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Monday, 13 May 1985
Page: 1839

Senator RYAN (Minister for Education)(6.19) —I move:

That the Bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows--

The purpose of this Bill is to allow the Stevedoring Industry Finance Committee greater flexibility in setting the rate of special levies on local cargo.

I will now explain briefly to honourable senators the background of this Bill.

The Stevedoring Industry is characterised by a higher degree of labour mobility between employers and ports, labour pooling in some ports and rotation of labour through terminals in major ports. These are important factors in ensuring efficient labour utilisation and higher industry efficiency.

These factors also make central funding of many employer obligations the practical and cost-saving alternative to individual company arrangements and complex portability provisions.

As a result of this, the stevedoring industry has a long history of levies on employers to fund these centralised arrangements.

Successive Federal governments have been involved in the industry since 1942. Although that role has been substantially reduced as a result of agreement reached at the National Stevedoring Industry Conference in 1976/77, the Government still provides statutory support for certain levy arrangements agreed between the parties.

In determining rates for the levies for which it is responsible, the government acts on advice from the Stevedoring Industry Finance Committee (SIFC) which is made up of representatives drawn from the industry. Other non-statutory levies are managed by the Association of Employers of Waterside Labour (AEWL).

At present, there are two types of levies applied in the industry-statutory and voluntary industry levies.

There are currently two types of statutory levies:

one is a general levy on man hours which finances employers' retirement fund contributions, long service leave provisions, administration costs, the port conciliator service and, in non-permanent ports, attendance money, guaranteed wage and retainer and annual leave; and

the second is a special levy on tonnages and on man-hours employed on bulk cargoes, which has been used to pay out the undischarged deficit of the Australian Stevedoring Industry Authority which was wound up in 1977.

Various voluntary levies are imposed by the AEWL to cover sick leave, annual and long service leave provisions, early retirement benefits, idle time, and ancillary labour redundancy and long service leave provisions. As with the statutory levies, these apply both to cargo tonnages and man-hours.

Between 1977 and 1984, redundancy in the Stevedoring Industry was financed through voluntary levies imposed by AEWL, with local cargo levied at 20 per cent of the rate applicable to overseas cargo. This differential rate reflected a much greater contribution by overseas cargo to the technological and trading pattern changes that have contributed to redundancy in recent years. In 1984, amendments to the Stevedoring Industry Finance Committee Act 1977 enabled the SIFC to fund redundancy through an increase in the statutory special levies. This allowed the SIFC to refinance an existing AEWL loan and take on responsibility to fund identified redundancy in the industry.

However, Section 7 of the Stevedoring Industry Levy Act 1977 requires that local cargo be levied at 75 per cent of the rate applicable to overseas cargo. This essentially reflects the relative contribution to the Australian Stevedoring Industry Authority deficit referred to above. This compares to the 20 per cent differential applying under the voluntary levies.

Consequently, the amendment currently before the Senate seeks to amend section 7 of the Stevedoring Industry Levy Act to provide discretion to the SIFC to recommend a rate of levy on local cargo (loaded) less than 75 per cent of the rate on overseas cargo (loaded and unloaded) should the Committee see this as appropriate.

This would allow the redundancy component of the statutory special levy to be set closer to the initial 20 per cent.

The exercise of this discretion by the SIFC is appropriate for several reasons.

Firstly, with the long-standing 'industry deficit' now fully amortised, the special levies will, from June 1985, solely provide funds to meet repayments of borrowings made to finance redundancy in 1983 and 1984.

Secondly, scope to allow a reduction in the levy on local cargoes will offer some relief to those operating the coastal trade. Coastal operators at present are facing severe competition from road and rail transport and an improvement in their cost structure will assist the industry in providing a more cost-effective service to its customers.

Honourable Senators should note that an increase in the special statutory levy on overseas cargo will be necessary to maintain sufficient funds to meet the Finance Committee's obligations. However, this increase will be small because the special statutory levies apply to a far greater volume of overseas cargo than local cargo. In 1983-84 the levies applied to approximately 23.9 million tonnes of overseas cargo and 4.9 million tonnes of local cargo.

Furthermore, any such increase would be more than offset by the overall reduction on the special statutory levies which will occur as a result of the amortisation of the industry deficit component of those levies. As I have indicated, this is currently scheduled to take effect in June 1985.

There will be no cost to the Federal Government as a result of this amendment.

The Government believes that this amendment represents a further step along the path of improving the efficiency of this vital industry.

I commend the Bill to the Senate.

Debate (on motion by Senator Lewis) adjourned.