Don Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Energy and Resources) Share this | Link to this | Hansard source

I rise to support the motion tabling the report on Australia’s coastal shipping industry, Rebuilding Australia’s coastal shipping industry: inquiry into coastal shipping policy and regulation, recently completed by the House of Representatives Standing Committee on Infrastructure, Transport, Regional Development and Local Government. The report was commissioned by the Minister for Infrastructure, Transport, Regional Development and Local Government, the Hon. Anthony Albanese MP, on 12 March 2008 to inquire into and report on coastal shipping policy and regulation by October 2008. The committee has thoroughly investigated this matter in accordance with the relevant terms of reference, receiving 81 submissions from 66 interested parties. Public hearings were held in Brisbane, Canberra, Perth, Adelaide, Launceston, Melbourne and Sydney in which 78 witnesses appeared before the committee.

The report makes a series of recommendations in accordance with the terms of reference on ways to enhance the competitiveness and sustainability of the Australian coastal shipping sector. These recommendations include the further examination of an optional tonnage tax, the reimplementation of accelerated depreciation requirements, enhanced skills recognition and training coordination, and a number of recommendations to improve the competitiveness of vessels operating under licences under part IV of the Navigation Act, as opposed to vessels operating under single voyage or continuous voyage permits. Many of the stakeholders in the Australian shipping industry that have been consulted list these issues as being at the forefront of the challenges facing the Australian coastal shipping industry. As such, it is extremely important that they are addressed to enhance the competitiveness of the Australian shipping industry and to reinvigorate and revive the industry.

As a new member of the Standing Committee on Infrastructure, Transport, Regional Development and Local Government, I look forward to a continuing dialogue with a number of stakeholders in this area to develop many of these issues further. I commend the committee members on their thorough approach in conducting this report, particularly the committee chair, Catherine King MP, and the deputy chair, Paul Neville. I thank the House.

Jon Sullivan (Longman, Australian Labor Party) Share this | Link to this | Hansard source

I support the tabling motion for this report and welcome the member for Canning. As a member of the committee, he will find that it is a committee that works as parliamentary committees are expected to work: towards a common goal and without concern for the political allegiances of its members. I acknowledge the very good work of our chairperson, Catherine King, and our deputy chairperson, Paul Neville, and all the other parliamentary colleagues on the committee. I also acknowledge the great amount of work put into this inquiry by the inquiry secretary, Michael Crawford, and the secretariat and staff who have been engaged in the inquiry throughout. They include the committee secretary, Janet Holmes, who has moved on to other pastures and has been succeeded by Richard Selth; our researcher, Katie Ellis; and our administration officer, Emma Martin, who has also moved on and has been succeeded by Jazmine Rakic. I acknowledge the Hansard staff who travelled with the committee, through the extensive itinerary referred to by the member for Canning, to record evidence that was taken.

In opening my comments about the report, let me say that it was quite wonderful to see both sides of the shipping industry argument, if we can characterise it as that. Both the union and the shipowners have had a very positive response to the report that has been brought down by the committee. As the deputy chairman would appreciate, serving two masters is never easy, but being able to do that means to me that the committee has done very good work. The Maritime Union of Australia, for example, has indicated that if these recommendations are followed then the shipping industry ‘is set for massive revitalisation’. Similarly, the Australian Shipowners Association has said that if these recommendations are followed it will ‘improve, streamline and invigorate the coastal sector of the Australian shipping industry’.

We cannot separate coastal shipping from international shipping in any real context, particularly with the way things are going now. The comments of the ASA also go to the fact that, if implemented, these committee recommendations will have an outstanding effect on the Australian shipping industry in its entirety. There is information in the report about how the number of Australian-flagged vessels has been in decline in recent years. This is something that has been a concern for all of us in government in Australia. Simply put, the purpose of the exercise that we were asked to undertake was to look at ways in which we could increase the coasting trade’s share of the Australian domestic freight market. Typically this would involve cargoes that are not time-critical—cargoes that do not need to be carried by air or, in many cases, by road or, to a lesser extent, by rail. We have seen that there are a number of advantages in each of the forms of transport that are operating in the country today; similarly, there are a number of disadvantages.

