Paul Neville (Hinkler, National Party) Share this | Hansard source

by leave—I thank the previous speaker for his kind words. Although we do not always agree as a committee there is a very civil atmosphere there and we seek by different routes to come to conclusions on legislation that are for the betterment of the Australian people. I would like to make a few comments on the Standing Committee on Infrastructure and Communications advisory report into the five bills comprising this shipping package.

This is not the first time this committee has looked into coastal shipping in Australia. In 2008, I was part of an inquiry that looked into coastal shipping policy and regulation, chaired by the member for Ballarat, Catherine King. The coalition and the government are of one voice when we recognise the need to have a strong coastal shipping industry—that has never been in dispute. For an island nation such as Australia, our maritime industry will form a vital part of our national and international transport network. The importance of shipping to our interstate, intrastate and international trade is significant. I understand that shipping carries 99 per cent of international cargo by weight and 75 per cent by value. However, domestically—and this is quite a shocking figure—ships carry only around a quarter of freight.

It is no secret that our domestic freight task is going to increase dramatically over the next 20 years with the mining boom and various things. Some estimates indicate that it may treble along the eastern seaboard. Obviously shipping has to play a greater role in moving domestic freight if we are to take the pressure off our congested national highways and make the best of our rail system. At present, however, the Australian flagged shipping industry is in decline. It has been regularly noted that the number of Australian flagged vessels has dropped from 55 in 1995 to 22 today.

It is disappointing that the inquiry into such a broad and complicated area was dealt with in a truncated way. In saying that, that is not a criticism of the chair or the previous chair or the government as such but of the process. This is a very important area and perhaps it should have been subject to a more wide-ranging inquiry before we got down to legislation. These bills, if passed, will have a very serious impact on the coastal shipping industry in Australia. It is only right that the committee should have given adequate time to consider the serious implications and to hear from the industry stakeholders. I am a great believer you should always have your witnesses before you.

This is not the first time that the committee has had a limited opportunity to investigate bills. It is incredibly disappointing that we have such a constrained inquiry process under what is called the 'new paradigm', which was supposed to give House committees greater not lesser scope to investigate matters. As I said earlier, I support the shipping industry in Australia playing a greater role in interstate and intrastate trade. This has been the consistent position of the Liberal and National parties for quite some time. However, the coalition members of the House committee have recommended that the bills not be passed.

The first objective listed in clause 3(1) of the Coastal Trading (Revitalising Australian Shipping) Bill 2012 is that the regulatory framework promote a viable shipping industry that contributes to the broader Australian economy. We are not convinced that this objective will be realised by the packages in their current form. In fact, we are concerned that the opposite may result. The regulatory impact statement on the bills states at paragraph 156:

With a tighter cabotage policy, Australian shippers of domestic freight incur higher costs from lost opportunities to take advantage of cheap transport in passing foreign ships and having to pay for empty repositioning voyages by domestic ships. Part of the cost of empty voyages by foreign ships may be passed on in the form of higher freight rates to the Australian exporters and importers that employ the foreign ships to carry their international cargoes.

However, as noted by the Australian Logistics Council, no attempt is made in the regulatory impact statement to quantify this.

The Cement Industry Federation and other bulk commodity users have expressed their fear that the legislation will push up freight rates to such an extent that, when combined with other government policies such as the carbon tax, it will make it more attractive to import products such as cement and sugar from overseas. As I come from a sugar-growing area, you can understand my double concern.

Additionally, as noted by the minister in his second reading speech:

We are committed to aligning Australian productivity practices with the best in the world.

To do this, we will need a compact between industry and unions.

This compact must include changes to work practices, a review of safe manning levels and the use of riding gangs on coastal vessels.

The minister has said that this is an essential element to make our shipping industry viable. The industry compact is yet to be concluded, so we have rushed ahead with this inquiry before we know the nature of the compact. Without seeing the principles agreed to by the Maritime Union of Australia and the Australian shipping industry it is difficult to assess whether the minister's stated goal will be achieved. If the compact is such a critical part of the package then surely it should be fully developed, agreed to and made public before the bills are debated. Only then will we be able to assess the matter on its merits.

A number of shipping companies and organisations have also raised practical concerns with the package. After considering their comments I believe that the new scheme will unnecessarily add to the industry's regulatory burden and at the same time will not achieve its stated goals of revitalising our shipping industry. The temporary licence system established by the coastal trading bill seems to increase complexities and red tape for business and, because of this, it does not appear to be an improvement on the current permit system contained in the Navigation Act.

The requirement for a minimum of five voyages in a 12-month period before an application for a temporary licence can be submitted and the requirement to provide the detailed particulars of each such voyage will certainly add to industry's regulatory burden. While a variation is possible, again, you have to vary a minimum of five voyages. Why this arbitrary limit has been added to the other five initial voyages is unclear and will, obviously, increase the paperwork for the industry. These are only some of the technical issues that were raised in submissions to the committee.

In conclusion, I repeat that the Liberal and National parties are keen to support the Australian shipping industry. It must play an increasing role in our domestic freight task. However, we sincerely believe that this package is flawed to such an extent that it will not meet the objectives and, as such, we have recommended that the package not be passed.

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