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Monday, 18 June 2012
Page: 3346

Senator THISTLETHWAITE (New South Wales) (11:36): I am pleased to speak in support of the Shipping Reform (Tax Incentives) Bill 2012 and related bills. They are vitally important to the ongoing sustainability of Australia's domestic shipping industry: setting the right conditions for operators to do business and maintain Australian flagships, restoring fairness to the architecture of the system of industrial relations that underpins Australian flagships, promoting health and safety in what is an inherently dangerous occupation and, importantly, providing incentives for the provision of training and the skilling of the workforce to ensure its long-term sustainability. We are an island nation and 99 per cent of Australia's international trade is conducted by ship. More than $200 billion worth of product is transported from our ports every year. This represents around 10 per cent of global sea-based trade. Australia has become the fourth largest carrier of sea trade on the planet. But despite the fact that 99 per cent of Australia's trade is conducted by ship, less than one-fifth of the trade is carried by an Australian merchant fleet. There are currently only 22 major trade ships carrying the Australian flag. This compares to 55 flagged Australian ships during the years of the Keating government in 1995. So over that period we have had a reduction by more than half in the number of Australian flagships and that slow decline has happened while Australian exports to the rest of the world have been growing. That is why these bills are so important and that is why the Senate must pass these bills. These bills mean that productivity and growth will be returned to the Australian shipping industry. They are a significant set of reforms that will revitalise an industry that was unfortunately forgotten during the Howard years.

The Shipping Reform (Tax Incentives) Bill and the Tax Laws Amendment (Shipping Reform) Bill are the first pillars of the reform package and they are vital to Australian shipping operators. Our shipping companies are competing against foreign operators that do have competitive taxation regimes and regulation of employment arrangements. The reforms contained in these bills will ensure that Australian flagged ships are provided with the same incentives: a zero rate of tax, meaning income from Australian flagged passenger and cargo vessels will not attract company tax; accelerated depreciation arrangements, meaning that Australian flagged vessels can now depreciate ships over 10 years instead of the current 20-year period; rollover relief for selected capital assets, meaning that when a ship is sold for profit the tax liability can be deferred by replacing the sold vehicles; tax exemptions for seafarers working overseas on qualifying vessels, meaning that a refundable tax offset will be available to Australian employers of Australian resident seafarers engaged in international trade; and, a royalty withholding tax exemption where vessels are leased by an Australian company from foreign owners under a demise or bareboat charter. These are a fantastic new set of opportunities and set of conditions for a fair and reasonable shipping industry in Australia.

The Shipping Registration Amendment (Australian International Shipping Register) Bill is the second part of the reform package. That will ensure that the Australian International Shipping Register will help our industry grow and take advantage of the enormous opportunities created by growth in the export shipping sector. Vessels on the international register will be Australian flagged. When international vessels undertake an overseas voyage, they must provide the crew with terms and conditions in line with the Maritime Labour Convention. This is the same practice used by major maritime nations that offer international registers. When Australian international shipping register vessels work domestic coastal routes, importantly all the crew, irrespective of nationality, will be covered by the Fair Work Act. This will remove that insidious practice that occurred under the Howard government of 'ships of shame' operating in Australian waters, employing foreign crew and giving them pay and conditions inferior to the basic standards provided by fair industrial relations laws in this country. Importantly, these bills will also promote safety. The crews will be covered by Australian domestic occupational health and safety laws and also Australian environmental laws.

This issue is close and dear to my heart. My grandfather was a wharfie. He worked at the Hungry Mile in Sydney for many years in the days when it was tough to work as a wharfie. He was quite badly injured on the job and hospitalised for a significant time. He broke his leg and fractured his pelvis and was in hospital for a couple of months. During his period of hospitalisation not once did anyone from the company that he worked for come to visit him or his family, with any concern for his welfare. These were the days before adequate occupational health and safety laws and adequate coverage of a person's income through workers compensation.

Naturally his family were concerned about how they would survive. But they survived for one reason. That reason was that my father was a member of his union, the Waterside Workers Federation. During his period in hospital, at least once a week and sometimes two or three times a week the union organiser, a fellow by the name of Tas Bull, someone who went on to lead that union and become a great leader and promoter of workplace rights in this country, would visit. He made sure that our family never went without and that the family had the ability to survive. That is the tradition in which the union, now the MUA, has operated in this country. That is the reason why my grandmother always said to me in the wake of that accident, 'Always join the union and remember what the union did for our family. We wouldn't have survived without them.' No-one from the company ever came down to visit my grandfather in hospital and ensure that he was okay and that the family could survive. But his mates on the wharves, the wharfies, who were members of the union, regularly carried the hat around and ensured that there was an income for the family to survive. So it is important that we continue to promote occupational health and safety and adequate workers compensation laws for people working on our wharves and for those who are working in seafaring around our coast. These laws do that. They restore fairness and equity which, unfortunately, was diminished during the years of the Howard government. I find it somewhat remarkable that Senator Sinodinos would refer to what occurred on the wharves in 1998, when we saw those insidious images of dogs and people in balaclavas attacking Australian workers and their conditions, as a breakthrough. It was nothing less than a disaster. It was a disgrace and, in the end, was ultimately found to be illegal by the Australian courts.

This government does not promote those sorts of practices and will not allow them to occur on Australian wharves or in our domestic shipping industry. That is why these laws are important. We prefer to promote cooperation between seafarers and their employers and between wharfies and their employers as a means of promoting productivity and ensuring that we are dealing with the issues faced from international competition. These bills will promote cooperation.

The bills will provide for the introduction of the Maritime Workforce Development Forum. Our maritime industry currently employs around 14,000 people and one of the greatest challenges it faces, similar to the rest of Australian industry, is an ageing workforce. The current average age across the sector is almost 45. Skills, education and training must be at the heart of any industry to see it grow and prosper. The Maritime Workforce Development Forum, which is an important part of these reforms, will address areas that are fundamental to building our skills base. This will include a workforce plan for the medium term to address issues, including the ageing workforce and the most immediate skills gaps.

The bills are a product of an extensive period of consultation with industry, and amendments to the bills have been introduced in response to issues raised by stakeholders through the parliamentary inquiries. In February 2009, the Minister for Infrastructure and Transport formed an advisory group to work together to implement the Rebuilding Australia's coastal shipping industry report recommendations. A discussion paper was released on 1 December 2010 and submissions from the industry provided a great amount of feedback on the proposed reforms that are before the Senate today.

I do take issue with some of the comments raised by Senator Sinodinos and other speakers in relation to Simplot's comments both to the parliamentary committee and publicly regarding these reforms. The comments made by others in respect of the comments by Simplot are quite simply misleading. Simplot's comments relate to increased costs for services at Bell Bay. They are not related to shipping reforms. Simplot denies the $7 million figure that has been put by others, so it is misleading for some senators to come into this place and use issues associated with other occurrences in the world economy as opposition to these reforms.

The feedback from many involved in the consultation period and from the parliamentary inquiries was positive. Many understand that these reforms are vital to Australian shipping. This is a sector of our economy that must be provided with the right tax incentives and conditions for investment and the right conditions to ensure fairness and reasonableness in the provision of wages, conditions and occupational health and safety laws to ensure that this industry can grow and flourish. The Stronger Shipping for a Stronger Economy package corrects the mistakes made by previous governments in an important industry for our economy. It replaces years of decline and sets our shipping industry on a steady course with an even keel towards growth and prosperity. I commend the bills to the Senate.