Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Hansard source

I rise to speak on one aspect of the Tax and Superannuation Laws Amendment (2014 Measures No. 5) Bill 2014, the second of the two bills that are currently before the House.

My colleague, the shadow treasurer, has already foreshadowed that the opposition will not support the government-proposed abolition of the seafarers tax offset. When clicking through the second reading speech of the Parliamentary Secretary to the Treasurer, I was taken by his claim that the abolition of the seafarers tax offset was part of the government's attempt to reduce costs of business. Given that this offset is actually a rebate for business, I am not sure that the parliamentary secretary has any idea what he is talking about. No wonder they do not have an Assistant Treasurer sitting opposite; it is because they do not have anyone—certainly not the Parliamentary Secretary to the Treasurer—who actually understands the tax system. This is a tax offset, designed to level the playing field between the Australian shipping industry and the foreign shipping industry. But this ignorance of the fine detail does not really surprise me.

The bill is the latest manifestation of this government's ideologically driven campaign to take on anything to do with the former government's shipping reform. The extraordinary thing is that this is a government which is out there talking about costs to the Australian shipping industry, but which is now proposing to gain savings by taking a rebate away from businesses here in Australia. There has been no consideration of the costs against the benefits of this proposition. Its lack of balanced consideration means that it opposes any of the reforms that were done as part of reforming and revitalising the Australian maritime sector during the last term of parliament—even though these changes were done completely in consultation with Australian industry: we established a group that included players in Australian industry, such as Rio Tinto and the big players in Australian shipping; and in relation to taxation, it was chaired by the Department of Treasury. And they came up with this proposal. In relation to an Australian who is working on an Australian-registered vessel: if that Australian is in the harbour at Southampton, they of course, currently, would have to pay Australian taxation rates. However, if that person is working in the pub at the port of Southampton, they of course would not be paying Australian taxation rates. So it is an extraordinary proposition that they have come up with. It was also recognised in their analysis that, for seafarers with our competitors for our Australian shipping, such as Singapore and other countries, they do not pay rates of their domestic taxation. So it was about having a level playing field for Australian shipping—as simple as that.

The former government introduced the offset in 2012, as part of a package designed to assist Australian shipping companies to compete against their international rivals; not through a protectionist measure, but through having a genuinely level playing field. The package included the creation the Australian International Shipping Register, which was designed to improve the competitiveness of Australian-operated ships. The seafarers tax offset provides a rebate to employers of Australian staff for part of the income tax withheld while those staff work on international voyages. In other words, it offers a tax break for companies which hire Australian seafarers to work on international voyages. It is payable for each employee a shipper hires, for at least 91 days in a year, on voyages to and from places outside of Australia—that is the important point here. The amount of tax offset is equivalent to 30 per cent of the seafarer's pay. The whole point of the rebate is to help strengthen the Australian shipping industry—a worthy aim, particularly given that Australia is an island continent, and that 99 per cent of our exports and imports are moved by sea.

According to the Australian Shipowners Association—which strongly supports the offset—there were only four Australian flagships involved in our international maritime trade. The association says this is equivalent to only 0.5 per cent of the total freight task. That is simply not good enough. Surely our country can do better, not just to help Australian shipping companies but also to create jobs for young Australians—jobs that would provide skills that could then be used in the maritime sector across the board, whether it be people who work in our ports, or people who work in the Navy. There is a real correlation between the maritime defence industry and the maritime sector.

Mr Ciobo interjecting—

The idiot opposite speaks about this policy because of—

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