I rise to make a contribution on behalf of the opposition to the Transport (Compliance and Miscellaneous) Amendment (On-the-Spot Penalty Fares) Bill 2013. On the advice of the clerks, under standing orders I wish to advise the house that I have amendments to the bill. I request that they be circulated and, as is the normal practice, I will deal with the bill and the amendments at the same time.

I will speak to the amendments in a moment. Firstly, allow me to outline the position of the opposition in relation to this particular bill. We do not oppose the bill. We think it contains some important initiatives, but we will seek to make what we think are pretty sensible amendments to it. I hope the government will, in good faith, examine the amendments after I have presented our argument for them. If the government is not in a position to do so when the debate is summarised, perhaps it might take the opportunity to consider the amendments between the houses.

The bill introduces on-the-spot penalty fares in the expectation of a number of benefits for the operators of the public transport system and public transport passengers more generally. As we know, fare evasion remains a very serious public policy challenge.

According to the minister’s second-reading speech, the current cost to the state in lost revenue is in the order of $60 million each year. Fare evasion was a particularly difficult issue for the previous government as it has proven to be for this government. The way contracts for the various transport operators are structured requires that certain revenue streams attend those contractual arrangements. There is a $60 million deficit in lost revenue from the public transport system. Last year 160 000 infringement notices were issued. Needless to say that has a very dramatic impact on the fare box. The on-the-spot penalty for fare evasion will be $75, and a $212 fine will remain in place for certain offences and situations.

I will now move to the opposition’s proposed amendments to the bill. One area of concern for us is the capacity of authorised officers to collect penalties by way of a cash transaction. Basically to avoid paying the $212 fine, a fare evader could pay a $75 on-the-spot fine.

That essentially provides an incentive for the fare evader to pay a fine without having to go through the lengthy process in place under the current regime. We do not oppose that; we think it is reasonable. However, we are concerned about the fact that authorised officers already have an onerous and difficult task in undertaking a policing role across the public transport system. Requiring those authorised officers to carry cash, places a further onerous and unnecessary burden on them and potentially exposes them to attack by somebody seeking to rob them of money.

The bill outlines an option for the electronic transfer of funds. We believe there are other, more sophisticated payment methods for the $75 on-the-spot fine than an exchange of cash. The use of cash will place authorised officers in a vulnerable situation. We do not think it is a contemporary way to deal with this issue. It places obligations on authorised officers to tally their accounts at the end of each day, which places a further burden on them.

We propose the amendments in the spirit of cooperation on bills such as this, where the government has a clear public policy intent which makes good sense. We do not just stand here and needlessly oppose bills. We simply suggest to the government that our amendments seek to take away an unnecessary burden on authorised officers. I have consulted with the Rail, Train & Bus Union, led by Trevor Dobbyn. He has clearly indicated the union’s concern over this issue. The union thinks our amendments are sensible. We hope the government takes them up.

The question of fare evasion is a very serious one. I draw the attention of the house to some contemporary research, for which I thank the parliamentary library. There is not a lot of contemporary research into fare evasion. I looked at research from the Australian Institute of Criminology, which has a very sound record of looking into these sorts of behaviours. The report I found was from 1991; there was nothing contemporary.

I recommend that people who are interested in this public policy challenge look at the Victorian Auditor-General’s report of August 2012 entitled Fare Evasion on Public Transport, which provides a comprehensive analysis of the dynamics around fare evasion. I have had an opportunity to talk to an academic who has done quite a lot of research in this area. It has not yet been published but it may well be in the next 12 months. The research looks at fare evasion and its frequency in Australia and a number of international cities. More interestingly it looks at what underpins fare evasion in the minds of those people who go about it in a systematic way.

Clearly there are a number of people who simply make a mistake. They do not have their myki card with them; it is a genuine mistake and a one-off. There is no doubt that among the 160 000 people who incurred infringements in the last financial year there is a group of people who simply made a genuine mistake for which they have paid a hefty price.

A $212 fine is a pretty significant price to pay. That is one group. But, as it has been explained to me, there is quite a hard-core group of people who genuinely go out with a clear and deliberate intent to fare evade, They do this not once when they have made a mistake, not twice; it is actually part of their modus operandi. This is the way they seek to live their lives. You might think this would be young students, but it is not. The early indications are that it is not just young students at all; it is people right across the spectrum who use the public transport system. The actual number of people is not clear, and I think further research is required.

To find successive governments in a circumstance where they have to address what is quite deliberate behaviour by people to avoid their obligation to pay their public transport fares seems to me an extraordinary social phenomenon. I was completely unaware of this prior to taking up these shadow public transport responsibilities on behalf of my colleague the member for Northcote.

