Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

The question now is that the amendment be agreed to.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Link to this | Hansard source

I speak in support of the amendment moved by the member for Grayndler and am strongly in opposition to this Shipping Legislation Amendment Bill 2015. Let us be very clear what this legislation seeks to do. It seeks to put about 10,000 hard-working highly skilled Australians out of work and replace them with foreign labour on foreign flagged vessels around the Australian coastline. That is succinctly what this bill is aimed at doing. That will be the effect of this bill, to put thousands of Australians—many of whom live in my community—out of work and allow so-called 'flag of convenience' vessels to operate in Australian waters, to employ foreign labour on those vessels, to avoid Australian workplace relations and safety laws, to avoid paying those crews fair and decent wages in accordance with Australian workplace agreements and awards, and to potentially undermine the environmental protections that Australia has built up around some of our most precious marine resources, particularly the Great Barrier Reef.

Australia is an island continent and we are heavily reliant on shipping for our trade. In fact, shipping represents 99 per cent of the carriage of our trade. We have one of the longest coastlines in the world and the fifth largest shipping task of any nation. Ten per cent of the world's cargo trade is carried by ship to or from Australia. Ten per cent of the world's international cargo shipping is done to or from Australia. That gives an idea of the magnitude of this industry and the importance of this industry to Australian employment and economic development. This bill seeks to undermine the sanctity of that particular industry and the importance of it to Australia's economic development.

Shipping is a massive industry and is one of tremendous importance to many Australians and to the Australian way of life. My own grandfather was a wharfie who worked at the Hungry Mile around Sydney. His job was related to that particular trade—the importance of shipping. When he was injured at work and was unable to work on the wharves anymore, his family suffered as a result. If it were not for the support of the Waterside Workers' Federation at the time, his family would indeed have struggled to get by. The importance of shipping, of this particular trade, to many Australian employees and families cannot be underscored enough. That is why I am vehemently opposed to what this government is seeking to do, which is to completely wipe out protections that have been put in place to ensure that we promote Australian jobs in this industry and to ensure that we are promoting Australian wages and conditions, safety and environmental laws at the expense of foreign-flagged vessels. I think is the height of un-Australian culture to ensure that foreign-flagged ships can come into the Australian shipping industry and begin to offer and operate services at a discounted rate, principally because they have got rid of protections on wages and conditions. It is against everything that Australia stands for when it comes to promoting jobs and a great industry that has served our nation well.

Labor recognised this when, in 2012, we introduced new laws designed to revitalise what was then a flagging shipping industry. We took this task seriously. Over many, many years the Labor Party consulted with experts in the field—with the shippers, with the businesses, with the logistics companies, with the stevedoring companies and, importantly, with seafarers. We looked at international best practice, and between 2010 and 2012 Anthony Albanese, the member for Grayndler, led an extensive consultation period. There had been a parliamentary inquiry in 2008. On the back of that we introduced measures that had the support of industry, that had the support of the operators of Australian-flagged ships on our shores. We introduced new measures to provide taxation incentives for Australian-flagged ships, encouraging the employment of Australian seafarers and ushering in workplace packages that focused on maritime skills development—on building a credible, sophisticated, highly skilled workforce that supported a very important trade in the Australian economy, that grew that trade in the Australian economy.

Since the day the Abbott-Turnbull government was sworn in, it has harboured a destructive attitude to some of those Labor reforms for an important industry and has sought to foster uncertainty regarding the potential of an Australian-flagged fleet. Since its time in opposition this Liberal government has been about ensuring that it undermined those policies that were put in place by Labor, seeking to create uncertainty within the industry. The Shipping Legislation Amendment Bill is this government's attempt to continue to undermine that industry. It will potentially result in the loss of 10,000 direct jobs that are currently undertaken by Australians and will see them go overseas—taken up by foreign labour. At the end of the day, that is the crux of the issue here. That is what will occur if this bill goes through this parliament.

This bill replaces preference for an Australian flag on ships working on the Australian coast with preference for a foreign flag—or at least indifference to flagging, with so-called flags-of-convenience ships being placed on the same level as Australian-flagged ships. When a ship has an Australian flag it is subject to Australian safety, workplace, environmental, taxation and industrial relations laws. It is subject to the laws of Australia, and in that respect those who operate those ships must operate in accordance with Australian laws and must employ Australians in accordance with those laws. As I said earlier, approximately 10,000 people are directly and indirectly employed in this industry. And let's face it: Australian shipping and seafaring workers do it tough. It is not an easy job being at sea for the majority of your working weeks in a particular year. It is tough on the individual, it is tough on their families and it is tough on the communities in which they live.

Just last month I visited Port Botany, in my local electorate, where hundreds of local workers were protesting the sacking of almost 100 port employees. We saw what occurred there. Those individuals were dismissed and were told by text message that they were being made redundant. When I went down to the port I saw workers who had lost their jobs, but I also saw the coach of the local footy and soccer teams, the husband or wife of the nurse who works at the local hospital, the husband or wife of the local teacher who works and educates kids in our community. They had been given a kick in the guts by this particular company—a foreign-based parent company that did not really understand the way Australian workplace and industrial laws work and thought it would be able to get away with dismissing people at night via text message. That is an insight into what is in store for those 10,000 seafaring-type workers who are employed in this important industry if this bill goes through.

It has been dubbed 'WorkChoices on water', and I could not think of a more appropriate way to describe what is going on here, what this government is attempting to do in attacking seafaring workers. Of the savings the government claims on the back of this bill, 88 per cent are due to the sacking of Australian workers and replacing them with foreign crews being paid Third World rates. That is what this government is attempting to do: make savings to the Australian budget on the back of sacking Australian workers. In my view, that is despicable—and that is why we are opposed to this bill.

