"All passengers fret at the double-gauge; all shippers of freight must of course fret at it; unnecessary expense, delay, and annoyance are imposed upon everybody concerned, and no-one is benefited."

These are Mark Twain's words when in the 1890s he was booted from his train at the state border to board another train because the two states had completely different rail gauges.

Were he alive today Twain would be horrified to learn that there is a possibility that Australia could make the same mistake, not with trains but with driverless vehicles.

Every day we hear more and more about how driverless cars are almost ready to be deployed on our roads.

While the technology may be nearly here, there is one thing potentially holding us back – Australia's transport laws. In fact we have identified 716 potential issues with our current laws that need to be considered carefully.

Time for an overhaul

In one sense there is nothing particularly surprising about this. Laws have to be fit for purpose, and it would have been ridiculous if the people who wrote our current laws included laws for driverless vehicles in the same way that we shouldn't bother writing laws for teleporting people now.

That said, it is now time to overhaul our transport laws. At the start of this year the National Transport Commission had a detailed look at our current laws and what we might have to do to ensure driverless vehicles get onto our roads as soon as possible.

In formal submissions our stakeholders told us that there is a lot of work to do. For example, how would law enforcement work for cars that don't have passengers, let alone drivers? If they drive a bit too quickly who gets the fine? Who is responsible for ensuring the brake lights are working?

The way our laws are interpreted requires drivers to be able to use a car's brake without having to take their hands off the wheel. How will this work in a future where the driver has nothing that remotely resembles human hands and the vehicle doesn't even have a steering wheel?

There are hundreds of these kinds of questions.

Don't let states go it alone

But sitting above them are even tougher ones. What kind of role will governments have in regulating transport in the future? Can driverless cars simply be regulated like other products using Australia's existing consumer and product liability laws?

In a fully driverless world we might not even need police on the side of the road, allowing them to focus more on stopping thefts and murders. But will every state and territory go down this path or choose other ones?

Illustration: John Spooner

Is a national approach required to make sure we get all of the benefits these new vehicles can provide? And what if companies like Google and Tesla need completely different laws to make their preferred technology work?

We may not need to find the answers to all of these questions right now, but we do need to start reforming the laws that would block the next generation of increasingly automated vehicles. And that is exactly what we have just started doing.

We are starting the process of writing national laws for the biggest shake-up of our transport system since cars replaced horses.

Time to speak up

But we will need help from all parties to help get this reform project right. It is important that all levels of government, vehicle manufacturers, technology developers and the insurance industry get their collective thinking caps on and help to shape our future laws.

A failure to act soon will see driverless car technology ready before our laws are – and that's bad news for local communities and our national economy, who stand to benefit greatly.

The good news is there aren't many countries ahead of Australia in this law reform process. The bad news is the risk of laying down the metaphorical 21st century rail gauges is real.

Just ask Chris Urmson, the director of Google's self-driving cars project, who in words similar to Twain's told the US Senate earlier this year: "If every state is left to go its own way without a unified approach, operating self-driving cars across state boundaries would be an unworkable situation and one that will significantly hinder safety innovation, interstate commerce, national competitiveness, and the eventual deployment of autonomous vehicles."

Australia has an opportunity to re-examine our current approach to regulation in road transport and ensure it is open to innovation, whilst still ensuring higher levels of safety.

We will need to get the timing right but done properly, this will allow us to gain the productivity and safety benefits of this exciting technology. Australia should take this opportunity.

Paul Retter is chief executive and commissioner of the National Transport Commission.