Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Training for ships of the future



Download PDFDownload PDF

ADDRESS

BY THE

HONOURABLE RALPH WILLIS, HP MINISTER FOR TRANSPORT AND COMMUNICATIONS

TO THE

MARITIME SYMPOSIUM

"TRAINING FOR SHIPS OF THE FUTURE"

WEDNESDAY, 3 MAY 1989

- 2 -

IT IS INDEED A PLEASURE FOR ME TO ATTEND THIS SYMPOSIUM WHICH ADDRESSES TWO ISSUES OF FUNDAMENTAL CONCERN TO THE FEDERAL GOVERNMENT - TRAINING AND SHIPPING.

BOTH OF THESE SUBJECTS LOOM LARGE IN OUR COMPREHENSIVE PROGRAM OF MICRO-ECONOMIC REFORM - WHICH IS BY FAR THE MOST INTENSIVE, SWEEPING AND PRODUCTIVE PROGRAM OF STRUCTURAL ADJUSTMENT EVER INITIATED BY GOVERNMENT IN THIS COUNTRY.

THE PURPOSE OF THESE MICRO-ECONOMIC REFORMS IS, QUITE SIMPLY, TO MAKE OUR INDUSTRY MORE EFFICIENT AND MORE COMPETITIVE, MORE PRODUCTIVE AND MORE EXPORT ORIENTED.

EVENTS IN RECENT YEARS HAVE CONVINCINGLY DEMONSTRATED THAT SUCH REFORM IS CRUCIAL TO OUR FUTURE ECONOMIC WELL-BEING.

THE COLLAPSE OF OUR TERMS OF TRADE IN 1984/85 EXPOSED THE FUNDAMENTAL WEAKNESS OF THE AUSTRALIAN ECONOMY.

THAT WEAKNESS STEMMED FROM OUR LAZY, SLOTHFUL APPROACH TO ECONOMIC DEVELOPMENT IN THE POST-WAR DECADES. SEDATED BY OUR BOUNTEOUS RESOURCES OF PRIMARY AND MINERAL PRODUCTS, AND SEDUCED INTO REGARDING OURSELVES AS "THE LUCKY COUNTRY" WE

DID LITTLE TO PREPARE OURSELVES FOR THE COLD HARD WORLD OF THE 1980S.

INDEED WE ENTERED THAT DECADE WITH HIGH AND GROWING LEVELS OF INFLATION, UNEMPLOYMENT AND INDUSTRIAL DISPUTATION, LOW ECONOMIC GROWTH AND DECLINING LIVING STANDARDS RELATIVE TO OTHER INDUSTRIALISED COUNTRIES.

WORST OF ALL HOWEVER WAS THE STRUCTURAL DISLOCATION WHICH THE TERMS OF TRADE COLLAPSE TOTALLY EXPOSED - THAT IS, THAT WHILE WE REGARDED OURSELVES AS AN INDUSTRIALISED AND DEVELOPED COUNTRY WE IN FACT HAD A THIRD WORLD PATTERN OF

EXPORTS.

- 3 -

NINETY PER CENT OF OUR EXPORTS WERE PRIMARY AND MINERAL PRODUCTS. WE EXPORTED LITTLE IN THE WAY OF MANUFACTURING GOODS OR SERVICES BECAUSE WE WERE HOPELESSLY UNECONOMIC AND UNCOMPETITIVE IN THESE AREAS.

OUR MANUFACTURING AND SERVICE INDUSTRIES WERE ESSENTIALLY GEARED TO THE INTERNAL MARKET - AND PROTECTED BY HIGH TARIFFS AND EXCESSIVE REGULATION. BEHIND THESE COMFORTABLE BARRIERS TO COMPETITION THEY HAD NO INCENTIVE TO BECOME MORE EFFICIENT. IT WAS FAR EASIER TO MAKE CONCESSIONS, ALLOW

INEFFICIENCY AND DEVELOP A "COST-PLUS" MENTALITY.

