House debates

Wednesday, 14 October 2015


Shipping Legislation Amendment Bill 2015; Second Reading

4:15 pm

Photo of Warren TrussWarren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | | Hansard source

I thank members who have contributed to this debate. It has been a fulsome debate. I would have to say that I think it has been a partisan debate, but it is reasonable that people will want to make their contributions to what is really an important area of reform. I would just like to make a few observations about the legislation and some of the comments that have been made.

The government has made it clear that it is committed to safe, secure and efficient transport systems, and this is unambiguously the case for coastal shipping. The current system has clearly failed. Just look at the facts. Under Labor the fleet of major Australian registered ships over 2,000 deadweight tonnes with coastal licences plummeted from 30 vessels, in 2006-07, to just 15, in 2013-14. The number of ships on the Transitional General Licence Register has dropped from 16 to just eight. Between 2000 and 2012, shipping's share of Australia's freight fell from 27 per cent to just under 17 per cent, while the volume of freight across Australia grew by 57 per cent. Over the first two years of Labor's coastal trading act, there was a 63 per cent decline in the carrying capacity of the major Australian coastal trading fleet. Looking forward, at this rate Australia's overall freight task is expected to grow by 80 per cent, come 2030, but coastal shipping will increase by only 15 per cent.

This is not to mention the increase in freight rates reported by some shipping users, or the many instances where the current system has proved inflexible, cumbersome and, frankly, impractical. For instance, Gypsum Resources Australia outlined in their submission to the Senate committee how they are losing business to Thailand under the current system. They said:

In February 2014 GRA applied for, and was subsequently denied, a temporary licence (TL) to enable it to compete for gypsum sales in Brisbane. The dominant factor in the denial was an objection by a GL holder to the granting of a TL to GRA. The denial of the licence rendered GRA's tender for the work uncompetitive. These customers were lost to Thai and WA gypsum which were transported on international vessels. Neither GRA nor the GL holder benefited.

These concerns have been echoed by Cristal Mining, who said in their submission:

The Act, in its current form, puts Australian industry at risk of operational shut downs and possible job losses.

The Australian Institute of Petroleum said:

The current cumbersome and inflexible regulations impede the efficient operation of domestic refineries and petroleum supply chains around Australia, do not facilitate liquid fuel supply security, and do not advance the objectives of the coastal trading legislation or the local shipping industry.

These sentiments have been recounted to me time and time again. The government's aim is to facilitate a greater use of coastal shipping services in Australia. We want coastal shipping to do more, not less, as our freight task continues to grow into the future

As an island nation, with the majority of our population living around the coast, it makes sense to do so, yet under the current legislative arrangements we are failing to capitalise on these opportunities. As Incitec Pivot, Australia's largest fertiliser provider, said in their submission to the Senate:

Deregulation of coastal shipping is needed to lift the competitiveness of the sector, reduce costs on business, increase flexibility and support opportunities for new investment and employment in Australian manufacturing.

What is clear is that Labor's reforms have failed coastal shipping and unless we act now businesses relying on coastal shipping will be sunk, and I fear that the Australian industry would just continue its decline. Without changes to economic and regulatory settings, shipping will not be able to deliver the competitive, efficient services that Australian businesses need.

The amendments to the coastal trading bill are necessary to facilitate the government's objective of supporting the provision of more-competitive and efficient coastal shipping services. The bill replaces the existing licensing framework with a single permit, significantly reducing red tape and regulatory burden.

The reforms will retain key maritime skills and support jobs growth in those parts of Australia where industry relies on competitive shipping to remain viable, such as Tasmania. The bill maintains a framework of entitlements, including part B of the Seagoing Industry Award 2010, and the Fair Work Act 2009, for seafarers on foreign ships predominantly engaged in coastal shipping.

Reducing red tape is the key priority of this government and a central aspect of these policy reforms. Currently, a holder of a temporary licence needs to provide information to the government three times about each voyage. Under the new arrangement the requirement will be removed to apply for a voyage, based on an estimate of what may happen, report before the voyage on what is likely to take place, and then report on what actually took place. Instead, permit holders will need to report on voyages only after the fact.

Importantly, the bill extends coverage of the existing act to allow the carriage of petroleum products from Australia's offshore facilities to the mainland for processing. It also will, for the first time, allow ships to carry out scheduled maintenance in Australia, under a permit. This change will encourage the use of our dry-docking and repair facilities and help to create a sustainable maritime cluster. Changes to the Shipping Registration Act 1981 will make entry to the Australian International Shipping Register easier and will reduce the barriers to ships on this register providing coastal shipping services.

The member for Grayndler in his speech to the second reading debate remarked that ships paying Third World wages will be plying our coast with unseaworthy vessels, having a devastating impact on our marine environment. The claims made by those opposite that the bill before the House will impact on Australia's maritime environment or stringent safety standards are simply wrong. As I mentioned in my earlier remarks in this debate, Australia's strong environmental and safety laws will continue to apply to all ships operating in Australian waters. Australian and foreign-flagged ships operating in Australian waters are subject to Australia's port state control regime, administered by the Australian Maritime Safety Authority. Our port state control regime is second to none in world terms. In fact, AMSA's port state control statistics indicate that, in the 2014 calendar year, the deficiency rate for Australian-flagged ships was 3.9 deficiencies per inspection, compared with a deficiency rate of 2.9 per inspection for foreign-flagged ships. So, again, the sensationalist claims by those opposite are simply not supported by the facts. Indeed, even two of the examples they cite as evidence for their claims, the Sage Sagittarius and the Shen Neng, were not even carrying coastal cargoes but were engaged in international trading.

