House debates

Monday, 22 September 2014


Marine Safety (Domestic Commercial Vessel) National Law Amendment Bill 2014; Second Reading

4:06 pm

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

Governments ought to do whatever they can to remove onerous regulatory burdens that make it harder for citizens and companies to go about their business. It is a matter of getting regulation right. Business and life are complex enough without over-regulation. Regulation that is not necessary can be a hindrance to productivity and jobs growth.

One of my proudest achievements as the Minister for Infrastructure and Transport was the delivery of a single national system of laws governing the maritime sector. This was a breakthrough reform—the biggest maritime reform in a century when coupled with the rewriting of the Navigation Act after 100 years, the legislation supporting an Australian shipping industry.

This package of legislation with regard to the maritime sector saw more reform occur in that sector than had occurred for many decades previously. It is absolutely vital. As an island continent, Australia relies upon our maritime sector, and too often—because by definition it is off the coast—it does not attract the same attention as our heavy vehicles sector, our roads or our rail sector. But it is absolutely critical for our national interest, for our environmental protection, for our national security as well as for economic growth.

This reform of having a single national maritime regulator through the Australian Maritime Safety Authority became law on 1 July last year. Previously, each state had its own maritime laws—a situation that burdened businesses with regulatory requirements that cost them time and money. In practical terms, it was the case that if you had a commercial shipping operator working in the gulf country between Queensland and the Northern Territory, where they were on the sea would determine whether their ship met the standards that were required by different jurisdictions. Indeed, where they were on the sea would determine whether the person in charge of the ship was permitted to do so, because he or she had to have the registration to undertake those activities in each of the states or territories where that work took place. The fact of circumstances such as the difference between the regulatory burdens placed upon the Gold Coast and Tweed Heads really shows how absurd that was.

Our nation certainly did not need that level of duplication and complexity. We are an island continent, and it simply made no sense to have these multiple jurisdictions. The former Labor government made elimination of regulation one of its main priorities. We delivered an ambitious agenda on reducing regulation, mainly by working with states through the Council of Australian Governments. In this space we delivered not just a national maritime regulator, but also a national heavy vehicle regulator and a national rail regulator. These reforms replaced 23 separate state and territory regulators through these national agencies. Together these changes were expected to save business in the order of $30 billion over just two decades. It took five years of negotiations with states and territories to deliver these changes. For every two steps forward there was one step back when we got to a ministerial council meeting, with particularly state bureaucracies defending their patches with regard to their own separate forms of regulation. It did not make much sense for heavy vehicles or for rail to have separate regulators, but it certainly made less sense when it came to commercial vessels on the blue water, where there are not boundaries that recognise the accidents of colonial history that are our state and territory boundaries.

The bill before us today retains the spirit of these national laws. It simply amends them to sharpen and clarify aspects of the legislation based on the experience of their operation. It was always envisaged that that would be the case. Therefore, the opposition will be supporting this legislation. It will allow the national regulator—the Australian Maritime Safety Authority—to exercise discretion when considering the suspension, revocation or variation of vessel certificates. The changes are designed to give the regulator greater flexibility to accommodate operational variables within the domestic commercial fleet. They also include minor changes relating to the definition of defence vessels, clarify the regulator's functions, and allow for sub-delegation of powers in some circumstances. I have every confidence in the magnificent job that AMSA does. It is a fine organisation that serves this nation well, whether it be in dealing with defence related issues, with issues of environmental protection or in search and rescue operations. AMSA has shown itself to be well run at a board level, at a management level and at a workforce level. I was very proud to be a minister with responsibility for such an impressive, professional and internationally well-regarded organisation. These changes are non-controversial and sensible. We will be supporting them, and I commend them to the House.

4:13 pm

Photo of Nola MarinoNola Marino (Forrest, Liberal Party) Share this | | Hansard source

Australian produce is generally exported by ship. We are an island nation and, apart from some air freight, the great bulk of our commodities and the vast majority of Australia's international trade by volume travels on the seas. The importance of shipping to modern trade in our economy cannot be underestimated. In 2012-13 Australian ports managed more than $400 billion worth of international cargo and saw some 4,900 overseas cargo ships make almost 14,000 port calls. With this level of activity we cannot afford for this industry, like all industry, to be beset as it has been by the dead weight of red tape and uncompetitive costs.

Under Labor's bureaucratic and protectionist permit system, which was put in place to placate the maritime union, there were almost 1,000 fewer coastal voyages and almost two million fewer tons of freight moved by foreign vessels in 2012-13. Figures released in the report Australian sea freight 2012-13 show that 49 million tonnes of coastal freight was loaded in 2012-13 but that five years earlier, in 2007-08, the figure was over 59 million tonnes. This represents an average 2.4 per cent decline each year in the total weight of coastal freight. In addition, the Australian trading fleet continued its downward spiral. The number of major Australian registered ships with coastal licences declined from 30 in 2006-07 to just 13 by 2012-13. Since the Australian Sea Freight 2012-13 report, five ships have been added to the fleet. However, over the two years of Labor's failed changes, the deadweight tonnage of coastal shipping has plummeted by 64 per cent.

