/ Review Qfthe Driving Instructors Act 1992 Final RfiPOrt RTA "?! ROADS AND TRAFFIC AUTHORITY REVIEW OF THE DRIVING INSTRUCTORS ACT 1992 FINAL REPORT July 2001 ROAD SAFETY AND ROAD USER MANAGEMENT DIRECTORATE ROADS AND TRAFFIC AUTHORITY Review ofthe Drivin\, Instructors Act 1992 Final Report TABLE OF CONTENTS SUMMARY OF RECOMMENDATIONS ........................................................................... iii 1. Introduction ....................................................................................................................... 1 1.1 The Purpose of This Report ........................................................................................ 1 1.2 The Need for Review .................................................................................................... 1 1.3 Principles and Stages of the Review ......................................................................... 2 1.4 Review Process ............................................................................................................. 2 2. Background to the Industry and the Act. ..................................................................... .4 2.1 Profile of the Industry ................................................................................................ .4 2.2 Driving Instructor Training Providers ...................................................................... 5 2.3 Background to the Current Legislation .................................................................... 5 2.3.1Scope of the Act .................................................................................................... 6 2.4 Major Provisions of the Driving Instructor's Act 1992 ............................................. 6 2.4.1 Meaning of Driving Instructor ........................................................................... 6 2.4.2Becoming a Driving Instructor and the Licensing Procedure ....................... 7 2.4.3Penalty Systems and Prohibitions ..................................................................... 8 2.4.4Regulation of Driving Schools ........................................................................... 9 2.5 Issues not covered by the Act..................................................................................... 9 3. Systems in other jurisdictions ....................................................................................... 10 3.1 Mutual Recognition Act 1993 ................................................................................... 10 3.2 Other Jurisdictions ..................................................................................................... 11 3.2.1 Victoria ................................................................................................................ 11 3.2.2Queensland ......................................................................................................... 12 3.2.3South Australia .................................................................................................. 12 3.2.40ther Jurisdictions ............................................................................................. 13 4. Clarification of Objectives and Identification of Market Failure ............................. 14 4.1 Objectives .................................................................................................................... 14 4.2 National Competition Policy and Market Failure ................................................. 15 4.3 Conclusions ................................................................................................................. 16 5. Competition restrictions ................................................................................................. 17 5.1 Restrictions on Competition ..................................................................................... 17 5.2 Entry Restrictions ....................................................................................................... 17 5.2.1Age and Licence Tenure ................................................................................... 18 5.2.2Character and Criminal Record Check ........................................................... 20 5.2.3Medical Fitness ................................................................................................... 21 5.2.4Instructor Training Requirements ................................................................... 22 5.3 Conduct Restrictions ................................................................................................. 22 5.3.1Duplicate Controls ............................................................................................. 22 5.3.2Duplicate Controls on Motorcycles ................................................................. 23 5.3.3Use of Unsatisfactory Vehicle .......................................................................... 24 5.3.4Advertising ......................................................................................................... 25 5.4 Other Issues in the Act .............................................................................................. 27 5.4.1 Use of Simulators ............................................................................................... 27 i Revjew Qfthe Driving Instructors Act 1992 Fjnal R'a'ort 5.4.2Post-licence Instruction ..................................................................................... 28 5.4.3In-House Driving Instruction .......................................................................... 29 5.4.40rganisations exempt from the Driving Instructors Act ............................. 30 5.4.5Conditional Licence ...................................................................... :.................... 32 5.4.6Private Instruction ............................................................................................. 32 6 Costs and Benefits of the Current Regulatory Regime .............................................. 34 6.1 Benefits ........................................................................................................................ 34 6.1.1 Consumer Protection......................................................................................... 34 6.1.2Road Safety ...................................................................................... :.................. 35 6.2 Costs ............................................................................................................................. 36 6.2.1Costs to Industry ................................................................................................ 36 6.2.2Costs to Government. ........................................................................................ 37 6.2.3Total Direct Cost ........................ ............ .............................. ......... ..................... 37 6.2.4Costs to Consurners ........................................................................................... 37 6.3 Conclusion .................................................................................................................. 38 7. Regulatory Options ......................................................................................................... 40 7.1 Alternative Models .................................................................................................... 40 7.2 The Preferred Option .................................................................. .............................. 45 8 Other Issues for Exarnination ................................................................................... 48 8.1 Quality of Instruction .................................................................................... 48 8.2 Insurance ......................................................................................................... 49 8.3 Consumer Complaint Mechanisms and Informed Choice ...................... 52 8.4 Reporting of Inappropriate Behaviour ....................................................... 53 8.5 Location of Giving Driving Instruction ...................................................... 54 8.6 Application for a Driving Instructor's Licence .......................................... 55 8.7 Driver Training Requirements for Instructors ........................................... 55 Appendix 1 - Terms of Reference ....................................................................................... 57 Appendix 2 - Members of the Steering Committee ......................................................... 58 Appendix 3 - Analysis of Submissions .............................................................................. 59 Appendix 4 - Respondents to Issues Paper ........................................................................ 71 Appendix 5 - Direct Costs of Regulation ............................................................................ 74 Appendix 6 - Unauthorised Promotions ............................................................................ 76 Il Review ofthe Driving Instructors Act 1992 Final RWOrt SUMMARY OF RECOMMENDATIONS 1. That any revised regulatory system implemented in New South Wales be compatible with systems operating in other States, particularly those adjacent to New South Wales, in that the system be recognisable under the Mutual Recognition Act and incorporate at least equivalent probity and competence standards. The Steering Committee recommends that the Act be amended to clearly state its objectives. In doing so, the following should be taken into account: The objective of the Driving Instructors Act is to ensure that driving instructors demonstrate minimum standards of character and competency in order to benefit the community and the industry. That the requirement for an instructor licence applicant to hold a driver licence for a period of not less than 3 years out of the last 4 years be retained. That the Act be amended to allow the RTA some administrative flexibility to consider a shorter tenure period provided proof of adequate driving experience in the class of vehicle can be demonstrated. That the minimum age of 21 for an instructor licence be retained. That the definition of 'driver licence' in the act be amended to exclude a Provisional (PI) licence, a Provisional (P2) licence, and a driver licence with a good behaviour period associated with that licence. 2. 3. 4. That the requirements in the Act relating to 'good character', 'fit and proper person' and criminal record checks be maintained. That the requirements in the Act relating to medical fitness be maintained. That the requirements in the Act relating to instructor training be maintained. That the fitting of duplicate controls no longer be mandated by legislation. That the fitting of duplicate controls be considered as a component of any industry Code of Practice. 5. 6. 7. 8. That if mandatory duplicate controls are retained, the Act or Regulation be amended so that the requirement for duplicate controls on motorcycles used for instruction be deleted. That the current provisions of the act regarding the use of unsatisfactory vehicle be maintained to reinforce road safety requirements thereby ensuring instructors do not provide driving tuition in unroadworthy vehicles. That the Driving Instructors Act be clarified so that the unsatisfactory vehicle provisions (Sections 53 and 54) apply wherever licensed instruction is given. 9. 10. iii Review qfthe Driving Instructors Act 1992 Final Report 11. That s.8 'Unauthorised promotions' clarify that only licensed driving instructors, or persons who are able to procure licensed instructors, are able to advertise their services. That the requirements to display the class of motor vehicle which the instructor is licensed to teach and the driving instructor's licence number be removed from the legislation. That consideration be given to including advertising guidelines in any industry Code of Practice. That the requirement for a driving instructor to display their licence "in a conspicuous position on the exterior or interior of the motor vehicle" remain. Clarify that it will be sufficient for instructors to identify thernself by showing the client their licence when providing motorcycle instruction or providing instruction using a vehicle not owned by the instructor. 12. That s.4(1) of the driving instructor regulation 1993 not regard as a driving instructor a person who provides instruction using a simulator. That instructors giving post-licence instruction, i.e. instruction to drivers who already hold the class of licence for the vehicle in which they are receiving instruction, not be required to hold a driving instructor's licence. That, if both recommendations 8 and 13 are not adopted, the Act or regulation be amended to ensure that post-licence instructors are not required to fit duplicate controls. That the definition of a 'driving instructor' in the Act be amended to include instruction "in the course of any trade or business" to more clearly explain the current scope of the definition. Deliverers of 'in-house' driving instruction (instruction given by company personnel to other company personnel) be licensed driving instructors when instruction is given to learner drivers or those seeking to upgrade their licence, but not when instruction is given in a vehicle for which the trainee is already licensed to drive. 13. 14. 15. 16. That the current exemption of some government instrumentalities from having to comply with the Act be withdrawn, with affected instrumentalities being allowed a reasonable time in which to arrange compliance. That the Defence Forces be encouraged to comply with NSW driving instructor licensing requirements. 17. That the RTA continue to no longer allow the Conditional Licence provisions in the Act to be used to issue driving instructor licenses to applicants who have yet to meet the training and competence standards for issue of a full licence. iv Review ~ftI!e Driving Instrllctors Act 1992 Final Rwort 18. That the following regime be adopted for future management of the NSW driving instruction industry: • retention of a core regulatory framework for licensing of driving instructors; • deregulation of a number of current requirements of the Act; • endorsement and encouragement of a system of self regulation within the driving instruction industry. That the driver training industry continue to develop competencies and training curricula for use within the industry with the assistance of the RTA. That the RTA make greater use of Section 25 of the current Act to retest driving instructors where this is appropriate as a result of complaints or performance monitoring programs. 19. 20. That the Act be amended to require licensed instructors: • to inform prospective students of the insurance status of the vehicle they will be driving prior to the first lesson; and • to display prominently in the vehicle in which instruction is given advice as to whether or not the vehicle is comprehensively insured. That consideration be given to an industry Code of Practice advocating instructors hold additional forms of insurance, and the display of insurance status in advertising material. 