James McGrath (Queensland, Liberal National Party, Assistant Minister to the Prime Minister) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

SHIPPING LEGISLATION AMENDMENT BILL 2015

Introduction

The purpose of the Shipping Legislation Amendment Bill 2015 is to amend the Coastal Trading (Revitalising Australian Shipping) Act 2012 and the Shipping Registration Act 1981.

The Bill I introduce today will implement major reforms to the regulatory framework for coastal shipping.

This Government is committed to a more competitive and efficient shipping industry. As an island nation it is no surprise that shipping is a vital part of our transport network. Through these reforms we will increase access to shipping services in a more open and competitive market.

This Government has declared that Australia is open for business and these reforms will help reduce the burden on business, open up new opportunities, and unlock the potential of our coastal trading routes.

For too long, companies wanting to move goods or passengers by sea have had to deal with a complex and burdensome licensing system.

The Bill I present today changes that. It recognises that shipping operates in a global context, and the framework it contains seeks to ensure that Australian businesses and industries can take maximum advantage of the opportunities created by global connectivity.

The Bill will address key challenges that the former Government's 2012 legislation created under the guise of reform.

The case for real reform is clear.

The fleet of major Australian registered ships (over 2,000 dead weight tonnes) with coastal licences is in sharp decline, plummeting from 30 vessels in 2006-07 to just 15 in 2013-14. Between 2000 and 2012, while the volume of freight across Australia actually grew by 57%, shipping's share of the Australian freight task fell from about 27% to just under 17%. Between 2010 and 2030, Australia's overall freight task is expected to grow by 80%, but coastal shipping is only forecast to increase by 15%.

Over the first two years of the former Government's Coastal Trading Act there was a 63% decline in the carrying capacity of the major Australian coastal trading fleet.

We need to act now to correct these failings. Without change, shipping will not be able to deliver the competitive and efficient services that Australian businesses desperately need.

The central feature of the Bill is a greatly simplified permit system that will reduce costs to business, and enhance access to competitive international shipping services.

Australia's rigorous maritime safety and environmental laws will continue to apply to all ships operating in Australian waters.

Simplifying rules for moving cargo will show Australian waters are once again open for business.

The Bill also has built-in protections for Australian workers and also for wages and conditions for all seafarers on foreign ships operating primarily in the Australian coastal trade.

The Bill will deliver more affordable freight costs for businesses and greater choice between shipping companies, which will provide better outcomes for Australian businesses reliant on coastal shipping services and open up new opportunities for growth in the industry. Domestic freight is growing exponentially and shipping must carry a much larger share of the load.

Evidence, supplied by shippers, shows that the current Act has increased the price of coastal shipping services, hitting Australian businesses hard and adding uncertainty and regulatory burdens, without improving the viability of Australian shipping or the quality or supply of shipping services.

Bell Bay Aluminium reported a 63% increase in shipping freight rates from Tasmania to Queensland in just the first year of the 2012 regime – from $18.20 a tonne in 2011 to $29.70 a tonne in 2012.

We know that the cost of shipping dry food powder from Melbourne to Brisbane is the same as shipping the same product from Melbourne to Singapore.

And it is cheaper to ship sugar from Thailand to Australia than it is to ship Australian sugar around our own coastline.

These are just a few of the many, many examples that have been provided to me by industry.

The current arrangements are self-defeating for the shipping industry, let alone our industries and manufacturers reliant on coastal shipping services. The extra cost for Australian businesses using an Australian vessel is unsustainable at some $5 million a year more than using a foreign vessel. More affordable freight means more freight, more efficient services and more competition, all of which will make Australian products more competitive internationally and domestically, helping local industries, which employ thousands of Australians, and providing the opportunity for economic growth and expansion.

We need to be working towards coastal shipping carrying a more significant share of the growth in long-distance cargo. Shipping should be seen as a viable and robust option for all forms of freight, with particular strengths in transporting high volume and long distance cargo around the coast.

This Bill is intended to facilitate that outcome. Shippers will have access to more affordable freight costs and a wider choice of ships; more ships will be available to carry spot cargoes better suited to transport around the coast.

Cruise ship passengers will have access to a greater range of cruise ship services around the coast, a boost to local tourism industries around the country. The tourism benefits are not limited to our major capitals, this Bill will provide greater opportunities for visitors to our coastal regional cities and towns right around the country.

Additionally, this legislation will facilitate more visits to Australia from the burgeoning superyacht sector.

The Government is determined to strike a sensible balance between reduced barriers to access and the long term availability of personnel with maritime backgrounds and skills to fill critical jobs in the industry.

Australia needs people with maritime skills and experience to be tug crews, harbourmasters, pilots and to fill other jobs in the industry where first-hand knowledge of how things are done on board is essential. That is why the Government has included measures to ensure ships trading predominantly in Australia have Australians undertaking the key skilled positions on board.

