ISSUES: Shipping reforms
NICK RHEINBERGER: We are currently waiting on line to talk to Anthony Albanese, who’s the Infrastructure Minister, to talk to us. And he is on line one now – Anthony Albanese, good morning.
ANTHONY ALBANESE: Hi, how are you?
NICK RHEINBERGER: Is there anything to worry industries, such as Port Kembla’s BlueScope, about the shipping reforms?
ANTHONY ALBANESE: Not at all. We have been through a process some five years, including full consultation with companies such as BlueScope which has been on the reference group that advised us of the reforms they currently use an Australian flagged vessel. And we understand they’d like to continue doing so which these reforms will assist. But they can’t do that if the Australian flag disappears off the back of our ships.
NICK RHEINBERGER: Why is the Australian flag likely to disappear off the back of our ships?
ANTHONY ALBANESE: Well this isn’t theoretical, it’s happening. We’ve gone from 55 ships in 1996 down to 21. The Australian flag is disappearing, and it’s disappearing because of competitive issues and a failure of the regulatory and policy environment implemented by the Howard government. They didn’t think that Australian shipping was important. We think it is, for our security, for our environment, as well as for our economy and more Australian ships and making them competitive. And what we’re not doing here is closing the coast. What we’re not doing is saying no foreign ships. What we are doing is reducing the costs of Australian ships by having a series of reforms including for the international register, a zero rate of taxation for Australian ships in order to encourage the use of Australian based shipping. A number of reforms, including halving the time period of depreciation which will provide incentive to invest in Australian shipping which will be good – not just for the shipping industry in terms of those that were used ships, but also for the manufacturing sector.
NICK RHEINBERGER: By its very nature, this is a globalised industry. A lot of these ships don’t just ply between Australia – Australian ports, but between Australian ports and ports overseas.
ANTHONY ALBANESE: That’s right.
NICK RHEINBERGER: Are we making Australian shipping more competitive, or are we simply subsidising it, and is that sustainable?
ANTHONY ALBANESE: No, we’re making it more competitive. It is in an extraordinary position, Nick, that there are currently only four Australian ships engaged in international trade. And those four ships are all LNG ships. An astonishing position that is the case. And what we’ll do – we’re taking international best practise and going one step further by establishing a second international register. This has been worked out with the cooperation of the industry and with the trade unions. And we make no apologies for saying that we have a national interest in having a shipping industry. See the problem is, once you get down to the sort of numbers of 20 ships, very soon you lose the ability to have any shipping industry at all. And the consequences of that are dire for those people who run our ports and run our harbours, for these skills that are required in an island continent such as Australia.
NICK RHEINBERGER: Look, finally, have you got any more information about who commissioned this report, which would not have been cheap for Deloitte to do. All I’ve got is it was commissioned by opponents of the reforms.
ANTHONY ALBANESE: Well if they were serious about having input to the process, we had a parliamentary inquiry through the House of Representatives, we then had a shipping industry review at which industries were represented, nine separate industries, and we had submissions. We then had a process whereby we had a full consultation period over nine months, and then we had exposure drafts of the legislation – it hasn’t even been introduced into Parliament yet.
We’ve put the draft exposure out there for that input, and what we saw was this report given to a newspaper rather than given to any of those processes – and they got some of their conclusions simply wrong. The report assumes that after five years, foreign ships won’t be able to operate on the Australian coast – that’s wrong. The report also makes an assumption that somehow foreign ships operating around the Australian coast can pay foreign wages – that’s wrong as well. As a result of Fair Work Australia, and the changes that we made when we got rid of work choices, ships that operate around the Australian coast already have to play Australian wages. So the sort of figures that are in there and assumptions are just simply wrong.
NICK RHEINBERGER: Alright, Anthony Albanese, good to talk to you, thank you.
ANTHONY ALBANESE: Great to talk to you.
NICK RHEINBERGER: Infrastructure Minister, Anthony Albanese.