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Monday, 18 June 2012
Page: 3334


Senator COLBECK (Tasmania) (10:46): I rise to make my contribution to the debate on the five bills that make up the shipping reform package. I do so from the particular perspective of my home state of Tasmania, which relies intrinsically on shipping and transport for almost everything that happens in that state—for all manufacturing and for all the goods that come onto the island. Effectively, we rely on shipping for everything that we consume and everything that we manufacture, except for some high-value products which are flown in and out. The cost of shipping and the impact of that cost on our island state is manifest. It is one of the most important issues for Tasmania.

In her presentation, Senator Urquhart mentioned the $20 million contribution that the Commonwealth government has made towards the cost of export for export businesses in Tasmania. I have to say that the way it has managed that process, particularly through the estimates process during the last fortnight that we were here, has been nothing short of disgraceful. For the Department of Infrastructure and Transport to have told the Senate Rural and Regional Affairs and Transport Legislation Committee on the Wednesday evening that negotiations with the Tasmanian government had not yet been finalised and that final decisions were a couple of weeks away, while at the very same time the media had an embargoed media release from the minister indicating how some of the funding was to be spent, is nothing short of a disgrace, in my view. The committee clearly felt misled by the evidence that was given. The following morning I received a phone call from a witness to the Senate Economics Legislation Committee inquiry into these bills. That person told me that the evidence I had been given at estimates was wrong, which indicates to me that the Senate should consider very closely the evidence that was given to it during those hearings, despite the denials that have come back in writing from the minister.

Industry in my state thought that the $20 million was going to assist them with exports. They were quite rightly disappointed to find that $4 million was being put into Tasmanian government-owned infrastructure. Mr Deputy President, I know that you as a Burnie boy would have some real interest in the investment that is being made in the port of Burnie. That investment is important; I will not deny it. That is an important investment that is being made. I live on the north-west coast, in Devonport, like Senator Urquhart. I spend time with my office looking out over the port, watching the port operations and understanding how vital it is to our home state. But that funding should have been given to the industry to do what the government told them it was going to do and what the government gave them the impression it was going to do: assist them with their export costs in the short term. The money being spent on the Burnie port is a medium- to long-term solution and should have been part of another funding package, if it was going to be spent in that area. It spent another $1.5 million setting up a committee, effectively doing work the Tasmanian government should have been doing in the past. There is no integrated transport plan for my home state of Tasmania and we still suffer from ad hoc decision making in Tasmania. There was $150 million allocated to the port of Bell Bay for upgrade work, yet progressively shipping companies have been pulling out of there.

The impact on Tasmanian exports is part of that problem but it is also part of a global change in the way that the shipping industry operates. Globally, export ships are getting larger; they need access to the larger airports and therefore Melbourne is becoming the regional export hub. That is one of the reasons that we are being affected, but it is also one of the reasons that we need to make sure that our shipping around the Australian coastline is globally cost competitive. We are not going to be able to compete in global markets unless we ensure a competitive industry here in Australia. We have heard expressed over the last couple of years significant concerns about our manufacturing sector and its cost competitiveness and its place in the global market.

One of the significant costs being felt by our manufacturers is the cost of shipping around Australia. I will give an example, again from my home state of Tasmania. A major food manufacturing plant, Simplot, estimates that the cost to it of the removal of continuing voyage permits is in the vicinity of $7 million a year. Coles will not give it that money, Kentucky Fried will not, McDonald's will not and Hungry Jacks will not. It means that it will lose markets—and it has lost markets. When we see potato farmers in Tasmania complaining that they have to leave their potatoes in the ground and McCain move all its vegetable processing to New Zealand because it is not cost competitive, we know that the cost of shipping is one of the elements that is affecting that. That is $7 million for the additional cost of shipping that is making an impact on the industry.