This is a disastrously short-sighted approach from this government that fails to take into account the devastating impact it would have on those who will lose their jobs, as well as on their families and the communities in which they work. The impact also includes lost spending in local economies, lost revenue to the government through a reduction in income tax payments from those who lose their jobs, and a further cost to the budget due to the resultant higher welfare spending—not to mention the emotional and psychological damage that is invariably associated with the sudden loss of one's job.

This legislation also has an environmental impact. Australia has some of the most pristine and ecologically important marine reserves in the world—most notably the Great Barrier Reef. No-one knows those waters better than the seafarers and captains who operate in those waters, particularly Australian seafarers and captains, many of whom have grown up on the waters around those important ecological areas. There have been cases of foreign flagged vessels that have run into difficulties in Australian marine reserves and damaged some of Australia's precious marine ecosystems. There was the recent incident of Shen Neng1, which in 2010 became stranded on the Great Barrier Reef and did significant damage. There were also incidents with the MV Pacific Adventurerin 2009 off the Sunshine Coast and with Chinese Steel Developer in 2015 off Mackay. This underscores the importance of ensuring that we have Australian flagged crews and Australian flagged vessels operating in Australian waters—because they appreciate and understand. They have the local knowledge, particularly of shipping channels, necessary to ensure proper navigation through these protected waters. They would understand the importance of ensuring that people are not working when fatigued or under poor work standards. They would ensure that ships operated with appropriate controls when navigating through these protected waters.

So there is not only the personal aspect; there is not only the economic aspect; there is also an environmental aspect to what this government is seeking to do. On those grounds, Labor has a very simple position: we are opposed to this bill. If you seek to move freight on the road in this country, the driver is paid Australian wages and the driver works to Australian safety standards and road conditions. The same goes for moving freight by rail. The situation should be no different if you are operating in Australian waters. If you are operating a company in Australian waters and moving cargo to and from Australia, you should operate under Australian rules—you should pay your workers Australian wages, you should provide them with Australian conditions and you should abide by Australian environmental and safety laws.

Australia is heavily reliant on the shipping trade to keep our nation going, and we need to rely on Australians to do this work. This bill attacks those workers and seeks to allow operators in Australian waters to bring in foreign flagged vessels and to bring in workers under foreign wages and conditions—to undercut Australian wages and conditions. On that basis, this bill should be opposed. I urge the House to support the amendment of the member for Grayndler.

Eric Hutchinson (Lyons, Liberal Party) Share this | Link to this | Hansard source

This debate on the Shipping Legislation Amendment Bill 2015 has demonstrated that the case for reform is very clear. Some of the preceding speakers have clearly highlighted that need for reform. But all we get from the other side is more of the same, more of what we are seeing in a lot of policy areas at the moment—they are just running a scare campaign. The previous speaker was running a scare campaign based on protectionism. I personally have great faith in the capacity of our local shipping industry to innovate where needed and to compete.

Australia has the fourth largest freight task in the world, but shipping's share of that freight task has continued to fall since 2012. I will run through the Tasmanian experience, because I think what has happened on the little island shows in microcosm what has occurred on the big island. We do not have road or rail connections to many of those important hub ports; we have Bass Strait. Because of the changes that were made to legislation by the previous government in 2009 and again in 2012, we—immediately after the Coastal Shipping (Revitalising Australian Shipping) Act—lost our international shipping service. That had a simple knock-on effect. We lost that international shipping service that was calling in at Port Adelaide, Bell Bay and Brisbane and then heading off to Singapore from where freight could go pretty much anywhere in the world. Once that service was lost, all of that volume moved onto the Bass Strait. I am not a master of economics, but with the lack of competition we saw prices go up.

You only have to look at the submissions that have been made to the Senate inquiry. Any number of representations have been made. Probably the most notable—and I note the member for Bass is sitting here next to me—was about the impact on Bell Bay Aluminium in his electorate. In the 12 months subsequent to the loss of that international shipping service, their costs went up by 63 per cent. Equally I could speak about Norske Skog, a paper manufacturer in the south of my electorate. The loss of that shipping service was not the sole reason, but it was certainly one reason, as Rod Bender said to me on many occasions, why they lost paper contracts in Western Australia—because there was no reliable way to service that market for newsprint in WA.

I could equally talk about Cement Australia at Railton, also in my electorate, another one that does not, of course, have the option of moving cement by road or rail. They depend absolutely on shipping. The costs to their businesses indeed have increased enormously. But just as easily I could be talking about every shipper, every exporter and every farmer in my electorate. This has a knock-on effect.

I note the review that was commissioned by the MUA and conducted by, if I am not mistaken, the Australia Institute. That is the same Australia Institute that I think did a lot of employee knock-on impacts within the forestry industry. They completely overestimated the impacts of the competition that would come and the potential job losses in these reforms, and they completely underestimated the impact on all of those other industries.

