Aug 7, 2012

Speech to NATSHIP12, National Shipping Industry Conference – Our Shipping Future – Park Hyatt, Melbourne

The Gillard Government believes there are sound economic, environmental and security reasons for Australia to have a strong shipping industry.

We are an island nation with responsibility for some 16 million square kilometres of ocean and a coastline of over 60 thousand kilometres.

Shipping carries 99% of Australia’s trade by volume and Australia’s shipping task makes up 10% of the entire world’s seaborne trade; the fourth largest global task.

Today, ships move nearly a billion tonnes of iron ore, coal, wheat and other goods in and out of our ports each year.

To put that into perspective, that equates to approximately $200 billion worth of cargo being moved annually around our ports and 14,000 people employed at sea or onshore.

At the same time, shipping growth in Australia is anticipated to be in the order of 80 per cent over the next decade.

For example, the Bureau of Resources and Energy Economics Gas Markets Report, forecasts national exports of LNG will more than triple to 63 million tonnes per annum by 2016-17.

All of this trade will be moved by ships.

These facts tell us, if we needed to be told, that the maritime industry is critical to our Nation’s ongoing prosperity, to employment, food security and ensuring that the vital economic arteries of Australia – its shipping lanes and ports – remain open, safe and efficient.

That is why, since 2007, I have worked with the industry to create the policy environment that will revitalise Australia’s shipping industry.

I am very happy to say that the key elements needed to do this have now been delivered.

With the collaboration of all the major players in our maritime industry we have successfully undertaken the most significant reform, of the industry since 1912.

THE REFORM PACKAGE

Over the next couple of days you will be hearing from industry experts from both at home and abroad.

You’ll be taking a closer look at key issues including the reforms to Australia’s treatment of shipping taxation, the creation of an international shipping register, maritime workforce development, innovations in navigation, environmental protection and seafarer’s rights.

As a prelude to your discussions it is worth outlining what the Government has done to revitalise our shipping industry.

TAX INCENTIVES

First up – we have delivered a shipping tax reform package that includes a zero tax rate, accelerated depreciation/rollover relief, refundable tax offset for employing Australian seafarers and the removal of the Royalty Withholding Tax.

These measures will have long-term benefits including encouraging much needed investment in new and more efficient ships which in turn will enhance productivity.

COASTAL TRADING

Secondly, in domestic coastal shipping, we have refined years of out-dated custom and practice to establish a new licensing regime to provide the clarity and transparency needed for long-term planning.

The new licensing arrangements also set out the boundaries around the necessary role of foreign vessels in our coastal trade.

AUSTRALIAN INTERNATIONAL SHIPPING REGISTER

Thirdly, we have set up an Australian International Shipping Register — a first for Australia.

Companies which place vessels on the AISR will be eligible to receive the Government’s tax and fiscal incentives.

In addition to reducing the cost of owning and operating an Australian ship, international labour terms and conditions will apply to seafarers working on board AISR vessels on international voyages, with a minimum safety net provided through the application of the International Labour Organization’s Maritime Labour Convention.

AISR vessels will be able to hire foreign seafarers; though two senior officers, preferably the master and chief engineer, have to be Australian.

The combination of a zero tax rate and internationally competitive employment conditions means AISR vessels can compete with international ships registered in a variety of jurisdictions, without reducing Australia’s enviable maritime safety and environmental standards.

These arrangements are designed to encourage investment in an Australian international fleet.

SKILLS DEVELOPMENT

The fourth element in the reform package is the creation of an industry led Maritime Workforce Development Forum.

The Forum which is comprised of representatives from across the maritime sector, met for the first time in February this year.

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

The maritime sector, like many other industries, is faced with an ageing workforce.

42 per cent of our seafarer workforce is aged 51 years or older — we need to find ways to make a career in shipping, a career of choice.

As shipping traffic increases, efficient port operations will become ever more critical, so too will our need to enforce strict safety and environmental requirements.

In order to do this, highly skilled seafarers will need to fill critical roles such as port masters, pilot and inspection roles with our maritime safety regulators.

We need to recruit, train and retain our future maritime workers now.

The Forum is working to address priority issues such as the development of a mandatory training requirement and the development a national approach rather than sector or state-based approaches that currently exist.

The Forum will also provide advice to the Government about how we can better use existing Government skills programs and funding sources.

ENVIRONMENTAL PROTECTION

The increased shipping traffic also means increased pressures on our marine environment and a need for even greater vigilance to enforce our safety and environmental protection measures.

It is critical that shipping meets the highest safety and environmental standards.

We will continue to ensure that appropriate safety controls are in place to respond to the expected increase in vessel movements and to protect the ships, crew, cargoes and most importantly the environmental values of the iconic regions of the Great Barrier Reef, the Torres Strait and the Coral Sea.

As will be discussed in this afternoon’s session the world of navigation is undergoing a revolution, with systems such as e-Navigation and under keel clearance further helping us protect the marine environment.

To provide increased protection for the Great Barrier Reef last year we extended the ship tracking system (REEFVTS) to cover the entire reef.

All large ships must regularly report their location and route and their progress is tracked by radio and satellite 24/7.

We are also planning for the future.

We are developing shipping management strategies to mitigate the risks.

A shipping management plan in our north-west is well underway and the Australian and Queensland Governments are working together now to develop a North East Shipping Management Plan which will be finalised by the end of this year.