21. The Fair Trading Act provides an adequate basis for customer protection and is complementary to the Driving Instructors Act, therefore the RTA, the Department of Fair Trading and the driving instruction industry should investigate implementing strategies to ensure that driving instruction clients are better informed when making a service purchase decision and on how and where to address any complaints they have concerning instruction services. That the Act be amended to require a driving school or any organisation employing a driving instructor to report to the RTA any allegations of improper behaviour committed by a driving instructor engaged by the school. That the Act be amended to allow for temporary suspension, pending the outcome of investigations, on receipt of any allegation of serious improper behaviour made against a driving instructor subject to there being reasonable grounds for belief that the allegations will prove to be valid. 23. That the Driving Instructors Act be amended to clarify that the requirement for an instructor's licence applies to tuition given on public or private property. That the Act or Regulation be amended to allow the RTA to formally administer a system under which eligibility criteria (character checks, tests, etc) must be met by instructor licence applicants before issue of an Eligibility Advice allowing enrolment in an accredited driving instructor training course. 22. 24. v Review «(the Driving Instrllctors Act 1992 Final R'Wort 1. 1.1 Introduction The Purpose of This Report The current regime for regulation of the New South Wales driving instruction industry is contained in the Driving Instructors Act 1992 and the Driving Instructors Regulation 1993. These have been examined as part of National Competition Policy, and this report makes recommendations concerning future regulation of. the industry for consideration by the NSW Government. 1.2 The Need for Review National Competition Policy (NCP) was endorsed by the Council of Australian Governments (COAG) in 1995. One of the major components of NCP is the Competition Principles Agreement, which commits the NSW Government to review all of its legislation which restricts competition by the end of year 2000. The Agreement requires that legislation should not restrict competition unless it can be demonstrated that the benefits to the community as a whole outweigh the costs, and that the objectives of the legislation can only be achieved by restricting competition. In accordance with the Agreement, all NSW legislation was examined for evidence of market entry barriers or conduct which has the potential to restrict competitive behaviour in the marketplace. The NSW Government's legislation review process examines legislation which: • restricts market entry / exit through professional regulatory regimes or other licensing regimes; and • reduces market contestability (for example, by the imposition of significant costs) or inhibits business innovation. The Driving Instructors Act 1992 (the Act) was identified as potentially restricting competition, and was therefore scheduled for NCP review. The Act was introduced to replace the Motor Vehicle Driving Instructors Act 1961. The Act was enacted largely as a result of the Independent Commission Against Corruption (lCAC) Investigation into Driver Licensing which identified instances of corruption within the driver licensing system (of the Roads and Traffic Authority) and the driving instruction industry. The objects of the Act are directed at providing integrity, professionalism and competence in the driving instruction industry. A review of the Act will assess whether the objects of the Act remain appropriate. The Driving Instructors Act 1992 has not been reviewed since it was enacted. Page 1 Review qfthe Driving Instructors Act 1992 Final Report 1.3 Principles and Stages of the Review There have beert two guiding principles for this review. They are: 1. Legislation should not restrict competition unless it can be demonstrated that: a) the benefits of the restriction to the community as a whole outweigh the costs; and b) the objectives of the legislation can only be achieved by restricting competition. 2. If they are to continue, the Driving Instructors Act 1992 and the Driving Instructors Regulation 1993 must be effective in ensuring professionalism, competence and integrity in the driving instruction industry. In considering these principles, the review should: a) b) c) d) clarify the objectives of the legislation and their continuing appropriateness; clarify the restrictions on competition imposed by the legislation; assess the effectiveness of the legislation in achieving its objectives; and consider alternative means of achieving the same results, including non-legislative approaches. The full terms of reference for the review are attached at Appendix 1. The terms of reference were approved by the Premier prior to the commencement of the review. 1.4 Review Process The Steering Committee The review was coordinated by a Steering Committee comprising representatives from the Roads and Traffic Authority, the New South Wales Cabinet Office, the driving instruction industry and the road freight industry. Members of the Committee are listed in Appendix 2. The Consultation Process The Steering Committee examined public and stakeholder views in accordance with the NSW Government consultation guidelines: Consulting on Reform - A consultation framework for the review of anti-competitive legislation. An Issues Paper was released for public discussion by the Minister for Roads in September 1998. An invitation to comment on the Issues Paper was forwarded to industry and government groups as well as consumer organisations. In addition, advertisements were placed in metropolitan newspapers inviting comment. A similar invitation was placed on the RTA Website during the consultation period. Page 2 Review Q,fthe Driving Instructors Act 1992 Final Report Nine seminars were held for specific stakeholder groups ranging from motor cycle riders and trainers to instrumentalities concerned with integrity issues (including ICAC). The consultation period closed on 30 November 1998. Development of the Final Report The RTA Traffic Technology Branch was engaged to study the economic effects of changes to the Act. This involved costs to the industry as well as the RTA. An abridged version of the RTA Traffic Technology Analysis of Submissions is included in Appendix 3. The Final Report has been prepared by the Steering Committee following consideration of submissions responding to the Issues Paper and further consultation with some stakeholders on future regulatory options. Page 3 Review ~fthe Driving Instructors Act 1992 Final RQ10rt 2. Background to the Industry and the Act This Chapter provides background information on the NSW driving instructor industry and its regulation. It also highlights some key industry issues not covered by legislation. 2.1 Profile of the Industry Currently in NSW there are 2,223 licensed car instructors and 580 licensed heavy vehicle instructors (of which 42 are also car instructors). NSW also has 270 licensed motorcycle instructors of which 22 are also licensed car instructors. The industry is characterised by several large franchises and a considerable number of sole traders and small independent driving schools. For example, a survey of the Sydney Yellow Pages listed 271 entries for car driving instruction. 7 of these entries were for franchises representing 63 outlets. While many of the 264 non-franchised entries represent individual instructors, a considerable number are for medium to large operations. Outside of Sydney, local Yellow Pages contained, for example,S entries for driving schools serving Lismore, 7 for schools serving Nowra and 5 serving Dubbo. A considerable number of schools serve specific ethnic communities and driving instruction is available in numerous languages including Arabic, Portuguese and Vietnamese. Prices and pricing structures vary considerably, from $ 20 to $ 50 per hourly lesson for cars, with some schools offering single charges of $300-500 for instruction until the test is passed. In 1992 the industry changed significantly. With the introduction of the Driving Instructors Act 1992, it became mandatory for an applicant for a driving instructor's licence to complete a course of training as an instructor. The industry has participated in the development of national competencies for driving instructors. A national Curriculum and Assessment Package in Road Transport Motor Vehicle Driving Instruction has been published by the Australian National Training Authority (ANTA) for the training of driving instructors. Set at Certificate ill standard to align with Australian Standard Framework Level 3 skill requirements, the package was developed after wide industry and licensing authority consultation. Quality systems such as IS09002 are being adopted by some driving schools and the industry is becoming more rigorous about adopting and adhering to internally developed codes of practice. For example, the Australian Driver Trainers Association (ADTA) is developing an industry Code of Practice for driving schools which covers industry standards, service delivery, complaints handling and other matters. Page 4 Review ~fthe Driving Instructors Act 1992 Final Rwart The industry is concerned to present a professional profile to the community. It is also tending to focus itself on training for road safety rather than simply training to pass a driving test. Thus it seeks a wider involvement in the road safety debate and in effective solutions. 2.2 Driving Instructor Training Providers With the introduction of the Driving Instructors Act 1992 it became a requirement for an applicant for a driving instructor's licence to undertake a mandatory Course of training. For general vehicle instructors, this training course was initially delivered by a limited number of TAFE Colleges and the TAFE Open Training and Education Network (OTEN). Provision of the course was discontinued by TAFE in 1999, and it is now offered by private RTA accredited training providers. Presently, the Australian Driver Education and Trent Driving School Pty Ltd are the only providers of the car instruction course. The course involves 160-180 hours of theory and practical work, which takes between three weeks and three months to complete. TAFE is understood to have plans to re-enter the market as a provider. For motor cycle instructors, there are only two providers of instructor training with the RTA being the major provider. There are currently 270 riding instructors licensed in NSW. There are currently 3 providers of training for heavy vehicle instructors, and 580 licensed heavy vehicle instructors in NSW. There is no restriction on the number of organisations which may be involved in driver or rider instructor training, provided they meet the basic requirement of delivering training (the National Certificate ill standard in the case of car instruction). Entry of any new training providers depends on demand. 2.3 Background to the Current Legislation The Driving Instructors Act 1992 and the Driving Instructors Regulation 1993 were enacted following the findings of the 1990 inquiry into driver licensing by the Independent Commission Against Corruption (ICAC). The inquiry found there was significant corruption in the Roads and Traffic Authority (RTA) and the driving instruction industry. The previous legislation, the Motor Vehicle Driving Instructors Act 1961, had been in place for thirty years, and was seen as an inadequate model for effective regulation of the industry. Penalties were minor and certain provisions, such as compulsory training, had never been proclaimed. The current legislation incorporates some features of the previous Act that were considered as still appropriate in the regulation of the instruction industry. These include prerequisites for licensing such as 'fit and proper person' and 'good character' requirements. Importantly the current Act contains provisions for dealing PageS Review ~flh. Driving Inslruelors Acl1992 Final R!1j1orl with corrupt conduct and preventing people reasonably suspected of being corrupt from any association with the industry, as well as providing for compulsory training of driving instructors. 2.3.1 Scope of the Act The Driving Instructors Act 1992 established a mechanism for the licensing and regulation of driving instructors, and covers the following activities: ' 1. The licensing process 2. Appeals 3. Business Compliance and Monitoring Scope Qf the Act and Regulations The LJcensin Includes: ,0 IoceSS , ,A als'and Plohibltions Business com Uanee iind,monitoIin , inclUdes: Includes: I, o o a o 't;J Unlic.rised proliihitions of" 't.;o License pr""'.r-S"' J1tat the ~~ent p'rovisions of ffie act reggaing tlie u~~ of un8ati8fa.doIY.vehld~ . be maintained to reini orce road siife~requirementsgter,ebye~gIn8~cto~;: dO'liot.;prol'jde driving tuition in unroadworlhp·ehicl.!!S, ' ; . ~'~~l: ; ... _ . ......," ,,_ • .:.. ~? !-!'a:;; ~(,~..{~:~~?' . Use of Unsatisfactory Vehicle on Private Property The unsatisfactory vehicle provisions of the Act apply only to using a vehicle, while acting as a driving instructor, on a road or road related area. This invokes a technical inconsistency with the requirement to be licensed, which is interpreted as applying to tuition on public or private land. It is suggested that if the licensing requirements of the Act apply to tuition on private property, then the unsatisfactory vehicle requirements should also apply to private property. Clearly a person who is paying a licensed instructor for professional tuition is entitled to expect that a vehicle is safe and roadworthy even if the instruction is being given on private property. Issues Paper respondents who addressed this matter clearly hold this view. Recommendation 10 I..,.. .' •• . . /~4t~ .. • .That the Driving InstiJjotors Acfbe Clarified so tliat'the.,~atisfacto~,v;~de· '. .liU provisions (Sections 53 and 54) apply wherever licensed;instructi.on~ig.given. ..:..:)'.; ......