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Thursday, 31 May 2012
Page: 6499


Ms GRIERSON (Newcastle) (11:34): I rise to speak on the Shipping Reform (Tax Incentives) Bill 2012 and associated cognate bills—a suite of legislation that will be greatly welcomed in my electorate of Newcastle, where maritime activities have always been central to our economy, the activities of our port and of course to exactly the people we are. I am very proud to stand here today, the niece of two wharfies—two MUA waterside workers—who, sadly, are no longer with us. One of them, Tom Lockett, particularly is missed by my staff for the wonderful voluntary work he did for us. But fortunately we also have the benefit in my office of a young man from a very well-known MUA family in Newcastle, Matt Murray. So it is very much part of who we are.

On any given day, there are dozens of bulk carriers off the coast of Newcastle waiting to enter the port and to transport cargo around the world. What is lesser known is that, whilst Newcastle is no stranger to Australian shipping or to shipbuilding, our national fleet has shrunk over the past decade from 55 to 21 ships, with only four of these operating on international routes. The vast majority of carriers entering and leaving the port in my electorate are foreign ships with foreign workers.

I looked back today at a 2004 newsletter which I sent around my electorate and I will repeat the sentence that caught my eye: 'In a bid to obtain the cheapest priced shipping services by assisting foreign ships to gain continuous and single voyage permits, the Howard government put Australian ports and borders at risk.' Well, that is exactly what did happen. Finally, this legislation before the House attempts to redress this situation.

Whilst Australia does not currently lack a shipbuilding industry altogether, it very well could in the near future if our situation does not improve. There has been a 40 per cent decline in Australia's national maritime fleet over the past decade. As well, our fleet is ageing. The average age of Australia's fleet is around 20 years compared to the global average of 12 years. Our country moves 99.9 per cent of our trade via cargo ships, with just half of one per cent of our maritime trade carried out on Australian flagged ships. The time is long overdue to act to ensure that the Australian shipping industry does not further flounder and become a distant memory.

This package of bills is a major step towards revitalising our shipping industry. It is part of the Stronger Shipping for a Stronger Economy package—the same package we took to the 2010 election. The federal Labor government is now delivering on that commitment. We are a government that keeps its promises. We are a government that believes in our nation's future.

As part of this package of legislation, the tax incentives bill that our government will introduce a zero tax rate for Australian shipping companies. We are introducing provisions for: accelerated depreciation of vessels through a cap of 10 years, down from 20 years, to the effective life of the ship; roll-over tax relief on the sale of shipping vessels; employer refundable tax offsets in relation to seafarers; and exemptions from royalty withholding tax for payments made for the lease of shipping vessels. We are also introducing a generous income tax exemption for core shipping activities, allowing flexibility and increased competitiveness on the global stage.

As the Australian Financial Review noted on 8 March 2012, the opposition were initially behind our recommended tax changes in 2008, but in 2012 have turned their backs on this important measure. It is a shame that the opposition do not support these tax incentives; it really does seem that there is not a tax cut that they would not say no to.

The Australian Shipowners Association has welcomed these bills, saying that the legislation will level the playing field. The association, which represents BlueScope Steel, Caltex Australia, Rio Tinto Marine, BP Shipping, Newcastle Port Corporation, Toll Marine Logistics and ANL Container Lines, has estimated that these tax changes could trigger up to $4 billion worth of investment as local shipowners look to add to the 21 Australian operated ships. This is investment into Australia, investment into local industry and investment into local job creation. With almost 800,000 jobs created by this federal Labor government, we know that to continue this employment growth we must keep introducing the necessary reforms to sustain our competitiveness, sustain our local industry and retain the capacity to build diversity in our economy.

Other measures in these bills include the shipping registration amendment component, which will establish a new Australian International Shipping Register and Australian General Shipping Register. The bill sets out the operation, administration and associated employment conditions. This new national body will oversee our participation in international trade, facilitate growth within the local industry and promote the viability and enhancement of our maritime skills base. Importantly, the bill will provide employment terms and conditions that are consistent with the ILO's Maritime Labour Convention. The bill will set employment conditions in accordance with the Maritime Labour Convention and other relevant ILO treaties to which Australia is a signatory. I welcome that measure.

