Oct 12, 2015

Shipping Legislation Amendment Bill 2015 – Second Reading

Mr ALBANESE (Grayndler) (17:01): The Shipping Legislation Amendment Bill 2015 is about replacing the Australian flag flying off the back of ships with the white flag on Australian jobs. This is unilateral economic disarmament. For an island continent it is in Australia’s economic, environmental and security interests that we are a shipping nation, and that is why it is so surprising that the current government has chosen to bring this bill forward. This bill, soaked as it is in ideology, sells out the national interest on each of these counts. It will allow overseas flagged and crewed ships, paying workers Third World wages, to undercut Australian operators on domestic trade routes. It will destroy Australian jobs, damaging the economy. It will increase the likelihood of maritime accidents in our coastal waters, threatening the environment. And it will replace Australian mariners, who are subject to stringent background checks, with foreign workers whose backgrounds are not subject to the same scrutiny when it comes to security. Jobs, the environment, national security—all basic requirements of good government, all thrown overboard by a government blinded to the national interest by its hatred of the Maritime Union of Australia.

Make no mistake: this legislation is bad for Australia. It is the most obscene piece of legislation I have seen in this House since WorkChoices. Indeed, it can be described as WorkChoices on water, which is why the Labor Party will oppose this legislation. When it comes to the maritime sector, Australia is ‘open for business’, but only to foreign flagged vessels that pay their crews peanuts and put Australians out of work. Under this legislation, if you are an Australian shipping company your business interests are about to be sold out to the lowest bidder. If you are an Australian mariner, a worker honestly going about your job, your job security is about to be terminated with extreme ideological prejudice.

This bill is designed to repeal reforms of the former Labor government implemented to create a level playing field in the domestic shipping sector. The Labor reforms followed a parliamentary committee inquiry and months of consultation with all relevant stakeholders. Using several pieces of legislation, including updating the century-old Navigation Act and creating the new Coastal Trading (Revitalising Australian Shipping) Act, the former Labor government sought to arrest a decline in the fortunes of Australian shipping by revitalising the sector. Our changes included the requirement that firms seeking to move freight between Australian ports first seek out an Australian operator and that when no Australian ship was available foreign vessels could be used, provided they paid Australian-level wages on domestic sectors. They included a zero tax rate for Australian shipping companies; the creation of an Australian international shipping register to help grow our international fleet and the creation of the Maritime Workforce Development Forum to improve training of seafarers and port workers.

The intent here was unambiguous. Labor wants Australian shipping companies to get fair access to the domestic shipping industry. We believe that ships moving freight between Australian ports should be crewed by Australians wherever possible. And where we do utilise foreign flagged vessels to assist with the growing Australian shipping task, their crews should be paid Australian-level wages so as not to distort the market. That is fair. That is sensible. It gives a fair go to all industry participants—shipowners, people moving goods, and mariners. If you move freight by a train in this country, the train driver is paid Australian wages and operates under Australian workplace and safety laws. The rail sector itself is subject to Australian standards and Australian laws. If you move freight by road—say, down the Hume Highway—the truck driver is paid in accordance with Australian standards, and he or she must observe Australian safety standards with respect to the nature of the truck used and the hours they spend driving without a rest. That is the Hume Highway, and I say there should be no difference between the Hume Highway and the ‘Blue Highway’ when it comes to moving freight around the Australian nation.

Labor’s position is very simple. If you work in Australia you must be paid in accordance with Australian laws, including earning fair wages. It is a concept that most Australians can understand and support—but not those opposite. They do not want to see Australians working on our coastal routes, because they believe it costs too much. The minister for transport has attempted to justify this madness by claiming he is implementing economic reform because current arrangements are protectionist. That is absolute nonsense. The bastion of free enterprise, the United States, does not allow any freight to be moved by sea between American ports unless the vessel involved was actually built in the United States, owned by the United States and crewed by United States mariners. Under the Jones Act, outsiders are excluded. That is protectionism. And there is strong bipartisan support for the Jones Act in the US. In 2008, then presidential candidate Barack Obama promised he could be counted on to support the Jones Act. In 2006, Republican President George W Bush said:

… it’s important for Presidents to embrace the Jones Act. … I have, so far, five-and-a-half years as the President, supported the Jones Act, and will continue to do so …

But it goes back further. In 1980, Ronald Reagan said: ‘I can assure you that a Reagan Administration will not support legislation that would jeopardize this long-standing policy … or the jobs dependent on it.’