The protectionist dogma used to justify Labor's reforms did not save Australian jobs on the water and it has literally cost Australian jobs on land. The situation is even more grim when it comes to domestic freight. Between 2000 and 2012, shipping's share of national freight plummeted from 27 per cent to less than 17 per cent. Over the same time, the volume of Australian freight grew by 57 per cent. Projections for 2010 to 2030 see Australia's national freight task growing by a massive 80 per cent. However, while the national road and rail tasks are expected to double, coastal shipping movements are expected to rise by only around 15 per cent. This is due to the uncompetitive nature of sea freight in the current settings. Operating costs, particularly labour arrangements, are uncompetitive when compared with operating costs of foreign ships. We need to fix all of this to build a competitive shipping industry. For example, coastal shipping is bound by regulations where a ship has to wait idle in a port for a day before loading can start. This can cost companies $10,000 to $20,000 a day, and it hits domestic sea freight companies whose costs have been increased by up to 50 per cent in some cases by Labor's changes. This costs jobs and has the potential to cost a lot more jobs in our mining and manufacturing industries.

The Business Council of Australia estimates that Labor's system has inflicted over 1,000 extra administration hours a year, every year, on the industry to comply with the new system. Thanks to Labor, Australian shipping has become uncompetitive. Shippers are telling the Australian government that container rates from Melbourne to Brisbane are almost twice the cost of those from Singapore to Melbourne, and bulk freight rates on the east-west route have reportedly doubled in the past year. Transporting sugar from Thailand is cheaper than shipping it from Queensland. According to Cristal Mining in my electorate, Australian shipping can cost around $5 million a year more than a comparable foreign-owned ship on comparable routes.

On 8 April 2014 the Deputy Prime Minister released the Australian government options paper on approaches to regulating coastal shipping in Australia. The paper was very well received by industry. The Department of Infrastructure and Regional Development received a total of 85 submissions and is continuing to receive supplementary submissions and additional information. There is a lot to consider. The submissions highlighted the problems experienced by producers, by manufacturers and by other users of coastal shipping with the current system. The five-voyage minimum requirement before a temporary licence can be granted hinders the ability to move just one-off cargoes by coastal shipping. For example, a piece of heavy machinery was unable to be shipped as a single voyage and therefore a temporary licence could not be granted and the machinery had to be moved by road. That required a police escort, because of the oversize load, and the removal of overhead power lines. Where is the common sense in that? It was more complicated and costly than a voyage by ship. Certain products like LPG are moved exclusively by foreign ships operating under temporary licences. Even though there are no Australian ships capable of carrying the products, the shippers must still obtain licences for the movement of goods—red tape, unfortunately, for the sake of union red tape. It is a costly, time-consuming process that delivers no real value to the Australian economy.

Tolerance limits make the current system inflexible for coastal shipping users. The tolerance limit for the amount of cargo means, for practical purpose, that last-minute changes to cargo just cannot be made, or, if a change has to be made, the ship has to wait—it is delayed while waiting for the change to be approved. These delays can cost foreign vessels around $10,000 a day, and more than $20,000 a day for Australian ships. It is extraordinary. Ships carrying petroleum products from offshore petroleum production facilities are not able to apply for a temporary licence, making it difficult to bring those products directly to mainland Australia. Submissions on the options paper have highlighted cost pressures faced by coastal shipping users. Bell Bay Aluminium indicated an increase in costs from $18.20 a tonne in 2011 to $29.70 a tonne in 2012—an increase of 63 per cent—following the introduction of the current regulations. Compare that with the freight rates offered by foreign vessels, which sat at $17.50 a tonne in 2012. How can an Australian ship be competitive?

Overall, the submissions shared a common goal—to reform the current regulations, to increase flexibility and affordability for the users of coastal shipping and to encourage more coastal shipping. The coalition government is carefully considering these issues and is committed to developing an internationally competitive coastal shipping framework that enables the industry to operate effectively, to operate efficiently and to operate in the national interest. Surely they are very worthy endeavours. These policies are also impacting onshore. They are having a knock-on effect on land-based Australian jobs and industry. The Business Council of Australia said that around 90,000 Australians are employed in manufacturing sectors that use coastal shipping, including oil refineries, cement, steel and aluminium. The BCA says that restrictions mean Australian firms are paying rates that can be up to double the rates offered by foreign ships, adding tens of millions of dollars to their cost base and making their operations less viable as a result.

There is a critical policy need for more affordable and flexible coastal shipping for major trade-exposed manufacturers that employ large numbers of Australians, especially when that employment is largely in a regional area like my electorate of Forrest. The Port of Bunbury in my electorate is central to the economic growth and development of the south-west region. The major products moving out through the port are alumina, woodchips and mineral sands. The port does not currently have a container-handling facility, despite calls for the development of this capacity for many years. There appears to be adequate cargo within the south-west region as its origin or destination to allow for the development of container-handling facilities; however, the port does suffer from competition with the Perth based Fremantle-Kwinana ports. The Port of Bunbury does need to expand to handle containers, and I am going to keep working on this.

I remember well in 2005 that the state Labor government announced they would build a new gas-fired power station in Kwinana instead of a coal-fired one in Collie. To compensate, they committed $60 million for the Port of Bunbury for a dedicated coal berth to assist coal exports. However, like many Labor promises, it did not eventuate. I find that particularly pertinent today, as a private coal company has been looking to export coal and there is no coal berth. At a time of uncertainty in Collie, as we see in the coal industry, an additional export opportunity that such a berth would have delivered would have been extremely valuable indeed. I support the legislation before the House today.

4:23 pm

Photo of Adam BandtAdam Bandt (Melbourne, Australian Greens) Share this | | Hansard source

Very briefly, the Greens will not stand in the way of the Marine Safety (Domestic Commercial Vessel) National Law Amendment Bill 2014 passing this House today. However, we do note that there are some matters which we want to pay closer attention to as this bill progresses, particularly those found in section 11 around the delegation of authority and powers that are being enshrined in this bill and what that might mean for appeal rights. Those matters will be raised and looked at more closely as this bill goes through to the other place.

Question agreed to.

Bill read a second time.