Wednesday, 15 August 2018
Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017; Second Reading
I can't let this moment go by without wanting to associate myself with all of the speeches and comments made before the Australian parliament today. I think a moment that unites this parliament against intolerance and division is always worth noting, and I'm so very proud of our parliament today.
I will continue my earlier comments with regard to the bill before the House today, the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017. I go back to some prior history, prior to this bill, back in 2015, when the Abbott government launched the first volley in its war on Australia's maritime sector through its thoroughly odious Shipping Legislation Amendment Bill 2015. That bill, which those of us on this side of the House remember being more aptly titled the 'WorkChoices on water' bill, scrapped the preference for all Australian flagged and crewed vessels and granted access to vessels of any nationality to work the Australian coastlines for a 12-month period. It also significantly prolonged for foreign vessels the exemption period from domestic wage standards. If this first bill had passed the parliament, 93 per cent of Australian seafarers would have been replaced with cheap foreign labour. Thankfully that wasn't the case. The government's own modelling revealed that more than a thousand seafarers would have been put out of work under what was then the government's preferred model. Moreover, the regulation impact statement showed that 88 per cent of the savings touted by the government were the direct result of bringing in cheap foreign labour rather than highly skilled Australian seafarers on proper wages.
This bill would effectively be the death knell for Australia's maritime industry. That's why those of us on this side of the House have been so strident in our criticisms of the bill before us. Thankfully that 'WorkChoices on water' bill was refused. The Senate threw its weight behind the Australian shippers and the Australian workers, who were unified in their rejection of that legislation. Regrettably this bill before the House today is of exactly the same intent. It has the same endgame: the decimation of Australian industry and Australian jobs. If passed, this will undermine the integrity of the entire coastal shipping regime in Australia and make it all but impossible for Australian flagged vessels to compete with their foreign flagged counterparts.
With my limited time available I will reflect on some of the critical, significant issues that Labor has with this bill today. One relates to the so-called tolerance limits. These define the acceptable range of loading days and acceptable variations in cargo or passenger volumes that apply. The second issue for Labor is the proposal to change variation processes for temporary licences. At the moment there are two ways to get a variation for a temporary licence. The first is for an authorised matter, such as a change to loading date or volume of a planned voyage, and the second is for a new matter, which authorises a completely new voyage. The bill before us today replaces both of these with just one single variation. The government tries to argue that this is merely streamlining the system, but the real impact of this change would in fact slash the time available for an Australian general licence-holder to apply, making it very difficult for operators to compete for work. This bill, like the previous bills from this government, is a full-frontal assault on the Australian shipping industry. We must oppose such bills. Those of us on this side of the House do so. I urge the government to reconsider its reckless behaviour.
The Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 is the Turnbull government's second attempt to wind back federal Labor's 2012 coastal trading reforms. Those reforms were introduced after a time, under the Howard government, when coastal shipping had basically been destroyed in this country. The number of ships and companies that were operating on the Australian coastline, carrying goods and providing jobs for workers, had been smashed by the Howard government. Who could ever forget, unfortunately, that this year is the 20th anniversary of the Maritime Union strike on the wharves, where the Howard government acted illegally?
The Howard government broke the law in Australia—as determined by the High Court in a 6-1 judgement—when they illegally locked out a complete workforce and conspired with a large Australian corporation, Patrick Stevedores, to bring the military onto the docks and take those workers' jobs. We all remember the footage of the dogs, the alsatians, and the locked gates and the military-style operation that was undertaken. That was all illegal. The Howard government broke the law regarding the Australian workforce on the docks in the 1990s. And that's been their approach to coastal shipping and to this issue since then.
The Liberals don't believe in protecting Australian workers' jobs in the maritime industry. They want to allow what they call flag-of-convenience ships—operators from countries that don't have the same safety standards as Australia does and that don't have the same wages and conditions for workers as Australia does—to operate on the Australian coastline and take Australian workers' jobs. This mob specialise in ruining Australian workers' lifestyles and jobs, and that's what they want to do with the passage of this particular bill here in this place. They call it the 'revitalising Australian shipping' amendment—wonderful Orwellian language for the title of a bill, because it does the exact opposite. It will actually destroy Australia's shipping industry and destroy those hard-fought-for jobs that provide decent incomes for people working under what are generally dangerous conditions.
According to the explanatory memorandum, the bill's aims are to simplify coastal trading regulation, reduce the administrative impost associated with the current regime, expand the coverage of the Coastal Trading Act and provide clarity on a number of minor technical matters. Compared with the extensive consultation process that was undertaken prior to the introduction of the reforms Labor introduced in 2012, the consultation associated with the preparation of this bill has been, basically, non-existent. That is why it is opposed by everyone who works in this industry. Of course, the bill will only accelerate the industry's decline, eventually consigning Australia's status as a once-proud maritime nation to the history pages.
It is a shocking result, but, coming from this government, it's something that we really shouldn't be shocked about at all. We've seen what this government are about when it comes to workers and their incomes—supporting the cutting of penalty rates for working on weekends in the hospitality and restaurant industries. They've supported changes to workplace relations laws that made it harder for workers to bargain in their workplaces to get a decent standard of living, wages and conditions. They've removed the obligation on employers to continue bargaining with employees when they can't reach agreement, and that now allows employers to basically put people back onto award wages and remove an enterprise agreement that operates in a particular workplace.
That's why we've seen a dramatic reduction in the number of enterprise agreements that are negotiated in Australian workplaces at the current time, and it's one of the factors that's contributing to the very low wages growth that we've seen in this country over the past six years, which is deeply affecting household incomes in Australia, and it is putting enormous pressure on the cost of living for many Australian households. That's why they feel they're being left behind by this government when it comes to soaring electricity prices and increasing costs associated with education. Private health insurance goes up by whopping amounts every year. General insurance is always going up, but wages aren't going up. In fact, real wages are going backwards, and this government is cheering on from the sidelines with cuts to penalty rates and changes to workplace relations laws.
If this bill were to pass the parliament it would undermine the integrity of the entire coastal trading regime that was put in place by the former, Labor, government. There are two sets of amendments that are particularly problematic. The changes would further deregulate what's already one of the world's most liberal coastal trading regimes. The proposed amendments would make it almost impossible for Australian GL vessels, Australian flagged vessels, to contest work, because their owner-operator would never know the actual volume or precise loading date. In responding to the discussion paper about the introduction of this bill, the Australian Institute of Marine and Power Engineers said in its submission:
The ultimate voyage carried out may bear no resemblance to the original voyage for which the Temporary Licence was granted. AIMPE opposes this proposal.Maritime Industry Australia Ltd said that without the tolerances being meaningful—and remembering that these were expanded by the 2012 reforms from 10 per cent and three days to 20 per cent and five days—the system may as well be 'deregulated entirely'.
