House debates

Monday, 13 August 2018


Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017; Second Reading

6:49 pm

Photo of Stuart RobertStuart Robert (Fadden, Liberal Party) Share this | Hansard source

The Coastal Trading (Revitalising Australian Shipping) Act was introduced in 2012 as part of a suite reforms designed to provide the Australian shipping industry with a stable framework and indeed to encourage further investment. Unfortunately that has not been the case. Since implementation of the current framework, the decline in the number of Australian flagged vessels has unfortunately continued. The reality at the moment is that many ageing Australian registered vessels are not being replaced. The sector is ostensibly in decline. This bill was intended to balance the interests of the Australian shipping industry and users of shipping services by regulating Australian and foreign flagged ships through a licensing system. Unfortunately this simply hasn't happened. Australian businesses have faced such significant issues accessing coastal shipping that they've given up and frankly started sending their products by road or rail. Something has to change.

My particular interest in the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017, notwithstanding the important areas of coastal shipping, has to do with the framework regarding superyachts, however, because this bill also supports an increase in visits to Australia by superyachts. The current coastal trading framework makes it difficult, indeed almost impossible, for foreign flagged superyachts to offer charter services in Australia, which they would like to undertake to defray the cost of operations. This bill makes changes to the coastal trading act that better align the framework with the operating model for superyachts, allowing a single voyage application, and departure and return to the same port. These minor changes should make coming to Australia more attractive for superyachts and increase job opportunities.

Unfortunately most superyachts go to Fiji or New Zealand because of customs importation duty and taxes. A one-voyage minimum requirement will allow superyachts to operate under the licensing system and obtain exemption from the current Customs Act and not pay duty. The drama of course at present is that, when a superyacht wishes to visit, it literally has to be imported, and a cost of 10 per cent of its total cost is applied to it. Clearly, no yacht is going to come here and do that if that's the cost of them having to charter. Therefore, Australia misses out on an entire opportunity to enhance the business of sailing in this country.

Opening Australia to the superyacht market will bring important trade and tourism benefits not only to areas of the Gold Coast, where I live, but to rural and regional areas in Far North Queensland. Small businesses in Cairns, the Whitsundays and Port Douglas, amongst others, will benefit greatly from it. In 2016, Superyacht Australia and the Queensland Treasury commissioned an economic impact study of the superyacht sector for the Queensland Labor government. The Queensland Superyacht Strategy envisages that, by 2023, Queensland's share of the global superyacht industry will have increased by 10 per cent and Queensland will be recognised as a key superyacht hub in the Asia-Pacific region. This can only happen if we make these changes. This growth would create thousands and thousands of new high-skilled jobs and contribute hundreds of thousands of dollars to the state's economy. The Queensland state Labor government support this inclusion, and they have come out publicly to support it. It's easy to see why they support it. Looking at the economic benefit alone, the ability for yachts to charter simply by taking away this customs impost on them will add an additional 11,800 jobs and $1.64 billion by 2021. This is the Queensland state Labor government's modelling, not this government's. The Queensland state Labor government is calling on the opposition to join us in this. The huge events in the Pacific over the next three years will mean a large number of superyachts will be in our region. There is the Rugby World Cup in Japan in 2019, the Tokyo Olympics in 2020 and the America's Cup in Auckland in 2021.

There is no loss of GST for the government. This is despite the member for Sydney's ridiculous question before the winter break about us somehow not wanting superyachts to pay GST but GST being on tampons, like the two are aligned in any way, shape or form, when this couldn't be further from the truth. This is an issue of a 10 per cent impost through customs duty, nothing more, nothing less. The dear member for Sydney simply didn't understand what she was talking about. There's no loss of GST for the government. Indeed, current foreign superyachts come in under a control permit and don't pay any taxes at all. Permitting charter will actually see the government receive hundreds of thousands of dollars in GST. It's actually the opposite of what the member for Sydney had said. Removing this customs restriction allows yachts to come in to charter, and GST will be charged and earnt, which currently is not the case. It's a win-win all around, something the Queensland state Labor government seems to understand.

Australians dominate the industry, with over a quarter of the world's crew being Australians. By supporting superyacht charters in Australia, we'll be supporting over 14,000 crew, new-age, highly skilled and well-paid seafarers—and 25 per cent of them are Australians. Tradesmen and small businesses are the huge winners from superyachts spending time in Australia, with each vessel spending millions of dollars, or 10 to12 per cent of the vessel's value, annually in maintenance and provisions directly into—predominantly—small family-owned businesses or small businesses with union membership.

New Zealand, Fiji and Tahiti all have booming superyacht industries dominated by charter vessels. Australia needs to permit charter to allow a similar boom in our industry here, along with the thousands of skilled trade jobs and economic benefits that come with it. Regions that have a high level of charter activity receive substantial international marketing exposure, which then encourages further investment in locally based vessels, infrastructure and repair facilities.

We're talking about an industry valued at just below $2 billion to Australia. If we were to make this simple change, the annual maintenance value of what is possible is $575 million in operational expenses. Currently we're earning nothing; it could be $415 million. The number of Australian maritime jobs could be well over 11,000. The total annual wages and salaries that would derive from this would be $1.2 billion. These are Queensland state Labor government figures from its study with the superyacht industry. All we need to do is make some simple changes to stop this ridiculous customs duty impost on vessels. At present, we're getting nothing. We have the opportunity to envisage an industry that is alive and growing, an industry to support 14,000 young Australians on these boats, an industry that will see over 11,000 Australians employed in high-tech areas to support these vessels, and the government earning GST on the charter of these vessels.

It's a little bit of a no-brainer: the opportunity to build an industry we don't have. And what makes it so frustrating is that every other country in the region has moved away from these custom import tariffs. We are the sole bastion of stupidity in the Pacific, where we alone are saying, 'If you come here, your boat has to be imported, and if you wish to charter, you've got to pay 10 per cent of the value of your yacht before you can charter.' So when the Dragonfly came in—the fastest superyacht in the world—not only did it take a month of negotiation to get it in, but, when it came in, it couldn't charter—because if it had wanted to, it would have had to pay 10 per cent of its value. For an $80 million yacht, that's $8 million for the purpose of chartering: ridiculous! So it didn't charter. And if they can't charter to defray costs, they don't come here for repair and maintenance, so we lose out on an entire industry because of a nonsense of a customs regulation.

For the love of all that is sacred, can we all just look at this, and not with the eyes of envy as the member for Sydney did—so ridiculously, so stupendously—at question time before we came in here; not understanding what she was talking about, running off at the mouth, linking superyachts somehow as some enviable thing compared to tampons, which is the current great issue of GST. Can we look at this in the cold light of day: what is actually sensible? It's a customs impost. Remove it. Let's allow an industry to grow. Let's allow 11,000 high-tech workers to be employed. Let's allow GST to be collected when these yachts charter. Let's do something sensible on this. We've been talking about this for years, and we are nowhere. This is such a no-brainer, and it is supported publicly by the Labor state government in Queensland. Can we just get this particular thing done?


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