Taxi Owners in Tasmania wearing cement shoes in a rising tide

Taxi licences are described as assets in the Centrelink assets test.

Facts

  • The Australian Tax Office and APRA allowed licences to be included in superannuation funds.
  • Banks lended up to 80% of their value and held them as collateral.
  • And a licence could be leased allowing people to derive an income.
  • Industry stakeholders thought they were safely putting their nest eggs into an asset created by government, sanctioned by government and where participation was encouraged by government. They had no reason to believe otherwise.
  • Perpetual taxi licences were entrenched in the lives of those who owned them and relied upon in every way any other income bearing property would be considered.
  • The impact of these reforms has become a social justice issue. Good, law abiding people have been stripped of their assets and left in debt with no income and no superannuation. Many self-funded retirees are now reliant on government benefits.
  • Uber entered the taxi and hire car market and have been in terms of number unregulated. The fares they were charging were below cost of delivery, subsidised by international corporate entities with deep pockets. They came in like poachers and pirates into Tasmania and helped themselves to destroy the existing market and get a foothold for themselves.
  • Plate owners are handicapped by legacy debts and by the hollow left by long gone assets and income which they had rightfully structured their financial future around. It is not fair.
  • The pie has not grown proportionately. 
  • The taxi industry is on its knees.

Outcome

Everyone was enamored by the shiny new toy and the dirt cheap cost of a ride. No one it seemed tried to stop them with any great effort much less cared that the cheap ride was only possible by exploiting the driver and owner.

The industry regulator didn’t know which way was up, they still don’t.

Overnight, the taxi business took a dramatic turn. Taxi owners are now running on earnings reduced 80-90%. Many owners are trying desperately to keep the bank at bay servicing the loans for licences, where in some cases mortgages were taken out.

The truth is retirements have been shattered. But just like that, and through no fault of their own, everything slipped through their fingers.

Surely, many taxi owners thought, when you have done nothing wrong, followed every rule and every regulation and met every requirement expected of you over the years that someone would step in to help, but this has not happened.

Owners believed that fairness and justice would prevail and that someone would stand up to acknowledge the carnage, stem the bleeding and heal the wound.

It was expected that those who worked within the law would be protected by the regulator from those who were breaking the law. That simply did not happen.

No one came to our aid. Plate owners were hung out to dry with virtually no income and lost asset value.+

The issuing of owner / driver licence by the Tasmanian State Government’ absurdity beggars belief but these are the consequences of the government treating licences as though they are tokens found in a box of cereal.

No transition assistance payments were offered and never even conceived. For those perpetual plate owners who had invested in the industry compliant with the laws of the day, are now wearing cement shoes in a rising tide.

The industry was promised a level playing field but that field was under water and only the new players could swim.

The Tasmanian State Government have a social and economic responsibility to adopt a plan to restructure the industry to support a better balance of market forces so that it can prosper once again.

Bottom Line

It may not have been the intention of the reforms to wipe away over a billion dollars in privately held assets, to destroy families and businesses and create an underclass of workers who will never get ahead. But this is precisely what has happened.

One could simply shrug shoulders and say “oh well, what’s done is done”.

Unfortunately the nightmare will never be over perpetual plate owners until it is fixed.

Submission

I am calling on the Government to accept my proposal to properly compensate the perpetual plate owners in the taxi industry for the poorly constructed reforms. This proposal is in the form of an optional buy back taxi plate at which it was purchased plus CPI.  This is both just and fair across the board.

I urge all parties from across the house to consider their moral obligations and hope that we as Australian hard working, paying tax citizens receive widespread support and right the wrong.

The fate of the families, small business owners and self-funded retirees of the taxi industry are in the hands of the members of the Tasmanian State Government.

Endre Kovacs

Trustee for SMSF 

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