House debates

Wednesday, 13 September 2017


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

9:58 am

Photo of Darren ChesterDarren Chester (Gippsland, National Party, Deputy Leader of the House) Share this | | Hansard source

I move:

That this bill be now read a second time.

The Australian government is committed to ensuring safe, secure and efficient coastal shipping as part of Australia's national transport system.

As part of this commitment, I am pleased to introduce the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017.

Between 2010 and 2030 Australia's overall freight task is expected to grow by 30 per cent but coastal shipping is only expected to increase by 15 per cent. With Australia's extensive coastline and broad network of ports, there is scope for this figure to be much greater.

However, it is clear that the current regulatory system does not fully support that potential being realised.

Following my appointment as minister, I have engaged with stakeholders in the coastal shipping sector, Australian operators who use the coastal shipping and Australian seafarers.

The stakeholders I have spoken to all agree there are aspects of the current Coastal Trading (Revitalising Australian Shipping) Act 2012, known as the 'coastal trading act', that are unreasonably limiting, inflexible or onerous.

These restrictions are limiting or preventing the use of shipping to move domestic freight. They are pushing costs up for businesses. It is an important part of the government's red-tape reduction work to ensure legislation in place is being effectively implemented and not imposing excessive administrative burden.

This bill makes amendments to the existing regulatory regime, rather than fundamentally restructuring it.

These amendments were set out in a discussion paper that I released for industry consultation in March this year and received significant support from stakeholders.

The Australian Aluminium Council, in its submission in response to the discussion paper, said:

'These amendments would reduce the regulatory burden for shipping users and increase the efficiency of the coastal shipping regime'.

In its submission Manufacturing Australia said:

'The proposed amendments are pragmatic, achievable and likely to deliver a material benefit in lower costs for Australian manufacturers'.

Turning to the amendments in detail, under the coastal trading act applicants must specify a minimum of five voyages they intend to undertake in order to secure a temporary licence.

I'm aware of one instance where a shipper was unable to obtain a temporary licence to move a piece of heavy machinery between two ports as it required only a single voyage and was therefore ineligible for a temporary licence.

The machinery was then instead moved by road, which required a police escort due to the size of the machinery, and overhead utilities had to be moved.

This was far more complicated and more costly than a voyage by ship would have been, but it was the only option available.

This bill removes the five-voyage requirement, increasing flexibility for industry.

The coastal trading act contains strict tolerance provisions for voyages under temporary licence that do not reflect the daily realities of how the shipping industry and supply chains in Australia operate.

The tolerance restrictions mean that a shipper has to apply for a variation to their temporary licence if they are going to move their cargo more than five days before or after the approved loading date or if they need to load 20 per cent more or less than the approved amount of cargo.

Such strict limits fail to reflect the fast-paced nature of the shipping industry.

For example, I'm aware of an Australian company which received a last-minute request from a customer for 2,000 tonnes of cargo to meet a customer shortage.

Despite already holding a temporary licence to carry 8,000 tonnes of cargo on a similar route, the ship it had chartered had to wait an extra day in port for a variation to come through, at a cost of US$15,000 in port costs.

Every time delays and costs like these are incurred by business, it impacts on profits and puts Australian jobs at risk.

The amendments in this bill relax the tolerance provisions to provide businesses with the flexibility and certainty they need to operate profitably.

This bill will also simplify the consultation provisions of the act, while not removing the protections that all general license (Australian) vessels currently exist.

All general licence holders must be consulted for a minimum period of either one or two days before any temporary licence is granted, or approval for any new voyage is granted.

That is mandatory even where there is no general licence (Australian) vessel capable of carrying the cargo or passengers the applicant wants to move.

For example, there have been no crude oil or petroleum tankers operating under general licence conditions since June 2016. However, the consultation requirements have resulted in the absurd situation where industry has spent 446 cumulative business days since 1 June 2016 waiting for consultation with a general licence holder that does not exist.

This bill will streamline the application by removing the requirement to consult when there is no general licence vessel that is able to carry the cargo or passengers.

The changes I'm introducing today will also extend the geographical reach of the coastal trading act, to support the Australian energy sector.

The current coastal trading regime is hindering the use of Australian crude oil and condensate products in Australian refineries.