FROM THE TIME THE HAWKE GOVERNMENT CAME INTO OFFICE IT SET ABOUT CHANGING ALL THIS - BY RESTRUCTURING THE ECONOMY TO PUT IT ON AN ECONOMICALLY VIABLE FOOTING. ALTHOUGH OUR MAJOR SHORT TERM AIM WAS TO GET ECONOMIC AND EMPLOYMENT GROWTH ON THE MOVE AGAIN, WE WERE ALSO CONCERNED TO RECTIFY

THE STRUCTURAL IMBALANCE THAT BLIGHTED THE WHOLE ECONOMY.

A KEY AREA OF FOCUS WAS TO INCREASE THE VALUE OF OUR MOST IMPORTANT RESOURCE - OUR HUMAN RESOURCE. EDUCATION AND TRAINING POLICIES WERE SET IN PLACE TO DEVELOP A MORE EDUCATED AND SKILLED WORKFORCE. A MORE SKILLED WORKFORCE WAS SEEN AS FUNDAMENTAL TO OUR ABILITY TO BECOME MORE

EFFICIENT AND INTERNATIONALLY COMPETITIVE.

COUNTRIES LIKE JAPAN, WITH LITTLE IN THE WAY OF NATURAL RESOURCES, WERE DEVELOPING RAPIDLY BY MAXIMISING THE SKILLS AND INGENUITY OF THEIR WORKFORCE. THAT IS, MAXIMISING THE HUMAN RESOURCE. WE CLEARLY NEEDED TO VASTLY INCREASE OUR

EFFORT IN THIS AREA.

SIX YEARS DOWN THE TRACK THERE IS NO DOUBT THAT A GREAT DEAL HAS BEEN ACHIEVED. EDUCATION LEVELS OF NEW WORKFORCE ENTRANTS HAVE INCREASED DRAMATICALLY AS EVIDENCED BY

RETENTION RATES FOR STUDENTS COMPLETING YEAR 12 INCREASING FROM 36 PER CENT IN 1982 TO 57 PER CENT LAST YEAR.

- 4 -

THE NUMBER IN TERTIARY EDUCATION HAVE ALSO INCREASED CONSIDERABLY. BY THE END OF THE 1989/91 TRIENNIUM AN EXTRA 130,000 PLACES WILL HAVE BEEN CREATED IN TERTIARY INSTITUTIONS SINCE THE HAWKE GOVERNMENT CAME TO OFFICE.

THIS REPRESENTS A MASSIVE 43 PER CENT INCREASE.

OUR TRAINING EFFORT HAS ALSO SHOWN GREAT IMPROVEMENT. APPRENTICESHIP INTAKES HAVE RISEN FROM 36,000 IN 1982 TO A RECORD 54,000 LAST YEAR.

THE AUSTRALIAN TRAINEESHIP SYSTEM HAS BEEN INTRODUCED IN A VARIETY OF WHITE AND BLUE COLLAR OCCUPATIONS WHICH PREVIOUSLY LACKED ANY FORM OF STRUCTURED TRAINING. SINCE

THE SYSTEM STARTED OPERATING IN AUGUST 1985, 22,000 TRAINEESHIP POSITIONS HAVE BEEN CREATED FOR YOUNG PEOPLE WHO LEFT SCHOOL WITHOUT COMPLETING YEAR 12.

IN ADDITION TO THESE ACROSS-THE-BOARD DEVELOPMENTS VARIOUS INDUSTRIES HAVE SOUGHT TO REVISE THEIR OWN TRAINING ARRANGEMENTS AND IN NO INDUSTRY HAS THIS BEEN MORE SUCCESSFULLY UNDERTAKEN THAN IN THE SHIPPING INDUSTRY.

