Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

I have five amendments that I wish to move. I think it might suit the convenience of the House if we deal with the first one alone and then maybe the others in a separate question. I move:

(1) Clause 3, page 2 (line 11), at the end of subclause 3(1), add:

;and (e) promotes competition in coastal trading; and

(f) ensures efficient movement of passengers and cargo between Australian ports.

This amendment is to the objectives of the Coastal Trading (Revitalising Australian Shipping) Bill 2012. Clause 3(1) of the bill lists the objectives of the bill. It says:

(1) The object of this Act is to provide a regulatory framework for coastal trading in Australia that:

(a) promotes a viable shipping industry that contributes to the broader Australian economy; and

(b) facilitates the long term growth of the Australian shipping industry; and

(c) enhances the efficiency and reliability of Australian shipping as part of the national transport system; and

(d) maximises the use of vessels registered in the Australian General Shipping Register in coastal trading.

The amendments that I propose are that two additional objectives be added, one promoting competition in coastal trading and the other ensuring the efficient movement of passengers and cargo between Australian ports.

The coalition believes that these two additional clauses to the objectives will make it clear that Australia has no intention of closing its coast and supports competition in shipping to promote the efficient and cost-effective movement of freight. The minister has clearly stated, earlier and again today, that it is not his intention to close the coast to foreign flagged vessels, yet the prescriptive requirements to obtain a temporary licence could be interpreted as an attempt, at the very least, to discourage international participation.

This amendment to the objects of the act makes it clear that in addition to supporting the Australian shipping industry and Australian flagged vessels, Australia's coastal trade must be efficient and internationally competitive. It should be noted that clause 34(2)(f) of the Coastal Trading (Revitalising Australian Shipping) Bill 2012 states that the minister may have regard to the objects of the act when determining whether or not to grant a temporary licence. Additionally, clause 63(2) gives the minister the power to issue a 'show cause' notice if a temporary licence is being used in a way that circumvents the objectives of the act.

The coalition amendment will make it clear that our coastal shipping industry should be competitive and efficient. It makes it evident that both foreign and Australian flagged vessels have a role to play. There were many submissions to the House and Senate committee inquiries on this point. The Australian Logistics Council, for instance, said that 'as important a policy goal as maintaining an Australian coastal fleet is, the efficient movement of cargo should also be a key national goal.' And the Business Council of Australia said:

A broader set of objectives is needed to ensure the subsequent reforms do not lessen the competitiveness of the market, negatively impact the interests of shipping users or result in lower employment and GDP outcomes for the wider Australian community.

That was the element that the opposition were keen to pursue through a Productivity Commission inquiry. We wanted it to look particularly at the impact of this bill on other industries so that there were not jobs lost in other industries as a result of this bill. The House has voted that that will not happen, so I think balancing the objectives will certainly make it easier for there to be confidence that coastal shipping will not be closed and that there will be opportunities for permits and that therefore we can have a competitive and efficient industry. On top of that, where there are specific tasks that require a specialist vessel, the door will not be closed to them.

The minister will still have to take into account the importance of promoting the Australian shipping industry and giving our own industry the opportunity to undertake these tasks but it puts some balance into the objectives, and I commend the amendment to the House.

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

The government will be supporting this amendment. The amendment goes to two issues: promoting competition in coastal trading—the government supports that—and ensuring efficient movement of passengers and cargo between Australian ports. The government supports that.

What these reforms are all about is creating competition. At the moment there is no competition because Australian ships are disadvantaged against foreign ships. The position that they are arguing here on competition is like arguing on the Enterprise Migration Agreements that any foreign worker should have the right to come in and do any work in Australia with no limitations whatsoever. But guess what? There would be no Australians working in the resources sector or in other sectors if that were the case. Extraordinary positions have been put during this debate, and I have had the same positions put to me in my office. It says, 'The problem with what you're doing here is that we won't be able to pay people less'—that is, that it will not be possible to pay a different wage to an Australian worker from that paid to a foreign worker. But we do not want to compete in a race to the bottom by paying people a dollar an hour. We do not want situations where people who work on flags of convenience ships crash those ships into the Great Barrier Reef because they have not been to sleep for more than 24 hours. That is why we need to ensure—and through the Fair Work Act we have ensured—that people who work on ships operating around the Australian coast do have to comply with Australian wages. The whole cost differential argument that has been put is a nonsense.

