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Wednesday, 22 May 1996
Page: 1052


Mr McMULLAN(12.30 p.m.) —I join with my colleague the Leader of the Opposition (Mr Beazley), the shadow minister for transport, the honourable member for Melbourne (Mr Tanner), and other colleagues in opposing this shipping grants legislation. The Leader of the Opposition, the shadow minister and others have put the general case more than adequately but eloquently. I will try to add to what they have had to say.

I will comment on what this legislation says to Australians about this government's attitude to Australian industry in general and the shipping industry in particular, my area of responsibility—industrial relations—and the role of government in our society. I will talk about the consequences for our economy and our sense of nationhood. What is it that we have here? The combined effect of the efforts of the Minister for Transport and Regional Development (Mr Sharp) will lead to uncertainty in an industry for which he is responsible.

As the Leader of the Opposition pointed out, it is not a unique achievement; he has done it in several other industries too. He is doing it with great effect to the aviation industry. But, here, with regard to these bills, we have the Chief Executive Officer of the Australian Shipowners Association saying:

. . . a substantial pause in investment in the industry is likely to take place due to the increased level of uncertainty that now exists . . .

By what criterion can you suggest that that pause in investment is in our national interest? The comments go on to say that the industry has grown but this growth will now stall. That is some achievement: a stall in the growth of Australia's shipping industry.

I will not repeat the figures that have been stated, firstly by the shadow minister, then by the Leader of the Opposition and others, about the proportion of our cargo, both domestically and internationally, which is carried in Australian ships. But it seems hard to imagine that a minister, in this instance, might set himself a goal of achieving uncertainty and stalling the growth of the industry. That is his first, and so far only, claim to fame with regard to this industry. It obviously has adverse consequences for the industry; you can see that directly in the comments about investment and in the comments that others have made.

I do not want to take up the time of the House merely and unnecessarily duplicating those remarks. However, I do want to talk to some extent about the implication for the broader economy, especially for our current account deficit. This is an issue I spent a great deal of time giving consideration to over the last two years when I had responsibility for trade policy in the previous government. One of the trends that was apparent—overall, a very positive trend—and one of the reasons that our current account deficit as a percentage of our gross domestic product was falling and why the report that we released in January suggested that the export trends were in place to shift us to a new growth plateau without blowing out the current account deficit, was the significant improvement in our balance of payments in the goods sector.

That was particularly because of the increase in exports and manufactured goods and also the improving prospects, both in terms of price and output, of the resources sector. It suggested that in those areas of manufactured goods we were doing better and better. The other area in which improvement was noticed, but necessary to maintain, was the services sector. One of the significant areas of deficit in services is transport services because, for an island nation, we have such dependence upon international shipping services. That adds billions of dollars to our current account deficit. Of course as a trading nation we will continue to have our international cargoes carried by ships from many parts of the world, as our ships carry goods around the world also. We cannot, and should not, seek to close our ports.

But we do have the circumstance where the proportion going into Australian vessels, with consequences for our current account deficit, is in jeopardy. It is in jeopardy not because our industry has failed to come to grips with international demands, not because companies have failed to invest, not because the partners—employers and employees—have failed to adjust to the demands of international competition, but as a result of a conscious decision of the government to withdraw those supports, which the industries with which they compete have in other countries, which enable them to compete on the so-called level playing field. This is another instance of the perverse consequence of a conscious decision of a government to put an important industry, which is a making a significant contribution to turning around our current account deficit, under threat.

There are other broader implications which have been dealt with. They are important, and I want to refer to them but not dwell on them. There are, of course, the defence implications, which the Leader of the Opposition spoke about with the passion which defence issues usually bring to him, and the environment matters which my colleague the shadow minister for the environment, the honourable member for Fremantle (Dr Lawrence), just referred to. They are significant with regard to this change. If this is part of the package which we expect it to be with issues of cabotage and second register, et cetera, becoming the next part of the package, those issues take on even greater significance. The environment issues become even more important the defence consequences even more profound.

But there is more, one should say—that is, the indication this gives about the role of government in our society as viewed by this so recent government and this so recent minister. The changes that have been taking place in the industry did not occur in isolation. They were part of an agreement—an industry development package announced in December 1986 which contained three points: union agreement to changes to improve efficiency; ship operators' agreement to invest; and government agreement to provide financial incentives to facilitate the process of reform. This was an important agreement with three parties making a commitment. From that period to this, the three parties have honoured their commitments. But what we find now is the government reneging on its part of the deal. This new government will hope to see the other two parties continue to maintain their side of the agreement but renege on its side.

I acknowledge that with a change of government after an election both the consequence of uncertainty to which I referred initially and the reneging on agreements are a consequence of a change of policy and the initiatives taken by new governments to implement their new policy. So some period of adjustment is always necessary. It is unreasonable to expect that every new government will not want to change policy in at least some areas. But when we see that the consequences of change are uncertainty and stalling in important investment, when we see that the implication of the change is reneging on an agreement with its potential consequence for the capacity and willingness of the other two parties to sustain their part of this important reform package, we have to do some sort of cost-benefit analysis. We have to say: what is it that justifies the uncertainty, the reneging on the agreement and its consequences?

Where are the benefits which flow to compensate for these consequences? Where is the benefit that flows from creating an environment where Australian workers and Australian businesses are put at an international competitive disadvantage? Why would a government, as a matter of conscious policy, say, `We want to put the Australian industry at a disadvantage compared with those with whom it must compete'?

