House debates

Tuesday, 14 August 2018


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

6:12 pm

Photo of Justine KeayJustine Keay (Braddon, Australian Labor Party) Share this | | Hansard source

Thank you for the opportunity again to speak on the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017, as I only had a minute yesterday. In continuation, I want to stress from the outset that this bill will actually mean a loss of hundreds of thousands of seafarer jobs in this country. Many of those could potentially be from my electorate. I'm from an island state which is predominantly an export state, and a number of shipping companies could potentially be at risk from this bill. It will mean that foreign ships and foreign crews could come in and take over some of the destinations and the work undertaken by Australian crews and Australian ships. We've seen it before with this government when it's been issuing permits left, right and centre that have resulted in hundreds of Australian jobs being lost, replaced by foreign workers. I've heard the Prime Minister say time and time again, 'The government is the friend of the worker.' Well, not when it comes to the maritime industry.

I was born into a seafaring family. My father was a seafarer. He was a steward on the Princess of Tasmania, the Empress of Australia and the Abel Tasman, where he passed away at sea while I was quite young. These vessels were largely passenger ships bringing visitors to and from Tasmania. Much like the current Spirit of Tasmania ships, they also had a large freight component.

I would also like to share with the chamber what a local seafaring job means to people in my electorate. I have a number of ports in my electorate, probably more than any other electorate in Tasmania, so there are many, many people that are supported by the shipping industry in Tasmania. Being from an island state that is absolutely reliant upon Bass Strait shipping, Tasmanians have a strong cultural affinity with the sea and with Bass Strait. Maritime operations are central to life in my electorate of Braddon and are vital to the Tasmanian economy. Like many in my home town of Devonport, Bianca, whose husband works as a seafarer, saw the crew from the Alexander Spirit when it was docked in Devonport in 2015—we have just celebrated the third anniversary of that dispute. The crew were told they would be sacked and replaced when the ship next docked in Singapore. This action has had a profound effect on her family and puts a human face on what it would mean, should this government have its way. Bianca told me: 'I lay awake at night, worried about my husband's job, worried that he and his shipmates are going to be replaced with a foreign crew, without warning. The current coastal shipping laws mean some security for my family. It means that my children, as proud Australians, will have a chance to go to sea, just like generations of my family have done before me.'

Over 99 per cent of Tasmania's freight volumes are moved by sea. The timely and efficient movement of passengers and goods to the mainland not only mean hundreds of local jobs but also supports important industries in tourism, agriculture, forestry, aquaculture, and the mining and manufacturing sectors. The most recent data from Tasmania's Department of State Growth states that over 12.5 million tonnes of freight is moved through Tasmania's publicly owned ports. An additional 2.4 million tonnes of freight is move through Port Latta, which is in my electorate. Tasmania's freight task is a mix of bulk commodities, at 65 per cent, and containerised freight, at 35 per cent. Eighty per cent of Tasmania's sea freight is for interstate trade, 17 per cent is for international exports, and a small amount is direct overseas freight.

Our containerised freight task is also seasonal. For imports, volumes increase in the spring and early summer. For exports, volumes increase between the summer and late autumn, driven by agricultural production. Tasmania is well serviced by three Australian owned and crewed shipping companies: Toll, SeaRoad and TT-Line. Just last week Toll Shipping announced its two new Bass Strait freighters are expected to start operating on 1 March next year. My local Burnie newspaper, The Advocate, reported that this is part of a $311 million spend, which the Melbourne headquartered company said would significantly increase shipping capacity between Tasmania and the mainland and support economic growth and rising demand for Tasmanian produce. The vessels set to operate between Melbourne and Burnie are being purpose-built at a cost of $170 million. The project also includes $141 million to upgrade terminals, wharves and berthing facilities at both ports. Toll Group managing director, Michael Byrne, said:

This is the largest ever investment by a logistics business in the Bass Strait, and underpins Toll's commitment to the Australian domestic market and the Bass Strait trade.

Another Bass Strait operator, SeaRoad Shipping, launched its $110 million Searoad Mersey II vessel in 2016, which lifted the operation's capacity by 62 per cent. They also have plans to replace the Searoad Tamar. All of this investment and the hundreds of jobs it supports would be placed at risk by this bill. That is unacceptable to me and to the people in my electorate.

The Tasmanian government's Tasmanian Integrated Freight Strategy contains the following statement:

Tasmania’s freight system underpins business and economic growth in the state. … It also equips our economy to optimise growing national and international demand for Tasmanian products. A reliable freight system is critical to Tasmanian businesses retaining and accessing new markets.

I would think the ears of those opposite should be pricking up on this kind of language.

A large proportion of Tasmanian sea freight is also time-sensitive, reinforcing again the need for reliable shipping services. This time-sensitive task is especially important to Tasmania's agriculture and aquaculture industries. These are high-value products and include seafood, cherries and berries. Currently, there is no dataset that comprehensively defines or quantifies the time-sensitive freight market. However, the Tasmanian government, through Infrastructure Tasmania, has recently completed a report examining production volumes and potential market growth across 28 time-sensitive freight commodities, including salmon, potatoes and frozen meat. The findings of this report are significant when you give consideration to future freight volumes and a vital need for a regular and reliable shipping services. The review found that even under a modest growth scenario the time-sensitive freight segment is forecast to increase by 43 per cent.

I trust the House now understands how vital a regular and reliable shipping service to Tasmania is. This government has destroyed Australia's car manufacturing industry, and now it seems that this government is determined to destroy Australia's coastal shipping industry and, more broadly, our maritime industry. I have listened intently and I'm yet to hear one member on the opposite side say the magic words, 'I support the Australian shipping industry, Australian ships, Australian crews and Australian jobs.'

As with so many other pieces of legislation that come into this place, this government has form. A previous bill that sought to deregulate the Australian domestic shipping industry resulted in replacing Australian ships with foreign ships and replacing Australian crews with cheap overseas labour. Tasmanian-owned shipper SeaRoad said at that time that they could be forced to replace local crews with foreign workers. SeaRoad was also concerned that that bill would ultimately lead to reduced services and increased prices. The government's own modelling from that bill anticipated that four of the six ships serving the Bass Strait would be foreign-flag vessels if that bill was passed. Fortunately, the Senate saw the multiple flaws in that piece of legislation and rejected it.

