Published on April 7th, 2016 | by Eva Cripps
GOOD GOVERNANCE, TAC & THE MOTORCYCLE LEVY
Any person or government agency entrusted with collecting and holding public money is burdened with an enormous responsibility. In particular, where that money has been compulsorily collected from the public to be spent solely for a specific purpose, the level of accountability and transparency when managing that money must withstand public scrutiny on every level.
It therefore comes as a grave concern to discover the flippancy and nonchalance with which the Transport Accident Commission (TAC) handles the Motor Cycle Safety Levy, a compulsory payment extracted from each and every person in Victoria who owns a motorcycle with an engine capacity greater than 125cc.
The Levy, currently set at $70.40, with a yearly CPI increase, is begrudgingly paid with many a whinge and moan and predicable calls for it to be abolished.
Yet, despite being a festering wound which is reopened each year when the VicRoads Registration and TAC premium renewal appears, once their cash is handed over, most motorcyclists pay scant regard as to what happens with their funds: Funds that amount to over $5 million dollars a year.
By ignoring the shambles that is VicRoads and TAC’s management of the Motorcycle Safety Levy, motorcyclists are doing themselves a massive disservice.
The Motor Cycle Safety Levy, as described in all references made to it on any official Government website or document, is meant to go directly to initiatives to improve the safety of riders.
However, the Report from the 2012 Parliamentary Inquiry into Motorcycle Safety (PIMS) raised serious governance and oversight concerns with the way the Levy is being managed by these Government organisations. Not only did the Inquiry find that the Levy is being used for projects that directly violate the Strategic Guide to Motorcycle Levy Expenditure – the official document outlining how the funds may be spent, but it found the financial, reporting and evaluation processes for TAC and VicRoads, completely farcical.
Good governance is the cornerstone of a responsible and good government. It is the basis on which effective governments operate. In line with good governance principles, it is an absolute necessity that public money, particularly public money compulsorily collected for a specific purpose, is managed and spent in accordance with that purpose.
TAC’s attitude to its responsibilities in regards to the Levy is astounding. This is demonstrated clearly in not only the findings from the 2012 PIMS report, but also from the results of a recent Freedom of Information (FoI) request and the official response from the TAC to the article, ‘What’s TAC doing with your motorcycle levy?’
When the Victorian Government made a conscious decision in 2013, against the recommendation of the 2012 PIMS report, to retain the Motor Cycle Safety Levy, it had full knowledge of the serious governance and oversight issues raised within that report – issues so serious, the Report called for the Levy to be scrapped.
Therefore, as a direct result of retaining the Levy, the Government impliedly made a commitment to the Victorian public to ensure the Levy was managed in accordance with accepted good governance principles.
The alternative, to retain the Levy without any intention of managing the money in a way which will withstand public scrutiny, and to continue to fund projects in violation of the Guidelines, shows complete and utter disdain for every motorcyclist who has no choice but to pay the Levy. It demonstrates appalling governance and oversight.
This is particularly appalling given the Levy is only imposed on registered motorcyclists: It is not charged to cyclists, taxi drivers, heavy vehicle operators, pedestrians, recreational licensed motorcyclists or any other class of road user.
Yet for more than two years after the PIMS Report was handed down, TAC continued to abrogate its governance obligations, asserting that the responsibility lay with VicRoads.
For over two years after the Inquiry findings became public, TAC continued with woefully inadequate management and governance practices, handing over public money it collected from motorcyclists to VicRoads with careless abandon, even when it knew there were questions about whether the funding was being used for its proper purpose.
Even now, the TAC seems to think that VicRoads is responsible for the administration of the Levy. It seems to believe that the TAC has no meaningful governance, transparency and accountability obligations to fulfil, despite it collecting and holding the money, and reimbursing VicRoads from the Motorcycle Road Safety Reserve for funding spent on projects.
TAC has known, since at least before the PIMS Report was released in the first part of 2013, that it was deficient in its management of the Levy.