We support competition; we do not support competition whereby Australian ships are unable to compete. That is why we have produced a zero rate of taxation for Australian shipping. The Leader of the National Party has said to industry, 'Gee, I wish I could've got that; I couldn't get that through Treasury.' I have delivered it; why don't you just vote for it? That is all I am asking you to do. It is easy—you do not even have to move; just sit there and vote for it.

We support this amendment but we do not think it is necessary in terms of the object of the bill, because the whole package is about having a stronger, more competitive, more efficient industry. We just happen to think that Australians can do it. The compact between industry and unions was so readily dismissed by the Leader of the National Party. I'll tell you what: I will listen to the people who actually run ships and work on ships—the employer organisation and the employee organisation—before I will listen to any politician about the realities of the shipping industry. But we do support the amendment.

The reforms in the bill will restore the level playing field and promote competition. A competitive shipping market will ensure that we can achieve efficiencies and that shipping regains its share of the transport task. One of the great advantages of promoting shipping is that the blue highway is free. There will be a real cost benefit in maximising the use of the blue highway as opposed to using our bitumen highways. There will be real benefits in economic productivity and real benefits in safety as well. But we need to get it right—and, if there is no Australian industry, the skills and workforce that can run our ports, our harbours and our logistics tasks will not be created. Shipping is essential for an island continent. We support amendment (1), moved by the Leader of the National Party.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

In speaking to this amendment I cannot help but praise highly certain people. I have seldom met such genuine individuals, with such fierce determination to represent their people, as Terry Snee, the Federal President of the Australian Institute of Marine and Power Engineers, Henning Christensen or Michael Bakhaazi. They have been absolutely relentless in pursuing the objectives embodied in this bill. I also pay tribute to Paddy Crumlin and his union, but the first three people I mentioned have been absolutely relentless on this.

One of their points which had very great traction with me and which pertains to this amendment is the fact that as late as two weeks ago a ship went adrift and smashed into the Barrier Reef because its engines were not working and because it had an incompetent crew who did not know how to fix an engine. It was a very big boat. I apologise to the House because I do not have the name of the boat with me at present. These foreign vessels can just come in, cross our reef any time they feel like it, lose their motors and smash through. Some of these ships have incompetent captains. Some of them are drunk some of the time and some of them have enormous difficulty reading charts that are written in English or communicating on the radio because they have very limited ability in English.

We North Queenslanders have not raised the issue of the Barrier Reef, but we are sick and tired of seeing boats leaking oil all over the Barrier Reef, smashing through the Barrier Reef and losing their engines and just drifting, as that ship did two weeks ago. I draw attention to the honourable opposition spokesman, who obviously thinks it funny—he is laughing—that the Barrier Reef is being destroyed under laws that his party introduced into this place and that they would like to keep. But we do not; we want competent people answerable to the people of Australia running the vessels backwards and forwards.

Almost all the bauxite from Queensland has to come down the coast for processing at Gladstone, and this means that all of our coal—and I mean all of it—has to go out through the Barrier Reef. So it is absolutely imperative to us that we have some knowledge, security and control and that we ensure that the people running the ships are Australians who are responsible to Australian laws, to Australian standards and to Australian conditions and that they have to face the Australian people if they smash the Barrier Reef, one of our nation's greatest assets, to pieces. I again pay a great tribute to the Australian Institute of Marine and Power Engineers, those three people I referred to before, and also Paddy Crumlin and his union, who have worked so terribly hard to bring attention to bear on this issue. I do not always agree with the unions—sometimes I have had to take very hostile positions—but in this case they had an argument that carried weight with me.

It is with deep regret that I watch my old party being the champion of free trade when they were the party who protected and built our industries. Now they are the party that are blowing up the walls of our fortresses and letting the vandals in—and the vandals came in the form of a ship that ago had no engine and smashed through the Barrier Reef in North Queensland two weeks ago. We had to meet the cost of going and picking up that vessel and towing it into port, where it could be fixed up.

