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Monday, 28 May 2012
Page: 5673


Ms SMYTH (La Trobe) (13:01): I am very pleased to speak in this afternoon's debate on some significant reforms being made by this government after some considerable effort by the minister, who has done an excellent job in putting forward such a comprehensive package of reforms, all of which are well overdue. I stand to speak against the amendment, which would have the effect of deferring, for another critical period of time, action in a very important area both for the productivity of the industry and for its very survival.

The Shipping Reform (Tax Incentives) Bill 2012 and related bills before us today are geared at revitalising the Australian shipping industry. We are invited by speakers opposite during the course of this debate to consider why these measures are being dealt with so promptly and why these measures are being dealt with in a seemingly—I believe I am quoting the member for Indi—'fragile industrial situation'. The reason for that is the same as the reason for so many of the reforms being undertaken by this government in the relatively short period of time which we have been in office. It is the simple fact that we experienced over a decade of policy inertia from the Howard government.

I have stood here on many occasions speaking about the significant reforms that the government are making after the Howard period of policy failure. It leads me to believe that all that was being done during the decade of the Howard government was that quite a lot of people were getting very experienced with Tetris, with playing with joysticks and with demonstrating their skills in online gaming. I simply cannot understand why so many areas of critical industry reform in so many areas of policy development are being left to this government to respond to after a period of inaction.

Despite the fact that we are in the middle of a once-in-a-generation resources boom, only half of one per cent of the trade generated by the mining industry is carried by Australian-flagged vessels. That is an astonishing figure. We know that over a decade Australia's fleet has declined from 55 to 21 ships with a mere four operating on international routes. For the largest island nation in the world that really is an extraordinary figure and requires the intervention of this government. While shipping carries around 99 per cent of Australia's trade by volume, and while Australia's shipping task comprises around 10 per cent of the world's trade carried by sea, our fleet is in decline.

We know that when John Howard came to office in 1996 Australia had 55 trading vessels shipping 3.2 million tonnes. By 2008 there were only 30 vessels remaining which shipped just 1.8 million tonnes. In an extraordinarily short-sighted move the coalition abandoned the capital grants assistance and accelerated depreciation in the PAYE rebate scheme. At the same time it tripled the number of trading permits to foreign-flag crews from fewer than 1,000 in 1999 to more than 3,000 around a decade later. The consequences for the industry of these moves was and is devastating. It really is an indication of just how short-sighted the coalition has been on the Australian shipping industry that, at precisely the same time it was cutting support to the industry, Germany, the UK, France, the Netherlands, Japan and South Korea were each embarking on comprehensive programs to rebuild their respective shipping industries. Those nations recognised the benefits in an economic sense, in a strategic sense and in environmental terms of a viable and robust shipping industry. Despite the fact that it was presiding over the economy of the largest island nation in the world, the Howard government made no meaningful attempts to reform the industry for our future.

We anticipate that trade in our ports is likely to triple during the next 20 years. It should be our own shipping industry which experiences the benefits of that increased trade. It should be our workforce that gets the benefit of jobs growth in a viable Australian shipping industry. All of this can only happen if the reforms in the bills before us are implemented and implemented now.

It is revealing to see the discourse of the Nationals leader today on the reforms before us. It is revealing to see the contributions of other members, particularly the National Party, to this debate. I see that we have some members of the National Party in the House as I speak. It might be worth their reviewing the document that I have in my hands at the moment, which is the policy platform of the Nationals for 2011-12. Tellingly, shipping reforms are right up the back on page 65. It would be worthwhile for Nationals members to have a look at the second column on that page, which talks about more efficient shipping. It has a look at four key dot points and states:

The Nationals will: Introduce a tonnage tax to replace company tax on an opt-in basis, linked to mandatory training arrangements.

Let us have a look at some of the reforms that are in the bills before us, most notably some of the taxation reforms. We know that the government has consulted extensively with industry and with the tax office and that, as a result of those consultations, it has become apparent that a zero tax rate was a better option because not only does it prevent the need to create a new tax arrangement and not only does it mean that we will be a world leader in shipping tax arrangements but also—and tellingly—it reduces red tape. The Leader of the Nationals today spoke at length about his concerns that the reforms and the measures before us would lead to a substantial amount of red tape. It has been a couple of years now since I was in commercial practice, but I certainly recall that the tax acts of Australia constitute about a foot's worth of pages. I would have thought that reducing the tax rate to zero would have meant a significant cut to red tape and would have satisfied the Nationals and, indeed, the stated policy platform objective at dot point 1 on page 65 of the Nationals' platform—but perhaps not.

Point 2 of the Nationals' platform says that they will introduce a national system of training support under the supervision of the Australian Maritime Safety Authority to replace the existing state based distribution of funds. Let us have a look at what the government is doing to promote training and to ensure that we have a well supported workforce. A key element of the government's shipping reform package is workforce development, and it is in order to ensure the continued viability of the Australian shipping industry that we know we must attract, re-train and retain a skilled workforce for the industry. It is for that reason that in January of this year the Maritime Workforce Development Forum was established—so that the government would take on the advice and expertise of experienced people from industry, unions and the training sector. That forum is addressing areas that are central to building Australia's skill base and will include a workforce plan being developed for the medium term to address the issues, including the ageing workforce and immediate skill gaps.