I have some sympathy, and I am not quite sure the member for Bass will have the same sympathy that I do, because I will give the benefit of the doubt to those opposite and I will say that the intentions of that Coastal Trading (Revitalising Australian Shipping) Act 2012 were well intentioned, that they were not a sop to the MUA and that they were genuinely trying to bring about reform and revitalisation, as the title of the bill suggested. It might be unkind to suggest that it was a sop to the MUA, but, in the island state in an island nation, the impact was absolutely enormous. I do not understand the case that is being made by those opposite, and I dispute absolutely the references and the reference material that they use from the Australia Institute, because that is the same Australia Institute that condemned forestry in my state of Tasmania. Remember: it was the former government, along with a terrible state government that we endured for many years, that shut down forestry. They said there were only 2,000 jobs in forestry, but they ignored utterly the takeaway shops. They ignored the engineering shops in Launceston and the tyre businesses in Sorell—all of these businesses that depended very much on that sector. So it is with the logistics that are demanded in an island state to move goods efficiently and reliably. I do not understand why a job on the water is somehow more important than, for example, a job in the factory at Norske Skog, a job at a dairy manufacturing plant on the north-west coast or a job at Bell Bay Aluminium, as I am sure the member for Bass will allude to later on. I do not understand. For me, morally, I will stand up for those jobs and for every job. I give the benefit of the doubt to those opposite and to the MUA, whose bidding they were doing, that they were well intentioned, but they failed. They have utterly failed.

The evidence is there for all to see that the number of registered Australian ships has fallen and has continued to fall. It has not moved. In fact, one of the interesting things in the submission that the MUA made to the Senate committee was that it noted that there would be a $4.25 billion benefit in output and 9,000 additional jobs assuming that 100 additional ships were registered under this Australian International Shipping Register. What they do not tell you is that since that was introduced there have not been 10 and there have not been five; there have been zero vessels that have actually signed up to that International Shipping Register. So this is the situation that we have. As I say, I will stand up every day for jobs in my state, but when we start valuing one job on the water more than many more jobs, whether that be two, three or five times the number of jobs in businesses and industries around my state, I think the argument has failed.

I mentioned some of the other submissions to the Senate inquiry. Indeed, they are compelling reading, and it does not take very much comprehension to understand the impact, whether it be Bell Bay Aluminium, Cement Australia or Aluminium Industries Australia. I think one of the most impressive representations I read was from Primary Employers Tasmania, who, in their covering letter, provided me with a copy of the National Farmers' Federation submission on the Shipping Legislation Amendment Bill 2015. Indeed, that made very compelling reading.

As I say, I do have some sympathy for those opposite, but the truth is that their reforms have unequivocally failed. The need for change is absolute; change is very much needed. The Shipping Legislation Amendment Bill 2015 will provide an unambiguous objective of ensuring efficient and reliable coastal shipping services as part of the very important national transport system. A single coastal shipping permit for all ships—Australian and foreign flagged—will replace the existing tiered system, which, as I have highlighted, has failed, granting unrestricted access to coastal shipping. All contestability aspects of the current framework will be removed, and Australian and foreign ships will be treated equally, but I have great faith in the capacity of our shippers to compete. Foreign ships will not be imported by Customs when operating under a permit, including when dry-docking.

Finally, I want to touch on this. I have had a number of people write to me highlighting their concerns about the impact on local employees. As I mentioned, with the overestimation by Labor and the underestimation of the knock-on the impact on other sectors of the economy, there is little reason for the domestic shipping industry to be concerned. Consideration has been given within the construction of this legislation to make sure that Australian crews are protected with a framework of entitlements for seafarers on foreign vessels that are engaged or intend to engage in coastal shipping for more than 183 days. The amendments will apply to part B of the Seagoing Industry Award of 2010 for seafarers on vessels that engage predominantly in coastal shipping when the Fair Work Act 2009 applies to them.

In summary, this is much needed legislation. It will protect jobs and I have no doubt that Australian coastal shipping will continue to be able to compete. More importantly, it will protect jobs in many businesses all around Australia.

Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

I rise to oppose the Shipping Legislation Amendment Bill 2015. The member for Grayndler has very cogently pointed out the difficulties with this bill and the unfairness of this bill in terms of labour market provisions, and has also touched upon the issues of national security that have arisen time and time again when we look at the demise of our nation's own ability to sustain a shipping fleet. On that point, we note that American analysis of the Jones Act, which the member for Grayndler referred to comprehensively, very significantly found the importance of having a domestic fleet that could be diverted in times of national crisis to assist with tasks and referenced the role of the shipping industry in fuelling the efforts in the various Gulf wars.

I want to talk today about another issue that has not been touched on and it is one that I have had personal experience of: the ability for us here in Australia to sustain a skilled workforce within our ports. For almost eight years, I had responsibility for running WA's eight ports. Those ports, particularly if you look at the Pilbara ports, were some of the largest ports in the world in terms of tonnage shipped through them. What become evident from my experience, and indeed it was in all the reports that were made to me at that time—and I see from my research that it continues to be the case—is that there are critical skills in the operation of ports that require people with profound and extensive blue-water experience. The key tasks include those of harbour masters, port marine pilots, tug operators and marine engineers. All of those are absolutely critical skillsets for the conduct of sophisticated port operations.

The previous speaker was getting worked up because some of the reports had been prepared by certain entities. He seemed to particularly have some difficulty with the Australia Institute. I am looking at a report prepared by Victor Gekara from RMIT University for the Transport and Logistics Industry Skills Council. It is a report that has been backed up by a variety of government agencies and, indeed, port authorities around the country. It points out just how critical it is for us to have those skills and how increasingly difficult it is to find those skills within Australia. It goes directly to the question of the absence and decline of domiciled shipowners. The report says:

The absence of domiciled ship-owners engaging in cadet training has ... led to the depletion of the existing pool of mariners due to natural wastage as well as sectoral migration.

Basically, without any workforce replenishment at the bottom, we are simply not getting the people who come through as recruits, become junior officers and work their way up. If we continue to have this erosion of a domiciled Australian shipping industry, we are going to continue to lose the very critical skillsets that we need to have port operation. The previous speaker went on at length about wanting to protect the timber industry and the dairy industry and wanting to ensure that they have the capacity to export their product. I absolutely agree, but a critical part of that supply chain and trade facilitation is the efficient operation of ports. Ports simply cannot operate without deep skillsets in all of those areas. I have seen ports with a variety of levels of sophistication in their operations and I understand how critical it is to have deep skill sets and to have people with deep and profound logistical abilities. That can turn a port around.

