Market Entry Changes: Impact on Your Business Explained

DATE PUBLISHED: December 1, 2022

key takeaways

Market entry restrictions affect the operation of public passenger services in Queensland.
A discussion paper released by the Department of Transport and Main Roads in November 2022 proposes to amend the current laws imposing market entry restrictions.
Any changes to market entry restrictions requires careful consideration of the impact on your business, particularly for the development of new public passenger services into 'greenfield' areas.

Market entry restrictions for public passenger services in Queensland are currently under review by the Department of Transport and Main Roads (TMR).

These laws contained within the Transport Operations (Passenger Transport) Act 1994 (Qld) (TOPTA) work to limit competition for passenger transport by making it a requirement to obtain permission from TMR to operate certain kinds of public passenger services in particular areas and routes.

Changes to market entry restrictions could adversely affect your current passenger transport operations and future plans for growth in South East Queensland.

What are market entry restrictions?

There are currently 45 individual areas and routes in Queensland where market entry restrictions affect the operation of general route services by road.

These are known as declared areas and routes where a service contract between the operator and TMR is required to lawfully provide these kinds of public passenger services.

A person can be liable to pay a financial penalty up to $23,000 for operating such a service in a declared area or route without authority.

Market entry restrictions can be made for general route services meeting one or more of the following criteria:

cities and towns with a population of more than 7,500;
routes for distances not more than 40km between cities or towns each with a population of more than 7,500;
routes for distances not more than 40km between a village and a city or town if the village has a population of more than 500 and the city or town has a population of more than 7,500;
Airlie Beach, Cannonvale, Proserpine, Shute Harbour, Shute Haven and the routes between them;
routes between Proserpine and Proserpine Airport.

A "general route service" is a scheduled passenger service that can be used by the general public, a substantial part of the public, or a person who pays a subscription or a membership fee that is paid principally for the service.

There are some scheduled passenger services that are excluded from being considered a general route service, and these include services that are restricted to use for one specific purpose such as a shuttle bus to and from a sporting event.

What could be changing?

TMR has recently released a discussion paper detailing possible changes to TOPTA, including to market entry restrictions.

The paper outlines three options for changing market entry restrictions:

1
Updating legislative terminology for all declared service contract areas in Queensland;
2
Declaring the whole of South East Queensland as a single declared service contract area;
3
Updating the legislative criteria for when declared service contract areas can be introduced.

The proposed single declared area for South East Queensland would capture the local government areas of Brisbane, Ipswich, Lockyer Valley, Logan, Moreton Bay, Noosa, Redland, Scenic Rim, Somerset, Sunshine Coast, and Toowoomba, Curiously, the paper omits Gold Coast City Council which may be an oversight.

What are the risks to my business?

Any change to market entry restrictions requires careful consideration of the impact on your business. For example, there could be impacts for general route services currently operating outside of the declared areas and routes, or your future plans for expansion into new 'greenfield' areas.

Critically, the State of Queensland is not required under TOPTA to compensate any person as a consequence of a regulation restricting market entry being made, amended or repealed. Additionally, compensation is not payable if as a result of such a change:

anything previously permitted is prohibited or regulated;
anything previously prohibited is permitted or regulated; or
anything previously regulated is no longer regulated or regulated in a different way.

conclusion

If you require any advice regarding the effect of market entry restrictions on your public transport operations, please contact Nick Wilson on (07) 3014 6574 or via nwilson@mcw.com.au.