Cheaper fees for some Victorian motorists under controversial VicRoads ‘privatisation’ deal

Victorians will get a discount for road safety and new drivers will get their licences for free under a controversial government deal to privatise part of VicRoads’ functions.

Key points:

A consortium of two super funds — Aware Super, Australian Retirement Trust — and global asset manager Macquarie Asset Management will run the overhaul of the roads authority’s IT system as part of the 40-year contract.

When the joint venture was announced in March last year, it was decried by the union as a part-privatisation that was a “betrayal” of both workers and motorists.

Friday’s announcement has been met with similar warnings about future price hikes for motorists, but the union has welcomed news that jobs will be protected.

Treasurer Tim Pallas said VicRoads had been operating under “trying conditions”, which included substandard IT programs and a massive backlog of work.

He said the consortium had a track record of modernising and improving such systems and “also had a desire to offer more products to the motorists” and the involvement of super funds would deliver returns to “mums and dads”.

Under the deal, the government retains ownership of VicRoads and remains in control of data and privacy, pricing of fees and services, and regulation and policy.

It is unclear what portion of revenue will be directed to the consortium.

The $7.9 billion in up-front payments to the state as part of the deal will be invested in the new Victorian Future Fund, which was announced as part of the budget earlier in the year as a way to manage ballooning debt.

“From our perspective, this is a great outcome for Victoria,” Mr Pallas said.

“It’s a great day for Victoria.”

The government said existing VicRoads jobs would be kept and a further 80 new roles would be created as part of the deal.

The Victorian Ombudsman and Victorian information commissioner will provide oversight of the venture.

‘It’s waddling, it’s quacking. It’s privatisation’

Australian Services Union assistant branch secretary Leon Wiegard said it would be better for workers and consumers for the deal to have not gone ahead, warning of the possibility of higher prices for motorists.

The ASU’s Leon Wiegard says the deal is clearly privatisation.(ABC News: Leanne Wong)

“We’ve always been clear with the government, that privatising VicRoads is not a good idea,” he said.

“Having said that, we have been able to secure some good conditions of employment, the enterprise agreement rolls on and everyone’s been guaranteed a job.

“It’s not a great outcome, but it’s the best of the possible alternatives”.

Mr Wiegard said the union remained concerned about private data being handled by the companies and a lack of clarity about how the joint venture would function.

Shadow Treasurer David Davis said it was a “fire sale” of VicRoads.

“The Andrews government is selling off what Victorians own to pay for its record debt, its mismanagement, the cost blowouts on so many of our major projects,” he said.

Mr Davis said it was clear the consortium would not have paid such a hefty sum if it did not think it could make money out of the deal.

“Don’t be fooled by the government’s spin,” he said.

“This sale will mean higher prices for licences, registration. It will mean higher costs for commuters. It will mean higher impacts on family budgets.”

The union says motorists would be better off if VicRoads remained in state hands.(ABC News: Billy Draper)

The Greens’ transport spokesperson Sam Hibbins labelled the deal a “sell-off” which “put the interests of private profit over the public good”.

“The lease, which will not expire until the 2060s, will mean higher fees, lower-quality customer service, and less jobs, lower wages and conditions for workers for decades to come,” Mr Hibbins said.

“It will put control over another public asset in private hands.”

The Greens and the union pointed to the privatisation of parts or whole of the Port of Melbourne, Land Titles Office and public housing estates as reasons for being concerned about the sale of public assets. 

Mr Pallas said the deal was “not a privatisation in anybody’s language” but was a joint venture that would see an improved VicRoads returned to the full control of the government in 40 years.

“And I know that motorists have been suffering as a consequence of the way that the system operates at the moment, and I know that VicRoads staff have been frustrated by the way that the system has operated and how they’ve been constrained in giving the service that they want to give to the public,” he said.

The Treasurer made a commitment to never divest the ownership of assets.

But the union’s Mr Wiegard said: “It’s waddling, it’s quacking. It’s privatisation.”

Drivers without demerit points to get cheaper licence renewal Drivers will be further incentivised to follow road rules under the changes.(ABC News: Danny Tran)

Drivers will see a drop in prices for a range of services now the deal has been inked.

From August, online testing will be made free, as will learner and probationary drivers licences.

Compared to the current rates, that will save L-platers $51.40 and P-platers $133.30.

Drivers who have not committed any road safety offences or incurred any demerit points in the three years prior to their licence expiring will get a 25 per cent discount on their renewal.

“We’re embedding a culture of road safety in Victoria,” Roads Minister Ben Carroll said.

That change will come into effect from October.

It is a reintroduction of a similar policy which was scrapped in 2013, with VicRoads questioning at the time whether people needed a reward for complying with the law.

The changes have been welcomed by the RACV, with head of policy James Williams saying “road safety improves when all drivers travel safely and an incentive such as this helps reduce road trauma and keeps Victorians safe”.

“We look forward to updates from the Victorian Government on this matter and hope that prices set for services are made with the best interests of motorists in mind,” he said.

Posted 4h ago4 hours agoFri 1 Jul 2022 at 3:57am, updated 1h ago1 hours agoFri 1 Jul 2022 at 6:41am