~: t:::~1( .:-:~~~ - .r.t:'- 5.3.4 Advertising Advertising by licensed driving instructors is regulated by s.8 of the Driving Instructor Act 1992. The main points to note are that the Act: • prohibits persons who are unlicensed (or not licensed for a particular class of vehicle) to falsely advertise their services as an instructor; and • provides that an advertisement by an instructor must specify (a) the class of motor vehicle and (b) the driving instructor licence number. (max. penalty 50 units). Section 8 of the Act 'Unauthorised promotions' is a source of some difficulty both for the RTA and for driving instructors. Sub-sections 3 and 5 are difficult to interpret, particularly when read together, and the placing of sub-section 4 between subsections 3 and 5 is also not helpful. The need for the sub-sections 3 and 5, which in Page 25 Review ~fthe Driving Instructors Act 1992 Final RQ10rt effect regulate the procurement of driving instructors by driving schools, is questionable. Sub-section 4 introduces a problem as to what are reasonable limits (if any) on the extent to which this sub-section applies. There is no dispute that it applies to car roof display boards. The difficulty arises when it comes to stickers, beer mats, complimentary pens, etc, where there is difficulty in including the amount of required information. Problems also arise when instructors change sChools or schools change ownership. If some flexibility or limit is appropriate then this should be allowed for in the Act and/ or Regulation. It is questionable whether the number of an instructor's licence need be included in any advertisement. Presumably the requirement is intended to discourage advertising by unlicensed instructors. It is noted that in this context the principal client safeguard against unlicensed instruction appears to be the requirement that a driving instructor display their licence "in a conspicuous pOSition on the exterior or interior of the motor vehicle ... " (clause 6(1) of the Regulation). The licence includes a photograph, currency date and the class of vehicle in which the holder is licensed to instruct. Respondents to the Issues Paper generally support rewriting this section of the Act to include some flexibility of interpretation if it is to be retained, and for there to be a Code of Practice for advertiSing. A Code of Practice would allow the industry to make recommendations on what is appropriate and inappropriate advertising, and could recommend that instructors include their licence number wherever possible as an example of 'best practice' behaviour. The requirement to display the instructor's licence "in a conspicuous location on the exterior or interior of the motor vehicle" also applies to motorcycle riding instructors. Motorcycle instructors generally instruct applicants in groups and do not ride the same motorcycle as their applicants. Thus it is not practical to display the licence on the motorcycle ridden by the instructor or the students. A more practical solution is for the instructor to be required to show the licence to trainees at the commencement of each training session. Page 26 Review ~fthe Driving Instructors Act 1992 Final Rgl'ort Recommendation 11 .. 5.4 5.4.1 Other Issues in the Act Use of Simulators It is not proposed to amend the current position that theoretical or classroom instruction is exempt from the requirement to obtain a licence. For example, instruction given to assist in passing the RTA Driver Knowledge, provided it is not given in-vehicle, does not require a licence. 54.1(1) of the Driving Instructor Regulation 1993 does not regard as a driving instructor a person who provides instruction using a simulator. Although there may be an increasing use of simulators in driving instruction and there is every possibility that simulators may, in future, come to substantially replace on-road tuition, the Steering Committee is of the view that presently there is no justification for restricting use to licensed instructors. However, the RTA should continue to monitor their use in driving instruction and driver training. Page 27 Review ~fthe Driving Ins/rue/Drs Ae/1992 Final RQIOr/ Recommendation 12 That s.4(1) of the driving instTILctor reguliltlo.n"1993 not r~gard as a driving . instructor a person who provides ins\:rf1ctiQn using'a simulator. . . .,; 5.4.2 Post-licence Instruction The Act requires that all persons 'who, for any monetary or other reward, gives another person instructions for the purpose of teaching that person to drive a motor vehicle' be licensed. This is understood to include not only instruction given to learner drivers, but instruction given to people who already hold a licence for the class of vehicle in which they are being taught e.g: • advanced and defensive driving instruction to Provisional and full licence holders; • instruction in special vehicle types or for specialist employment (four wheel drives, ambulances, bush fire vehicles, etc); • instruction prior to re-test, e.g. aged drivers; • in-house refresher training (road freight companies). Post-licence instruction is designed to improve a driver's car handling ability, rather than provide fundamental instruction on how to drive a car. Clients who elect to undertake post-licence instruction have already demonstrated that they are able to control a car and are knowledgable of the road rules, unlike learner drivers. It is noted that Queensland and Victoria do not require licensed driving instructors for post-licence instruction. The following factors emerged when consideration was given to limiting the scope of the Act to instruction being given to learner drivers: • post-licence instruction is not associated with driver licensing; • this area of instruction is not subject to significant complaint or community concern; • the types of post-licence instruction are so diverse that effective management is not practicable; • clients are usually mature and better informed than learner drivers; • specialist providers tend to be mobile and State instructor licensing laws are restrictive. In essence, licensing of post-licence instructors is seen to be unnecessarily restrictive, serving no major purpose and represents an inappropriate restraint on open market competitive supply. Page 28 Review ~ftl!e Driving Instructors Act 1992 . Final Rgport Strongly divergent views were expressed on this issue in responses to the Issues Paper. Advanced/defensive driving school proprietors and instructors clearly do not support post-licence instructor licensing, whilst novice driver instructors generally do. After full consideration of the range of issues in this topic the Steering Committee concluded that, from a competition policy viewpoint, there was not an adequately substantiated case to continue to require the licensing of post-licence instructors. Recommendation 13 That instructors giving'post-licence instrugign,i.e. ·ins~(!lion ~fO drlvem who ' . already hold the class'of licencdor ffie vehlBe in wliiCh thiJ; are-~eceiVirig· ~ :iD.stniction, not be requireiHo 1lCitd a diivmg inslfudfit,dJIP,licate controls. 5.4.3 In-House Driving Instruction Situations often arise where a person gives driving instruction as one component of their employment duties. For example, a number of organisations (eg major road freight companies) employ company trainers to provide driving assessment and refresher and/ or specialist driver training to employees, or regular company drivers may at times be used as accompanying drivers for licence upgrade driving experience. Page 29 Review ~fthe Driving Instructors Act 1992 Final R'I'ort It has been questioned whether the definition of 'driving instructor' applies in these in-house situations, and therefore whether an instructor's licence is required. Legal advice indicates that under the current Act an instructor's licence is required. This confusion indicates there is scope to improve the definition of 'driving instructor' to deal with the above situations. Victorian legislation defines driving instructor as a person who "for hire or reward or in the course of any trade or business, gives another person instructions ...". It would appear useful to adopt a similar definition in the NSW Act in order to provide greater certainty about when an instructor's licence is required. In many cases the in-house instruction takes the form of post-licence instruction, i.e further tuition once a licence has been obtained. Therefore, consistent with recommendation 15, the Act should ensure that in-house trainers who give instruction to learner drivers or for licence upgrades are required to hold an instructor's licence, but if in-house training is for the purpose of post-licence instruction then no licence should be required. ~e'c.omnienaationJ5 5.4.4 Organisations exempt from the Driving Instructors Act A number of government instrumentalities are currently exempt from the Act. Specifically, under s.4(2) of the Driving Instructor Regulation 1993, a person "who is employed or otherwise engaged to provide driving instruction to employees of the Police Service, the New South Wales Fire Brigades, the Ambulance Service, the State Rail Authority or the State Transit Authority for the purposes of their employment is not a driving instructor for the purposes of the Act when providing that instruction." s.4(3) of the Regulation exempts persons instructing bush fire brigade members and staff. These organisations were exempt under the 1961 Act and for expediency Yfere also exempted again in 1992, the intention being to remove the exemptions in a timeframe mutually acceptable to the RTA and the organisations. Page 30 Review Rfthe Driving InstructQrs Acl1992 Final R{lJQrt It is noted that the Act contains no statement as to whether it is binding with respect to Commonwealth law, and the Defences Forces have so far presumed that they are exempt from the Act. From both social and competition equity viewpoints it is inappropriate that concessions are allowed to government instrumentalities simply because they are government instrumentalities. If there is a requirement for licensing driving instructors, as such, then the provisions should apply equally to both the public and the private sectors. The Regulation exempts any person who instructs an employee of one of the listed organisations. While initially intended to exempt instrumentality employees, this is not how the Regulation is worded. In an environment where government is increasingly using outsourced services, this regulation allows instrumentalities to hire unlicensed and potentially unprofessional instructors to instruct their staff. There is growing acceptance by government instrumentalities that it is inappropriate for them to be operating on a concessionary basis. Both the State Transit Authority and Railway Services Australia have now licensed their driving instructors, and they are conducting licence assessments to full RTA Competency Based Assessment requirements. In case of, for example, a coronial inquiry, they can claim their drivers have complied with RTA standards and procedures. The Police Service has also decided to licence their instructors. Respondents to the Issues Paper very strongly support that the exemption be withdrawn. Driving instructor organisations and driving instructors generally do not support the exemptions. Typical comment included "No government instrumentalities should be exempt from the Driving Instructors Act. If the Act is there for the common good of the public why is some part of it exempted?", and "It should be withdrawn as it could be regarded as unethical". Reaction from government instrumentalities was mixed. One government authority stated "to maintain ethical and codes of best practice, together with establishing greater credibility in the eyes of the driving instruction industry and general public, the exemption for all government instrumentalities should be withdrawn". Another authority advised that it would continue to seek exemption from the Act. However, most driving instruction given to government employees is post-licence instruction. It is specialist training given to staff who already hold a licence for the class of vehicle in which they are to receive instruction. Should recommendation 15, exempting post-licence tuition from the need to hold an instructor's licence be adopted, the impact on government instrumentalities is likely to be minimal. Even if licenSing of post-licence tuition continues, the exemption for government instrumentalities should be withdrawn. In conclusion, it is proposed that the exemptions of public instrumentalities be withdrawn. Page 31 Review ~f the Driving Instructors Act 1992 Final &vort Recommendation 16 ..... Tlt.at the c~ent eXeDll?tion of-some govemptent instrumentaJjtie~,from having to ." comply with,the Act be withdrawn, with affected instrumenfaliti~ being allowed' a reaso~b !! ~e ift which to an:ange.com iliance. ,', . .' 5.4.5 Conditional Licence The Driving Instructors Act (s.19) currently provides that a licence may be issued to an instructor subject to such conditions as the Authority may determine. As outlined earlier, one form of condition placed on a licence was to allow an instructor to teach applicants before the instructor completed the second stage of practical training and assessment conducted by TAFE, In these circumstances the instructor was providing tuition to clients who were generally unaware that the instructor had only completed the first stage of their training. Should novice drivers be paying for a service where the instructor has not been fully trained or assessed? Is it appropriate that the RTA issue an instructor's licence to person who is not yet fully qualified? Issues Paper respondents generally believe that this concession should not be allowed. For example "It is unprofessional to allow partially trained instructors to provide lessons for reward on the commercial arena." With the establishment of accredited commercial driving instructor training providers and the discontinuation of the previous TAFE course, this concession is no longer being granted by the RTA and all trainees must fully complete all training and assessments before being issued with an instructor's licence. Recoifurtendation 17 That the RTA continue tOlOO longer allow the Con Hiofuil Licence provisions in the Act to be used to issu~ driving in§fructor licenses' to' ap'Elicants w1lo I ave yet to ., h meet the training and competence,standaras'foI ~sue- of a:.fiilllicencj!. . 5.4.6 Private Instruction The Act only requires all persons "who, for any monetary or other reward, gives another person instructions for the purpose of teaching that person to drive a motor vehicle" to be licensed, Any person who holds an unrestricted driver's licence may supervise and instruct a learner without holding a driving instructor's licence, provided this is not done for reward in any form. Page 32 Review {l{the Driving Instrllctors Act 1992 Final &port It is often suggested, principally by driving instructors, that all learner drivers should undertake some form of compulsory instruction from a driving instructor, and even that only licensed d~iving instructors be allowed to instruct learner drivers. The arguments used in these instances centre on safety, and whether a driver taught by an instructor is a better driver than one taught privately. The issue of compulsory instruction by a licensed instructor is a matter of Government policy regarding novice drivers and road safety generally. The recent introduction of the 50 hour logbook requirement could result in learner drivers undertaking some form instruction with a licensed instructor, rather than relying on friends or family. Page 33 Review q{the Driving Instructors Act 1992 Final Report 6 Costs and Benefits of the Current Regulatory Regime National Competition Policy reviews are required to examine the costs and benefits of the existing regulatory regime, and any alternative arrangements. This process recognises that legislative restrictions create both costs and benefits, and both need to be considered when restrictions are examined. The Competition Principles Agreement requires that restrictions be retained only when it can be established that the benefits outweigh the costs. 6.1 Benefits Many of the benefits of the current regulatory regime (and possible alternatives) have been raised in the preceding chapters. The benefits generally accrue to those who use driving instructors and the community in general, and as such can be classed under the broad heading of consumer protection. There are also elements of road safety associated with the licensing of driving instructors. 