Sea transport has a great environmental advantage in what we now commonly consider to be a carbon constrained future. It has advantages in the cost of infrastructure required to support it: the ocean surface does not need resealing every so often or new sections of it to be laid. If we are able to move some of our freight onto the sea lanes, it will relieve significant congestion that currently exists on our highway and rail networks. Road transport also has advantages. In particular, it has transit time advantages over sea freight. It has a significant convenience advantage. Somebody shipping by road transport can back their truck up to the loading dock at a particular business in Brisbane, for example, fill the truck up, drive it to a loading dock in Sydney and unload. It has convenience and handling advantages in that you load and unload only once. In the current circumstance, road transport has schedule certainty that sea transport is not able to provide. Rail transport has some advantages over road transport, particularly environmental advantages. Rail transport relocates congestion from the road to the rail. That is an advantage if you happen to be a road user—which most of us in Australia are.

We have three—if we leave out air transport for the really critical stuff—forms of transport. Each has some advantages and disadvantages. Significantly, our report has been able to create a set of recommendations which, if they are followed, will create a situation where sea transport, which has carbon, infrastructure, cost and congestion advantages, will get a greater share of the market. Currently sea transport accounts for about 24 per cent of the domestic freight in Australia. Significant proportions of that are carried in bulk cargo supply chain operations. A good example is the transporting of bauxite from the mine site at Weipa to the Boyne Island smelter. We carry most of the heavy lift cargo by ocean. These are the sorts of items that would be untenable on either railway line or road. But there are very few scheduled, regular shipping movements by Australian-flagged vessels on the coast. Most of the containerised and general cargo carried on the coast is carried on permit vessels from foreign-flagged nations. The results of this are that services are difficult to market to shippers and that shipping cannot really, because of the lack of fixed scheduling, get out to compete for cargoes in the marketplace. The permit system simply does not allow that to happen.

We on the committee were, of course, very mindful of the fact that we needed to protect employment for Australian seafarers who are protected by cabotage arrangements but not nearly as thoroughly as those arrangements in place in the United States of America. We were mindful of the fact that operating costs are substantially higher with Australian crews and—although the MUA is living in the real world in relation to matters like smaller crews, and in the dealings that they have undertaken with Canada Shipping Lines or CSL for crewing the Australian-flagged ships in its fleet—it is still cheaper to crew a ship with non-Australian ratings, although permit ships are required to pay Australian equivalent wages while they are operating on the coast in the coasting trade for that portion of their voyage. Most of our coasting trade occurs on interstate legs of foreign ships’ voyages.

We have taken a number of approaches. In the couple of minutes I have left to me, I will say that I think the support we have been given by both the union and the shipowners has been wonderful. The shipowners, of course, are quite impressed by the fact that they will have the option of opting for a tonnage tax in place of the tax regime that exists now—an option that has been used overseas quite successfully to revitalise registers—and they are happy with the return of the accelerated depreciation facility which was discontinued in 1996, which will make our shipping fleet into a much younger fleet. We have been deteriorating that way for a while.

We felt that port infrastructure needed to be given priority in the development of national infrastructure. We also thought that we need to establish a national maritime training authority—and I know that my colleague, the member for Forde, will have a lot to say about that; he is particularly keen on that area. That will give rise to employment opportunities for Australians who desire a seafaring career.

We have also recommended that this and, I guess, future reform of the shipping industry be overseen by a reform implementation group to be established within a re-established Australian Maritime Group. These, we believe, will stand the country and our shipping industry in good stead into the future, and I look forward to seeing the government’s response to this report and its implementation.

Melissa Parke (Fremantle, Australian Labor Party) Share this | Link to this | Hansard source

I welcome the tabling of the report of the inquiry by the House Standing Committee on Infrastructure, Transport, Regional Development and Local Government into coastal shipping policy and regulation. The report’s title, Rebuilding Australia’s coastal shipping industry, is in itself a good summary of my position on the subject, for I believe the industry needs rebuilding. I am strongly of the view that it is in Australia’s interests that a national policy to increase the coastal shipping share of the domestic freight task—and, in particular, to support and increase the role of Australian-flagged coastal shipping—be developed and implemented as soon as practicable.

