Eric Hutchinson (Lyons, Liberal Party) Share this | Link to 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.

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

Is the motion seconded?

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Julie Collins (Franklin, Australian Labor Party, Shadow Minister for Regional Development and Local Government) Share this | Link to this | Hansard source

This motion really does two things. One is to divert attention away from the fact that the Liberal Party, since coming to office in September 2013, has done nothing at all about Bass Strait freight. Despite all of its promises, it has done nothing. It promised a lot and it has delivered nothing. It has had the Productivity Commission report that was referred to by the member for Lyons since 7 March this year. What has happened to it? Nothing. We have had Minister Truss come down and, essentially, say that the Joint Commonwealth and Tasmanian Economic Council will look at it. That was in June. There is still nothing from that report. We have had the members for Bass, Braddon and Lyons talk about the possibility of the Tasmanian Freight Equalisation Scheme being opened up to north-bound exports. And then, of course, in the last few weeks we have heard this murmuring about coastal shipping.

But coastal shipping, of course, is really talking about the wages—the wages of the Australian workers on the ships. This government has never seen a worker's wage it does not want to cut. We have seen that recently. We have seen it with the ADF and we have seen in the past, because it will take every opportunity it can to attack workers.

But if you look at the history of Bass Strait freight and how complex an issue it is, and if you talk to industry and to the exporters who are trying to get produce off the island, it is much more complicated than those opposite would have you believe. That is why, of course, the Labor government introduced the Freight Logistics Coordination Team in 2011 to deal with the issues and to have the people that are trying to get produce and freight off the island in conversation with the government about what levers government has and what governments can do. That led to Labor investing $40 million over two years to help exporters tackle the high freight costs and to grow and export their volumes and their value. It would fund the establishment of the expert advisory support and a trial of an online trading portal especially aimed at small agricultural producers and look at the ways of cutting waste, particularly when it comes to empty shipping containers across the strait.

We looked at this very, very carefully, and we had $40 million on the table—$20 million from the Commonwealth and $20 million from the state. What happened when those opposite came to government? They scrapped that $40 million that industry and people had asked for in Tasmania. Since then, they have had the Productivity Commission review, which we talked about, which they have had since 7 March. That review, of course, said what every other Productivity Commission review has said—that is, there is no coherent economic rationale for the Tasmanian Freight Equalisation Scheme. The Productivity Commission report said what we said it would say, and that is that the scheme should be scrapped. This is, of course, not what we support on this side of the House. But, clearly, they went into that report knowing that it was going to come to this conclusion. Since then, they have done absolutely nothing with it.

To make it worse, the state Liberal government came out just last week with the same announcement that the former state Labor government made in February. It was the exact same announcement—that is, they are commencing negotiations for an international ship to go out of Tasmania to export our goods—except that, of course, the state Liberal government are saying it is going to cost more than when Labor was having those same negotiations. So the state Liberal government and the federal Liberal government said that they were going to fix Bass Strait. And, of course, they have not been able to do it, because it is complex. They made all sorts of promises to exporters and to people who want to get freight off the island, and they have delivered nothing—nothing at all.

When are they actually going to deliver a response to this Productivity Commission report? When are they actually going to tell Tasmanians how they intend to resolve it? From talking to those exporters and those people who have ramped up production because of Labor's $100 million jobs and growth plan, we know it has seen volumes increase and has seen these industries grow—

Government Members:

Government members interjecting—

Julie Collins (Franklin, Australian Labor Party, Shadow Minister for Regional Development and Local Government) Share this | Link to this | Hansard source

You are all very happy over there to go and make these re-announcements and see these industries grow, I am sure, and the jobs that grow from them, because your name is on every press release for the $100 million that Labor committed. And we have seen it working. We have seen these industries grow. We have seen them expand. They are now all complaining that, of course, they cannot get stuff off the island, because you have let them down. They are telling me that the Liberal Party have let them down at the state and federal levels, because they have not delivered what they promised they would deliver. (Time expired)

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

Bell Bay Aluminium, in my electorate of Bass, is, sadly, one of the few businesses of its size left in northern Tasmania. Its importance simply cannot be overstated. It uses 25 per cent of Tasmania's total electricity; it contributes $700 million year on year into the Tasmanian economy; and it is responsible for supporting 1,000 direct or indirect jobs. The General Manager of Bell Bay Aluminium, Ray Mostogl, is a very good bloke, a capable bloke. Last Friday, he won The CEO Magazine's Manufacturing Executive of the Year Award. Ray Mostogl is one of those people who is not murmuring; he is screaming for change in the coastal shipping area. He said publicly that, after Labor introduced the coastal trading act in 2012, 'Bell Bay Aluminium faced a 63 per cent increase in its freight rates.' He has said that this has, 'led to greatly reduced shipping options and competition'. And critically, he identifies sea freight as, 'one of the key means to keep the Bell Bay aluminium smelter viable'.