I will pause to say, Acting Speaker, that I am in very regular contact with that colleague, comrade and friend, and she is in very good shape. She is travelling very well and completing her various treatments at the moment. I know she is very much looking forward to resuming her role, hopefully early in the new year. I know I am passing on the wishes of both sides of the house for her full, complete and speedy recovery. And she is certainly well on her way towards that, which is fantastic.

The public policy question here is: how should this government respond when we have a significant number of people who are wilfully going out there and testing their arm by fare evading on a systematic, regular — sometimes daily — basis? One of the potential ironies of the on-the-spot fine is this: if you are someone who thinks you are not going to be detected or that your chances of being detected are relatively low, you will chance your arm and you will continue to chance your arm until such time as you get caught.

There is some evidence to suggest that people make a conscious decision along these lines. They think, ‘Well, if there is a high chance of me getting caught only once a year or twice a year, compared to what it would cost me to travel on the system every day, then ultimately I am in front. If it costs me $400 a year to travel on the public transport system legally and instead I get two penalties a year, that is $424, so I am still in front’.

It is a bit confronting. It is a bit hard to get your head around if you live your life by a particular moral compass which says that if you get on the public transport system, you must pay for it.

The Acting Speaker was confirming my position! But there are people who do not, and it is a bit hard to get your head around.

Nonetheless, this is part of the dynamic. The potential unintended consequence of this on-the-spot fine regime may be that it sends a message to those people that it is no longer $212. They may think, ‘I might still get caught only twice, and my on-the-spot fine might be only $150’. I think we have to look at this very carefully to see whether there is an unintended outcome that might attach to this particular initiative, which I indicate that opposition members support.

We think this is a good initiative, but when you look at the criminality of this, in effect it is an offence against the public good. Perhaps it is not criminal, but it is an offence against the public good that people are consciously going out to commit. I think we need to look at this, and I would encourage the minister to continue to do further research to understand more clearly what the dynamics are that drive the systemic, deliberate fare evasion undertaken by many people on a daily basis.

The Auditor-General’s report entitled Fare Evasion on Public Transport is unsurprisingly a very comprehensive report. I recommend it to members who may want to delve into these issues in more depth. In the commentary by Mr Pearson in this report of August last year — which was prior to his departure from the role of Auditor-General — he indicated that:

Fare evasion has come full circle since 2005, declining to a low point in the first half of 2008 before losing these gains by mid-2011. Since then overall fare evasion fell to 11.9 per cent in the second half of 2011 and to 11.6 per cent in the first half of 2012.

The current fare evasion rates for trains and trams are high compared to the levels achieved in 2007 and 2008 and the relevant international benchmarks —

because the Auditor-General compared our circumstance to other cities with similar transport systems. He goes on to say:

The lowest fare evasion rates achieved for trains (2008), for trams (2007) and for buses (first half of 2009) represent reasonable targets to work towards.

If you look at the trends, and I invite members to have a look at the fare evasion rates in the report at section 2.4.1 on page 10, they are plotted from 2005 right up to 2012, and they certainly do bounce around.

For instance, figure 2B shows that overall metropolitan fare evasion fell by over 40 per cent to a low point of 7.8 per cent in the first half of 2008, increased steadily between mid-2008 and late 2009 and accelerated significantly to reach 13.5 per cent in the first half of 2011 following the start of new tram and train contracts and the introduction of myki. It fell back to 11.6 per cent in the first half of 2012.

At one level it is not surprising that there were issues around fare evasion with the introduction of myki. I go back to what I understand to be one of the motivations of people who fare evade. People made genuine mistakes because they did not understand how the myki system works — how to top up their myki, how to swipe on and how to swipe off. These are the usual teething problems that occur when new systems are introduced.

While the current government has sought to excoriate the previous government for the implementation of myki, I draw the attention of the house to the rollout of the Oyster card in London and the rollout of another program in Asia. The London experience was that it took about five years to bed the new system in, but it has been operating very successfully for a number of years now.

It is fair to say that myki is now well established in the psyche of Victorians. I use the tram network reasonably regularly; I used it a couple of days ago. People get it: you swipe on, you swipe off. It is pretty clear that the Victorian population has understood myki and that by and large the system is working extremely well. That being said, the Auditor-General’s report also shows that the rate of fare evasion on trams jumped significantly — a full 3 per cent — from a low point of 9.2 per cent in the first half of 2007 to 12.4 per cent in the second half of 2009 before increasing to 20 per cent in the first half of 2011. That is an enormous leap.

The latest fare evasion survey for May 2012 shows a reduction in fare evasion on trams to 13 per cent. It has dropped back significantly. As I said, the graph indicates that fare evasion rates move around quite significantly.