The inquiry report cites clear evidence that sea freight has lost ground against other modes of domestic freight transport over the last 10 years and that, while the total demand for coastal shipping services has grown, this has been accommodated by cargo shipped under permit, which grew 56.4 per cent between the years 2005-06 and 2006-07, rather than by Australian-flagged vessels. There is no doubt that Australia’s coastal shipping industry has fallen away over the last decade and that this has been to our detriment in a number of significant areas. Chief among these are the deterioration of employment and training opportunities; the increased pressure upon other modes of domestic freight and the resulting social, economic and environmental costs of this pressure; and the negative transport security ramifications of a coastal shipping mix in which the Australian-flagged share of the task is both too small and declining.

I was pleased to make a submission to the inquiry and it was only appropriate that I should do so, as a representative of Fremantle, an electorate which includes the historic and economically vital Fremantle Port. As I noted in my submission, Western Australia is our leading export state when it comes to sea freight, with one-third of national exports by value and one-half by volume. Fremantle Port is the largest and busiest general cargo port in Western Australia. It handles 83 per cent of all seaborne imports and 25 per cent of all seaborne exports by value. The total value of trade through Fremantle Port in the financial year 2006-07 was $24 billion.

In remote parts of Western Australia, coastal shipping is not just the preferred mode of transport; it is the only effective mode of transport. It is for this reason that Seacorp, a coastal shipping line that operates through Fremantle Port, holds a long-term state government contract to provide coastal shipping services to link a range of smaller north-west ports with both Fremantle and Darwin. This shipping service runs on a regular 17-day cycle, sailing from Fremantle via Dampier, Port Hedland, Broome and Wyndham on its way to Darwin. It carries 14 per cent of the total amount of freight by road and sea within the Perth-Darwin corridor. Its newest vessel, the MV Kimberley Rose, has delivered a further 20 per cent cargo capacity and, in addition, contributes to both the national Coastwatch program and the Weather Watch program. The Kimberley Rose is utilised for pilot training, and it carries three maritime trainees on each voyage, one from each of the maritime unions.

The benefits of a strengthened and rejuvenated coastal shipping industry are numerous, but I want to mention a few of them. There are significant environmental benefits to shifting freight from road to sea transport. While shipping meets 24 per cent of Australia’s total freight task, it contributes only four per cent of freight emissions. The inquiry report notes that freight transport accounts for six per cent of the total of Australia’s carbon emissions. This is not insignificant. I support the report’s recommendation that the CSIRO study and report on ship emissions. I share the report’s concern about the effect that an emissions trading scheme would have on the competitive position of Australian-flagged vessels versus permit vessels. An emissions trading scheme is likely to improve the cost-competitive position of shipping vis-a-vis other modes of transport. I would hope that any negative impact on the competitive position of Australian-flagged vessels per se would be ameliorated under the proposed Carbon Pollution Reduction Scheme.

As the member for Fremantle, I acknowledge that the movement of freight through the port of Fremantle, particularly container freight, is in turn sustained by road transport. Truck movements in and out of Fremantle have been an understandable cause of community concern for some time. In this context, I am pleased to say that the Gallop-Carpenter state government made significant progress in moving freight out of Fremantle Port by rail instead of by road. In May this year, the Western Australian Minister for Planning and Infrastructure announced a 1,200 per cent increase in the number of containers moving through Fremantle Port by rail since 2002. This increased transport of containers by rail would otherwise have required an estimated 65,000 annual truck movements through the port. The rail container freight share has now risen to 14.5 per cent of total container freight through Fremantle. I hope this effort to move container freight from road to rail will continue to be supported by the Barnett government.

I also welcome the provision in the 2008-09 budget of $1.3 million for investigation and implementation of network intelligence infrastructure and freight traveller information on Leach Highway between Kewdale and Fremantle. This project will improve the efficiency of freight movements by providing freight vehicles with real-time information to allow them to meet allocated time slots at port.

