Govt has failed to grasp the ACTION nettle, again

Govt has failed to grasp the ACTION nettle, again

The option of saving about $47 million annually from ACTION's operating budget within 10 years has been rejected by the government, which is instead opting to renegotiate an enterprise agreement in 2017. Given its record since assuming office in 2001, there can be little confidence that the government will seriously grasp the nettle of significant restrictive work practices which greatly contribute to the inefficient and costly operation of Canberra's bus service.

In yet another report to government highlighting what it already does or should know, highly credentialed transport and planning consultants MRCagney points out that on average ACTION drivers are paid $21,883 a year more than comparable operators in NSW and SA. While it might be argued other jurisdictions do not pay their drivers enough, MRCagney says the enterprise agreement contains a number of specific clauses that give rise to and/or maintain less efficient practices within ACTION.

There can be little confidence the government will grasp the nettle of restrictive work practices contributing to the inefficient and costly operation of ACTION.

There can be little confidence the government will grasp the nettle of restrictive work practices contributing to the inefficient and costly operation of ACTION.Credit:Graham Tidy

For example, most bus operators specify a 38 to 40-hour week, within which the length of shifts can vary, allowing more efficient route and shift scheduling. However, in the ACT, the drivers' enterprise agreement guarantees eight hours of work each day for full-time drivers, thus limiting options for different patterns across the week.

Two chief ministers ago, in 2010, a consultant's report commissioned by the government found ACTION was spending more than 30 per cent of its $100 million annual budget on waste and inefficiency. With the departure soon after of Jon Stanhope, to Christmas Island, transport Minister Simon Corbell promptly agreed to a new enterprise agreement which largely left that waste and inefficiency in place.


In the report it gave to the government in March this year but only recently made public, MRCagney says that over the past 15 years, bus services in Australia have been characterised by a shift to outsourcing and competitive tendering. This had resulted in improvements in service quality, increases in patronage and cost reductions of 10 to 30 per cent. Based on the experience of other cities in Australia, MRCagney says a fully implemented outsourcing model could save the ACT government about $27 million annually by 2018-19, and up to $47 million – about 46 per cent – by the mid-2020s, or allow network frequency and coverage improvements of a commensurate amount.

Instead, the government says it is committed to working with its employees and their unions to deliver a better service while ensuring good pay and fair working conditions. "The government's chosen approach will keep the public asset in public hands and protect fair working arrangements for our workforce." The consultant estimates the government's approach could save about $12 million annually by the mid-2020s.

Even if this is achieved, and there can be no confidence of that, the government's approach will effectively cost rate payers about $35 million annually to pay for this profligacy.

Speaking of profligacy, MRCagney notes the suggestion that the light rail operator, in a staged approach, expand its role to cover services currently not undertaken by ACTION, such as airport services and city centre loops.

MRCagney recommends against this approach, as it would incur added expense and the government's time would be better spent formalising a franchising action plan. The government responds that Transport Canberra will be responsible for overseeing the delivery of light rail and integrated transport.

Given the considerable disquiet over the economic and practical benefit of any light rail operation, and the government's determination to continue to operate arguably Australia's most costly bus service, the downward trend of public transport use in Canberra seems set to continue for the foreseeable future. The MRCagney report says that from 2011 to 2014, the percentage of Canberrans taking public transport to work decreased from 7.8 to 7.1, despite an increase in public transport expenditure. ACTION is subsidised by about $7.20 per passenger, about double that of other similar public and private bus operations.

This high level of subsidy is in part the result of a government decision to introduce a flat fare from July 1, 2002, regardless of the distance travelled. That decision was contrary to advice by independent transport economists Booz Allen Hamilton that flat and single-zone fares were not a viable option for Canberra public transport. Strongly supported by Corbell, the introduction of flat fares sees people travelling longer distances effectively subsidised by those making shorter trips and at the time reduced ACTION's annual income by about $1.76 million.

This is another example of the government's public transport policy being driven by political ideology instead of overall fairness. MRCagney says if the government reverted to a distance-based fare, revenue could remain neutral while public transport journeys increased by 9.6 per cent.

The government says that it is developing a fare strategy for consultation in 2016 that will consider a range of different fare options including distance-based fares. Meanwhile, a fare increase of 2.5 per cent, as foreshadowed in the 2015-16 Budget, will proceed in January.

Stating the obvious, the government says, "Clearly, more work needs to be done to make public transport a stronger alternative to driving for many Canberrans. Improving the customer experience of ACTION is needed to support patronage and as a result improve financial sustainability. This will be a key emphasis of the government's work over the next six to 12 months." The public has a right to ask why this has not been a key emphasis of the government over its 14 years in office. Its continued refusal to demand from ACTION management and employees at least reasonable value and efficiency indicates a considerable disregard for the public generally and public transport users in particular.

The government says the establishment of Transport Canberra, on July 1 next year, will be a key step towards delivering lasting improvements. "Transport Canberra will be a new agency with its sole focus on public transport and will have strong strategic management capabilities." In principle, the establishment of Transport Canberra should be a good thing, but it will not be if subject to continued political expedience.

Meanwhile, given the government's overall response to the MRCagney report, no significant improvement in Canberra's public transport seems likely for at least several years.

Graham Downie is a Canberra writer.

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