PAUL ECCLES FROM MY DEPARTMENT WILL ADDRESS YOU IN DETAIL ON THESE ARRANGEMENTS LATER IN THIS SYMPOSIUM. AS YOU WILL SEE FROM HIS ADDRESS, THE SHIPPING INDUSTRY HAS LED THE WAY BY BEING THE FIRST INDUSTRY TO DEVELOP THE CONCEPT OF MULTIĀ­ SKILLING, BROAD-BANDING OF CLASSIFICATIONS AND DEVELOPMENT OF CAREER PATHS.

THESE CONCEPTS ARE THE ESSENCE OF AWARD RESTRUCTURING.

WHICH IS TO BE BASIS FOR THE NEXT ROUND OF WAGES POLICY. AWARD RESTRUCTURING IS IN ITSELF A DRAMATIC MICRO-ECONOMIC REFORM. IT OFFERS BENEFITS TO ALL PARTIES.

FOR EMPLOYERS, IT PROVIDES A FLEXIBLE, ADAPTABLE WORKFORCE WITH OBVIOUS ECONOMIES COMPARED TO A SYSTEM OF NARROW

- 5 -

CLASSIFICATIONS AND RIGID DEMARCATION OF DUTIES. THERE SHOULD ALSO BE FAR FEWER DEMARCATION DISPUTES.

FOR EMPLOYEES, IT PROVIDES THE PROSPECT OF MORE JOB SATISFACTION BY ADDING VARIETY TO THEIR WORK, AND THE POSSIBILITY OF ADVANCEMENT TO HIGHER SKILLED OCCUPATIONS.

FOR THE NATION, IT SHOULD RESULT IN INCREASED NATIONAL PRODUCTIVITY AND GREATER CAPACITY FOR US TO TAKE ADVANTAGE OF NEW BUSINESS OPPORTUNITIES.

ONE OTHER FACTOR THAT IS CENTRAL TO ITS SUCCESS IN THE SHIPPING INDUSTRY IS THAT ONLY BY THIS MEANS IS IT POSSIBLE TO ACHIEVE SUBSTANTIAL REDUCTIONS IN CREW NUMBERS.

THIS IS NOT JUST AN INDUSTRIAL REALITY BUT ALSO A PRACTICAL REALITY. WITH LESS CREW IT BECOMES ESSENTIAL TO HAVE MULTI-SKILLED SEAMEN. THIS IS THE ESSENCE OF THE POLICY FOR CREW REDUCTIONS ON NEW SHIPS NEGOTIATED UNDER THE MARITIME

INDUSTRY DEVELOPMENT COMMITTEE (MIDC).

BEFORE MOVING ON TO CONSIDER DEVELOPMENTS IN COASTAL SHIPPING MORE FULLY I WOULD LIKE TO STRESS THE POINT THAT MULTI-SKILLING AND AWARD RESTRUCTURING REQUIRES A VERY CONSIDERABLE DEVOTION TO TRAINING BY BOTH PARTIES.

EMPLOYERS ARE FACED WITH A NEED TO TRAIN AN EXISTING WORKFORCE IN A WIDER VARIETY OF SKILLS, TO TRAIN NEW ENTRANTS MORE FULLY THAN PREVIOUSLY AND TO TRAIN WORKERS TO

HIGHER SKILL LEVELS. THOUGH THIS SHOULD BE BENEFICIAL TO THE EMPLOYER IN THE LONGER RUN IT DOES IMPOSE INCREASED TRAINING COSTS.

FOR WORKERS, THE INCREASED TRAINING OBLIGATION MAY BE SEEN AS BURDENSOME AND IRRELEVANT LEADING TO REJECTION OR NONĀ­ COOPERATION UNLESS THE BENEFITS TO INDIVIDUALS ARE FULLY "SOLD" TO THEM.

- 6 -

AS THE WHOLE WORKFORCE IS REQUIRED TO MOVE IN THIS DIRECTION THERE WILL BE CONSIDERABLE INTEREST IN THOSE INDUSTRIES THAT HAVE ALREADY TAKEN "THE PLUNGE". IN THIS RESPECT THE SHIPPING INDUSTRY IS LIKELY TO COME UNDER CONSIDERABLE

SCRUTINY.

