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Monday, 4 May 1987
Page: 2517

Mr HOLLIS(4.58) —I welcome this important legislation. As has already been stated, the purpose of the Ships (Capital Grants) Bill 1987 is to give effect to the shipping industry development package announced by the Government on 22 December 1986. The package consists of shipboard productivity and capital assistance measures. The previous speaker, the honourable member for O'Connor (Mr Tuckey), found so little to criticise in this legislation that he had to make a very wide-ranging speech-as, indeed, I will. He went into details of the building industry and various other things. I am pleased that the honourable member has given his support for this important legislation. How could he do otherwise?

This legislation will assist Australian ship operators to acquire modern, technologically advanced ships which can be operated effectively at the crewing levels specified in the Bill. The key aspect of the package is the introduction of new ship-board organisation and work practices to maximise the benefits of modern ship technology. One may well pose the question: What is the point of having modern ship technology unless we take advantage of it? That is one of the things that this Bill will do. The financial incentives provided in the Bill will assist Australian ship owners in the purchase of the modern, technologically advanced ships necessary to make the package work.

This Government, under the Minister for Transport (Mr Peter Morris), has a firm commitment to the development and expansion of efficient, competitive and reliable Australian flag shipping. Coming as I do from the Illawarra region, I have a particular interest in this. My region exports coal and iron. Soon, a modern wheat terminal will be opened at Port Kembla, allowing the export of grain. Discussions are well advanced on the export of wool, live sheep and vegetables from Port Kembla.

Mr Robert Brown —Yes.

Mr HOLLIS —As the honourable member for Charlton says, yes indeed. It will be a great credit to this Government when that new facility is operating. I invite my friend the honourable member for Charlton to inspect the port of Kembla with me, either in its present state or when the new facilities are up and running.

Mr Robert Brown —I would like to inspect it under both circumstances.

Mr HOLLIS —The honourable member has a double invitation. I want to see Australian products and produce exported from Port Kembla carried in Australian ships wherever possible. There are opportunities for Australian shipping to compete internationally on its commercial merits despite the very difficult market situation that shipping faces generally.

As previous speakers have said, less than 5 per cent of our trade is carried in Australian flag ships. This reliance on foreign shipping not only places a heavy burden on our balance of payments but also makes us hostage to foreign owners. For example, recently in an attempt to force Australian producers of steaming coal to lower their prices significantly, one of Japan's nine big electric power companies threatened to stop sending ships to Australia. We were held hostage. Foreign owned or controlled shipping could effectively halt Australian exports. Other speakers have gone through all the details of the Bill. I will not repeat all of them. Suffice it to say that under this legislation the Government will provide a taxable grant of 7 per cent on the purchase price of new or newly-acquired second-hand trading ships meeting the following eligibility criteria: They must be crewed in accordance with specified crewing benchmarks, registered in Australia and crewed with Australian residents. The newly-acquired second-hand tonnage ship must not have been registered previously in Australia and must not be more than five years old. In some circumstances a grant will also be available for the cost of converting an existing Australian ship to the Maritime Industry Development Committee's standards.

The Bill specified maximum crew level benchmarks for eligibility for assistance. I notice that the honourable member for O'Connor touched on this. Benchmarks were established in consultation with the shipping industry to take into consideration the type of ship, the nature of operations and trading patterns. As the honourable member said, this is 21 crew for bulk carriers, container ships, roll-on, roll-off ships and tankers engaged in international trade and 23 crew for tankers engaged in coastal trade. Additional benchmarks can be created by regulation for vessels which do not fall into the specified categories.

I have no great worry with what the honourable member for O'Connor said about allowing families on ships. As he said, this happens on many overseas ships. I think that there could be problems on some large tankers if sea-going people had large families and wanted to take them all on board. There may be a safety hazard with young children running around the decks of some of these huge container ships. I was a little worried when the honourable member talked about families eating in their cabins. If we are talking about a crew of 21, if there were 21 partners-one must not be sexist and say wives-and children all eating in their own cabins there would probably need to be an additional 21 kitchens. This could lead to additional costs, which the honourable member seems so keen to get away from. But I see nothing wrong with the idea of taking a partner on a ship, as happens in many overseas countries.

Although it is very fashionable in this House to attack the unions, the industrial record of Australian seafarers in recent years has been good. In 1986, ship days lost through industrial action involving seafarers numbered less than half those lost in 1982. In 1986, 210 days were lost compared with 485 days lost in 1982. Across an Australian fleet of over 100 ships, the 1986 figure represents a time loss of less than 0.6 per cent. In 1983 the Government adopted the recommendations of a report by Sir John Crawford entitled `Revitalisation of Australian Shipping'. Under subsequent legislation, ship operators were offered tax incentives to purchase new ships linked to crew size reductions. This process improved industrial consultation. These consultative processes have been built on with the establishment of the maritime industry mission and the Maritime Industry Development Committee.

The maritime industry mission, which comprised senior representatives of ship operators and leaders of sea-going unions, studied at first hand developments in a number of leading maritime countries; in particular, training and human resource development arrangements, ship-board operational procedures and personnel organisation. MIDC was subsequently established by the Minister for Transport to examine the mission's findings and develop appropriate measures for Australia. As industry practices continue to be improved through such consultative processes, rather than by confrontation, our shipping efficiency and competitiveness will continue to improve and our reputation for reliability will continue to be enhanced. This is crucial for the future growth of the Australian fleet.