During the Parliamentary Inquiry, Samantha Cockfield, TAC Senior Manager, Road Safety admitted to the Committee that ‘it was reasonable to expect more information’ with regards to financial reporting of the Levy. Incredibly, nothing has changed despite this concession to Parliament. Ms Cockfield remains in this key management role.
Additionally, Ms Cockfield admitted that the TAC treated the reimbursement of the Levy to VicRoads as an ‘administrative process’, ergo, once the TAC was satisfied that VicRoads had expended the money, simply on the say-so of the director of finance, it reimbursed VicRoads, without any concern as to whether that money was spent in accordance with the Strategic Guide to Motorcycle Levy Expenditure. The TAC appears blindingly complacent as to whether the projects were properly completed, or the processes audited.
While TAC is correct in saying that VicRoads expends the money, it is astounding that TAC reimburses VicRoads for that expenditure without satisfying itself that it was correctly spent in accordance with the purpose of the Levy, other than on VicRoads mere say-so.
This is particularly shocking, given TAC had actual knowledge from the PIMS Report that some of the projects violated the Strategic Guide to Motorcycle Levy Expenditure, which in particular, specifically prohibited using Levy funding for ‘enforcement’. For example, the program named ‘Operation Yellow Flag, Black Flag’ included education, enforcement and five statewide police operations conducted over two years. The Report shows that not only was the program ineffective at improving rider safety, the Levy funds were quite blatantly and proudly used for enforcement projects and to pay for police operational costs, which raises serious probity issues around the allocation of the Levy funds.
TAC’s duty of care in regards to the proper use of the Levy funds is so lacking as to be non-existent – as with its copy of the Strategic Guide to Motorcycle Levy Expenditure, which it did not hold at the time of the FoI request, or for some years before. It was only as a result of the FoI request that the TAC actually obtained a copy of this most important governance document in regards to how the Levy should be spent!
The TAC cannot blame lack of corporate knowledge for its lax handling of the Levy. Ms Cockfield, who responded to the 2012 Parliamentary Inquiry and addressed the Committee’s concerns, remains the senior manager of Road Safety at TAC. Victorians will recognise her as the TAC’s favourite media spokesperson in respect of motorcycle safety and road safety generally.
While there may be some hope on the horizon that the TAC will ultimately take its governance responsibilities seriously, the response from TAC in regards to its obligations still raises serious concerns.
In September 2015, TAC finally signed a Memorandum of Understanding (MoU) with VicRoads, which apparently incorporates an assumedly updated Strategic Guide to Motorcycle Levy Expenditure. The MoU also allegedly includes provision for a Steering Committee, comprising representatives from the TAC and VicRoads, which has oversight over the Levy.
According to the formal response from TAC, VicRoads – and not the TAC who should be accountable – will develop project proposals designed to comply with the guidelines contained in the Strategic Guide to Motorcycle Levy Expenditure. The Steering Committee will consider the proposals, and endorse them, after which they will then be passed on to the VicRoads Chief Executive who recommend them to the Minister for Road Safety for approval.
While this new process sounds fair, the concerns regarding the actual management of the Levy remain real. The original Strategic Guide to Motorcycle Levy Expenditure included oversight from the Victorian Motorcycle Advisory Committee (VMAC), which was disbanded in 2011 and replaced with the Motorcycle Advisory Group (MAG), which itself had only an illusionary oversight role, if any at all during its existence.
Almost immediately, the new MAG operated in practice as a rubber stamp for VicRoads, with any concerns raised by members of the group with regards to the expenditure of the Levy completely ignored and overridden by representatives of the Government.
Minutes from the MAG meeting of 29 May 2014 show that several members objected strongly to the Levy funds being used for the Motorcycle Graduated Licensing Scheme (MGLS).
The minutes confirm that the majority of the representatives from the former VMAC also opposed the Levy being used for this purpose. However, despite the clear disagreement, James Holgate, the VicRoads representative advised those present that the project met the Guideline criteria, without any further evidence other than his word.
Additionally, members were practically told that as there was no other funding available, the VicRoads decision, already approved by the Minister, should be accepted.
