Senate debates

Thursday, 26 November 2015


Shipping Legislation Amendment Bill 2015; Second Reading

1:18 pm

Photo of Ricky MuirRicky Muir (Victoria, Australian Motoring Enthusiast Party) Share this | | Hansard source

One of the great things about this job is that I get to learn of things that I had no idea about prior to taking my seat. Today's topic is Australian coastal shipping. It has been an interesting voyage, and I have navigated my way through some strong arguments. I have been involved in a lot of consultation on the government's Shipping Legislation Amendment Bill 2015 since it was introduced, and I would like to thank all those who have made contact with my office.

The purpose of the Shipping Legislation Amendment Bill 2015 is to increase access to Australian coastal shipping for foreign crewed ships in an attempt to make coastal shipping cheaper. The bill was referred to the Rural and Regional Affairs and Transport Legislation Committee, and some of the submissions were quite concerning. In its submission to the Senate committee, The Australia Institute stated:

Foreign flagged and crewed ships already have considerable access to the Australian coastal shipping market, making Australian coastal shipping possibly the only service sector facing competition that can use foreign labour while actually operating in Australia.

The Australia Institute's submission also notes that the cost-benefit analysis estimates only 88 Australian seafarer jobs will remain under the department's preferred option for policy change. This represents a loss of 1,089 Australian seafarer jobs, or 93 per cent of the current workforce.

The MUA stated in its submission that the passage of the Shipping Legislation Amendment Bill 2015 will 'destroy the Australian shipping industry' and, according to its own modelling, will have an impact of removing over 2,000 jobs. Maritime Industry Australia Limited stated in its submission that the passage of this bill 'will lead to the complete demise of the Australian flagged trading ship fleet.'

I do want to provide a bit of perspective however. Approximately 96 per cent of Australian shipping is for exporting Australian products overseas. This is not coastal shipping and it is not covered by the coastal trading act 2012. So we are talking about four per cent of Australia's shipping trade. It is a small percentage but is still important.

In reviewing the Senate committee report, I was astounded at some of the evidence given which demonstrates that there is a desperate need for reform. The committee heard about a ship, chartered by Incitec Pivot Limited, which could not unload additional fertiliser at Geelong due to the tolerance limits on the licence. As a result, the ship sailed from Geelong to its Adelaide destination only for the additional fertiliser to be loaded onto trucks and taken back to Geelong. According to Incitec Pivot Limited this was at an additional cost of about $75,000, but it also placed an additional 40 B-double trucks onto the road between Adelaide and Geelong.

I have also spoken to the Cement Industry Federation at length and know that they have been working very hard at trying to find a compromise position. The Cement Industry Federation provided me with some concerning statistics around clinker production and imports. The amount of clinker being imported has gone from 20 per cent in 2012 to 40 per cent in 2015. This may not be a direct result of the legislation but that does not mean we should not be taking steps now to ensure a strong manufacturing presence and reduce the need for imports. I believe there is a way forward that can protect the interests of both Australian seafarers and manufacturers.

I am concerned, however, that it is possible that the current legislation is effectively reducing the amount of freight available for Australian coastal shipping as manufacturing plants close and imports increase. There has been quite a bit of conjecture about how many jobs will be lost, but I do not want to get into a debate around whose modelling is wrong and whether these job losses have been underestimated or exaggerated. I think it can be said that jobs will be lost, so that is enough of a concern for me.

But I want to have a debate on how we can improve Australia's coastal shipping. I want to have a debate on how we can overcome some of the restrictive administrative burdens that currently exist within the Coastal Trading (Revitalising Australian Shipping) Act but still maintain an Australian presence. I want to have a debate on how we can successfully manage and protect the interests of Australian seafarer jobs and Australian manufacturing. Unfortunately, the government's bill does not allow us to have those debates. In my opinion, the government's bill goes too far in repealing the tiered licence system and replacing it with a single coastal shipping permit. I think that a better starting point would be to examine what amendments could be made to part 4 of the coastal trading act in order to create a more flexible, streamlined system while still maintaining an Australian presence.

