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Thursday, 15 September 2005
Page: 17


Senator MINCHIN (Minister for Finance and Administration) (10:06 AM) —I move:

That this 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—

PROTECTION OF THE SEA (SHIPPING LEVY) AMENDMENT BILL 2005

The Protection of the Sea (Shipping Levy) Amendment Bill 2005 amends the Protection of the Sea (Shipping Levy) Act 1981 (the Act), which enables the Australian Government to impose a levy on shipping for funding of pollution prevention, response and mitigation measures. It will remove the maximum level of the levy rate, enabling prescription of an appropriate levy rate through the relevant regulations.

The Act prescribes that a quarterly levy will be payable by ships visiting Australian ports in that quarter which are of 24 metres or more in length and carrying a quantity of ten tonnes or more of oil in bulk on board. The Act sets the upper and lower limits of the levy but the actual rate of levy, prescribed in terms of cents per ton, where ton is a unit of the net tonnage of the ship, is prescribed through the Protection of the Sea (Shipping Levy) Regulations.

The Australian Maritime Safety Authority (AMSA) administers the functions associated with the levy, with the levy revenue used to fund the National Plan to Combat Pollution of the Sea by Oil and other Noxious and Hazardous Substances. The Act currently prescribes a maximum rate of six cents per ton. The actual rate at present is 3.3 cents per ton. This rate has been unchanged since 1 July 1995.

Shipping is a vital service that supports Australia’s strong trading performance. The overall standard of shipping in Australian waters is steadily improving, and thankfully incidents are becoming much less frequent. This is due in no small part to the considerable efforts of the industry and maritime safety regulators to enhance the quality of shipping.

Australia to date has avoided a major pollution problem such as those experienced overseas. Nevertheless there is always the risk of an incident occurring, and even a single incident can have major harmful consequences.

Incidents overseas have shown the severe impacts of a major pollution incident, and that while international compensation regimes are generally highly effective, on occasions the cost of responding to an incident can exceed the liability and compensation limits that are available. In those cases, governments and affected citizens have had to bear the surplus costs, which may be many hundreds of millions of dollars.

The remaining 2.7 cents available within the current cap on the Protection of the Sea Levy (PSL) is intended to permit the recovery of costs to Government of any oil or chemical spill which would be irrecoverable from the polluter. In light of recent overseas experiences in dealing with major oil spills, it is likely that this buffer now could be inadequate to recover costs that the Government may have to meet in the event of a major incident.

In addition, the Australian, State and Northern Territory Government Transport Ministers, meeting as the Australian Transport Council (ATC) in June 2005, agreed in-principle to the introduction of a national approach to maritime emergency towage around the Australian coastline to minimise the risks of ship-sourced marine pollution. The unanimous preferred option for funding the national system, if it is to proceed, involves full cost recovery from the shipping industry via a single national levy and the PSL has been identified as the most appropriate vehicle for this purpose. A final decision will be taken later this year on the national approach, and the Government sees a strong prima facie case for proceeding with it.

A key element of the proposed national approach to emergency towage is the provisioning of a dedicated emergency towage service in the northern section of the Great Barrier Reef and the Torres Strait region. The service will be provided by an AMSA contracted vessel that will combine its emergency towage role with the provision of navigation aid maintenance services in the region. The combined role will minimise the costs of the new arrangements and, as the current navigation aids contract expires in June 2006, this will necessitate the new tender proceeding in the fourth quarter of 2005.

Owing to the likely cost of the vessel resulting from the tender, and the associated PSL revenue required, this will necessitate removal of the current legislative cap on the levy in time for the tendering arrangements to proceed. Removal of the cap will enable adequate funding to be made available through subsequent amendments in the relevant regulations. Removal of the cap is required by end October 2005 in order to meet contracting/tendering timelines associated with the new emergency towage arrangements.

The removal of the levy cap will facilitate the introduction of streamlined administration of the two principal ship-sourced pollution prevention and combat regimes, namely the National Plan and the National Emergency Towage proposal. Removing the levy cap will result in more expeditious access to required funding by removing the need for adjusting the legislative cap repeatedly as costs become progressively apparent. Given the burden of legislation on the House in any sitting period, it does not appear prudent that repeated amendments of the Act to adjust the cap are desirable.

There is sufficient safeguard in the system to ensure that this amendment effecting the removal of the cap will not enable unjustifiable levy rates to be set. The levy rate for any quarter will be prescribed by the regulations and, as these are a disallowable instrument, any amendments to these will be subject to the usual Parliamentary and regulatory scrutinies to justify the proposed rate of levy at any time.

Debate (on motion by Senator Minchin) adjourned.

Ordered that the resumption of the debate be made an order of the day for a later hour.