We are also committed to ensuring that where these ships engage primarily in domestic trade, in domestic waters, they are covered by domestic workplace relations arrangements.

The Provisions of the Bill

The Bill will rename the Coastal Trading (Revitalising Australian Shipping) Act 2012 the CoastalShipping Act2015. This name change will also require consequential amendments to a number of other pieces of legislation: the Australian Maritime Safety Authority Act 1990, the Occupational Health and Safety (Maritime Industry) Act 1993, the Seafarers Rehabilitation and Compensation Act 1992, and the Shipping Registration Act 1981. As the Coastal Trading (Revitalising Australian Shipping) (Consequential Amendments and Transitional Provisions) Act 2012 will no longer be needed the Bill will also repeal this Act.

The Bill redefines and streamlines the Object of the Act to reflect Australia's need for a regulatory framework for coastal shipping that fosters a competitive coastal shipping services industry that supports the Australian economy; and maximises the use of available shipping capacity on the Australian coast.

To achieve this unambiguous objective, the Bill repeals the existing tiered licencing system comprising General Licences, Transitional General Licences, Temporary Licences, and Emergency Licences. These will be replaced with a single Coastal Shipping Permit that will be available to both Australian and foreign registered ships.

Ships operating under a Coastal Shipping permit will be permitted to engage in unlimited transport of passengers and goods on the Australian coast for a 12 month permit period.

This streamlined approach will be much simpler than the current system which is overly bureaucratic, deliberately cumbersome and inflexible to the point where it does not recognise the realities of how businesses want to move freight around the coast.

The Coastal Shipping Permit will also protect vessels from importation under the Customs Act 1901.

Importantly, for the first time the Bill's coverage will be extended to include ships engaged in the carriage of petroleum products from our offshore facilities to the mainland and ships engaged in dry docking.

This will mean more business for Australian dry-docks and repair facilities and it will mean that our growing fleet of cruise vessels can stay in Australia for repairs, rather than going to Singapore or elsewhere for routine maintenance.

It will also mean that petroleum products can be transported from our offshore facilities to the mainland for processing. One of the counter-intuitive consequences of the existing framework is that currently processing of petroleum from Australian offshore facilities is happening overseas and then fuel is being shipped back to Australia because offshore facilities are outside the scope of the licencing system.

These changes are essential to ensure Australian shippers are able to move goods efficiently and effectively.

The Bill will require a permit be granted in respect of a vessel, rather than a voyage. This will reduce paperwork in the shipping industry, and will ensure ships wishing to provide services in Australia know their status and obligations under Australian law.

Consistent with the existing provisions, the Bill requires ships engaging in Coastal Shipping to hold a Coastal Shipping Permit. Contravening this requirement will attract a significant civil penalty of 300 penalty units for individuals and 1,500 penalty units for bodies corporate.

The owner of a vessel, or a person who has day to day responsibility for the management of a vessel with the permission of the owner, will be eligible to apply for a permit. Only one permit can be issued to a vessel at any point in time.

Applications for a Coastal Shipping Permit will be required to include evidence the applicant is a party eligible to apply for a permit, for example proof of ownership, or day to day management of the vessel, a copy of the registration certificate for the vessel (including a translation if the registration certificate is not in English) and a modest application fee.

The Bill contains provisions to allow the transfer of a permit if the ownership or management of the vessel changes during the permit period, however, permits cannot be surrendered.

While the Coastal Shipping Permit system introduced in this Bill will be significantly simpler than the current regime, it does place a number of conditions on operators.

Breaching any of these conditions exposes the holder of a Coastal Shipping Permit to a civil penalty for individuals of 50 penalty units and for bodies corporate of 250 penalty units.

In addition, if a Permit Holder breaches a condition of a Coastal Shipping Permit, a previous Coastal Shipping Permit, or of a licence granted under this Act, the current Permit may be cancelled by the Minister following a show cause process. For example, failure to comply with any Australian crewing requirements for foreign vessels predominantly engaged in coastal shipping may result in the initiation of a show cause process that could ultimately result in the cancellation of the permit.

Ships holding a Coastal Shipping Permit must continue to be registered, a copy of the permit must be displayed in a prominent place on board, the holder of the licence must comply with reporting requirements, and in certain circumstances, requirements for crew composition and pay and conditions will apply.

Ships engaged in Coastal Shipping for more than 183 days in a normal permit period will be required to adhere to minimum Australian crewing requirements mirroring those for ships registered on the Australian International Shipping Register. That is, they will be required to employ a Master or Chief Mate and an Chief Engineer or First Engineer that is an Australian Citizen, Australian Resident, or holds an appropriate visa, prescribed in the rules, allowing the person to work in one of those occupations in Australia.

This crewing requirement is a cornerstone of the revised system along with key protections for seafarers on board ships engaged predominantly in Coastal Shipping.

