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Monday, 18 June 2012
Page: 3324


Senator JOYCE (QueenslandLeader of The Nationals in the Senate) (10:05): I rise to speak on a matter of immense importance to the Australian economy and in particular to the regional economy. Transport has always been crucial to Australia. We have the curse of being so far from many of the world's major markets—but maybe it is a blessing being so far from any of the world's major problems at the moment. However, this is an issue with transport, so if we want to compete on a global market then we must have globally competitive costs.

Whilst the success of our agriculture, mining, manufacturing and tourism industries cannot be faulted without an efficient and effective transport system, all their efforts will be for nothing if we cannot get the product to the purchaser. There is no point in growing wheat, barley or triticale if we cannot transport it to a market. There is no point in exploring for new reserves of iron ore, coal, rare earths or bauxite if we cannot get the shipping to take it to the ports near markets in South-East Asia. The question before us is not one between no transport network or some transport network but one about getting the most effective transport in place so that Australian industry can be encouraged and invigilated—and I love that word—by access to the world's best transport infrastructure at a reasonable price.

We have all seen the impact of the high Australian dollar on our exporting industries. We might be encouraged in some instances that the dollar is high because people are purchasing our products. It was a fortunate circumstance that we had South-East Asia to drag us through the global financial crisis with their purchase of coal and iron ore—obviously nothing to do with any crazy schemes of putting ceiling insulation in roofs or building school halls or absent-mindedly throwing out $900 cheques. But if we go to the actual structure of how we support our nation and to one of the fundamentals, which is transport cost, and start meddling in that in such way as to make our exports less competitive then we are really just having a shot at ourselves. It is the same as making our costs higher and less competitive. It makes it harder for Australian businesses to sell their products overseas. It is always a staple that we must understand that the only mechanism that really keeps the Australian economy going is those export based industries, predominantly based in regional Australia, that rely on the export of goods. In the whole GDP argument so often people misled by saying, 'Well, the majority of the GDP is in the crescent economy that exists between Melbourne, Sydney and Brisbane.' That might be the case, but the source of that wealth comes from regional Australia. Somebody has to put something on the table to make the money spin around. That person who puts something on the table must be able to get it onto a ship and export it to get those dollars into our nation to support the standard of living we expect.

   We are an island nation. Commodities rely on coastal shipping: 99 per cent of our exports travel by sea and only one per cent by air. In fact, 75 per cent of the value of our exports travel by sea and a large proportion of our interstate transport travels by sea. So we are really dealing with something that is fundamentally important to the fluid movement in the Australian economy.

We should apply this test to all transport bills that come before us: do these bills make it easier for our farmers, miners and manufacturers or do they make it harder for them and therefore increase the cost and their frustration? It is by this test that the coalition will oppose these bills. We oppose these bills because the government plans to introduce a complicated, convoluted and futile system which will frustrate the access to shipping for Australian business and thereby choke the business prospects of future opportunities. Because these bills do not meet our own objectives and are a threat to the competitiveness and vibrancy of our exporting industries, the coalition will move a second reading amendment that has been circulated in the chamber. This amendment says that we decline a second reading for these bills until the bills have been referred to the Productivity Commission for further consultation.

Australia has the sixth longest coastline of any nation in the world despite being only the world's 13th largest economy. We have the fourth largest shipping task in the world and shipping takes a quarter of Australian freight between the states. It is therefore fundamentally true that Australian businesses need access to the most affordable shipping we can provide to make them competitive. These bills will put into question whether we can achieve such an increase in shipping. If we cannot, that will put more pressure on our roads and more pressure on our rail network. It is quite obvious that, if we are not moving things by sea, we are going to have to sit behind a truck going down the Pacific Highway. We have also failed in other major tasks in this nation such as getting alternate transport corridors going such as inland rail, which is something that the Labor Party is always talking about, always announcing, but never building. Already we have 3,000 trucks a day going through a place such as Moree because of inadequate rail services. Coal is being transported along the roads of western Queensland. Trains, whilst leaving Fallon, the second-biggest grain receival depot in Queensland, have a maximum speed of 40 kilometres an hour. These are all signs of a government that has lost its way and has not invested in infrastructure, that is failing to take account of the fact that the times of prosperity that are currently seen in the Asian economy may not be there for an eternity, but our debt will be.

We see lately that the Indian economy is starting to plateau and we also see on the nightly news what is happening in Europe. We acknowledge that, if Europe falls out of bed, as the biggest economic bloc in the world and obviously the largest consumer of Chinese product, the Chinese demand for our commodities will peel off, and if the Chinese demand for our commodities peels off then the question we all have to ask ourselves is, how do we pay what is currently our $231 billion debt, how does Queensland pay what will be a $100 billion debt, how does New South Wales pay its debt, how does South Australia refloat its economy? All these questions are the realities of what is before us at the moment.

