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Monday, 28 May 2012
Page: 5668


Mr ADAMS (Lyons) (12:33): Hearing the Leader of the Nationals takes me back to 1999, when John Anderson, the then Leader of the National Party and Commonwealth Minister for Transport and Regional Services, declared that Australia is 'a shipper, not a shipping nation'. Send all the livestock overseas to be processed. Do not worry about having any ships in Australia. That is the National Party position. 'As long as we look after our constituency, who cares about anything else? Don't care about the nation, just concentrate on what we're interested in.' I am very, very sad to hear all that.

These are exciting times and exciting opportunities for Australia as a nation. Last week, it was good to receive the great news that Tasmania is receiving a one-off package of $20 million to help Tasmanian exporters reach international markets. This has come about as a result of the rising transport costs for Tasmanian exporters and the difficulties exporters face with the sole shipping container operator into Tasmania ceasing its operations. However, more needs to be done to ensure that Tasmanian exporters have equal access to the export trade and to export transport. These bills therefore come at an opportune time to help Tasmania restructure its freight carrier systems and look at new ways to integrate transport in the state and overseas, not ruling out the possibility of international ships calling again to Tasmania.

Shipping reform seems to be well overdue. I understand from the minister that there are aspects of shipping law that have not changed for over 100 years, which seemed to amuse the crew on the Insiders program yesterday. The Shipping Reform (Tax Incentives) Bill 2012 provides a mechanism for the shipping industry to obtain a certificate for an initial step in gaining access to a range of taxation concessions for the shipping industry. Additional criteria are contained within the Tax Laws Amendment (Shipping Reform) Bill 2012. I would have thought that was a pretty good aim for Australia as a nation to encourage ship ownership and ship operations in Australia, as well as to encourage the employment of Australian seafarers.

Shipping is a global industry, characterised by intense competition among international companies with relatively few barriers to entry and exit. Vessels in more than 30 foreign jurisdictions—with which Australian vessels must compete—receive the benefits of fiscal support, for example, tonnage tax and taxation concessions, exemptions and subsidy schemes under their home registries. This has tended to lead to bigger ships and therefore many of these countries have introduced fiscal support measures as a means of retaining ships on their national registers, rather than see their national flags moved to foreign registries over which they have less direct control. This action has seen their formerly sinking national registries attract back many of the defecting ships and is consistent with the findings of the House of Representatives committee on infrastructure and transport. I think of the British government's situation during the Blair years where it was bringing back shipping and a shipping industry for the UK. That seems to have worked tremendously for them. The regional development and local government department notes that supportive fiscal measures have resulted in an increase in additional tonnage back to national registers. The tax incentives will provide for the following: accelerated depreciation, with rollover relief for owners of Australian registered eligible vessels; an income tax exemption for Australian operators of Australian registered eligible vessels on qualifying income; a refundable tax offset for employers who employ eligible Australian seafarers; and an exemption from royalty withholding tax for foreign owners to eligible vessels leased under a bare boat or demise charter to an Australian operator.

This bill is the first step a taxpayer will need to take in establishing their eligibility to access the tax concessions. It provides for the issue of certificates after the end of the financial year to applicants who need to meet the requirements of the regime. It also provides companies applying for those concessions for the first time the opportunity to obtain a notice during the first year of entry that will give them a degree of comfort that the arrangements they propose will meet the requirements of the Shipping Reform (Taxation Incentives) Bill 2012, thus reducing the pressure on both them and the department when they are compiling their tax returns.

In summary, the new legislation will: establish eligibility criteria for access to the taxation concessions by defining 'eligible company' and 'eligible vessel'; provide a framework for the Department of Infrastructure and Transport to issue applicants with a notice and, later, a certificate confirming they have satisfied the department's requirements for the certification; provide for the department to collect and collate data in relation to these reforms; and provide for decisions to be reviewed if disputed.

The other issues I wish to mention relate to the Coastal Trading (Revitalising Australian Shipping) Bill 2012—which I think is very well named—the Coastal Trading (Revitalising Australian Shipping) (Consequential Amendments and Transitional Provisions) Bill 2012 and the Tax Laws Amendment (Shipping Reform) Bill 2012. As most people are aware, we are in the middle of a resources boom. Yet only one-half of one percent of that boom is carried by Australian flag vessels—hence my original statement. In the past decade the Australian fleet has gone from 55 ships to 21, with only four operating on international routes. Our ports manage 10 per cent of the world's entire sea trade and $200 billion of cargo is moved annually. I wonder how much of that insurance is written in Australian dollars by Australian companies. We need to encourage more investment in shipping within Australia, and these ships will be the catalyst to attract an increase in shipping.

As we have found in Tasmania, Mr Deputy Speaker Lyons, as you would be well aware, Australian shipping is at a critical juncture in its ability to continue to be viable. Ships are getting bigger, which puts pressure on the ports they visit and affects which ones they can get into, and their business plans are changing because of that. The lack of an Australian shipping industry that can compete in the international market place is a lost national opportunity—and certainly for Tasmania it is an even bigger one.

One of the consequences of this lack of investment is that the average age of the Australian fleet now sits at almost 20 years, as against the global average of 12 years. The age of our fleet has implications for the industry's productivity and environmental performance. Modern vessels incorporate new technology delivering greater efficiencies and, of course, better environmental performance. Without new investment in the fleet, Australian shipping will continue to lag behind world standards. These bills aim to: promote a viable shipping industry that contributes to the broader Australian economy; facilitate the long-term growth of the Australian shipping industry, enhance the efficiency and reliability of the Australian shipping industry as part of the national transport system; and maximise the use of vessels registered in the Australian general shipping register.

However, a ship is only as good as its crew. That is why a key element of the government's reform package is workforce development. We must attract, train and retrain a skilled seafaring workforce. There will be no incentive to invest without the right people in the right jobs. In Tasmania we have the Australian Maritime College, which is part of the University of Tasmania. That is partly in your electorate, Mr Deputy Speaker Lyons, and it is partly in mine. It will certainly give us an opportunity to not only train local seamen but offer courses for many other countries—as we have done in the past, especially throughout Asia and the Pacific region but also in other parts of the world.

On the simulator at the Australian Maritime College people can learn how to bring ships in to dock. And you, Mr Deputy Speaker, like me, have probably knocked over a couple of wharves using that piece of equipment! It is a major piece of equipment. There are ships belonging to the Maritime College tied up at the jetties at Beauty Point. They take engineers and trainee masters to sea to teach them how to gain the skills to work in the industry. So we have the facilities and we have many opportunities which can be expanded through that college. The college has experimental facilities through which a huge volume of water can be moved—a research component which I am sure we can grow into the future. That gives us an opportunity to bring seamen from all over our part of the world into better training plus an Australian seafarers training package. I note that we do need to go through the compact and work out what are modern work practices and what helps the productivity process, which gives us the opportunity to make our shipping viable internationally. I am sure we can achieve those things.

This is a very important set of bills for my home state, Tasmania. They are important in the restructuring of the shipping industry. I commend the minister for the interest he has taken in this and for making it happen. It is a vital part of the development of the national economy through infrastructure, and we need to continue to build on that infrastructure into the future. I certainly support the bills and I oppose the amendment.