That view is echoed by the Maritime Union of Australia:
The MUA is strongly opposed to the proposed amendment. 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, including CSL, which currently runs Australian flagged vessels around the coastline, employing Australians, have also expressed their concerns about the changes to tolerance limits. This is the point: they can't even get the employers onside with what they're doing here. The employers oppose it. They say that the current date tolerance regime seems reasonable.
Currently, there are two types of licence variations to an existing TL: authorised matters—a change to a loading date or volume and an existing planned voyage—and new matters, authorising an entirely new voyage on an existing TL. In the name of streamlining, as this government calls it, the bill proposes replacing the two types of licence variations with a single TL variation provision. However, reclassifying the addition of a new voyage to an existing TL from a new matter to an authorised matter would halve, from the current two days to just 24 hours, the time available for a GL holder to apply for that new voyage. Put simply, it would make it more difficult for Australian vessels and owner-operators to compete for work.
The major peak body that represents Australian owned shipping operators and other Australian based maritime businesses, Maritime Industry Australia Limited, says:
Any new voyage should be subject to the existing timeframes for GL holders to respond or else the integrity of the system is undermined as GL holders rights/opportunities are reduced.
Another submission stated:
This unreasonable competitive advantage arises as the proposed amendments allow foreign shippers to compete in the domestic freight market against land freight transport operators that have to comply with all laws and regulations. In particular, exemptions would allow foreign ships to incur substantially lower wages, conditions and associated workplace relations costs when compared to rail, road and Australian-based coastal shipping companies.
That is the voice of the industry. They are saying that they have concerns about what the government is doing here.
Labor is not prepared to co-sign the death warrant of the proud Australian maritime industry, but that's exactly what we will do if this bill is passed by the parliament. Labor is not prepared to see Australian workers put out of jobs. We are not prepared to see Australian businesses, many of which have been around for centuries and have served the coastline of Australia in a very safe and dignified manner, providing jobs for Australians, put out of business.
The bottom line is that there is a very real difference between the two sides of politics when it comes to shipping in this country. The coalition doesn't believe that Australia needs a viable, competitive and growing domestic industry. The Labor Party does and we will be taking a set of policies to the next election that will help rebuild Australian shipping and ensure that it is viable into the future. Simply put, we want more Australian seafarers and to see more of them crewing Australian flagged ships carrying more Australian goods around the Australian coastline. Our long-term national interest demands nothing less. What the government is attempting to do here is completely undermine that goal and that ambition for Australian shipping by allowing in foreign flagged vessels—vessels that come from places like the Philippines and countries in South America that are known as flag-of-convenience vessels—that specialise in going around the world and undercutting conditions that exist, through regulations, in domestic markets.
Australia is an island nation. We rely on sea transport to get goods in and out of our country. The health of our economy relies on a strong maritime industry. It has been one of the staples of this country's economic development over the last couple of centuries, yet this government is willing to undermine that by allowing foreign operators, non-Australian vessels, to bring foreign crews onto the Australian coastline, putting Australians out of work—all in the name of deregulation and cutting costs—and undercutting the costs of Australian shipping providers and workers. Well, Labor won't allow it, and that's why an amendment has been moved by the shadow minister for transport. It's a very sensible amendment, and I urge all members of the House to support that amendment and reject this ridiculous notion, which has been put forward by the Liberal government, that will undermine the Australian shipping industry.
Those who fail to learn from history are doomed to repeat it, so I thought I'd take this opportunity today to teach those opposite a valuable history lesson and implore them to reconsider this bill, the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017. When federal Labor took office in 2007, the Australian shipping industry was in decline. Our shipping industry had dropped from 55 Australian flagged vessels in 1996, at the beginning of the Howard government, to just 21 by the end of that government in 2007. The former Labor government then endeavoured to revitalise the shipping industry, spending years consulting with industry, unions and other key stakeholders about how to best support our shipping industry in Australia.
In the interests of assisting my colleagues opposite, in case they weren't aware, we live on a continent that is, indeed, surrounded by the ocean—we are girt by sea—and where the vast majority of importing and exporting occurs in the hulls of ships. In fact, one-tenth of the world's sea trade flows through our ports. This is hardly insignificant. Yet, despite our nation's obvious reliance on the maritime industry, Australia's own merchant fleet and the skilled workforce it subsequently trains and employs are rapidly disappearing. At last count, 12 Australian vessels have been reflagged since the election of this Liberal government in 2013. One of these ships is the MV Portland, an Australian flagged and crewed ship that has been used to transport Alcoa alumina from Western Australia to the smelter in Victoria for more than 27 years. The name might ring a bell. The Portland's crew were forcibly removed from the ship in 2016, as they refused to sail it to Singapore, where it was to be scrapped. After they were escorted from the ship, a foreign crew was escorted on board and took control of the ship. Now a different foreign ship with a different foreign crew undertakes the same route, transporting the same volume of alumina, all to save a big business millions of dollars but at the expense of millions of Australian jobs. Then there are the CSL Thevenard and the CSL Brisbane, now proudly flying the flag of the Bahamas.
We must prevent the demise of our proud maritime industry before it's too late. We must strengthen Australian shipping policy, and that will not happen should this bill be passed. Since the election of this government in 2013, the federal coalition has been committed to repealing legislation that was the culmination of a four-year process of consultation—legislation that sought to facilitate the long-term growth of the Australian shipping industry by levelling the playing field and providing the industry with a stable fiscal and regulatory regime that would encourage greater investment and promote international competitiveness. That legislation became law in July 2012. These measures were based on an extensive reform program that had already been implemented in other maritime nations, including the United Kingdom, Japan, China and Denmark, to keep their industries afloat. One of the policies brought in by the UK government was the introduction of a tonnage tax in the year 2000, causing its fleet to almost double in size in the seven years that followed.
From the outset, this federal coalition government has been committed to repealing the legislation and deregulating our shipping industry. This would remove the preference for Australian flagged and crewed vessels, making it easier for vessels of any nationality to work the Australian coastline at the detriment of Australian jobs. Thank goodness that the Senate declined to give that bill, introduced in 2015, a second reading after it was realised that under that legislation 93 per cent of seafarer jobs on Australian vessels would be lost and the vast majority of the supposed savings that the bill was trumpeting would come from the abolition of Australian wage standards in favour of Third World 'standards'. You may think that this is being a tad melodramatic, yet a Senate inquiry heard that senior government officials advised a cruise company, in that same year, that the only way their company would remain competitive under the proposed legislation was to reflag their vessel to a foreign state, sack their Australian crew and hire a foreign crew with Third World wages. While that legislation did fail, the uncertainty it brought to the industry was successful in deterring investment in Australian vessels and shipping.