The facts are: we have the world's best-practice maritime safety and environmental laws, which are rigorously enforced by AMSA, and, when the statistics are analysed, foreign-flagged and Australian-flagged vessels come out basically on par when it comes to reported deficiencies. And the facts are: if you do the wrong thing, regardless of the flag your ship carries, AMSA will detain your ship until it is fixed; and, if you still do not get the message, they can direct you out of Australian ports and not to come back.

As for Third World wages and conditions, I remind the House that wages and conditions for Australian-flagged vessels remain unchanged under this legislation. Additionally, part B of the modern award, introduced while Labor was in government, will apply to all seafarers on foreign-flagged vessels from day one who spend the most of their time trading in Australian waters. Significantly, the government will not issue further permits to a foreign-flagged vessel unless it has complied with past obligations to pay Australian wages. Foreign-flagged vessels trading for a limited time in Australian waters will be governed by international arrangements. This is a condition which is common practice around the globe where foreign vessels carry coastal cargo. Acknowledging that shipping is an interconnected international business that operates, by its inherent characteristics, in many different jurisdictions, it, however, must also be noted that the Maritime Labour Convention, implemented by the former Labor government and supported by the coalition, will provide a safety net to all seafarers in Australian waters. The Maritime Labour Convention provides an international safety net of standards for regulating seafarer employment relationships for the world's seafarers. To date, 64 International Labour Organization member states, representing more than 80 per cent of the world's shipping tonnage, have ratified the convention. These minimum standards cover a wide range of areas, including employment, accommodation, health protection, medical care, welfare and social security protection.

In his second reading speech, then Minister Albanese said:

The MLC is intended to provide decent working conditions for seafarers by setting minimum requirements for seafarers to work on a ship.

He said we need the MLC to be ratified because:

We cannot reasonably expect seafarers who are subject to Third World living and working conditions to provide First World shipping services.

Maritime Union of Australia secretary and former International Transport Workers' Federation president Paddy Crumlin said of the MLC:

By lifting international minimum standards, the MLC promotes fair and decent work …

The coalition supported the passage of this legislation at that time. Let me be clear: this legislation makes no changes to the application of the MLC. The MLC will still apply to provide, in Labor and the MUA's own words, decent conditions for seafarers. As the MUA said when the current legislation was enacted:

The Bills represent over 10 years of work by the MUA, especially National Secretary Paddy Crumlin, and follows the endorsed support from members at the recent Seafarers Conference and National MUA Conference.

Over the last month—

before the legislation was carried—

the core team has been working 24-7 to make sure the legislation was complete and presentable, and that there were sufficient votes [in] the lower house.

And now even the MUA acknowledge that Labor's legislation is flawed. The MUA have said that the operation of the coastal trading act has indicated:

… a need for some streamlining and additional commerciality in its administration.

They went on to note that the act was 'not as effective' as they would like.

I can remind the House of the MUA's record in fostering a competitive employment environment in Australia. As senior Labor figure Martin Ferguson said:

I think the Maritime Union WA branch is a rogue union.

I think they are not only potentially going to kill jobs for their own members, children and grandchildren in the future the way they've conducted themselves.

I think it's about time the rest of the union movement fronted up to the fact that they are now killing jobs in manufacturing.

As the member for Brand noted in relation to unreasonable MUA demands on resource projects:

We do have to be conscious that unreasonable wage demands do place pressures on projects.

So the former Labor government, with its colleagues in the MUA, have created the current regime after a lot of deliberation and, in doing so, created a system that has actually seen the capacity of Australian-flagged vessels drop by 63 per cent. Estimates of seafarer job losses used by many opposition members and provided in the submission to the Senate inquiry by the Australia Institute, a report that was commissioned by the MUA and repeated in their own submissions, are a significant overestimate of the likely job impacts of the reforms and ignore the economy-wide benefits to manufacturing, resources, cement and aluminium, fertiliser, petroleum, sugar, grain and many other products that can or could use coastal shipping if it were more competitive.

If we do not get coastal shipping right, there will be more trucks on the roads. If we do not get coastal shipping right, jobs in the industry, which has declined so much over the years, will continue to drift away. The reality is that we need to be a strong shipping nation. Because we are an island continent, because we are so dependent on international freight, we need to have a shipping industry that works well, employs Australians and creates the skills that are necessary to ensure the effective operation and management of our coastal sea lanes. Because we need those jobs, it is important that we have a strong and healthy shipping industry.

This legislation is a conscientious attempt to try to make the system work better to make sure that the shipping share of the Australian freight task goes up, not down; that opportunities are provided for young Australians to have careers in this important industry; and that we have a regulatory environment that encourages innovation, encourages Australian freight forwarders to use shipping and therefore delivers a significant boost to the Australian economy.

Photo of Craig KellyCraig Kelly (Hughes, Liberal Party) Share this | | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Grayndler has moved, as an amendment, that all words after 'that' be omitted with a view to substituting other words. The immediate question is that the amendment be agreed to.

The question now is that this bill be read a second time.