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Fair and equitable compensation for taxi plate owners.

‘People in ACT are crying to me on the phone’: Taxi owners face bankruptcy

A reporter for The Canberra Times, Daniel Burdon has highlighted on 19 September 2018 the injustice being faced by taxi owners in ACT and have taken the liberty to share his report verbatim. Read below:

Canberra’s taxi plate owners are facing potential bankruptcy as the ACT government looks to increase the territory regulated taxi plate cap by almost 40 per cent, to 500, a move that could further devastate the local industry.

The situation facing owners is increasingly dire, according to the head of the ACT’s Taxi Plate Owners Association Phil Booth, who is concerned about the state of owners’ mental health.

Attorney-General Gordon Ramsay and Greens leader Shane Rattenbury on Tuesday also confirmed the government would not offer owners of the perpetual licences bought before 1995 any compensation for losses in the value of the plates since the ACT legalised ride sharing companies in 2015.

While it is unclear how much value has been stripped from the value of ACT plates, in NSW they have fallen as much as 75 per cent in recent years, as the globe grapples with how to deal with ride-sharing firms disrupting the traditional taxi market.

The ministers on Tuesday also released research the government commissioned looking at the effects of the 2015 over the following two years on plate owners, drivers and consumers using taxis in Canberra, as well as a discussion paper on further reforms.

While the research by the Centre for International Economics examined a range of scenarios including compensation, it recommended against compensation, partly because the government had made no public comments it had any intention of providing such compensation prior to the research.

The research found up to $3.78 million in net benefits for the community, largely for consumers, but the costs of running taxis had not fallen, and network fees and other charges remained higher in the ACT than other jurisdictions.

It also found while uberX fares averaged about 10 per cent cheaper [except during surge pricing periods] than taxis in Canberra, the ACT cost of UberX trips was $2.48 per kilometre, slightly higher than the ride-sharing fares in both Sydney [$2.44] and Melbourne [$1.95], partly due to a 55 cents “booking fee” charged in the ACT.

The CIE analysis indicated licence plate owners were still maintaining their incomes from leasing the licences at about $21,000 a year, but also showed rising costs were meaning returns on the licence plates were negative for any plate bought since 2006.

It showed an owner of a licence bought in 2014 for $244,000 was losing 42% of its returns as at 2017, and while lease rates are static, they could start falling – a change that would be “hastened” by the government issuing more plates.

ACT Taxi Plate Owners Association head Phil Booth says the ACT government’s latest decision will devastate the industry. Photo: Jamila Toderas

Phil Button ACT Taxi Owner President

ACT Taxi Plate Owners Association head Phil Booth says the ACT government’s latest decision will devastate the industry. Photo: Jamila Toderas

Mr Booth said the territory government was dealing a further blow to existing plate owners with a decision to also raise the ACT’s cap on licence plates from the current 358 cap up to 500 plates.

He said he believed the CIE research was commissioned with the government’s predetermined outcome in mind, to introduce ride-sharing in Canberra without thought to the financial and emotional toll on the existing taxi industry.

Mr Booth said the latest decision meant plate owners could go bankrupt to avoid paying back loans used to buy the plates, some could lose their homes or be forced onto the aged pension in the absence of the plate income, which many had hoped would provide a nest egg.

“How is that looking after the families, the operators and drivers already working in the industry?” he said.

“Many people invested in the plates as a future superannuation option, and also bought them as something to be handed on to a family member.”

Mr Booth said many owners were now thinking their life’s work trying to build a financial future for their children was now “worthless”.

“Our people are crying to me on the phone, they’ve been waiting for good news, but today it hasn’t been good news.”

The government will immediately issue 30 plates to some of those on the 250-odd long waiting list for plates, to meet the current 358 cap, plates which cost just $5000 a year to lease from government, compared to the perpetual licences costing about $20,000 to lease from owners.

A further 50 plates will be issued by March next year, while the government seeks submissions on a discussion paper about how to implement the 500 cap, as well as related issues including how much the maximum fares would be for licensed taxis.

Despite plans the increase the cap, a government spokeswoman said the government has no plans to reach the new cap, but the extra amount could allow for more “flexibility in coming years, which could include the release of additional wheelchair-accessible taxi licences”.

The government has also announced plans to provide counselling services for taxi industry participants in need.

Mr Booth said while all the other Labor-governed states had agreed to buyback existing plates for some sort of price, the ACT government was refusing to put forward any compensation.

“We asked for compensation from the government months, ago, all we asked for was some compassion, but this government seems devoid of compassion,” he said.

“We just want our money back to move on with our lives.”

If you find the issues raised in this report distressing, you can call Lifeline on 13 11 14.

A smack across the face for all taxi owners in Australia

In his first major speech as Prime Minister, Mr Morrison cited Menzies’ achievement of taking home ownership rates from 40 per cent to 70 per cent and his emphasis on the importance of a stable job, good pay and accessible health services in setting out his own priorities.

Scott Morrison speech: I believe in a fair go for all Australians.

“I believe in a fair go for those who have a go in this country,” said Mr Morrison. “I think that’s what fairness means in this country. It’s not about everybody getting the same thing. If you put in, you get to take out, and you get to keep more of your what you earn.”

Action speaks louder than words

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