The plan will recommend new and enhanced safety measures that might be needed as shipping activities increase in that region.

We are also taking this opportunity to review the effectiveness of our current safety measures.

This plan will become our work program for the next ten to twenty years.

It will focus on issues directly related to the safety of shipping – including navigation aids, designated routes, ship reporting and communication – as well as issues that prevent and respond to ship-sourced pollution.

We are also significantly improving Australia’s oil spill response capability.

AMSA has begun with $13.5 million roll out of new equipment across nine ports around the country.

The National Resource Centres in Sydney, Melbourne, Devonport, Adelaide, Perth, Dampier, Darwin, Townsville and Brisbane will begin to receive the equipment over the coming weeks.

The new equipment will improve Australia’s capability to clean up oil spills more effectively and in more difficult conditions than existing equipment allows.

Additionally, six new oil sweep systems have been purchased which will expand the environmental conditions in which oil spill response operations can be conducted.

We will continue to plan for the future of Australian shipping and its important contribution to Australia’s economy, environment and security.

NATIONAL PORTS AND FREIGHTS STRATEGIES

This Government’s commitment to planning for Australia’s economic and shipping future is not just focused on sea-side operations.

We also understand the importance of land-side operations.

We are putting in place a plan that ensures we are well-positioned to provide the facilities and supply chain infrastructure to meet the expected growth of Australian exports.

Central to this plan are the National Freight Strategy and the National Ports Strategy.

An important step in this process was achieved a fortnight ago when the Council for Australian Governments endorsed the National Ports Strategy.

A key objective of the strategy is improving long-term coordinated planning around future ports capacity, transport corridors and shipping channels feeding our major ports.

The National Freight Strategy highlights the importance of the freight industry to our competitiveness in international markets and the vital role it has in the domestic economy.

This Government is committed to ensuring we have the national infrastructure, planning systems and regulatory frameworks we need to move freight efficiently between our key transport hubs.

AMSA – NATIONAL REGULATOR FOR COMMERCIAL VESSEL SAFETY

1 January 2013 is an important date in the Government’s plan to improve the movement of freight in and around Australia.

That is the date when Australia finally gets three national transport regulators; one for rail, one for heavy vehicles and one for the maritime industry.

This means that for the first time in its history, Australia will have a single national regulator for commercial vessel safety – and AMSA will be the national maritime safety regulator.

This will ease the burden of red tape, increase regulatory confidence, remove inconsistency in the law applying to Australian commercial vessels and streamline new maritime safety plans.

We will have one maritime safety regulator — and one law — Commonwealth law — applying to all commercial vessels in Australian waters.

In terms of sheer numbers alone, this increases AMSA’s responsibilities from around 6000 to 30,000 vessels.

This is a mammoth task but I know that we are in safe hands and the economic productivity benefits are undeniable.

COMMITMENT TO THE IMO AND ILO

Central to all of our maritime responsibilities is Australia’s commitment to the International Maritime Organization.

It is a great privilege and a responsibility we take seriously.

We were active participants from the beginning.

Australia is a founding member of the IMO, 2012 is the 60th anniversary of Australia ratifying the IMO Convention, and we have served on the IMO Council for more than 40 years.

Just last November we were successful in being re-elected to Category C of the IMO Council, reflecting our role as a key voice in international shipping.

I am sure that IMO Secretary-General, Mr Koji Sekimizu, who will be speaking to you tomorrow, will agree that our adoption and implementation of IMO Conventions is almost unparalleled.

Decisions made through the IMO have a direct bearing on the safety standards of international ships visiting Australian ports.

We will continue to be active in the IMO improve and implement international standards and conventions that will directly benefit us – through increased efficiency and the safety of ships.

Still looking internationally, we continue to work closely with the International Labour Organization, with a particular emphasis on the Maritime Labour Convention, 2006.

This convention is often referred to as the ‘seafarers bill of rights’ as it sets minimum working and living conditions for the world’s 1.2 million seafarers.

Last year Australia ratified the MLC and I am pleased to report that this ratification was strongly supported by both maritime unions and employers.

We look forward to the day when the MLC comes into force – a day that is not far off.

RE-WRITE OF THE NAVIGATION ACT

I also want to comment on the massive overhaul and re-write of the Navigation Act 1912 — a move I flagged at Natship09.

The Navigation Act is the primary piece of legislation by which the Australian Government regulates the maritime industry – particularly large vessels.

It was imperative that the 100 year old Act be overhauled and brought into the 21st Century.

The revised Act passed the House with unanimous support and is currently before the Senate and I am confident the Senate will support this important legislation.

CONCLUSION

Shipping is one of the world’s oldest and most important global industries.

Only through high level cooperation and coordination can we ensure effective management and ongoing sustainability.

I hope that the next two days provide the opportunity for you to further engage in discussions on these issues.

In closing today I want once again to thank the Australian industry and its workforce for your commitment, advice and input into crafting a maritime reform package that will ensure Australian shipping has a strong future.

To our international partners – thank you for your ongoing support and cooperation and can I suggest that you take another look at Australia as a place to base and operate your ships.

We have picked the best practices of our competitors and in some cases surpassed them.

If you take one message home from Natship12 it is this; Australia shipping is open for business.

To all of you I say – the Government has created the regulatory and fiscal framework that supports the revitalisation of the shipping industry.

It is now over to you to make the investments, to create the business models that tap into this great opportunity.

Thank you