It would seem that at least two points of the Nationals' platform have now been attended to or worked towards in the bills before us. Let us have a look at point 3 of their platform on more efficient shipping:

Examine ways to reduce the income tax disadvantage suffered by Australian seafarers operating outside Australian waters, compared with seafarers from other nations.

I have a swathe of reforms being put forward in the bills before us to deal with exactly that point, but apparently it has escaped the Nationals' notice. The reforms in the two tax related bills, as part of the five reforming bills before us today, deal with four matters—I have already mentioned a zero tax rate but have not mentioned the others—which are: accelerated depreciation arrangements; rollover relief for selected capital assets; tax exemptions for seafarers working overseas on qualifying vessels so that we remove disincentives for companies employing Australians; and, finally, exemption from the payment of royalty-withholding tax for owners of vessels where the vessel is leased under a bareboat charter to an Australian company. That is quite a significant package of reforms put together in consultation with industry, developed by this government and contemplated, it seems, in the Nationals' platform document—though apparently they are not up to accepting it. I will leave a copy of this platform document here when I leave. I encourage members of the Nationals to be vigorous in coming over here and having a read of it.

The final point in the more efficient shipping section of the Nationals' platform document, right up the back, is to establish an Australian second shipping register. I simply say—

Mr Robert: Mr Deputy Speaker, I rise on a point of order on direct relevance. I do not see anything to do with the Nationals' shipping plan in the resumption of debate in the Shipping Reform (Tax Incentives) Bill 2012, nor do I see any reference to the Nationals' shipping platform within the articles of the bill. I ask that the member be directly relevant.

The DEPUTY SPEAKER ( Mr Lyons ): Thank you for the attempted advice. The member will be relevant.

Ms SMYTH: I am indeed pleased that it has been conceded that the Nationals' platform is utterly irrelevant to national shipping policy in this country. That was a courageous point of order well made.

As to the final point that I referred to—and I will not mention the particular document that I was reading from in deference to the preceding speaker—the policy reforms before us create an Australian International Shipping Register and require the master and chief engineer to be Australian residents, while the balance of the crew may be foreign residents paid at internationally competitive terms and conditions of employment.

It would seem that these reforms satisfy, in the main, 75 per cent of the Nationals' policy objectives and are well on the way to satisfying the remaining 25 per cent. Yet today the Leader of the Nationals is seeking to push these five important reforming bills off to the never-never. It is very disappointing to see that, because the issues surrounding Australia's shipping policy have been examined at length and in consultation with industry on several occasions; indeed, they were considered by the House of Representatives Standing Committee on Infrastructure, Transport, Regional Development and Local Government in its final report in 2008. A regulatory impact statement has been prepared on the proposed reforms, and that has been made available. Ultimately it is not clear to any of us why the coalition, after a decade of inaction, is now seeking to defer meaningful, significant and revitalising reforms for our shipping industry for any reason other than, presumably, its own political ends.

These reforms mark the most significant and the most holistic reforms to Australian shipping since the early 1900s. They are long overdue. Australian shipping is at a critical point, and without the reforms before us we risk not only the considerable benefits that could flow to the industry from the mining boom but also the industry's continued viability. A failure to support an Australian shipping industry that can compete in the international marketplace is a lost national opportunity.

Our competitors in the global market are well ahead of us in fiscal incentives. They were well ahead of us during the Howard years, as I mentioned earlier. As a result, for more than a decade there has been almost no meaningful investment in Australian ships. One of the consequences of this lack of investment is that the average age of the Australian fleet now sits at around 20 years in comparison to a global average of around 12 years. Inevitably that has detrimental consequences for the productivity of the Australian shipping industry, its efficiency—and we have certainly heard about more efficient shipping from the Nationals' platform document, but they seem to block it out—

Mr McCormack: No, please do. It's a great document.

Ms SMYTH: To the member for Riverina: I will certainly leave a copy of your platform here for you to read for the first time.

The DEPUTY SPEAKER: Direct your comments through the chair. The member for Riverina, you will get your chance.

Ms SMYTH: Inevitably this ageing fleet has very significant consequences for efficiency, productivity and the environmental performance of Australian vessels compared with more modern fleets. The reforms in the bills before us include significant measures to promote investment in Australian shipping through tax concessions, the variety of which I mentioned earlier. Without these, we will continue to lag behind world standards. Without a sufficiently modern fleet, we cannot in turn attract new recruits. The shipping industry already faces pressures that arise from an ageing workforce and, without the capacity to attract new recruits, we are likely to see it become an even less viable proposition than it currently is. Without being able to assure new recruits of continued work in the shipping industry, the pressures of an ageing workforce will only increase.

It is timely that the bills are before us today. The bills address a variety of measures from taxation to training opportunities to changes in licensing arrangements. They promote a viable shipping industry that will contribute to the broader Australian economy, they will facilitate the long-term growth of the Australian shipping industry, they will enhance the efficiency and the reliability of the Australian shipping industry as a part of our national transport system and they will maximise the use of Australian vessels. In short, these reforms are well overdue. It would be derelict of this parliament to defer them to any future period, and I encourage the House to support their adoption.