In April this year, the vessel MCP Kopenhagen was floating off the coast of Newcastle, temporarily storing 3,000 tonnes of ammonium nitrate for chemical company Orica to service the region's mines. By all accounts, the conditions for the Filipino seafarers aboard were abysmal. I have boarded flag of convenience ships in the port of Newcastle in the past, with Dean Summers from the ITF, and on several occasions I expressed my concerns regarding the management of dangerous cargoes as well as conditions on ships. I know that when our local MUA judges a ship or the welfare of its crew to be substandard then action does have to be taken. I am pleased that in this case the shipowners came through and signed an agreement with the International Transport Workers Federation, ensuring the workers' pay rise and that their wellbeing would be maintained on board.

But we must ask: why does it always have to come to a point where an inspector has to intervene and board a ship? Quality standards and conditions should be made a priority around the clock, but what we continue to see is a quest to keep prices down by neglecting responsibilities to crews, to safe practice and to the maintenance of an acceptable condition of ships. The stronger shipping bills will certainly go a long way towards addressing these concerns, concerns that the MUA has had the integrity to keep raising with governments for many years.

I cannot mention 'ships of shame' without acknowledging the former member for Shortland and minister for transport under the Hawke government, the Hon. Peter Morris, who, I am pleased to report to the House, was awarded an Order of Australia Medal this year. Peter chaired the International Commission on Shipping and headed the Ships of shame inquiry in the 1990s, an inquiry that found significant problems occurring within the maritime industry—from unseaworthy ships to ships being operated by seafarers with false qualifications. It was a very well deserved award. Peter is also the President of the Newcastle Maritime Centre, which this year commemorates the 70th anniversary of the Newcastle submarine attack, which saw a Japanese assault on merchant ships within the port, as well as the anniversary of the sinking of the Iron Chieftain on 3 June 1942, killing 12 crew members. The Iron Chieftain was one of the big iron ships of BHP, sailing from Newcastle to Whyalla. BHP's second ship, the Iron Crown, was also attacked the following day, with only five of the ship's 43 crew surviving. Those were the days when Australian merchant mariners prevailed, and they worked hard for our nation during times of peace and times of conflict. Sadly, you can count the iron fleet on one hand today.

I would also like to mention to the House that the Merchant Mariners Memorial Service will be held in Newcastle's foreshore park on 2 June, this coming weekend, to commemorate the most invaluable contributions made by our merchant mariners and the waterside workers who supported them.

Other measures in the bill include the three-tier licensing system which will increase efficiency within our national shipping system. A general licence for general register vessels will provide unrestricted access to engage in coastal trading within our waters. A temporary licence will provide access to coastal trading, limited in time and voyages, authorised by this licence. Emergency licences will also provide access to Australian waters for coastal trading purposes, with such licences granted within three business days for emergency situations such as natural disasters. We also recognise that change cannot happen overnight, and this legislation puts in place transitional arrangements through a transitional general licence, which will authorise foreign flagged ships operating under existing licences to continue their operations for up to five years. It is fair legislation and it certainly carries through on our belief that if you are working in Australian waters, you should have Australian regulation on your side.

The MUA's Paddy Crumlin says these changes will be a vital economic boost, stating in the Financial Review on 10 September 2011: 'It will be massive.' Citing London as an example of a successful shipping industry, he said: 'It's got 500 ships on its register. It's got no iron ore, no coal, no LNG.' And that is very true. He is absolutely correct. Why shouldn't Australia take advantage of its resources, of its capacity, of it strengths, to support our local industry and our primary resource industries with local ships, local jobs and fair working conditions? This is a Labor package that has been developed with no half measures. It will bring good news for our local shipping, keep our local industry afloat and deliver prosperity in Australia's maritime sector for many years to come. In conclusion, I note the AMWU's video 'Aussie Shipbuilders' Message to Clive Palmer'. I recommend that everyone has a look at it. It is certainly doing the rounds online and in my city. It features Newcastle's Forgacs, who, of course, build ships. We still do build ships, Mr Palmer, and now we have a real change to make sure we can build the shipping industry of the future. I commend the bills to the House.