May 31, 2012

Coastal Trading (Revitalising Australian Shipping) Bill; Coastal Trading (Revitalising Australian Shipping) (Consequential Amendments and Transitional Provisions) Bill; Shipping Registration Amendment (Australian International Shipping Register) Bill; Shipping Reform (Tax Incentives) Bill; Tax Laws Amendment (Shipping Reform) Bill – Consideration In Detail

Mr ALBANESE (Grayndler—Leader of the House and Minister for Infrastructure and Transport) (12:05):  I thank all members of parliament for their contribution to the debate on these five bills that comprise the government’s Stronger Shipping for a Stronger Economy legislative reforms. These bills represent the most significant overhaul of the Australian coastal trading arrangements since these arrangements were put in place in the 1920s. These reforms address the 40 per cent decline in the Australian fleet over the last decade by encouraging investment in Australian shipping and levelling the playing field for Australian flagged ships so they can better compete.

The Coastal Trading (Revitalising Australian Shipping) Bill sets out the new licensing arrangements to enable vessels to engage in coastal trading in Australian waters. Australian vessels paying Australian wages and providing jobs to Australians will be given preference to carry Australian goods on the Australian coast. However, as I have said previously, the new licensing arrangements do not close the coast to foreign ships.

The government recognises the legitimate role foreign-registered vessels have in our domestic shipping industry, and they will continue to have access to the coast, subject to Australian vessels being given the opportunity to compete for the job. The bill provides for an open and transparent decision-making process when deciding who gets that job. The bill also provides for sufficient flexibility to enable variations to existing licences. We have introduced government amendments to address concerns that have been raised by the major oil companies. Expedited variations may be made to temporary licences to enable fuel carriers to respond quickly to special energy related situations.

The Coastal Trading (Revitalising Australian Shipping) (Consequential Amendments and Transitional Provisions) Bill will provide for a smooth transition from the current coasting trade arrangements to the new regulatory framework to ensure the supply chain will continue to operate while the new regulatory regime is being bedded down. As I have said previously, we have only four Australian vessels participating solely in international trade. It is time that we take action to increase Australian participation in the international trades.

One way of achieving this is the creation of an Australian International Shipping Register through the Shipping Registration Amendment (Australian International Shipping Register) Bill. Over the last 20 years, international registers have been embraced by many advanced maritime nations to address loss of tonnage to open registers. Most of these countries have now established international registers, which provide financial and taxation incentives to increase the competitiveness of their fleets. The Australian International Shipping Register is not, however, a flag of convenience. Companies wishing to register in the Australian International Shipping Register will need to have strong links to Australia. This will ensure that our maritime safety regulator, the Australian Maritime Safety Authority, has the regulatory reach to ensure compliance with our safety, environmental, and occupational health and safety standards.

Importantly, we have the Shipping Reform (Tax Incentives) Bill and the Tax Laws Amendment (Shipping Reform) Bill, which provide for tax and other fiscal incentives to ship operators. The major concessions provided through the tax bills are a zero tax rate for ship operators and a seafarers’ tax exemption, measures that reduce the cost of Australian shipping operations. The tax bills also enable ship owners to depreciate the cost of their ships over ten years instead of the average 20 years, along with roll-over relief on sale of a ship. Finally, an exemption from royalty withholding tax reduces the cost for Australian ship operators to secure foreign vessels. We have also introduced a minor government amendment to this arrangement to ensure the exemption from royalty withholding tax will not have the unintended consequence of creating an income tax liability for the foreign lessor in lieu of the royalty withholding tax.

When I introduced these bills I stated that the industry had to do its bit to reduce the costs of Australian shipping. I can advise the House that the shipping industry and unions have reached an agreement on an industry compact—something that the shadow minister said would not happen. It has happened and here it is: the bluewater Shipping Reform Labour Relations Compact, signed by Paddy Crumlin, the National Secretary of the Maritime Union of Australia; Fred Ross on behalf of the AMOU Executive Council; and Theresa Lloyd, the Executive Director of the bluewater employers’ Australian Shipowners Association.

Here we have a historic agreement. I congratulate both industry and unions on getting together in the interests of our nation, putting aside sectional interest for the national interest. That is why this bill should be supported by everyone in this House. It is extraordinary that you have a position whereby industry and unions are as one in urging support for this legislation. Yet those opposite cannot bring themselves to support this legislation, even though it is consistent with the policy adopted at the National Party conference just a short time ago.

What the amendment does before the House is ask for another review lasting six months. We have had a House of Representatives committee inquiry, of which the member for Hinkler was the deputy chair. It produced unanimous recommendations. We then had a discussion paper released. We had a shipping advisory task force, comprising groups including the National Farmers Federation—people who use the ships—as well as the Australian Shipping Association, and the union. We then had another process where you had three groups: one looking at taxation, chaired by Treasury; one looking at regulatory reform; and one looking at workforce development. In this groups across the sector were involved in the development of this legislation. We then had exposure drafts of the legislation released for people to comment on. We then had another House of Representatives inquiry into these bills. We have produced amendments as a result of some of the submissions to that inquiry. And what do they say over there? ‘Let’s have another inquiry’!

We had 55 ships when this mob came to office in 1996. We are now down to less than half of that. You reach a tipping point whereby there is no industry at all. We either do this today and get it done or the industry is done—there will be no Australian flag on our coast. The consequences of that not just for our economy but for our national security and for our environment are dire indeed. We as an island continent with the fourth-largest shipping task in the world simply cannot walk away from our responsibility to take action.

That is what I am urging here today. Supported by industry, supported by unions. I congratulate the delivery of key productivity reform in this agreement: productivity and efficiency gains; minimum manning levels process for review; and riding gangs in coastal trades. They are all included. In addition, the compact contains many other desirable clauses, such as a dispute resolution clause with a continuity of work commitment; a commitment to review the Seacare scheme, with the objective of protection and indemnity insurance clubs re-entering the market; and setting the crew to berth ratio at two to one.

These reforms will benefit Australian shipping companies and establish a solid platform for investment in Australian shipping. More importantly, the revitalisation of the Australian shipping industry will build the maritime cluster and benefit the Australian economy as a whole. These legislative reforms are a product of a long and thorough processes of review and industry consultations beginning back in 2007. We simply cannot afford to continue to do nothing about these issues. In fact, a number of significant industry groups—Teekay Shipping and other shipping operators—have written to members of the opposition asking them to support this vital legislation. So I encourage the opposition to listen to Australian industry and think about the future prosperity of the nation. These reforms are long overdue. The country cannot afford any further inaction on this important issue. We are an island continent. We must be a shipping nation, not just a shipper nation. We have had the courage to take action. I encourage members of this House to do the same.

There are people up there in the public gallery—I want to particularly single out Teresa Lloyd and Paddy Crumlin—who have had the courage to not get their ambit claims up in this process. They have not get everything that they want. They have had the courage to step away and to make decisions to make sure this reform can happen and that you have a movement forward on these issues. I commend the bills to the House and ask the House to reject the amendment moved by Leader of the National Party to set up yet another inquiry.