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Monday, 10 November 2008
Page: 10379


Mr SULLIVAN (4:02 PM) —I support the tabling motion for this report and welcome the member for Canning. As a member of the committee, he will find that it is a committee that works as parliamentary committees are expected to work: towards a common goal and without concern for the political allegiances of its members. I acknowledge the very good work of our chairperson, Catherine King, and our deputy chairperson, Paul Neville, and all the other parliamentary colleagues on the committee. I also acknowledge the great amount of work put into this inquiry by the inquiry secretary, Michael Crawford, and the secretariat and staff who have been engaged in the inquiry throughout. They include the committee secretary, Janet Holmes, who has moved on to other pastures and has been succeeded by Richard Selth; our researcher, Katie Ellis; and our administration officer, Emma Martin, who has also moved on and has been succeeded by Jazmine Rakic. I acknowledge the Hansard staff who travelled with the committee, through the extensive itinerary referred to by the member for Canning, to record evidence that was taken.

In opening my comments about the report, let me say that it was quite wonderful to see both sides of the shipping industry argument, if we can characterise it as that. Both the union and the shipowners have had a very positive response to the report that has been brought down by the committee. As the deputy chairman would appreciate, serving two masters is never easy, but being able to do that means to me that the committee has done very good work. The Maritime Union of Australia, for example, has indicated that if these recommendations are followed then the shipping industry ‘is set for massive revitalisation’. Similarly, the Australian Shipowners Association has said that if these recommendations are followed it will ‘improve, streamline and invigorate the coastal sector of the Australian shipping industry’.

We cannot separate coastal shipping from international shipping in any real context, particularly with the way things are going now. The comments of the ASA also go to the fact that, if implemented, these committee recommendations will have an outstanding effect on the Australian shipping industry in its entirety. There is information in the report about how the number of Australian-flagged vessels has been in decline in recent years. This is something that has been a concern for all of us in government in Australia. Simply put, the purpose of the exercise that we were asked to undertake was to look at ways in which we could increase the coasting trade’s share of the Australian domestic freight market. Typically this would involve cargoes that are not time-critical—cargoes that do not need to be carried by air or, in many cases, by road or, to a lesser extent, by rail. We have seen that there are a number of advantages in each of the forms of transport that are operating in the country today; similarly, there are a number of disadvantages.

Sea transport has a great environmental advantage in what we now commonly consider to be a carbon constrained future. It has advantages in the cost of infrastructure required to support it: the ocean surface does not need resealing every so often or new sections of it to be laid. If we are able to move some of our freight onto the sea lanes, it will relieve significant congestion that currently exists on our highway and rail networks. Road transport also has advantages. In particular, it has transit time advantages over sea freight. It has a significant convenience advantage. Somebody shipping by road transport can back their truck up to the loading dock at a particular business in Brisbane, for example, fill the truck up, drive it to a loading dock in Sydney and unload. It has convenience and handling advantages in that you load and unload only once. In the current circumstance, road transport has schedule certainty that sea transport is not able to provide. Rail transport has some advantages over road transport, particularly environmental advantages. Rail transport relocates congestion from the road to the rail. That is an advantage if you happen to be a road user—which most of us in Australia are.

We have three—if we leave out air transport for the really critical stuff—forms of transport. Each has some advantages and disadvantages. Significantly, our report has been able to create a set of recommendations which, if they are followed, will create a situation where sea transport, which has carbon, infrastructure, cost and congestion advantages, will get a greater share of the market. Currently sea transport accounts for about 24 per cent of the domestic freight in Australia. Significant proportions of that are carried in bulk cargo supply chain operations. A good example is the transporting of bauxite from the mine site at Weipa to the Boyne Island smelter. We carry most of the heavy lift cargo by ocean. These are the sorts of items that would be untenable on either railway line or road. But there are very few scheduled, regular shipping movements by Australian-flagged vessels on the coast. Most of the containerised and general cargo carried on the coast is carried on permit vessels from foreign-flagged nations. The results of this are that services are difficult to market to shippers and that shipping cannot really, because of the lack of fixed scheduling, get out to compete for cargoes in the marketplace. The permit system simply does not allow that to happen.

We on the committee were, of course, very mindful of the fact that we needed to protect employment for Australian seafarers who are protected by cabotage arrangements but not nearly as thoroughly as those arrangements in place in the United States of America. We were mindful of the fact that operating costs are substantially higher with Australian crews and—although the MUA is living in the real world in relation to matters like smaller crews, and in the dealings that they have undertaken with Canada Shipping Lines or CSL for crewing the Australian-flagged ships in its fleet—it is still cheaper to crew a ship with non-Australian ratings, although permit ships are required to pay Australian equivalent wages while they are operating on the coast in the coasting trade for that portion of their voyage. Most of our coasting trade occurs on interstate legs of foreign ships’ voyages.

We have taken a number of approaches. In the couple of minutes I have left to me, I will say that I think the support we have been given by both the union and the shipowners has been wonderful. The shipowners, of course, are quite impressed by the fact that they will have the option of opting for a tonnage tax in place of the tax regime that exists now—an option that has been used overseas quite successfully to revitalise registers—and they are happy with the return of the accelerated depreciation facility which was discontinued in 1996, which will make our shipping fleet into a much younger fleet. We have been deteriorating that way for a while.

We felt that port infrastructure needed to be given priority in the development of national infrastructure. We also thought that we need to establish a national maritime training authority—and I know that my colleague, the member for Forde, will have a lot to say about that; he is particularly keen on that area. That will give rise to employment opportunities for Australians who desire a seafaring career.

We have also recommended that this and, I guess, future reform of the shipping industry be overseen by a reform implementation group to be established within a re-established Australian Maritime Group. These, we believe, will stand the country and our shipping industry in good stead into the future, and I look forward to seeing the government’s response to this report and its implementation.