The bill now before the House represents this government's second attempt to quash Labor's 2012 coastal trading reforms. Labor's coastal trading reforms in 2012 weren't just based on Australian jobs and skills. You can appreciate that that would have been, and is, sufficient motivation enough. These reforms were also based on national security and environmental concerns. There are significant synergies between our naval and merchant fleets. Indeed, defence experts will tell you that maintaining a domestic maritime workforce is vital to ensure that, if required, Australia has a pool of highly skilled labour that can quickly mobilise during times of war or national emergencies. Similarly, we know that Australian seafarers are subject to stringent background checks to assess any security threat. The same cannot be said for the inflow and outflow of overseas seafarers. You would think that this government would want to know as much as it can about who is coming in and out of Australian ports and waters.
In addition to this, we know that Australian seafarers have a vested interest in protecting and respecting our world-renowned environmental assets, particularly the Great Barrier Reef and the Ningaloo Reef off Western Australia. The simple fact is that, in recent decades, all of the major maritime accidents that have occurred in our waters have involved foreign flagged vessels crewed by foreign seafarers, not experienced Australian crews. It was in the interest of our nation's economic, national security and environmental future that the former federal Labor government set about rebuilding our Australian shipping industry after years of neglect under a Liberal government. How can this government possibly argue with this concept of more Australian seafarers crewing more Australian flagged ships, carrying Australian goods around the Australian coastline? But, alas, we stand here today in the face of this bill. We believe that instead of distorting coastal shipping laws, as in this bill, it would be more appropriate to address these concerns in new standalone legislation covering tourism operators, instead of this issue that has been flagged of trying to change GST operations for superyachts—but I will turn to that later.
One of the numerous issues that have been put forward in this legislation is trying to remove red tape. It is red tape that the government says is hampering our shipping industries. But what we actually know is that we need to build bipartisan support for our shipping industry here in Australia. What's interesting is that at no stage before or after the release of the discussion paper that the government brought forward in relation to this legislation was the opposition consulted about the merits or otherwise of the proposed amendments. In the foreword of the discussion paper, the minister wrote:
… regulatory certainty, ideally bipartisanship, is essential for investment to be made in the industry …
For the benefit of the minister, I note that the definition of 'bipartisanship' is the agreement or cooperation between two political parties that usually oppose each other's policies. Maybe he got confused and was referencing his own party room's discussion on the NEG. This bill will only accelerate the shipping industry's decline into nothing more than a history lesson. This would be an unbelievable development in Australia, given that we are an island continent. Our import and export industries clearly rely on shipping. We also require shipping to move goods around and through our nation.
There are two sets of amendments in this bill that are of particular concern, the first being amendments to the tolerance provisions. This amendment would make it almost impossible for an Australian flagged vessel to contest work, because its owner-operator wouldn't know the actual volumes or precise loading date of a foreign vessel. The MUA is strongly opposed to the amendment, as such open-ended tolerance provisions would totally undermine accepted commercial arrangements and make it impossible to contest a cargo. The Australian Institute of Marine and Power Engineers explains there would be no way of knowing what a vessel was carrying because the ultimate voyage carried out may bear no resemblance to the original voyage for which the temporary licence was granted.
The second major concern we have with this bill is the streamlining of the TL variation process. Currently, there are two licence variations: authorised matters; and new matters. Through streamlining this, the authorised matter would halve the time available to a GL holder to apply for a licence, ultimately making it more difficult for Australian vessels, owners or operators to compete for work, putting Australian businesses at a disadvantage.
Almost a year ago, the minister assured the parliament that this bill would make amendments to the existing regulatory regime rather than fundamentally restructuring it. However, looking at these changes, that is blatantly untrue. Maritime Industry Australia, upon hearing of this, told us:
… there is nothing in the Bill to assist Australian shipowners to compete with foreign ships that have all but unfettered access to coastal trades.
The Australian Maritime Industry is concerned that this bill will tilt the playing field even further in favour of foreign operators, and now other transport modes are feeling the heat, too.
The Freight on Rail Group believes that this will also put them at a competitive disadvantage. Imagine that—changes to our shipping laws that will even put rail at a disadvantage when it comes to transporting goods across our nation. They say the proposed amendments have the potential to introduce 'an unreasonable competitive advantage to foreign ships that might choose to compete in the domestic freight market', and that:
This exemption would allow foreign ships to incur substantially lower wages, conditions and associated workplace relations costs compared to rail, road and Australian coastal shipping businesses.
Ultimately, how can we compete with Third World wages of companies from other countries? Well, we shouldn't. Labor is not prepared to sign the death warrant of this proud Australian industry, an industry that has made this country what it is today. We would not even be here—literally—without it. The bottom line is that there is a very real difference between our two sides of politics when it comes to shipping. The government doesn't believe in a viable, competitive and growing domestic industry. I think some would observe that shipping is only one of those industries that this government does not believe in.
Federal Labor, on the contrary, will be taking a set of policies to the next election that will be about rebuilding this industry. I don't think it's too much to ask that Australian seafarers, the crews of Australian ships, and even those that are operating Australian ships have our support in carrying Australian goods—instead of us making life easier for other countries to benefit from our industries. When we look at the long-term national interest, it deserves nothing else. What is really interesting to observe about this, as I mentioned before, is that a number of other countries have gone through a process of strengthening their support for their local shipping industries. When we look around the world, the trajectory of local shipping is being supported by all of our competitor nations. Economically competitive nations around the world are supporting their shipping industries. They ensure that it's only their countries' ships that are able to have access to port-to-port coastal trade in their nations. Yet, for some reason, our government has decided to do exactly the opposite. We talk about trying to support jobs in this country, to see wage growth and to grow our local businesses, and what this government has put forward in this bill is exactly the opposite: this is about reducing wages, reducing conditions and destroying local businesses—when the government should be doing the opposite and supporting our coastal trade and the Australian shipping industry.
The Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 further deregulates and erodes what is left of a once strong and vibrant Australian shipping industry. With coalition governments having, over the years, already decimated the Australian shipping industry, the Turnbull coalition government is still not content and is determined to wipe out the last remnants of this industry.
The destruction of the Australian shipping industry by coalition governments is a short-sighted national disgrace. It is in keeping, however, with coalition government philosophy of destroying unionised labour, driving down workers' wages and fair conditions, and attempting to weaken the Labor Party by weakening the union movement. This is a government which has intentionally destroyed Australia's auto industry for the same reasons—an industry which underpinned much of Australia's manufacturing industry for decades—and is now on the verge of doing the same with the Australian shipping industry. And it does that in pursuit of its blind ideology. It's a blind ideology of coalition governments who are prepared to destroy Australian jobs, destroy Australian families, diminish Australian national security, and in doing so damage the Australian economy and the nation's future.
As so many other speakers on this side have said, Australia is a land surrounded by sea. Every day over $1.2 billion worth of goods are imported and exported through Australia's 70 trading ports. Yet today Australia has only 11 or 12 trading vessels employing full Australian crews, a figure down from hundreds in the 1980s. In addition to the economic consequences for Australia that the demise of Australian shipping has caused, it has also created a national security risk, because, in times of national crisis, the merchant fleet can assist the Navy with supply of provisions, aid, fuel and surveillance. Furthermore, Australian crewed and operated vessels are much more likely to operate with the broader national interest in mind: abiding by Australian rules and protecting the coastline environment. Indeed, much of the damage that has occurred from time to time on the Australian environment when shipping has been involved has been because the ships were not Australian crewed vessels.
