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The shipping industry: a backgrounder.

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3 September 1998






As announced today the government will form a working party to review progress on a range of issues including implementing company employment. A press release on the working party has been issued today separately.


Australian ship owners and operators have been negotiating with the maritime unions for several months over the implementation of reforms recommended in the Manser Report, commissioned by the Howard Government.


The Government’s consistent position has been that until genuine labour reforms were agreed to and implemented the fiscal incentives outlined in the Manser Report would not be considered.


Progress is being made. The payment of attendance money has ceased, redundancy offers have been made to 70-80 ratings so that the pooled labour system will be finally wound up in October, and a further round of redundancy offers for about 110 excess caterers have also been made. These manning level reductions are a consequence of the Coalition’s initiative to force the end of the Seamen’s Engagement System.


Mr. Reith pointed out that the Government wanted to see the industry become more competitive. At present an Australian flagged ship, on average, costs $2 million more per year to operate than ships of like nations. Australia needs a strong and viable shipping industry and must become more competitive through reform. Thirteen years of Labor had left the maritime industry in almost terminal decline. Since 1985 the number of Australian flagged vessels had fallen from 85 to 62. The industry had been the captive of militant unionism, featherbedding, beset with restrictive work practices and was an expensive impost on shippers and the overall economy.


Mr. Reith said that the Howard Government was taking a new approach. This was symbolised by last week’s sale of ANL. While the Keating Beazley Labor Governments had repeatedly stated their intention to sell ANL they had failed to do so in 1995 after the MUA had pulled a national waterfront strike and forced Labor to back down. The MUA was able to pull a national strike because Labor had emasculated the Trade Practices Act through the removal of the secondary boycott provisions. As a direct result of Mr. Keating and Mr. Beazley’s inability to stand up to the MUA and the ACTU, Australian taxpayers were forced to fund millions of dollars of losses at a weakened and dispirited ANL.


When the Howard Government came to office effective steps were taken to staunch the losses and the sale of ANL was initiated when Mr. Reith took responsibility for the maritime sector last October. Mr. Reith said that the ANL operations had a much brighter future in the private sector as part of larger shipping operations and Australian taxpayers would benefit from the Government’s resolute action to sell ANL.


For its part the Government has moved ahead with key components of maritime reform. After the 1996 election, the Government implemented its commitment to remove PAYE tax breaks and reinstate the sunset clause of the Ships Capital Grants Act.


In March, the Government withdrew the Australian Maritime Safety Authority (AMSA) from the administration of the Seamen’s Engagement System. Extracting AMSA from the SES was a catalyst to the negotiations between shipowners and the maritime unions aimed at ending the SES.


The government has also initiated a sweeping review of the Navigation Act, 1912 which is outmoded and inconsistent with other key Commonwealth legislation such as the Workplace Relations Act. As far as practicable a modernised Navigation Act will bring legislation applying to seafarers into line with employees in other industries. The first phase of the review has already been completed and legislation introduced into Parliament. Phase Two of the review will see a complete rewrite of the Navigation Act.


The Government reduced navigation levy charges by 15% through efficiencies achieved at the Australian Maritime Safety Authority. Further savings will flow from the recent implementation of new enterprise agreements on the AMSA maintenance vessel, “Cape Grafton.”


In December, 1997, the Government streamlined the Voyage Permit System, making it cheaper and easier for shippers to apply for both Single and Continuing Voyage Permits. At the same time, cabotage was removed for cruise liners and ships trading to Christm as Island.


Looking ahead to further Government initiatives aimed at reducing shipping costs, the Government’s tax reform package through removal of the fuel excise will result in a $24 million per annum saving to the shipping industry in the cost of bunker fuel. A further $10 million per annum will be saved by the offshore oil and gas fleet.


In the area of maritime safety and search and rescue the Government has consolidated the civilian search and rescue function into a single unit under AusSAR and placed it under the jurisdiction of AMSA. AMSA’s search and rescue unit is acknowledged as a world leader with several high profile, international rescues to its credit.


The Government commissioned the Easson report for advice on Maritime and Stevedoring Occupational Health and Safety issues. The report revealed serious OH&S problems in the maritime sector with nearly one rating in four being injured in 1995-967.


Following the Easson Report the Government commenced work on the development of uniform OH&S indicators for the industry and instructed the Australian Maritime Safety Authority to develop OH&S reporting mechanisms for Australian ships. Recommended changes designed to improve occupational health and safety performance in the maritime sector have been circulated to the industry for comment.


The Government is committed to continuing with its maritime reform programme which will lead to a viable Australian shipping industry.



For further information contact Ian Hanke: 0419484 095