Our shipping companies have an excellent record of service to Australia's overseas customers. Over the last two years, no time has been lost through crew disputation by ships of the Broken Hill Proprietary Co. Ltd in its export trade. Similarly, Howard Smith Industries Pty Ltd has not lost any time in its coal trade with Japan. A spin-off of the Government's approach of co-operation and consultation has been moves to reduce the number of sea-going unions. If all the proposed amalgamation moves come to fruition there will be only two unions, compared with seven in 1980 and five presently.

Exports are the life-blood of our economy. Australia's export performance must improve in all areas if we are to sustain our national standard of living in the face of the difficult trading environment. I want to pay a particular tribute to the Port Kembla harbour task force because, although we can improve shipping, unless the port structure is in order it will all be worthless. The Port Kembla harbour task force was formed in May 1981 to promote economic activity, diversification and development at Port Kembla as a focus for regional development. It is a non-political community organisation made up of a number of interested groups representing shipping agents and stevedoring, trade unions, local government, shippers and transport companies, commercial and industrial companies and citizen members and academics.

The chairman of the task force is Alderman Peter Morton of the Wollongong City Council, who is well known to the Minister. The management committee members are Professor Ken Blakey, an economist; Captain Charles Rose, a shipping expert; Ted McAlear, the secretary of the combined port unions at Port Kembla; Warwick Reader, an executive officer employed by Wollongong City Council; Tas Kollaras, a business representative; Frank Jackson and Rod Paterson of the maritime unions; Bruce Noble, a farmer; Gus Keeson and Kevin Wingate from the shipping and stevedoring area; and Tom McCabe from the transport area.

During the last six years the Port Kembla harbour task force has undertaken research and promotion work on a series of projects for cargo development with a system of port-based transport and communications. In this area of development, it has established a body of knowledge about project identification and preparation and the application of systems analysis. The proposed grain handling project has been at the centre of the study and the task force was responsible for convincing the Government and farmers to build it at Port Kembla. I like to think that I had a little bit to do with that persuasion as well.

The task force is now working on a number of new projects relating to rural exports. These include the export of greasy and processed wool; fresh fruit and vegetables to Hong Kong and other Asian countries; live sheep and cattle; and frozen and chilled meat. Four members of the Port Kembla Harbour Task Force have recently returned from a business development trip to Singapore, Taiwan, Japan and Hong Kong, where a number of valuable contacts were made with companies wishing to purchase these products through Port Kembla. I might point out that these people made the trip at their own expense. With the co-operation of the Federal and State governments the task force believes that there is in excess of $150m worth of new trade that could be exported from the country areas via Port Kembla. I emphasise that I am talking about new trade here, not existing trade.

Another important initiative of the Port Kembla harbour task force has been directed towards the improvement of industrial relations. The task force has instigated important moves to bring together those involved in the rural production areas and those involved with the movement, handling and export of these goods, with particular emphasis on the maritime unions. A number of seminars have been held in Port Kembla and the central-west of New South Wales, the latest being at the Orange Agricultural College a couple of weeks ago which had the theme of `Consultation, not Confrontation'. I was privileged to attend this seminar, as indeed did the honourable member for Calare (Mr Simmons), Senator West and Senator Brownhill. I believe that what has been achieved by the Port Kembla task force should be an inspiration to all involved in shipping, exports and industrial relations. I hope that during the forthcoming break the Minister for Transport will accept my invitation to visit me at Port Kembla so that he can see for himself some of the important work that has been going on there.

For too long we have regarded shipping solely as a service to trade. Indeed, we have often preferred to abuse shipping-especially Australian shipping-as a scapegoat for all sorts of shortcomings in our trade and marketing arrangements. After we have mined, grown or manufactured our exports and organised their sale, we have found it too easy to leave it to others to manage and profit from our export shipping. As a result we have turned our backs on an enormous deficit in trade in services by allowing foreign shipowners to carry our trade. I suggest that there has been a failure to look objectively at shipping, its real weaknesses and its strengths. We need to look at the facts. We must treat Australian shipping both as a service to trade and as an export trade in itself and we must put the necessary effort into its improvement and promotion. Commodity exports such as coal will always be important, especially to the honourable member for Charlton (Mr Robert Brown) and me. We must continue to ensure that such exports are shipped competitively and reliably. But this is not enough. We must increasingly seize every opportunity to expand our trade in other sectors, particularly services. As the initiatives in this legislation come together, more Australian exporters will be able to choose to use efficient Australian ships at competitive freight rates.

Australia's economic and trade performance need the benefits of greater exporter control of shipping and greater national participation in shipping as part of an integrated Australian marketing and supply chain. Yet, there are those who question our ability to become competitive. They point to the artificially low costs available to some foreign shipping. They are the knockers-the voices of defeat and surrender to foreign interests. One half of our exports are still carried in ships of other higher-cost countries, such as Japan, Britain, West Germany and Scandanavia. While we may not now be the lowest cost shipping operator in the world, we can and we must compete with these countries. I commend the Bill to the House.