There is not a murmur, as the member for Franklin says, about coastal shipping; it is a scream from manufacturers and businesses in our home state of Tasmania. Mr Mostogl draws a clear link between Labor's coastal shipping regulations, the impact on shipping costs and the direct viability of his company in Tasmania. So you might dismiss these people, member for Franklin, as irrelevant to the debate, but we take them a little more seriously on this side of the House.

Mr Mostogl has revealed that leaving ships idle at ports for a day—as demanded by the MUA before loading can commence—costs international ships $10,000 a day and Australian ships up to $20,000 a day. He points out, as the member for Lyons did, that freight rates from Tasmania to Queensland in the first year of Labor's coastal trading act rose dramatically from $18.20 a tonne in 2011 to $29.70 a tonne in 2012—while international rates elsewhere in the Southern Hemisphere are about half that at $17.50. Mr Mostogl is just one of those stakeholders demanding change in this important policy area.

I wonder what the member for Franklin, the member for Grayndler and the member for Denison might say to the 130 people at Bell Bay Aluminium who lost their jobs in the last two years of the Labor-Green government, partly as a result of this ridiculous change. What would they say to those people? I am sure they would flick them onto the Greens leader, Christine Milne, who said in last Saturday's Examiner, where she denigrated Bell Bay Aluminium and the three other major industrial companies in Tasmania as, 'exaggerators wanting a handout'. They are not exaggerators; they are taxpayers and employers of people in our state, member for Franklin, and you should be ashamed of supporting this coastal trading change that the member for Grayndler made. I express my absolute disgust at what we are hearing from the member for Franklin when it comes to Tasmanian jobs.

As Tasmania's representative on the coalition's deregulation committee, I want to continue removing bad Labor-Green legislation from the productive components of our economy. I want to roll back these special deals with the MUA and the union handlers, which have contributed to reduced productivity and a growing disparity between domestic shipping costs and shipping from overseas.

I know the member for Grayndler and his offsider, the member for Franklin, revel in the shrine that has been established for them on the MUA website by Paddy Crumlin—that wonderful shrine to the member for Grayndler. But he would get a different reception in Tasmania—and so would you, Member for Franklin—if you ventured outside of Hobart and talked to some of these big producers about what they think about coastal shipping regulations.

Under Labor's protectionist permit system, there were almost 1,000 fewer coastal voyages and almost two million fewer tonnes of freight moved by foreign vessels in 2012-13. There has been a huge decline in coastal freight loaded in 2012-13 compared to five years earlier under the Howard government. It is the knee-jerk policies we saw from Labor with the live cattle trade that cost jobs in the cattle industry and, as the Productivity Commission has shown, are costing jobs in Tasmania. We are determined to roll back these changes, release our coastal trading potential and support Tasmania's economic revitalisation.

Unlike the Greens, the member for Franklin, the member for Grayndler and the member for Denison, the Tasmanian Liberals will continue to stand up for jobs in our state and push for urgent changes to Labor's coastal trading act.

Andrew Wilkie (Denison, Independent) Share this | Link to this | Hansard source

This motion is a dud. It is a dud for three obvious reasons. First, it is clearly an attack on Australian workers, because the federal government obviously has a preference for foreign ships and foreign crews working our coastline. We have precious few ships and precious few Australian workers on our coastline at the moment. If this motion was ultimately to be enacted and to become the law of the land and the coastal shipping reforms of the previous government were to be overturned, then some of those people would lose their jobs. Those who remained would have to endure diminished conditions of service.

The second issue is that this is an attack on the rights of workers to organise and negotiate. This is clearly an attack on the MUA and the Australian Institute of Marine and Power Engineers, two of the key unions that represent Australian workers on Australian ships. But I do not want to dwell on those first two issues, on how it is an attack on workers and an attack on unions. I want to dwell on what this is really all about. This is all about Bass Strait. This is all about the federal Liberal-National government not wanting to do anything to remedy the situation with Bass Strait, and the situation is that Bass Strait is and remains the most significant brake on Tasmanian economic development and it is the easiest to fix.