Even with the failure of that bill, a dozen Australian ships have been reflagged as foreign ships, replacing Australian crews with overseas labour. I put this test to every member sitting opposite who intends to support this bill: go and speak to one of the many, many workers on the MV Portland or the Alexander Spirit, who were sacked at the stroke of the pen by Senator Abetz, which meant that those ships were going to be sent off, replaced by a foreign ship with a foreign crew. Many of those workers, including in your state, Mr Deputy Speaker Buchholz, have yet to find other work. The crew of the Alexander Spirit, while docked in Devonport, were told they would lose their jobs when the vessel next docked in Singapore. While this ultimately did happen, I was heartened to see the strong community support for the crew of the Alexander Spirit. Those crew members were not local to my home town, where that dispute took place. They were from across the country, but the community stood beside them. Braddon voters, Tasmanians and Australians do not want to see Australian jobs going to overseas workers. This is what this bill would do, and those sitting opposite who vote for this are potentially sacking hundreds of seafarers and replacing them with foreign workers doing exactly the same job as the Australian workers.

Not only that; this bill places more risk on our fuel security and our national security. To some members opposite, these are important factors that they support at any other time of the week. If they vote for this bill, to me it's just an ideological attack on maritime workers and the industry and any future notional support from those opposite to espouse national fuel security as something they care about is just a hollow, insincere gesture. If those opposite are truly concerned about fuel security, as I know the member for Canning is—he's the chair of the Parliamentary Joint Committee on Intelligence and Security—and Liberal Senator Jim Molan, they should cross the floor and not support this bill. It's that simple.

I will explain a little bit further. I've spent a lot of my time outlining why a regular and reliable shipping service is critical to Tasmania. I would have thought that to give the Australian shipping industry confidence the government would want to achieve bipartisan support. In fact, in the minister's own discussion paper for this bill he said that bipartisan support is essential. On this count alone he has failed. This bill allows temporary-licence foreign-flag vessels to significantly vary their freight volumes and the days they are carrying the domestic freight, at the same time making it almost impossible for an Australian general-licence ship to contest those movements. This means that Australian shippers simply won't know what is being carried until after the event. In effect, this means that any half-smart foreign operator and 'compliant' local freight company can game the system to use foreign-flag ships.

What is also disappointing is that despite the minister making a commitment to consult on this bill, he did not do this appropriately. Australia's peak shipping industry body, Maritime Industry Australia Ltd, was not invited to the consultation sessions on this bill. MIAL's membership includes Toll, SeaRoad, ANL, North West Shelf Shipping Services Company and BP Shipping to name just a few. No other Australian maritime businesses, except Carnival Australia, which is a cruise ship operator, were invited. How can you possibly consult on shipping changes without speaking to the actual shipping companies? It was almost as if the minister wanted to consult in an echo chamber, where the sounds he heard were the ones he wanted. If he had consulted with MIAL, he would have heard this—and I quote from MIAL's media release from September last year:

… there is nothing in the Bill to assist Australian shipowners compete with foreign ships that have all but unfettered access to coastal trades. We held low expectations on that front and unfortunately haven't been disappointed there.

This is a damming indictment of this bill from Australia's peak shipping industry body.

Following discussions with SeaRoad, I understand Bass Strait may currently have some protections. There is only one temporary licence available for Bass Strait. If one was issued from Devonport to Melbourne or Bell Bay to Melbourne, SeaRoad would be able to object and stop it. Similarly, Toll could do the same from Burnie to Melbourne. However, I invite the government to provide Tasmanian shippers with an assurance that this will continue, because I am concerned that, if this bill passes, Bass Strait may be opened up more widely to temporary-licence vessels. I am advised that this could be the case. If this is the case, how can potentially opening up Bass Strait to the whim of foreign shipping companies achieve the Tasmanian Liberal government's own objective of a reliable shipping service? What measures will the government put in place to prevent foreign shippers cherry-picking Tasmania's peak periods, thus undermining existing Australian owned shippers? What guarantee can the Prime Minister give to ensure Tasmania is serviced by Australian flagged shippers? I look forward to receiving these answers, and I will be on it until I get those answers. But there are so many other reasons why Labor will not support this bill.

6:26 pm

Photo of Rowan RamseyRowan Ramsey (Grey, Liberal Party) Share this | | Hansard source

Welcome back to the member for Braddon. I'm not sure how much you've learnt in the time you've been away, but I was interested to listen to that long list of great Tasmanian products that you are very confident about growing, and I know the Hodgman government is very confident about the growing agricultural sector in Tasmania. But it seemed to me that you were very focused on the jobs of MUA workers and very poorly focused on the jobs of those who work in agriculture. There is repeated evidence that the Australian coastal shipping trade runs at roughly four times the cost of the international trade, and that will be worn by the Tasmanian industries that you're so very proud of and that I'm keen to see succeed as well.

You also touched on fuel supplies. If we lose the coastal shipping trade, there is not one Australian registered tanker. There is not one tanker. Every voyage has to be offered up to the market and then it is passed by, which is a two-day delay, and then it is given to international shipping. So, unfortunately, you are defending something that has virtually passed us by.

I remember that we debated this bill in 2012. The member for Grayndler, then the minister, brought in the platform that we are living on now. He was very keen to give his mates in the MUA a good run. At the time, there were 22 Australian registered vessels. That was down from 55 six years before. Now, as it was then, the fleet remains old by world standards. We are the fourth-largest user of shipping in the world, but for most of the tasks we are served by a competitive world practice. But, if you're an Australian business needing Australian supplies, it's a whole different world. It's roughly four times the cost and a whole lot of red tape. This bill seeks to streamline, to speed up, the permit system.

In 2012, when then Minister Albanese brought in the current act, he said it was designed to ensure the Australian shipping industry survived. In 2012 there were 30 ships. In 2018 there are 13. That reduction was under the act that the member for Grayndler said would protect Australian shipping. There was a reduction in deadweight capacity, over those six years, of more than 65 per cent.