If I could talk about the Port Hedland facility, which is now part of the combined Pilbara Ports, there was a time when BHP would question whether or not we could get much more than 190,000 tonnes out of that port. Last year that port got 264,000 tonnes of iron ore out on a single day. It is just extraordinary that we would get out a shipment of that size. Port Hedland is a heavily tidal port and these ships are very large, so it is a challenge as to how many ships you can bring out on a single tide. Earlier this year the Port Hedland facility of Pilbara Ports was able to ship out 1.5 million tonnes on eight Cape-class bulk carriers, within a single tidal window of 4.75 hours. You do not do that without profound logistical capacity and profound skill levels in your pilotage and in the port traffic operations. These are all skill sets that are acquired after very detailed and lengthy experience as blue-water mariners.

I ask members to look at where this whole issue of an Australian shipping industry fits within our ability to run ports that are efficient, that are able to cut costs and that are able to use their infrastructure in the most efficient way possible. So it is not just a question of looking at the industry itself. We need to look at the superstructure that is very much dependent on there being skill formation going on within the country.

I am very concerned that, as the member for Grayndler said, in a nation where we export 85 per cent of what we produce, Australian companies are responsible for exporting only around two per cent of the product that is produced on our shores. That is insufficient to either generate the jobs that we need to keep Australia going and, certainly, it is insufficient to generate the jobs we need to have efficient port operations. Our current account deficit obviously would be so much better if we were able to attract a much larger portion of shipping to Australia.

I think this legislation, in addition to all the unfairness in it that has been set out by previous speakers, is also a deeply irresponsible piece of legislation. It certainly shows that Australia is one of the few developed nations that has a large export industry yet does not work very hard to ensure, through legislative and fiscal means, that it sustains an efficient locally domiciled shipping industry and that it recognises the value of creating those jobs in themselves to allow Australians to have access to that work. It is equally important that as an exporting nation we recognise the need to have deep maritime skills so that we are able to operate efficient port operations. If we are to continue to provide meaningful, good jobs for Australians we need to make sure that we have an Australian based shipping industry.

So, I will be supporting my colleagues on this side of the House in refusing to support this bill. I am very mindful of the number of maritime workers I have met in recent times—a number of highly skilled seafarers in Western Australia—who are out of work. They have had exemplary work records and have been employed in the industry for the last 20 years. Now, particularly with the legislative diminution brought in with regard to the pipe-laying vessels offshore, jobs have been lost in the Australian resource sector as pipe laying and the servicing of rigs has been allowed to go offshore. Through the administrative dumbing down and non-enforcement of the rules in relation to our offshore resources facilities, many hundreds of Western Australian seafarers have lost their jobs. This legislation we are considering here today will increase that trend.

Therefore, I will not be supporting this legislation and I really urge the government to rethink this. I certainly hope that our friends on the cross benches in the Senate can see the folly of our losing yet another key skill set, consequently undermining our capacity to run the ports around our country, those ports that are so absolutely critical for trade facilitation.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

As we have heard from many speakers this evening, Australia is an island nation, unique in being the only country in the world to occupy its own continent. If you were to superimpose a map of Australia over a map of the continental United States, you would see that they are about the same size, but in terms of population we are only about one-fourteenth the size of the United States—about the same as the great state of Texas. My home state of Tasmania is an island state, so the issue of shipping is of vital importance to both Australia and Tasmania's future prosperity. Coastal shipping helps ensure that we optimise the benefits of globalisation and growing trade, particularly in the much heralded Asian century. As the key drivers of global economic prosperity transition from the north Atlantic to Asia, Australia, sitting there beautifully positioned astride the Indian and Pacific oceans, is well placed to take advantage.

My point is that readily available and efficient coastal shipping and international shipping will help ensure that quality Tasmanian produce and manufactured goods can serve growing Asian middle-class markets from India to China, which, in the next 15 years, are projected to grow from 500 million people to 1.7 billion people. That is why I am so pleased to make a contribution to the debate on the Shipping Legislation Amendment Bill 2015, which helps to untangle the mess left by the Labor-Greens government's legislative changes in 2012.

I can recall our announcement in April 2014 of an options paper on this issue, which elicited public comment from Bell Bay Aluminium, one of the biggest businesses in my electorate of Bass. The general manager, Mr Ray Mostogl, said in a media release on 8 April 2014 that, following the introduction of Labor's coastal trading act, Bell Bay Aluminium faced a 63 per cent increase in freight rates. He noted that Labor's licensing arrangements:

… have led to greatly reduced shipping options and competition in the market and an associated increase in the cost of shipping. Bell Bay Aluminium is pleased to see that the current government review is looking to address the competitiveness of services and shipping costs.

He went on to say, perhaps most importantly:

Freight has been identified as one of the key means to keep the Bell Bay Aluminium smelter viable.

What you hear from Mr Mostogl is that there was greatly reduced competition in the market, fewer shipping options and increased costs to his business in the immediate aftermath of Labor's 2012 coastal shipping laws. Perhaps of greatest concern is the link that he draws between these impacts and the very viability of Bell Bay Aluminium. That raises some pretty major red flags about jobs and other human consequences in northern Tasmania. There is no doubt that Labor's 2012 coastal shipping changes added greater pressure to jobs and livelihoods at Bell Bay. We are talking here about real people in the beautiful northern Tasmanian coastal community of George Town and surrounding areas. These are proud, hardworking people who felt the adverse effects of these ill-considered changes—yet another kick in the guts for a community that had experienced more than its fair share from 16 years of state Labor and Labor-Greens government in Hobart.

