Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Hansard source

The minister just shows ignorance of the legislation with that response. We are not talking about nationality as in citizenship. We are talking about nationality as in where a company is registered, as in whether there should be a distinction between an Australian flag on the back of a ship and a flag of convenience. It is pretty simple. I referred to the act. I asked about the definition of Australian nationality with respect to a ship that has been deleted from the act. The reason it has been deleted is that previously, under the Howard government, under the Menzies government, under the Bruce government and under every government in power prior to this legislation today this parliament has seen fit to draw a distinction between the Australian flag and conditions and a foreign flag and conditions. Why have we done that? It is because governments have understood that it is in our economic, environmental and, importantly, national security interests to have the presence of an Australian flag and to have a merchant fleet.

For goodness sake, have a look at the role the merchant fleet plays in the defence of our nation. That is why we included the Navy as a direct representative in the consultative group that drew up the legislation that I introduced before this House. This is a government that speaks about stopping boats. We did not think that meant stopping having the Australian flag. But that is what it means here. The merchant fleet play a role in that as well. They play a role in safety. They play a role in security. For an island continent, where 99 per cent of our exports travel by sea, the existence of a maritime sector is critical to our national interest. That has to be the starting point for legislation.

That is why this is not just some semantic debate about words. That is why 'revitalising Australian shipping' was in the title. That is why the objectives of the act included 'facilitates long-term growth of the Australian shipping industry'. That has been removed. That is why you have a definition of Australian nationality. I will provide the answer for the minister. You do not need a definition of Australian nationality with respect to a ship if you do not draw any distinction between an Australian flagged ship travelling from Brisbane down to Sydney and a foreign flagged ship, if it is just a free-for-all with no preference, which is what is in this legislation, and where the Australian ship has to compete on the basis of foreign wages being able to be paid. That is the point, Deputy Prime Minister, that I was making. It is not some academic exercise.

I would ask the minister to indicate if any of the following G20 nations open up their coasts to all comers without making a distinction about nationality of ships and flags, as his government proposes to do. The United States does not. Canada does not. Japan does not. The countries in the European Union bloc do not. India does not. Indonesia does not. China does not. That is why I say this is unilateral economic disarmament. None of our competitors do this. The minister, to his credit, understood this in resisting the absurd proposition of Minister Robb to get rid of cabotage when it came to aviation. But he does not seem to understand that it is the same argument here.

The United States, under the Jones Act, not only does not allow goods to be transported around its coast by anything other than a US flagged vessel with US seafarers; the ship has to be built in the United States as well. That is a proposition that has the support of the Democrats and the Republicans. It was supported by Ronald Reagan. It was supported by George Bush Sr and George Bush Jr. It is supported by Barack Obama, President of the United States. A few of the fruitloops in the Tea Party oppose it, but everyone else in mainstream politics in the United States supports it. That is because of the experience of the US in World War II. They understand how important it is for the national interest. That is why, if the Deputy Prime Minister can indicate any nation comparative to ours, any major economy, that says, 'We will allow a free-for-all and get rid of preference around our coast,' I would like him to please tell me where it is.

We speak a lot in this place about trade, bilateral agreements and multilateralism. We speak about equality of opportunity and arrangements. There is no equality of opportunity here. It is simply not possible for Australian flagged ships to turn up in the US, Canada, Japan, the EU, India, Indonesia or China—any of the G20 nations where we have significant trading relationships—and just start doing business on their coasts. There is a reason for that. It is extraordinary that this is being given up.

If the Deputy Prime Minister has some knowledge that some of these countries are about to do this, I would like him to tell me. But I draw his attention to the United States, the land of the free market. It has a very protectionist system. We do not have a protectionist system here. We have a system that says, 'When an Australian ship is available to do a domestic freight task, it should get that work.' Secondly, it says, 'If an Australian ship is not available and a foreign ship does it that is a good thing, but it has to pay Australian wages.' That is what this argument is about, here, and the uncertainty.

