The Victorian Government should reject the imposition of fixed payment rates under the Owner Drivers and Forestry Contractors Act 2005 (Vic), the ATA submission to the review of the Act says.

Fixed rates increase costs and make owner drivers uncompetitive, and cost resources that could be used for more effective, evidence-based road safety measures.

The Commonwealth has already trialled fixed rates with the former payments order of the now-repealed Road Safety Remuneration Tribunal (RSRT).

Evidence from the failed RSRT shows that it would have increased costs for owner drivers by 20-30 per cent, and had an overall net cost of $2.3 billion in NPV terms over 15 years.

The ATA submission says the review should also recommend the inclusion of fuel tax credits in the indicative rates under the legislation

The rates and cost schedules issued under the Victorian legislation do not presently include information on fuel tax credits, but these are a vital part of the cost structure of many small trucking businesses.

The submission supports the existing indicative rates and guidance under the Victorian legislation, and calls for these to be strengthened by warning against using recipient created tax invoices (RCTIs) to artificially extend payment terms beyond 30 days.