Part of that can be explained by the introduction of the myki system — people getting to understand how it works and making genuine mistakes in taking it up and transitioning from the previous system — but nonetheless it is also fair to say there is an element of people who systematically fare evade and genuinely think it is their right to do so. One of the motivations that has been put to me is that they do not want to contribute to private operators running the public transport system. They do not wish to make a contribution to what they would argue is a multinational corporation. This is complete nonsense, and we utterly repudiate it. As citizens of this state, we have the unambiguous obligation to pay our way. In that context, we completely repudiate these rather warped justifications.

We think the notion that somebody can get a free ride on the system — that in effect they can be immune from their social obligations as active members of the Victorian community — is simply not on. That is why we do not oppose the on-the-spot fine regime that the government seeks to put in place.

However, significant challenges remain for the government — and this was the case with the previous government as it is with this government. If you look at the data that has been provided by the Auditor-General, you will see that from July 2005 to July 2011 fare evasion averaged 10 per cent on trains, 14 per cent on trams and 8 per cent on buses. If you compare this with international data, you see that international fare evasion rates are significantly below these rates. Fare evasion in Sydney’s metropolitan rail system is 4 per cent, versus 10 per cent for Melbourne’s rail system. That is a significant difference. Fare evasion averaged 14 per cent in the Melbourne tram system; in the North American and European cities cited it was 9.9 per cent.

These are really significant differences. There is no comparable data for buses. The messages that successive governments have put out about people’s obligations are good — they are important reminders to people — but it is clear that there has to be a deterrent element in place.

We have provided some commentary in relation to some recent and very disturbing video footage of authorised officers — and I was pleased that the minister took this matter up immediately. It seemed to me that the authorised officers in the footage significantly overreacted to the fare evasion of a young student — I think he was an international student at the University of Melbourne. If members were to see the footage, they would agree that what happened to this young man following his admitted fare evasion was quite disturbing.

However, that would be the exception. The really troubling public policy issue is this hard-core group of people who wilfully continue to fare evade. We would like the government to monitor the on-the-spot fine regime for a period of time. If we had the honour of being returned to office at the end of 2014, we would take up this opportunity to try to understand this core group of people — they do not number in the tens but in the thousands — who wilfully fare evade. We need to try to better understand the mentality of these people and what we can do, as government in its broadest sense, to address a significant leakage of fare box revenue in the order of $60 million each year. This is not a small amount of money; it is a large amount of money.

I have put forward my amendments in a genuine spirit to encourage the government to consider this question. The key interest group in this matter is the Rail, Tram & Bus Union, which represents these authorised officers. The union completely supports the on-the-spot fine regime. The union thinks it is a good initiative. We are simply arguing that in a contemporary society where there are any number of ways in which funds can be transferred, the government should reconsider the question of putting authorised officers, who have a difficult job at the best of times, in the vulnerable position of having to carry cash and exchange cash with offenders. That is not a contemporary solution to this problem.

Finally, I made some comment earlier about the potential impact of more than halving the fine from $212 to $75.

My fear is that there may be an unintended outcome in relation to recalcitrant fare evaders, people who do not wish to subscribe to the general social mores of our society and believe they can get a free run on the public transport system. There is a bit of evidence to suggest that there is a conscious and deliberate element to this fare evasion.

We may find a circumstance where, bizarrely, rather than fare evading decreasing as a result of the new fine regime, the new regime acts as an incentive. A fare evader may estimate that they are only going to be caught once or twice a year and calculate that into their budgetary arrangements. Bizarre as that sounds, it is part of the mentality of some of these people. Rather than getting what would have been a $212 infringement penalty for an offence, they will get a $75 on-the-spot fine and ultimately a $150 penalty if they are fined for two offences.

In its research the government may need to consider whether there needs to be a ratcheting up of the penalty regime for people who are wilfully fare evading on a systematic basis time after time.

I put forward this submission in a spirit of goodwill. We hope the government responds positively. However, if our amendments are not successful, the opposition will not be opposing the bill. We ask sincerely that the government look at this question of putting authorised officers in a vulnerable position where they have to carry cash in circumstances during the day and night when they could easily become the target of people who seek to rob them. I know authorised officers travel in groups of two and three, but in 2013 we do not want our authorised officers to be out there exchanging cash.

In the spirit of trying to make this legislation better and more workable, I indicate to the house that my amendments have the strong support of the Rail, Tram & Bus Union. The union is deeply concerned about its officers being put into vulnerable circumstances and having to deal with all the complications of accounting for the funds every night, where the cash is to be stored and so forth. There are better and smarter ways of dealing with this issue.

We hope the government will look at this matter carefully in the 12 months after the regime is put in place to see what sorts of outcomes we get in relation to fare evasion going forward. It is a very serious public policy challenge and one that we have to address in a systemic way. We cannot afford to have the public transport system losing $60 million per year.