What makes this situation worse is that, in 2012, Canberra's Labor-Greens government only added to their problems with these ill-considered shipping laws. Tasmania's interests were sidelined, and Bell Bay Aluminium's interests were sidelined, by Labor-Greens governments led by Lara Giddings and Julia Gillard. It is important because we are not talking here about some small employer. I am hesitant to say it, but Bell Bay Aluminium is one of the few large employers we have left in northern Tasmania. It is a significant employer and a significant taxpayer. It supports the employment of more than 1,000 Tasmanians. It uses 25 per cent of Tasmania's total electricity and it contributes almost $700 million each year to Tasmania's gross state product.

So, when the General Manager of Bell Bay Aluminium said to the Productivity Commission that Labor's coastal shipping changes caused 'a 63 per cent increase in freight rates', why didn't Labor listen? When Mr Mostogl gave testimony that leaving ships idle at ports for a day before loading can commence, as demanded by the Maritime Union of Australia, costs foreign vessels about $10,000 a day and Australian ships more than $20,000 a day, why didn't Labor listen? When exporters said that freight rates from Tasmania to Queensland in the first year of Labor's coastal trading act almost doubled to $30 a tonne, while rates elsewhere in the Southern Hemisphere remained at about half that at $17 a tonne, why didn't Labor listen? When the fleet of major Australian registered ships—over 2,000 deadweight tonnes—halved from 30 vessels in 2006-07 to just 15 in 2013-14, and the number of ships on Australian transitional general licences dropped from 16 to just eight, why didn't Labor listen? When there was an over 60 per cent decline in the carrying capacity of the major Australian coastal trading fleet in the first two years of the former government's coastal trading act, why didn't Labor listen? When there were almost 1,000 fewer coastal voyages and almost two million fewer tonnes of freight moved by foreign vessels in the year after Labor's laws came in, why didn't Labor listen? When demurrage rates tripled from $15,000 to $45,000, why didn't Labor listen?

In the member for Perth's contribution, I heard her talk about the importance of maritime skills, knowledge and attitudes to the future of Australia's productivity, but how do any of those things that I have just described help people in the maritime industry keep their jobs? How does the halving of the coastal trading fleet lead to more jobs for people in the maritime industry? The undeniable fact is that not only did the cost for bulk shippers like Bell Bay Aluminium go up but their shipping options dramatically decreased, and the projections into the future are no better. From 2010 to 2030, under what Labor has in place, Australia's overall freight task is expected to grow by 80 per cent, but coastal shipping will only increase by 15 per cent. Think of what that means for a maritime nation like Australia and an island state like Tasmania. I want to hear those on the other side explain to me how halving of the fleet after Labor's laws came in is good for jobs in our maritime nation and my maritime state. How does a much-reduced share of the national freight task help jobs in the industry? How can those people who are studying at the Australian Maritime College in my home city of Launceston look to the future with those sorts of metrics and think about a bright, rosy maritime industry in the aftermath of Labor's 2012 laws? Of course, they cannot, and those opposite who continue to cheer for this legislative gift to the Maritime Union of Australia should listen to those actually reliant on coastal shipping, who see these ill-considered laws as yet more economic vandalism.

But, to add insult to injury, Labor's former coalition partners, the Greens, not only cheered for these laws but actually insulted the big employers and the big taxpayers. In comments to the Launceston Examiner, recently retired Greens leader Christine Milne denigrated Bell Bay Aluminium and three other major industrial companies in Tasmania as having 'exaggerated' because they 'want a handout'. What callous indifference to Tasmanian jobs shown by the Labor Party and former Greens leader Christine Milne, who appear happy to sacrifice Tasmanian jobs on the altar of union-Greens ideology!

So, for my home state of Tasmania, fixing this Labor mess is of vital importance, and the productivity Commission agrees, noting in its recent report on Tasmanian freight:

Given its reliance on sea transport, Tasmania is particularly affected by inefficiencies embedded in coastal shipping regulation. This regulation should be reviewed and reformed as a matter of priority.

That concern is echoed by the Tasmanian Minerals and Energy Council, who say in their submission that Tasmanian businesses 'are the most exposed in Australia to the regulatory framework for coastal shipping which is in urgent need of reform'. The Launceston Chamber of Commerce and Industry has said about Labor's reforms:

… Launceston and Northern Tasmania has suffered considerably from increased costs and timeliness for exports and imports of freight as a result of the enacting of the Coastal Shipping Legislation—

that Labor brought in.

So, as you can see, Labor's coastal shipping legislation is a cumbersome, protectionist regime that reduces our competitiveness. It has no friends in those businesses reliant on getting their goods to market in a timely and efficient way. It should have no friends in an island nation like Australia and an island state like Tasmania.

Perhaps of greatest concern is that Australia's coastal trading sector is at a crucial way point. By making coastal shipping more competitive, the government is supporting the growth and expansion of jobs in Tasmania's manufacturing, mining, horticultural and agricultural industries. So the purpose of this bill is to implement much-needed reforms to the complex regulatory framework for coastal shipping, easing the damage Labor has inflicted on Northern Tasmania and other coastal shipping centres around the country.

The bill's central feature is a much-simplified permit system to reduce costs to business and grow their access to competitive international shipping. The bill reaffirms the government's commitment to greater efficiency and competitiveness in Australia's shipping industry. Through the reforms in this bill, we help ensure greater access and greater choice to shipping services in a more open and competitive market, because, as the four free trade deals that Minister Andrew Robb has negotiated clearly demonstrate, we operate in a global context, so every bit of efficiency and productivity we can build into that global connectivity framework is vitally important.