The minister said he is serious about Australian jobs. He said he wants jobs created in the Australian shipping industry. What we know from the legislation is that the Australian shipping industry will decline. Eight-eight per cent of the savings are due to the difference in wage costs. We know four ships in Tasmania will remove their Australian flags. That is the expectation. The expectation of the cruise-ship industry is that it will literally disappear, in terms of the Australian flag. It is there in the legislation. This is not something we needed an inquiry on. I ask the minister: what comparative nations—any at all—is this legislation going to be consistent with, or is it the case that it can be seen as unilateral economic disarmament?

I refer to the regulatory impact statement at pages 74 and 75. The following is the preferred option 4, which is in the RIS and is the basis of the bill. It says this about the exclusion of Australian workplace standards for ships in Australia up to six months. It states:

Some foreign ships would continue to be subject to the Fair Work Act under option 4, however the threshold for coverage will be lifted to ships that engage in more than 183 days of coastal trading in a permit year. This policy change acknowledges the concerns of stakeholders that current Fair Work Act coverage is burdensome, while also requiring adherence to Australian wages and conditions for ships engaged in significant Australian coastal trade.

It is extraordinary that because of the nature of these flags of convenience, that tend to be major operations, it could simply replace one ship around the coast with another one at the six-month mark and the clock starts ticking again, enabling it to pay foreign wages. There is nothing in there, beyond that six months continuous work or 183 days in the year. It is an extraordinarily high figure. Even under its own logic, surely the government—if it were fair dinkum at all—would have a figure in there that was not such a free-for-all. That 183 days exposes the weakness in the government's position.

I do not know if the minister wants to respond to that specific argument. I am more than happy to come back, at a later time, if it suits the minister. I provide him with that offer in good faith. I have been trying to go through, very specifically, problems with this legislation. I might move onto the next one while he is giving consideration to that.

The regulatory impact statement, at page 55, says the following, when evaluating constraints and barriers:

In the current global environment with an oversupply of ships, shippers are unlikely to face difficulty in sourcing transport services; however, in the future an increased exposure to global market forces—

And I ask the minister to respond to this—

could result in a situation where Australian shippers are less able to source cheap and reliable domestic sea freight services. Consultation indicated this is a risk the industry is willing to assume in a globalised economy.

This is a problem for the Australian economy as a whole.

The minister has clearly indicated he is prepared to see the Australian shipping industry decline—or disappear—because he thinks that will produce benefits for other industries. But here we have, in the government's own regulatory impact statement, a statement from the government that there could be circumstances whereby Australian shippers—people who want to carry freight around the coast—simply are not able to engage in that trade, thereby representing an extraordinary risk to the economy. It is one of the reasons we have an Australian industry, why you need the Australian flag, when you are an island continent. The consequences of that are quite extraordinary.

The RIS, in the legislation here, essentially says, 'There's a risk there but industry is prepared to cop that.' I am sure there would be some people—Shipping Australia is clearly supportive of this legislation—who are prepared to accept that. For those people who the minister says rely upon shipping services it is quite extraordinary. It goes to issues such as energy security as well. What happens if there isn't a ship available to supply the energy security that Australian industry requires? It seems to me that the reliability risk is a real issue.

I go now to the issue of assumptions on foreign registration. I go to the cost-benefit analysis, which is at page 128. It operates under the following basis for making its assumptions:

An analysis of the ships that operated under a Temporary Licence between July 2012 and June 2014 using Lloyds data indicates that foreign vessels operating in Australian coastal shipping are registered mostly in open registry countries including Panama, Liberia, the Marshall Islands or the Bahamas, or otherwise registered in low-wage countries or countries offering favourable conditions to foreign ship owners …

There it is in black and white on page 128. They are called flag-of-convenience ships because those nations, quite frankly, are prepared to allow the use of their flag on the back of ships that really have nothing to do with those nations. The ships that fly the Liberian flag are not actually ships that arise from the Liberian shipping industry. They are called flag-of-convenience ships because those nations are prepared to allow what I regard as a misuse of their flag—something that the Australian people would never allow any government in this nation to operate. But it makes it very clear in terms of the circumstances of the RIS when it talks of 'favourable conditions to foreign ship owners'. Exactly what does that mean? What that means is the way that workers are treated. What that means is that less tax is being paid into the Australian economy. And the government makes this assumption in its official modelling that is the basis of this legislation. I hope that those who are sitting in their offices—particularly the National Party members who, historically, have been prepared to stand up for Australia—are listening to this. There, in black and white on page 128, are the assumptions that I regard as quite remarkable.

