Member Alert

BusS
Bus & Coach Association SA
8 September 2016
In This Edition
01 Open Board Meeting
Member Visits
02 Land Tourism Forum
Code of Practice for Buses
03
View From CanberraThe Federal Election, Outer
Metropolitan Electorates
and Future Bus Business - All
connected
04 Industrial Relations
06 Vehicle Fleet Valuations
Member Alert
Executive
Director’s Corner
Lauran Huefner, Executive Director, Bus SA
Open Board Meeting
There will be a Board meeting on 19
September 2016 at 11.00 on L13, 147
Pirie Street. As usual, this is an open
Board Meeting and any member can
attend. I look forward to seeing you
there.
Member Visits
Over the past month or so our Chair,
Dean McGinty, and I have been visiting
members and operators around the
state from the Mid North and Yorke
Peninsula to Adelaide based and
the South Coast. I have also had the
opportunity to visit members further
afield in the South East.
The common message from all the
visits is that operators remain optimistic
that we continue to work towards
an operating environment that sets
minimum standards and promotes
sustainability of their businesses. This
is the challenge we put to Government
when we recommend ways to
continuously improve how the industry
functions.
Recently Government made major
announcements about ride-sharing
and the taxi sector, brought on by the
effect new technology can have on how
an industry runs. We continue to call
on the Government to recognise that
change is needed for our industry and
that the changes we propose in Moving
People SA are those that will help
prepare our members for a future that
is upon us already.
A key element of bringing the Bus SA
vision to fruition is for operators to raise
the recommendations of Moving People
SA with local MPs, regardless of their
political persuasion. Encourage Mps
to gain further knowledge about your
business and the challenges you face.
Tell them about opportunities to find
out more about the bus industry and
2 Bus SA Member Alert
how mobility supports communities.
Events such as the Australian Bus Show
in Sydney, as well as the BIC National
Conference in Perth, will help them
learn about the ways in which bus
operators are part of a network of
important services that keep people
moving, driving local communities and
local economies.
Land Tourism Forum
As you are aware, the Land Tourism
Forum was held prior to the Bus SA
Conference in May. We are pleased to
advise that a summary of the speakers
and their presentations are now
available on our website here.
This event will return in 2017 and we
encourage further involvement by
members.
Code of Practice for Buses
The DPTI Code of Practice for Buses
was updated earlier this year to pull
it more in line with the current NHVR
requirements. The website has now
been updated and can be found here
where MMS sheets are now available as
separate pdf files.
© Bus SA
Training
Transport Training Solutions, one of our partner
organisations, is a South Australian-based Registered
Training Organisation, providing a ’one stop shop’ for
all of the training services a transport company might
require for its operators.
Call Transport Training Solutions on (08) 8186 7200 or
email [email protected]
Upcoming Courses in September
Dangerous Goods
Wednesday 14th & Thursday 15th September, 2016
Saturday 17th & Sunday 18th September, 2016 REGIONAL
Wednesday 28th & Thursday 29th September, 2016
Chain of Responsibility
Tuesday 20th September, 2016
Forklift Licence
Tuesday 6th September, 2016
Tuesday 13th September, 2016
Tuesday 20th September, 2016
Load Restraint
Tuesday 27th September, 2016
Fatigue Management
Tuesday 20th September, 2016
3 Bus SA Member Alert
View From Canberra
The Federal Election, Outer Metropolitan Electorates and
Future Bus Business - All connected
Michael Apps, Executive Director, Bus Industry Confederation
It is always interesting to read the
post mortems after an election and a
recent article in the Weekend Australian
piqued my interest.
What it said was that the Liberals did
better in the inner city electorates
around Australia.
Outer metropolitan electorates were
another story. In every Australian city
the swing against the Liberals was
double that for inner city electorates
with the greatest swings in South
Australia and Tasmania.
In rural/regional electorates, the
Nationals saved the day because they
focused on local issues and campaigned
at the local level.But what does this tell
us?
It tells us that cost of living issues
and what I call "city living" factors,
saw punters in outer metropolitan
electorates walk away from the Liberals.