The carbon tax is another cost, of $8 million a year, imposed by this government on that plant. None of those companies is going to give Simplot any of that money. Woolworths has said that the cost of its carbon tax is something in the order of $64 million. It is going to absorb that, but it means it will not accept cost increases from the carbon tax from any of their suppliers, either, unless they can justify it. Coles has said the same sort of thing. So the cost of shipping, the cost of getting produce in and out of this country, and particularly on and off my home state of Tasmania, is absolutely vital. If you go back and look at history you will see that whenever there has been an increase in access to Tasmania and particularly a cost reduction in access to Tasmania there has been a blip up in the economy. That is a clear indicator that access and the cost of access is vital to my home state of Tasmania.

Shipping, as I have said, is a global industry. We need to ensure that we are cost competitive globally. We cannot be imposing artificial restrictions on our shipping sector if we are going to be competitive. We do not want, as the petroleum industry has said to us, the potential impacts from shortages of petroleum and fuel in Tasmania because they cannot be certain or they cannot predict 12 months in advance, as this legislation determines, the shipping movements that they will need to move the petroleum backwards and forwards and in and out of the state. We just cannot afford to be putting those artificial restrictions in place. Those artificial impositions add cost and uncertainty to the economy, particularly for an island state like mine, which relies so heavily on transport.

I acknowledge, though, that the government have accepted, as I understand it, an amendment from the opposition in the House of Representatives in relation to temporary licences and some of the movements around the countryside of Australia. I think it really important to acknowledge the fact that they are prepared to consider some of the elements that we are putting up. But I really urge the government to consider this. We have had in the last six or eight months significant issues in my home state.

We have seen Western Australia and New South Wales complaining about the fact that they are having to prop us up with GST revenues because our economy is not going all that well. One of the reasons our economy is struggling is the impacts on companies like Simplot, because there is no global export shipping service coming into Tasmania since the AAA service pulled out in May last year. It has gone from costing something like $1,800 to get a container to Singapore to costing an additional $1,300 or $1,400 to get it to Melbourne and then the $1,800 to get it to Singapore. Those are the sorts of costs that we are talking about. Bass Strait is one of the most expensive stretches of water on the globe. We need to make sure that we are cost efficient in doing that if we want my home state—and I do want this—to be playing its part in the overall economy of this country. It is absolutely vital that we do that.

The objective of having a coastal Australian shipping industry is a noble one. I share Senator Ludlam's view. It is great to see the four ships that come in and out of my home town of Devonport and the two Australian owned ships that go into your home town of Burnie, Mr Deputy President, that are coastal ships and Australian owned. I acknowledge Senator Urquhart's comments about employment and the importance of those vessels to our local economy, but we have to be looking at this in the sense of a broader economy.

We have just had the Commonwealth government come in and put $324 million into the Tasmanian health system. Because of the state of the Tasmanian economy, we cannot raise the funds to look after fundamental services in our home state. If we have a strong economy and vibrant manufacturing, export, agricultural, mining and tourism sectors in our home state, we will be able to raise the funds that we need. It will take the pressure off the other states and their GST revenues and allow us to play our part.

My view is that the Greens support these bills because they are all about imposing cost on a whole range of industries. They are about imposing cost on the mining sector, the forestry sector and the fishing sector. They do not want to see economies of scale. They want to make them globally uneconomic to operate so they can have them shut down at a local level. That is why the Greens are supporting these bills. It is not because of any love for the maritime workers of Australia or the Australian shipping industry. They want to see us move back towards cottage-style business and industry. They do not want to see us operating at a globally competitive level. They just want us to scale everything back, to shut everything down, to close off huge areas of Australia to Australians and lock Australians out of Australia. That is why they are supporting this legislation. The Greens are quite happy to see all those additional costs imposed on our industries to make them unsustainable and uneconomical on a global scale. They are not interested in global markets. They do not want global markets. They want to close everything back down to a local level. That is the fundamental reason behind their stance.

The government claims to support our manufacturing sector, our agricultural sector and our food-processing industry, but these are real impacts and there is not just one. This government has done a number of things. I have already mentioned some of them. They have taken away the capacity for continuing voyage permits, adding cost to our food-processing sector, and they are losing markets as a result. We are losing jobs and volume. With that volume and those jobs comes economic viability. If you go below a certain level you will start looking at the viability of the entire business. We are seeing that with companies, as I said before, like McCain, who are leaving Tasmania and Australia with their vegetable processing.