There is also the likelihood that we will see less illegal activity or unethical operations if vessels are crewed by Australians. With respect to the Australian Border Force's searches of Australian vessels, I note that last year there were some 15,700 vessels that came to Australia and of those just over a thousand were searched by the Australian Border Force. I understand that, and I understand that they have limited resources, but the reality is that each and every day there are vessels docking on the Australian coastline that are not inspected and not searched, and we really don't know what is on board those vessels.
I turn to another matter relating to Australian shipping, a matter that is before the parliament right now: the live sheep export trade. If the livestock vessels carrying Australian animals to the Middle East had been crewed by Australian seafarers, the horrific conditions that those animals were subjected to may not have occurred. Australian crews would not have tolerated the situation—not for themselves or for the animals. I note that the Minister for Agriculture and Water Resources is at the table, so my remarks are very much directed for his benefit. To my understanding, all of the vessels used for livestock transport in recent years were flagged in low-tax countries, owned by overseas registered entities—sometimes entities which Australians have an interest in—and crewed by foreign seamen who work in atrocious conditions simply to make a living. Not surprisingly, the operators of those vessels have, for years, thumbed their nose at Australian authorities, ignoring the horrific conditions that crews and livestock endure, because they know that the crews will remain silent about what they experience and see. The live sheep export community backlash and the parliamentary debate about live exports may never have become an issue if Australian crews had been used on those vessels.
Of course, with respect to the use of foreign vessels, the wider loss is to our economy, because foreign flagged vessels are crewed by foreign crews who do not employ Australian labourers and don't pay Australian wages and therefore don't pay income tax to the Australian tax office. Furthermore, on many vessels, crews are exploited. They have to work under terrible conditions for minimal wages—as low as $1.25 per hour.
No other mainland industry would be allowed to operate in the same way that shipping is allowed to operate, yet shipping operates within Australian waters. Australian waters are part of Australian territory. The kinds of activities and rules that apply to shipping that we are currently seeing are not ones that we as a nation would tolerate in a similar industry operating on the mainland. They don't operate in the road vehicle transport industry and they don't operate in the airline industry, but the shipping industry, because it is on water, is treated differently. It is simply wrong and it is, in fact, foolish. I understand that there are some differences with respect to the cruise vessel sector, which is somewhat protected at the moment, and I understand that there may be some changes in respect of that sector. But, putting that sector to one side, we seem to have a different standard when it comes to industrial laws for the shipping sector, for the larger vessels, compared to other sectors in the rest of the country.
In introducing this legislation, the minister said of the current rules:
They are pushing costs up for businesses.
This legislation will mean lower costs for big business, including the nation's biggest exporters of minerals and gas, who are making huge profits right now. Indeed, only this week they put out a statement highlighting the level of profits or activities that they are generating economically in this country—and quite properly, just to highlight the importance of that sector to the Australian nation. They are making a lot of money, yet that is the sector that is probably going to benefit the most from the changes in this legislation proposed by the government. They will profit the most because, ultimately, the additional savings that they make—and I understand that some estimates have put the figure at about 88 per cent—will come from the lower wages that they will pay. In other words, the savings that they will make will arise from the exploitation of labour.
It seems quite ironic to be doing that at a time when we have before the parliament a modern slavery bill. The exploitation of crews on foreign flagged vessels is indeed modern slavery. But then, of course, there is a long history of slavery in shipping. The fact that it still occurs does not justify it. In fact, the long history of slavery in shipping is even more reason why we should be trying to ensure that anyone who works on board a vessel, whether it is Australian flagged or foreign flagged, should be treated appropriately and paid accordingly.
There is another serious matter with regard to the demise of Australian shipping that has also been part of the national debate in recent times. I refer to the reliance on Australian shipping in conjunction with our nation's ability to meet our oil and other fuel requirements. Australia as a signatory to the International Energy Agency has an obligation to hold oil stocks equivalent to 90 days of the previous year's daily net oil imports. The reality is that that is not happening right now. In the year 2000, there were some 11 or 12 Australian crude oil tankers supplying fuel to Australia. Today, there are none. We have also had several oil refineries close since then. National fuel and oil stocks are down to just over a month's supply, somewhere between 30 and 40 days, if the two weeks of stocks that are on sea are included. But those stocks on sea are on board foreign vessels. In the event of a major international conflict, Australia has left itself entirely dependent on foreign vessels to deliver fuel. It is a most unsatisfactory situation because, in the event of a major conflict, there is no guarantee and, indeed, very little likelihood that those foreign vessels would make Australia a priority. We need to have some control of our own fuel supplies because, in the event of a major conflict, fuel supplies would be critical to this nation's ability to defend itself.
As other speakers have quite rightly pointed out, the situation with respect to this legislation is that the government previously tried to bring it before the parliament and it was rejected. It was rejected because logically it is a proposition that leaves Australia much more vulnerable than it already is.
That is not in the national interest at all. I doubt that any other country would be so foolish as to do the same, particularly given Australia's circumstances of being so dependent on shipping for its imports and exports, and being so far away from other allies that we work together with. The USA has what they refer to as the Jones Act, which ensures that, within their waters and ports, only American flagged ships crewed by Americans can operate. I totally understand that and it makes a great deal of sense. It is not unreasonable to do that, because it simply ensures that that country is looking after and putting its own interests ahead of anyone else's. Time and again around the world foreign ships in most cases are flagged in very low-tax jurisdictions in order to pay even less tax, crewed by people from predominantly Third World countries who are desperate to seek some income, and managed and operated in a way to simply serve the interests of the shipowners. It is not in the interests of this country to allow itself to go down that path, as it already has done.
It's more in the interests of Australia to, as Labor was attempting to when last in office, revitalise the Australian shipping industry by changing the laws that would support the growth of the Australian shipping industry. The Australian shipping industry is not some minor little industry to one side; it is not only a major economic contributor because of the transport that it provides to the goods and services that we need but also a contributor to shipping construction and to ship maintenance and stocking each and every time they come into our ports. It would be a major economic driver for this nation. For all of those reasons Labor has quite rightly opposed this legislation. Labor believes there is a better way to deal with the Australian shipping fleet of this country. Labor believes that it is not in the national interest. Labor believes we need to have a long-term strategy to ensure not only that this shipping industry survives but also that the economic and security future of our country comes first and foremost.
