We wish to thank all witnesses who participated in this Inquiry and gave their time, expertise and effort to provide evidence to this Committee. This Inquiry has spanned across the 45th and 46th Parliaments, with all the evidence from the original inquiry being made available to the succeeding one. From the outset of their involvement, Senators McDonald and Rennick were optimistic about, and excited by, the prospect of investigating the revitalization of the Australian shipping industry.
With approximately 99% of Australian exports and a significant portion of domestic freight depending on maritime transport, the benefits of a strong and sustainable shipping industry are obvious. Unfortunately, the Australian shipping industry is currently in decline and has been for some time. Despite the length of the inquiry and the volume of evidence, the Coalition Senators do not agree with the overall tone and position of the recommendations outlined in the report. Furthermore, we believe that many of these recommendations will lead to greater industry decline.
Some of the most worrying recommendations include wage manipulations, possible changes to tax concessions, increasing the power of overseeing authorities, increasing training requirements and qualifications for crew as well as other increases in burdensome bureaucracy. When considering such recommendations it is important to acknowledge that cost and regulatory burden are the predominant causes of Australian shipping’s inability to compete internationally.
It is our belief that many of the proposed recommendations will increase regulation, decrease efficiency and further increase costs for businesses and end-customers. This would have devastating effects on the industry and the wider economy. Increased transport costs for shipping would see even greater substitution towards road and rail transport. This will further congest land transport bottlenecks and increase existing infrastructure stresses. Reduced throughput and higher marginal costs would also likely jeopardise the viability of ports and the jobs they provide.
An affordable, competitive shipping industry is not just about direct jobs; there are many other economic benefits, such as improving the viability of manufacturing. As it stands container transport rates are often higher between Australian capital cities than those between major international locations and Australian ports. Such prohibitive maritime transport costs are undermining investor confidence in other, seemingly unrelated industries, particularly those located in rural/regional areas.
With Australia facing a “freight challenge” over coming decades, which will see the freight task increase by over 35% by 2040, the need to increase our transportation capacity has never been more important. Sea transport should be of particularly interest as a solution, because aside from the ports themselves there are very little infrastructure costs incurred by government which will also reduce costs for consumers. In an unmanipulated economic/industrial environment, maritime transport should be extremely efficient.
COVID-19 has very clearly demonstrated the importance of maintaining critical supply lines within Australia. Throughout the pandemic the maritime part of our supply chain has performed well and has continued the vital function of importing and exporting supplies. What this event has done though, is prove once again the substantial value of this industry and of the need to ensure it remains sustainable.
We are great supporters of Australian shipping and believe it is critically important to the success of this country. We cannot though support many of the recommendations within this report for fear of inadvertently further burdening and weakening the industry.