Report

Investigation into the administration of the Fairness Fund for taxi and hire car licence holders

14 Jun 2018
Description

It is not surprising that the Ombudsman, with our mandate about fairness, should be asked to investigate a payment scheme called the ‘Fairness Fund’, one of several schemes set up by the state government as a result of reforms to the taxi and hire car industry.

We received sixty-four complaints about the Fairness Fund, about delays, letters without information, lack of communication, apparently incomprehensible decision-making leading to dire personal circumstances, and one overwhelming complaint: that the Fund was not fair.

Inevitably, many complaints were also concerned about the perceived unfairness of the taxi industry reforms themselves, as a result of which many licence holders lost a great deal of money. We explained that the deregulation of the taxi industry was not a matter for the Ombudsman – the policies of elected governments are matters for the ballot box. But we could, and did, look at the administration of the Fairness Fund, which had attracted so much ire.

Perhaps equally inevitably, the full picture was more complex than that presented by the many distressed complainants. Reforms to the taxi industry have been underway since 2013, and the Fairness Fund was one of a number of schemes intended to deliver financial assistance to those impacted. Overall, the government claims to have provided over half a billion dollars of financial assistance to licence holders.

The Fairness Fund was set up to provide ex gratia assistance for licence holders experiencing significant financial hardship. It is the nature of ex gratia payments that they are not compensation – they are an ‘act of grace’ – providing sums of money in situations when there is no legal obligation to do so, when it is believed to be morally right.

But the discretionary nature of such schemes makes it all the more important that they operate in a timely, flexible manner, providing clear advice and information to applicants. This did not happen. Much of this was the result of initial miscalculation.

The Fund initially expected to receive 150 applications; it ultimately received 1,247. This clearly had an impact on timelines, as did the fact that many applicants did not provide the comprehensive financial information requested, and the high potential for fraud.

But while the Fund was overwhelmed with applications and needed to ensure that public money would not be paid out inappropriately, hundreds of people were given the bureaucratic run-around. The call centre operated on such a limited script it is difficult to see why it was even set up. Letters were pro forma templates with little information. Confusion persisted about eligibility criteria.

We did not conclude that the Fund itself was flawed, although much better planning and communication, including managing expectations, would have avoided many of the complaints. We did not examine the fairness of the decisions on payment. These were made following review by external auditors according to detailed criteria that could not be published to mitigate against fraudulent claims, and it was reasonable for the Fund to ensure it had full and honest financial information before making a decision on payment.

But it should have anticipated at least some of the difficulties it encountered. Its poor communication, compounded by delay, was unreasonable and would have exacerbated the distress already felt by people who believed the government had taken away their livelihood or life savings.

In these circumstances, despite the worthy motive behind its establishment, calling it a Fairness Fund was asking for trouble.

The Fund itself has completed its work but there are important lessons to be learned for the handling of such schemes in future. Good intentions should not be undone – as they were in this case – by poor execution.

Publication Details
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CC BY-NC-SA
Published year only: 
2018

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