I'm glad to have the opportunity to speak in support of the second reading amendment moved by the member for Grayndler and to make some remarks in opposition to the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 as a whole. I'm pleased to make my first legislative debate contribution, since being re-elected as the representative for Fremantle, in defence of Australian shipping and Australian seafarers, but I am sorry that once again this government appears by the evidence of this bill to be set on unpicking and running down an industry that has always been and always will be a vital part of our life as a nation and a key to our future. With regard to Australian shipping and Australian seafarers the government's approach has consistently presented the full a la carte menu of poor governance. It has actively undermined Australian shipping through what can be described only as very poor process and in ignorance of the clear and present signs of danger with respect to its health. As well as acts of direct harm there have also been sins of omission. This government has failed to act in response to those signs of danger. It has failed to follow the lead of the former Labor government in seeking to address through a careful and long-running framework the operational, regulatory and workforce challenges that exist for Australian shipping and Australian seafarers.
Australian shipping is vital. It's not a matter of romance or nostalgia, nor just another aspect of transport or economic activity; Australian shipping is fundamental to our wellbeing. In an age of air travel and internet shopping, there's a danger that we underestimate the lifeline that shipping represents—and it is a lifeline. We are an island nation. An overwhelming proportion of our imports and exports are transported to and from this country by ship, and those ships travel here through a changing and volatile region. In those circumstances we should all, in this place and in the wider Australian community, be concerned that our coastal shipping is in decline—and there's no doubt, there can be no question at all in this place and in the debate, about that fact. The Australian coastal shipping industry has been left to wither by a regulatory framework that doesn't accord proper value to Australian shipping and doesn't work effectively to protect the jobs, conditions, skills and safety of Australian seafarers. That means that very few Australian owned and flagged vessels remain.
I think it's right to say that under the Howard government the number of Australian flagged ships declined from 55 in 1996 to 21 in 2007, and it's got worse since that time, as the member for Makin observed. There isn't currently an Australian general licensed vessel capable of transporting petroleum. We do not have sovereign self-sufficiency when it comes to the delivery of petroleum to our country. That's coupled with the fact that we have a very poor record of maintaining our fuel supplies in accordance with the obligations we've signed up to under the International Energy Agency. I spoke about that in the first few months of my time in this place, and I note that subsequently others, including the member for Canning in Western Australia and Senator Molan in the other place, have talked about how dangerous that state of affairs is.
We cannot continue to sit idly by and watch Australian shipping and our capacity in that space decline. It is critical to our economic wellbeing. We are a trading nation. We are an island nation, and shipping is our lifeline. It's a matter of sovereign self-sufficiency. Without it we can't be sure in general terms and we certainly can't be sure in times of crisis that we will be able to function economically and be able to secure and sustain the social and economic wellbeing of Australia. It's also central to our capacity to be engaged in and support our region, to respond to natural disaster and at times to draw on a merchant marine capacity.
A number of people have noted over the years the difference in approach between Australia and the United States. The previous speaker talked about the Jones Act. The United States is taken by some as a kind of paragon of a free market operation and deregulation and all these sorts of things. The United States, of course, has taken, for a long time, careful steps to protect its own shipping capacity, precisely because it won't tolerate being without the ability to export, to import and to be engaged in the world, particularly in a defence capacity and at times of humanitarian crisis.
The running down of Australian shipping does have direct relevance to the preservation of our marine and coastal environment. We've seen in other parts of the world some very savage environmental disasters—the Exxon Valdez spill back in the 1980s, and more recently Deepwater Horizon. But there have been a number of those offshore events and other related shipping events that have had a phenomenally harmful impact on coastal and marine environments. And there's no doubt that when you have foreign flagged ships and you have ships that are not operated by Australians, with their local knowledge and their high level of skills, you put that coastal marine environment at greater risk.
I make the further point that Australian seafarers have a proud tradition, through their representatives in the maritime union and through the International Transport Workers' Federation, of being concerned not just about Australian pay and conditions, safety regulations and skills development but about those things for seafarers around the world. Seafarers are a particularly vulnerable class of worker, and Australian seafarers and their representatives have been very active in working to protect the rights of seafarers around the world and to improve them. In many places they are still very poor.
It's for all those reasons that the former Labor government undertook a careful and substantial program of first consultation and then reform. Of course, I'd like to recognise the huge amount of work over a long period of time undertaken by the member for Grayndler in government, which he's continued now as a shadow minister. That work was designed to arrest what was already a pretty significant slide in Australian flagged shipping, and it put in place a careful structure that meant that Australian flagged vessels using general licences had the ability to properly compete and to continue to operate.
This bill, unfortunately, follows previous legislative attempts by the government in weakening and loosening that framework. It weakens and loosens what was already a thoroughly hopeless and ineffective regulatory framework. It will make it harder for Australian flagged vessels to participate and essentially compete for freight work. It introduces flexibility in the form of tolerances that really make a mockery of the existing tiered licence regime. As Maritime Industry Australia has pointed out:
Without the tolerances being meaningful (and remembering that these were expanded by the 2012 reforms from 10% and three days to 20% and five days) the system may as well be deregulated entirely.
I suspect that that's what this bill actually seeks to do. It's a view that has also been put by the Maritime Union of Australia. In relation to this bill, they have said:
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.
If you want to understand why the government is going down this particular path, it is tempting to say that it's through ideology and idiocy, to borrow a phrase from the Prime Minister. But I'd point out that I think ideology unfairly gets a bad name. Ideology is essentially a set of values that inform a political and policy program. There's nothing wrong with ideology, subject to what those underlying values are. I'm afraid to say you can't really describe this bill and the government's approach in this area as springing from any kind of comprehensive or sophisticated ideology or set of values, other than perhaps the extent to which there are some on the government's side who are captive in a simplistic way to the idea that anything that can be deregulated should be deregulated. Of course, that's a folly. Our system is properly a combination of market forces within a regulatory framework. It always has been. It always will be.
If you cut away every form of regulation and every kind of structure around market forces, you will see that what you think of as red tape really is the circulatory system that makes the whole thing work and makes the whole body vital. We know that the previous attempts by the government involved almost complete deregulation. We know that the 2015 legislation, whose justification was really around cost savings, derived 88 per cent of those cost savings from a reduction in labour costs, and the reduction in labour costs was going to be achieved by the fact that the work would shift to foreign flagged vessels and foreign crews. It meant that 93 per cent of Australian seafarer jobs would disappear, and we saw, through that experience, cases where Australian companies who put questions to the relevant department about how they would be expected to survive with their Australian flagged vessels and their Australian crews were given direct advice, 'You should use these changes to chop your Australian workforce.' It's an approach—I don't know if you can call it an ideology—that is best captured by that expression about knowing the price of everything and the value of nothing.
What this really does spring from, I think, is a reflexive antipathy and a reflexive enmity towards Australian seafarers and the maritime industry in this country, and that's not the way any government should proceed. The fact that some on the other side of the House regard maritime workers and, particularly, their representatives, the Maritime Union of Australia and other maritime industry representative groups, as the enemy shouldn't be what drives policy in this country. Seafarers play a vital role in the life of this country, and they are a vital part of communities around Australia. They certainly are a very important part of both the history of Western Australia and contemporary life in Western Australia, particularly in the seat I represent, the division of Fremantle. There's no good reason whatsoever for following the kind of program that puts our national wellbeing at risk in pursuit of an ancient grudge—a shallow and superficial political enmity.