6.1.1 Consumer Protection This is an important consideration, since most driving tuition involves young applicants and is undertaken in the privacy of a motor vehicle. These factors combine to produce a high level of vulnerability of the applicant to corrupt/unethical behaviour, harassment or sub-standard tuition (either in quality or quantity). In the closed environment of a private vehicle, it is difficult for the applicant to obtain proof that an instructor was sub-standard in order to seek redress. This situation is unlike most other areas of consumer-supplier relations, where the evidence of poor workmanship and the like are more obvious. Patronage of driving instructors is likely to drop if people are not confident oyerall that driving instructors are competent and honest. While the current legislation imposes costs on driving instructors (and also on those instructors who may lose their job by haVing their licence cancelled for anyone of a variety of reasons), there is a corresponding benefit in greater public confidence in the system, and hence a greater inclination to use professional driving instructors in preference to private tuition. It might be argued that appropriate regulation can be pro-competitive through enhancing the opportunity for the industry to provide choice and for customers to make informed choices whilst being assured through the protection of the regulation that inappropriate operators are excluded from the marketplace. Without regulation, disreputable driving instructors are likely to offer poor quality instruction to young, impressionable customers, many of whom are not in a position to make informed judgement on the service. If the customer is not able to differentiate between good and poor products before buying, the market becomes econOmically inefficient and the overall level of demand may be suppressed by lack of buyer confidence. The driving instruction market is Page 34 Review Qjthe Driving Instructors Act 1992 Final Rlil'ort particularly vulnerable to this effect, since a "free" alternative (i.e private tuition by a friend or relative) is available to many people. 6.1.2 Road Safety The effect of the Driving Instructors Act on accident rates is difficult to establish. There has been a downward trend evident in both accident numbers and fatalities since the late 1970s. This has been the result of a combination of many factors, including: • • • • • • improved roads; compulsory seat belts; improved driver licence testing; road safety education in schools; safer vehicles; and greater enforcement, particularly of speeding and drink-driving laws. It is not possible to determine the exact extent to which driver training in the broadest sense, or the provisions of the Driving Instructors Act in particular, have contributed to this reduction. There is international literature which questions the value (in accident reduction terms) of post-licence defensive driving courses, however the value of commerciallyprovided versus private learner driver training is difficult to establish. In 1999, a slight majority of car licence applicants who presented for testing, after going through driving schools, had a marginally higher pass rate (NSW Vehicle & Driver Statistics 1999). The reasons for the higher pass rate are unclear, but may be related to some commercial tuition being aimed at coaching the student to pass the test. This does not necessarily imply that commercial trainers are producing better drivers with more appropriate attitudes to the driving task. There is a counter view that private tuition with family members or friends may make up for any lack of technical content by additional on-road hours, since there are no direct costs to the learner. On-road experience is generally acknowledged as a valuable contributor to road safety. Nevertheless, learner drivers are not able to gain a provisional licence until they pass the Driving Ability Road Test (DART). The DART requires drivers to demonstrate they have adequate skills and knowledge of driving a car safely, decision making and awareness of other road users. Driving instructors are one method of gaining these skills and knowledge, and therefore could be regarded as contributing to road safety by ensuring learner drivers are adequately equipped to pass the DART. In addition instructors, as part of the tuition process, may also pass on 'better' driving techniques that will stay with the learner driver over a long period of time. This can be regarded as a positive contribution to road safety that may not occur for a person who uses family I friends rather than a licensed instructor. Page 35 Review Qf the Driving Instructors Act 1992 Final Rf!POrt Given the difficulty in linking tuition with a licensed instructor and any definite general road safety benefit, it may be that the only road safety benefit accrues to the learner class. That is, there may be a road safety benefit for the student in learning to drive with a licensed instructor who has received specialised training and may have duplicate controls, compared to private instruction with a parent, friend, etc. 6.2 Costs There is a range of costs associated with the regulation of the driving instruction industry by the Driving Instructors Act. Some impact directly on the members of the driving instruction industry and others on consumers, the RTA and Government. These costs are detailed in AppendiX 5. 6.2.1 Costs to Industry In the process of qualifying for a car instructor's licence, an applicant incurs the following costs: • • • • • RTA test fees Medical examination Training course fees Photographs Licence fees $70 $36 $2000 $10 $117 Thus it costs of the order of $2,230 to obtain a car driving instructor's licence. Car driving instructors are also required to have duplicate controls fitted to their vehicle. Installation cost is about $600. For a heavy vehicle instructor's licence the costs are of the order of $1,100 and $950 for a motorcycle instructor's licence. It is noted that the major costs are associated with training and assessment to ensure that the applicant has the requisite knowledge and skills to enter the driving instruction industry. Community expectation is that a driving instructor has the particular skills required to effectively train someone to drive safely. A client has a higher expectation of an instructor's teaching ability and knowledge of the topic than if they learnt to drive with a family member of friend. After becoming licensed, ongoing costs to meet Act requirements are the licence fee, renewable every five years, which averages $23.40 per annum and the cost of record keeping. The marginal cost of additional record keeping required by the Act is assessed at $0.50 per applicant or about $60,000 per annum for the industry. Page 36 Review Q,(the Drivjng Instructors Act 1992 Final Rozort Thus, based on 200 new car instructors, 80 heavy vehicle instructors, and 40 motorcycle instructors entering the industry each year, and a continuing average of 3,000 instructors within the industry the total annual cost of regulation for the industry is $ 820,000. This comprises $ 690,880 (84%) for new entrants and $129,000 (16%) for continuing costs. Thus the major component of industry costs associated with regulation relate to initial training, testing and the fitting of dual controls. The continuing costs, once an instructor is licensed, are minimal. Clearly the continuing costs of regulation for the industry are not having a Significant impact on the cost of instruction. However the costs of entry may be limiting the number entering and within the industry. This may impact on fee levels which the market is thus unable to sustain. This issue is dealt with in more detail in Section 4.2. 6.2.2 Costs to Government As indicated in Appendix 5, RTA costs to administer the licensing process are estimated at $227,000 annually. The RTA also incurs costs of approximately $ 25,000 annually in investigating unlicensed instruction and about $30,000 in court costs related to the Act. The Police Service is estimated to spend about $84,000 per annum on investigation of driving instructor's licence applicants. RTA annual income from ongoing licence fees is approximately $ 69,000. Fines average $10,000 per annum. The net cost to Government is thus assessed to be approximately $287,000. Whilst, clearly, the Government does not achieve full cost recovery, the outlays for continuing management of the driving instructor licensing system appear, in comparative terms, reasonable and not inappropriate. 6.2.3 Total Direct Cost By combining costs to the driving instruction industry with the Government costs, as indicated in Appendix 4 the total direct cost of compliance with the Driving Instructors Act is estimated to be about $1,200,000 per annum. It is noted that about 58% is associated with licence applicants meeting the entry costs of training, testing and fitting of dual controls to their vehicles. 6.2.4 Costs to Consumers The current regulatory regime does impose direct costs on consumers, or the students of driving instructors. The main cost is the fee charged by licensed driving instructors. The key issue that needs to be assessed is whether regulation excessively influences fee levels and the availability of instruction to a point where regulation is no longer in the public interest, i.e tuition fees are too high and there are not enough instructors to meet demand. The experience of Victoria allows a comparison of the impact of regulation/ deregulation on fee levels and the number of driving instructors. As discussed in section 3.2.1, the Committee established in Victoria to review the deregulated instruction market found that: Page 37 Review ~f the Driving Instructors Act 1992 final RqJort • the market for driving instructors was excessively competitive (i.e too many instructors) resulting in unsustainable fee levels (i.e too low); and • tuition standards had dropped under deregulation. Regulation of driving instructors means that the munber of potential instructors is restricted as a result of entry barriers to the market. This means that consumers will experience potential inconvenience (cost) in some areas because there is a reduced choice in the instructor market. With a reduced number of instructors there is a corresponding reduction in competition, so instructors are able to charge higher tuition fees (compared to a deregulated market). In section 2.1 it was noted that there is a variety of prices and pricing structures charged by driving instructors. Instructors can charge per lesson (between $20 and $50 per hour for cars and up to $120 per hour for heavy vehicles), or offer a single charge of between $300 and $500 for instruction until the Driving Ability Road Test (DART) is passed. 6.3 Conclusion Due to the uncertainty regarding any definite road safety benefits, and the inability to quantify consumer protection benefits, the Steering Committee is required to take a qualitative approach and make informed judgements when comparing the costs and benefits of the current regulatory regime. Although the costs to industry and Government of the current licensing regime amounts to approximately $1.2 million, and the regime adds to consumer costs when compared to a deregulated market, the Steering Committee concludes that, on balance, the costs identified are not an excessive cost when compared to the benefits received by the community from licensing driving instructors. Although regulation may result in higher tuition fees and less consumer choice in terms of the absolute number of instructors available, this needs to be balanced against the benefits that have been identified as resulting from regulation: • improved customer protection through - reduced exposure to inappropriate operators; - reduced potential for corrupt practices; and - improved competence of instruction. • possible road safety benefits. The Steering Committee believes that, although regulation does impose additional costs on consumers when compared to a deregulated market, the benefits of regulation more than make up for those additional costs. Page 38 Review q{the Driving Instructors Act 1992 Final RlJlOrt It should also be noted that, in Chapter 5, the Steering Committee identified a number of reforms that have the potential to further reduce the costs of the licensing regime without compromising these benefits, such as removal of the requirement to install duplicate controls. Page 39 Review qf the Driving Instrllctors Act 1992 Final Rewrt 7. Regulatory Options The terms of reference of this review require consi,deration of not only specific issues relating to the driving instruction industry, but also whether an alternative regime for management of the industry might be more appropriate for the future. A number of options have been considered and have been the subject of extensive discussion during the consultation process. They vary in the degree of control which would be exercised by Government and in the level of self-regulation that may be expected of, or provided by, the industry itself. Alternative regulatory options need to be assessed against the objectives of the Act to ensure all objectives can be met. The option that provides the greatest net public benefit should then be selected. 7.1 Alternative Models Respondents to the Issues Paper were asked to comment on the following issue: Which, of the following alternatives, would be the most apprapriate future regime for: • complying with the Competition Principles Agreement (which requires that legislation should not restrict competition unless it can be demonstrated that the benefits to the community as a whole outweigh the costs and the objectives of the legislation can only be achieved by restricting competition), and • ensuring the professionalism, competence, and probity, coupled with a road safety and customer focus, of the driving instruction industry: 1. Retention of the existing legislation framework - the status quo with possible amendments? 2. No regulation? 3. Self or Co-regulation? 