Feb 28, 2012

Keynote address – MUA 140th anniversary dinner

Introduction

We have achieved a great deal in the past 18 months.

  • Our equal wage case that ensures some of Australia’s lowest paid workers get a decent wage,
  • Our safe rates legislation that is currently in the Parliament that will ensure our nation’s truck drivers can do their jobs safely and be paid a decent wage,
  • The abolition of the ABCC so that workers in the nation’s construction sector have the same rights as all other workers, and
  • The increase in the superannuation guarantee ensuring that Australian workers can retire and do so with dignity.

Of course, and most importantly for this audience, we are delivering for seafarers and your industry.

In September last year, I announced the most significant reform of the maritime industry in Australia’s history. 

Unions, industry and government have all worked together to deliver these reforms – and that is something we can all be proud of.

Development of these reforms has been a long haul. 

Since the Government was elected in November 2007, I have been working with the MUA and the industry. 

I would like to take this opportunity to thank Paddy Crumlin– without his commitment and hard work these reforms would not have happened. 

There have been some tough debates in getting us to this point. 

As you well know there are some people who don’t think we need an Australian shipping industry – they think we should just let the industry wither and die and let foreign ships, employing foreign workers ply our coast.  

That is why this industry has been in decline for the last 15 years. 

99 per cent of Australia’s international trade is carried by ships, yet only one half of one per cent of that trade is carried by Australian flagged vessels.

We are the largest island nation and the fourth largest shipping task in the world.

There are only four Australian flagged vessels engaged in international trade; and they are all gas tankers.

I believe Australia must be a shipping nation; not a shipper nation.

 

Shipping Reform – A considered process

That is why we have been working on these reforms since late 2007. 

One of my first actions as Minister was to commission the parliamentary inquiry into the coastal shipping sector. 

In late 2008, the bi-partisan Committee issued a unanimous report, with 14 recommendations on how we could reinvigorate our shipping industry and make it competitive and sustainable in the long term.

In 2009, I convened an advisory group of industry and unions to help us decide the best way to implement these recommendations. 

Rebuilding an industry that has been allowed to decline is a difficult task, and I wanted the best advice from those who work in it.

During the 2010 election campaign, I announced that a re-elected Gillard Government would implement measures to revitalise Australian shipping.

On re-election I released a discussion paper and established three industry reference groups to work through how we would implement these reforms. 

Again, the MUA made a vital contribution to these working groups.

All this work culminated in my announcement in September this year.

 

The Reforms

It is worth reminding everyone of the reform package.

There are four key elements to the package:

  • tax reform to encourage investment in new and more efficient ships to enhance the industry’s productivity, including a zero tax rate and seafarer tax exemption; 
  • an Australian international shipping register to help grow our international fleet;
  • a new licensing regime to provide clarity and transparency to enable long-term planning and set clear boundaries around the necessary role of foreign vessels in our coastal trade; and
  • the establishment of a Maritime Workforce Development Forum to progress training to help us build a highly skilled maritime workforce.

 

Key elements of the proposed laws

I can categorically say that we are committed to establishing a quality register – that means Australian safety and environmental standards. 

While on international voyages, wages and conditions will be in line with the Maritime Labour Convention. 

I have been working with the maritime unions to ensure that fundamental conditions that are enshrined in international conventions will apply to these vessels. 

Our legislation will provide an employment safety net, with a minimum wage that can be no lower than what is provided in the ITF Total Crew Cost (TCC) Uniform Collective Agreement.  

Minimum hours of work and rest and leave entitlements will all be legislated for. 

As will the requirement for ship operators to take out insurance to provide for compensation in the event of death or long term disability.  

The ITF TCC Collective Agreement will be the minimum for these benefits.

We will provide a framework for collective bargaining

Australia has a proud history of ratifying ILO conventions. 

Those ILO Conventions enshrine workers’ rights to organise, freedom of association and collective bargaining. 

Our legislation will ensure these rights are maintained. 

Our legislation will also set out a clear process for the resolution of disputes. 

This process is based on the Dispute Resolution Procedures that the ITF agreed earlier this year with the International Bargaining Forum. 

I expect disputes to be settled directly between the parties.  

However, we will ensure there is a backstop – provision will be made for recourse to the Australian Federal Court, Federal Magistrates Court or State/Territory Supreme Court if the legislation is breached.