I will give you a sense of how big a problem it is. To get a 20-foot container of some sort of commodity from Hobart to a North American market, it costs $500 to get the container to a northern Tasmanian port, another $1,000 to get that container from the north of Tasmania landed in the port of Melbourne—so we are up to $1,500—but only $500 to get that container from the port of Melbourne to the North American market. In other words, three quarters of the cost of shipping a container from Hobart to North America is getting it landed in the port of Melbourne from Hobart. The majority of that cost is getting it across Bass Strait. Yes, we can tinker around the edges with an international shipping service in Bell Bay that will advantage a small number of Australian producers and yes we can commission a Productivity Commission report, but frankly what is needed—and it is quite simple—is an effective subsidy arrangement applying to all people, vehicles and freight in and out of Tasmania across Bass Strait.

Government Members:

Government members interjecting—

Andrew Wilkie (Denison, Independent) Share this | Link to this | Hansard source

One of the reasons the broad community treats politicians with complete and utter contempt is that they are sick of all this mudslinging and abuse in places like this. I sat here quietly and I showed respect to the two government speakers. I would ask that they do the same to me and then maybe the community will treat us with more respect.

So, what is needed? It is quite simply an effective subsidy arrangement for all people, vehicle and freight in and out of the state. That will take leadership. I understand that the government has an ideological position—it wants to reduce the cost of business. That is what I want to do as well. The government also has an opposition towards organised labour and opposition to the unions. What I ask the government to do is show some really strong leadership here and put the ideological battle off to the side and act in the public interest.

We have talked a lot about these firms and the difficulties that they have to endure. Think about Blundstone—it makes gumboots in Moonah in my electorate. Think about the fact that three-quarters of the cost of getting those gumboots to their North American markets is just getting them landed in the port of Melbourne. Deregulating coastal shipping in Australia will do next to nothing to help that company. In fact, the government itself has already, with its two speakers, given a number of examples of Tasmanian businesses who are crippled by the high costs of Bass Strait. You were giving the examples yourself and I have given another example of Blundstone boots. The fact is that the strait is a crippling brake on our economy and, until we can give effective subsidies to bring it into line with transporting goods across a similar distance on the mainland, Tasmanian businesses will be fundamentally disadvantaged.

Remember, if we help the businesses we help the community. Yes it might take a little bit more federal money up front to improve the subsidy arrangements, but I tell you what, members of the government—it will save Canberra money in the long run. The more we boost the economy, the more we do not need other handouts from Canberra.

Brett Whiteley (Braddon, Liberal Party) Share this | Link to this | Hansard source

What an amazing contribution from the member for Denison—the man who claimed to all Australians that he was the most influential member of the lower house for the years 2010 to 2013. He said he was going to do great things for our state and great things for our country. He has made a compelling case on a number of the issues that we are concerned about as Tasmanian MPs. Why didn't you, Mr Willkie, member for Denison, do anything about it for the three years that you were apparently—according to yourself—the most powerful man in this country? You did nothing.

Andrew Wilkie (Denison, Independent) Share this | Link to this | Hansard source

Mr Deputy Speaker, on a point of order: I do not think any good comes from the government verballing me. I have never said what he has claimed I said.

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

That is not a point of order. The member will resume his seat.

Brett Whiteley (Braddon, Liberal Party) Share this | Link to this | Hansard source

We have the member for Denison taking this holier than thou line that he is the only respectable member in this chamber, and everyone else is riffraff.

Let me get back to the point. The Rudd-Gillard-Rudd governments, coupled with the Tasmanian Labor-Greens coalition, have failed my state on just about every single social and economic indicator: unemployment levels are up, education levels are down and budgets on both fronts are in massive deficit. Of all the failures of those two governments, including the federal government, the coastal trading act was perhaps the most effective in assisting the former government in hogtying the Tasmanian economy. Shipping is the lifeblood of the Tasmanian economy. When shipping works, the Tasmanian economy works; when shipping fails, the Tasmanian economy fails.

Just a few weeks ago there was a press release from the Maritime Union of Australia which said, 'We are urging the Abbott government to protect Australian jobs.' They should rewrite that. What they are urging the Abbott government to do is to protect their jobs. At the end of the day, as a government, we have a job to protect all jobs. We do not protect one sector of the economy—10 jobs here—but cost 50 jobs there. If you come to my state and go around my electorate, manufacturers will tell you they have been shedding jobs now for years and years and years. But what this government did was put in place the productivity report. It is, member for Franklin, a complex matter, and we are working very diligently on it.

Under the previous Labor government's coastal shipping reform—where shipping companies were loaded down with bureaucracy, red tape and the need for endless permits, coupled with union protectionism—the shipping industry was effectively run into the ground, costing jobs and increasing costs to consumers and exporters. Yes, it saved some jobs—the jobs that obviously count to the Australian Labor Party—but in my electorate, in my state, it has cost hundreds of other jobs. What you are really saying on the other side of this chamber is that is okay to protect these jobs, and we will do whatever we have to do through legislation, but at the cost of hundreds of other jobs, which obviously do not count.