The average age of the registered fleet, all 13 of them—there are 13 registered under the Australian flag—is 24, up from 23 last year. The oldest vessel is 26 years old and the youngest is two. There is one vessel that is only two years old. But, if you remove the two-year-old vessel from that list, every other vessel is at least 17 years old, and the average age goes up to 26. This is a very old fleet by world standards. In fact, the world standard is around 13 years old. It's 13, and we've got a fleet servicing Australia that is 26 years old. The largest vessels—and this is interesting—those over 10,000 tonne deadweight, are all over 19 years old. Sadly, in June, CSL's Iron Chieftain, used to bring coal to Whyalla, suffered a fire on board. While it is still actually registered, it has been retired. The Iron Chieftainwas our largest vessel, at 50,600 tonnes—not too bad a size. The next largest vessel we have surviving in the trade is 27,700 tonnes. So it's a 20-year-old fleet, when the world average is 13. I'm glad the member for Grayndler has just walked in, because it is his act that has brought us to this stage.

How strong a message do we need? We are still protecting, basically, a dying species. There are 13 ships left in the trade. When will we wake up and realise that the horse has expired—or perhaps, a bit more like Monty Python, that the parrot is dead? Electorates like mine are in the firing line. Nyrstar in Port Pirie; GRA in Thevenard, out west of Ceduna; Liberty OneSteel in Whyalla—they are all users of coastal shipping. The best way to avoid this overly expensive and antiquated fleet is to import product as well.

At the time of addressing that bill in 2012, I brought up the issues for GRA, west of Ceduna. It is cheaper, as it was then, to bring gypsum in from South-East Asia to Brisbane and to Sydney than it is to ship it around the Australian coast—basically, from just west of Adelaide, to Sydney and Brisbane. It's four times the distance, but it's cheaper to bring it on the overseas fleet. I'm even hearing stories at the moment of companies talking about shipping their goods to Indonesia and then bringing them back again so they can avoid the coastal shipping trade. This is an incredible inefficiency that we are visiting upon our industries.

I touched on oil tankers; we don't even have an oil tanker. There is not an oil tanker registered in Australia. Yet, if the refinery companies want to shift fuel up and down the coast, they have to put that out to tender on the Australian market—only to find no-one tenders—and then they can go to the international market. Talk about ridiculous red tape. We need to let this system evolve to reflect the Australia that we are living in at the moment.

I also raised, in 2012, the cost of demurrage. I haven't checked the figures again, but I don't imagine they're much different today from what they were then. Demurrage is $10,000 a day. That is when a ship is lying off-port, at anchor, waiting to get into the loading dock. It's $10,000 a day for an international ship and $37,000 a day for an Australian registered ship. That's enormous! That is an enormous difference. Essentially, we are inflicting extra cost on our fully Australian industries—those employing Australian labour, as the member for Braddon talked about; those that are giving a leg up, an opportunity, to our kids. We are imposing extra costs on them to protect an ever-dwindling number of jobs in the MUA.

The parliament is indebted to a former member for Wakefield, Bert Kelly—a heroic man who waged a one-man battle against tariffs in Australia throughout his time in parliament. Gough Whitlam eulogised Bert Kelly at his funeral. He said, 'No one man has done more to change Australian economic policy as a backbencher than Bert Kelly.' Bert Kelly talked about lowering tariffs and protections when it was completely unfashionable. His adage was that one man's tariff is another man's job. So it is with the coastal shipping act. The protection of the marine workers is costing jobs in the rest of Australia. Other people are paying the cost of those jobs.

We are a free and open economy in most cases. We certainly have to trade with the world. We sell 75 per cent of the food we grow to the world. We are a major export nation. In as much as we can access overseas shipping for the bulk commodities, we are treated well. But in as much as we're trying to support our manufacturing industry, shifting commodities around Australia for the blast furnace in Whyalla or the blast furnace and metal manufacturing plant in Port Pirie, or trying to get gypsum from Kevin around to Melbourne so we can use gyprock to build Australian houses, we are imposing a major penalty on those employers and on those businesses. This bill doesn't seek to abandon the Australian maritime industry—even though, probably, if I had my druthers, I would—but perhaps it is being a bit more pragmatic about the world in which we live at the moment. It is an assessment of the capacity of the Australian fleet.

The bill also seeks to lighten the red-tape disincentives for superyachts to come and visit our communities. I'm not too sure how many superyachts you have, Mr Deputy Speaker Vasta. I don't have one yet. But the people who have them like to sail the world, and they like to come to the South Pacific.

Photo of Rowan RamseyRowan Ramsey (Grey, Liberal Party) Share this | | Hansard source

And they like to spend money—thank you for that help. At this stage, it's difficult for them to come to Australia, because they'd have to get single-voyage permits, so they go to New Zealand and they go to Fiji. So, New Zealanders and Fijians are benefiting from Australia's coastal shipping act. It seems absurd, really, doesn't it? I don't know how it's protecting jobs here. I don't even think it's protecting our superyacht owners. Perhaps it's protecting their wharf space from Europeans and Americans coming into their little bit of port. I don't know. I mean, it is clearly absurd. Of course I'm making fun of the situation as it sits at the moment, but this bill seeks to get past that, to open up trade—as we should. We should always be opening up Australia to trade, on every front. We should always be breaking down the barriers that impose costs on our local businesses.

All in all, this bill is not as ambitious as the one that was put forward by the former Deputy Prime Minister, Mr Truss, but it is a reflection of what's happened to the shipping industry, which, despite the efforts of the member of Grayndler, continues to dwindle. More than 50 per cent of the capacity has gone since Mr Truss introduced that bill—63 per cent in 2012. Half the vessels have gone. The age of the vessels is double the world average. The writing is clearly on the wall. We are protecting an inefficient and outdated industry here, and Australia needs to sharpen up, get on with its act and reflect the realities of the day. This bill goes a little way—a little way—to addressing some of the issues that Australian industries face. I recommend it.

