The Gillard Labor Government has announced the most comprehensive package of reforms to the Australian shipping industry ever undertaken including a zero tax rate for Australian ship operators.
These historic reforms are designed to make the Australian shipping industry more internationally competitive and allow Australian shipping companies to compete on international routes.
We also need to reform and revitalise coastal shipping in Australia to create a competitive environment that’s attractive to investors.
The package has four key elements:
- tax reforms to remove barriers to investment in Australian shipping and to foster the global competitiveness of the shipping industry a simplified three tier licensing framework for participation in the coastal trade
- establishment of an Australian International Shipping Register to put Australian companies on a level footing with their international competitors
- establishment of a Maritime Workforce Development Forum to progress key maritime skills and training priorities.
Companies will also be given a financial incentive to replace ships earlier, with the depreciation rate reduced from 20 years to ten years to encourage renewal of the fleet.
An international study also found the cost of operating a 20 year old ship compared to a five year old ship is 40 percent higher.
This has the additional benefit of incorporating new technology to improve safety and efficiency which will also reduce the risk to the environment.
The reforms also include a tax break for companies employing Australian seafarers on international voyages.
The Australian shipping industry has been operating at a substantial disadvantage compared to international operators who have access to beneficial tax, regulatory and employment arrangements.
The industry has been in decline for decades and if we don’t act now, in five years time, Australia won’t have a shipping industry. In 1995 there were 55 Australian operated ships – now there are only 22.
These reforms will improve productivity and ensure the safety and security of our marine environment for future generations.
Stronger Shipping for a Stronger Economy documents