The Australian Institute of Petroleum told me earlier this year that uncertainty over the status of oil tankers moving between floating production storage and offloading units and floating storage units and mainland Australia actively discourages the use of Australian crude oil and condensate in Australian refineries.

This bill will enable voyages occurring between a floating production storage and offloading unit, or a floating storage unit, and the mainland to be covered by a coastal trading licence.

This bill will also allow vessels undergoing dry-docking to be covered by the coastal trading licensing system.

Under current arrangements, vessels undertaking scheduled maintenance in dry-docking facilities are subject to importation under the Customs Act 1901.

Covering vessels undergoing dry-docking in the coastal trading licensing system will provide certainty to operators and potentially increase the use of Australian facilities.

The amendments also change the voyage notification requirements by removing the need for industry to submit a notification when none of the voyage details have changed.

The bill will require ships to provide their International Maritime Organization number rather than their name as an identifier.

Ships are able to change their name—having the IMO number of vessels operating in our waters will improve the government's ability to verify that operators are complying with the requirements of this and other Australian legislation.

The Turnbull-Joyce government has a vision for a simpler and more flexible costal shipping industry that is positioned to meet an increased share of Australia's freight task.

This bill removes some of the red tape and unnecessary administrative burden that the current legislation has imposed on the coastal shipping sector.

I commend the bill to the House.

10:04 am

Photo of Mr Tony BurkeMr Tony Burke (Watson, Australian Labor Party, Shadow Minister for Finance) Share this | | Hansard source

I move:

That the debate be adjourned.

And I ask that a separate question be put on the resumption of the debate.

Question agreed to.

Photo of Rob MitchellRob Mitchell (McEwen, Australian Labor Party) Share this | | Hansard source

The question now is that the resumption of the debate be made an order of the day for the next sitting.

10:05 am

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

I move:

That the words 'the next sitting' be omitted with a view to substituting 'the first sitting in 2018' to allow proper consultation to take place consistent with the commitment made by the Government.

The fact is that, on this government's watch, the Pacific Triangle, the CSL Pacific, the Pioneer, the Lindsay Clarke, the Tandara Spirit, the Araluen Spirit, the Alexander Spirit, the British Loyalty, the Hooghly Spirit, the MV Portland, CSL Melbourne, British Fidelity, CSL Brisbane and CSL Thevenard have all left our shores. They have left our shores and the Australian flag has been lowered. The Australian flag has been lowered and Australian jobs have been lost. This is a government that has been prepared to destroy the Australian shipping industry because, rather than having Australian workers who are members of unions, it prefers to have foreign workers being paid foreign wages on foreign-flagged ships around our coasts.

The abuse of the temporary licence system is something that has to be addressed. This government has no plan. Indeed this is replacing the Australian flag with the white flag when it comes to Australian jobs. On this government's watch, it has allowed temporary licences for work, such as that done by the MV Portland, which takes minerals from Western Australia to Portland in Victoria to the smelter and then the ship returns to Western Australia—a very consistent voyage between two destinations that in no way could be defined as temporary. Yet this government has failed to put in place a mechanism to ensure that the legislation carried by this parliament in 2012 is given a chance to operate. That has led to a loss of Australian jobs.

I think this minister, who has his 50th birthday today, I am told, isn't too bad a bloke. But he's a part of a bad government. On this, he said 'another key message from my recent stakeholder consultations is that regular certainty, indeed, ideally bipartisanship, is essential for investment,' and it is. But has there been any briefing for the opposition on this legislation? No, there hasn't been. Has there been an exposure draft of this legislation? No, there hasn't been. Has there been consultation with stakeholders? Have they had the potential to see this legislation? No, there hasn't been.

It stands in stark contrast to the way that we on this side dealt with this when we were in government. In 2007, we asked a parliamentary committee to conduct a comprehensive review; indeed, I think one that the member for Ballarat played a critical role in. In October 2008, that committee brought down a unanimous bipartisan report that provided the basis for the legislation moving forward. In 2009, we established a shipping policy advisory group comprising shippers, industry and unions, convened in order to implement the committee's recommendations. We released a discussion paper for public comment in 2010, and in 2011 we established three industry reference groups to work through the details of the reform package. Later in 2011, we released exposure drafts of the bills for public comment and another roundtable was conducted with industry and government officials. And then, of course, we introduced the legislation to the parliament and it was carried by this parliament at that time in spite of the extensive consultation, the attempt at bipartisanship and the getting together with industry players, whether they be users of ships or owners of Australian ships in the shipping industry, to participate in this process.