4. Other industry management systems e.g: - regulation of businesses? - negative licensing? Are there other models that warrant consideration? In summary the response was: • There was full support for retention of the existing legislative framework. There were no responses arguing against retaining the existing framework. • There were no responses in support of de-regulation. All respondents addressing this issue rejected the concept. • There was about equal support for and against self or co-regulation. • Few commented on other possible industry systems and most were against any other models. Page 40 Review Qjthe Driving Instructors Act 1992 Final Rnmrt Option 1 - Negative Licensing Negative licensing is a regulatory system designed to ensure that individuals who, by their behaviour, have shown themselves to be incompetent, irresponsible or lacking in probity, are precluded from operating in a particular industry. Basically there are a set of regulated requirements for entry and continuation in the industry, but there is no review process prior to entry or a licensing process as such. Checking is through audit processes or when, for some reason, a person comes to notice. Under this model more emphasis is placed on continuing compliance and actual performance. Instructors who come to notice for not meeting set standards would be removed from the industry. Supporting reporting, investigative and audit systems would be required to effectively identify non-performers. It is possible that this model could include a significant degree of self-regulation with industry establishing the control, audit and performance review processes supported by a regulatory regime which allows action to be taken based on industry verified evidence. Steering Committee Assessment - Not Recommended The benefits of negative licensing models centre around reduced administration costs for industry and Government, in that the application and approval process would not be needed. The requirements of the Act regarding who can operate in the industry would still apply. The regulatory focus would be on compliance via an audit process and monitoring of complaints. Given the nature of the consumers in this market, the objectives of the legislation and the market failures identified earlier, the Steering Committee felt that negative licensing would not provide the same level of benefits that exist under the current regulatory model. Option 2 - No Regulation If no particular legislation was in place concerning driving instructors or driving schools, then the total initiative for any setting and maintaining of standards would be with the industry itself. From a regulatory viewpoint, an instructor would be an individual in society who complied with the Traffic Act and other related legislation regarding their vehicle, their fitness to drive as an accompanying driver with a learner, vehicle insurance, etc. As business persons, they would have to continue to comply with legislation such as the Fair Trading Act regarding the conduct of their businesses and in their dealing with clients, with Federal laws regarding keeping records for taxation, etc. There would be no specific requirements to be met to enter the driving instruction business. Page 41 Review Qfthe Driving Instructors Act 1992 Final RgpOTt The comparative model for this alternative is the recent Victorian experience, where the industry was deregulated in 1993 but has since been re-regulated (see Section 5.2.1). Steering Committee Assessment - Not Recommended. This concept is strongly rejected by respondents. The Steering Committee supports this position, particularly as deregulation has the potential to reopen some of the practices which resulted in the establishment of the ICAC inquiry into the industry. The Steering Committee does not accept that deregulation offers any guarantees that the objectives of improving integrity and deterring corrupt and improper behaviour will be able to be met in an adequate manner. As previously discussed, deregulation in Victoria was a failure because excessive competition led to loss of quality of instruction, and no control over the integrity of persons giving instruction. Option 3 - Self-regulation or Co-regulation Rather than move directly to an unregulated environment, as Victoria did in 1993, one option is to move progressively towards self-regulation of the driving instruction industry through a process of decreasing regulatory support while encouraging the industry to establish its own regimes for ensuring professionalism, competence and probity. The Queensland and Victorian models The recently introduced system in Queensland and the reintroduced system in Victoria, where entry requirements are regulated through legislation but Codes of Practice are set by the industry, are recent examples of co-regulation. These are more fully described in Chapter 3. As an opportunity has arisen for all three States to adopt very similar systems, the Queensland and Victorian models merit close consideration. The Professional Standards Council Another possibility, available in NSW, is for co-regulation through the Professional Standards Council. The Professional Standards Council was established in 1995 to: • approve and monitor professional standards schemes which limit civil liability of members of profeSSional and other groups; • improve standards; • protect customers. The Council is constituted tmder the Professional Standards Act 1994, and the scheme comes under the auspices of the NSW Attorney General. Page 42 Review of/he Driving Instructors Act 1992 Final Rwort The Scheme works through industry associations rather than through individuals and has been adopted, for example, by the Institution of Engineers Australia and the Law Society of NSW. There is potential for the driving instruction industry to come under the program either in lieu of the Driving Instructors Act or as a complementary strategy to an amended Act. Steering Committee Assessment - Not Recommended The Steering Committee supports the fairly frequently expressed view that, while coregulation may be an objective for the future, the industry is not yet ready to take on this responsibility without a regulatory support base. The Committee does agree that there are areas of industry management where self or co-regulation could be introduced. Indeed some of these issues are more appropriately addressed by industry rather than by Government even though, to date, the perception has been that Government is responsible for all industry matters. There are two levels at which industry self or co-regulation could work: via driving schools or driving instruction industry associations. There is potential for the result to be a combination of both. However, because of the disparate nature of the industry, as it currently stands, it would be difficult for the industry to take on the role of ensuring that adequate levels of professionalism, competency and probity exist and to move directly to a selfregulation or co-regulation framework. Option 4 - Regulation of Driving Schools, not individual instructors This concept is that provisions similar to those currently in place for professionalism, competence and probity would apply but it would be the responsibility of businesses, i.e. driving schools, to ensure that the standards are met. For this, schools would have their own quality management and performance monitoring systems which could well be subject to audit. Non-compliance would be an issue between Government and the driving school in question, rather than with an individual instructor (although any matter might pertain to an individual instructor). Steering Committee Assessment - Not Recommended Although one respondent tabled a thoroughly considered and cogent argument for regulation of driving schools rather than of instructors, this concept has received little support from industry which still sees itself as based more on individuals rather than on organisations. As argued above, the fact that driving schools do not encompass the majority of instructors means there are potential difficulties in adequately fulfilling the objectives of the current legislation. Page 43 Review Qf/he Driuin~ Instrllctors A ct 1992 Final RqlOT/ What does seem more viable and acceptable is a system which regulates, on an individual basis, who may enter and operate within the industry and to use driving schools in a co-regulatory role to ensure consistency of quality, customer service, etc. Option 5 - Retention of the Existing System, with possible amendment At the very minimum, some fine tuning of the legislation appears inevitable as a result of this review process. This option would retain the existing framework, a positive licensing system with stringent entry requirements, as a basis for any change. Amendments could be made to the existing regime to steer the industry in a direction the industry and Government regard as appropriate for the future. The core issue to be addressed with retention of the current legislation is whether the legislation provides an appropriate basis for the future direction of the driving instruction industry, or whether it should be amended accordingly. Areas where changes might be made within the context of the existing regulatory framework, include: • • • • • • regulation only of instruction relating to driver licensing; deletion or amendment of the advertising requirements; requirements relating to performance and quality of instruction; customer complaint mechanisms; deletion of current exemptions; insurance requirements, etc. Steering Committee Assessment - Conditionally Supported This option has almost universal support and is, of course, the simplest, most comfortable and least challenging solution. However, the Steering Committee does not necessarily see this model as being in the long-term best interests of the industry, or consumers. Nor does this option necessarily reconcile with the NCP requirement that legislation should not restrict competition unless the benefits outweigh the costs, and the objectives of the legislation can only be achieved by restricting competition. While the existing regulatory framework may represent the best alternative in terms of meeting the objectives of the Act, the Steering Committee believes that there are elements of the current regime that do impose too great a cost on the industry, consumers and government. Page 44 Review of/he Driving Instrllctors Act 1992 Final RWOTt 7.2 The Preferred Option To a large degree the basis for a preferred option has been developed in the preceding chapters. In surrunary, the previous discussion and reconunendations have established that: . • significant market failure can be expected if the industry were to be deregulated; • the current industry is sufficiently competitive and consumers have adequate choice as to price, availability and level of service; • the current entry provisions to becoming a driving instructor are not unnecessarily restrictive; • the provisions of the current Driving Instructors Act and Regulation continue, with some minor exceptions, to be relevant; • the retention of integrity and probity should be an important objective of any regulatory model; • any revised regulatory system should be compatible with systems operating in other States, in that the system be recognisable tmder the Mutual Recognition Act; • the Driving Instructors Act and Regulation, or any alternative regulatory regime continue to be administered by the Roads and Traffic Authority; • an industry Code of Practice, developed in conjtmction with the NSW Government and managed by the industry, would assist the standing of the industry; • the current level of direct costs for ensuring compliance with the Driving Instructors Act are acceptable; and • any unnecessarily restrictive provisions in the current Act and Regulation should be abolished or amended, provided that integrity and quality of service are not. sigrlificantly compromised as a result. Core components of the Proposed Regime Core Regulatory Framework It is proposed that a core regulatory framework for licensing driving instructors be retained containing the following components of the current Driving Instructors Act and Regulation: • entry conditions, including age, licence status, probity, traffic and criminal record, licence tenure, not being previously engaged in fraud and corruption, character (fit and proper) medical fitness and testing requirements • compulsory training requirements • cancellation, suspension and renewal of a licence • advertiSing requirements (amended) • appeals provisions • prohibition of certain persons from conducting a driving school Page 45 Review QFthe Driving Instruc/ors Ac/1992 final RliPor! • • • • keeping of records relating to driving instructors and driving schools identification requirements unsatisfactory vehicle proviSions (amended) display of driving instructor's licence Issues For Deregulation In the interests of supporting competition and an open market where restrictions are not essential the following requirements of the current Driving Instructors Act are proposed for deletion or diminution: • • • • • fitting of duplicate controls licensing for post-licence instruction some advertising requirements deletion of Government instrumentality exemptions from the Act minimum driving licence tenure for instructor licence applicants. Putting in place the above revised regulatory approach would allow the industry to investigate moving towards greater self regulation under a scheme administered by the Professional Standards Council. Such a scheme is the core proposal in a major submission to the Committee by one of the largest driving instruction industry associations in NSW and the only one with a national base. Briefly described in Section 6.3 the scheme will now be discussed in more detail. Application of the Professional Standards Council Scheme to the Driving Instruction Industry Ihe scheme operates through industry associations. This appeared to be a stumbling block as it would be inappropriate, given the terms of reference of the Review, to be recommending further regulation through requiring that driving instructors be a member of an industry association. However, the scheme could be voluntary for instructors, who would still need to be a member of an association, and participation could be encouraged by both Government (particularly the RIA) and industry promotion of the benefits to clients of engaging participating instructors. While the RIA has steered clear of promoting driving schools, driving instructors and driving instructor associations in the past, and this policy would remain, the Professional Standards Council scheme, being a Government program administered by the Attorney General's Department and focused on professional service delivery, can quite legitimately be promoted. Thus Government would be able, in a very practical way, to encourage industry self-regulation. Concerns that the scheme would promote a monopoly situation for driving instructor associations have also been allayed. The Professional Standards Council is prepared to work with more than one organisation representing a particular industry and already works with some quite small industry associations. Thus those Page 46 Review Qfthe Driving Instructors Act 1992 Final Report individual instructors and/or driving schools which are currently not associated with a particular industry association could form further associations, should they wish, so as to participate. . The areas which it is envisaged the scheme would cover include: • a charter, concerned with broad objectives, such as road safety, working with stakeholders, etc; • an industry code of ethics and business practice; • quality of service, and quality management and accreditation; • monitoring provisions; management, administration, quality, pass rate. etc; • consumer protection and advice; • receipt and resolution of complaints; • disciplinary proceedings; • content of advertising (correctness and road safety positive); • standard curricula for instructing learner drivers; • standard progress assessment procedures; • age and condition of vehicles; • responsibilities and roles of driving schools; • delivery and curricula for post-licence instruction; • insurance requirements; • eligibility; • disciplinary procedures and measures. Clearly, such a scheme has the potential to assist people in making purchasing decisions, substantially increase the professionalism of the industry, and increase the industry's standing in the community; with minimal involvement by Government. The proposed scope of the scheme in some areas is somewhat beyond the present scope of PSC schemes but the Council appears keen to