Canberra Airport - Rego ACT - ACT Government

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5. Peak Period Plates Canberra Airport submits that Peak Period Plates are a device used to remedy existing failings in the market – it is a situation where the regulator attempts to “fix” supply and demand at a particular time because the regulator has been unable to “fix” supply and demand for the market in general. The operation of Peak Period Plates is complex, is difficult to enforce and is really just a symptom of a market with structural failings. Accordingly, in pure market terms, the only situation in which Peak Period Plates should be required would be where either: 1. An inadequate number of plates is being supplied for the general market; or 2. The annual licencing fee for normal plates is set at too high a level to allow normal taxi plates to be financially viable to cover both the demands at peak period times and the lulls in non-peak times. Accordingly, in our opinion, the better solution is not to have Peak Period Plates but rather to ensure that there is an uncapped system of issuance of taxi plates and secondly that the annual licence fee is not set at a prohibitive level. Having said that, given the critical shortage of taxis at peak periods throughout Canberra, Canberra Airport would welcome any solution that resulted in an immediate increase in the number of available taxis – if the only way to do this is through the issuing of Peak Period Plates, then that solution needs to be adopted as a matter of urgency.
6. Licence Fee In order to improve the quality of service of the taxi industry while at the same time releasing more plates, it will be necessary to substantially lower the annual licence fee charged by the ACT Government. The annual licence fee of $20,000 is currently causing higher fares, lower returns to investors, and lower incomes earned by drivers, consequently resulting in reductions in service quality while limiting the ability of the Government to issue more plates. In our opinion the licence fee should be reduced from $20,000 to $1,500 per annum, but in any event it should not exceed $5,000 per annum in any circumstance. To ensure equity across the industry this reduction should apply to both existing and new taxi licences, and to ensure that the full benefit of this reduction is passed on to drivers and investors, Canberra Airport submits that the current fare levels should not be reduced. The reality is that the loss to the community and to the city through poor quality of service and lost business is much greater than the revenue lost by the Government through this proposed reduction in licence fees. It is a taxing impost on an undersupplied industry that is reducing the number of taxis that can viably and sustainably afford to operate in the market. A reduction in the fee in this way is consistent with the Henry Review Tax Reforms. In relation to Peak Period Plates, it is recommended that the licence fee is set at no more than $500 per annum. As an alternative to reducing the licence fee with immediate affect, this reduction could be phased in gradually over the next five to seven years, with an immediate reduction to $15,000 per annum, then a reduction to $10,000 per annum in two years time, followed by a reduction to $1,500 per annum two years after that.
Page 1 and 2: ACT Taxi Industry Review Canberra A
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Canberra Airport - Rego ACT - ACT Government

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