Yet what we have now is legislation being introduced into this parliament consistent with this government's attempts to destroy Australian shipping. We had legislation from the minister's predecessor, the former member for Wide Bay and Deputy Prime Minister. It came before this parliament and it was the first legislation I had ever seen that made it clear in the explanatory memorandum that the result of that legislation would be the replacement of the Australian workforce with a foreign workforce. We had Australian businesses, such as tourism operators in the Kimberley, being advised by departmental officials that the way they should go forward and be competitive was to replace the Australian flag on the back of their ships, to put a foreign flag on them and to employ a foreign workforce on foreign wages.

That was an extraordinary admission made by the government officials at that time. I don't blame them; I blame the elected government for that responsibility. Mr Bill Milby gave extraordinary evidence before the Senate about the conversations that were taking place when he asked for a briefing about how he could deal with the response to the legislation that was being put forward by the government. That legislation was defeated in the Senate because people of goodwill said they wouldn't cop this. Senator Xenophon, who would normally, as is his practice, grant a second reading amendment so there could be further debate, killed that legislation at that point. He refused to allow it to occur.

What we have now is in spite of the fact that a birthday boy over there was prepared to make comments at a Shipping Australia Limited annual review in January 2017 like:

I am acutely aware of the need to work in a bipartisan way …

But we are not seeing that. We are not seeing that happen.

Of course, there is the euphemism of industry bodies such as 'Shipping Australia', which is actually about foreign ships. It shows that they know Australians want to see an Australian shipping industry, because it is in the interests of our economy, it is in the interests of our environment and it is in the interests of our national security. The minister at the table regularly speaks about stopping boats. Well, this legislation and this government's approach has been to stop ships and boats with the Australian flag on them and replace them with foreign ships around the coast that, of course, enter our harbours without the same migration or security checks that Australian workers have to go through to get their MSICs.

Mr Chester interjecting

Photo of Rob MitchellRob Mitchell (McEwen, Australian Labor Party) Share this | | Hansard source

The member will be heard in silence!

Mr Chester interjecting

If you want to challenge what I am saying you can leave!

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

We have very clearly put forward our preparedness to sit down with the minister and work through these issues. Certainty is required for legislation to produce the intended outcome—a revitalisation of the Australian shipping industry. So I am very disappointed with the minister. In spite of the fact that we received commitments about proper consultation about any legislation before it comes into the House, that simply hasn't happened. It has been abandoned. Once again, there is another gap between the rhetoric of the government and the reality. Teresa Lloyd from the industry body, who is overseas, contacted us to tell us she had been notified that this legislation was coming in this week and asked us whether we knew anything about it. That was how we found out about the legislation. So the Australian shipping industry has not been briefed on this bill either. How hard is it to pick up the phone? We sat last week in parliament. How hard would it have been to get a proper briefing to allow for some advice before we went forward? This amendment will allow for that proper consultation to occur, and that is why it should be carried.

Photo of Rob MitchellRob Mitchell (McEwen, Australian Labor Party) Share this | | Hansard source

Is the amendment seconded?

10:15 am

Photo of Mr Tony BurkeMr Tony Burke (Watson, Australian Labor Party, Shadow Minister for Finance) Share this | | Hansard source

I second the amendment. I will explain to the House what this amendment does. It says that the bill will be brought back next year to enable time for the consultation that the government had previously guaranteed. The government had said there would be consultation. They've then come in here with a bill without that consultation. That is simply because we have a government that is more determined to get rid of union members than they are to have an Australian industry. If it is a choice between a unionised Australian industry and no industry at all, they would rather have no Australian shipping industry at all. That is the choice they are making. They said there would be consultation. This amendment does one thing and one thing only: it guarantees time for that consultation. If they don't want to have the consultation, they will vote against the amendment.

Photo of Tony SmithTony Smith (Speaker) Share this | | Hansard source

The original question was that the motion be agreed to, to which the honourable member for Grayndler has moved an amendment. The immediate question is that the amendment be agreed to.

The question now is that the motion be agreed to.

Question agreed to.

Debate adjourned.