I refer the minister to page 156 of the explanatory memorandum—the cost-benefit analysis. It says the following of the preferred option:

Many of the operators currently operating under the Australian General Register would likely re-flag their vessels in order to compete with the foreign operators who enjoy the benefit of comparatively lower wage rates. Australian seafarer jobs would be adversely affected as Australian operators re-flag from the Australian General Register.

Ship operators are likely to replace Australian seafarers (paid under EA rates) with foreign seafarers (paid under ITF rates). Nevertheless, a portion of the crew may remain Australian due to the world-wide shortage of high-ranking positions.

Can the minister indicate why his official modelling indicates the loss of Australian seafarers' jobs and their replacement with a foreign workforce? What is the assumed size of the Australian major trading fleet following the passage of this legislation—that is, what is the end point that the government sees? Is it zero Australian ships?

I also ask the minister this. As part of shipping reform we had a maritime workforce development forum that worked with the Australian Maritime College at Launceston, with industry, with the unions, with the navy—all were represented on that task force. I do not believe that the minister or the government have considered the implications for the crossover in skills that a domestic Australian maritime sector provides: the people who run our ports; the people who run our harbours; the people who go from the navy to the merchant fleet. There is a real crossover and, in getting rid of, essentially, an industry in the way that it is envisaged, I believe that the government has not given appropriate consideration to that.

There is another issue I would like a response to. The minister made an assertion in response to my comparative analysis in my second reading speech about the way in which the Australian shipping industry has a very good record and the foreign flag-of-convenience industry has not such a good record; he sought to suggest that that was not the case. I have witnessed, and I refer the minister to, the Pasha Bulker incident off the Newcastle coast—one that created a great deal of damage and one which the reports showed certainly could have been avoided had the ship's captain acted in a responsible way. I also refer him to 2009 as cyclone Hamish approached the Queensland coast, when the Pacific Adventurer lost shipping containers overboard that created a huge hole in the hull of the ship and a 60-kilometre oil slick which hit the beaches of the Sunshine Coast—indeed, very close to the minister's electorate. The clean-up bill there was $34 million and, again, the ship had a foreign flag.

About a year later I was the minister when Shen Neng 1 ran aground off Rockhampton. As you are aware, the Australian Maritime Safety Authority do a fantastic job—that is something we can agree on. I flew over the site in an AMSA Dornier aircraft, and you could literally see the channel where the ship should have gone through off the coast and turned. You could see precisely what happened from the air—the ship just kept going. The consequence of that was a hole in the Great Barrier Reef three kilometres long and 250 metres wide.

Just after that I went to New Zealand and looked, along with the New Zealand minister, at the consequences of the disastrous foreign flagged ship that stopped the trade from the major port on the North Island near Auckland for a period of many weeks. AMSA and Australian experts came and assisted in that process. There is something that all of these incidents have in common—they did not have the Australian flag on the back of the ship; they did not have an Australian captain and seafarers who were actually aware of local conditions; they were circumstances that cost a substantial amount of money. The consequences for our environment of these incidents was to be dire indeed

I repeat my offer to the minister to come back and have further debate—if the minister is going to answer these questions, which are very specific, about his legislation. All of my contributions have gone to the detail of the legislation—detail that has not been considered properly by the government. Paul Neville of the National Party, who was one of the architects of this legislation, would be quite shocked by the way in which this legislation is being dealt with. I have one summing up contribution, but if the minister does want to respond to the questions that have been asked now or at a later time, I would ask him to.

See this speech in context