It is very clear that, indeed, this government is going it alone amongst all of the countries in the G20 in abandoning any preference for an Australian maritime sector engaged in domestic work around our coast. It is an extraordinary proposition. There you have the comparison: three US Presidents, including two Republicans, making it very clear that they understood that the maintenance of a US shipping industry was central to America’s economic, environmental and, importantly, national security interests. Yet here in Australia our government, obsessed with attacking workers and eroding wages and conditions, is blind to the same imperatives. That is why I speak of unilateral economic disarmament. None of our major trading nation competitors in the G20 will have a regime anything like this, because they understand the consequences of it.

This bill focuses primarily on the former government’s Coastal Trading (Revitalising Australian Shipping) Act 2012. It changes the act’s name so it no longer refers to revitalising Australian shipping. Instead, the objects of the act will be narrowed to fostering a competitive shipping services industry that supports the Australian economy and maximises available shipping capacity around the Australian coast. There is no mention of maintaining an Australian shipping industry, only of delivering arrangements that reduce shipping costs. The current object of facilitating the long-term growth of the Australian shipping industry is simply removed.

All of existing part 4 of the act, which creates the existing system of preference for Australian ships in the coastal trade, is repealed and replaced with a permit system with absolutely no preference for Australian shipping. Coastal trading permits will be available to foreign ships on the same basis as they are to Australian ships. They will be of 12 months duration and transferable. Foreign-flagged ships will not be required to pay Australian-level wages until they have spent more than half the year, 183 days, in Australian waters.

These new arrangements do not subject non-Australian ships to Australian workplace standards. They do include a requirement that overseas vessels employ an Australian citizen, resident or holder of a working visa in two senior roles: as either master or chief mate or as either chief engineer or first engineer. But, again, that is only after 183 days on our coast. You do not have to be Nostradamus to see where this is likely to end up. Overseas shipping companies will obtain permits, operate vessels on the Australian coast for up to 183 days in the year and then replace them with other vessels so that the 183-day clock can start all over again for the remainder of the year.

The bill before us also proposes changes to the Shipping Registration Act 1981 in terms of the operation of the so-called second register. The registration requirement for a collective agreement to be in place is removed and a requirement to be predominantly engaged in the international trade is reduced to at least 90 days in any year. Ironically, this antiworker bill was introduced to this House on 25 June, the International Maritime Organization’s annual Day of the Seafarer, which promotes careers at sea.

These provisions are not surprising. The minister for transport was attacking and undermining Labor’s reforms before they even took effect. His attacks on the legislation were calculated to create doubt in the mind of business as to the durability of the change and to undermine investment. He went out of his way to make it clear that the changes would be repealed by an incoming coalition government, and this white-anting discouraged the industry from working with the new system.

If Labor’s reforms are to work they needed to be given time. The time in which a business can make a decision to invest in infrastructure, such as having an Australian-flagged vessel on the international trade routes, is significant. You cannot make a decision one day and have a ship operating the next day. Businesses have told me they wanted to reflag ships in Australia to take advantage of the incentives in Labor’s legislation. Others contemplated increased investment in the local industry, including in the manufacturing of ships. Indeed, after the former Labor government’s shipping reforms took effect, Tasmanian shipping company SeaRoad Holdings decided to invest $100 million in the first of two new cargo vessels, the first of which is due to begin operating on Bass Strait next year.

In a submission to the Senate committee examination of this legislation, SeaRoad’s Michael Easy warned that the legislation before us would imperil this investment. Mr Easy wrote that, when seeking bank finance for its expansion, the company cited the strong support for an investment in Australian shipping that was there in the existing legislation. He wrote:

It is crucial to our funding arrangements, Tasmania’s future and Australia’s credibility on the world stage that the legislation acknowledges that the current regime be preserved on Bass Strait.