THAT OF COURSE WILL NOT BE A NEW DEVELOPMENT. IN RECENT TIMES THERE HAS BEEN MUCH SAID AND WRITTEN ABOUT THE SHIPPING INDUSTRY, PARTICULARLY COASTAL SHIPPING, AND NOT MUCH OF IT COMPLIMENTARY.

INDEED, IN RECENT TIMES THIS INDUSTRY HAS BEEN PRESENTED IN A VERY BAD LIGHT. COASTAL SHIPPING HAS BEEN CHARACTERISED AS INEFFICIENT, UNCOMPETITIVE, DISPUTE-PRONE AND A BURDEN ON THE NATION. IF YOU BELIEVE SOME OF THE INDUSTRY'S CRITICS,

IT WOULD SEEM ALL OF AUSTRALIA'S ECONOMIC PROBLEMS COULD BE SOLVED BY REFORMING COASTAL SHIPPING, AND PERHAPS THE WATERFRONT.

THERE IS, HOWEVER, A GAP BETWEEN THIS GLOOMY PICTURE AND THE REALITY. I WOULD LIKE TO TAKE A LITTLE TIME TO EXPLORE THIS BECAUSE I THINK COASTAL SHIPPING PROVIDES A GOOD ILLUSTRATION OF THE PROCESS OF MICRO-ECONOMIC REFORM.

IT IS FAIR TO SAY THAT IN THE EARLY 1980S THE PICTURE OF COASTAL SHIPPING I HAVE JUST DESCRIBED WAS FAIRLY ACCURATE. JUST ABOUT THE ONLY THINGS THAT MOVED AROUND THE COAST WERE GOODS THAT COULD NOT PHYSICALLY BE MOVED ANY OTHER WAY, SUCH AS IRON ORE, BAUXITE, CRUDE OIL AND PETROLEUM PRODUCTS. COASTAL LINER TRADES HAD VIRTUALLY DISAPPEARED, APART FROM

THE BASS STRAIT.

THERE WAS, HOWEVER, A RECOGNITION WITHIN THE INDUSTRY THAT THINGS HAD TO CHANGE. UNLESS THEY DID THERE WAS NO FUTURE FOR COASTAL SHIPPING EXCEPT STAGNATION AND CONTINUING DECLINE.

- 7 -

AS A CONSEQUENCE, A TRIPARTITE COMMITTEE UNDER THE CHAIRMANSHIP OF SIR JOHN CRAWFORD WAS ESTABLISHED TO EXAMINE WAYS OF REJUVENATING AUSTRALIAN SHIPPING.

THE KEY RECOMMENDATIONS OF THAT REPORT, WHICH CAME TO BE KNOWN AS THE CRAWFORD REPORT, PROPOSED THAT UNIONS AGREE TO REDUCE CREWS ON NEW SHIPS AND THAT THE GOVERNMENT PROVIDE

TAXATION INCENTIVES, PARTICULARLY BY EXTENDING THE INVESTMENT ALLOWANCE TO AUSTRALIAN SHIPS TRADING INTERNATIONALLY AND BY PROVIDING ACCELERATED DEPRECIATION, TO ENCOURAGE THE INTRODUCTION OF MORE NEW SHIPS.

THE HAWKE GOVERNMENT MOVED TO IMPLEMENT THE REPORT EARLY IN OUR PERIOD OF GOVERNMENT. THE FIRST NEW "CRAWFORD" SHIPS CAME INTO SERVICE IN 1984 WITH CREWS OF 26 ON DRY BULK SHIPS. THIS WAS A SIGNIFICANT IMPROVEMENT ON PREVIOUS BEST PRACTICE OF 33 FOR SUCH SHIPS AND WELL BELOW CREW LEVELS FOR

SHIPS OF AN EARLIER GENERATION WHICH WERE STILL IN THE MID TO HIGH 30S.

