Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017

House of Representatives, 15 August 2018

Watch Matt's speech here

Mr KEOGH (Burt) (12:16): Those who fail to learn from history are doomed to repeat it, so I thought I'd take this opportunity today to teach those opposite a valuable history lesson and implore them to reconsider this bill, the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017. When federal Labor took office in 2007, the Australian shipping industry was in decline. Our shipping industry had dropped from 55 Australian flagged vessels in 1996, at the beginning of the Howard government, to just 21 by the end of that government in 2007. The former Labor government then endeavoured to revitalise the shipping industry, spending years consulting with industry, unions and other key stakeholders about how to best support our shipping industry in Australia.

In the interests of assisting my colleagues opposite, in case they weren't aware, we live on a continent that is, indeed, surrounded by the ocean—we are girt by sea—and where the vast majority of importing and exporting occurs in the hulls of ships. In fact, one-tenth of the world's sea trade flows through our ports. This is hardly insignificant. Yet, despite our nation's obvious reliance on the maritime industry, Australia's own merchant fleet and the skilled workforce it subsequently trains and employs are rapidly disappearing. At last count, 12 Australian vessels have been reflagged since the election of this Liberal government in 2013. One of these ships is the MV Portland, an Australian flagged and crewed ship that has been used to transport Alcoa alumina from Western Australia to the smelter in Victoria for more than 27 years. The name might ring a bell. The Portland's crew were forcibly removed from the ship in 2016, as they refused to sail it to Singapore, where it was to be scrapped. After they were escorted from the ship, a foreign crew was escorted on board and took control of the ship. Now a different foreign ship with a different foreign crew undertakes the same route, transporting the same volume of alumina, all to save a big business millions of dollars but at the expense of millions of Australian jobs. Then there are the CSL Thevenard and the CSL Brisbane, now proudly flying the flag of the Bahamas.

We must prevent the demise of our proud maritime industry before it's too late. We must strengthen Australian shipping policy, and that will not happen should this bill be passed. Since the election of this government in 2013, the federal coalition has been committed to repealing legislation that was the culmination of a four-year process of consultation—legislation that sought to facilitate the long-term growth of the Australian shipping industry by levelling the playing field and providing the industry with a stable fiscal and regulatory regime that would encourage greater investment and promote international competitiveness. That legislation became law in July 2012. These measures were based on an extensive reform program that had already been implemented in other maritime nations, including the United Kingdom, Japan, China and Denmark, to keep their industries afloat. One of the policies brought in by the UK government was the introduction of a tonnage tax in the year 2000, causing its fleet to almost double in size in the seven years that followed.

From the outset, this federal coalition government has been committed to repealing the legislation and deregulating our shipping industry. This would remove the preference for Australian flagged and crewed vessels, making it easier for vessels of any nationality to work the Australian coastline at the detriment of Australian jobs. Thank goodness that the Senate declined to give that bill, introduced in 2015, a second reading after it was realised that under that legislation 93 per cent of seafarer jobs on Australian vessels would be lost and the vast majority of the supposed savings that the bill was trumpeting would come from the abolition of Australian wage standards in favour of Third World 'standards'. You may think that this is being a tad melodramatic, yet a Senate inquiry heard that senior government officials advised a cruise company, in that same year, that the only way their company would remain competitive under the proposed legislation was to reflag their vessel to a foreign state, sack their Australian crew and hire a foreign crew with Third World wages. While that legislation did fail, the uncertainty it brought to the industry was successful in deterring investment in Australian vessels and shipping.

The bill now before the House represents this government's second attempt to quash Labor's 2012 coastal trading reforms. Labor's coastal trading reforms in 2012 weren't just based on Australian jobs and skills. You can appreciate that that would have been, and is, sufficient motivation enough. These reforms were also based on national security and environmental concerns. There are significant synergies between our naval and merchant fleets. Indeed, defence experts will tell you that maintaining a domestic maritime workforce is vital to ensure that, if required, Australia has a pool of highly skilled labour that can quickly mobilise during times of war or national emergencies. Similarly, we know that Australian seafarers are subject to stringent background checks to assess any security threat. The same cannot be said for the inflow and outflow of overseas seafarers. You would think that this government would want to know as much as it can about who is coming in and out of Australian ports and waters.

In addition to this, we know that Australian seafarers have a vested interest in protecting and respecting our world-renowned environmental assets, particularly the Great Barrier Reef and the Ningaloo Reef off Western Australia. The simple fact is that, in recent decades, all of the major maritime accidents that have occurred in our waters have involved foreign flagged vessels crewed by foreign seafarers, not experienced Australian crews. It was in the interest of our nation's economic, national security and environmental future that the former federal Labor government set about rebuilding our Australian shipping industry after years of neglect under a Liberal government. How can this government possibly argue with this concept of more Australian seafarers crewing more Australian flagged ships, carrying Australian goods around the Australian coastline? But, alas, we stand here today in the face of this bill. We believe that instead of distorting coastal shipping laws, as in this bill, it would be more appropriate to address these concerns in new standalone legislation covering tourism operators, instead of this issue that has been flagged of trying to change GST operations for superyachts—but I will turn to that later.

