed.

Other developments

On April 1, 2016, the Department of Employment released two independent reviews of the Road Safety Remuneration System, as well as its own discussion paper with options for reform.

The first review report, completed by Rex Deighton-Smith of Jaguar Consulting in April 2014, concludes that the Tribunal should "not continue in its current form".

The second review report, prepared by PricewaterhouseCoopers in January 2016, estimated that the two orders made by the Tribunal to date will have a net cost to the economy of $2.3 billion by 2027, even with safety gains factored in. The report concludes that there would be a significant net benefit to the economy and community if the Tribunal were abolished.

Both reviews found there is substantial regulatory overlap with work health and safety laws and other road safety regulation, and that the level of regulation is not justified based on the limited evidence as to the link between remuneration and road safety in the road transport industry.

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FOREIGN investment in Australia is operating under new restrictions from December 2015.

Analysis of the changes have identified how the Federal Government has moved to close loopholes and impose more realistic costs for international applicants, Mullins Lawyers director Tony Hogarth said.

“From December 1, 2015, the Foreign Investment Review Board (FIRB) has implemented new rules aimed at strengthening the regulation of foreign investment in Australia,” Mr Hogarth said.  

A significant change in the compliance regime has been the appointment of  the Australian Taxation Office (ATO) to regulate foreign investment in residential real estate, to improve compliance and strengthen the enforcement of the FIRB rules.

“The ATO now has the capacity to match its own taxpayer data with those from the states and territories relating to land titles, immigration, FIRB and AUSTRAC,” Mr Hobart said. AUSTRAC follows the movement of funds in and out of Australia.

Foreign nationals wanting to invest in Australia are also now required to pay an administrative fee before their investment application is processed. The fees apply for each application lodged from December 1, 2015.

Residential properties valued at $1 million or less now attract a $5,000 fee. Residential properties valued over $1 million have a fee of $10,000 then $10,000 incremental fee increases per additional $1 million in property value.

For commercial real estate there is now a $25,000 fee, while vacant commercial land attracts a $10,000 fee.

For proposed foreign investments in agribusiness, there are fees of $25,000, but that raises to $100,000 where the investment is greater than $1 billion. The agribusiness investment threshold is at $55 million to be indexed annually, but exceptions apply for some Free Trade Agreement (FTA) countries.

Agricultural land attracts fees of $5,000 to $100,000 and the threshold is at $15 million (cumulative) with exceptions for some FTA countries.

In addition, an administrative fee is now payable by developers when applying for advance off-the-plan approval. For developments of 50 or more residences, property developers can now apply for a new dwelling exemption certificate to enable them to sell new residential dwellings to foreign investors without the need to apply for FIRB approval.

The general ‘substantial interest’ threshold for acquisitions requiring notification has been increased from 15 percent to 20 percent, consistent with the Corporations Act 2001 takeovers threshold, Mr Hogarth said.

He said the ATO plans to establish a register relating to foreign ownership of residential real estate from July 1, 2016. The FIRB has already established a register relating to foreign ownership of agricultural land from July 1, 2015.

Significant changes have been made to the penalties, introducing civil penalties for the first time while previous criminal penalties have been expanded.

“Generally, the maximum ‘criminal’ penalty for individuals and companies has been increased to $135,000, or three years imprisonment, and $675,000, respectively,” Mr Hogarth said. 

He said ‘civil’ penalties cater for situations where a foreign person makes an acquisition without approval; a foreign person fails to comply with a condition of approval; a non resident acquires established residential property; a temporary resident acquires more than one established residential property; a temporary resident fails to sell an established residential property when it ceases to be their principal place of residence; and a temporary resident rents out an established residential property.

“By way of example, in the case of residential real estate, the maximum ‘civil’ penalty is the greater of 25 percent of the purchase price in addition to the relevant application fee, or 25 percent of the market value of the property in addition to the relevant application fee,” Mr Hogarth said.

“The civil and criminal penalties are now extended to third parties, who knowingly assist a foreign person to breach the FIRB rules. This raises the level of responsibility for real estate agents, lawyers and others involved in the sale of property to foreign buyers, to take care and provide proper advice in relation to the FIRB rules and requirements.

“Foreign investors and advisors need to be aware of their obligations and to abide by the FIRB rules to avoid incurring the significant penalties which may now be imposed,” Mr Hogarth said.

www.mullinslaw.com.au

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A NEW online classifications registration portal is proving to be popular with film festival organisers and computer game expos. The Classification Board  has seen almost 200 events registered through the online system in its first four months.

The portal gives festival and event organisers a streamlined, accessible way to register the unclassified films and computer games in their program. 

This is a major change from the old system where event organisers had to apply to the Director of the Classification Board for an exemption from the usual classification requirements for each film or computer game being used at their event.

The portal was launched to coincide with the commencement of new laws for events wishing to exhibit unclassified content.

The registration record can be instantly sent to venues, such as cinemas, to confirm event details and if there are last minute changes, such as a late program entry or a change of venue, this can be updated online by event organisers. It is fast, simple and, in combination with the relevant legislative changes, represents a significant reduction in workload for both government and industry.

The online tool is especially important for events organised by community groups and non-profit organisations running on a shoestring budget, often relying on volunteers working long hours in the final push to opening night and enables the art sector to more easily provide the community with access to a broad range of diverse content.

As well as being part of the Federal Government’s deregulation agenda, the registration portal is an important step in the Classification Department’s digital transformation journey and provides a technological solution to make it easier to comply with classification requirements and to interact with government online.

In the four months since the launch, industry use indicates the portal is already a success.

The portal services the needs of an estimated client base of 500 event organisers and an estimated 1,000 events a year.

For more information, go to the Registered Events page on the classification website.

www.classification.gov.au

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