Maritime Industry Australia Ltd has suggested that some changes could be made to the existing legislation which would improve the process of contestability and coastal trading in general. These proposals include removing the five-voyage limit, fast-tracking some applications and being more flexible with variations—voyages where there is no general-licence vessel available and/or willing to utilise the contestability provisions should be exempt from the existing contestability and notification requirements, thereby expediting approval. This should include waiving the need for 'voyage notifications', allowing pre-load flexibility and, in the liquid fuels industry, allowing on-water changes in the event of supply disruptions. Whilst there is no general-licence vessel able to utilise the contestability provisions, the reporting of voyage details could occur at the conclusion of each voyage.

The proposals also include removing the application of the Seagoing Industry Award part B and the Fair Work Act. The application of the Fair Work Act to ships trading under temporary licences should be removed as it adds no discernible benefit to the Australian industry or national economy and creates an enormous red-tape and compliance burden to the ships so affected. The proposals also include providing priority access to coastal cargo to AISR ships, thereby promoting their existence and use, providing a competitive Australian option; and moving away from a 'one size fits all' solution and tackling the issues specific to each trade type separately and, where necessary, distinctly.

I am not saying that I would support all these changes, but this is the debate that we should be having. We have an opportunity—or the government has an opportunity—to overcome the administrative inflexibility that exists within the current legislation but still protect Australian jobs. I urge the government to engage in further discussions with the opposition, the MUA, Maritime Industry Australia Ltd, the Cement Industry Federation, the Australian Institute of Marine and Power Engineers and other stakeholders in order to reach a compromise on how the coastal trading act can be amended in a less destructive way. I will not be supporting this bill but I want to make it clear that I am more than happy to work with the government to improve Australia's coastal shipping trade but also maintain an Australian presence.

1:26 pm

Photo of Glenn LazarusGlenn Lazarus (Queensland, Independent) Share this | | Hansard source

I will be voting against the Shipping Legislation Amendment Bill 2015. In my opinion, this bill is one of the most unpatriotic and un-Australian bills I have ever seen. As a senator for the great state of Queensland, I take great care to consult with the people of Queensland in relation to all government bills and policy to ensure the people of Queensland are consulted, their views are considered and their voices are heard. My approach with this bill has been no different. I have consulted widely with the maritime and shipping industry across Queensland to find out what people think about the bill and how it will impact on the maritime and shipping industry in Queensland. Every person I have spoken to is of the opinion that the bill will kill off Australia's maritime and shipping industry. The industry is strongly opposed to this bill and does not want it to pass under any circumstances. Unlike the government, I have listened to the people of Queensland and the rest of Australia, and I am voicing my disapproval of this bill. I am voting how the people of this country want me to vote. They want me to vote against this foul bill, and that is exactly what I am doing. Perhaps if the government had consulted with the maritime and shipping industry before drafting this bill, we would not be here today wasting taxpayers' time considering this load-of-rubbish bill.

As you may now be aware, I have many concerns regarding this bill. My first concern with this bill is strategic. For an island nation surrounded by coastline, it is absolutely imperative to have a strong, robust and effective shipping industry to transport goods around our coastline and overseas. We should not be placing our country in a position where we are dependent on the rest of the world for the transport of our own goods by water. In years gone by, Australia has boasted a very strong maritime and shipping industry. However, over the years, due to the actions of inept, stupid and short-sighted governments, we have witnessed a sharp decline in our maritime and shipping industry. I have included some statistics to demonstrate this. In 1962 there were 138 Australian flagged vessels operating in Australian waters under Australian law, employing Australian seafarers, moving our cargo around our coastline and overseas. In 1979 this number had reduced to 93. In 1987 there were only 89. By 2002 there were only 54. In 2012 the number had further reduced, to 28. Today, in the year 2015, we only have 15 remaining, and this is due to reduce to 14 very shortly. To summarise: in 1962 we had 138 Australian flagged ships servicing our waters, employing our people, and today we only have 15 ships remaining. Clearly, from a strategic point of view, we do not need legislation that is going to further destroy our maritime and shipping industry; we need legislation that is going to grow our maritime and shipping industry. We need policies that ensure our country is well positioned for the future.