This is good legislation. I praise the minister as one of the first people in this place in my time in here who has actually moved with courage, resolution and intelligence to protect and take forward Australian industry. There is $178,000 million a year going out of this country to foreign shipping. The Americans will not allow one dollar. The great champions of free markets? Not one dollar. I am sure if you tried to get away with this in Europe they would laugh at you. But the great champions of the free market in here today stand by themselves. You stand by yourself, LNP. There is not another country on earth that agrees with your policies. God bless the minister on this one. (Time expired)

Question agreed to.

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

by leave—I move opposition amendments (2) to (5):

(2) Clause 28, page 22 (line 10), after "specify", insert ", to the extent known,".

(3) Clause 28, page 22 (line 11), omit ", which must be 5 or more,".

(4) Clause 51, page 32 (line 25), after "specify", insert ", to the extent known,".

(5) Clause 51, page 32 (line 26), omit ", which must be 5 or more,".

Amendments (3) and (5) remove the requirement that an application for a temporary licence must have at least five voyages in a 12-month period. As I noted in my speech on the second reading debate, one of the exposure drafts of the Coastal Trading (Revitalising Australian Shipping) Bill set the minimum number of voyages at 10 in a 12-month period. As noted in the explanatory memorandum, there was a broad consensus from industry that many operators could not provide sufficient detail for 10 voyages and that five voyages was more practical. However, I would argue that the same objections from industry that applied to the 10-voyage minimum threshold also apply to the five-voyage threshold.

While it is true that most industry participants that would be applying for a temporary licence do engage in five or more voyages per year, it is not the case for everyone. The bill in its present form would see these smaller operators unable to comply with the new regulatory arrangements. There is almost universal agreement in the industry that this requirement should be removed. As Caltex noted in their submission to the House committee inquiry:

Implementing a minimum voyage requirement on [Temporary Licence] applications is not practical or reasonable. The requirement places unnecessary restrictions on shippers who undertake less than five voyages in a 12 month period and disadvantages these stakeholders whose trade is not likely to encourage investment on the coast due to their variable needs and low demand.

The prospect of temporary licence holders making up fictitious or spurious voyages to meet the five-voyage minimum is discussed in many of the submissions to the House and Senate inquiries. A regulatory system is obviously deficient and clearly does not meet its objectives if, in order to comply, applicants are forced to make up fictitious voyages. Not only will this undermine the integrity of the system; it will waste industry and department time and resources processing applications for voyages that will never occur.

Additionally, general licence holders who are given the option of objecting to a particular voyage listed on a temporary licence if they believe they are able to take the cargo or passengers may needlessly spend time objecting to voyages that a temporary licence holder has no intention of undertaking but is just making up to get to the numbers for this five-voyage limit. Shipping Australia comments on the five-voyage limit in their submission, stating:

… the minimum of five voyages, which in our view, discriminates against the smaller coastal shipper who may, for example, have two or three voyages per year …

The department states in its supplementary submission to the House committee inquiry in response to the industry's concerns about the five-voyage limit that the vast majority of shippers undertake in excess of five voyages per year so would qualify under the new temporary licence. I accept that. But then they go on to acknowledge:

For the small number of operators requiring fewer than five voyages, the new arrangements may require some reconsideration of their operating requirements.

If they only want to conduct one or two voyages, how on earth can they reconsider their operating requirements to meet this five-voyage limit? There does not seem to be any logic in requiring five, seven, 10 or any other number. Surely, if they wanted to undertake a voyage—even if it is only one—that ought to be available for assessment. It does not mean it would be granted, but they ought to be able to apply for it. The smaller operators will not be able to operate in the Australian coastal trade, because they really cannot change their operations.

Additionally, the five-voyage minimum will also stifle the ability of start-up routes for new entrants into the market who are not on the Australian register. You will not be able to test a market to see whether there is demand for a particular route if you are unable to commit to five voyages in a 12-month period. One such example is raised by Sucrogen in their submission to the House inquiry. They explain:

The bioethanol business was recently re-structured to provide only fuel grade ethanol into the Queensland market with industrial markets served by product imported to the Port of Melbourne. Ships for this product also have to meet certain product specific requirements. Under recently changed market conditions, Sucrogen Bioethanol will re-start coastal transfers of ethanol from North Queensland to Melbourne displacing imports.

However, Sucrogen believes this is made more difficult because of this bill. They say:

It might be that from time to time depending on the market situation the business needs to only move one cargo. It may be that it needs to move four and this cannot be predicted over a 12 month period. Thus the business is beholden to this Act .… At present the differentials for moving cargo from North Queensland versus imports from Brazil are marginal.