One of the numerous issues that have been put forward in this legislation is trying to remove red tape. It is red tape that the government says is hampering our shipping industries. But what we actually know is that we need to build bipartisan support for our shipping industry here in Australia. What's interesting is that at no stage before or after the release of the discussion paper that the government brought forward in relation to this legislation was the opposition consulted about the merits or otherwise of the proposed amendments. In the foreword of the discussion paper, the minister wrote:

… regulatory certainty, ideally bipartisanship, is essential for investment to be made in the industry …

For the benefit of the minister, I note that the definition of 'bipartisanship' is the agreement or cooperation between two political parties that usually oppose each other's policies. Maybe he got confused and was referencing his own party room's discussion on the NEG. This bill will only accelerate the shipping industry's decline into nothing more than a history lesson. This would be an unbelievable development in Australia, given that we are an island continent. Our import and export industries clearly rely on shipping. We also require shipping to move goods around and through our nation.

There are two sets of amendments in this bill that are of particular concern, the first being amendments to the tolerance provisions. This amendment would make it almost impossible for an Australian flagged vessel to contest work, because its owner-operator wouldn't know the actual volumes or precise loading date of a foreign vessel. The MUA is strongly opposed to the amendment, as such open-ended tolerance provisions would totally undermine accepted commercial arrangements and make it impossible to contest a cargo. The Australian Institute of Marine and Power Engineers explains there would be no way of knowing what a vessel was carrying because the ultimate voyage carried out may bear no resemblance to the original voyage for which the temporary licence was granted.

The second major concern we have with this bill is the streamlining of the TL variation process. Currently, there are two licence variations: authorised matters; and new matters. Through streamlining this, the authorised matter would halve the time available to a GL holder to apply for a licence, ultimately making it more difficult for Australian vessels, owners or operators to compete for work, putting Australian businesses at a disadvantage.

Almost a year ago, the minister assured the parliament that this bill would make amendments to the existing regulatory regime rather than fundamentally restructuring it. However, looking at these changes, that is blatantly untrue. Maritime Industry Australia, upon hearing of this, told us:

… there is nothing in the Bill to assist Australian shipowners to compete with foreign ships that have all but unfettered access to coastal trades.

The Australian Maritime Industry is concerned that this bill will tilt the playing field even further in favour of foreign operators, and now other transport modes are feeling the heat, too.

The Freight on Rail Group believes that this will also put them at a competitive disadvantage. Imagine that—changes to our shipping laws that will even put rail at a disadvantage when it comes to transporting goods across our nation. They say the proposed amendments have the potential to introduce 'an unreasonable competitive advantage to foreign ships that might choose to compete in the domestic freight market', and that:

This exemption would allow foreign ships to incur substantially lower wages, conditions and associated workplace relations costs compared to rail, road and Australian coastal shipping businesses.

Ultimately, how can we compete with Third World wages of companies from other countries? Well, we shouldn't. Labor is not prepared to sign the death warrant of this proud Australian industry, an industry that has made this country what it is today. We would not even be here—literally—without it. The bottom line is that there is a very real difference between our two sides of politics when it comes to shipping. The government doesn't believe in a viable, competitive and growing domestic industry. I think some would observe that shipping is only one of those industries that this government does not believe in.

Federal Labor, on the contrary, will be taking a set of policies to the next election that will be about rebuilding this industry. I don't think it's too much to ask that Australian seafarers, the crews of Australian ships, and even those that are operating Australian ships have our support in carrying Australian goods—instead of us making life easier for other countries to benefit from our industries. When we look at the long-term national interest, it deserves nothing else. What is really interesting to observe about this, as I mentioned before, is that a number of other countries have gone through a process of strengthening their support for their local shipping industries. When we look around the world, the trajectory of local shipping is being supported by all of our competitor nations. Economically competitive nations around the world are supporting their shipping industries. They ensure that it's only their countries' ships that are able to have access to port-to-port coastal trade in their nations. Yet, for some reason, our government has decided to do exactly the opposite. We talk about trying to support jobs in this country, to see wage growth and to grow our local businesses, and what this government has put forward in this bill is exactly the opposite: this is about reducing wages, reducing conditions and destroying local businesses—when the government should be doing the opposite and supporting our coastal trade and the Australian shipping industry.