6:38 pm

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

I rise to oppose the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017. Australia is an island continent girt by sea, located in a relatively remote part of the globe. Almost all of our imports and exports are transported in the hulls of ships. Equally significantly, one-tenth of global sea trade flows through our ports. However, despite this obvious reliance on the maritime industry, Australia's own merchant fleet, as well as the skilled workforce it trains and employs, is fast disappearing. Our responsibility is to prevent the demise of this proud industry. The government's approach is to hasten the demise of this proud industry.

It is about more than jobs and skills; there are also very sound national security and environmental reasons for having an Australian fleet. Firstly, there are clear synergies between our naval and merchant fleets. Defence experts have long recognised the importance of maintaining a domestic maritime workforce that ensures Australia has a pool of highly skilled labour that can be quickly mobilised during times of war or other national emergencies. A national workforce forum that was established with a former Public Service Commissioner as chair, involving industry, the Navy and the agricultural sector, came up with a consensus proposal to advance workforce development with a very modest contribution from the Commonwealth, which was cut to zero as one of the first acts of the incoming Abbott government. Australian seafarers also undergo stringent background checks to ensure they pose no security threat. We hear a lot from this government about national security, including relating to people on boats, yet this government is prepared to have overseas seafarers whose backgrounds are a mystery on ships around our coast and in some cases in our harbours and our ports.

Secondly, Australian seafarers are familiar with our coastlines and have a vested interest in the protection of our world renowned environmental assets such as the Great Barrier Reef. All of the significant maritime incidents around our coast over recent decades have something in common: a foreign flag on the back of those ships. Be it the Pacific Adventurer or the Shen Neng, an enormous ship that ploughed into the Great Barrier Reef off the coast because the captain literally forgot to turn through the channel, the major maritime accidents that have occurred in our waters and New Zealand's in recent decades have involved foreign flagged vessels crewed by foreign seafarers.

There are good economic, national security and environmental reasons for having an Australian fleet, which is why the former federal Labor government was so determined to rebuild Australia's shipping industry following years of neglect. Our goal was simple: we wanted to see the Australian flag flying on the back of Australian ships with Australian seafarers carrying more Australian goods around the Australian coastline. We wanted to see an international fleet with the Australian flag on the back of it and with Australian seafarers.

After extensive consultations with all sections of the industry we put in place far-reaching reforms that were designed not as a protectionist model but as a model which reduces the costs faced by Australian shippers in order to level the playing field with their international competitors. The 2012 reform package amended legislation from the Navigation Act 1912. The major legislation governing shipping in this nation had been in place for literally 100 years. There were all sorts of arcane provisions in that legislation, such as the fact that a captain could be free from prosecution if they literally murdered a lunatic, defined in the act, around the coastline. That was part of the legislation that was still in place, which was derived not of course from 1912 but really from Westminster in the 19th century. Yet it hadn't been updated.

We had a comprehensive update. The package included a zero tax rate, more-generous accelerated depreciation arrangements, rollover relief for selected capital assets, new tax incentives to employ Australian seafarers, and an exemption from the royalty withholding tax for bareboat leased vessels. To further strengthen the local industry, an international shipping register was created, allowing operators of Australian flagged vessels to employ mixed Australian and foreign crews on internationally agreed rates and conditions. These measures were based on extensive reform programs that had already been implemented by other maritime nations, including the United Kingdom, Japan, China and Denmark. For example, when the UK government introduced a tonnage tax in 2000, its fleet almost doubled in size in just the next seven years. So, while others were employing policies to keep their industry afloat, our industry was sinking into oblivion. Importantly, Labor's changes did not preclude the use of foreign vessels. They simply required that firms needing to move freight between Australian ports first seek out an Australian operator. When none was available, foreign vessels could be used, as long as they paid Australian-level wages on domestic sectors.

Our efforts to revitalise this country's shipping industry didn't stop there. We also enacted that first major rewrite of the nation's maritime laws in a century. We've made sure that oil companies pay for any and all damage that their ships may cause. We developed Australia's first national ports strategy, and we replaced a myriad of confusing, often conflicting state and territory based laws and regulations with just one national maritime regulator, the Australian Maritime Safety Authority, administering one set of modern, nationwide laws. However, for Labor's suite of reforms to work, they needed time. Because they relied upon investment—and investment decisions don't occur over a month or even a year; they occur long term, for the life of the vessel—they needed that certainty. Before the reforms even took effect, the coalition sought to undermine them. Their attacks were calculated to create uncertainty and doubt in the minds of those considering investing in the Australian industry as to the durability of the regulatory changes and the new tax incentives. Still, some companies, like SeaRoad in Tasmania, certainly did invest in new vessels. But, not satisfied with white-anting Labor's reforms in opposition, once elected the coalition moved quickly to scrap them altogether and dismantle what remained of the industry.

All of us want to reduce the cost of doing business in Australia, but at what cost, if the cost is the destruction of a strategically significant industry and the loss of a highly skilled workforce? In the end, that will put up costs over a period of time if you don't have Australian competitors. The legislation put forward by then minister Warren Truss put ideology ahead of the national interest. Contrary to the coalition's repeated claims that their proposed changes were designed to eliminate red tape and strengthen shipping, what they were about was eliminating Australian jobs. That wasn't a matter of rhetoric or argument from the Australian Labor Party. You just had to look at the regulatory impact statement. The regulatory impact statement attached to that legislation stated explicitly that the savings were as a result of the replacement of Australian seafarers and wages with foreign seafarers being paid foreign wages. Ninety-three per cent of the savings that were identified were as a result of that.

No other major advanced nation has attempted to engage in such unilateral economic disarmament, which is what it was. For this reason, the Senate rejected the coalition's legislation after the evidence of people like Mr Bill Milby of North Star Cruises, who gave evidence that he had actually had consultations with officials from the department of infrastructure at forums where this policy was launched. Of course, it was launched at the body run by the foreign shippers. That was where the policy was launched. When Mr Milby asked for advice on what to do, he was advised to replace the Australian flag, to register as a foreign flagged vessel and to replace his Australian workforce with foreign workers—quite extraordinary. That was the evidence given by Mr Milby before the Senate committee in this parliament—an extraordinary proposition.