On this issue, I would also like to mention fuel. Sadly, despite the fact that both sides of politics are receiving large donations from resource companies—Australia still lacks a national fuel security policy. Australia has about two to three weeks supply of petrol, diesel and jet fuel. Since the year 2000, our dependence on imported fuel for our nation has grown from 60 per cent to a whopping 91 per cent today. Fuel is the lifeblood of our way of life. As an island, nation surrounded by water, it is vital that we have not only a robust shipping industry but a fuel refinery industry to produce our own fuel. Without this, our country could be brought to a complete standstill at any time.

My second concern with this bill is national security By utilising Australian flagged vessels in our waters, we have more control over the operation of these ships, what is being transported and who is being employed on these vessels. We also have greater control over who comes into our waters, with what and for what reason. If we kill off our own industry, we will have no option other than to rely on the use of foreign owned vessels to operate in our waters, increasing the associated security risks.

Many other countries have already figured this out. For example in America, the US has what is called the Jones Act. The Jones Act requires all goods transported by water between US ports to be carried by US flagged ships, built in the US, owned by US citizens and crewed by US citizens and permanent residents. The Jones Act has assisted to protect the security of the US for many years as well as protect their important shipping industry, which employs many people. Why we cannot move to a similar system in Australia is beyond me.

In the current environment of increased terrorism, our coastline is something which requires increased, not reduced , protection. Currently, foreign ships are able to pull up to ports around our country, and the foreign crews simply disembark and make their way into our cities on buses and modes of transport, virtually unchecked. While government authorities maintain this does not happen, the reality is that it does. And it happens, because there is too little compliance and not enough resources on the ground to manage these issues.

When Australian ships pull into international ports overseas, Australian seafarers are required to undergo extensive checks before leaving ship. Other countries seem to get this basic stuff right, but not us. It saddens me that our own government does not seem to understand the real implications of their own bills and the impact on our country and the real associated risks.

My third concern with this bill is jobs. The bill will remove any residual right of a tax-paying Australian ship to have preference for Australian domestic shipping business opportunities over foreign flagged ships and will give equal rights to a tax-free foreign ship. The bill effectively sets aside the national transport system and replaces it with an international tax-free system in which Australian ship operators and Australian seafarers are not able to compete on the same tax-free terms. In effect, our Australian maritime and shipping industry is being asked to compete against the world in our own waters with a competitive disadvantage.

The result is that foreign flagged vessels with cheap foreign labour will take business, jobs and opportunities away from Australian flagged ships. This means asbestos-riddled ships, unacceptable under Australian legislation, will once again be permissible in Australia, making a mockery of Australian state and federal OH&S laws. Our maritime and shipping industry will simply collapse. Foreign owned companies operating in Australia will utilise cheap and nasty shipping options to move their goods by water instead of Australian ships.

The maritime and shipping industry predicts that, if this bill passes, up to 600 ship engineers will lose their jobs across the country , and many of these will be in my home state of Queensland. Thousands more jobs will be lost across other sectors of the Australian marine and shipping industry as a flow-on effect.

I should note the bill includes a feeble and insulting attempt to pretend to support a decent framework of entitlements for seafarers on foreign vessels, if a foreign vessel operates in our waters for more than 183 days per year. But we all know that this will be avoided as most international shipping fleets can cycle their vessels into and out of Australia in such a way that no single ship ever trips that entitlement.

My fourth issue with this bill is that it sells out Australia. My view is that this bill is nothing more than a direct attack on the Australian maritime and shipping industry and an attempt to give mining companies more power to ship coal and other resources around the country and overseas on foreign owned ships , using cheap foreign labour.