So here we have very clear evidence that the current regime is working. Other companies were looking at having their own ships with an Australian flag engaged in the international trade. This was despite the undermining of the current minister for transport.

Now this minister, having sabotaged and undermined the changes for nearly three years, has the gall to point to the need for change. This is a triumph of intellectual dishonesty. Unbelievably, the minister for transport’s key criticism of current arrangements is that paying Australian seafarers Australian-level wages costs too much when you can simply open up the waterways to cheaper foreign competitors. But, if we follow this line of argument to its natural conclusion, we might as well replace all of the Australian workforce throughout the economy with foreign workers paid foreign wages. That is the kind of ideological madness we are dealing with here.

The role of government is to balance competing interests in the national interest. In this case, it should mean doing everything possible to minimise shipping costs while also supporting the survival of an Australian maritime industry in recognition of the broader national interests served by its existence. That is Labor’s approach. But this minister behaves as though the Australian shipping industry and the people who work in it have no inherent value. To him, Australian shipping is just an expendable line item in some other industry’s balance sheet. This is an incredible rejection of the national interest, an astounding abandonment of any ambition for our nation.

Here we are, an island nation that relies on the maritime sector to move 99 per cent of its exports, and this minister cannot see any value in maintaining an Australian domestic fleet, with the consequential skills that come from having a maritime sector. It is no wonder that twice in the past 12 months the minister has received a warm welcome when giving speeches at the Orwellian named Shipping Australia, the representative of foreign ships, where he has attacked Labor’s common-sense reforms as a sop to trade unions. I use the term ‘Orwellian’ with respect to Shipping Australia because it does represent foreign shipping interests. After the minister announced his plans for this legislation to Shipping Australia in May, the organisation released a statement which declared these changes would be of great benefit to primary producers and manufacturers who wanted reduced costs. Shipping Australia had absolutely nothing to say about what the changes would mean for the Australian shipping industry.

It is within Australia’s economic interests to retain a vibrant Australian shipping industry. Thousands of jobs are involved. That is thousands of people who pay tax and who contribute to the broader health of the economy as consumers fuelling economic activity, thousands of people who rely on their wages to raise their families and put food on the table. Then there are the Australian businesspeople who have taken the risk to start shipping companies. They are also at risk, not because they are inefficient but simply because those opposite place no value on their existence.

The minister has claimed the changes will strengthen shipping in this country. That is not right. And, importantly, it is not what the government is telling employers behind closed doors. Take, for example, the advice given to North Star Cruises representative Bill Milby by a senior official in the Department of Infrastructure and Regional Development. Mr Milby’s company operates cruises in Western Australia’s Kimberley region. It offers foreign visitors a uniquely Australian experience—beautiful scenery and top-notch service from an Australian crew. In a submission to the Senate Rural and Regional Affairs and Transport Legislation Committee inquiry into this legislation, Mr Milby wrote that, when he attended the minister’s speech announcing this legislation back on 20 May, he raised a question from the floor asking the minister to consider the effect of the changes on his business. The minister said there would be no effect. Mr Milby then approached departmental official Judith Zielke, who was with the minister, who told him that if he wanted to remain competitive under the new regime he should re-register his vessel overseas and sack his 50 Australian staff and replace them with cheap foreign labour. Mr Milby followed up with another meeting with Ms Zielke and also Michael Sutton in Canberra a few weeks later, where he received identical advice.

After Mr Milby made this information public in a submission to the Senate committee inquiring into this legislation, the member for Warringah, who was at that time the Prime Minister, questioned Mr Milby’s integrity by claiming this advice was never given. But, in a 7 September public hearing of the Senate Rural and Regional Affairs and Transport Legislation Committee, Mr Milby repeated his evidence on oath, and Ms Zielke and Mr Sutton confirmed his version of events. Despite this, the member for Warringah and the minister for transport refused to apologise, even after they had heard Mr Milby say publicly he took exception to being declared a liar by our national leaders. Departmental briefing papers delivered to the Senate during the previous sitting fortnight again confirmed that this advice was given.

