On the Road to Reform

Bookmark and Share | Mike Nahan
Herald Sun 15th November, 2003

While the transport sector has arguably been the subject of greater beneficial change than any other sector in the economy, a recent study indicates more is likely to come.

Tens years ago, aside from trucks and cars, the transport sector was largely government owned, union-run and uncompetitive. While it directly accounts for just 1 per cent of economic activity, the sector impacts 25 per cent of total economic activity and all exports and imports. As such the sector acted as a sea anchor on the nation's competitiveness.

Governments along with entrepreneurs and technology have steadily transformed the sector. Governments have largely got out of operating transport businesses and concentrated on providing infrastructure and promoting competition. Entrepreneurs have taken over ownership and invested heavily in technological, infrastructure and workplace reform.

As a result of these changes, many sections of the transport sector are now world competitive; many transport entrepreneurs---including Lindsey Fox of Linfox, Paul Little of Toll Ltd, Chris Corrigan of Patrick---have made millions; and the economy is better off.

There is, however, at least on the workplace reform, substantial scope for further improvement as shown by the IPA's Capacity to Manage Index.

The Index assesses the degree to which enterprise based agreements (EBAs) increase or decreases the flexibility of the firm.

Not surprisingly, the transport sector has in general much more flexible working arrangements than the other sectors examined to date (ie construction, food and automotive). Also not surprisingly Patrick Stevedores has the most flexible EBA across the four sectors.

Despite the transport sector's generally more flexible workplace arrangements, most EBAs in the sector reduce rather than enhanced managerial capacity. That is most transport firms would achieve greater flexibility, if they operated under the relevant award rather than under their own EBA. This, of course, goes directly against the underlying purpose of EBAs, which is to tailor arrangements to the particular needs of the firm.

Some transport firms have particularly inflexible EBAs. P&O Ports stands out with a rating of negative-16. This was not only the lowest rating in the transport sector, but stands in stark contrast to postive-7 rating of Patrick Stevedoring---its major competitor. Another firm with a surprisingly inflexible EBA was Toll's stevedoring operations which had a rating of negative-15. All three of these EBAs are with the MUA. Clearly Toll and P&O have significant scope to improve workplace arrangements and to increase efficiency by adopting aspect of the Patrick's EBA.

Air Transport is another area which has potential for further improvement. The best EBA in this sub-sector is Virgin's technical service (negative-1) followed by Qantas' non-pilot operations (negative-4). Most other EBAs in air transport rated lowly, such as Australian Airports (negative-14), Qantas' pilots (negative-11), Sydney Airport Corporation (negative-13) and Virgin Blue Airlines (negative-9).

In terms of unions, while there is significant variations between EBAs with the same union, the Transport Workers Union appears to be the most amenable to a flexibility workplace.

Given the importance of the transport sector and its competitive nature, we should expect a new wave of reform focused on further optimisation of work place culture.