The Bill ensures that if a foreign ship is predominantly operating in Australia – that is, for more than 183 days of Australian coastal trading in a 12 month permit period – it will be subject to domestic workplace relations arrangements. If a foreign ship engages predominantly in international trading – that is, for less than 183 days of Australian coastal trading in a 12 month permit period – their existing on-board workplace arrangements will apply.

The Fair Work system already provides special arrangements for foreign vessels. The relevant award – the Seagoing Industry Award 2010 – currently has two parts: Part A for Australian ships and Part B for foreign ships engaged in coastal trade. If a ship trades for more than 183 days, they will need to pay the Part B Australian wages from day 1 of the permit period.

In addition, if a foreign ship declares an intention not to trade predominantly on the coast but then trades predominantly on the coast will be subject to a condition requiring that they pay Australian wages for their entire permit period. Any future permits will not be issued to a foreign ship unless it has complied with past obligations to pay Australian wages.

As the Seagoing Industry Award makes explicit reference to the old licencing system, the Bill contains amendments to ensure that Part B continues to apply to foreign ships operating under a permit in the new system. This will give greater certainty to ship operators, but does not restrict the Fair Work Commission's ability to set or change award conditions.

Any ships that choose to register on the Australian International Shipping Register are likely to have trading patterns similar to foreign ships. For this reason, Part B of the Seagoing Industry Award will also apply to ships operating on the Australian International Shipping Register while they operate in Australian waters.

There are protections and compliance mechanisms built into the permit system to deal with ships that fail to comply with these rules. These include the ability to cancel a permit, refuse any future permit applications and civil penalty provisions.

Importantly, if a ship has done the wrong thing and failed to pay Australian wages when they should have, they may be subject to a civil penalty and there is a mechanism to recover amounts owing to a seafarer. A key feature of the new permit is that a foreign vessel predominantly engaged in Australian shipping cannot be granted any future permits if they have not complied with the Australian pay requirements.

As the application of Australian workplace relations laws has implications for the Fair Work Act, some of the changes I have outlined will require changes to the Fair Work Regulations 2009 to ensure the appropriate workplace relations arrangements continue to apply. These amended regulations are drafted and the Government will make them available once the Bill has passed.

To facilitate the efficient administration of the measures and provide opportunities for non-judicial review, decisions to refuse to make a declaration the Act does not apply to a vessel, to refuse to grant an application, grant an application to transfer, or cancel a Coastal Shipping Permit will be appealable to the Administrative Appeals Tribunal.

Additionally, the Bill also permits the making of rules to impose additional conditions and for the Minister to impose or vary other additional conditions not inconsistent with those set out in the Bill or the rules if made.

This Bill significantly simplifies reporting requirements for permit holders. Under the new system, the holder of a Permit will be required to report on voyages undertaken at six monthly intervals, or more frequently if directed by the Minister. This replaces the existing system of pre voyage notification at least two days before the actual loading date and post voyage reporting no more than 10 days after the end of the voyage and will be a significant deregulatory measure for industry.

A summary of these reports, as well as information relating to Coastal Shipping Permits granted is required to be published on the Department's website.

Shipping Registration Act

The Bill amends the Shipping Registration Act 1981 to simplify and streamline the requirements for ships wishing to join the Australian International Shipping Register (the AISR). In particular, a ship on the AISR would no longer have to be predominantly engaged in international trade and instead would be required to spend at least 90 days in a year engaged in international trading. This requirement will be pro-rated for part years. Where a ship does not meet this requirement, the Registrar will have the power to cancel the registration of the ship.

The Bill also amends the Shipping Registration Act 1981 to provide that a collective agreement may be made with the Seafarers' Bargaining Unit but that the presence of such an agreement is not a mandatory precondition for registration of the vessel.

In addition, the requirements around Australian work rights for the minimum contingent of Australian crew working on board ships on the AISR is clarified to include people with an appropriate Australian work right.

Transitional Provisions

The Bill includes a number of significant transitional provisions, designed to ensure a smooth transition between the current licencing system and the Bill's permit framework. Specifically, the Bill will remove the requirement for a person applying for a Temporary Licence to be an owner, charterer, master or agent of a vessel or a shipper. This will alleviate the issues that have arisen in court cases since the current Act has been in place.

Further, the existing challenge provisions and the associated consultation periods will be removed during the transitional period, alleviating industry concerns about delays brought about by the licensing framework.

The transitional provisions also ensure that a licence due to expire during the transitional period is deemed to not expire until the end of the period. Further, Coastal Shipping permits can be granted during the transition period but do not commence until the end of the period.

Conclusion

In short, the availability of high quality transport services at the right price, with a minimum of red tape is critical to Australia's economic prosperity. Of course, Australia's transport needs into the future will rely on a mix of air, road, rail and maritime transport. The amendments in this Bill will ensure our future ability to choose the most appropriate mode of transport based on speed, price, availability and quality of service.

I commend the bill to the House.

Debate adjourned.