(Extension of time granted). The bill, if successful, will make moving bioethanol from Queensland to Melbourne harder not easier.

There are one-off cargoes requiring a specialist vessel for a single or a couple of journeys. These tasks could not be undertaken under the restrictive legislation as it currently stands as there is no provision for tasks requiring less than five voyages in the temporary licence arrangements. The Australian Logistics Council states in their submission to the House inquiry:

In the absence of an explanation why the arbitrary figure of five voyages was picked, ALC would recommend the five voyage threshold to eligibility to apply for a temporary licence be removed from the legislation.

The coalition agrees, and that is why we have proposed the amendment.

The second amendment of this group is to remove the five-voyage minimum for applications to vary the temporary licence. You have to amend five at a time, or if you want to add two voyages to your five-voyage application you simply cannot do it. That does not make any sense. Often there is no option to send it by road or rail; the reality is that the task cannot occur and that just does seem to be a very curious requirement.

The coalition believes that this amendment is sensible and would assist in making the temporary licence system more workable for the industry. If a temporary licence has been granted and a temporary licence holder wishes to add extra voyages not contemplated when the temporary licence was first applied for they should be able to do so without impediment.

Amendments (2) to (4) insert the words 'to the extent known for applications for a temporary licence and variation to a temporary licence'. The amendments make it clear that only the information that is actually known at the time of the application must be submitted. It will address some of the industry's concerns about the prescriptive nature of applying for a temporary licence. Frequently, you do not know all of these details this far in advance. It is reasonable, therefore, that they only be required to provide information that they actually know about. It is certainly reasonable. The government has in the bill, and particularly in its amendments, in some circumstances allowed for only information that the applicant knows about to be required in their application. But why is this not universal to all of the requirements that an applicant needs to provide to the minister when making the original application? To say that some things do not have to be provided if the applicant does not know about them but that others do, even if they do not know about them, does not seem to me to be logical at all.

The explanatory memorandum for the Coastal Trading (Revitalising Australian Shipping) Bill says on page 23 that a temporary licence will be issued for:

… only those voyages where the required information is known (including expected loading dates, loading and discharge ports and cargo type and volumes) …

So the minister really is not able to waive this requirement, even though the applicant does not know what the information is at the time. He is obliged to approve these applications only when all of this information is known.

The rationale for the 12-month period for a temporary licence as opposed to continuing voyage permits, which last for three months, has been explained by the department as providing holders of these licences with a greater certainty regarding their shipping arrangements. However, this does not take into account the commercial reality in many parts of the shipping industry where a 12-month schedule is not possible to predict. Shipping Australia says in its submission that it is impossible to forecast the movement of such cargoes over a 12-month period. That is particularly true of break-bulk and the bulk industries. You do not know how big the sugar crop is going to be at the beginning of the year, or who the eventual purchaser will be. So why are these restrictive requirements being included in the application for temporary licences?

A number of the major users have certainly backed the changes proposed by the coalition, including Caltex. Shell backs up the assertion, saying:

Overall the Temporary Licence system appears more complicated and burdensome to both the oil industry and the Department than the existing Permit system, and in our opinion, will fail to deliver any of the objectives of the Act in respect to the oil tanker segment of the Australian shipping industry.

So this amendment will clarify the existing provision, reduce the regulatory burden on the shipping industry and ensure that the self-evident logical occurrence would be that if the information is not available it does not have to be provided. (Time expired)

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

The government will not be supporting these amendments. These amendments would indeed undermine the very intent of the legislation.

Last year there were 1,400 single-voyage permits issued. Part of the problem in the ability of Australian ships to compete around the coast is about transparency and information. That is how the bill has been constructed, so that Australian ships can compete in full knowledge of what the circumstances are of what jobs are available. I find it astonishing that the House would consider there to be something inappropriate about that transparency and about giving Australian ships the right to compete. That is simply what these provisions are there for.

The shadow minister said earlier that he supported Australian ships getting jobs around the coast where that was possible, and he confirms that that is his position now. That is why the bill was constructed this way. I commend the bill to the House, and I ask the House to reject these amendments moved by the Leader of the National Party.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The question is that the amendments be agreed to.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The question now is that the bill, as amended, be agreed to.