A TOTAL OF 11 SHIPS WERE INTRODUCED UNDER THE CRAWFORD SCHEME WHICH REPRESENTED A CRITICAL TURNING POINT FOR THIS INDUSTRY. IT SHOWED THAT SHIP OWNERS AND THE UNIONS COULD WORK TOGETHER TO ACHIEVE A COMMON OBJECTIVE, INDUSTRY , REVITALISATION. IT SHOWED THAT THERE WAS A CONSTRUCTIVE WAY

FOWARD FOR THE INDUSTRY.

WHAT CRAWFORD DIDN'T DO WAS TO TOUCH THE WAY IN WHICH SHIPS OPERATED. THERE WAS STILL RIGID SEGMENTATION OF SHIPBOARD FUNCTIONS.

TO MAINTAIN THE MOMENTUM FOR REFORM THE HAWKE GOVERNMENT ESTABLISHED THE MARITIME INDUSTRY DEVELOPMENT COMMITTEE WHICH UNDERTOOK AN OVERSEAS MISSION TO EXAMINE THE BEST OF INTERNATIONAL PRACTICE AND EVENTUALLY DELIVERED A REPORT

ENTITLED "MOVING AHEAD."

- 8 -

THIS REPORT PROPOSED A RADICAL CHANGE TO THE TRADITIONAL APPROACH OF OPERATING AUSTRALIAN SHIPS. IT RECOGNISED THAT EFFICIENCY WOULD ONLY COME FROM OPERATING A SHIP THROUGH A TEAM, THE MEMBERS OF WHOM WERE MULTI-SKILLED AND CAPABLE OF MOVING FLEXIBLY FROM ONE DEPARTMENT TO ANOTHER.

THE FIRST STEP IN THIS PROCESS WAS TO CREATE AN "INTEGRATED RATING" WHO COULD WORK IN BOTH THE ENGINE ROOM AND ON DECK. SUCH AN INNNOVATION WOULD PERMIT SIGNIFICANT REDUCTIONS IN CREW SIZES FROM 26 ON A DRY BULK SHIP UNDER CRAWFORD TO 21.

THE KEY TO THIS CHANGE WAS TRAINING. IT WAS NOT SIMPLY A MATTER OF REMOVING JOBS FROM A SHIP.

RECOGNISING THE VALUE OF THIS INNOVATION, AND APPRECIATING HOW THIS EVOLUTION HAD BUILT ON THE GOOD WORK STARTED BY CRAWFORD, THE GOVERNMENT SUPPORTED THE MARITIME INDUSTRY

DEVELOPMENT COMMITTEE PROPOSALS.

ACCORDINGLY, IN 1987, WE INTRODUCED NEW TAXATION INCENTIVES TO FURTHER DEVELOP THE MOMENTUM STARTED UNDER THE CRAWFORD SCHEME. j

NOW, SOME TWO YEARS LATER, WE ARE STARTING TO SEE THE BENEFITS OF THE MIDC SCHEME. ALREADY THERE ARE FIVE SHIPS OPERATING IN THE AUSTRALIAN FLEET WITH MIDC CREWING LEVELS, THREE OF WHICH ARE SMALL GENERAL PURPOSE CARRIERS OPERATED BY STATESHIPS IN WESTERN AUSTRALIA.

A FURTHER 14 MIDC SHIPS ARE ON ORDER, WITH FIVE OF THESE DUE TO START OPERATIONS THIS CALENDAR YEAR.

WHEN ALL THESE SHIPS ARE IN SERVICE, THE AVERAGE CREW SIZE ON AUSTRALIAN TRADING SHIPS WILL BE 26. THIS COMPARES WITH AVERAGE CREWS OF 33 WHEN THE HAWKE GOVERNMENT CAME INTO OFFICE. IN OTHER WORDS, REFORMS IMPLEMENTED BY INITIATIVES

- 9 -

PROMOTED BY THIS GOVERNMENT WILL HAVE REDUCED CREWS BY OVER 20%.

