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Australian shipbuilding industry



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AUSTRALIAN SHIPBUILDING INDUSTRY

Details of a major new package to assist the Australian

Shipbuilding Industry were announced today by the Minister for Industry and Commerce, Senator John Button.

The package comprises:

1. extension of the existing bounty to cover ships built for export; '

2. effective from today, removal of the two percent (2%) revenue duty from imported goods used in the construction or modification of ships eligible for bounty;

3. a proposed industrial agreement between the industry and the ACTU;

4. registration criteria for shipbuilders who want to claim bounty; and

5. establishment of a Shipbuilding Consultative Group to monitor progress in the industry and examine registration applications.

"The package should provide a much needed boost to this

industry", Senator Button said.

The Minister said that in January the Government had received a report from a Shipbuilding Industry Task Force. The report made several recommendations aimed at increasing the throughput of Australian shipyards.

Since the receipt of the Task Force report, Senator Button has had a series of discussions with the industry and the ACTU. During these discussions the industry and the ACTU agreed they would endeavour to achieve an industrial agreement covering a

range of issues. (The issues are set out in Attachment A to this press release) .

On the basis of this agreement, the Government has decided to extend to vessels constructed for export the bounty assistance currently provided to the industry (25% of the cost of construction).

An additional part of the shipbuilding package will be the introduction of registration criteria for purposes of bounty (copy of criteria is at Attachment B). These criteria will ensure that bounty is only paid to shipbuilders who have a clear long­

term commitment to the industry. The criteria will not, however, prohibit entry into the industry by a shipbuilder prepared to undertake the necessary commitment.

Senator Button said that a disturbing aspect of the world shipbuilding market which has adversely affected the Australian industry in recent years has been the advent of finely tuned finance packages. The Government believes that if the industry and the workforce make genuine efforts to improve efficiency, contracts should not be lost on the domestic market because of cost differentials brought about by the industry's inability to offer competitive finance packages.

When shipbuilders or owners believe that the major reason for the inability of the local industry to gain a contract on the domestic market was because of associated finance packages, the AlDC could be approached to discuss what role it might be able to

take in putting together an appropriate package. If, after thorough examination of the circumstances special measures appear to be necessary to meet the overseas offer, shipbuilders should approach the Department of Industry and Commerce on a case by case basis.

The Minister added, with respect to the export market, the Government believes that the extension of the bounty to vessels built for export combined with the improved Export Finance Insurance Corporation (EFIC), arrangements will be very beneficial to the Australian industry and the effects of these

arrangements should be fully tested before any consideration is given to new finance arrangements for export sales.

The Minister emphasised that the Government placed great importance on continuing progress in the discussions between the industry and the unions. Because of the importance of these discussions to the long-term future of the industry a

Shipbuilding Consultative Group (SCG) will be established to monitor progress. The SCG will consist of an industrialist, a unionist and a Government representative. The Group will report to the Minister at least every three months.

If the reports from the SCG indicate that continual progress towards rationalisation and improved industrial arrangements is not being ‘achieved, the Government will review the augmented assistance package. Subject to the combined industry/union

response the Government would consider whether the previously existing bounty assistance should also be reviewed.

The Minister added that the SCG would also be responsible for examining applications for registration from shipbuilders under the new criteria and that he would decide whether to grant or refuse registration following reports from that Group.

Details and operating dates of the new arrangements will be announced in the near future.

CANBERRA ACT CONTACT: P.M. RICHARDS

72 3076 (w) 54 9161 (h)

ATTACHMENT A

HEADS OF DISCUSSION AGREED BY THE SHIPBUILDING INDUSTRY AND UNIONS

1. Establishment of a single shipbuilding award or industrial agreement for the purposes of consolidating wages and working conditions throughout the shipbuilding industry.

2. Review of the trade training of shipbuilding apprentices with a view to "developing a training curriculum that provides apprentices in the industry with a broad skill base.

3. Development of training courses established to improve and upgrade employees' skills and efficiency relative to the requirements of modern-day shipbuilding methods.

4. Examination of the current working, practices within the industry for the purpose of eliminating unnecessarily wasteful labour practices that restrict the most effective and efficient utilisation of labour resources.

5. Examination of the functions of middle management, foremen and supervisors and trade union shop stewards.

6. Examination of trade union structures within individual companies including the extent to which company information is made available to trade unions and employees and their involvement in the company decision making process.

7. Establishment of technological agreements within which provision will be made for joint employer/union committees to continually monitor and recommend improvements in quality control and methods, and the introductions of new technology and equipment.

8. Establishment of agreement to improve health and safety of shipyard employees.

ATTACHMENT B v :

SHIPBUILDING BOUNTY ACT REGISTRATION CRITERIA

Registration will be for a period of one year. Shipbuilders , if not already registered, will be required to apply for

registration prior to commencing construction or modification of a vessel.

To qualify for registration a shipbuilder must:

be a registered Australian company, registered business or organisation

demonstrate financial and commercial capacity (by way of an independent auditor's report) to build a

bountiable vessel

employ directly, or through nominated sub-contractors , or have demonstrated clearly that an average of 20 persons will be dedicated to shipbuilding throughout the period of construction for the purpose of building

the bountiable vessel (this is to be substantiated by a periodic return)

have an ongoing apprenticeship scheme employing a ratio of at least one apprentice to eight tradesmen directly employed by the shipyard, and encourage all sub­ contractors to maintain a similar scheme

own or have access to shipbuilding facilities (including a waterfront site) which are assessed as adequate for building the vessel or vessels for which registration is sought.

Registration will be granted for a shipbuilder to build vessels up to a specified size and if appropriate of a specified hull material. NOTE :

(1) Registration in force at the date of implementation of these criteria will remain valid until completion of the bountiable vessel currently under construction or modification.

(2) If a shipbuilder registered prior to the introduction of these criteria is not successful in gaining a new

registration because of the inability to meet one of the above criteria, the refusal to register will be reviewed.

(3) If a new entrant clearly meets all but one of the criteria, the Minister will have the discretion to register the appropriate builder.

(4) If in any review it is decided not to renew a particular registration, vessels under construction or modification by that shipbuilder at the time of review will remain eligible for bounty.

(i)

(ii)

( iii)

(iv)

(v)