What we've seen since then is, quite frankly, an abuse, including by the department, with regard to the way that the legislation has been implemented. The legislation, as it currently exists, provides for temporary licences. We did that to allow flexibility. What has occurred is abuse. Perhaps the most obscene example of that is the MV Portland. The Portlandtakes the raw materials for aluminium from Western Australia over to the smelter in Portland on the coast of Victoria and then goes back again. There is nothing temporary about the Portland. Yet, in the middle of the night, seafarers were thrown off that vessel. People on that side talk about thuggery. People were thrown off their workplace in the middle of the night to be replaced by foreign workers. I don't understand how the National Party, a party that says it's about the Australian national interest, can support that, but it has supported it over and over again. On this government's watch, the Pacific Triangle, the CSL Pacific, the Lindesay Clark, the Tandara Spirit, the British Loyalty, the Hugli Spirit, the Alexander Spirit, the MV Portland, the CSL Melbourne, the British Fidelity, the CSL Brisbane and the CSL Thevenard have all gone, replacing the Australian flag with the white flag when it comes to the protection of Australian jobs and the Australian national interest.

This bill will only accelerate the industry's decline, eventually consigning Australia's status as a proud maritime nation to the history pages. That would be an unbelievable development for an island continent like Australia. It's no wonder that, the last time this legislation was before the other chamber, it didn't even get a second reading. People like former Senator Nick Xenophon and others, who always vote for a second reading in the other place because they argue that that's just allowing further debate, saw this legislation as being so reactionary, so against the Australian national interest, that it didn't even get to that stage. Let me tell you: this legislation will not go anywhere either. It is sunk before it has even been through this chamber, and that is a result of the implications which are in it. That's why there's no support.

In spite of the fact, as we've run through minister after minister—and there have been four infrastructure ministers in the recent period that I've shadowed; it's a revolving door—I've said that I'm prepared and Labor is prepared to have constructive dialogue, but they are not interested. This legislation was introduced not by this minister or the minister before, but, I think, the one before that. Minister Chester, I think, introduced this legislation. It has not received any support. The Australian shipping industry itself opposes this. The workforce opposes this. People who actually understand this industry are all opposed to this legislation because it would undermine the integrity of the entire coastal trading regime. So we will be moving a second reading amendment, and then we will have further amendments in consideration in detail.

Let's look at the two sets of amendments in this bill which are particularly problematic. The first amendments relate to the tolerance provisions. The proposed changes to the tolerance provisions would further deregulate what is already one of the world's most liberal coastal trading regimes. The proposed amendments would make it almost impossible for a general licence holder—namely, an Australian-flagged vessel—to contest work, because their owner-operator would never know the actual volume to be loaded or the precise loading date. So they're being asked to basically go for a contract for work without knowing when it'll happen and what the task is. No wonder the domestic industry opposes it. In its submission to the discussion paper, the Australian Institute of Marine and Power Engineers said:

The ultimate voyage carried out may bear no resemblance to the original voyage for which the Temporary Licence was granted. AIMPE opposes this proposal.

According to the peak industry body, Maritime Industry Australia Ltd:

Without the tolerances being meaningful (and remembering that these were expanded by the 2012 reforms from 10% and 3 days to 20% and 5 days) the system may as well be deregulated entirely.

The Maritime Union of Australia says:

Such open-ended tolerance provisions would totally undermine accepted commercial arrangements and make it impossible for a GL holder to contest a cargo, as the GL holder would not know what they are contesting. The ability to position a ship when the loading date could vary by up to 30 days would be commercially untenable for a GL holder, as would be the unknown nature of the cargo volume.

Operators of vessels involved in the coastal trade have also expressed their concern about changes to the tolerance limits, including CSL, which currently owns three Australian-flagged vessels operating around the coastline. According to another, ANL:

… the current date tolerance seems reasonable …

There's no justification for putting this forward. There is a flexible regime now, but it works. By way of comparison—and I note the member for Dawson is here; he's a bit of a fan of President Trump—in the United States, there is no possibility of any ship other than one with an American flag on the back of it taking goods from San Francisco to Los Angeles—none! They have a completely closed system, and that's a bipartisan position supported by both the Democrats and the Republicans in the United States, because they understand that it arose out of the need to defend their nation. As a result of that and the emphasis they have on defence, they understood the importance of having a national maritime industry. Yet, here in Australia, which has one of the most liberal regimes in the world, this mob want to make it impossible to have an Australian-flagged vessel with Australian workers on it. Just think of the implications for national security.

The second proposal in this legislation is to so-called streamline the temporary licence variation process. I've already spoken about the abuse of the temporary licence process when it comes to vessels like those that replace the MV Portland. Currently there are two types of licence variations to an existing temporary licence. Firstly, there are authorised matters, namely a change to a loading date or volume on an existing planned voyage. Secondly, there are new matters, which authorise an entirely new voyage on an existing temporary licence. In the name of streamlining the bill proposes replacing the two types of licence variations with a single provision. However, reclassifying the addition of a new voyage to an existing temporary licence from a new matter to an authorised matter would halve the time available to a general licence holder—Australian ships—to apply for that new voyage from the current two days to just 24 hours, cutting it in half. In practice that would make it more difficult for the Australian industry to compete. Those opposite say they stand for Australian industry. According to Maritime Industry Australia Ltd—this is the peak Australian industry, not the Maritime Union of Australia; this is the industry, the employers and the bosses—any new voyage should be subject to the existing time frames for GL holders to respond or else the integrity of the system is undermined as GL holders' rights and opportunities are reduced.

In his second reading speech the former minister—Darren Chester, the one three ministers back, who introduced this legislation—assured the parliament that the bill makes amendments to the existing regulatory regime, rather than fundamentally restructuring it. However, in light of the two amendments I have just highlighted, this statement is not the case. This is what Maritime Industry Australia Ltd said on 13 September last year. They warned this:

… there is nothing in the Bill to assist Australian shipowners compete with foreign ships that have all but unfettered access to coastal trades. We held low expectations on that front and unfortunately haven't been disappointed there.

