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Monday, 28 May 2012
Page: 5723


Ms RISHWORTH (Kingston) (16:14): I am very pleased to rise today to support the Shipping Reform (Tax Incentives) Bill 2012 and the other four bills that make up the government's Stronger Shipping for a Stronger Economy legislative package to revitalise Australia's shipping industry, and also to deliver on our 2010 election commitments. These reforms have been long awaited by industry as they will help the Australian shipping industry to become more competitive and will open up a lot more opportunity. Importantly, they will encourage the development of a vibrant Australian maritime industry.

The previous speaker talked about how this package was pro-union. This is not pro-union, and it is not pro-business; this is pro-Australian. It is pro-Australian to encourage Australian workers and Australian industry. I am really at a loss to understand why the previous members would not be pro-Australian jobs and pro-Australian industry.

Australia is an island continent surrounded by sea, with most of the population centres plotted along the sea line, which makes it no surprise that it is dependent upon sea trade. We are a trading nation. Indeed, 99.9 per cent of our trade is moved by ships. However, the involvement of Australian companies and Australian workers in this shipping trade has been in decline. In the past decade, the Australian fleet has gone from 55 ships to 21 ships, with only three operating internationally.

The increasing trend for foreign vessels to be employed to carry our goods around the Australian coast and internationally is to the detriment of the Australian coastal shipping industry. There is a broadly shared view amongst many seafarers in the Australian maritime industry that the Australian coastal shipping sector needs to be revived from the clutches of this downturn and that it needs to be expanded. As the minister said in question time today: if we do not act soon, it may be too late and we may not have a maritime industry at all.

We know that when those on the other side of the House were in government, they ignored Australian jobs and the Australian shipping industry. They abandoned capital grants assistance, and they abandoned accelerated depreciation and the PAYE rebate scheme. At the same time, they tripled the number of trading permits to foreign flag crews. At the same time as other countries around the world—developed countries around the world—were acting to strengthen their shipping industries, the Howard government was abandoning ours. Germany, the UK, the Netherlands, Japan and South Korea all embarked on extensive and very successful programs to rebuild their shipping industries. These countries, unlike Australia under the Howard government, understood that a healthy, competitive shipping industry sector brings great economic, strategic and environmental benefits.

The House of Representatives Standing Committee on Infrastructure, Transport, Regional Development and Local Government also recognised the importance of this sector in 2008, in their conclusion of the unanimously supported inquiry into coastal shipping policy and regulation in Australia. This inquiry undertook an extensive consultation with stakeholders about the various issues impeding the industry. The legislation before the House is entirely consistent with that unanimous report by the committee and its recommendations. So I do find it strange that those on the other side have decided to say no to this. Of course, in 2008 the coalition was under a different leadership. Perhaps with the current Leader of the Opposition, the impetus to just say no has really taken off. Here, despite the unanimous report in 2008, they now just say no.

After that report by the House of Representatives standing committee, the minister established a Shipping Policy Advisory Group with representatives from Australian shipowners, maritime unions and key users of shipping, to assist in preparing the response to this issue. The group and the key industry stakeholders were consulted closely and a lot of analysis was undertaken. They were for the most part supportive of the positive action the government was taking, and they supported us in our efforts to revitalise the maritime industry.

The strongest argument for revitalising Australia's coastal shipping industry is an economic one. A strong domestic shipping industry can assist in the alleviation of land transport bottlenecks, infrastructure constraints and environmental impacts, as well as provide economic benefits derived from the creation of local employment and the growth of maritime services. What we are really talking about here is Australian industries and Australian jobs. We should take this very seriously. In addition, Australian defence, maritime safety and security will also benefit from an expanded coastal Australian shipping sector. The package will provide a response to a substantial portion of the issues raised by a range of stakeholders and by the parliamentary inquiry.

We heard the previous speaker, the member for Aston, talk about the Deloitte Access Economics report. Quite frankly, there were some flaws in that report. The report is factually incorrect in regard to the operation of the new licensing system, which leads to a range of incorrect assumptions about the likely economic impacts. Of course, if the members on the other side of the House had actually listened—this has been outlined by a number of speakers—they might not rely so closely on the report. As most people would know, if the assumptions in economic modelling are wrong, then it is likely the results of that economic modelling are also wrong.

The modelling is based on the assumption that all temporary licences will be phased out in five years, and that all coastal cargo will be carried on Australian licensed vessels. This has never been suggested by the government. There are no plans to restrict the number of foreign vessels in Australian waters. The reforms are simply about providing a level playing field for Australian ships so they can compete better. Foreign ships operating on the Australian coast already have to pay Australian wages. The government's shipping reforms do not change this. All sides of the House should be very clear on and very supportive of the fact that, no matter what country you come from, if you are in Australian waters you should have the benefit of Australian workplace relations laws and the safety net of employment conditions. That is certainly supported on this side of the House and I hope, although I would not necessarily expect it, on the other side of the House.