The ‘John Howard battlers’ abandoning
Malcolm Turnbull, who, because of high
level economic and productivity based
campaigning, was seen as ‘not in touch’
with the pressures on families living in
the outer burbs of our cities.
Local issues in outer metropolitan
areas relate to cost of electricity and
transport, basically the cost of living.
Sure, the Coalition announced its
“Smart Cities” policy but it was very late
in the election and pitched at a very
high strategic level with little detail on
what it was going to deliver. It did not
hit the mark at the local level and will
need to do so over the next 3 years if
Turnbull is going to win Johnny's battlers
back.
Research has shown over and over
© Bus SA
again that families living in outer
metropolitan suburbs spend a large
proportion of their household income
on transport. When I say large I mean
sometimes more than 50%, which
leaves, not much, for covering other
costs like mortgage, education, health
and food, let alone having some fun.
The reason for the high cost of transport
is simple. Families are forced to be 2
or 3 car households, usually having to
drive the longest distances to work or
education and on the most congested
roads at the most congested times
with often no effective, convenient or
frequent public transport services to
provide a real choice to leave the car at
home.
This is why cities and public transport
and the changing nature of PT services
will be fertile political ground over the
next 3 years.
Both major political parties want to
own this space and the Greens and
cross benchers are going to be very
influential. This can only mean greater
investment in improving transport
choices for people. BIC's research and
policy focus places Industry in a strong
position to lead the debate over the
coming years.
And it’s not just about the political
parties all agreeing about greater
investment in PT and related
infrastructure. Personal App and other
technology and the types of vehicles
in use will be a major factor in how
governments now and in the future
view the delivery mechanisms for public
transport services.
Have you noticed the increase in pace
for the uptake of electric bus technology
in Europe?
The fast advancement is not just with
the vehicles and plans to have fully
electric fleets running by 2030, but also
in the recharging technology where
vehicles can connect to a flash charging
system in less than a second and be
recharged in 15 seconds.
Did you know the National Transport
Commission has a discussion paper out
on the future regulation of automated
(driverless) vehicles?
Mercedes-Benz are trialling a driverless
bus on the biggest European BRT system
in the Netherlands now. With the driver
(labour) being the major cost of a bus
operation, Governments are looking at
all of this very closely?
Uber is on the ground and leading
the charge on more personalised
on demand mobility services. Mass
mobility as a personalised service is
the emerging business model that will
and in fact is changing the way people
travel. Uber and micro transit is already
a reality in the United States. Will this
micro transit reality be reflected in
Australia in the near future and if so,
how will ‘traditional’ PT modes and
services adapt?
All of this is swirling around us and
a confluence of factors are and will
impact on the bus industry and how
governments will fund or not fund
future bus services.
So if you are interested in the future
direction of your business and Industry,
check out the BIC Conference Program
at OzeBus and register to attend
because what I have just outlined above
is what it is all about.
4 Bus SA Member Alert
Industrial Relations
Ian MacDonald, National Industrial Relations Manager, APTIA
Annual Leave
Fair Work Commission has now
finalised the model terms in relation
to cashing out annual leave, leave in
advance, payment by EFT and excessive
leave for most modern awards. Final
determinations varying modern awards
have been issued with provisions
generally taking effect from the first
pay period that starts on or after 29
July 2016. There is an exception to this
commencement dates in the case of
the clause enabling employees to take
leave where they have excessive leave
which comes into operation from the
first pay period that starts on or after 29
July 2017.
A summary of the model clauses is
provided below:
Cashing out of annual leave
APTIA members will recall the claim
advanced by employers seeking to
insert a clause into 120 modern awards
enabling
the cashing out of annual leave.
Last year the Full Bench granted the
employer group’s claim, subject to the
incorporation of additional safeguards.
A revised cashing out model term will
be inserted into most modern awards
with the term taking on the following
features:
ßß Paid annual leave must not be
cashed out except in accordance
with an agreement that complies
with the clause.
ßß Each cashing out of a particular
amount of paid annual leave
must be the subject of a separate
agreement.
© Bus SA
ßß The agreement needs to be in
writing and must:
i. state the amount of leave
to be cashed out and the
payment to be made to the
employee for it; and
ii. state the amount of leave to
be taken in advance and the
date on which the leave is to
commence; and
iii. be signed by the employer
and employee and, if the
employee is under 18 years
of age, by the employee’s
parent or guardian.