This bill gives all the rights to international companies and foreign countries seeking to buy up our country and exploit our country at the expense of our own people. Australia spends r oughly $9.8 billion per year in freight costs to ship our export products overseas. This is money that is being spent on foreign flagged ships to move our own products to other countries. This is money that is going out of our country and into the hands of other countries. In contrast, Australia only makes $240 million in revenue from freight charges for freight carried on Australian flagged ships. These figure s should be the other way round— Australia should be making money from shipping freight charges to carry our products overseas, not the rest of the world making money out of shipping our products.

In the context of what is happening across the world in the area of shipping, Australia is the fourth largest shipper of goods in the world. This is not surprising, given we are an island nation. So, in view of this, why would we not be seeking to grow our shipping industry? I have no idea why the Turnbull government is hell-bent on destroying the shipping industry, although, as I have said, I have my suspicions and they all relate to donations.

I strongly support Australia's maritime and shipping industry and I want to see it restored and strengthened in this country. I have actively support the implementation of a Jones-style act in Australia; additional tax incentives to help Australian shipping operators compete against foreign owned vessels including costs, labour, insurances, maintenance et cetera; the establishment of a grants program to activate a large-scale shipbuilding industry in Australia; additional tax incentives to assist with the management of depreciation in the Australian shipbuilding and maintenance industry; incentives to encourage Australian and international businesses in Australia to utilise the Australian shipping industry instead of foreign flagged ships; and incentives to encourage international shipping companies to utilise Australian seafarers.

I should also note that I want shipping engineers and masters excluded from the 457 visa and migrant visa lists as a matter of urgency. There are currently many Australian shipping engineers and masters out of work as a direct result of a diminishing Australian maritime and shipping industry. We do not need to be bringing in any more foreign visa holders to this industry, when our own people cannot get jobs. I am determined to work with the maritime and shipping industry and other crossbenchers to pursue a better outcome for Australia's maritime and shipping industry and our country.

In conclusion, I will be voting against this rotten bill, and I encourage the government to start listening to the people of Australia, because they want their elected representatives to put Australia first.

1:38 pm

Photo of Matthew CanavanMatthew Canavan (Queensland, Liberal National Party) Share this | | Hansard source

I was not going to contribute to this debate on the Shipping Legislation Amendment Bill 2015, but after those last two contributions from the crossbench I do want to add some thoughts. Firstly, I want to commend the contribution by Senator Muir. I thought it was a very considered and well thought through speech. He has obviously thought very deeply about these issues. While I am disappointed that he is not supporting the government on what I think are much needed reforms, I do commend his contribution and also his open mindedness to continue to discuss what might be the best way forward here.

Senator Lazarus is right that there are serious issues with our coastal shipping sector. He is also right that it has been in decline for decades. But that has of course occurred with a variety of different regulatory structures, including a very strong coastal shipping regime which was established to try to protect our industry. There is no doubt about that but, on that objective, it has seriously, seriously failed, on the numbers that Senator Lazarus presented. We may all disagree with what needs to be done and what needs to change—because we all want to support our shipping industry—but, clearly, the current system is failing and clearly something needs to change if we are serious about rebuilding a strong shipping sector in this country.

I take issue with some of Senator Lazarus's comments. He mentioned that, as a Queensland senator, he had consulted with a variety of Queensland stakeholder groups. He then went on to mention that he had not spoken to anybody who supported reforms to these regulations. He must not have consulted very wide, because he must not have spoken to the Queensland sugar industry—the second biggest agricultural exporter in the state; he must not have spoken to the cement industry and he must not have spoken to the beef industry, the biggest agricultural sector in the state. All of those industries do rely to some extent on our coastal shipping network—sugar more than most—and it is failing them. It is failing them because right now it is cheaper to import sugar from Brazil to Melbourne, where a lot of soft drink manufacturers are, than it is to send sugar from North Queensland to Melbourne. That is a problem. It is a problem if we want to maintain a strong cane-growing industry in our country—and, as a Queensland senator, I certainly want to do that. So I urge Senator Lazarus to take a leaf out of Senator Muir's book and come to this debate in a constructive fashion—and, if there are other ideas on how we can reform this legislation, to get what we all want, please bring them forward.