While the TAC representative, Ms Cockfield, was an apology for the meeting, TAC holds a copy of the minutes from the 29 May 2014 meeting which was eventually released under FoI. As such, the TAC representative, Ms Cockfield had, or should have had implied knowledge of the serious concerns raised about the appropriateness of using the Levy funds for the MGLS program.
Despite this, the VicRoads website shows the MGLS project as being approved for Levy funding, with the serious concerns that the project did not meet the criteria completely disregarded.
Rather than funding being used in line with the purpose of the Levy, the MAG minutes provide a strong inference that the Levy is being used as a slush fund by VicRoads for any motorcycle related project. Yet TAC has knowingly reimbursed VicRoads, without exercising due care and professional oversight over whether the funds were properly spent in accordance with the Levy purpose or not.
To add further concern to the blithering mess that is the Government bodies’ collective governance and oversight of the Levy, the Motor Cycle Safety Levy page on VicRoads website, current as at 13 January 2016, lists ‘enforcement’ as one of the four key priority areas for use of the Levy. This is despite the PIMS Report highlighting that Levy funds should not be used for enforcement projects.
Did TAC and VicRoads change the Strategic Guide to Motorcycle Levy Expenditure when it signed off on the MoU in September 2015 in order to overcome the serious concerns raised by the PIMS Report, or is it willfully and deliberately violating the intent of the Levy and the Guidelines carefully formulated when the Levy was introduced in 2002?
Unsurprisingly, the TAC Media Team has advised that the MoU is likely to be deemed commercial-in-confidence and therefore not to be released under an FoI request. Clearly, with such serious and obvious accountability issues, the MoU is a document that should, and must, be released in the public interest.
The TAC is demonstrably complicit in the misuse of Levy funding by neglecting to take steps to confirm that expenditure is only reimbursed where the criterion contained within the Strategic Guide to Motorcycle Levy Expenditure is met. The fact it did not even hold a copy of the Guidelines until recently is a clear indication of its careless abandon of its governance responsibilities.
Additionally, the recently signed MoU offers no guarantee that TAC will take its obligations seriously, given its continued assertion that the administration of the Levy is a matter for VicRoads. In particular, if the same persons currently representing the TAC and VicRoads are part of the Steering Committee, there is a real risk that the Steering Committee will become another toothless body, rubber stamping projects for VicRoads without any genuine consideration for the intent and purpose of the Levy.
The 2012 PIMS Report also called for a full audit of the Motor Cycle Safety Levy by the Auditor-Generals office. Since the Government opted to retain the Levy, and took so long to act on any of the governance oversight recommendations from the report, if its new processes are effective at all, it is of utmost importance that the Auditor-General conduct a full audit of the Levy expenditure, which the Auditor-General’s office has advised remains under active consideration. Its findings should be considered by the Victorian Ombudsman.
TAC cannot – and must not – continue to abrogate its governance responsibilities to VicRoads. As the PIMS report identifies, both organisations have equal responsibility for the management of the Levy. After all, the TAC’s own statute obliges it, and not VicRoads, to manage the TAC scheme as effectively, efficiently and as economically as possible and to ensure that the Scheme emphases accident prevention and effective rehabilitation of all injured motorcyclists.
Ironically, TAC has excluded motorcyclists from its funded Monash University ‘Enhanced Crash Investigation Study’, a world-first study which will examine more than 400 serious injury crashes in ‘microscopic detail’. Given the objectives and policy intent supporting the Motor Cycle Safety Levy this unexplained omission is remarkable and should be explained.
The management of the Motor Cycle Safety Levy does not meet the expectations of the Victorian public or the motorcycling community, and is not in accordance with the accepted practices for receiving, holding and expending public funds in Australia. Further, the secrecy around the MoU, the sudden appearance of ‘enforcement’ being a key priority for the use of the Levy funds, and the continued reimbursement of Levy funds by TAC to VicRoads where questions remain about the legitimacy of the expenditure, indicates that an official audit by the Auditor General and the Ombudsman must be a priority for the Minister. Only then will TAC start to take its governance obligations seriously.