I noted in the submission I made to the government's coastal shipping discussion paper that the government's record has been to undermine Australian shipping and actively weaken the position of Australian seafarers and their representatives. It's unintelligent and it's dangerous. That's why I oppose this bill.
I want to briefly outline my position on the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017. I will support the passage of this legislation through the House, but I want to put on the record that I and my Centre Alliance colleagues have significant concerns with some of the measures included in this bill.
Of particular concern is the measure to change acceptable tolerance limits in relation to cargo or passengers to be carried on a vessel under a temporary licence. We've been advised by stakeholders that changes to the volume tolerance from plus or minus 20 per cent to plus 200 per cent and minus 100 per cent, as well as the push to increase loading date tolerances from five days to 30 days, would have a detrimental impact on the coastal shipping sector. This measure would further deregulate the coastal shipping industry and make it almost impossible for an Australian flagged vessel to contest work because the operator would never know the actual volume or the precise loading date. I will continue to examine these measures with my Centre Alliance colleagues before settling on a final position.
I'm also concerned about the streamlining process that will apply to temporary licences. Under the government's plan, the new process will mean that the time available to an Australian flagged vessel to apply for a new voyage would be halved from two days to 24 hours. This will make it much more difficult for Australian vessels to compete for work.
I also want to flag our party's concern in relation to the government's move to open the coastal trading regime to chartered recreational vessels. I'm not sure that it is entirely appropriate for legislation which is meant to regulate the economic circumstances of Australia's domestic coastal trading industry to be extended to provide for recreational vessels. I and my Centre Alliance colleagues reserve our position on this aspect of the bill.
In conclusion, I support the passage of this bill through this House but make it clear to the government that I and my Centre Alliance colleagues are not happy with the bill as it currently stands. We will continue to examine the impact this legislation will have on Australian shipping and Australian jobs before coming to our decision, should the bill progress to the Senate.
I support the second reading amendment moved by the member for Grayndler—I do—but, frankly, I'm calling on the government to withdraw the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017. I'm calling on the government to withdraw this bill, because it's bad for jobs, it's bad for my electorate and, I believe, it's bad for the country.
There are often occasions when bills that come before this parliament have the effect of leading to a loss of jobs. There are times when bills that come before this parliament have the effect of leading to a loss or a reduction in wages and income. This bill does both of those things. But it's not an unintended or incidental consequence of the bill that there are going to be job cuts; it is the central purpose of the bill. The central purpose of this bill is to make it easier for shipowners to take an Australian flag off the back of their ship and replace it with a flag of another nation so that they can replace the seafarers on that ship with an overseas work crew. That is the central purpose of the bill. It's not an unintended consequence of this bill that wages will be cut. It is the central purpose of the bill that wages will be cut. The only reason that a ship owner would substitute an Australian flagged vessel with a foreign flagged vessel would be to enable them to replace the crew and to reduce the wages. So, it's not an incidental or unintended consequence of this bill that Australian jobs will be lost and wages will be cut; it's the central purpose of the bill—and for that reason the bill must be rejected.
This is not a small matter. Over 17 per cent of our domestic freight burden is carried by our coastal shipping fleet, and of that burden around 10.3 million tonnes is carried by ships with a temporary licence. That is more than the 7.1 million tonnes of freight which is carried by general licence operators. What we have is a crisis. We have a crisis in Australian shipping. Under the previous coalition government, under the prime ministership of former Prime Minister John Howard, we saw the number of Australian registered ships plummet. We saw it fall from 55 Australian registered ships to 21 Australian registered ships plying our domestic waters and doing the domestic trade. We are an island nation. We sing about it in our national anthem—'girt by sea'. If we cannot provide a workforce and a shipping fleet to enable us to move freight from one port to another, from one place to another, we are very vulnerable indeed. So this is bad legislation. Out of national interest, all members should reject this bill.
I have a very keen interest in this issue. The port of Port Kembla in the Illawarra is a major freight asset within the region and within the state of New South Wales. It's got a long and proud history. As some may recall, in June this year an Australian registered ship by the name of the Iron Chieftain was retired due to significant damage that it sustained during a fire while unloading at Port Kembla harbour. While discharging a load of dolomite, the belt drive system caught fire and spread along the entire system. More than 100 firefighters were involved in fighting the blaze, which took more than five days to bring under control. The vessel will be towed out of Port Kembla harbour after it's been emptied of fuel and all the toxic sludge has been cleaned out of the tunnels and bilges below decks. However, as a result of the fire and the retirement of the vessel, all CSL Australia positions on the Iron Chieftain will be made redundant, with expressions of interest being taken for voluntary redundancy.
I and the representative of the workers are concerned that the Iron Chieftain, one of our few remaining coastal Australian flagged vessels, is going to be replaced and, with it, the crew that are being made redundant will be replaced by an overseas crew. I hold nothing against those overseas workers. Many of them are coming from some of the poorest nations in our region. They deserve to make a living as much as the crew who are about to be made redundant. They are the pawns in this battle. What I am concerned about, and what the workers who formerly worked on the Iron Chieftain are concerned about, is that this legislation, which government members are about to support, will make it not only easier but will create a positive incentive for shipowners to replace this with a foreign flagged vessel. This means it won't be an Australian crew working out of Port Kembla, working out of Port Botany, working out of Fremantle, working out of Newcastle or working out of any of our coastal shipping ports; it will be an overseas crew. It is not the fault of those overseas workers; it is the fault and lack of vision of this government. It is a deliberate policy to make it easier—in fact, to make it imperative—for those shipowners to replace their flag and replace their crew.
This is not just an economic issue; it is an issue of national security. There are clear synergies between our naval and our merchant fleet. Indeed, Defence experts have long argued the importance of maintaining a domestic maritime workforce. They have argued—and we agree—that it ensures that Australia has a pool of highly skilled labour that it can quickly mobilise during times of conflict or other national emergencies. Furthermore, Australian seafarers undergo stringent background checks to ensure they pose no security threats. Regrettably, overseas seafarers, whose backgrounds are a mystery to us, do not undergo such close scrutiny. I hold nothing against those workers. It is not their fault. It is the fault of the system that this government is putting in place.
Secondly, I want to talk about the impact on our local environment. 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. The fact is that all the major maritime incidents to have occurred in our waters in recent decades have involved foreign flagged vessels crewed by foreign seafarers—again, not their fault; it is simply that our seafarers feel an ownership and environmental responsibility, and they are experts in plying and navigating the passages up and down our coastline. They know it, not surprisingly, better than any other seafarers in the world. They deserve a right to work on the ships that travel up and down our coastline.
