Eric Hutchinson (Lyons, Liberal Party) Share this | Hansard source

I move:

That this House:

(l) acknowledges the detrimental results of the former Labor Government's coastal shipping regulatory changes introduced between 2009 and 2012 which have significantly impacted on Tasmania;

  (2) agrees that the number of major Australian registered ships with coastal shipping licenses fell from 30 in 2006-07 to just 13 in 2012-13;

  (3) recognises that the Coastal Trading (Revitalising Australian Shipping) Act 2012 adversely affected the Australian maritime industry, with Tasmania losing its international shipping service because of changes to cabotage;

  (4) recognises the great potential of a coastal trading sector unconstrained by needless red tape and distorted shipping arrangements;

  (5) notes the review into coastal shipping undertaken as a matter of priority by the Minister for Infrastructure and Regional Development with its findings currently being considered by the Minister's office; and

  (6) urges the House to reform the Coastal Trading (Revitalising Australian Shipping) Act 2012 to mitigate the damage that has already occurred, particularly in the state of Tasmania.

The changes to coastal shipping in 2009 and again in 2012 under the Coastal Trading (Revitalising Australian Shipping) Act 2012, particularly in relation to cabotage rules, damaged our nation's competitiveness, decreased productivity on our vital coastal shipping routes and pushed up costs. Higher costs have seen manufacturers in aluminium, cement and fuel refining have no choice but to use coastal shipping for their products and raw materials, and a number of these businesses have closed in recent years as a result of dramatically higher rates for coastal shipping.

The changes by Labor have impacted nationally but, as an island state, nowhere has been harder hit than my state of Tasmania. The last international vessel to service Tasmania, the AAA service, stopped at Bell Bay and other domestic ports on the east coast before heading back to Singapore. The service ceased under the changes made by the previous government, overseen by the member for Grayndler. One might ask who the member was bidding for. It certainly was not the manufacturers, farmers and exporters in my state. Perhaps it was for the members of the MUA.

When the AAA service was deemed unviable more volume moved on to Bass Strait and, with no competition due to the competitiveness of Australian ships, prices went up. In fact, the number of major Australian registered ships with licences to move coastal freight fell from 30 in 2006-07 to just 13 by 2012-13. Whilst the number of vessels has marginally risen since the period of the Australian sea freight 2012-13 report, deadweight tonnage has plummeted by 64 per cent over the last two years.

The state government at the time responded, after ignoring the problem for two years hoping it would go away, with the policy of going into competition with the private businesses plying Bass Strait—great! The then opposition, now government, committed $33 million over three years to entice, encourage and, if you will, subsidise the service to return to Tasmania and service hubs in Asia. No more starkly can you see the financial impact directly on Tasmania as a result of Labor's changes in government. Multiply that cost around the country and consider the length of our coastline and you can imagine the impact on business that relied on such services.

Australia is not an island, at least not in the sense of the way we compete in the cost of our goods getting to market. Australia is a signatory to the Maritime Labour Convention of 2006, the MLC, which came into force in August 2013. To date, 64 ILO member states, representing more than 80 per cent of the world's global shipping tonnage, have ratified the convention. The MLC provides an international safety net of standards regulating seafarer employment relationships for the world's 1½ million seafarers and creates a level playing field for shipowners and ship operators.

I know that they are enforced very strictly here in this country. I will provide some examples of the direct impact on businesses in my state, but I emphasise this is indeed a national issue. Norske Skog pays 27 per cent more to move paper across the 420 kilometres of Bass Strait to the port of Melbourne than the cost of moving paper from their mill in Albury, also roughly 420 kilometres—the same distance. The demise of coastal shipping has reduced the routine services they depend upon to Adelaide, Perth and Brisbane. When you compare costs at New Norfolk to their operation in New Zealand, it gets worse. New Zealand to south Queensland is 30 per cent higher, New Zealand to New South Wales is 10 per cent higher and New Zealand to Western Australia is 10 per cent higher—all with the Tasmanian Freight Equalisation Scheme taken into account. New Zealand into Asia compared to New Norfolk into Asia is 35 per cent without the TFES and roughly 15 to 20 per cent with the TFES. It is a disaster.

Farm machinery manufacturer Mick Boyd from Longford paid $800 for moving a cultivator from Rotterdam to Melbourne. From Melbourne to Devonport is $1,600. Hansen Orchards, in the electorate of Franklin, for a 12-kilogram carton to Sydney, including the TFES, pays $4.40 compared to an 18-kilogram box ex New Zealand on international freight services for around $1. Wood machining from Melbourne pays $4,000 to Longford—the same piece up the Hume Highway would cost around $900.

This was a scathing report that the Productivity Commission gave. The commission found that as an island state Tasmania was especially vulnerable to regulation and regulatory changes that increased the cost of coastal shipping trade. This was failed policy by Labor. Every Tasmanian senator and member should support the scrapping of the changes that were made in 2009-12.

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