BUT THIS IS NOT THE FULL STORY. OTHER SIGNIFICANT CHANGES HAVE OCCURRED WHICH HAVE ASSISTED IN CONSOLIDATING THE INTEGRATED CREW INITIATIVE. THUS, A NEW SOCIAL ENVIRONMENT

HAS BEEN DEVELOPED FOR MIDC SHIPS BY SUCH MEANS AS COMMON DINING FACILITIES FOR OFFICERS AND RATINGS, THEREBY HELPING TO BREAK DOWN THE RIGID DEMARCATION BETWEEN THE TWO GROUPS.

FURTHERMORE, THE NUMBER OF SEAGOING UNIONS OVER THE LAST SIX YEARS HAS DROPPED FROM SEVEN TO THREE AND WILL SHORTLY BE DOWN TO TWO. THIS HAS DRAMATICALLY REDUCED THE SCOPE FOR DEMARCATION DISPUTES. INDEED, SHIP TIME LOST DUE TO

INDUSTRIAL DISPUTATION BY SEA-GOING UNIONS HAS DROPPED TO LESS THAN A TENTH OF THAT EXPERIENCED IN THE EARLY 1980S.

FIGURES PROVIDED BY THE AUSTRALIAN NATIONAL MARITIME ASSOCIATION INDICATE THAT 4.1% OF SHIPS TIME WAS LOST IN 1982. IN 1983 THAT DROPPED TO 0.4% AND HAS CONSISTENTLY REMAINED WELL BELOW THIS LEVEL FOR THE SUBSEQUENT FIVE YEARS. IN TERMS OF ACTUAL SHIP DAYS LOST THROUGH INDUSTRIAL

DISPUTES, THE NUMBER HAS FALLEN FROM 1593 IN 1982 TO 72 LAST YEAR.

HOWEVER, DESPITE THESE QUITE SUBSTANTIAL ACHIEVEMENTS, AUSTRALIAN SHIPPING IS STILL NOT AS EFFICIENT AS IT COULD BE.

THIS IS FREELY ACKNOWLEDGED BY ALL WITHIN THE INDUSTRY AND INDUSTRY PLAYERS HAVE DISPLAYED A COMMENDABLE DETERMINATION TO CONTINUE TO IMPROVE, TO BUILD ON THE GAINS ACHIEVED TO DATE AND TO FINISH THE JOB.

THE GOVERNMENT MOVED TO HARNESS THIS POSITIVE ATTITUDE TOWARDS FURTHER REFORM IN NOVEMBER LAST YEAR WHEN I ESTABLISHED THE SHIPPING REFORM TASK FORCE UNDER THE

- 10 -

CHAIRMANSHIP OF IVAN DEVESON, CHIEF EXECUTIVE OF NISSAN AUSTRALIA, AND A LEADING EXPONENT OF THE NEED FOR REFORM IN OUR SHIPPING AND WATERFRONT INDUSTRIES.

THE TASK FORCE WAS A TRIPARTITE BODY WHOSE CHARTER WAS TO DEVELOP A STRATEGY TO ENSURE THAT AUSTRALIAN SHIPPING WAS COMPETITIVE, EFFICIENT AND RELIABLE, BOTH IN INTERNATIONAL AND COASTAL TRADES, AND THAT IT MET AT LEAST THE STANDARDS OF THE MARITIME INDUSTRIES OF OTHER ECONOMICALLY DEVELOPED NATIONS.

THE TASK FORCE REPORTED TO ME A FORTNIGHT AGO AND I AM SURE MANY OF YOU HAVE SEEN THE REPORT WHICH CONTAINS AN IMPRESSIVE PROGRAM FOR FURTHER REFORM OF THE INDUSTRY.