ßß The payment must not be less than
the amount that would have been
payable had the employee taken
the leave at the
ßß time the payment is made.
ßß An agreement must not result in
the employee’s remaining accrued
entitlement to paid annual leave
being less than 4 weeks.
ßß The maximum amount of accrued
paid annual leave that may be
cashed out in any period of 12
months is 2 weeks.
ßß The employer must keep a copy
of any agreement as an employee
record.
An example of the type of agreement
required is set out in a schedule
although there is no requirement to
use it.
Leave in advance
APTIA members will recall that
employers sought to vary 48 modern
awards to include a provision allowing
for the taking of annual leave in
advance of an entitlement to such leave
accruing, by agreement between an
employer and employee.
In the June 2015 decision the Full
Bench was persuaded to include such a
term. The model clause has now been
finalised by the Commission and has the
following features:
ßß An employer and employee may
agree in writing to the employee
taking a period of paid annual
leave before the employee has
accrued an entitlement to the
leave.
ßß An agreement must:
i. state the amount of leave to
be taken in advance and the
date on which the leave is to
commence; and
ii. be signed by the employer
and employee and, if the
employee is under 18 years
of age, by the employee’s
parent
iii. or guardian.
ßß The employer must keep a copy
of any agreement as an employee
record.
ßß If, on the termination of the
employee’s employment, the
employee has not accrued an
entitlement annual leave already
taken in accordance with an
agreement under the clause, the
employer may deduct an amount
equal to the amount that was
paid to the employee from the
employee’s termination pay.
An example of the type of agreement
required is provided in the form of a
5 Bus SA Member Alert
schedule but there is no requirement to
use the form of agreement set out in the
schedule.
to make a written request to take leave
which the employer must grant in
circumstances where:
EFT and paid annual leave
ßß the employee has genuinely tried to
reach agreement with an employer
but agreement is not reached;
ßß the employee has had an excessive
leave accrual for more than six
months at the time of giving the
notice;
ßß the employee has not been given a
direction by the employer to take
leave (as described above) that
would eliminate the employee’s
excessive leave accrual;
ßß if granted, the employee’s remaining
leave balances will be at least 6
weeks;
ßß the period of leave is for at least one
week;
ßß the leave period requested is no
less than 8 weeks or more than 12
months after the notice is given;
ßß the employee has not requested by
such a notice more than 4 weeks’
paid annual leave (or 5 weeks’ paid
annual leave for
ßß a shiftworker) in any period of 12
months.
Modern awards which currently require
the employer to pay an employee for
annual leave prior to the employee taking
the leave have been varied to insert a
term enabling employees who are paid
by electronic funds transfer to be paid in
accordance with their usual pay cycle
while on paid annual leave.
Excessive annual leave
Members will recall that employers
sought to insert a provision into modern
awards to enable employers to direct
employees with excessive leave balances
to take leave. The finalised model term
provides such a right if:
ßß an employee has accrued more
than 8 weeks’ paid annual leave
(or 10 weeks’ annual leave for a
shiftworker);
ßß an employer has genuinely tried to
reach agreement on how to reduce
or eliminate the excessive accrual
but agreement is
ßß not reached.
ßß The direction:
ßß is of no effect if the employee would
have less than 6 weeks’ accrued
leave remaining after the direction;
ßß must not require the employee to
take less than one week leave;
ßß must not require the employee to
take the leave less than 8 weeks
or more than 12 months after the
direction is given;
ßß must not be inconsistent with any
leave arrangement agreed by the
employer and employee.
If an employee is given a direction they
may request to take leave as if the
direction had not been given.
A clause will also come into operation
from 29 July 2017 enabling employees
© Bus SA
These clause now apply to the Passenger
vehicle Transportation Award 2010
Cost Implications of the 4 Year
Review of the PVTA
There are significant future cost implication that may result if all of the proposed
changes occur to the PVTA as envisaged
through the 4 yearly review process.
Some of those areas include:
ßß A ‘secure employment’ application
by the ACTU to allow regular and
systematic casual employees (i.e.
employed for up
ßß to 6 months) to convert to permanent or permanent part time work.