The Stronger Shipping for a Stronger Economy initiative delivers a reform package that positions the Australian shipping industry to take advantage of the opportunities provided by our huge and increasing export market. Our increased domestic transport task creates a platform for rejuvenation, with all those potential new jobs, opportunities and prosperity.

The revitalisation of Australian shipping is one of the three elements of the government's broader reform of maritime policy and regulation. The other two elements are the reform of the Navigation Act, and the COAG initiative for the creation of a single national jurisdiction for the regulation of commercial maritime matters. The announced shipping reform package is conditional on a compact between industry and unions to deliver better productivity and efficiency reforms to better align practices in the Australian shipping industry with international best practice. The shipping package comprises four key elements: tax reforms to remove barriers to investment in Australian shipping and to foster the global competitiveness of the shipping industry; a strengthened and simplified regulatory framework with a transparent licensing regime supported by clearly stated objectives; the establishment of an Australian International Shipping Register to encourage Australian companies to participate in international trade; and the establishment of a Maritime Workforce Development Forum to progress key maritime skills and priorities.

The Shipping Reform (Tax Incentives) Bill will provide for conditions for vessels to access the tax exemption and other concessions; 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 certification; and provide for the department to collect and collate data in relation to these reforms.

In addition the Tax Laws Amendment (Shipping Reform) Bill amends the Income Tax Assessment Act to give effect to the tax exemptions and other tax concessions. These tax incentives will breathe life back into our shipping and maritime ministry. The taxation element will provide for a zero tax rate for shipping companies; accelerated depreciation of vessels via a cap of 10 years effective life for those vessels; rollover relief for income tax to an employer refundable tax offset in relation to seafarers; and an exemption from royalty withholding tax payments made for the lease of shipping vessels. These bills will encourage and support capital investment and ensure we have taxation arrangements that are internationally competitive. The changes will also encourage the employment of Australian seafarers on international trade routes.

For those on the other side of the House who might be slow to recognise this, what we are talking about here is tax cuts for this industry. We know that those opposite have changed their colours recently. They used to be the party of reducing tax but then they opposed the reduction of the corporate tax rate—which, of course, we on this side of the House found quite surprising. We are seeing those on the other side opposing these tax cuts, so it is hard to get your head around what they stand for. They used to talk about tax cuts, but that is right off their radar now and they just seem to oppose anything that has the term 'tax cut' in it.

The Shipping Registration Amendment (Australian International Shipping Register) Bill will establish a new Australian International Shipping Register and provide for its operation, administration and employment conditions. The creation of this register will enable Australian shipping companies to compete on a level playing field internationally by removing cost disadvantages experienced by Australian registered ships when competing in the global market. These registers have been embraced by many advanced economies and it is time our country did the same. The crewing and labour provisions are key elements of this bill and go to its core competitiveness.

The other bills associated with these changes include the Coastal Trading (Revitalising Australian Shipping) Bill, which will provide a new regulatory framework and licensing system for vessels engaging in coastal trading in Australian waters, and also the Coastal Trading (Revitalising Australian Shipping) (Consequential Amendments and Transitional Provisions) Bill 2012 and the Tax Laws Amendment (Shipping Reform) Bill 2012. These are all very important.

As I said, it is not really surprising that the Liberal Party will not be supporting this legislation. I am not surprised, because they seem to say no to everything. But what I am surprised about is that the National Party are saying no to this. In the Labor Party's platform there is a clear policy outlined. Indeed, we took this policy to the election, so I am pleased to be supporting it. But the National Party also supported that. The National Party policy platform for 2011-12 says that the National Party will introduce the means to allow Australian shipping to compete effectively against other transport modes and internationally while maintaining our national shipping identity. Well, that is what this bill is doing. The National Party platform also says the Nationals will introduce a tonnage tax to replace a company tax on an opt-in basis linked to mandatory training arrangements. Well, we did propose that but, after a lot of consultation with industry, it has become apparent that a zero tax rate is better. So obviously in light of this I would encourage the National Party to change their position and support this.

The National Party also wanted to examine ways to reduce the income tax disadvantage suffered by Australian seafarers operating outside of Australian waters compared with seafarers from other nations. This bill does this. It starts to create a national playing field. Once again, that is in the National Party platform. Also, the National Party says it will establish Australia's second shipping register. Of course, the Australian International Shipping Register is a very important part of this legislation and it seems to be supported in the Nationals policy platform. So, while I do understand that the Liberal Party have changed and are no longer the party of lower taxes but are in fact the party of saying no to tax cuts, it is strange that the Nationals clearly state that they see this as an important issue yet have failed to act on their national platform. That is very disappointing. I would call on those in the National Party to keep their identity as a distinct political party, uphold their national platform and vote with the government when this bill comes to a vote.

The Labor Party went to the last election clearly stating that we wanted a vibrant Australian shipping industry. We should be ensuring that as many industries as possible benefit from our mining boom, and this includes the Australian maritime industry. We should not just be digging up minerals; we should be processing them, we should be adding value and we should be responsible for transporting them around the world. After many years of inaction by the Howard government, this government is putting Australian industry and Australian jobs first. I commend the bill to the House.