THE KEY FEATURE OF THE REPORT IS THAT THE PARTIES REPRESENTED ON THE TASK FORCE - SHIPOWNERS, UNIONS, SHIPPERS AND GOVERNMENT - REACHED AGREEMENT ON THE MEANS BY WHICH AVERAGE CREW SIZE ON MAJOR AUSTRALIAN TRADING SHIPS CAN BE REDUCED TO 21 OVER THE NEXT THREE YEARS. IN BRIEF, THIS

INVOLVES REDUCING CREW LEVELS ON EXISTING SHIPS, REDUCING CREWS LEVELS ON NEW SHIPS BELOW MIDC LEVELS, AND INTRODUCING A PART GOVERNMENT-FUNDED REDUNDANCY SCHEME TO REDUCE THE NUMBERS IN THE INDUSTRY BY ABOUT 1,000 - OR NEAR 20% - BY

1992.

THIS WOULD BRING THE OVERALL REDUCTION IN AVERAGE CREW SIZES RESULTING FROM INITIATIVES PROMOTED BY THE HAWKE GOVERNMENT TO 36%. AND IT WOULD HAVE BEEN ACHIEVED BY AGREEMENT AND WITHOUT CONFRONTATION OR DAMAGING INDUSTRIAL DISPUTES.

MOREOVER, WITH AUSTRALIAN SHIPS INTRODUCED AFTER 1993 OPERATING WITH CREWS AS LOW AS 14 TO 16, AS PROJECTED IN THE REPORT, AUSTRALIAN FLAG SHIPS WOULD BE IN A POSITION TO

MATCH THE SHIPPING PRACTICES OF OUR OECD COMPETITORS.

- 11 -

TO ACHIEVE THIS FURTHER REDUCTION IN CREWS AFTER 1993 WILL REQUIRE A FURTHER DEVELOPMENT IN INTEGRATION OF CREWS, INVOLVING A FURTHER INCREASE IN THE TRAINING AND SKILL OF RATINGS, AND ESPECIALLY BY INTRODUCING DUAL CERTIFICATED OFFICERS ABLE TO WORK ON DECK AND IN THE ENGINE ROOM. THAT OF COURSE REQUIRES MORE TRAINING TO DEVELOP OFFICERS WITH SUCH CAPABILITY.

THE TASK FORCE ACKNOWLEDGED THAT THE SHIPPING INDUSTRY CURRENTLY INVESTS SOME $12 MILLION A YEAR, OR 6 PER CENT OF ITS ANNUAL WAGES BILL, ON TRAINING AND THAT THIS INPUT IS WELL ABOVE THAT PROVIDED BY MOST OTHER AUSTRALIAN

INDUSTRIES.

NEVERTHELESS, IT RECOGNISED THAT EXTRA EFFORT WAS REQUIRED IF ITS RECOMMENDATIONS WERE ACCEPTED. ACCORDINGLY, IT RECOMMENDED EXPANSION OF THE CAPACITY OF THE AUSTRALIAN MARITIME COLLEGE TO PROVIDE THE NECESSARY TRAINING AND/OR PROVISION OF ADDITIONAL FACILITIES AT OTHER CENTRES TO CATER FOR DEMAND.

IF ALL THE GAINS PROJECTED IN THE TASK FORCE REPORT ARE BROUGHT TO FRUITION, AND I HAVE NO REASON TO BELIEVE THAT THEY WOULD NOT BE, THEN THIS INDUSTRY WILL HAVE PROVIDED A DRAMATIC DEMONSTRATION OF WHAT CAN BE ACHIEVED BY THE VOLUNTARY ACTION OF THE PARTIES AND SOME STRONG

ENCOURAGEMENT BY GOVERNMENT.