Whilst a casual employee who
converts to a part time
ßß employees loses their casual loading
of 25% they become entitled to all
on costs available to permanent
employees.
ßß The ACTU is seeking to increase the
minimum engagement payments for
all casual employees and part time
employees to
ßß 4 hours. This would increase by one
hour the current minimum engagement for a part time employee and
between one hour
ßß and two hours for a casual employees.
ßß The ACTU has also made application
for 10 days domestic and family
violence leave to be added to the
existing 10 days
ßß of personal leave which would
apply to casual employees as well
as permanent employees. This
leave would not accrue but would
add a significant contingent costs
to the employment on costs for all
employees.
ßß The ACTU has further applied to
include a mandatory provision that a
person returning from parental leave
could seek to
ßß reduce their hours or type of work
to cater for caring for their child.
This would add a significant cost as
alternative employees would need
to be found to cover the work load
of existing employees enjoying this
benefit.
ßß Paid antenatal leave of 13 1/2 weeks
is also sought by the ACTU which
adds costs to the employer.
ßß The TWU has made application to
limit the spread of ordinary hours to
those hours between 6.00am and
7.00pm. This
ßß means overtime loading of time and
half for the first three hours and
double time thereafter would apply
to each shift
ßß exceeding these hours. Currently
ordinary can be worked at any time
of day up to 10 hours a day.
6 Bus SA Member Alert
Vehicle Fleet Valuations
Robert van Raay, Director, Corporate Finance,
Head of Tangible Asset Valuations |Pitcher Partners
Question: Is the market value of
an asset in a fleet the same as the
market value of an individual asset?
Answer: That depends.
If you’re a fleet owner (e.g. buses, trucks,
equipment hire, aircraft, water coolers,
etc.) you may have some thoughts on this
question, particularly if you are:
ßß Considering selling your fleet;
ßß Considering acquiring a fleet;
ßß Restructuring your fleet/business
from a partnership to a trust or
company;
ßß Considering a succession plan for
your fleet/business; and/or,
ßß Considering how much to insure
your fleet assets.
It is reasonable to assume that the value
of a fleet asset (in this case an asset that
forms part of a profitable fleet/business),
would be worth more if sold/acquired as
part of a fleet/business, than if that asset
was to be sold/acquired individually.
The market valuation of a fleet needs to
start with each asset’s individual market
value. Additional considerations a
hypothetical (or actual) purchaser would
take into account in respect to the fleet
are:
ßß The time required to assemble (or
replicate) the fleet;
ßß The availability (or lack thereof) of
the assets in the marketplace;
ßß The costs associated with financing
the assembly (or replication) of the
fleet;
ßß The costs/benefits associated with
the provision of up-to-date fleet
documentation;
ßß The fleet is painted in corporate
colour scheme/livery;
ßß The fleet is earning income on day
one (of the valuation or purchase);
and,
ßß Routes, contracts, staff, drivers,
infrastructure, policies, insurances,
and other owner’s costs are in place
and form part of or enhance the
value of the fleet.
Clearly a fleet that forms part of a
profitable business is more valuable
intact than it is to dismantle. This is also
referred to as the “Highest and Best Use”
of the fleet.
Market valuations of individual fleet
assets typically assume the asset is ready
for sale and is to be removed from its
current location.
The owner of a profitable fleet business
would typically place a higher value on
the fleet to remain intact as part of the
business rather than for it to be assessed
on an individual asset basis for individual
sale or breaking up of the fleet.
financial position. A fleet owner that
continued to make losses as it went
about liquidating its fleet would normally
entertain a discount to the sum of the
individual market values if the sale
could be completed in one transaction.
Discounting the sum of individual market
values (for removal) could come from
but not be limited to, the following
arguments:
ßß The costs associated with storing,
maintaining and insuring the fleet;
ßß The costs associated with staff and
third parties charged with managing
the sales process;
ßß The costs associated with advertising
and marketing, commissions,
brokers and agents fees;
ßß The costs associated with lost
interest from the investment of
proceeds; and,
ßß The costs associated with
accumulating operating losses from
a prolonged liquidation process.