take the issues on board. One particular element which is missing at the moment is a strategy, in terms of a logo and motto, which supports presenting a clear message to the community of the advantages of engaging the services of a scheme participant. T,hat the follomng;.tegune J>e adopted for'futUre'management of tI1~ NSW drivjnginstnldlon.fudusay: - ,(eten tion of a core regulato!)' framework f~r licensing of.;~ ';': :',1 8.7 Driver Training Requirements far Instructors The RTA is empowered under the Act to require an applicant for a driving instructor's licence to pass driving and instructional ability tests and to undergo training in driving instruction. Since 15 June 1999 applicants for a licence to drive Road Trains and B-Doubles (MCMulti Combination licence) are required to undertake and satisfactorily complete an RTA-approved MC driver training and assessment course before they can receive their licence. This requirement has been introduced to ensure newly licensed drivers Page 55 Review qfthe Driving Instructors Act 1992 Final RliJlort of MC vehicles have the skills necessary to competently and safely drive these vehicles. This compulsory training requirement does not apply to applicants for an MC driving instructor's licence. Thus MC licence holders who obtained their licence before 15 June 1999 and who apply to become instructors may not have completed an approved MC driver training course. The Issues Paper proposed that the RTA have the option, where appropriate, of requiring driving instructor licence applicants to satisfactorily complete a driver training course. Feedback from the Issues Paper indicated support for the inclusion of such a provision in the Act. For example "Yes - this seems essential if we are to have competent and trained professional instructors... " However, adopting a risk management approach, some time has now passed since the introduction of the course and it is now doubtful that many pre-June 1999 MC licence holders who have not had significant experience driving these vehicles will apply to become MC instructors. In any case, such applicants must successfully complete a Heavy Vehicle Driving Instructors Course before their licence is issued. Given that the MC licence is currently the only class of driver licence which requires completion of a compulsory driver training and assessment course, it does not appear necessary to impose an additional entry barrier by requiring a driving instructor licence applicant to complete a driver training course. Page 56 Review ~ftJre Driving Instructors Act 1992 Final &port Appendix 1 - Terms of Reference Review of the Driving Instructors Act 1992 Terms of Reference 1. The steering committee reviewing the Driving Instructors Act is to conduct the review in accordance with the terms of reference for legislation reviews set out in the National Competition Principles Agreement. The guiding principle of the review is that legislation should not restrict competition unless it can be demonstrated that: a) the benefits of the restriction to the community as a whole outweigh the costs; and b) the objectives of the legislation can only be achieved by restricting competition. 2. The steering committee is to assess the efficacy of the Driving Instructors Act 1992 and Regulation in ensuring professionalism, competence and integrity in the driving instruction industry. 3. Without limiting the scope of the review of the Driving Instructors Act 1992, the steering committee is to: a) clarify the objectives of the legislation; b) i) ii) iii) clarify the nature of the restrictive effects on competition; analyse the likely effect of any identified restriction on competition on the economy generally; assess and balance the costs and benefits of the restriction identified; and c) assess the effectiveness of the existing legislation in achieving its objectives; d) consider alternative means of achieving the same results, including nonlegislative approaches. 4. In the course of the review the steering committee should: a) identify any issues of market failure which need to be, or are being addressed by the legislation; and b) consider whether the effects of the legislation contravene the competitive conduct rules in Part IV of the Trade Practices Act 1974 (Commonwealth) and the New South Wales Competition Code. 5. The steering committee is to consult with and take submissions from driving instruction clients, driving instructors and other interested parties. 6. The steering committee must deliver a final report on the review within six months of its establishment. Page 57 Review ~fthe Driving Instructors Act 1992 Final Rlwort Appendix 2 - Members of the Steering Committee • GregBooth Chair, Steering Committee General Manager Driver and Vehicle Strategy Roads and Traffic Authority Carolynne James Policy Officer Inter-Governmental and Regulatory Reform Branch The Cabinet Office Allan Porter Executive Director Australian Driver Trainers Association (ADTA) representing the ADTA and the Independent Driving Instructors Guild (!DIG) Eugene Brancourt Principal Unique Training Technologies International Pty Ltd representing the Road Freight Advisory Council • • • • Jim Castles Manager Asset Support Services Roads and Traffic Authority • Paw Rees Manager Driver Development and Education Roads and Traffic Authority Page 58 Review C/fthe Driving Instmetors Aet 1992 Final Rf!j?Ort Appendix 3 - Analysis of Submissions RTA Review of the Driving Instructors Act I 992 Analysis of Submissions (Abridged Version) Traffic Technology Branch Roads and Traffic Authority March 1999 Page 59 Review ~flhe Driving Ins/rue/Drs Ac/1992 final Repor/ 1. Purpose of Report The purpose of this report is to summarise the key points raised in written submissions to the Review of the Driving Instructors Act 1992. 2. Background An Issues Paper was produced by the Review Steering Committee in September 1998, outlining the main areas covered by the Act and highlighting several anomalies and ambiguities in the Act and Regulation. All licensed Driving Instructors in NSW, various industry groups and interstate Govenunent agencies received ~ copy of the Issues Paper. Advertisements inviting public comment were run in several daily newspapers. A series of ten information sessions was held with key stakeholder groups during early November, to discuss areas of interest to the particular group. These groups included: • • • • • • • • • Driving Instructor Organisations Advanced/Defensive Driving Schools Associations / Consumer Groups Driving Instructor Course Providers Audit Groups Motorcycle Groups Internal RTA Stakeholders Freight Industry Groups Govenunent Organisations Matters raised in these information sessions were fully documented for review by the Steering Committee. Written comments were invited by 30 November 1998. Several submissions were received late and their comments have been incorporated into this report. Methodology To allow for subsequent querying, each submission received was initially categorised as being from either a: 3. • • • • • • • • • • Driving Instructor Driving Instructor Organisation Driving Instructor course provider Driving School Post-Licence trainer Association / Consumer Group Internal RTA Freight Industry group Government Organisation Member of the Public Page 60 Review qfthe Driving Instrllctors Act 1992 Final R'W"rt The last category was applied where the submission gave no indication of the nature of the respondent's interest in the Review. Each submission was read and the key points raised were highlighted. An analysis spreadsheet was set up, to tabulate the findings. Each of the issues from the Issues Paper was recast as a proposition (rather than as a question), so 'that where a submission mentioned a specific issue, the response to that issue could be scored as follows: • • • • • "2" for definite agreement "1" for qualified agreement "0" for mentioning the issue but not stating a position "_1" for qualified disagreement "_2" for definite disagreement In this way, a distribution of opinions for any issue could be readily established, and an "average" calculated to indicate the overall acceptance or rejection of the proposition. Where an issue had a series of individual points within it, these were given separate numbers, eg 6a, 6b and 6c. It should also be noted that a few issues were presented as a series of alternative propositions (eg Issue 27 - consumer issues to be handled through either RTA / Dept of Fair Trading / industry / further legislation / Code of Business Practice). Responses were logged as "votes" for the preferred alternative(s). Opposition to any particular alternative was only logged where it was specifically stated in the response. In the tables below, responses are summarised in terms of "votes" for but not against each alternative. In addition to the 43 issues outlined in the Issues Paper, any new issue raised by a respondent which was relevant to the Review was added to the set of issues. By the end of the analysis, some 129 issues (or variants) had been identified. Most of these additional issues related to quite specific concerns and were typically only referred to by a single respondent. A full description of the issues raised is included in Section 9. Summary sheets, showing a tabulation of the responses, were prepared for consideration by the Steering Committee. 4. Responses Received A total of 80 submissions were received. Of these, 71 were received by the closing date of 30 November 1998. Two organisations were given an extension of time to lodge their detailed submissions. Similarly, a response was received after the closing date, but was subsequently accepted. During the analysis of the individual responses, several were noted as being particularly well prepared and comprehensive, and it was suggested that the Steering Committee members read those submissions in some detail. Page 61 Review of/he Driving Instructors Act 1992 Final R'Wort 5. Frequently Raised Issues The issues raised by the greatest number of respondents are shown below. It should be noted that not all respondents in this Table actually expressed an opinion about the particular issue. Issue Number I 3 4 Short Description Issues addressed by the legislation Code of Ethics Who should administer 01 Act (or eqUivalent) Relationship of 01 industry & Act Competitiveness of industry Entry requirements Cross·border recognition Dual controls No. of Responses addressing the Issue 28 30 27 27 29 27 28 31 38 5 6 " 13 16 22 23 24 26 27 28 29 30 Licence required for post-licence instructors licensing of in-house instructors 32 29 26 28 36 26 26 32 29 26 28 36 Standard curricula Monitoring & benchmarking Authority for resolving consumer issues Insurance requirements Dual controls for post·licence instruction Restriction of Act to training on public roads Exemption of Government instrumentalities 34 36 39 40 43 Conditional instructor's licences Retain provision for course in driving instruction Pre·training "Eligibility Advice" Retention of existing legislative framework Page 62 Review Q{the Driving Instructors Act 1992 Final Rqrort 6. Major Areas of Agreement The issues on which there was broad consensus across a reasonable number of responses were as follows: Issue Number I 4 Short Description No. of Responses FOR' 26 22 ) No. of Responses AGAINST' 5 6 8 10 II 12 13 16 28 Issues addressed by the legislation still relevant 0 .1 Act (or alternative) to be administered by: . RTA other authority How should the industry maintain ~robity & professionalism! retain legislated minimum standards • self-regulation Competitiveness of industry: • industry is competitive • consumer has adequate choice more competition would be beneficial Training & licensing requirements affect competition Market failure would occur if Act abolished Entry requirements are: • necessary • an unreasonable barrier • an unreasonable COSt Current penalties are reasonable & appropriate States should have similar systems, to promote crossborder recognition Dual controls should be mandatory 0 • • • 21 0 24 14 2 I 18 19 4 2 21 25 25 29 27 26 18 25 18 15 21 17 15 25 25 14 26 12 2 I 15 16 3 3 17 19 2 0 4 3 3 3 4 4 4 I I 3 2 • Insurances required: 31 34 35 )7 38 3rd party property damage public liability • professional indemnity Unsatisfactory Vehicle provisions should apply on private property Withdraw exemption for Government instrumentalities Tenure rule should: • be made more flexible • at least include an experience requirement RTA should have option to reqUire completion of a driver training course • RTA should advise driving school if it is investigation a 01 for inappropriate behaviour • Driving school should advise RTA of complaints about a 01 Retain driver instruction training requirement • • 39 40 41 43 Pre-training "Eligibility Advice" should be retained RTA should be allowed more administrative flexibility Alternative regulation schemes: • Retention of existing legislative framework • other options Either "QuiJified Agreement" or "Definite Agreement" with the proposidon Eimer "Qualified Disagreement" or "Definite Disagreement" with the proposidon I 3 3 a 35 Notes: I. 2. Page 63 Review of/he Driving Instructors Act 1992 Final Report 7. Major Areas of Disagreement The following issues were the subject of strongly divergent views amongst a reasonable number of responses: Issue Number Short Description No. of Responses FOR' No. of Responses AGAINST' IS IS 19 22 26 27 29 Notes: I. 2. Instructor licence infonnation should be required In any advercisin2 Licence should be reauired for Dost-licence instructors Monitorin2 of pass rates should be introduced Consumer issues should be resolved by: • RTA • Dept of Fair Trading • industry-managed process • furcher legislation • Code of Business Practice Dual controls should be required for post-licence instruction In light vehicles Either "Qualified Agreement" or "Definite Agreement" with the proposition Either "Qualified Disagreement" or "Definite Disagreement" with the proposition 9 23 13 12 20 5 I 13 6 12 14 l. 8. Analysis by Group An analysiS of the responses of various groups compared to the overall responses was also undertaken, to determine whether there were significant variations between the comments of that group as against the overall response. This analysis indicated that, for those issues where there was a reasonably high response rate within the group: a) RTA staff, compared with the overall response, were: more strongly opposed to leaving the competence of instructors to market forces; less strongly of the view that the current penalties are reasonable and appropriate; more in support of mandatory dual controls; more in support of mandatory instructor information in advertising; less inclined to support RTA handling consumer complaints, showing stronger support for Dept of Fair Trading; undecided (as a group) as to whether some government departments should be exempt, compared with the overall response that the exemption should be removed; more strongly against self-regulation or co-regulation. b) Driving Instructors / Driving Schools / Driving Instructor Organisations, Industry Associations & Consumer Groups all tended to be in alignment with the majority view, particularly on the matter of mandatory insurances. The driving instructing industry made many disparaging comments on the Victorian deregulation experiment, and several in that group felt that the industry in NSW was in fact already excessively competitive. Page 64 Review of/he Driving lnstruetors Aet 1992 final R"",rt Driving Instructors were more strongly opposed to advertising controls than the overall response. Driving Schools were more strongly in support of advertiSing being controlled by a Code of Practice or similar and were slightly opposed to standard curricula despite overall mild support. They also slightly opposed benchmarking. One submission was notable for its strong endorsement of a Professional Standards Council to oversee the industry rather than legislative control. c) Government agencies (other than RTA) tended to focus on a few issues of direct interest rather than responding to the broad range of issues presented. d) The Post-Licence training industry was strongly (but not unanimously) of the view that instructors in that industry should not be required to be licensed, while the overall response to this issue was more divided. 