The government is only proposing to return the system to something very close to what was in place before 2009 when the Labor Party changed the regulations. Before then, there were permit systems available and there was still a process that had to be gone through, which is what is envisaged under this bill, and it was not open slather t foreign flagged vessels. There was a workable coastal shipping sector. Notwithstanding that there were pressures on our coastal shipping sector, it was a system which was able to support the needs of our agricultural sector as well as provide some business for our domestically flagged vessels. So I take with a grain of salt some of the more outrageous claims from Senator Lazarus that somehow this bill will open the gates to massive amounts of asbestos and security risks along out coastline, when these laws were in place for more than a decade previously and there was no evidence of any of that occurring.

I want to finish by commending the efforts of the Deputy Prime Minister, Warren Truss, who has worked long and hard to find a solution to this. It is incredibly important not only for our shipping sector but also for our entire nation to find a way forward here. I am not hopeful that this particular solution today will receive the support of the parliament. However, I know the Deputy Prime Minister is committed to moving forward and trying to find a solution. I urge all senators, but particularly those senators on the crossbench to engage in good faith with the Deputy Prime Minister and try to find a solution for our shipping sector, for our agricultural users of shipping and for our entire nation.

1:42 pm

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Minister for Tourism and International Education) Share this | | Hansard source

As Senator Canavan has just indicated, the Shipping Legislation Amendment Bill 2015 is a really important piece of legislation not just in respect of shipping but also for industry and commerce generally in Australia. I say at the outset that the government is committed to a safe, secure and efficient transport system. This is unambiguously also the case for coastal shipping. Nowhere is this more important than in my home state of Tasmania, which, by virtue of geography, requires affordable and competitive shipping. It plays an incredibly important role in our economic prosperity.

Under Labor, the fleet of major Australian registered ships with coastal licences dropped from 30 vessels in 2006-07 to just 15 in 2013-14. The changes that Labor made were supposed to save the Australian shipping industry. Under Labor's changes, there is less freight, fewer ships and less employment. So the costs that were imposed on all of the Australian industries that used those coastal shipping services have not done anything to save the Australian coastal shipping industry, as Labor promised when they passed the legislation.

Between 2000 and 2012 the shipping industry's share of Australian freight fell from 27 per cent to just under 17 per cent while the volume of freight across Australia actually grew by 57 per cent. What Labor's laws did was take freight off the coastal shipping routes and put it onto the roads of Australia. You only need to think about that additional load on the road transport system to consider what the potential impacts might be, yet Labor said that they were going to save the coastal shipping sector. When we look forward—with Australia's overall freight task expected to grow by 80 per cent by 2030 but, under the current settings, coastal shipping is to only increase by 15 per cent—there will be more trucks on the road and less freight being carried around the Australian coastline by ships.

The government's objective is to facilitate greater use of coastal shipping services around the coastline. The coastal shipping has more to do. It can do it economically and it can do it efficiently, particularly for a number of industries. I say that nowhere is more important than my home state of Tasmania. Why should Bell Bay Aluminium pay something like $29 a tonne for moving its freight from Bell Bay to Gladstone when the global going rate is about $17 or $18 a tonne, and before Labor's coastal shipping laws came in the rate was about $1 or $2 more than the global rate. Labor's laws have inflated costs and made it more difficult for Australian industry to compete within Australia. Labor's coastal shipping changes are locking Australian industry out of the Australian market. That is the effect of Labor's coastal shipping laws that they said would save the industry, but it has had less freight, less ships and less employment as a result of their process. Our amendments provide a more competitive and efficient coastal shipping industry for Australian shipping users. It replaces the cumbersome and complex framework, which was put into place by Labor, with a single permit significantly reducing red tape and regulatory burden.

There is some view being put around this place that these changes will create some form of disaster in employment in Australian coastal shipping that does not exist already. One of my Tasmanian colleagues foretold job losses at Toll, TT-Line and Searoad. All of those businesses existed within a coastal shipping framework that existed prior to these costly Labor regulations. All of those businesses operated using Australian employees prior to the commencement of these destructive changes that were brought in by Labor in 2009 and 2012. So to suggest that there is not some concept where they can exist within a new environment that takes us back more to that framework I do not accept.