To be sure, the regulation impact statement is explicit about the bill's goal of increasing the presence of foreign vessels around the Australian coastline. This what is it says:

… the current framework makes it unattractive for foreign ships to enter the coastal trading sector … These amendments … will remove the barriers that currently face many foreign flagged vessels under the current system.

There you have it. They are saying explicitly what this legislation is about: favouring foreign-flag vessels rather than Australian vessels, all because of their ideology.

The destructive potential of this bill isn't limited to what remains of the Australian-flag merchant fleet. Just this week, Coral Expeditions, which is based in Cairns, has written about their opposition to this legislation. This is a cruise company whose vessels are crewed by Australians. They employ 150 seafarers in regional Queensland, North Queensland and Far North Queensland. They've been going for 34 years, and they're planning to invest some $100 million to acquire two new additional builds that will employ another 70 Australian seafarers. These cruises go to the Kimberley, Arnhem Land and Cape York regions. However, if the bill now before the House were to become law, it would not only jeopardise Coral Expeditions' expansion plans and the jobs they would create but it would threaten the very survival of the industry. This is what the company says: 'It will have the unintended consequence of killing off the growing and globally respected Australian-flag expedition cruise ship industry.' So says the group general manager, Mark Fifield, and the commercial director, Jeff Gillies. The letter concludes with this simple request to the parliament: 'We urge that the current restrictions on coastal trading for foreign flagged passenger ships be maintained in order to facilitate the steady and sustainable development of coastal tourism and the Australian seafaring industry.'

I spoke before about Mr Bill Milby of True North. He was opposed to the previous legislation. On the current legislation, he says this: 'The purpose of temporary licences was to allow foreign ships to carry cargo and passengers in the event that cargo and passengers were already waiting in a port to be shipped from one destination to another. This amendment allows foreign ships to apply for and be granted a temporary licence when there is no cargo or passengers thus allowing the foreign ship to wait at any port and choose to bid against any general licence holder at any time.'

So the fact is that this is opposed, and that's why I move the following amendment:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House:

(1) notes that during the current Government's tenure 12 previously Australian-flagged vessels have been reflagged to foreign States—in each case the Australian flag has been lowered and replaced with the white flag when it comes to Australian jobs;

(2) further notes that:

  (a) the consultations associated with preparation of the bill were negligible, the Minister failed to build bipartisan support for the changes he has brought before the Parliament, and the Government is attempting to tilt the 'playing field' further in favour of foreign operators to the detriment of Australian-based shipping companies and other domestic modes of transport, including rail; and

  (b) the Government's true intentions are confirmed in the bill's Regulation Impact Statement, which on page 9 reads '… the current framework makes it unattractive for foreign ships to enter the coastal trading sector' and on page 14 reads 'These amendments … will remove the barriers that currently face many foreign flagged vessels under the current system'; and

(3) reaffirms that Australia’s vital economic, environment and national security interests are best served when there is a viable, competitive and growing local shipping industry".

Before concluding, I want to touch briefly on the issue of superyachts. Over the past 12 months, there's been a concerted lobbying campaign to make it easier for foreign flagged superyachts to charter in Australian waters. They have sought changes to the coastal trading act which in turn would afford them protections from Customs obligations. In this bill, the government is attempting to do this, but the problem is that what it is doing through this legislation is potentially harming existing, more traditional sections of the domestic maritime industry. Indeed, it could open the way for foreign transhipment and bunker barge operators to apply for temporary licences to work around the Australian coast. Currently the companies performing these activities, which usually begin and end in the same port, are Australian based and employ Australian seafarers.

To be clear, Labor is open to reforms that are specifically about that industry and will promote the growth of the industry to the benefit of communities up and down the Australian coastline. But what we're not about is supporting reforms that have unintended consequences such as those that I have just described. We think a better, more sensible long-term solution would be new standalone legislation covering all tourism operators, both local and foreign. Alternatively, the government should give consideration to amending the Customs Act.

The fact is that this legislation as it stands is flawed. We will fight this legislation in the House. We'll fight it in the Senate. We'll continue to argue the case, because this is about a government that's not prepared to stand up for Australian industry and Australian jobs.

Photo of Ross VastaRoss Vasta (Bonner, Liberal Party) Share this | | Hansard source

Is the amendment seconded?

Photo of Andrew GilesAndrew Giles (Scullin, Australian Labor Party, Shadow Assistant Minister for Schools) Share this | | Hansard source

I second the amendment and reserve my right to speak.

Photo of Ross VastaRoss Vasta (Bonner, Liberal Party) Share this | | Hansard source

I thank the honourable member for Scullin. 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. If it suits the House, I will state the question in the form 'That the amendment be agreed to'. The question now is that the amendment be agreed to.

7:09 pm

Photo of George ChristensenGeorge Christensen (Dawson, National Party) Share this | | Hansard source

With great pleasure I rise to speak on the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017. I want to talk about the aspect of this bill relating to superyachts and the provisions around superyachts, because one of the greatest benefits of the bill will be the jobs that are created out of an expanding superyacht industry. I'm particularly thinking of jobs that will be created in my electorate, around the Great Barrier Reef, one of the prime spots that superyachts want to come and visit, particularly the Whitsunday Islands. The Whitsundays are somewhat of a sailing Mecca. This weekend Hamilton Island Race Week starts, followed the week after by the Shag Islet Cruising Yacht Club race week, where every sailor is also a vice-commodore. The Whitsundays are just so beautiful. People who have been there, who have been out on the water and seen those islands, know that this is a world-class destination comparable to any around the world when it comes to sailing, whether it be Monaco, the Greek islands or the Caribbean. Being biased, I've got to say that it's better.

In the Whitsundays, just near Airlie Beach we have the Abell Point Marina, a very large marina that's been developed in recent years by the company there, headed by Paul Darrouzet. They have been instrumental in pushing for the establishment of a superyacht hub in the Whitsundays. Kate Purdie, the general manager at Abell Point Marina, emailed me today saying that it's expected that large numbers of superyachts will venture into the South Pacific in the next few years leading up to the America's Cup in New Zealand. For the Whitsundays to benefit from this influx of superyachts, it is imperative that we have charter rules similar to those of other South Pacific countries, such as New Zealand. Should charter be permitted in Australia, it is expected that vessels will stay significantly longer in the region.

