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Federal Government says no need to apologise over North Star Cruises comments -

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MARK COLVIN: The Federal Government says it has no need to apologise to a small business cruise line about an incident related to the Government's proposed changes to shipping laws.

The WA-based shipping company North Star Cruises last week said senior government bureaucrats had told it that it could consider firing its local crew and employing foreign workers more cheaply.

The move would be allowed under the shipping legislation amendment bill, which is currently before the Senate.

If passed it would allow foreign flagged ships with foreign crews to pay international wages in Australian waters.

Last week, the Government denied it advised North Star Cruises, but bureaucrats last night admitted that the company was told it did have such "options" under the proposed changes.

Will Ockenden reports.

WILL OCKENDEN: Bill Milby represents a small business called North Star Cruises.

It runs a luxury passenger cruise service around the Kimberley, and the business is worried about the proposed changes to Australia's shipping llegislation.

Last week, as part of Senate inquiry into the laws, North Star Cruises made submission outlining a conversation that had taken place between Mr Milby and a senior Government bureaucrat.

BILL MILBY: She said, "Maybe you should look at de-registering an Australian ship - in other words taking it off the shipping register - perhaps put on a foreign flag, which will allow you to put on a foreign crew, which will reduce your wages cost."

WILL OCKENDEN: It's an account Mr Milby has never backed away from.

Last week, when it was asked about Mr Milby's submission, the Department of Infrastructure and Regional Development said it "did not provide this advice".

Last week, PM gave the department a chance to explain the discrepancies between its response and Mr Milby's evidence, but the Department said it had no further advice to add.

It wasn't just the Department denying Mr Milby's Senate submission allegations.

Last week, this from Prime Minister Tony Abbott.

TONY ABBOTT: Well, it's just not true.

WILL OCKENDEN: And this from the Deputy Prime Minister Warren Truss, in Parliament yesterday.

WARREN TRUSS: The comments which were attributed to a senior member of the staff of the department are inaccurate and do not reflect accurately the words of the conversation.

WILL OCKENDEN: So it was somewhat of a surprise when last night, under questioning from a Senate committee, the department's Michael Sutton admitted Mr Milby was correct when he said he'd been told he could hire cheaper foreign crew members.

MICHAEL SUTTON: We discussed the options that are available to all operators, shipping operators. There's a range of options that are available to operators. One of them is the reflagging option.

So we discussion those options; we did not give any advice.

WILL OCKENDEN: The key words there are "options" and "advice".

The Transport Department's Judith Zielke says while she did tell Mr Milby about his options under the proposed legislation of replacing his Australian crew with cheaper foreign workers, it never gave him advice.

SENATOR: He was telling the truth when he said that you discussed with him the option of going offshore et cetera.

JUDITH ZIELKE: Yes. But I don't believe I provided advice that he should take that action.

SENATOR: Well, anyhow that's subject to interpretation.

WILL OCKENDEN: In Question Time this afternoon, the Prime Minister interpreted the meeting between the officials and Mr Milby in the same way as the department has - that is he was given "options" not "advice".

TONY ABBOTT: I am quoting from the executive director of surface transport policy, Department of Infrastructure and Regional Development, who said yesterday, and I quote: "I did not say to Mr Milby that he should sack his crew and that he should reflag his vessel."

So this is a direct denial, this is a direct denial from the relevant official.

WILL OCKENDEN: The Federal Opposition has also been demanding that Deputy Prime Minister Warren Truss apologise for his comments.

But Warren Truss says he has no need to.

WARREN TRUSS: I haven't corrected the record because there's no error in the record. The record is correct. Now what I said yesterday was that Mr Milby wasn't advised to take any particularly course of action.

No one from my department has ever said to Mr Milby that he should sack his crew of reflag the vessel, as has been reported. That is simply inaccurate. There were discussions as confirmed with the transcript last night, that between Mr Milby and officers of my department to discuss options.

At no stage did the Government tell him what he should do. He makes his own decision as a responsible businessman.

WILL OCKENDEN: Mr Milby was in the gallery watching Question Time today, and told PM he's sticking by his submission.

He maintains, as he has all along, that he was told he should "consider taking our ship True North off the Australian Shipping Register" in order to "lay off our Australian crew and hire a cheaper foreign crew".

MARK COLVIN: Will Ockenden.