It was the changes that were made by Labor that actually cost Tasmania its international shipping service. That is one of the reasons the AAA service left Tasmania—

Photo of Jacqui LambieJacqui Lambie (Tasmania, Independent) Share this | | Hansard source

That is rubbish!

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Minister for Tourism and International Education) Share this | | Hansard source

You ought to talk to AAA, Senator Lambie. I know it is the truth because I have had the conversation. Senator Lambie, through you, Mr Acting Deputy President, I know you are trying to pretend that you support Tasmanian business, but you are locking Tasmanian industry out of the Australian market. You are stopping Tasmanian businesses from participating in the Australian market with some sort of pretence that you care about them, but you are voting against Tasmania by voting against this piece of legislation. Quite clearly you are voting against Tasmania.

Senator Lambie interjecting

Photo of Cory BernardiCory Bernardi (SA, Liberal Party) Share this | | Hansard source

Order! Senator Lambie.

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Minister for Tourism and International Education) Share this | | Hansard source

It is cheaper to bring sugar from Thailand into the Australian market, as Senator Canavan quite rightly said, than it is to bring it in from Queensland, so the Australian sugar industry is locked out of the Australian market. It is locked out of its own market. It is cheaper to bring timber from New Zealand to every eastern port in Australia than it is to bring it from South Australia or Tasmania. The South Australian timber industry and the Tasmanian timber industry are locked out of their own Australian market. It is cheaper to bring cement from China than within the Australian market.

The measures brought in by Labor increased costs, reduced flexibility, made it less competitive for Australian business in the Australian market and it did nothing—as they claimed it might—to save the Australian shipping industry. In fact, the Australian flagged vessels that are leaving the Australian coastline right now are doing so under Labor's provisions. Labor's provisions that were supposed to save the Australian coastal shipping industry are doing nothing to save the Australian coastal shipping industry. Why is it that they are not prepared to stand up for the rest of Australia's industry sectors that want an efficient and cost-effective shipping system? Why is it that they will not stand up for them?

Throughout the debate on this bill there have been some quite mischievous claims with respect to the impact on Australia's marine environment and maritime safety, and they are quite clearly false. Australia's strong environmental safety laws will continue to apply to all ships operating in Australian waters. All ships operating in Australian waters are subject to the Port State Control regime administered by the Australian Maritime Safety Authority, which is world's best practice.

AMSA advise that their port state control statistics indicate that in the 2014 calendar year the deficiency rate for Australian-flagged ships was 3.9 deficiencies per inspection, compared to the deficiency rate of 2.9 deficiencies per inspection for foreign-flagged ships. Looking at the statistics, you can see that Australian and foreign-flagged vessels are basically on a par when it comes to reporting deficiencies. If a vessel does the wrong thing, regardless of its flag, AMSA will detain the ship until it is fixed and if a vessel continues to fail to comply, AMSA can direct a vessel out of Australian waters.

The reason for bringing this legislation forward is so that it can work for the benefit of the Australian shipping industry. My colleague Senator Abetz talked about the impact of a proposed development at Burnie in my home state of Tasmania where DP World are proposing a major container port expansion. The impact of that expansion and the resultant increase in flow of coastal shipping and changes to coastal shipping would reduce the price of a 20-foot container from $2,800 to $1,350—that is, more than halving the cost. It brings it back to more like the cost which occurred before Labor brought in their disastrous coastal shipping reforms—again, that were supposed to save the industry. That saving, by more than halving the cost, is great news for Tasmanian business. It epitomises the fact that this legislation would be a stimulus for investment in my home state.

I will close my remarks by commending the bill to the Senate. I urge members in this place to continue to engage with us and, hopefully, to support the legislation.

Photo of Stephen ParryStephen Parry (President) Share this | | Hansard source

The question is that the bill be read a second time.

2:00 pm

Photo of Stephen ParryStephen Parry (President) Share this | | Hansard source

Order! It being past 2 pm, we now proceed to questions without notice.