Jason Comben CMPA Chairperson

Extract from Jason Comben’s 2024 Annual Dinner Speech

My message to the Minister and her team is beware of perverse outcomes. At last year’s dinner I was speaking with the head of DEECA John Bradley when he used the phrase perverse outcomes. Here’s an example of a perverse outcome.

Speaking to one of my customers recently he explained about a change of policy that has lead to exactly that. The Victorianbitumen spray sealing industry, like ours, has certainly encountered their fair share of challenges. In response to some OH&S issues interstate DOT Vic determined that all spray seal contractors must use forward spread aggregate trucks on its contracts. The forward spreader is a purpose built vehicle involving a second cabin mounted to the rear of a conventional vehicle, increasing the size but reducing payload on the truck.

At around 3 times the cost of a standard tipper mounted with a spreader box the short comings of the configuration is that they tend to be slower reducing efficiency, less nimble due to their size creating problems in court bowls and narrow pavements and unlike a tipper body they have little application outside of spray sealing and so are limited to working 6-8 months of the year.

Needing multiple units this contractor had spent the best part of $4M on 5 vehicles as opposed to 5 standard tippers that cost him under $1.5M that would have year round utility.
This in response to a safety issue that had not occurred in this state to the best of his knowledge and logically was not likely to because to be in the way of a reversing spreading truck you would have to walk onto the boiling hot bitumen that had just been sprayed which are being monitored full time by truck spotters.

To add insult to injury immediately following the introduction of this requirement and after a few companies made the investment the sealing market has contracted significantly to about 25%. Not by 25% but to 25%.

The outcome is that at least 3 sealing companies have left the market entirely, those remaining are burdened with significantly higher costs in a drastically reduced and hyper competitive market where the emerging centralised duopoly are crushing local competition and the remaining small operators are left to do tiny local government contracts where forward spreaders aren’t suited.

To summarise competition has been stifled, the cost per square metre has increased yet the OH&S issues are not demonstrably reduced as the perceived risk has not been eliminated. The point of this longwinded anecdote is that the best of intentions can lead to perverse outcomes.

The CMPA maintains that the rehabilitation bond reviews are chock a block full of perverse outcomes and we will continue to advocate for the industry. The CMPA also sounds the alarm for potential future perverse outcomes with such significant changes as has been touted in the MRSDA reforms. We are one year on yet still have no idea what we are facing.

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