Annual Report 2018-19

We monitor prices for prescribed services at the Port of Melbourne, advise the Minister for Roads on accident towing prices, and determine fares for unbooked taxis in the metropolitan and large regional zones and the maximum non-cash payment surcharge for taxis. We also report annually on the performance of Victoria’s domestic building insurance scheme.

Our year in review

We reviewed the taxi non-cash payment surcharge

In May 2019, we published a draft decision seeking submissions on whether the maximum taxi non-cash payment surcharge should be reduced from its current five per cent. Our draft decision intends to ensure taxi payment processors who facilitate the making of non-cash payment transactions can recover the reasonable cost of accepting and processing non-cash payment transactions.

We reviewed accident towing and storage fees in Melbourne 

Our December 2018 report on fees for accident towing, storage and salvage services in Melbourne recommended to the Minister for Roads that current regulated accident towing fees should remain unchanged. However, we recommended regulated storage fees be increased by 47 per cent, which amounts to an additional $2 per day for motorcycles and $7 per day for vehicles.

We delivered our biennial domestic building insurance premiums report

Domestic building insurance is taken out by builders and covers homeowners for defects if their builder dies, disappears or goes out of business. 

In April 2019 we reported that the Victorian Managed Insurance Authority’s domestic building insurance premiums are at sufficient levels to cover its expenses, risks and long-term claim costs. 

Handling and administering expenses declined significantly between July 2016 and June 2018, with premium reductions for policy holders.

Progress report, 2018–19

Ensure our regulatory regimes are administered to promote outcomes that are in the interests of consumers.
Status: On track

Outputs    

• Published our commentary on the Port of Melbourne’s 2018–19 tariff compliance statement.
• Published our annual monitoring report for domestic building insurance.
• Determined regulated maximum fares for unbooked commercial passenger vehicle services.
• Provided recommendations to the minister on appropriate fees for accident towing, storage and salvage services.

Outcomes

• Our observations on the Port of Melbourne’s 2018 tariff compliance statement and our domestic building insurance report improve market transparency for stakeholders including governments and regulated entities.
• The maximum fares we determine for unbooked commercial passenger vehicle (taxi) services, and recommend for accident towing and storage services, reflect each industry’s service delivery requirements.

Create effective and efficient incentives for businesses to perform consistent with regulatory objectives.
Status: Complete

Outputs    

• Determined maximum fares for unbooked commercial passenger vehicles.
• Published annual interim commentary on the Port of Melbourne’s 2018–19 tariff compliance statement.
• Published a draft decision on taxi non-cash payment surcharges.
• Completed our biennial review of the adequacy of Victorian Managed Insurance Authority’s domestic building insurance premiums.

Outcomes

• Operators of commercial passenger vehicles charge users in accordance with our determinations, including offering discounts where appropriate, while maintaining or improving service quality and reliability.
• The Port of Melbourne displays an awareness of our compliance concerns by either modifying its behaviour or responding with evidence to justify its conduct. This promotes and encourages transparency and certainty, and minimises surprises for the Port of Melbourne shareholders and customers during the formal five-year compliance assessment in 2021.

Inform policy makers and consumers regarding market performance in relation to commercial passenger vehicles, accident towing and domestic building insurance.
Status: Complete

Outputs        

• Analysed the dynamics of the commercial passenger vehicle industry in our review of maximum fares for unbooked services.
• Made recommendations to the minister on appropriate fees for accident towing, storage and salvage services.
• Published our annual monitoring report for domestic building insurance.

Outcomes

• The Victorian Government acknowledges and appropriately responds to our recommendations.
• Affected stakeholders contribute to our consultations by informing our decisions and influencing recommendations.

Administered the Victorian rail access regime until the new rail access regime took effect on 1 November 2018. 
Status: Complete

Outputs    

• Maintained oversight of rail access arrangements. Provided relevant material to the new body overseeing the regime, Transport for Victoria.

Outcomes

• Ensured rail access seekers (such as freight and passenger train companies) have a fair and reasonable opportunity to access rail transport services.
• Confirmed rail access providers have binding access arrangements in place when the new rail access regime commenced on 1 November 2018.

Measuring our success in 2019–20

Goal	Objective	What outputs do we intend to produce?	What outcomes do we intend to achieve?
Goal 2	Publish our annual commentary on the Port of Melbourne’s 2019 tariff compliance statement and our annual monitoring report for domestic building insurance.	Publish our commentary on the Port of Melbourne’s compliance with the Pricing Order. Advise the Assistant Treasurer on the performance of the domestic building insurance scheme.	Regulated entities provide services at a price and quality that improve over time, while also sustaining the long-term viability of their industry and reliability of services. These documents will enhance market transparency and better inform actions of affected stakeholders, including governments and regulated entities.
Goal 3	Commence our review of the process by which the Port of Melbourne sets rents, in order to assess whether the port has misused market power in setting or reviewing rents payable by tenants under lease agreements.	A decision containing well-reasoned analysis of the Port of Melbourne’s process for setting land rental charges, including the size of any increases in those rents.	Minimise resource allocation distortions between the port and leaseholders, by ensuring that the Port of Melbourne has not misused its position to harm others, and therefore damaged the long-term interests of Victorians through the price of goods and services transported through the port.
Goal 4	Enhance effective and constructive stakeholder relationships.	Engage regularly with our stakeholders and continue to look for new ways to engage including through newsletters, social media and online (for example Engage Victoria).	Deepen our relationships and understanding with industry through more frequent engagement. Maintain accessible and plain English reports and exceed our targets in the annual reputation survey.

Environmental factors

There are three main environmental factors affecting our work:

• The Port of Melbourne has stepped up its consultation on strategic plans relating to port access by customers and the associated costs of moving goods through the port. This engagement included with government on the merits of new port capital investments and related amendments to the pricing order.
• Regulation of commercial passenger vehicles has changed. The Commercial Passenger Vehicle Industry Act 2017 covers regulatory requirements for taxis, hire cars and ride share services (collectively known as commercial passenger vehicles). This required us, for the first time, to review the maximum surcharge for paying a taxi fare by means other than cash.
• Since 1 November 2018 we no longer have a role in setting standards and approving rail access arrangements. The Minister for Public Transport and Public Transport Victoria are now responsible for administering the new rail access regime. The Rail Management Act 1996 (Vic) has been amended to reflect these changes.

Cost of our transport activities

In 2018–19, the total cost of our transport regulatory activities was $2.39 million. The cost includes the direct costs incurred by the team plus an allocation for overhead costs.