Here we have a government who continue to impose all of these costs on our businesses and industries—red tape, regulatory burdens, labour costs and all of these things. We need to be considering how we remove costs and burdens from our businesses. Adding additional costs through unnecessary regulatory processes around our shipping is not the way to do it. As I said, the motive to have an Australian shipping industry is a noble one, but let us not do it at the cost of the rest of the economy. Let us not do it at the cost of my home state of Tasmania, because it is having that effect. There is no question that that is the case. There are examples of it on the record already. When I look at a company like Cement Australia, dry bulk goods shippers, I see that they are going to wear a significant cost because of the carbon tax. They are also going to wear a significant cost as a result of this legislation. I can tell you the workers at that plant are very, very concerned about their futures because they are having costs continually added to the business that they work in.

The government will tell us that the additional cost of the carbon tax is minimal. I can tell you that in Tasmania it is going to be felt more than the national average because we have the additional cost of shipping. I know it adds over one per cent to the additional cost of shipping that is going to be added in Tasmania because I have spoken to the businesses who are working out the costs. But it is not just those costs. Even TT-Line, the Tasmanian government owned business, have said that their shipping costs are going to go up in excess of 10 per cent as of 1 July, the carbon tax being one of the reasons.

So we continue to add and add costs to business. We then look at the economy and ask: why is the Tasmanian economy in such a terrible state? On the face of things, most people in Tasmania say it is because of the absolutely hopeless government we have down there that is in coalition with the Greens. It has just destroyed confidence. That, on the face of it, is true, but you have all of these other underlying effects. You have a government that is making ad hoc decisions without any plans, at the whim of the Greens, closing down industries and destroying the investment confidence in the state.

But you also have these other additional costs. The federal government never looks at them as a whole. They will use a national average to say the impact of the carbon tax on the cost of living, for example, is 0.7 per cent. But look at the Bass Strait islands, which also have important manufacturing industries. They are looking at significant costs to their businesses. King Island beef and King Island cheese are some of the best known brand names in Australia. The impact on them of the cost of shipping is going to be significant. It is already high because they are out in the middle of Bass Strait. They are 100 per cent reliant on shipping for the life of their businesses, yet here we have a government that continues to impose additional costs. Each time they say it is only an incremental cost, that it is only a small amount, but they do not add it all up.

So you put $7 million here as the cost on Simplot for the loss of continuing voyage permits and they lose one of their potato chip supply contracts in South Australia as a result. You put another $8 million on top of that for the cost of the carbon tax. How long before they are no longer sustainable? I have to say this company is being very proactive. It is working very hard cooperatively with its growers to ensure that it maintains contracts. It has taken the potatoes this year that it was contracted to take, but it does not have the capacity to take extra when the farmers have a good year. So when the farmers have a good year where is the payoff? There isn't one. Farmers are giving away potatoes with a bale of pea straw at the moment in Tasmania because they cannot sell them to the processors. That is the situation that is occurring. Those sorts of impacts are coming because this government continues to impose additional costs on industry. It might only be incremental each time the government does it, but it continues to add up.

The one thing that we need in this country is cost competitive transport. It is a large country. Huge amounts of our bulk goods, particularly our dry bulk goods, are shipped around the coastline and it is important that we do this in a globally competitive manner. We live in a global economy now. We are seeing the results of that. We are feeling the results of that in our economy. I am not saying they should pay Third World wages—I am not saying any of that, so do not accuse me of that—but we must not put in place artificial regulatory burdens that add additional costs. I have said a number of times that to have an Australian owned shipping industry is a noble idea, but it must be cost competitive so that the rest of our industries that rely on shipping—and my home state in particular is dependent on it—can thrive economically. Otherwise, you are going to have to continue to subsidise my home state. You are going to have to continue to pour money in there when you do not need to.

We need to change the government so we can get some decent decision making—that is granted. That has to occur and the sooner the better. The sooner we get rid of this absolutely hopeless Labor-Green government in Tasmania the better for all of us in my home state. But we do not need the Commonwealth government continuing to impose additional costs that make us unviable economically.