1.1
The
modest amendments in the Coastal Trading (Revitalising Australian Shipping)
Amendment Bill 2017 are welcome but do not go far enough.
1.2
Of
all the states, Tasmania has the most to gain from our Free Trade Agreements.
But importing nations and mainland states are price sensitive. Every extra
dollar per container will count against us as we compete with other states on
both the Australian and world markets.
1.3
The
Labor/Green changes to placate the extreme Maritime Union of Australia in the Coastal
Trading (Revitalising Australian Shipping) Act 2012 have had a devastating and
foreseeable impact. Rather than encourage and promote Australian shipping,
these changes have stymied growth in the number of ships servicing Australian
waters, whether foreign or Australian. The number of major trading vessels on
our coast has continued to decline. Further impacts include:
- Between
2000 and 2012, shipping’s share of Australian freight fell from 27% to just
under 17%, while the volume of freight across Australia actually grew by 57%;
-
Over
2010-30, Australia’s overall freight task is expected to grow by 80%, but
coastal shipping will only increase by 15% unless we act now;
-
There
aren’t enough ships to move our cargo and for some cargoes there aren’t any
Australian ships at all. Take for instance containers and cars. There are no
Australian container ships, and with the exception of the Bass Strait Ferries,
there are no Australian car carriers;
-
a
substantial increase in the freight rates experienced by shipping users – e.g.
Tasmanian company Bell Bay Aluminium recorded a 63 per cent increase in freight
costs in one year;
-
a
63 per cent reduction in the deadweight tonnage (or capacity) of major
Australian-flagged vessels with coastal licences from 2011‑12 to2013‑14;
-
around
1,000 extra administration hours per year on the industry to meet the red tape
of the scheme, as estimated by the Business Council of Australia;
-
the
fleet of major Australian registered ships (over 2,000 dead weight tonnes) with
coastal licences plummeted from 30 vessels in 2006‑07 to just 15 in
2013‑14; and
-
the
number of ships on Australian Transitional General Licences has dropped from 16
to just 8.
1.4
Indeed,
the Productivity Commission noted in its report into Tasmanian freight that:
Given its reliance on sea transport,
Tasmania is particularly affected by inefficiencies embedded in coastal
shipping regulation. This regulation should be reviewed and reformed as a
matter of priority.[1]
1.5
This
concern was echoed by the Tasmanian Minerals and Energy Council who say in
their submission that Tasmanian businesses:
...are the most
exposed in Australia to the regulatory framework for coastal shipping which is
in urgent need of reform.[2]
1.6
And
the Launceston Chamber of Commerce has said that:
Launceston and Northern Tasmania has
suffered considerably from increased costs and timeliness for exports and
imports of freight as a result of the enacting of the Coastal Shipping
Legislation.[3]
1.7
The
current system just doesn’t work. Tinkering around the edges will make it
better but it won’t let the industry fix its structural issues. We’ve got an
ageing fleet that isn’t being replenished.
1.8
In
2013, 49 per cent of the ships in the world fleet were under 15 years old and
79 per cent of the world’s gross tonnage was under 15 years old.
1.9
In
contrast, the average age of an Australian ship in the major trading fleet and
operating under a general licence is 23 years.
1.10
As
these ships get older, they get less efficient, they break down more and they
cost more to insure. This is why we’ve seen operators of Australian ships
progressively retiring their vessels and not replacing them.
1.11
Without
drastic change, the industry will continue to burn out slowly. The current
licensing system has little benefit for Australian shippers and ties up the
industry in red tape. A simple, one stop, one size permit will ease this
burden and make it clear Australia is open for business.
Recommendation 1
1.12
That
the Government progress wider coastal shipping reform in order to support jobs
and investment in Tasmania and around Australia. Reforms could be modelled on
those that were brought to the Parliament by then Minister for Infrastructure
and Transport, the Hon. Warren Truss MP and myself as Employment Minister in
the Shipping Legislation Amendment Bill 2015 which included:
- introducing
a single Coastal Trading Permit for all ships to replace the current tiered
system;
-
amending
legislation to allow the carriage of petroleum products;
-
applying
a minimum Australian senior crewing requirement for foreign ships remaining on
the coast for more than 183 days in a permit period;
- reducing
monthly trade reporting requirements to annual reporting;
-
removing
exemptions for large ships from the Coastal Trading Permit requirements; and
-
making
amendments to the Australian International Shipping Register to improve
competition amongst foreign flagged ships.
Senator
the Hon. Eric Abetz
Liberal Senator
for Tasmania
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