Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

On behalf of the Standing Committee on Infrastructure and Communications, I present the committee’s Advisory report on the Coastal Trading (Revitalising Australian Shipping) Bill 2012, Coastal Trading (Revitalising Australian Shipping) (Consequential Amendments and Transitional Provisions) Bill 2012, Shipping Registration Amendment (Australian International Shipping Register) Bill 2012, Shipping Reform (Tax Incentives) Bill 2012 and Tax Laws Amendment (Shipping Reform) Bill 2012, incorporating a dissenting report together with the minutes of the proceedings.

In accordance with standing order 39(f) the report was made a parliamentary paper.

by leave—These bills form part of the federal government's Stronger Shipping for a Stronger Economy package and include tax reforms to promote global competitiveness of this industry, a new regulatory framework for coastal trade with a transparent licensing system, the establishment of an Australian International Shipping Register to encourage Australian businesses to participate in international trade and the establishment of a Maritime Workforce Development Forum to advance maritime skills and training priorities.

In 2008 the former Standing Committee on Infrastructure, Transport, Regional Development and Local Government recommended the creation of a new policy framework for Australian coastal shipping in the Rebuilding Australia's coastal shipping industry report. In 2010 the Department of Infrastructure and Transport released a discussion paper for stakeholder comment on those reforms. And in late 2011 to early 2012 the Department of Infrastructure and Transport and the Department of the Treasury released exposure drafts of the bills in further consultation with industry on proposed reforms. As mentioned earlier, the five bills were introduced on 22 March, 2012.

The inquiry had to look at not all that had come before it but just at the legislation proposed before the House. We did not intend to, and I do not think it is sensible to, go over ground that had been well examined by previous inquiries. The submissions we sought were to the extent to which any concerns were raised regarding the consultation process as reflected in the legislation introduced. We received 31 submissions from shipping companies, petroleum companies, union representatives, industry representative bodies, the Department of Infrastructure and Transport and the Department of Education, Employment and Workplace Relations. The committee also sought a supplementary submission from the Department of Infrastructure and Transport based on the issues brought up in some of those submissions.

There were some general issues raised with the committee. These were mainly concerns regarding industry competitiveness and substitution, the limiting of foreign vessels on coastal trades and the level of consultation, which seems somewhat surprising given that this issue has been examined not just in inquiries, as I outlined before, but also originally in the Ships of shame report back in the early nineties. It is a little surprising that the issue of consultation was raised. Also raised were requests for a Productivity Commission inquiry.

There are five bills in this package. They are all significant, they are before the House and they are well canvassed by the report. Given that we intend to have a fairly dynamic debate in the House I do not propose to go over the content of all those bills. There is a minority report which gives some indication that all of these bills will be contested vigorously on a fairly partisan basis, so I am sure the House will hear all of the arguments more than once before the end of this process.

However, I acknowledge the goodwill of the deputy chair and opposition members of the committee. Despite their dissenting report they were cooperative and decent in the process and the procedures of the committee. It is always a pleasure to work with the deputy chair. I acknowledge the work of our predecessors in the 42nd Parliament for establishing the foundation for these Australian coastal shipping reforms.

We understand that it is not the committee's role in considering legislation to replicate the entire policy debate but simply to consider the effectiveness of the legislation in achieving the stated objectives and improving and establishing a vibrant Australian shipping industry. The committee outlines in the report some proposed areas of reform that could be included in regulations that are yet to be made public or considered in future reviews of the legislation. The committee's majority believes that the stated aims and reforms in these bills are desirable and that they are in the national interest, and we recommend that they be passed. I thank the House for its time.

Paul Neville (Hinkler, National Party) Share this | Link to this | Hansard source

by leave—I thank the previous speaker for his kind words. Although we do not always agree as a committee there is a very civil atmosphere there and we seek by different routes to come to conclusions on legislation that are for the betterment of the Australian people. I would like to make a few comments on the Standing Committee on Infrastructure and Communications advisory report into the five bills comprising this shipping package.

This is not the first time this committee has looked into coastal shipping in Australia. In 2008, I was part of an inquiry that looked into coastal shipping policy and regulation, chaired by the member for Ballarat, Catherine King. The coalition and the government are of one voice when we recognise the need to have a strong coastal shipping industry—that has never been in dispute. For an island nation such as Australia, our maritime industry will form a vital part of our national and international transport network. The importance of shipping to our interstate, intrastate and international trade is significant. I understand that shipping carries 99 per cent of international cargo by weight and 75 per cent by value. However, domestically—and this is quite a shocking figure—ships carry only around a quarter of freight.