This government is not only driven by ideology on shipping; it is also happy to trample the reputation of anyone standing in the way. The facts here are simple: Mr Milby was given two options. Option 1: move offshore, sack your Australian staff and hire foreign workers being paid foreign wages. Option 2: go out of business. It is very clear that this legislation should be dropped and the new Prime Minister should take the opportunity of the transition to do just that. Almost a fortnight ago, I wrote to the new Prime Minister suggesting he do just that. The fact that I am speaking now on this bill means that the leadership change has not changed the government’s policy on destroying Australian jobs and the Australian shipping industry. Under this legislation, the only option for Australian shipping operators who want to be able to compete against foreign shipping companies is to effectively become a foreign company. This is too absurd for words.

While Mr Milby outlined what looks to him like a very dismal future for his company, other operators have already seen the writing on the wall. In January, Tony Briggs, head of the Cairns based Coral Princess Cruises, said he was selling out to foreign interests because he could not compete with a Bermuda flagged vessel that began operating in competition. Mr Briggs told the Cairns Post that the changes that are before us would make matters worse and damage Australian businesses. Mr Briggs’s assessment of the government’s reform plans was pretty simple. He described them as stupid. He said this: ‘There will never be another passenger ship built in Australia if there is no certainty on how we can operate. It is exporting jobs.’

I note that the minister for transport claims this bill is about reducing red tape. This is not true. The explanatory memorandum attached to the legislation says that 88 per cent of the economic benefit the changes will deliver will come from reduced labour costs. That is what it says, very clearly, in the explanatory memorandum. It is one thing to export jobs, but let us consider the record of foreign flagged vessels in this nation when it comes to maritime safety. We cannot underestimate the importance of maintaining our clean and green coastal environment to our tourism industry, which employs more than one million Australians.

Since 2004 Australian inspectors have detained 122 foreign flagged oil tankers because they have been overloaded or have had defective equipment or serious deterioration of their hulls and were judged to be a risk to their seaworthiness. In the same period, they detained no Australian flagged oil tankers. Just have consideration of recent incidents. In June 2007 the Pasha Bulker ran aground, on Nobbys Beach, at Newcastle. It was flying the flag of Panama and its crew was made up of mariners from the Philippines and Korea. The subsequent investigation raised concern about the failure of the ship’s master to take on ballast or to weigh anchor and move offshore before the winds associated with the storm reached gale force.

In 2009, as Cyclone Hamish approached the Queensland coast, the Pacific Adventurer began losing shipping containers overboard in very heavy seas. One or more of those containers pierced a hole in the vessel as it tumbled into the water. The result was a 60-kilometre-long oil slick that hit the beaches of the prime tourism region of the Sunshine Coast, resulting in a clean-up bill of $34 million.

About a year later, Chinese registered bulk carrier Shen Neng 1 ran aground off Rockhampton. The vessel was 10 kilometres away from normal shipping lanes. It gashed a hole in the Great Barrier Reef three kilometres long and 250 metres wide, the equivalent of about 58 football fields. It created an oil slick more than three kilometres long. There was no Australian pilot aboard this vessel. There should have been. As transport minister, at the time, I flew over the site on an Australian Maritime Safety Authority aircraft. It was very clear what had happened. We could see from the air the channel through which the ship was supposed to pass, but it simply failed to turn. The mariner in charge had little knowledge of Australian conditions and had had little sleep because he was operating under third-world industrial conditions. He was later sentenced for 18 months in jail for his negligence.

Australian vessels are crewed by Australians, who are obliged to observe Australian safety rules and are intimately familiar with our coast. They are also alive to the fundamental importance of tourism for our economy. The Great Barrier Reef is this nation’s No. 1 drawcard for tourists, particularly from the booming Chinese and Indian markets. Tourism related to the reef earns this nation $5.7 billion every year. It supports 65,000 jobs. The reef—about the size of Italy—supports regional cities and towns along the Queensland coast, be they Cairns, Townsville or right down at Gladstone, where Heron Island is such an important part of the tourism industry. It is not just the reef—right around Australia job-generating tourism depends on a clean environment.