THERE IS A STRONG LINE OF THOUGHT IN CONVENTIONAL ECONOMIC CIRCLES THAT IS IMMENSELY SUSPICIOUS OF ANYTHING ACHIEVED BY AGREEMENT - ESPECIALLY IF UNIONS ARE INVOLVED. UNLESS THEY SEE BLOOD ON THE FLOOR THEY DON'T BELIEVE ANYTHING WORTHWHILE COULD HAVE BEEN ACHIEVED. THEY CANNOT CONCEIVE

THAT UNIONS AND EMPLOYERS COULD ACTUALLY AGREE TO TAKE DIFFICULT DECISIONS TO REFORM THEIR INDUSTRY WITHOUT BEING FORCED TO DO SO BY ACUTE MARKET PRESSURE OR BY SOME OTHER EXTERNAL FORCE.

- 12 -

THIS IS CERTAINLY THE POSITION OF THE INDUSTRIES ASSISTANCE COMMISSION (IAC), WHICH CONCLUDED ITS REPORT ON THE COASTAL SHIPPING INDUSTRY BY SETTING OUT A NUMBER OF REASONS WHY AN INDUSTRY PLAN WOULD NEVER WORK. THE IAC CLEARLY DID NOT CONCEIVE THAT AGREEMENT OF THE KIND OBTAINED BY THE SHIPPING REFORM TASK FORCE WAS EVEN REMOTELY ACHIEVABLE.

THE GOVERNMENT CONSIDERED, HOWEVER, THAT THE EVIDENCE OF THE PAST GAVE REASON FOR OPTIMISM THAT THE PARTIES IN THIS INDUSTRY COULD ACHIEVE GREATER EFFICIENCY BY WAY OF AGREEMENT.

THAT EVIDENCE RELATED TO THE ACCORD, AND THE VOLUNTARY LIMITATION OF WAGE INCREASES OVER THE PREVIOUS FIVE AND A HALF YEARS, AGREEMENTS REACHED ON INDUSTRY DEVELOPMENT IN A NUMBER OF MANUFACTURING INDUSTRIES, AND DEVELOPMENTS IN THIS

INDUSTRY THROUGH CRAWFORD AND THE MIDC.

WHAT WAS NEEDED, HOWEVER, WAS GREATER REALISATION BY THE PARTIES THAT THE EXTENT AND PACE OF CHANGE HAD TO BE INCREASED. I'M VERY PLEASED THAT THE PARTIES HAVE ACCEPTED THAT HAS TO HAPPEN - BUT I ’M NOT SURPRISED.

ONE OTHER ASPECT OF THE TASK FORCE REPORT THAT IS IMPORTANT HOWEVER RELATES TO ITS CONCLUSION THAT IT IS ESSENTIAL THAT THE INCREASED EFFICIENCIES OF THE INDUSTRY ARE PASSED ONTO SHIPPERS - THE INDUSTRY’S CUSTOMERS.

THE TASK FORCE DID NOT SAY HOW THIS SHOULD BE ENSURED, BUT THE GOVERNMENT IS CERTAINLY GIVING CONSIDERATION TO THE MEANS OF ENSURING SUCH AN OUTCOME.

THE GOVERNMENT'S TASK OVER THE NEXT FEW WEEKS WILL BE TO CAREFULLY APPRAISE THE SHIPING INDUSTRY'S LATEST PROPOSALS.

I AM NOT IN A POSTION TO SAY WHAT THE GOVERNMENT'S PRECISE CONCLUSIONS MIGHT BE BUT I CAN SAY THAT I, AND A NUMBER OF MY COLLEAGUES, REGARD SHIPPING AS BEING A REAL ACHIEVER OVER

RECENT YEARS. THE CHALLENGE NOW IS TO GO FURTHER AND FASTER AND SO ENSURE THAT THE INDUSTRY MAKES A POSITIVE CONTRIBUTION TO THE ECONOMIC DEVELOPMENT OF AUSTRALIA.

I'M SURE THAT ALL OF YOU WILL TODAY AGREE THAT THIS IS WHAT HAS TO HAPPEN TO YOUR INDUSTRY, AND WILL PLAY YOUR PART IN ENSURING THAT IT DOES.

- 13 -