9. Issues Raised Forty-three issues were raised in the initial Issues Paper. Some responses presented issues or options not raised in the Issues Paper and these are also listed below. These matters tended to be raised by just one respondent, but those which were mentioned in three or more responses are shown in bold type. Issue 1. 1b 2 3a 3b 4a 4b Sa 5b 5c 5d 6a 6b Assertion A. FROM ISSUES PAPER: The issues (professionalism. competence and integrity of the industry) addressed by Ihe legislalion are slill relevant It is now possible to address these Issues in an ongoing.manner through other measures Issues such as the competence of instructors should be left to market forces An industry Code of Practice or Code of Ethics should be included within the Driving Instructors Act An industry Code of Practice or Code of Ethics should be addressed by the industry itself The Driving Instructors Act (or alternative) should conlinue to be administered by the RTA The Driving Instructors Act (or alternative) should be assigned to a different authority The existing Act should be retained to prescribe minimum standards for the driving instruction industry The industry should be left to find its own way The Act should be extended to mandate improved service delivery by the industry Provisions In a new regulatory regime should be based on encouragement of increased self control and greater acceptance of responsibility from within the industry The currenl driving instruction industry is sufficiently competitive The consumer has adequale choice in price, availability and levet of service The consumer and the industry would benefit from a more competilive environment There is evidence that the driving Instruction induslry, as regulated by the Driving Instruclors Act 1992 and other legislation, Is not meeting client needs The training and licensing requirements of the Act cause significant adverse effects on the level and degree of competilion There are areas of market failure that are not being effectively addressed by the current legislation or the industrY Market failure would occur if the Driving Instructors Act were abolished 6c 7 a 9 10 Page 65 Review Q,fthe Driving Instructors Act 1992 Final Report lla The entry requirements (prerequisites and grounds for refusal of an application) to become a driving instructor, together with grounds for suspension or cancellation of an instructor's licence, are necessary to achieve the objectives of the Act llb The requirements represent an unreasonable barrier to entry 12 The current penalties in the Driving Instructors Act and Regulation are reasonable and appropriate 13 It is important that the review place particular emphasis on ensuring, if possible, that the NSW driving instructor regulatory system is similar to systems operating in other Australian States so that full cross-border recognition can be given to instruct 14 The entry requirements for becoming a licensed driving instructor impose unreasonable costs on market entrants 15 A total direct cost of about $1,100,000 per annum is appropriate for ensuring NSW driving Instruction industry compliance with the competence and probity standards mandated in the Driving Instructors Act 16a 16b 17 18 19 20a It is necessary to regulate that driving instructors must instruct in vehicles fitted with dual conlrols The dual control requirement is adequately defined in the legislation The current regulatory regime impacts excessively on fee levels and accessibility of driving Instruction It Is necessary to regulate advertising for the procurement of driving instructors It is necessary that the Act requires inclusion of instructor licence information in any advertising If the requirements of the Act concerning inclusion of instructor licensing information in advertising are to be retained, they should be rewritten in a more understandable form 20b The Act andlor Regulation should allow some reasonable flexibility of interpretation of advertising requirements 21 The content of driving school or instructor advertising should be subject to a code of practice or some other monitorinQ measure 22 A driving instructor's licence should be required to be held by instructors giving post-licence instruction I.e those who teach drivers who already hold a licence for the class of vehicle being driven 23 24 25 26a 26b 27a 27b 27c 27d 27e 28a Deliverers of 'in-house' driving instruction (instruction given by company personnel to other company personnel) should be required to be licensed driving instructors Standard curricula for training of learner drivers should be introduced and instructors be required to teach to them Govemment should be intervening on issues of quality of delivery of driving instruction Monitoring of pass rates, benchmarking and other service quality andlor performance criteria should be introduced with the power to take corrective action or remove an unsatisfactory performer from the Industry If benchmarking is introduced, instructor pass rates should be published Consumer issues be resolved through the RTA Consumer issues be resolved through the Department of Fair Trading Consumer issues be resolved through an industry managed process Consumer issues should be further addressed by legislation A code of business practice in relation to consumer issues should be established and, if necessary, appropriately reQulated Driving instructors andlor driving schools should be required, as a minimum, to have 3rd party property insurance 28b Driving instructors andlor driving schools should be required, as a minimum, to have public liability Insurance 28c Driving instructors andlor driving schools should be required, as a minimum, to have professional indemnity insurance 28d 29 30 31 32 33 Driving instructors andlor driving schools should be required, as a minimum, to have full comprehensive Insurance Dual controls should be required in cars (vehicles under 4.5 tonnes GVM) used for post-licence instruction The Act should only apply to instruction given on the public street The unsatisfactory vehicle provisions of the Act should apply to instruction given on private property The satisfactory vehicle provisions should remain in the Act even though they duplicate sections of the Motor Traffic Act Duplication of Traffic Act provisions in the Driving fnstructors Act (if any such duplication is to remain) should be comprehensive The current exemption of some govemment instrumentalities from the requirements of the Act should be withdrawn The Act should be amended to allow the RTA some flexibility of interpretation of the requirement that applicants are to have held a licence of the class of vehicle which they intend to teach for at least three out of the last four Ivears This tenure rule should be replaced by, or be complementary to, a requirement for a minimum of actual driving experience The facility for the RTA to issue a conditional driving instructor's licence to a partially trained instructor should be discontinued 34 35a 35b 36 Page 66 Review oUlle Driving Instructors Act 1992 Final Rf1POrt The RTA should have the option, where appropriate, to require that instructor licence applicants satisfactorily complete a driver traininQ course 38a Given due privacy considerations, it should be required that the RTA advise a driving school 11 one of Its instnuctors is being investigated lor alleged inappropriate behaviour 38b A driving school should be required to advise the RTA of any complaints and investigalions about a driving instnuctor lor Inappropriate behaviour 39 The current training provisions In the Act, that instructor licence applicants complete 'a course in driving instnuction approved by the Authority and conducted by an organisation approved by the Authority' should be retained 40 The RTA should retain the 'Eligibility Advice' system which protects Ineligible licence applicants Irom unnecessa,rily taking a driving instnuctor course 41 37 42 438 43b 43c 43d 439 It is appropriate, in the interests 01 customer service and having a capacity to respond appropriately to particular situations, that the RTA be allowed greater administralive tlexibility within Ihe proVisions of the Driving Instnuclors Act and Requlation There are other issues, not currently covered by the Driving Instructors Act and Regulation, which need 10 be addressed, including proposals lor amendment, addition to, or deletion from, the legislation Support retention of existing legislation framework Support no regulation Support sell-regulation or co-regulation Support other industry management systems Other models warrant consideration 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 B. ADDITIONAL ISSUES RAISED: Thanks for opportunity to participate - no comment made "Fitness" test should precede any payment by applicant 01 applicants should lace a panel as part of the "fitness' assessment process Regulation of maximum daily hours of tuition is required 01 remuneration is too low ALL initialleamer training should be on dual control car, even if parents/friends then lake over tIhe training 01 training courses should include economic aspects of the industry Free driving Inslruction should be curtailed Emphasis should be on road safety, not competition Ref to No. 38 - schools to be advised AFTER investigation Is complete Dis should regulariy cross·check themselves with their peers "Dual controls" will have to be redefined, in light of new clutchless manual & sequential auto systems Mutual Recognition Act should contain provisions for probity/competence checks Results of "Iltness" test should be released by Police direct to applicant, not RTA Must retain exemption re dual controls in leamer's own cars RTA should ask how many lessons preceded a failed test in an instructor's vehicle Dual controls are not required for "in-house" tuition Ref to No.3Sa - tenure should be 5 YEARS MINIMUM Ref to NO.36 - conditional licence holders should have a cap on fees chargeable Learners should be taught correct steering technique to minimise injuries in an air bag-equipped car; ABS brake ·feelHV 01 entry skills are Inadequate Literacy, numeracy & language skills essenlial for Dis Ref No.28 - should also have Workers Comp insurance ReI No.34 - only emergency services should be exempt from the Act 01 licence should be shown to learner on first lesson; no need for ongoing display Replace "tenure" with "competence In the operation of the respective class of vehicle" Reduce "10year" condition in Sec lion 18 of Act to "5years" (prior period olconviclion for fraud, elc) Section 30 (duplicate licences) - validate all circumstances before granting duplicate - holder may be facing cancellation In-house" instruction - should not require a 01 licence if giving instruction on same class 01 vehicle as already licensed for Ref No 24 - standard curricula required in 4WD training - both recreational & vocational. Operators to be licensed Regulate driving schools (presumably instead of Dis) 01 Act should only refer to relevant provisions of the TraHic Act, not duplicate them in detail Page 67 Review ~fthe Driving Instruc/ors Act 1992 fingI R<:part 76 77 78 79 80 81 82 83 84 85 86 87 Ref 24 - curriculum should require minimum number of lessons, and include defensive driving component Ref 22,39 - Instructor licence applicants should be required to "demonstrate competency' rather than 'complete a course~ DI training should include practical training, eg observation of actual instruction in progress Ref 42 - Competency based approach should be required for more advanced skills, immediately prior to RTA licence test Ref 42 - The age and condition of vehicles used for instruction should be more tightly controtled ReI 42 - A system of Management Agreements with Driving Schools would be a beller approach than legislation and regulation Post-licence training industry is very different from pre-licence industry, works well un-regulated and would not benefit from r9llulation Insufficient time was allowed to respond, not all instructors have received the Issues Paper, suspects RTA want to escape its responsibility for the DI Act An option of CBT&A would enhance competition by providing an alternative means of assessment. Ref 7 - For most customers, their "need" is simply to pass the RTA test Ref 13 - Cross-border recognition should not be allowed to reduce standards in NSW Ref 68 - The requirement to display the instructor's licence In the vehicle is not practical if the Instructor is required to change vehicles regularlv Ref 39 The current instructor's training course is far too complex and costly Ref 3 Any Code of Practice should be developed in consultation between RTA and Dis, and all Dis must agree in writina to abide bv It A Quality Assurance process (ADTA procedures) should be mandated Ref 42, 79,84- Competency based assessment for all classes of licence would improve the quality of training. Dis should be re-assessed when their licences are renewed Ref 34 - 2-year phase-out period for withdrawal of Government dept exemptions Ref 6c - Consumers, not the industry, would benefit from more competition Ref 11 alb - should be limits placed on number of DI licences issued, to preserve standards Ref 48 - Act should specify maximum & minimum fees for driving instruction Ref 11 - Medical Check, & Entry Knowledge/Driving Tests are not necessary. RTA Exit Test should cover drivina AND teachina ability Ref 11 - Police check should not involve personal contact with applicant Ref 24 - Leamer Driver Competencies need to be developed Ref 37 - All approved courses should foilow National Competencies lor Dis Ref 16,29 - Motorcycles should have been granted a formal exemption from the requirement to fit dual controls, display Instructors Licenses etc Ref 38 - Draft procedures for advice re investigation of Dis should be referred to the Privacy Commissioner Ref 24 - Mfnlmum syllabus requirements should be set, but not a detailed syllabus Ref 43 - Due to ils intemal shortcomings, RTA's role in driving instruction should be regulatory only There is at present no regulation of professional KNOWLEDGE TEST training, which is provided by some driving schools Ref 27b - Mechanism for lodging a complaint needs to be clearly explained Ref 19,20,21 - The Act should prohibit inappropriate advertising that is inconsistent with the RTA's objectives Ref 26 - industry should do its own benchmarking Five-year period for retention of records is excessive Dis should be able to recommend to RTA that a learners licence should be canceiled, if the pupil is not physicaily or mentally capable of obtaininq a fuil ticence (NB - IS THIS A DRIVER TESTtNG ISSUE?) Ref 12 - RTA pennits some breaches of the Act/Regulation if legal advice indicates a less than 100% chance of aa 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 success Ref 22 - Post-licence industry needs a governing body (independent of RTA); this body could accredit new entrants and train its own instructors 113 Ref 35a1b - a DI should be required to have been a practising DI for 3 to 5 yrs before he/she can open a Driving School 114 Ref 28alblcld - Dis and driving schools should be made aware of the necessity to comply with the provisions of the 'Workplace Injury Management and Workers Compensation Act 1998' . Act should also refer to the 'duty of care' provisions of the OH&S Act. 115 RTA should be more forthcoming when Dis request reasonable information 116 Some type of 'Pre-Learner' (14-16 yrs) education should be included in part of the Dltraining curriculum 117 Ref 18119/20 - Act should not allow advertising which promotes aggressive driving altitudes 118 Ref 41 - RTA should advise industry of examples of inflexibility in the Act before freeing the Act up 119 Submission lists specific changes in wording for sections of the Act & Regulation Page 68 Review ~fthe Driving Instructors Act 1992 Final R'WQrt 120 May be need for more consumer education, as well as education for RTA staff on the role of Oepl of Fair Trading 121 Ref 43b - Professional Standards Council Is the most appropriate body to oversee the industry if co-regulation is the chosen path . 