Australia’s mariners also have a critical role in protecting our national security. They understand the location and importance of coastal facilities that could be subject to terrorist attacks. Because they are familiar with what goes on around our coast, they are more likely to notice when something untoward is going on. In June, the ABC’s Four Corners program highlighted the security implications of the coastal free-for-all. The program concerned activities aboard the Sage Sagittarius, the coal freighter operating between Australia and Japan. The vessel’s Japanese owners registered the ship in Panama to minimise wage bills, even though their key business is hauling coal from Australia to Japan.

The Four Cornersreport contained allegations that three men were killed aboard the ship: one disappeared overboard, another was attacked before falling 12 metres to his death and another had his body crushed in machinery. Investigations are ongoing, and we await their results. I do note that while Australian mariners undergo stringent background checks before going to sea, checks on overseas mariners are not of the same level. We have a government that will bang the national security drum until the cows come home, each and every day. We have a government that speaks about stopping boats but has legislation here that is about stopping boats with the Australian flag on the back of them.

I note that on 17 June The Australian reported the head of the government’s Border Protection Command, Rear Admiral Michael Noonan, gave a blunt assessment of foreign flagged vessels. He said: ‘Vessels that flew flags of convenience flouted safety and employment standards and posed risks to revenue, trade and environmental hazards.’ That is a common-sense and informed observation from someone—with no political motivation—who is trained to look at the world from the perspective of Australia’s national interest. That is why I move the following amendment. I move:

That all words after “That” be omitted with a view to substituting the following words:

“the House:

(1) notes the evidence given before the Senate inquiry into this bill to the effect that senior officials from the Department of Infrastructure and Regional Development advised Mr Bill Milby of North Star Cruises that for his company to compete in Australia under this proposed legislation, he should reflag to a foreign state, sack his Australian crew and hire a crew on cheap foreign wages;

(2) accordingly declines to give the bill a second reading; and

(3) expresses its support for regulation aimed at revitalising the Australian shipping industry by ensuring that:

(a) the Australian shipping industry operates on a level playing field with foreign ships, based on Australian standards, when working in Australia; and

(b) Australia’s vital economic, environmental and national security interests in fostering a local shipping industry are safeguarded”.

In conclusion, I end where I began. Australians are entitled to expect their governments to put the national interest above all else. The legislation abandons Australia’s economic, environmental and national security interests.

We on this side of the House are in favour of reform that makes our nation more efficient. We can even reluctantly accept reforms that are at odds with our political and policy instincts if we can see that change is motivated by good intentions. This is not. The motivation for this is ideological and based upon an idea that they want fewer members of the Maritime Union of Australia, and the way to achieve that is by destroying the Australian shipping industry. It is very short-sighted, it is unilateral economic disarmament and it is something that is not contemplated by any other nation in the G20. That is why Labor will oppose this bill.

My advice to those opposite is that they can do much better than this. We want to see the Australian flag flying off the back of trading vessels around the Australian coast and, indeed, right around the world, but this legislation raises the white flag on the continued existence of an Australian maritime sector and Australian jobs. This legislation arose from a unanimous parliamentary inquiry, the deputy chair of which was the former member for Hinkler, Nationals member Mr Paul Neville. It arose out of full consultation with the maritime industry and sector as well as with the workforce, the navy and departments across the government. This ideologically driven legislation is short-sighted and should be rejected. The government should go back to the drawing board and start again, and the legislation inquiry in the Senate confirmed exactly why that is the case. I commend the amendment to the House.

The DEPUTY SPEAKER ( Mr Broadbent ): Is the amendment seconded?

Ms Collins: I second the amendment and reserve my right to speak.

The DEPUTY SPEAKER: The question now is that the amendment be agreed to.