The problem, as was alluded to in that email from Kate from Abell Point, is that there are currently impediments amongst our regulatory settings that prevent superyachts from gaining a temporary licence for a round-trip voyage. The regulations currently force superyacht operators to pay customs importation duties and taxes, so they simply don't come. Why would they? When you're paying the equivalent of 10 per cent on a vessel that's $50 million or $100 million, you simply go elsewhere. So, we don't get them. We have some domestic superyachts, but in terms of the big international drawcard, we simply don't get them. They go elsewhere. They go to New Zealand, they go to Monaco, they go to Noumea, they go to Vanuatu and they go to Fiji. They go anywhere else that doesn't have these impositions. What ends up happening is that we just lose the revenue. There are significant economic benefits—revenue in particular, as I said. The ability for these vessels to charter would unlock about $1.64 billion for our national economy, creating almost 12,000 jobs. That's money that I want to see pumped into the Whitsundays economy, pumped into the Mackay economy and pumped into the Townsville economy. That will be pumped into the Gold Coast and it will be pumped up into Cairns, and jobs will be created.

Bizarrely, there is an argument that's been put here, and I've heard it—and I've got to say, it's quite unfortunate that I heard some derogatory remarks by the Labor Party around this provision, as if this is some benefit for the richies. They simply don't come. They don't come to Australia, because of this tax. So, no money is actually being paid in tax at the moment. They don't come. We have domestic vessels here, but the significant number of superyachts that sail around the world go to places where there's no financial imposition on them like what we have in Australia, so they don't come, and we don't get that income. We could be getting income, because if they came and then they chartered the superyachts we'd be collecting the GST on all the tickets that went out. But they don't even come, so we don't get anything at all.

Blue-collar workers would receive a very big benefit from superyachts being here in their droves. Tradies and small businesses would be the big winners from superyachts spending time in Australia. Each vessel spends millions of dollars—about 10 to 12 per cent of their vessel value annually—in maintenance, which goes directly into small family-owned businesses up and down the coast, in these marinas, and employs workers. It's critical for all of these ports, particularly in places like the Whitsundays. Industry peak bodies are saying that superyachts domestically—and perhaps there are a few that come in from time to time, but not many—add about $590 million to our economy, but it could generate $3.34 billion by 2020-21, if the regulatory settings were right.

In 2016, Queensland Treasury commissioned an economic impact study of the superyacht sector. It was done by the Queensland Labor government. The strategy forecast Queensland's share of the global superyacht sector to increase by about 10 per cent, making Queensland a key destination for superyachts throughout the Asia-Pacific. The majority of the benefits would be in the Whitsundays, Cairns, and Port Douglas. Again, this is a critical reason why I'm here speaking on this and pleading with the other side to let it pass so that we can create these local jobs. It is money spent in the local community. But it's more than just the vessels getting fixed or serviced. There's the retail spend of the people who go on these vessels. They are very, very rich indeed and they drop a fair bit of coin when they're in a port. There are the food services—food that has to be loaded onto the vessels for the people on them. There is the accommodation, if they stop for a little while. Then there are the running costs, the repairs and maintenance and other provisions and supplies. Having a single superyacht in the marina at Abell Point, or any marina for that matter, would push about $50,000 to $60,000 a week into the local economy—a job a week. I'm told that in Noumea they have about 200 sitting there for a week every year. Think of the income we're losing. That is a lot of money flowing through a regional economy.

I have to give a lot of credit to Paul Darrouzet for being at the point we are at today with this legislation, Paul being the owner of Abell Point Marina. Back in 2016 we started this journey of looking at these provisions. He got in contact with me and said that, unfortunately, due to 20-year-old restrictions we achieve visitation from less than one per cent of the world's superyachts. Consequently, the vast economic benefits inherent in these visits are reaped by all of our Pacific neighbours, and specifically New Zealand, with its now world-class superyacht refit, repair and new-build industries. He said at the time that six superyachts that he knew of had stated in writing their intention to avoid the region in the next year, unless those regulations were removed, either by legislation, regulation, ministerial instrument or whatever is necessary. He has begged this place to remove the bureaucratic roadblocks and allow Australia's emerging superyacht industry to achieve its potential. We are here today to do that.

This legislation will exempt superyachts from paying customs import duties and taxes. It will remove the five-voyage minimum requirement, which better reflects the superyacht operating model. Superyachts are often chartered for a single voyage at a time. The operators follow the best weather and cruise the Pacific's beautiful locations, like the Whitsundays. The legislation will also broaden the definition of a voyage to include round trips—superyachts can't get temporary licences, because they're usually round trips that start and leave at the same port. The legislation will also allow vessels to dry dock under a temporary licence, which means repairs and refits of superyachts can be done in these places, once again pumping money into local economies and creating a hell of a lot of local jobs. I am told that what this legislation will not do is remove protections for Australian-flagged superyachts. An Australian-flagged superyacht operator with a general licence would still have the same right to contest an application under the coastal trading act.

This is an industry that is ripe for the picking. We've just got to get the settings right. Let me just explain the flow-on benefits that this could potentially have. There's a little community called Bowen in my electorate. Bowen has been a Labor town for a long, long time—until recently, I have to say. It is a coalmining town and a port town. These are salt of the earth workers. It's a little town that's suffered a death of a thousand cuts economically. Slowly things have been whittled away from it. We've pumped in government services there but industries have closed down, meatworks and saltworks have scaled back, and there have been knocks to the ag sector there. Adani, which everyone opposes, and the expansion of Abbot Point could have lifted that town up by now but, no, that's not to be.

Paul Darrouzet has a vision to have a huge marina down there at Bowen, which would have servicing centres for superyachts within it. This could create a whole new industry in that small town, which, as I said, over a long period of time—decades—has been dying a death of a thousand cuts economically. It could revitalise the place. It could create so many new local jobs just if we did this one thing—if we passed this bill—because there are people who are already looking to jump on board that potential investment and get it going. I'm very hopeful that we'll be able to deliver that for Bowen, but it is going to take this bill getting passed through this place to get that done, otherwise all these opportunities are dashed.

