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Tuesday, 13 May 1980
Page: 2160


Senator KEEFFE (Queensland) - I do not propose to make a long contribution to this debate but I hope the Government will reply to a number of points. Mr Hurford, my colleague in another place, said, as reported at page 1339 of Hansard:

Australia has the advantage of having established advanced technology in many areas of small ship construction. It is close to a potentially large market in South East Asia. Some sales of ships built in this country have already been made to Burma. I mentioned the importance of exports of pharmaceutical products and of ensuring that there is an Australian-based pharmaceutical industry . . .

He went on to point out the same in relation to small ships. He stated:

Surely in these circumstances there is scope for the payment of a bounty at least for a few years, on ships intended for export.

Honourable senators will know that ship building in Australia has travelled a fairly rocky road over quite a number of years. Ship building ought to be encouraged. The Asian market is an area- as my colleague Mr Hurford said in the House of Representatives- in which there could be some expansion. The major point, of course, is that these actions must all be taken in the right perspective. The original Ship Construction Bounty Act-Act No. 79 of 1975-had an attachment which made reference to some payments that were made at that time. A bounty was paid to Carrington Slipways Pty Ltd, Old Punt Road,

Tomago, New South Wales, for the construction of two 29-metre tugs for Carrington Investments Pty Ltd, Campbell Cove and Botany Cove. The amount expended was $1,498,794.10. In the same year Mill Kraft Boat Yard Pty Ltd of 59 Byron Street, Bulimba, Queensland was paid $53,937 for the construction of a 158 gross tons research and collection vessel for Seaworld Pty Ltd.

I am giving some of the history of the bounties that have been paid. Prior to the introduction of the Ship Construction Bounty Act 1975 financial assistance to the shipbuilding industry was provided under section 47 of the Australian Shipping Commission Act 1956. During 1975-76 the net subsidy paid under these Acts was about $40. In looking at some of the payments made in those years I am a little worried. In particular I speak for the Queensland professional fishermen's organisation. That organisation has some problems in getting the ships built to which the bounty is applicable. I have noted some of the bounty payments made under the Ship Construction Bounty Act 1975 for the financial year 1976-77. Kali Boat Building and Repair Pty Ltd of 34 St Albans Terrace, Semaphore Park, South Australia, received a bounty for the construction of a 23-metre wooden fishing vessel for V., A., L. and A. Musumeci. 'K' Shipyard Construction Co. of 17 Mews Road, Fremantle, Western Australia, received a bounty for the construction of two 24-metre prawn trawlers for M.G. Kalis Gulf Fisheries Pty Ltd. Bob McLaren Pty Ltd of Smith Drive, Ballina, New South Wales, received a bounty for the construction of a 21 -metre timber trawler for R., R. and J. Musumeci. I do not know whether there is any relationship between the two organisations of that name which I have mentioned. Mill Kraft Boat Yard Pty Ltd, a company I mentioned previously, received a bounty for the construction of a 26-metre timber research and collection vessel for Seaworld Pty Ltd. The total amount paid in that period was $5,696,872.07.

A number of points in the second reading speech of the Minister for Social Security (Senator Dame Margaret Guilfoyle) confused me. We have never been given a proper breakdown of how this money has been allocated. In particular, is the money going only to those people who are well established in the fishing industry or in other aspects of the shipping industry at the expense of the smaller people who cannot get their ships constructed because they do not have the financial assets to be able to make a straight out purchase of a vessel? Some of the smaller shipbuilding firms which do not receive the bounty are not able to be successful. The second reading speech stated:

Under the Ship Construction Bounty Act 1975, bounty is currently calculated as a specified percentage of the lowest acceptable Australian tender price.

I do not know whether the Minister for Aboriginal Affairs (Senator Chaney), who is in the chamber, knows that there are whispers of scandal in this area. Is that statement in the second reading speech true? If the scheme has not been properly and honestly run there is a need for a major public inquiry to see how the bounty is being paid out and whether some of the bigger organisations are able to get away with typical commercial blue murder while small people, particularly small shipbuilders and people who are not able to afford expensive ships to carry on in the industry, are the subject of some discrimination. The second reading speech continued.

The revised scheme, as proposed by this Bill, will commence on 1 July 1 980, and will introduce a new simplified procedure under which bounty will be payable to eligible shipbuilders of vessels exceeding 1 50 gross tons and fishing vessels exceeding 2 1 metres in length . . .

The new scheme follows the Government's consideration of advice and recommendations by the Industries Assistance Commission in its report No. 219 of 25 July 1979 entitled Ships, Boats and Other Vessels Not Exceeding 6,000 Tonnes Gross'. With one exception, the Government has decided to adopt the Commission's recommendations for bounty assistance in so far as they related to that assistance after 1 July 1980. The Commission recommended that, in the first two years of the revised scheme, the industry be assisted by a bounty at the rate of 2714 per cent of the construction cost of a vessel. It also recommended that this rate be reduced to 25 per cent in the third year, to 2214 per cent in the fourth year and to 20 per cent thereafter . . .

The scheme, as proposed by this Bill, will thus provide for the payment to eligible shipbuilders of a bounty at the rate, in respect of vessels exceeding 150 but not exceeding 1,000 gross construction tonnes and in respect of fishing vessels exceeding 2 1 metres in length, for the purpose of commercial operations and based in an Australian port, and where construction ofthe vessel is commenced during the period 1 July 1980 and 30 June 1984, of 27V4 percent ofthe construction cost.

I ask the Minister. Who decides who the eligible shipbuilders are? What sorts of guidelines are laid down? Who decides whether the bounty will be paid? How is the application made? This scheme has to be able to stand up to public scrutiny. Whilst I am not making any charges at the moment, serious allegations are being made in some areas that manipulation is going on between some shipbuilders and some sections of the Government. If these allegations are not true a clear public statement will clarify the situation. If the agents of the Government are woried about the scheme there ought to be a public inquiry. After all, the shipbuilding industry is a struggling industry. The fishermen in particular are disadvantaged if they cannot get the types of vessels they require.

I appreciate that the scale of payments is clearly set out, but it is the manner in which the payments are made that is causing concern. It does not matter where we go to inquire about the matter. There is a cloak of secrecy in Government departments when we try to make quiet informal inquiries. We are fobbed off. The people in the departments say: 'I do not know. You will have to ask Mr Smith'. When we talk to Mr Smith he says: 'You will have to talk to Mr Jones. He is in charge of that '. I have always been reluctant to start a conflagration. If there is nothing to hide either the people handling the scheme do not know what they are about or they have been threatened by the Government into maintaining secrecy. The second reading speech also stated:

Finally in relation to bounty assistance, the Government has decided that the present requirement for a ship-owner to enter into an agreement to repay bounty if a vessel built with the assistance of bounty is subsequently taken off the Australian coast or registered abroad, will not be adopted under the new scheme. However, vessels built for export will remain ineligible for bounty.

That statement is a lot of gobbledegook. It does not even mean what it says. When public funds are up for grabs this Government has a very sincere desire to hide as much as it can so that it can carry on underground with its manipulation of taxpayers' money. This area is not exempt. The Minister may have a clear and unequivocal statement to expose publicly the guidelines. Quite frankly, we cannot get such a statement from the Department. The Bill itself, of course, has a tremendous number of advantages, but I think these rumours ought to be cleared up. If the Minister knocks around amongst people who are building ships and those who are trying to buy ships he will know precisely what I am talking about. ( Quorum formed).







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