122 Tax advantages enjoyed by TAFE, OECA should be removed 123 Low-distance heavy vehicles (i.e those used only for instruction) should have lower rego charges 124 Remove the words "any lest the RTA requires" from the Act - adopt more appropriale wording 125 Ref12 - gUidelines required to describe "unsatisfactory driving record' 126 Rel13 - mention Trans-Tasman Mutual Recognition (NSW) Act in 01 Act 127 List all Sydney Registries which can conduct the driving & impart knowfedge tests 128 Act should allow exemptions and provisional/limited licences for those organisations which are currently exempt 129 Recognition of Prior Learning should be examined as an option 10. Conclusions Of the 43 issues discussed in the Issues Paper, 21 attracted a both reasonable number of responses and a general consensus of opinion. Conversely, only 5 of the issues attracted a strong divergence of opinion. The main themes emerging from the survey were that: i) the issues addressed by the Driving Instructor Act 1992 are still relevant; ii) there is strong overall support for retention of a legislative framework for the administration of the Driving Instructor industry (although the ADTA, the largest representative driving instruction industry group, expressed support for less regulation and a Professional Standards Council to oversee the industry); iii) the RTA should continue to administer the Act; iv) entry requirements are reasonable, to ensure ongoing professional operation of the industry; v) current penalties are appropriate; vi) the Tenure Rule should allow some flexibility, and be complemented by a driving experience requirement; vii) insurances (3rd party property, professional indemnity and public liability) should be mandated; viii)exemptions forBorne_Government departments should be withdrawn; ix) dual controls -should be mandatory for pre-licence training (though no clear consensus emerged on the role of dual controls in the post-licence training industry); x) despite the controls imposed by the Act and Regulation, the industry in NSW is already sufficiently competitive (and some felt it to be excessively competitive); xi) the Eligibility Advice system should be retained; and xii) the NSW regulatory system should be similar to those operating in other States, so long as NSW standards are not lowered to achieve this. Two issues seem to have been misunderstood by some respondents. Issue 18 related specifically to advertising by Driving Schools for the procurement of instructors, though a number of responses seemed to interpret the issue as relating to general commercial advertising by Driving Schools. Issue 39 referred to the desirability of driving instructors having had the experience of being formally trained to drive the type of vehicle on which they are giving instruction. Responses suggested that this issue was read as referring to a need for formal training in instructional methods, rather than formal training to drive. Page 69 • Review q,fthe Drivi1J~ 'nstructors Act 1992 Finnl RQ?Ort A substantial number of issues and options were raised by respondents, in addition to those presented in the Issues Paper. Some of these offer useful insights into specific areas of operation and ideas which may be worth pursuing. Page 70 Review ~fthe Drivinr Instructors Act 1992 Final Report Appendix 4 - Respondents to Issues Paper The respondents have been <::ategorised as being from either a: AUD - CON DI DIC DIO DS F GOV - PL PUB - RTA Submission No. Audit Group Association/ Consumer Groups Driving Instructor Driving Instructor Course Providers Driving Instructor Organisations Driving School Freight Industry Group Government Organisation Post-licence training Member of the Public Roads and Traffic Authority Name Type Position Organisation NRMA Insurance Council at Australia Limited Motorcycle Council at NSW Kuringai Police and Community Satety Committee Australian College at Road Salety (NSW Chapter) NRMA 29 32 50 63 72 75 9 11 13 14 16 Mr Mr Steven Peter Gray Eagle Hall Wilkinson CON CON Manager, Operations CON CON Chairman Mr Mark Mr Peter Mr Tony Mr Alan Snepp Finlay CON State Secretary CON Manager, Public Affairs DI DI DI - DI DI DI DI DI DI DI DI DI DI DIO DIO Secretary Secretary 0 - Mr Mr Mr Ms Mr J. Bob Peter Beverley Jim Koolhaas Allan McKinnon Pal Fraser Stanfield Nelson Rotik Nattrass Wiggins Banoa O'SUllivan Norman Polhill Polhill Porter Watson McKinnon Trainino Services Raymond Terrace Driver Trainino o _ _ 17 18 25 39 46 48 49 64 1 65 70 71 Mr Peter Mr Brian Mr Eric Mr Geolf Mr Stephen Gianc Kerry Mr Philip Mr Mr Chris Chris Trent Drivino School Mr Allan Mr Brian DIO Executive Director DIO President The Driving Instructor Group of the lIIawarra The Driving Instructor Group of the Illawarra Australian Driver Trainers Association Independent Driving Instructors Guild of NSW Page 71 • Review ~fthe Driving Instructors Act 1992 Final &port 10 24 33 34 37 44 45 51 55 56 59 62 19 2 3 4 5 6 7 20 21 23 26 27 30 31 40 53 60 61 66 68 69 73 74 76 Mr MI MI Mr Mr Mr Mr Mr Mr Ms A.A. Andy Robert Tonv Mark Victor Steven Bruce Stephen Angela Milbourne Andic Howarth Brown Simpson Bonet! Shiels Munro Shiels Clark DS DS DS DS DS DS DS DS OS DS DS DS F Manager Manaaer Proprietor Mr Mr Michael Eugene Laurent Brancourt Roy's Dlivino School MacQuarie Driving School Kev Link Driving Schoof Combined Driving School Hiohlands Driving Academy Bonet! Driving School Bathurst Driver Training Kerry Haulage Driver Trainino Bathurst Driver Training Clarence Valley Driving School Watson' Drivino School Laurent Driver Training Unique Training Technologies P/L Department of Local Government Minister for Roads and Ports Minister for Transport Department of Industrial Relations NSW Rural Fire Service Ambulance Service of NSW Minister for Transport and Infrastructure Development Land & Water Conservation ACT Vicroads Department of Fair Trading KU-Ring-Gai Municipal Council NSW Rural Fire Service NSW State Forests Workcover NSW Department of Transport, Tasmania Department of Fair Trading NSW NSW Police Service Mr Garry Payne Crawlev Cooper McDonald Anderson Storer Hawthorne Smith Smyth Jordan May de Vries Robeson Page Medd Grayson O'Farrell Taylor Eaan Evans GOV Director-General GOV Personal Assistant GOV GOV Director-General GOV Executive Director, Corporate Services GOV AlState Superintendent GOV Ministerial Officer GOV Director General GOV Minister for Urban Services GOV Chief Executive GOV Ministerial Officer GOV Plant Coordinator - DAT. GOV Manager, Training Services GOV Min ister for local Government GOV GM, Human Resources Division GOV General Manager GOV Acting Secretary Ms Julianne Mr Robin Mr Warwick Mr Mr Mr Mr Mr Trevor David Norm Bob Brendan Mr Colin Ms Louise Mr Fred - Mr Mr Mr Mr Mr Phil ET Jim John George Ms Linda Mr Michael Mr D.J. Ms Diana Laidlaw Mr Mr Bob Geoff Debus Craige GOV GOV Treasurer of NSW GOV Inspector, AlCommander, Traffic Services Branch GOV Minister for Transport SA Department of and Urban Planning Transport and Urban Planning NSW GOV Minister for Emergency Services Victoria GOV Minister for Roads and Ports Page 72 Revi,,", ~fthe Driving Irlslruelors A el1992 Final ReJlorl 78 P. R. Blake 79 80 Mr Jeff Mr John Shaw Aquilina GOV Executive Director Queensland Transport (Land Transport & Safety) GOV NSW Minister for Fair NSW Trading GOV NSW Minister for NSW Education and Tralnina DIC Coordinator, Commercial Driver Instruction AUD Director, Corruption Prevention and Education PL PL PL PL PL Director TAFE 41 Mr Andrew Elliot 67 Mr Peter Gifford ICAC 12 22 35 3B 58 8 15 42 47 26 Mr Peter Mr Vic Mr Bill Mr Ian Mr Jeff Mr Mr Mr Mr Stephen Russell Roger Keith Finlay Widman Hartnett Luff Kelly Gunn Scott Ibbotson Hall Carruthers Orth Manaaina Director Managing Director Proprietor Nationwide Defensive DrivinQ School Great Divide Tours Drive Smart Sydney West Driver Education Centre Precision Driver TraininQ PUB PUB PUB PUB Senior Fire Fiilhter RTA Manager, Traffic Unit RTA Driver Testing liaison Officer, Sydney Operations Directorate RTA GM, Driver & Vehicle Procedures RTA Corruption Prevention & Investigation Section RTA Manaaer IT Audit RTA RTA Driver Testing Coordinator, Country Operations Directorate RTA RTA Manager, LicensinQ Policy RTA RTA 36 Mr Jim Mr Craig 43 52a Ms Sylvia Ms Irene Stockwell Agosti RTA RTA 52b 54 57 Mr Ron Mr Jim Mr Grant Eslick Cummins Tonkin RTA RTA Grafton RTA 77 Mr Don Carseldine RTA Page 73 • Review ~{the Driving Instructors Act 1992 Final Rl1jIOrt , Appendix 5 - Direct Costs of Regulation COSTS TO GOVERNMENT RTA $'000 $'000 Routine Administration (1) 227 Legal & related costs (2) 30 Investigation of possible unlicensed driving schools (') 25 CosttoRTA Police Police investigation of applicants (4) Cost to Police Net Cost to Government COSTS TO INDUSTRY (5) Driver Instructors (') TOTAL COST OF REGULATIONS 282 84 366 1,186 Notes 1. Includes Salaries and on cost for 100% of 2 Clerks and 15% of 1 Administrative Officer (AO CIS), working on driving instructor-related tasks. Impact on licence processing and internal fraud detection is expected to be negligible. 2. Estimate based on approximately 20 Court actions per year @ $1,500 each. 3. Includes Salaries and on cost for 5% of the time of Project Analyst (AO CI4), Compliance Officer (AO Cl2), Unit Manager, Driver Testing Compliance (AO CIS). 4. Assumes 3 person-hours to undertake criminal record check and integrity check for 280 applicants per year@ $100 per hour. 5. Only compulsory costs are included; penalty costs are discretionary and thus not included. 6. Estimate based on assumption that about 200 new car driving instructor's licences, 80 new truck driving instructor's licences and 40 riding instructor's licences will be issued per year, and 3,000 existing instructors. No records are kept on the number of licence upgrades per year from car to truck. Cost to Instructors New Applicants - Car 0' New Applicants - Truck 0" New Applicants - Motorcycle ,"', Licence Renewal Fees 0-' Compulsory record keeping ,-, $566 $86 $38 $70 $6l! $!l2ll Page 74 • Review ~ft/!e Driving Instructors Act 1992 Final R'Wort • i. New Applicants" Car Knowledge Test Driving Test booking fee Medical Certificate (extended consultation) Certificate 111 in Road Transport Motor Vehicle Driving InstTuction course 4 Photographs for Dr Licence RT A Impart Knowledge Test booking fee Issue of 01 5 years Licence Installation of Dual Controls ,.) Total $0 $35 $36 $2000 $10 $35 $115 $600 $2,831 x 200 pa = $566k '~British experience indicates that the vast majority of driving instructors fit dual controls, even if they are not compulsory. It is assumed that all instTuctors will own a vehicle, with dual contTols fitted. ii. New Applicants - Truck Knowledge Test Driving Test booking fee Medical Certificate (extended consultation) Course fees (Avg.UTTI, HPOTS & TETA) 4 Photographs for Dr Licence RTA Impart Knowledge Test booking fee Issue of DI 5 years Licence Total $0 $35 $36 $850 $10 $35 $115 $1,081 x 80 pa = $86k iii. New Applicants - Motor Cycle Knowledge Test Driving Test booking fee Medical Certificate (extended consultation) Attend learner rider course Course fees (average) 4 Photographs for Dr Licence Issue of DI 5 years Licence Total $0 $35 $36 $52 $700 $10 $115 $948 x 40 pa = $38k iv. Annual cost equivalent of licence renewals based on 5-year licence fee of $117 for 3000 existing Driver Instructors. v. Most of the record keeping required under the Act would be kept as normal practice by most businesses. It is assumed that half of the 240,000 tests conducted per year are of applicants from driving schools, and that a driving instructor's time (NB not including car use costs) is valued at $I5/hr. Calculation: 120,000 tests @ 2 mins per unit @ 15 ph. Page 75 Review Qf the Drivin~ Instructors Act 1992 Final Report • Appendix 6 - Unauthorised Promotions (1) A person who is the holder of a licence must not advertise or state that the person acts or is willing to act as a driving instructor. A person who is not the holder of a licence authorising the person to act as a driving instructor in respect of motor vehicles of a particular class must not advertise or state that the person acts or is willing to act as a driving instructor in respect of vehicles of that class. . A person must not advertise or state that the person is willing to procure another person to act as a driving instructor, or as a driving instructor in respect of motor vehicles of a particular class, unless that other person is the holder of a licence authorising the person to act as a driving instructor or as a driving instructor in respect of the class concerned. A person who advertises, or makes a statement in writing, to the effect that the person acts or is willing to act as a driving instructor or as a driving instructor in respect of motor vehicles of a particular class must specify in the advertisement or statement: (a) the class of motor vehicles in respect of which the person acts or is willing to act as a driving instructor; and the number of the person's licence. (2) (3) (4) (b) (5) A person who advertises, or makes a statement in writing, to the effect that the person is wiling to procure another person to act as a driving instructor or as a driving instructor in respect of motor vehicles of a particular class must specify in the advertisement or statement: i • (a) the class of motor vehicles in respect of which the person is willing to procure another person to act as a driving instructor; and the name and place of business of the driving school that will procure the person. (b) Maximum penalty: 50 penalty units. Page 76