We have to be pragmatic and understand that we have to take the best advantages that are before us at the moment. We must take advantage of these global markets and we must make sure that we must remove whatever impediments exist between us getting that commodity out of the ground or off the paddock and into the market, not exacerbate them. This bill exacerbates them. I hear the Reserve Bank talking and the Prime Minister and the Treasurer talking about how we should have a spring in our step. I have been examining the spring in our step lately and I think it is Topy spring soles. We have at this point of time in our economy extreme concerns, especially in the commercial sectors, especially in small business, especially on the high street, where we are just not getting the trade we expected. The Labor Party's process of trying to fix this is to bring in a mining tax, that is find the person who is making some money and hit them over the head. What they should be doing is trying to make sure that a well-oiled economy gets that money flowing around by its own natural means. One of the ways to do that is by having an effective transport system, an efficient transport system.

The Labor Party's logic is completely counterintuitive. They are creating another impediment on our coastal shipping, they have failed to invest in our internal transport corridors, they are creating unnecessary impediments in such things as development of the Galilee Basin by disappearing overnight a la the live cattle trade debacle approach and throwing sand in the wheels of trying to get another export market going and trying to take advantage of the prices that we are currently seeing in South-East Asia. We have seen the Labor Party stand up and all of a sudden turn most of the Coral Sea into a marine park. This is not a sign of a government that seems to be watching the news at night and trying to work out what on earth is happening around the world. This is a government that is completely distracted. We have Minister Burke crying in his beer because he cannot go to Rio tomorrow. There are probably other things at home you should be talking about, Minister Burke. You should be explaining to us what on earth you are doing shutting down large sections of the Queensland fishing industry, creating yet another impediment; why you are creating these impediments on the export of coal; why you are so negative. They always complain that we say no, but what they do is say no to future prosperity and completely ignore what is happening on the television at night. These bills will establish a second register of Australian ships, to be known as the Australian International Shipping Register. Ships will be able to join this register provided they meet the eligibility criteria, including the requirement to have two senior Australian officers on board. These bills will help respond to the critical skills shortage that exists in the Australian shipping industry.

Whilst the coalition supports these changes, the bills have some concerning flaws that may be the result of an inadequate consultation process. Despite these bills being very complex, the consultation period for the draft legislation was open for only a few weeks. Once the bills were introduced, they included new provisions not previously contemplated. Unfortunately, despite some positive changes in these bills, because of these flaws the coalition remains unconvinced that these changes will see a significant increase in the number of Australian flagged vessels operating on our coast. This is not just the position of the coalition; it is supported by industry as well. For example, Shipping Australia stated in its submission that some of the provisions, at least in the Coastal Trading (Revitalising Australian Shipping) Bill 2012, are confusing and 'in our view require substantial amendment to meet what we understand to be the objects of the bill'. Tom Pinder, from Australian Coastal Shipping said:

The proposed legislation, as it relates to coastal container shipping, can only exacerbate this situation and will not result in any Australian flagged/registered ships valiantly taking up the challenge of carrying containers on the principal coast route, namely, east coast to west coast.

A continuation down the path of a one size fits all [policy] will result eventually in all of the current east west freight task being diverted to the inadequate infrastructure of road and rail with hugely increased costs and a totally detrimental effect on the carbon footprint—

Which the Labor Party seems to bang on about all the time. You are going to have to explain to every family on holidays that has a truck sitting in front of them with a container on the back that it could have been going by sea. It is not going by sea because, in their wisdom, the Labor Party has decided to make moving stuff by sea harder. So where else will they go? They will go down an inadequate rail network. An adequate inland transport corridor has just never been built by the Labor Party, and the roads are chock-a-block and are being torn to pieces, especially after the floods. Or they will go down the Pacific Highway, in amongst mum and dad and the kids going on their holidays. It is peculiar, but you get used to that hanging around with this crowd.

Even the department of transport itself is not promising that these bills will lead to an increase in the number of ships. The Australian Logistics Council has raised questions about how many ships this package would actually see come onto the register. The department said in its reply that it is 'not appropriate to speculate on how many will take advantage of this new legislation'. So there is no guarantee that these bills will increase the number of Australian ships, and there is no doubt that these bills will increase red tape and costs for those using Australian shipping.

One bill in this set, the Coastal Trading (Revitalising Australian Shipping) Bill 2012 abolishes part VI of the Navigation Act 1912 and, hence, abolishes the current permit and licensing system. These bills will lace that system with a three tiered licensing system: (1) a general licence which provides unrestricted access for Australian registered vessels crewed by Australians, permanent residents or foreigners with appropriate work visas to engage in coastal trading in Australian waters for a maximum of five years; (2) a temporary licence which provides limited access to engage in coastal trading for foreign flagged vessels or Australian international second register vessels for a 12-month period for specifically identified voyages; and (3) an emergency licence which provides extremely limited access in identified emergency situations such as natural disasters.

This three tiered system will create obvious difficulties. The new temporary licence category will only be issued where, according to the explanatory memorandum, 'those voyages where the required information is known, including expected loading dates, loading and discharge ports and cargo types and volumes'.