I've got to say that a lot of work that I have done, along with other people in the superyacht industry down here, over the last couple of years will probably have been in vain if this is not passed. We've done a lot in terms of changing the settings within the Great Barrier Reef Marine Park, working with the former environment minister—now health minister—and working with the current environment minister to get settings changed where these superyachts were restricted throughout specific areas of the Great Barrier Reef. They are completely unnecessary restrictions, because these are first-class environmental vessels. While they're big, big ships, they actually carry a very small environmental footprint. They go to very sensitive areas and they do it in a very well-managed process and a well-managed operation where they're not upsetting the local environment. We've done all that. We've achieved all that. We got the settings changed when there were people at the start saying, 'You probably can't do that. People will get upset,' but no-one's been upset. They've all been achieved.

What we need to do now is remove these financial barriers that currently send these superyachts to Noumea, Fiji and New Zealand—anywhere elsewhere where there's no financial barrier. All these other places are reaping the rewards in terms of the spend that the people who go on board the superyachts bring to local communities. They're getting the jobs. We're not getting them. We're not getting them in Cairns. We're not getting them on the Gold Coast. We're not getting them in Townsville, Mackay, the Whitsundays or Bowen. The sad thing is that if this doesn't pass this place, we just won't get them. It will go begging. It will take a long while before we get back to this place again where we're able to have a bill before the House that actually allows us to do this. It would be a great, great shame. For a little town like Bowen, a solid Labor voting town over most of its years of existence, another economic opportunity will be denied to them.

There are cheap shots that can be thrown, and they have been thrown in this place, about removing the GST off superyachts like it benefits the rich. It's nonsense. It will benefit these poor people in Bowen who are unemployed, underemployed and desperately seeking work. It will benefit the workers in Airlie Beach. It will benefit all of these communities up and down the Queensland coastline that could potentially have superyachts in there revitalising their communities with that extra spend.

I urge each and every one of the members of this House to think of those communities, think of those job opportunities, think of that money that could be pumped into these economies and vote for this bill.

7:24 pm

Photo of Brian MitchellBrian Mitchell (Lyons, Australian Labor Party) Share this | | Hansard source

I will respond to the member for Dawson. I could not help but think to myself, here he is advocating for the removal of GST from vessels worth $100 million, a tax that his party introduced to this parliament over the vehement opposition of those of us on this side. If his party hadn't introduced the GST he wouldn't be having that problem. You might want to think about that, Member for Dawson. This is a problem entirely of your own party's making. You brought in the GST; now you have to live with it. And to think that he stood there advocating for the removal of the GST from vessels worth upwards of $100 million, while the people of Bowen, when they go to their local shops, have to pay GST on the goods that they pay for—those good, hardworking people still have to pay the GST—well, it just beggars belief and says everything about those on that side of the House.

Australia is an island country. We are the only country in the world to straddle an entire continent. From east to west, north to south, we are surrounded by water. Of all the countries in the world, you would think that we, above all others, would cherish a domestic maritime fleet. Of all the countries in the world, you would think that it would be Australia that would home to a strong coastal shipping industry and that it would be Australia training the best maritime engineers, the best shipmakers, the best sailors and officers, the best technicians and the best navigators in the world. But that is increasingly not the case. Under the Howard government, Australian shipping was decimated. The Liberals happily turned a blind eye to massive rorting of temporary licences for foreign vessels in Australian waters, leading to the near disappearance of Australian vessels and Australian crews on our coastal routes.

When Labor defeated the Howard Liberal government, we introduced the Coastal Trading (Revitalising Australian Shipping) Act 2012, which breathed new life into the sector by changing tax rules and tightening the rules around foreign vessels. The member for Grayndler was infrastructure minister at the time, and his changes to the coastal trading act remain Australia's biggest maritime reform since the passing of the Navigation Act roughly 100 years earlier. But now, again, we have a new attempt by the Liberals to cripple Australian coastal shipping, and, more particularly, to target the men and women who work on Australian ships. I've heard it said by some that the decimation of coastal shipping is an inadvertent by-product of this. I don't believe it is. I think it's the aim of the government—to decimate Australian coastal shipping.

Let's not beat about the bush: we all know that the Liberals hate Australia's coastal shipping sector because its labour force is unionised and refuses to doff the cap. While workers are unionised, whether on ships or building sites, in schools or hospitals, or on trains, the Liberals will do everything in their power to bust them apart, because they know that workers who are not unionised are easier to control, will accept lower wages and will not stand up for their rights in the workplace. The Liberals care about one thing—getting the cheapest deal possible. They don't like Australian coastal shipping, because it costs more than the rust buckets crewed by exploited foreign workers that can get goods from A to B for a few dollars less. Little wonder then that the Liberals are so committed to repealing Labor's legislation, which provides fairness for workers and certainty for investors.

The bill we're speaking about today seeks to deregulate the Australian domestic shipping industry. It will have the same effect on Australian shipping that Liberal policies have had on Australian car manufacturing. It will destroy investment and destroy jobs. Importantly, it will destroy career pathways for young Australians. This bill removes the preference for Australian flagged and crewed vessels, and replaces the three-tiered licencing regime with a single permit system that grants access to vessels of any nationality to work the Australian coastline for a 12-month period. It significantly extends the period of exemption from domestic wage standards for workers on foreign vessels in Australian waters. It's a disgrace. Every bit of this bill is an affront to Australian workers.

The Liberals are actively seeking to replace Australian ships with foreign ships. The Liberals are actively seeking to replace Australian workers with foreign workers. The Liberals are actively seeking to replace Australian wages in Australian waters with foreign wages in Australian waters. And they're not even being covert about it. If they can do this with ships, they will do it with shops, and they'll do it on building sites. How long before the Liberals actively seek to replace Australian shop workers and Australian construction workers with foreign workers on visas? How long before the Liberals actively seek to replace Australian wages with lower foreign wages on land, not just on water?