It was for these economic, national security and environmental reasons that the former federal Labor government was so determined to rebuild Australia's shipping industry, following years of neglect by the then Howard government. Our goal was quite simple: more Australian seafarers working on more Australian flagged ships up and down our coast, carrying more Australian goods in and out of our ports. After extensive consultations with industry, all sections of industry, we put in place far-reaching reforms designed to reduce the costs faced by Australian shippers and to level the playing field with their international counterparts. For Australian shipping companies 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. It was a comprehensive plan. What this government has done, to its monumental shame, is to unpick every stitch of that plan, stitch by stitch by stitch.
It is not an incidental or unintended consequence that as a result of this government's actions we will have fewer Australian ships and fewer Australian workers working on those ships. It is not an unintended consequence; it is a deliberate consequence and a deliberate strategy. That is why we call on the government to withdraw this legislation and we call on government MPs to reject it. If you want to stick by Australian workers you will vote against this legislation. You will withdraw it and you will ensure that it never sees the light of day.
I rise today to speak on the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017, this government's second attempt to wind back Labor's 2012 coastal trading reforms. I support the amendments moved by the member for Grayndler and what the member for Whitlam has just said in suggesting that the government withdraws this legislation. It is a good idea, a fine idea, and I hope they take it up.
Briefly, on indulgence, if I may, Deputy Speaker, I want to take this opportunity—my first opportunity at the despatch box as a new shadow minister in the Labor opposition, having joined the shadow ministry at the end of June—to thank my Labor colleagues in this place and in the other place for their tremendous support before and since that time. It is an honour to serve my electorate of Brand and to work alongside such dedicated people who are committed to the Labor cause and to their local communities, their states and territories and to the nation as a whole. I would also like to thank those on the other side of the chamber who offered me their best wishes. I would like to thank my husband, Jamie King, for his unwavering support, and I would especially like to thank my electorate office staff—Kate, Amy, Ryan, Georgia, John and Jenny—for their commitment to the people of Rockingham and Kwinana, their hardworking efforts in supporting my role, and their patience and understanding as together we take on the responsibilities of a shadow ministerial office. You are great people doing great work and I thank you all immensely.
Returning to the coastal shipping legislation, it is, as I said, this government's second attempt to wind back Labor's 2012 coastal trading reforms. Like everyone on this side of the House, like everyone on the side of Australian flagged and crewed vessels, I do not support this bill and its damaging intent. Labor will always support Australian shipping, while this government will seek only to destroy it. It is a rehash, a second run, after the coalition's failure to pass the Shipping Legislation Amendment Bill back in November 2015. It is a bill that continues to push this government's ideological agenda to deregulate Australia's shipping industry at all costs, and the costs will be great if this government gets its way.
If we look back at its first failed attempt at repealing Labor's legislation of 2012, and related bills, we can see that Australian jobs and Australian wage standards are just collateral damage for this Liberal government. The means by which wage-earning Australians can earn a decent living is just collateral damage to this government as it puts its ideology of 'profits at all costs' first. We see this in its enduring support for the cutting of penalty rates, cuts that are hurting some of the lowest-paid workers in this country, and we see it in its $85 billion tax break for big business.
Labor puts people first. Our reforms sought to revitalise the Australian shipping industry, which fell into decline under the Howard government. But let's be straight about this: the Howard government set out to fundamentally dismantle the shipping industry in Australia. During the Howard government's time, the number of Australian flagged vessels fell from 55 in 1996 to only 21 in 2007.
And let's remember—as if we could forget—in 1998, Australia witnessed the most despicable act of a democratically elected government against a free citizen workforce. Aided enthusiastically by the Howard government, Patrick Stevedores sacked its entire workforce in the middle of the night and replaced it; brought out the security guards and attack dogs; dropped in, by dinghy and minibus, a mostly ex-military workforce, trained in Dubai—that in itself an exercise enabled by the Howard government. The Howard government, Minister Reith and Patrick together colluded to exclude workers from their workplace, to replace the workforce with another one trained overseas, to bring attack dogs onto our wharves and to intimidate and harm legitimate workers who were merely seeking to do their job.
What transpired was the lowest point in Australian industrial relations history. It was brutal and it was barbaric. It was shameful and disgraceful conduct by the Liberal government then, 20 years ago, and no-one has forgotten what they did. How can anyone forget those scenes they created of balaclavaed men on the wharves, with their security guards and their dogs on patrol? It seems more like a war zone than the working port of Fremantle, and I know my friend and colleague the member for Fremantle will remember those scenes, as we all do. We were younger at that time—much younger—but we cannot forget. This brutal behaviour by a government inspired hundreds of thousands of workers around the country to support their unions, to join with the MUA, which were at the front of this battle. Many of my generation caught the spark of this action, describing it as the seminal moment of their career. Indeed, Sally McManus, President of the ACTU, stated as much, describing the Patrick dispute as a flashpoint in her fight for workers' rights and conditions. The Australian Labor Party and its members stood side by side with the wharfies and the Maritime Union of Australia to fight against this awful and immoral attack by a government and its cronies on the workers of this country.
Earlier this year, I was really pleased to join Christy Cain, the Secretary of the WA MUA, and Paddy Crumlin, the national secretary, and other leaders and members of the trade union and labour movement to commemorate the 20th anniversary of the waterfront dispute. You couldn't say it was a happy occasion. We were just remembering—they in particular were remembering; they were the people that fought the fight—really dark times in this nation's history. We understood the significance of the time then and we still do today. It's something that Labor could never do. That's because Labor is the only party that truly understands that, to build national wealth and business confidence, you must have support from the ground up. You must reach an accord or a consensus, otherwise what's the point? Labor knows in our bones that without consensus lasting reform is unlikely. And I don't mean the pseudo consensus that the Liberal Party manufactures in the other place as they buy off and make dodgy deals with the disgraceful Pauline Hanson's One Nation Party of two; I mean the consensus across the community and the workforce and industry that can only be built with commitment to genuine consultation and engagement. This is the consensus that the Labor Party builds with the best interests of all at heart.
When we returned to government in 2008, we knew we needed to look to the long-term growth of the Australian shipping industry by encouraging investment and promoting international competitiveness, and our reforms did this. Our reforms also encouraged the employment of Australian seafarers. But this government's anti-Australian seafarer agenda takes another approach altogether. According to the official modelling for its failed 2015 legislation, which the legislation before us is trying to re-enact, it was forecast that 93 per cent of seafarer jobs on Australian vessels would be lost and that Australian wage standards would be replaced with Third World standards. That is the outcome of this legislation. This is the Liberal Party vision and the Turnbull government's vision for Australian shipping: 93 per cent of seafarers' jobs cut on Australian vessels. Well, what a disgrace, what a legacy—cutting 93 per cent of a workforce. But they have done worse. After all, they cut 100 per cent with Patrick late last century. Even though that legislation failed, following its defeat this government has continued to foster uncertainty in our once great shipping industry.