It is no secret that our domestic freight task is going to increase dramatically over the next 20 years with the mining boom and various things. Some estimates indicate that it may treble along the eastern seaboard. Obviously shipping has to play a greater role in moving domestic freight if we are to take the pressure off our congested national highways and make the best of our rail system. At present, however, the Australian flagged shipping industry is in decline. It has been regularly noted that the number of Australian flagged vessels has dropped from 55 in 1995 to 22 today.

It is disappointing that the inquiry into such a broad and complicated area was dealt with in a truncated way. In saying that, that is not a criticism of the chair or the previous chair or the government as such but of the process. This is a very important area and perhaps it should have been subject to a more wide-ranging inquiry before we got down to legislation. These bills, if passed, will have a very serious impact on the coastal shipping industry in Australia. It is only right that the committee should have given adequate time to consider the serious implications and to hear from the industry stakeholders. I am a great believer you should always have your witnesses before you.

This is not the first time that the committee has had a limited opportunity to investigate bills. It is incredibly disappointing that we have such a constrained inquiry process under what is called the 'new paradigm', which was supposed to give House committees greater not lesser scope to investigate matters. As I said earlier, I support the shipping industry in Australia playing a greater role in interstate and intrastate trade. This has been the consistent position of the Liberal and National parties for quite some time. However, the coalition members of the House committee have recommended that the bills not be passed.

The first objective listed in clause 3(1) of the Coastal Trading (Revitalising Australian Shipping) Bill 2012 is that the regulatory framework promote a viable shipping industry that contributes to the broader Australian economy. We are not convinced that this objective will be realised by the packages in their current form. In fact, we are concerned that the opposite may result. The regulatory impact statement on the bills states at paragraph 156:

With a tighter cabotage policy, Australian shippers of domestic freight incur higher costs from lost opportunities to take advantage of cheap transport in passing foreign ships and having to pay for empty repositioning voyages by domestic ships. Part of the cost of empty voyages by foreign ships may be passed on in the form of higher freight rates to the Australian exporters and importers that employ the foreign ships to carry their international cargoes.

However, as noted by the Australian Logistics Council, no attempt is made in the regulatory impact statement to quantify this.

The Cement Industry Federation and other bulk commodity users have expressed their fear that the legislation will push up freight rates to such an extent that, when combined with other government policies such as the carbon tax, it will make it more attractive to import products such as cement and sugar from overseas. As I come from a sugar-growing area, you can understand my double concern.

Additionally, as noted by the minister in his second reading speech:

We are committed to aligning Australian productivity practices with the best in the world.

To do this, we will need a compact between industry and unions.

This compact must include changes to work practices, a review of safe manning levels and the use of riding gangs on coastal vessels.

The minister has said that this is an essential element to make our shipping industry viable. The industry compact is yet to be concluded, so we have rushed ahead with this inquiry before we know the nature of the compact. Without seeing the principles agreed to by the Maritime Union of Australia and the Australian shipping industry it is difficult to assess whether the minister's stated goal will be achieved. If the compact is such a critical part of the package then surely it should be fully developed, agreed to and made public before the bills are debated. Only then will we be able to assess the matter on its merits.

A number of shipping companies and organisations have also raised practical concerns with the package. After considering their comments I believe that the new scheme will unnecessarily add to the industry's regulatory burden and at the same time will not achieve its stated goals of revitalising our shipping industry. The temporary licence system established by the coastal trading bill seems to increase complexities and red tape for business and, because of this, it does not appear to be an improvement on the current permit system contained in the Navigation Act.

The requirement for a minimum of five voyages in a 12-month period before an application for a temporary licence can be submitted and the requirement to provide the detailed particulars of each such voyage will certainly add to industry's regulatory burden. While a variation is possible, again, you have to vary a minimum of five voyages. Why this arbitrary limit has been added to the other five initial voyages is unclear and will, obviously, increase the paperwork for the industry. These are only some of the technical issues that were raised in submissions to the committee.

In conclusion, I repeat that the Liberal and National parties are keen to support the Australian shipping industry. It must play an increasing role in our domestic freight task. However, we sincerely believe that this package is flawed to such an extent that it will not meet the objectives and, as such, we have recommended that the package not be passed.