Contrary to the claims of some members opposite, there is no change to the rigorous maritime safety and environmental laws that apply to ships operating in Australian waters. The bill also has built-in protections for Australian workers. Wages and conditions for all seafarers on foreign ships operating primarily in the Australian coastal trade are covered by domestic workplace relations arrangements.

For Tasmania, which is increasingly benefitting from tourism traffic, this bill also helps ensure greater access by cruise ship passengers to my home state and other coastal cities around the country. Restoring vibrancy to coastal shipping means a continuing and, I hope, growing role for people with the maritime skills, knowledge and experience to man tugs, supervise harbour traffic, and fill the myriad other jobs in this industry. That is why the bill contains measures to ensure that ships trading predominantly in Australia have Australians undertaking the key skilled positions on board.

The member for Lyons, who spoke before me, mentioned some of the estimates we have heard from the Maritime Union of Australia and the Australia Institute about job losses. That Australia Institute report—which was in fact commissioned by the MUA and repeated in their own submission—is a significant overestimate of the number of jobs that might be lost. I think the member for Lyons made a very good point when he said that we need to focus on the value of jobs in all industries, not just in the maritime industry, and in my home state of Tasmania, where horticulture is about to lose that 30 per cent tariff and become much more competitive in those growing Asian markets in our region, that we need to think about jobs in manufacturing, resources, cement, aluminium, fertiliser, petroleum, sugar, grain and many other products that could use coastal shipping services if they were more competitive. So I say to the member for Perth and the members opposite that those skills in the maritime domain are important, but so are the skills in those other industries.

In concluding, the case for coastal shipping reforms is clear. Labor's so-called reforms have failed coastal shipping, and unless we act now businesses relying on coastal shipping will be disadvantaged. Without changes to economic and regulatory settings, shipping will not be able to deliver the competitive, efficient services that Australian businesses need and that Tasmanian businesses need, and that has a knock-on negative effect. We need this change, and it must happen as soon as possible. I commend this bill to the House.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

It is astonishing to stand in this chamber and to listen to members opposite—particularly those from the island state of Tasmania—support this bill and its direct attack on Australian jobs and the Australian shipping industry. I am very happy to rise alongside my colleagues on this side of the House to speak in opposition to the Shipping Legislation Amendment Bill 2015 introduced by the Abbott-Turnbull government.

If passed, this bill will decimate the Australian shipping industry and, indeed, our maritime skill base. It is a textbook Abbott-Turnbull-government race-to-the-bottom approach to industry policy in Australia. We saw it with the renewable energy sector and in car manufacturing, and we see have seen it now in naval shipbuilding.

Rather than destroying the shipping industry as this bill proposes, we should be supporting it, investing in its growth and building on the reforms of the previous Labor government. As an island nation, Australia has a strong national interest in fostering our own coastal shipping industry. Australia is dependent on shipping for 99 per cent of its trade, and we have the fifth largest shipping task of any nation.

The industry holds particular significance for my electorate of Newcastle. The Port of Newcastle is the world's largest coal export port and is one of Australia's largest ports by throughput tonnage. It has a 215-year history of commercial shipping and is the economic and trading centre for Newcastle, the Hunter Valley and much of northern and north-western New South Wales. The Port of Newcastle is a critical supply-chain interface in the movement of some 40 different cargoes and manages more than 4,600 ship movements every year. In addition to its important role as a trading port, it has been a key water berth for our nation's shipbuilders for nearly a century, with Royal Australian Navy and commercial ships being built at yards in Newcastle, Carrington and Tomago.

From HMAS Strahan and Condamine, built in support of our World War II defence in the 1940s, to the Huon-class minehunters built in their entirety in Newcastle in the 1990s, to today, with more than a third of the three air warfare destroyers being built at Forgacs, Newcastle is home to a highly-skilled shipbuilding industry.

Perhaps nowhere else is this government's neglect—this complete lack of policy to grow Australian jobs and Australian industry—felt more keenly than in my electorate of Newcastle. With more than 600 job losses at Forgacs since this government was elected, you can appreciate the concerns that Newcastle has about this legislation.

The Port of Newcastle is no doubt one of my electorate's most important economic contributors, leading to the employment of thousands of Novocastrians. Regrettably, this highly profitable port was recently privatised by the New South Wales Liberal government, and Newcastle continues to battle with Sydney to secure our fair share of the spoils.

More broadly, Australia is the world's largest island nation, with one of the world's longest coastlines, and 10 per cent of world trade moves to and from Australia by sea. I doubt there would be a stronger case put for the retention of a viable shipping industry as part of our strategic national interests.

Shipping is important in terms of our economy, our environment and our national security. Economically, a local shipping industry helps maintain control over both freight reliability and price stability for shippers. Environmentally, it helps protect coastal icons such as the Great Barrier Reef, with skilled local mariners that know our coastlines and reefs. And, from a national security and defence perspective, it provides ready links to a Navy and a well-trained and available merchant fleet. It is most definitely in our national interest and the interest of my electorate of Newcastle to have a strong, viable, local shipping industry.

In 2012, Labor gave the shipping industry in Australia certainty, and it is vital that the reforms we introduced are maintained. These reforms need time to work, and they need a government committed to promoting Australia's national interest in shipping.

Comparable nations all strongly regulate their coastal shipping for national interest reasons. This includes the United States—the free-market home of the world—which, via the Jones Act, bans foreign ships and crews from its coastal trade. It requires that all goods that are transported by water between US ports be carried on US-flagged ships—ships that are constructed in the United States, owned by United States citizens and crewed by US citizens or permanent residents. Now that is a committed government that appreciates the multiple and complex needs for a viable local shipping industry.