With this new bill, the government continues to work at eliminating Australian jobs and the entire Australian domestic shipping industry. And to what end? It's not sound for economic or national security measures. If the government had bothered to adequately consult with the industry and stakeholders, it would find this out. It has not adequately consulted with those who will be impacted by this bill.
One face-to-face meeting with each of the maritime unions on the importance of a skilled maritime workforce and two meetings with stakeholders does not seem like even remotely enough consultation for these important matters, especially when the major peak body that represents Australian based shipping operators was not invited to either of those meetings.
The government chose to ignore the Department of Infrastructure and Regional Development's recommendation that a draft of the bill be circulated for feedback prior to being tabled in parliament. That's a top idea—ignore the experts! Ignore your own departments! And, despite acknowledging a need for bipartisanship in the area of coastal shipping reform, at no stage before or after the release by the minister of the Coastal Shipping Reforms Discussion Paper was Labor consulted about the merits or otherwise of possible amendments to the existing legislation, nor were we given a briefing on the final version of the bill before it was tabled in parliament. The Minister for Infrastructure and Regional Development did not build bipartisan support for these changes, and, if he thinks he did, he failed utterly.
On the other hand, Labor's shipping reforms were the result of a four-year process which involved a parliamentary inquiry and a consultation with industry, unions and key stakeholders. Our legislation was also subjected to two rounds of exposure drafts. The goal behind our reforms was to rebuild Australia's shipping industry with a lasting consensus. Following years of neglect, Labor determined to have more Australians crewing more Australian flagged vessels, carrying more Australian goods around Australia's magnificent coastline. We worked with industry to put in place reforms that were designed to reduce the costs faced by Australians so they could be competitive with their international rivals.
They were pretty comprehensive reforms, as a matter of fact, with a package for our shipping companies that 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. We also worked to strengthen the local industry by creating an international shipping register. This register allowed operators of Australian flagged vessels to have a mix of both Australian and foreign crews employed on internationally agreed rates and conditions. I would like to note that Labor's changes did not preclude the use of foreign vessels. They required firms needing to move freight between Australian ports to, in the first instance—and quite rightly so—get an Australian operator to do the work. If no Australian operator was available, then foreign vessels could be used, as long as they paid Australian-level wages on domestic sectors. And that's fair. We also made sure that oil companies had to pay for all damage caused by their ships, as we developed our country's first National Ports Strategy. We replaced a multitude of conflicting and confusing state and territory laws and regulations with one national regulator, administering one set of modern laws.
The cost of the government not committing to building consensus and not helping to revitalise our coastal shipping industry will lead to the destruction of an industry that is of vital national importance and of strategic importance. Defence experts have long recognised the importance of maintaining a domestic maritime workforce. It ensures that Australia has a pool of highly skilled labour that can be quickly mobilised during times of national emergency. Our naval and merchant fleets come together in such times. But all that would change if the government got its way and passed this legislation. And, obviously, there are national security concerns when we outsource our shipping industry. Australian seafarers undergo stringent background checks to ensure that they do not pose security threats. We have no oversight on overseas seafarers; we do not know their backgrounds, and we do not know what, if any, scrutiny they undergo. Why would you want to do away with a highly skilled workforce in any event? What about the national interest, and what about Australian jobs?
What these changes would do is eliminate Australian jobs, decimate an entire industry and, potentially, put the national interest at risk. And this evidence all comes from the regulation impact statement that accompanied the Liberal's 2015 legislation which the current legislation is trying to mimic. In that statement, we were told that most of the savings expected to be produced by that legislation—88 per cent of the savings, in fact—were to come from Australian crews being replaced with cheaper, foreign crews. This government was seeking for vessel operators to sack Australians from their jobs and give those jobs to less-well-paid overseas crews to make savings. Thankfully, the Senate at that time acted in the national interest and quite rightly rejected the coalition's legislation.
As an island continent, we are reliant on our maritime industry. Nearly all of our imports and exports are transported by ship. In fact, the Department of Infrastructure, Regional Development and Cities advises that 99 per cent of our exports rely on sea transport—an industry also heavily relied on for our foreign domestic freight. One-tenth of global sea trade flows through our ports. Given this, why would we work in this place against positive reform of this very important industry? We are here today again seeing the government at it, just doing exactly that. Less than two years after the Senate rejected its flawed agenda, this government is having another crack. And it is not only the maritime industry that is worried about what the government is trying to do; other transport modes are concerned, too. They are concerned that this bill will advantage foreign operators and put them at a competitive disadvantage. The Freight on Rail Group made a submission in response to the discussion paper. They were concerned about what it would mean to them. They submitted that the proposed amendments have the potential to introduce an unreasonable competitive advantage to foreign ships that may choose to compete in the domestic freight market. How on earth is that fair?
To conclude, let me say that we on this side do not support this legislation. I agree with what the member for Whitlam suggested: it should be withdrawn entirely. If it is not, I will support the amendments suggested by the member for Grayndler. But, best of all, I think those opposite should withdraw it. We do not support the legislation. It is an attack on the Australian shipping industry, Australian seafarers and our national interest. There is a very real difference between Labor and those opposite in relation to the shipping industry. We will not agree to the destruction of the shipping industry in this country. We simply will not. Let me point out that during this government's time in office we have seen 12 vessels reflagged to foreign states, and, with each vessel being reflagged, we have seen the Australian flag replaced and Australian workers replaced. It is not good enough. (Time expired)
I rise to speak on the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017. It may have escaped some people's notice, but there is a fair bit of water around Australia, and some ships move in that water. We are an island nation where a lot of the goods get moved from one part of the country to another by ship and have done so for a while. We are an island nation that at some times in the past has had to rely on having a merchant navy. We are an island nation that could, if we had the right approach, have a shipping industry and a shipping workforce which we could be proud of. Some other countries have done this. They don't have to be island nations to do it; they just have to have significant coastlines. They have worked out that, when you regulate the movement of ships between ports on your coast, you can actually increase employment; you can increase the control and safety of the ships that are moving around, which is good for people and good for the environment; and, when you have the appropriate tax arrangements in place, you can generate revenue for the country.
So, if we think about it and decide that, as a country which has got so much coastline, it is a potential advantage for us to build and regulate our shipping industry, it could be a source of economic wealth and environmental protection. But, instead, we are suffering from a series of crazy decisions that have been made over many, many years. We now find ourselves increasingly without a shipping fleet or a shipping workforce to speak of. Why? Because over many, many years, the tenets of neoliberalism have taken hold. What that looks like when spread on an international scale is selling off the coastline and more or less saying, 'We do not care about the ships that come here or the conditions of the workers on those ships or whether or not we generate any return to the Australian taxpayer through the form of the revenue that we could be raising.' We have opened up a series of holes in our employment laws as well, which means that currently, after both Labor and Liberal have had a go at it for a few decades, we can have people working on ships under enterprise agreements that were signed by a small handful of workers—