Our legislation will also provide for a single bargaining unit when undertaking industrial negotiations. 

The aim of the Australian International Register is to build Australia’s participation in international shipping.  

I envisage that these vessels will spend most of their time in international waters.

However, when these vessels are operating in the domestic coastal trade, the Fair Work Act and Seacare will apply as it does now to vessels operating under permits.     

These provisions will be in legislation – this does matter. 

On my watch, I will not allow these workers’ rights to be left to regulations. 

Any future Government that tries to take these rights away will need to get the approval of the Australian Parliament.

It is this protection that will ensure our International Register maintains Australia’s enviable maritime reputation and does not become a flag of convenience.

 

Other Benefits of the Reforms

I don’t need to tell you that workforce skills and training is one of the biggest challenges facing the industry. 

The workforce is ageing, at the same time our need for highly skilled seafarers is growing rapidly as shipping traffic increases.  

We are using these reforms to build a home grown maritime workforce.  In providing the shipping industry with a ‘world class’ tax package, we have asked them to play their part. 

Access to the company tax exemption will be dependent on meeting a mandated training obligation.  

This issue is being considered by the Maritime Industry Workforce Development Forum.

Last Tuesday I address the first meeting of the Forum and am confident that it provide the industry with a blue print for addressing the future skills and training needs of the industry; an industry which I am sure will grow.

Another important part of the tax package is the seafarers’ tax exemption. 

I understand that some have been critical that it is the employer rather than the employee who will directly receive this benefit.

I disagree with this criticism. 

The exemption provides an incentive for Australian seafarers to be employed in the international trades. 

We know that the international shipping is highly competitive. 

I want to help Australian seafarers gain valuable international experience. 

Reducing the cost of employing Australian seafarers will encourage this.

I turn now to the coastal trading system. 

I think it is important to reiterate that this is a package of reforms – no single measure will revitalise our shipping industry. 

Getting the balance right has been the challenge throughout this process.

Some of you may wonder why I have not implemented “Jones Act” arrangements such as in the US. 

The reality is we cannot operate like that in Australia. 

Our location off the major trade routes and dispersed national geography undermine the fundamental economics of shipping. 

Foreign flagged vessels will still be required to carry some cargos. 

What I am doing however is strengthening the regulatory system for participating in the domestic coastal trade:

  • Permits will be abolished under the new regime. 
  • Australian licensed vessels will be required to be flagged in Australia.
  • Only Australian registered vessels will be able to access the tax incentives thus reducing the operating costs for Australian licensed vessels. 

A new three tiered licensing system will be introduced: 

  • General Licences will only be available to Australian registered vessels.  These vessels will have unrestricted access to coastal cargoes
  • Temporary Licences will be available to foreign flagged vessels or those on the Australian International Register.  Prior to issuing these licences, the applications will be published on the Department’s website to enable any General Licensed operator to nominate to carry the trade identified in the application.
  • Emergency Licences will only be issued in genuine emergencies. They will not become a de facto permit.

The Government is committed to the principle of cabotage – supporting existing General licensed ships and supporting the transition to new General licensed ships.

Data on cargo moved under temporary licenses will be published in a user friendly format. 

This transparency will enable General Licensed operators to track movements of trade over time and inform their business development strategy.

 

Regional partnership

The Government is also supportive of the MUA’s efforts to grow the seafarer’s labour pool through the training and development of regional seafarers.

The ability for regional seafarers to learnt heir trade on international register vessels is something that will be beneficial to both Australia and our near neighbours.

 

Next Steps

All the exposure drafts of the Bills have now been shown to the industry, including your Union.

The consultation on the Bills has been very helpful and will ensure we get it right.

We will introduce the Bills in this sitting period. 

 

Conclusion

We are delivering the future prosperity of the nation for working Australians.

A strong economy needs a strong shipping industry.

These reforms will rebuild our nation’s shipping industry.

These reforms will attract ship owners, operators and ship investment in Australia, which will provide the new framework for revitalising domestic shipping and protecting it in the long term – this is key to the revitalising Australian shipping.

I am particularly proud of what this Labor Government has achieved.

Achievements that has been done in cooperation with the MUA. 

The work is not finished and I look forward to continuing to work with all of you to rebuild Australian shipping.