Another positive outcome of a rejuvenated coastal shipping industry would be the national and transport security benefits inherent in a greater role for Australian-flagged vessels. Many other countries, including the United States, recognise these benefits and set their policy accordingly. Few of them have the coastal security challenge that confronts Australia. As I noted in my submission to the inquiry, the United States has traditionally supported and protected its domestic shipping industry to a much greater degree than Australia. Section 27 of the US Merchant Marine Act 1920, known more commonly as the ‘Jones act’, requires that all water transportation of goods between US ports be on US built, owned, crewed and operated ships. ‘Jones act’ ships constitute a large and service-ready merchant marine and they maintain a pool of well-trained maritime personnel. While this is a degree of regulation that would not be contemplated in Australia—it would not be appropriate for a range of reasons—it remains the case that a return to the intention, spirit and objectives of the Navigation Act, especially where it concerns the granting of permits and special licences, would encourage the rejuvenation of coastal shipping by Australian-flagged vessels. A return to the intended function of cabotage in Australia, with the addition of the appropriate administrative structures, could deliver the dual benefits of supporting coastal shipping in general while also increasing Australia’s latent defence and peacekeeping capabilities. Any increase in coastal shipping by Australian-flagged vessels would certainly provide an increase in the degree of transport security.

Domestic freight in Australia is projected to double in the next 10 to 15 years. It is important that this growing freight task be shared appropriately between the various modes of domestic transport, and in my view this will require a significant growth in the share held by coastal shipping. I endorse the purpose and conduct of the inquiry by the House of Representatives Standing Committee on Infrastructure, Transport, Regional Development and Local Government, and I support the report’s recommendations, particularly the recommendations that go to the review of the Navigation Act and to the creation of the reform implementation group.

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak on the report Rebuilding Australia’s coastal shipping industry. This follows the inquiry into coastal shipping policy and regulation. The House of Representatives Standing Committee on Infrastructure, Transport, Regional Development and Local Government was given the task of inquiring into coastal shipping policy and regulation in Australia in order to make recommendations on ways to enhance the competitiveness and sustainability of this sector. We are an island nation, and our economy relies on the shipping trade. Almost all of our export trade is moved by ship, and shipping plays a significant role in fulfilling Australia’s domestic freight task, carrying 24 per cent of the total freight task in 2004-05. While this is a significant contribution from the shipping industry to the national freight network, there is still room for improvement and growth in Australia’s coastal shipping industry. This report is specifically about our coastal shipping as a domestic effort, quite apart from our international effort, which in itself is very, very significant.

It had always puzzled me that, although we are an island nation surrounded by extraordinary coastline, our coastal shipping industry had been slowly sinking. The Australian coastal shipping industry has been in decline for some time. In 2005-06, the Australian registered trading fleet consisted of 46 vessels. In 1996, some 12 years ago, it stood at 75. There has been an increase of foreign vessels employed to carry goods around the Australian coast, at the cost of the Australian coastal shipping fleet. For all sorts of reasons, that permit system has been allowed to exist, and this report was very much about getting an inside view of why these arrangements were working, if they were working, and whether it was beneficial to our country to support such a scheme.

During the inquiry, as a member of the standing committee, I attended many of the hearings. The feeling and sentiment from many in the Australian maritime industry was that Australia would benefit from a revived and expanded coastal shipping sector. A revived and expanded maritime industry in Australia would complement and benefit intermodal freight transport, to name one area of industry. Containerised cargo and significant movement of domestic trade freight would certainly benefit. My electorate of Forde, while very much a landlocked electorate, is very, very dependent on its access to the ports through normal freight, through road and through rail.

There are many arguments for reviving the coastal shipping industry, and the strongest one, of course, is economic. If we revitalise the coastal shipping industry, we can free up the land transport bottlenecks, infrastructure constraints and environmental impacts that are felt in many parts of the country, including my own electorate of Forde. In this chamber I have spoken many times about the electorate of Forde and about the fact that we have very limited infrastructure in terms of rail and road and the ability to move freight around. I will talk later in my speech today about the opportunities that exist within my electorate and about why coastal shipping certainly has some major benefits for electorates like mine that are landlocked. The economic argument, of course, is really about how we improve the shipping industry. The creation of jobs, which will have wide-reaching effects beyond the shipping industry and ports, will also contribute to the growth of maritime services and associated services. In the current economic climate, anything that will stimulate and create jobs will have a net benefit. Other areas that will also benefit from a revived and expanded shipping industry are Australian defence, maritime safety and security.