In my two years as trade minister or in my public life I have never been an advocate of taxpayer subsidies to give Australia unfair advantages. We complain about others around the world doing that, about the United States using its taxpayers' money to subsidise its agricultural industry to give it an unfair advantage in comparison with us and about the Europeans doing the same. I do not advocate we should do that firstly because I think it is very bad policy and secondly for the self-evident reason that there are many competitors with deeper pockets than us. So it is a competition which we could not win if we were prepared to give away good policy.

I certainly have never advocated and have never seen a precedent for a government policy saying: we will deliberately set out to put the industry at a competitive disadvantage by withdrawing a grant, a package of support, which is available—not in the circumstance where this can in some way be justified by the great con that is being perpetuated about budget circumstance because it is a longstanding policy of the coalition that precedes by at least several years any evidence that they claim to have concerning the current budgetary situation. In any event, we are talking about $52 million over four years. We are talking about not even a small indentation, let alone a large black hole.

So we must ask why a government would do this, why for this minuscule saving when it does not make economic sense for the industry—a very important industry with all those flow-on, land based consequences that I heard the member for Shortland (Mr Peter Morris) speaking of earlier and the member for Fremantle speaking more recently about, both on the basis of their experience and their commitment to their local constituents. It is certainly not a move reflecting international trends or our international obligations.

The international trends suggest that in the OECD countries, in the countries with which we normally compare ourselves, in the countries with which we are competing in the shipping area, these sorts of supports, modest as they are, that are undermined and under threat by this bill in fact are commonplace. At least a dozen OECD countries have similar provisions in place. Others have different sorts of support arrangements for their shipping industry because they know the international competitive environment in which they must compete. We are not confronting an international obligation that requires us to do something about which we feel uncomfortable morally or are under international law obliged to act. That is not the case.

It is not that the industry has failed to invest. It is not that industry has failed to meet its side of the bargain. The most recent figures I looked at suggest investments of about $2 billion since 1989 and, very significantly for this bill, substantial investment commitments made on the basis of government policy at the time the investment decision was made, the bottom line for which is going to be profoundly adversely affected by legislation which is in its impact retrospective. The fundamentals of law about changes to tax and changes to government policies as they affect citizens and corporations have always been that you should be able to make decisions confident in the fact that the law that applies when you make the decision will not he changed in a way that adversely affects the decision that you have made on the basis of a proper understanding of the current law. Of course, the law may change in future. If you enter into a 20-year commitment, you enter into it in the knowledge that in year five, 10, or 15 you might be in a different environment. Particularly in a democracy that is always possible, but not such that it goes to affect retrospectively the decision which you made on the understanding you had of the grants that would be available to affect your assessment of the bottom line of an investment decision.

Several of our major corporations—BHP was cited, but it is not the only one—have made important investment decisions which will enhance the quality of our shipping fleet and now find the viability of those investments put at risk with broader consequences for the industries that they support, the so- called triangular trade and its importance for the steel industry, for example.

So it is not that the industry has failed to invest. It is not that the unions and the employers have not been able to come to agreement about reform of the industry. I refer only briefly to the standard figure with regard to staffing that others have quoted—the 31.6 standard in 1986, falling to 18.4 per vessel in 1995. One thing we can be certain of is that it was not an industry change made at the request of the industry.

So why have these changes been made? It does not meet any of the normal criteria by which you would suggest that, in an analysis, a government might choose to act. It seems to me clearly that this is part of a package to encourage and attempt to force the shipping industry to confront its employees and the Maritime Union of Australia—a conscious and deliberate attempt to promote, to encourage, to attempt to force confrontation between the employers in the shipping industry and on the waterfront and those employees and the unions which represent them.

This is the first of a series of such measures, to be followed by cabotage, by the second register, by what might be proposed for the waterfront. We see in the background—slightly to his credit, I suppose, to some extent it was acknowledged by the minister for transport—that the big changes are waiting in the hope that when the industrial relations legislation, the so-called workplace relations bill, comes in, it will, by its passage, provide a big stick, sections 45D and 45E of the Trade Practices Act, so that when this attempt to force confrontation has its impact, the employers and the government will be armed with weapons.

I find it very frustrating as an Australian to see this circumstance in which, at the time in our history when we have the lowest level of strikes and a very low level of industrial disputation on the waterfront, we have a government setting out to raise the penalties for industrial disputes, to bring in new, enhanced penalties, to deal with disputes. Why do they think this problem will occur? It is not because there is a proliferation of strikes in Australia, because there is not. There has been a record level of industrial peace for a decade. It is because they know their policies will provoke industrial disputes. In fact, it would be a terrible disappointment to them if they did not, because that is their clear and deliberate intent in the case of the waterfront—but not everywhere, I accept.

The other disputes they will provoke will be by inadvertence and incompetence. But, in this case, you cannot claim those two things. This is a deliberate attempt to create that confrontation and to arm themselves and the employers with the weapons to seek to change the industrial balance of power in a way that can have only adverse consequences for the working conditions of the men and women in the maritime industries and those who support them.

We had 13 years of record industrial peace, by the end of which we were beginning to overcome the legacy of industrial strife with which previous conservative governments left us. Around Asia, we were slowly beginning to overcome the view that Australia was not a good place to do business with because it was plagued by strikes. After 13 years, we were just beginning to overcome that, and now we are consciously trying to go back to it again.

So for general transport and other policy reasons outlined by the Leader of the Opposition, the shadow minister and others, for broader socio-economic reasons, particularly for industrial relations reasons, I join my colleagues in urging the House to reject this bill.