Canada, Japan and the nations of the European Union all do similar things. Contrary to shipping industry laws in the US, Canada, Japan and the EU, the bill we are debating this evening removes any obligation or incentive to revitalise the Australian shipping industry and replaces Labor's explicit preference for an Australian flag on ships working the Australian coast with complete indifference—leaving so-called flag-of-convenience ships to be placed on the same level as the Australian-flagged ships.

When a ship has an Australian flag, it is subject to Australian standards of safety, environmental compliance, taxation and industrial relations, both here and on the open sea. And it employs Australian seafarers. Flags of convenience are, of course, not a new phenomenon, but are no less damaging now than they have been in the past. Former Minister for Transport and fellow Novocastrian Peter Morris outlined some of the dangers associated in ships operating under flags of convenience in his well-known and highly-regarded 'ships of shame' inquiry in 1992.

A recent ABC Four Corners program outlined some of the current-day dangers, with their expose into the events on-board the MV Sage Sagittarius that saw three lives lost in 2012. One of the deaths happened as the ship pulled into Newcastle. So these matters are very close to the heart of Novocastrians. We know the value of shipping regulations. The coastal trading laws put in place by Labor created a level playing field for Australian ships, rather than allowing undercutting on costs, including wages and workplace conditions.

The Abbott-Turnbull government, on the other hand, is more than happy to strip away the rights and conditions of Australian seafarers, proposing instead its very own version of WorkChoices on water. This was outlined in Budget Paper No. 2 this year, which exposed the government's true desire for 'better aligning employment conditions for ships based in Australia with international standards'. Since many shipping companies base their ships in Third World nations to minimise their pay levels and working conditions, this was an explicit statement that the government wants to impose massive reductions in pay and conditions on Australian seafarers.

We already see many ships flagged to countries where taxation and wages are much less and compliance less vigilant. Make no mistake: 88 per cent of the government's estimated 'savings' from this bill are due to sacking Australian workers and replacing them with 90 percent foreign crews. What the government's official modelling does not account for, however, is the cost of Australian jobs lost, of the lost local spending and local tax and the higher welfare spending resulting from this appalling package. This modelling ignores job losses and the impact on local economies affected, like communities in Tasmania, North Queensland and Newcastle, and is negligent.

As noted in the recent Senate inquiry, job losses will undoubtedly come if this bill is passed. Indeed, government officials are already advising shipping operators to sack their Australian staff and replace them with cheap, foreign labour to stay competitive. In sworn evidence to the Senate's Regional and Rural Affair Committee last month, cruise ship operator Bill Milby of North Star Cruises said that government plans to allow foreign-flagged vessels paying Third World wages to undercut Australian vessels on the Australian coasts would damage his business, which operates cruise vessels in the Kimberley region of Western Australia. Mr Milby said on 20 May and again on 16 June that he had discussions with Department of Infrastructure and Regional Development official Judith Zielke, who told him the best way to remain competitive under the changes was to register his vessel overseas, sack his Australian crew and hire foreign workers on lower wages.

This evidence is alarming and lays bare the real implications for Australian workers should this bill pass. Our shipping industry employs 10,000 Australian workers in direct and indirect jobs. It deserves a regulatory regime that allows it to operate on a level playing field. That is what happens in every other industry, including in the road, rail and air freight sectors. Labor's position is simple. If you seek to move freight by road in this nation, the truck driver is paid Australian-level wages and operates under Australian workplace health and safety rules. If you seek to move freight by rail, the train driver is paid by Australian standards and is required to operate in accordance with Australian law. The situation should be no different on the 'Blue Highway'. If you work in Australia, you should be paid in accordance with Australian conditions and legal requirements.

We on this side of the House have every right to be critical of the Liberal government's track record on Australian shipping. They have serious form in this regard. When Labor took office in 2007, the Australian shipping industry was in a state of decline. Under the Howard government, the number of Australian-flagged vessels working domestic trade routes plunged from 55 in 1996 to just 21 in 2007. Labor introduced new laws, designed to revitalise the Australian shipping industry. This followed the unanimous recommendations of a 2008 parliamentary inquiry and an extensive consultation program with all stakeholders between 2010 and 2012. The aim was to support the ability of the Australian shipping industry to compete within its own borders. The package included taxation incentives for flagging ships as Australian and to encourage employment of Australian seafarers, a new 'second register' with tax benefits to ships engaged predominately in the international trade, coastal shipping reform and a workplace package focusing on maritime skills development.

Since the day it was sworn in this government has promised to repeal these laws, undermining their effect and deterring investment in Australian-flagged shipping. This bill rips at the heart of Labor's package by removing a level playing field for Australian shipowners operating in their home waters in the coastal trade. It removes support for the industry and replaces it with nothing. This bill should be condemned. It attacks an industry that is vital to Australia's economic, environmental and national security interest. Having a strong shipping industry is undeniably in our national interest. Current laws, introduced by Labor, help strike the important balance between competition and the national interest. This bill, on the other hand, will decimate the Australian shipping industry. This government stands condemned for its lack of vision and policy to secure Australian jobs and an Australian shipping industry.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

Coastal shipping is an issue that I have raised on a number of occasions in this place. The dead weight of regulation in Australian coastal shipping is not only killing the very sector it was supposed to support; it is dragging other perfectly good and viable industries down the gurgler with it. Following the years of decline under Labor, the fleet of ships greater than 2,000 tonne deadweight have halved from 30 to 15. It was then, in 2012, that former minister Albanese stepped in to help. It is bit scary; it is that great phrase, 'I'm from the government and I'm here to help.' Well, it has made matters worse. In fact, since that time there has been a 63 per cent reduction in deadweight capacity. It was Bert Kelly, the then member for Wakefield, who blew the whistle on protectionism in Australia in the sixties and seventies. He was an individual whom Gough Whitlam later described by saying, 'No private member has ever had as much influence in changing a major policy of the major parties.' Simply put, Bert Kelly knew that protectionism not only was futile but actually tore down our most efficient industries. Nothing has changed in the 40 years since, and coastal shipping is one of the last fully protected industries in Australia.