I listened to the member for Fremantle and the member for Longman, who challenged me to talk about education today, and I will talk about the education and training aspects of this review of coastal shipping. But I will say a little bit more about the importance of having a well-established transport freight network, which includes road, rail and certainly coastal shipping.

If you look at the electorate of Forde, the area of Bromelton is a greenfield site for the development of industrial and freight intermodal transport. I have mentioned Bromelton many times in this House. It is an area that is within 70 kilometres of the Brisbane port. It is not currently very well serviced by road but it has the standard freight line running right through it. This facility at Bromelton was just recently named by the state government in Queensland as a state development area because of its significant value and its significant contribution to the ability to deal with and move freight. With this in mind, it is not just about rail and it is not just about road; it is also about the connection to that wonderful opportunity that we have with our coastal highways.

I said that the member for Longman challenged me to talk about education and training today, because during our discussions about coastal shipping my concentration was on the ability to train people adequately in all of the processes involved with shipping. It appears that the emphasis in the industry and the coastal shipping effort is on not only the ability to encourage people with certain skills into the industry but also the ability to train. It is interesting that there is confusion amongst many about how this training should occur. There is misunderstanding about the notion of competency based training.

I have often spoken about the need for adequate, appropriate and industry linked training and outcomes. It is also important to recognise prior learning. There is concern that it might take a number of years to train certain operatives within coastal shipping. Having a lot of people leave the industry and having the fleet diminish over time means that we lose opportunities for on-the-job training—the ability to give people competencies within a particular field. As far as I am concerned, for the industry to have the ability to revive itself, the education and training aspects are very important. The recommendations within the report look at a number of ways for us to provide adequate and appropriate training that will stimulate the industry. I have made my views known in this House before about the role that education and training plays in most industry sectors. The coastal shipping sector is one that can hugely benefit from some concentrated effort in education and training.

Of course, though, there are challenges for the shipping industry. It will need to compete. I have just talked about road and rail. While it needs to compete on timely service, reliability and competitive pricing, it probably owes its future to the fact that we can complement road and rail transport through that very process. It is very much about having a complete, overall freight movement plan for this country which will significantly involve coastal shipping.

There have been infrastructure constraints at the ports, and this has constrained the industry’s competitiveness. For this country and this government to make a commitment to coastal shipping means that infrastructure needs to be a major part of that commitment. While the processes at the ports that we observed around the country are very good and very efficient in so many ways because of our international shipping effort, there seems to have been over a period of time a lack of deliberate links to the domestic freight task. That is something that I think this report deals with very well in the detail of some of the recommendations. With these issues now presented in the report and with the recommendations in the report also, I am sure that the minister will be able to make some very good decisions about our way forward.

Recommendation 9 suggests that Infrastructure Australia create a national port development plan, which I will just mention, to address current and potential capacity constraints in the ports. This plan would then be used to direct funding to critical port infrastructure projects in Australia to address not only export capacity but also the ability to respond to the potential growth in coastal shipping. It is critical for the shipping industry to get back on its feet, and it needs port infrastructure suitable for the current and potential capacity of Australian ports. Infrastructure is directly related to providing services and boosting productivity. It is necessary to improve the policy framework for the shipping industry.

Those water highways are there. We know that a lot of Australia’s history was built on a lot of freight movement prior to our road and rail infrastructure being established, and it is clear that we now have an opportunity to link what we have established as major infrastructure in this country with coastal shipping lanes—old is new again—to support the growth of industry in this country. Certainly, it will bring an economic stimulus and an ability to commit to major infrastructure related to ports.

Although my electorate of Forde is landlocked, this push to increase our port capacity and port movements will bring huge opportunities to this country. Bromelton will be the largest intermodal port in this country. Irrespective of whether coastal shipping occurs or not, it just makes so much sense that we move forward and establish the infrastructure to support our coastal shipping efforts.

Debate (on motion by Mr Hayes) adjourned.