Remember these temporary licences are issued for a 12-month period. How can a user of shipping provide information on their expected loading dates 12 months in advance? Let us do an experiment on this. How many people in this chamber could tell us exactly where they are going in the next 12 months? How many politicians would like to submit a register for the next 12 months of exactly what flights they are going to catch and, if they go beyond that, provide a licence? This is obviously another form of bureaucracy that has passed the backbench of the Labor Party and, no doubt, had good oversight from Senator Doug Cameron, but it obviously has not passed anything that has to do with a reasonable expectation or understanding of the requirements for fluid movement of transport or to try to remove some of the impediments and red tape.

By doing this, we want to keep Australians in jobs. Let us keep the economy going and not the idea that you think you are going to create jobs by making things impossible. It just seems bizarre. It is another extension of the mad carbon tax idea. With the carbon tax they are going to cool the planet. Somehow, by putting up the price of power, it will keep people in work. No it will not. If you put up the price of power it will put people out of work. That is the only logical thing. You are putting people out of work by putting up the price of power and making life a misery for everybody who has to turn on the lights in their house and by shutting down the economy even further and putting more waste in the economy by saying that, even if you do manage to get something to the port, you are going to have an uncompetitive weight placed on you so that people exporting from Indonesia will have greater access to the market for coal than people exporting from Australia.

We have to understand that the global market, from all observations, looks like it is heading into a very uncertain time. We in this country should be doing everything in our power to realise that and to make sure that the mechanisms of commerce and the movement of things are as fluid as possible. We can protect our interests, but we do not protect our interests by winding back the clock and creating unnecessary impediments on the movement of Australian products from Australian fields and Australian mines. That is basically what this will do: it is just going to create an unnecessary overhead in the movement of Australian product. Noting that our major export is coal and our major sector is mining and that it is all moved by ship, we have to understand that this economy works on export dollars, on what you put on the ship.

Look at what people are wearing. This gentleman in front of me is wearing a shirt from China or somewhere and a suit that is pretty nice and could come from Italy or somewhere like that. The shoes are not from around here; they are from overseas. I do not know where the chair he is sitting on was made. Everything around us—including the computers—is made overseas. We live by the benefaction of things that come off a boat to us. Our cars predominantly come from overseas. Our fuel comes from overseas. The hotplate we cook on at night comes from overseas. I do not know where the lights are made but you would probably find they come from overseas. So everything is coming off a ship. If you do not believe it, think of your own household and think of where the things come from: they have come off a ship. So, if you are going to increase the cost of shipping, quite obviously you are going to increase your cost of living.

The only way we survive—and they do not send this for charity—is by somebody somewhere sticking something on a ship and sending it in the other direction. Who are these people that stick something on a ship and send it in the other direction? Let us face it: we have a manufacturing sector but it is not a large one, so we are sticking coal on a ship, we are sticking iron ore on a ship, we are sticking wheat on a ship, we are sticking barley on a ship and we were sticking cattle on a ship until they closed down the live-cattle trade.

All these things are the source of our wealth when that money turns. That is when that $20 turns up. That is when the five people at the table spin it and then the five people say, 'Well, the GDP of this table is now $100—five times $20.' But if that $20 had not turned up—so if that person who put the $20 on the table had not turned up—the GDP of that table would have been zero. And the person who puts that $20 on the table is regional Australia. Coal, iron ore, barley, sheep—that is where the money turns up from and then it spins around our nation's economy. But, if we are going to put in an impediment to that $20 turning up on the table, life for the rest of the people living off the table is going to become harder; it has to.

This is why we have to look at the practicalities of what these bills mean. We have got to make it as easy as possible for that 20 bucks to turn up at our table. We have got to make it as easy as possible for the exporting of coal so it makes it to its market and as easy as possible for the exporting of iron ore so it makes it to its market, and we have got to be time sensitive because these prices that we are getting at the market are peeling off and they are not going to stay up forever. If they peel off sufficiently enough our capacity to finance our debt and to finance the things that people have an expectation to receive—health services, education services, police services and defence services—will not be there.

When we look at these things and when we look at the legislation, we say at first glance, 'Oh well, it gets more Australians in the shipping industry jobs,' and I suppose it does, but that is very short term thinking because what it is going to do is make the system uncompetitive so everybody loses out. Caltex said in their submission that, given the variable nature of their operations, it was not possible—

The DEPUTY PRESIDENT: Order! Senator Joyce, your time has expired. Can I invite you to move your second reading amendment?

Senator JOYCE: Yes. I move:

Omit all words after “That”, substitute:

the Senate declines to give this bill and related bills a second reading until the bills have been referred to the Productivity Commission to:

(a) assess the Government's proposed “shipping reform package” for both international and coastal trades with reference to the current and historical arrangements;

(b) measure and discuss the economic and environmental impacts of reducing or increasing regulation of Australia's coastal shipping services to Australian manufacturing and industry dependent on coastal shipping services, the wider economy and Australia's coastal trading fleet, including passenger services;

(c) provide recommendations on policy options that would achieve the Government's objective for a viable, competitive shipping service in Australia for both coastal and international shipping that is in the national interest, lead to productivity gains and will not disaffect Australian manufacturing, industry and tourism;

and report on or before 31 December 2012.

The DEPUTY PRESIDENT: Thank you, Senator Joyce.