Australia has rid itself of the last of the old barriers, and we have enjoyed huge jumps in our standard of living on a comparative basis with the rest of the world. Yes, we have challenges. Yes, unemployment is too high. Yes, we have to work hard to address inequalities. But there are more people employed in Australia now than ever before. Compared with the rest of the world, we enjoy an almost unparalleled standard of living because we have been prepared to take the tough decisions on market and labour reform. Clinging to the past and penalising our best industries is not the future, neither is it so with coastal shipping and its impact on successful industry.

I have raised the case of GRA's gypsum mine at Kevin a number of times in this place in connection with this inequality. Kevin is near Penong, the westernmost town in my electorate, which is 100 kilometres west of Ceduna. GRA is owned by CSR and Boral, and it once produced more than 90 per cent of the gypsum that produces Australia's plasterboard. It is now a little less than that. It is mined very cheaply and then railed about 80 kilometres to the coastal shipping port of Thevenard. More than 1½ million tonnes a year are mined. Gypsum is not rare and not expensive to mine. It is virtually worthless at the mine gate. Most of the cost is in freight, and it is a sad fact that it has now become cheaper to import gypsum from Thailand for the Brisbane market and increasingly for the Sydney market than it is to transport it the relatively short distance—less than a third of those distances—from Thevenard to those markets around Australia's coast.

The Kevin mine exists because GRA has a long-term shipping contract with a Canadian company, incidentally called CSL. These contracts do not last forever, and when they conclude it is difficult to see why the parent companies would elect to continue mining at Kevin when they can import product cheaper from Thailand. This is not because it is cheaper to mine, not because it is better quality and not because their Australian workforce is unproductive. It is simple because of transport costs and, in this case, sea freight—transport compulsorily supplied by totally uncompetitive Australian registered shipping. It is madness, and in the end neither the miners, those employed to service the short rail service to Thevenard or those loading the vessels will keep their jobs. And neither will those whom the Labor government legislated to protect: the members of the MUA. They too will lose their jobs because there will no freight to shift.

OneSteel and Arrium are significant players at Whyalla in my electorate. They mine in a region that is a bit bigger than just that and they are big users of coastal shipping—metallurgical coal from Queensland and New South Wales to Whyalla, dolomite from Ardrossan to Whyalla and New South Wales for steel making. One would think the iron ore would come to Wollongong from Whyalla. But, no, I understand it is a better result for the company to import the raw product from Brazil and to export Australian iron rather than use the local product. That is really telling us something. It is cheaper to use iron ore from Brazil than to use local, Australian iron ore. I cannot be sure if the cost of coastal shipping is the only reason for this, but if it costs $20 to shift the local product and $10 to import, it is likely that it is a big part of the reason. I also understand they import limestone from Japan. You would not think there was any great shortage of limestone in Australia.

Nyrstar are also significant users. Over half the concentrate is now sourced overseas. Australia is a major exporter of lead and zinc concentrates. Yet there is only one sum here that matters: the cost of the concentrate at the smelter door—material costs plus freight. Australian material costs are good. That is why we can make money exporting. But increasingly we must export our concentrate and import our feedstocks for smelting just because of the freight differentials. Others may argue that the current system does not completely eliminate the chance of international competition on coastal sea freight, which in itself would bring pressure to bear on the ridiculous workplace practices embedded in the awards covering Australian seamen, but it is a fig leaf of an argument.

In effect, it is all but a closed shop. For instance, if a company is unable to find Australian shipping to complete a task, they can ask an international supplier to apply for a temporary licence for a minimum of five voyages. What if the movement is a one-off? The company must apply for a minimum of five movements. Additionally, once the application is lodged, there is provision for the local supplier, even if they cannot supply a timely service, to disallow. Restrictions that include tolerance levels—that is, the nominated tonnages—and delays abound while certification alterations are sought. Constantly we speak about the need for flexibility and agility in our business sector. This is a complex, protective labyrinth of regulation. It is the very antithesis of efficiency.

Even when foreign specialist ships are brought into our waters they are required to recrew with Australian seamen. This, of course, means long-term, efficient international crews have their employment terminated while the vessel remains in Australian waters. Some will think this is a fair enough requirement. Why wouldn't we look after our Australian crews? However, a few months ago I was speaking to an Australian worker who was part of a specialist technical team working on a survey vessel. He said, 'I work my guts out. Do you know why?' And I said, 'No. Tell me.' He said, 'Because I am so embarrassed to say I'm Australian. They think all Australians work like these sea crews. I'm embarrassed. I work to prove that we're not all the same.' He used language that was a bit stronger than that, I must say. But it is a very telling story because he works alongside those international crews when the ship is not in Australian waters.

The issue is not the wages but the work the Australian crews do for the money under conditions bludgeoned out by a militant union. And who pays? The workers in our manufacturing industry, the building manufacturers, the agriculturalists, particularly the Tasmanian agriculturalists, and workers in our steel refining sector pay for it. They pay for it with their jobs. In fact, the BCA estimates there are 90,000—

Debate interrupted.