The opposite is true for the owner of a
non-profitable fleet. If operating a fleet
in its existing form does not produce
a profit the owners would need to
consider if it would it be more beneficial
to liquidate the fleet, stop the daily
operating losses and invest the proceeds
to receive a positive return.
In a fleet/business restructure, it is
important to consider the capital gains
tax, stamp duty and ATO requirements.
You may also need to consider other
taxation requirements (thin capitalisation
for example) or you may wish to take
advantage of the market value provisions
within the ATO’s Taxation Consolidation
Regime and operate as a single entity for
income tax purposes. An independent
assessment of your fleet values is
the simplest way to address these
compliance and regulatory requirements
on a fair and reasonable basis.
A potential purchaser of such a fleet
would also consider the fleet owner’s
Conclusion
Pitcher Partners has valued fleet assets
7 Bus SA Member Alert
for numerous purposes. Some of the fleet types we have
valued include but are not limited to:
Buses and Coaches Aircraft, rotable
and sonsumable
spares
Passenger,
commercial
and specialised
vehicles
Passenger
and freight
locomotives &
rolling stock
Rental fleet such
as fork lift, trucks,
water coolers,
refrigerators and
merchandisers
Set top boxes,
water meters and
other electronic
instrumentation
Mining assets
(yellow goods)
Service vehicles
and service
equipment
Passenger, freight
and commercial
ships
So whether you’re buying or selling, restructuring or
considering succession planning, insuring or financing your
fleet, or considering taxation implications of what you’re trying
to achieve, you need independent professional advice to ensure
you have the correct values assigned to your fleet assets.
For further information please contact:
Robert van Raay
FRICS FAPI CPV ASA CMILT MAusIMM MAICD
Pitcher Partners | Director, Corporate Finance
Head of Tangible Asset Valuations
Direct: +61 (3) 8612 5975
Email: [email protected]
Social Media
Twitter highlights include:
•
SA government’s updated 30 - Year Plan for
Greater Adelaide includes Smarter Travel
http://ow.ly/3yFR303XSPW #livingadelaide
•
South Australia ready to take the next step
in #PublicTransport payments
•
RT @ozebus: Michael apps discusses the
GVM limit increase with @ABCmag
•
RT @ozebus: Q: How can transport
strategies help people? A: Moving People is
key to people’s health and happiness: http://
ow.ly/bMno3033gIA
•
Redevelopment & transport improvements
among the most frequently covered topics
at the 2016 TTF summit Via @ABCmag
•
RT @busvictweets: Book Ninjas on
Melbourne’s trams, trains and buses. ABC
news
•
The six key challenges for Sydney and
Melbourne to be smart cities of the future.
https://t.co/aq9BthU5AT
•
RT @ozebus: Our Annual National
Conference is only 2 months away. We hope
to see you there! http://ow.ly/ujHO3033joJ
•
Opal data gives insight into Sydney’s busiest
buses Via @smh
•
Poll reveals significant improvements in
#Publictransport but there’s always room
for more Via @ABCmag
•
RT @ozebus: Don’t miss out on the one and
only bus show in Australia this year hosted
by @BusNSW 5-6 Oct. Register now http://
ow.ly/kaUq303FneH
•
RT @ozebus: More rapid bus routes, buses
and drivers to improve #PublicTransport
across #Canberra.
•
RT @ozebus: Get a national update on key
bus business issues and a Q&A session at
#BicConf16 http://ow.ly/jRpM3033gCB
•
RT @ozebus: Find out more about the
future of PT including ride-sourcing, Uber
and emerging trends at #BicConf16 http://
ow.ly/xOe13033gxw
•
RT @ozebus: The BIC’s response to the
National Transport Commission’s PAYGO
reform Via @ABCmag
•
The transport Affordability Index reveals
the average Australian family is spending
$22,000 p/y on transport. AAA
8 Bus SA Member Alert
2016
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Why you should consider this a real growth
opportunity for your business:
9 Opportunity to meet key contacts from the bus and
coach industry
9 Be seen among the top suppliers
9 Raise your company’s profile and create brand awareness
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9 Opportunity to attend social functions, network with delegates
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