Labor's coastal shipping reforms are really a throwback to the old Labor new protectionist platform of the early 1990s. Just 49 million tonnes of coastal freight was loaded in 2012-13. Five years earlier, it was over 59 million tonnes. Over the period 2010 to 2030, Australia's freight task is expected to grow by 80 per cent. While the national road and rail component is projected to double, coastal shipping movements are only expected to grow by a mere 15 per cent.

These sorts of figures will not surprise anyone—not least the Labor Party or the member for Grayndler, who will be in the chamber to wrap up this debate—because they knew exactly what they were doing when they introduced this backward-looking reform. They knew that, by implementing their union protectionist policies, overloading shipping companies with red tape and requiring permit after permit to ship goods around the country, it would cost the industry billions of dollars, it would increase the cost of goods to consumers, it would cost jobs and it would hurt the Tasmanian economy. But they pressed ahead regardless of the damage that it was going to wreak on every single business that relies on shipping in this country and particularly in the state of Tasmania—including businesses in my electorate.

In December 2010 the then shadow minister for transport, the Hon. Warren Truss, said:

This change would immediately take us back to the bad old days where companies wanting to ship product around Australia would have to wait weeks and sometimes months for an Australian flagged and crewed vessel to become available.

The now Deputy Prime Minister predicted:

It will be cheaper and simpler to import products from Asia, the United States and even Europe than it will to move them from one port to another in Australia. It will be more attractive to process Australian raw materials overseas than to ship them to an Australian port.

He was spot on. It has cost Tasmanian producers, manufacturers and small businesses money and jobs. (Time expired)

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

The oncers who have promoted this motion before the chamber do not know what they are talking about. They are driven by an ideological position that says: when in trouble on an issue, attack workers. That is their reflex position. They do not understand the reforms that were introduced by the former federal Labor government and they do not understand what the challenges are for the shipping sector in Tasmania.

The industry agreed with us. We did not write the policy. We sat down and worked with industry, and what they came up with were issues such as the volume of exports, which is one of the big challenges. So how do you facilitate an increase in the volume of exports? You do so through practical measures. For example, by dealing with salmon so that it is not frozen but semifrozen, and giving public support for that, you increase not just the value of the product at its end destination but also the volume of exports, due to the demand that increases for that product. They were practical solutions, not the simplistic, just-smash-workers solution that is being put forward.

Our shipping reforms were not a protectionist model. If you want to look at a protectionist model, have a look at the Jones act in the United States and what other countries do with their shipping policy. What we said was: 'We want a level playing field for Australian shipping. We want them to be able to compete with their international competitors on an equal basis.' So we undertook measures such as slashing tax rates on Australian shipping companies to zero; introducing a seafarers tax offset to encourage the employment of Australians, something that this government is trying to abolish now; and creating the Australian International Shipping Register, allowing foreign-owned vessels limited access to tax relief provided that they hire Australians as senior officers and commit to investment in skills training. They are the sorts of measures that we undertook. In Tasmania, a $37.5 million fund was set up to help Tasmanian companies overcome obstacles to increase exports.

But what we see from this government is an attempt to throw all of that out. They say that workers who staff ships around the Australian coast should not be paid Australian wages. Just think about that. At the same time, we are having a debate about the China free trade agreement, where Andrew Robb says it will not allow Australian wages and working conditions to be undermined by Chinese wages and working conditions. If a truck that goes from Melbourne to Sydney happens to be owned by a Filipino who brought in a Filipino worker in order to drive that truck, that driver cannot be paid foreign wages. Shipping cannot be undertaken in those circumstances either.

It is not just about the undermining of working conditions. We know that, if you look at where incidents have occurred around the coast—incidents that have a significant impact on the Australian economy—they have involved foreign-flagged ships. We know that flags of convenience represent a problem not just for the economy but also, potentially, for the environment due to the damage that can occur, such as what occurred off the Gladstone coast just a few years ago, and national security. It amazes me that those opposite, who speak a lot about border security, are quite prepared to have the Australian flag completely disappear from the Australian coast. This is not Work Choices; this is Work Choices on water. That is what they want. They want Work Choices on water to enable the replacement of what remains of the Australian shipping industry.

We have an opposite approach. We want to build the Australian shipping industry. We want to build its capacity. It has not been given a chance to work, because those opposite have been busy undermining the investment that would occur from the business community. The business community will not invest in a program that the current government are saying that they will get rid of; common sense tells you that. Those opposite have failed in their approach. They have retreated to the old-fashioned, bash-the-worker approach. That is simply not good enough and not in the interests of Tasmania. (Time expired)

Debate adjourned.