Speech - Shipping Legislation Amendment

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12 October 2015

It is astonishing to stand in this chamber and to listen to members opposite—particularly those from the island state of Tasmania—support this bill and its direct attack on Australian jobs and the Australian shipping industry. I am very happy to rise alongside my colleagues on this side of the House to speak in opposition to the Shipping Legislation Amendment Bill 2015 introduced by the Abbott-Turnbull government.

If passed, this bill will decimate the Australian shipping industry and, indeed, our maritime skill base. It is a textbook Abbott-Turnbull-government race-to-the-bottom approach to industry policy in Australia. We saw it with the renewable energy sector and in car manufacturing, and we see have seen it with naval shipbuilding.

Rather than destroying the shipping industry as this bill proposes, we should be supporting it, investing in its growth and building on the reforms of the previous Labor government. As an island nation, Australia has a strong national interest in fostering our own coastal shipping industry. Australia is dependent on shipping for 99 per cent of its trade, and we have the fifth largest shipping task of any nation.

The industry holds particular significance for my electorate of Newcastle. The Port of Newcastle is the world's largest coal export port and is one of Australia's largest ports by throughput tonnage. It has a 215-year history of commercial shipping and is the economic and trading centre for Newcastle, the Hunter Valley and much of northern and north-western New South Wales. The Port of Newcastle is a critical supply-chain interface in the movement of some 40 different cargoes and manages more than 4,600 ship movements every year. In addition to its important role as a trading port, it has been a key water berth for our nation's shipbuilders for nearly a century, with Royal Australian Navy and commercial ships being built at yards in Newcastle, Carrington and Tomago.

From HMAS Strahan and Condamine, built in support of our World War II defence in the 1940s, to the Huon-class minehunters built in their entirety in Newcastle in the 1990s, to today, with more than a third of the three air warfare destroyers being built at Forgacs, Newcastle is home to a highly-skilled shipbuilding industry.

Perhaps nowhere else is this government's neglect—this complete lack of policy to grow Australian jobs and Australian industry—felt more keenly than in my electorate of Newcastle. With more than 600 job losses at Forgacs shipyards since this government was elected, you can appreciate the serious concerns that Newcastle has about this legislation.

The Port of Newcastle is no doubt one of my electorate's most important economic contributors, leading to the employment of thousands of Novocastrians. Regrettably, this highly profitable port was recently privatised by the New South Wales Liberal government, and Newcastle continues to battle with Sydney to secure our fair share of the spoils.

More broadly, Australia is the world's largest island nation, with one of the world's longest coastlines, and 10 per cent of world trade moves to and from Australia by sea. I doubt there would be a stronger case put for the retention of a viable shipping industry as part of our strategic national interests.

Shipping is important in terms of our economy, our environment and our national security. Economically, a local shipping industry helps maintain control over both freight reliability and price stability for shippers. Environmentally, it helps protect coastal icons such as the Great Barrier Reef, with skilled local mariners that know our coastlines and reefs. And, from a national security and defence perspective, it provides ready links to a Navy and a well-trained and available merchant fleet. It is most definitely in our national interest and the interest of my electorate of Newcastle to have a strong, viable, local shipping industry.

In 2012, Labor gave the shipping industry in Australia certainty, and it is vital that the reforms we introduced are maintained. These reforms need time to work, and they need a government committed to promoting Australia's national interest in shipping.

Comparable nations all strongly regulate their coastal shipping for national interest reasons. This includes the United States—the free-market home of the world—which, via the Jones Act, bans foreign ships and crews from its coastal trade. It requires that all goods that are transported by water between US ports be carried on US-flagged ships—ships that are constructed in the United States, owned by United States citizens and crewed by US citizens or permanent residents. Now that is a committed government that appreciates the multiple and complex needs for a viable local shipping industry.

Canada, Japan and the nations of the European Union all do similar things. Contrary to shipping industry laws in the US, Canada, Japan and the EU, the bill we are debating this evening removes any obligation or incentive to revitalise the Australian shipping industry and replaces Labor's explicit preference for an Australian flag on ships working the Australian coast with complete indifference—leaving so-called flag-of-convenience ships to be placed on the same level as the Australian-flagged ships.

When a ship has an Australian flag, it is subject to Australian standards of safety, environmental compliance, taxation and industrial relations, both here and on the open sea. And it employs Australian seafarers. Flags of convenience are, of course, not a new phenomenon, but are no less damaging now than they have been in the past. Former Minister for Transport and fellow Novocastrian Peter Morris outlined some of the dangers associated in ships operating under flags of convenience in his well-known and highly-regarded 'ships of shame' inquiry in 1992.

A recent ABC Four Corners program outlined some of the current-day dangers, with their expose into the events on-board the MV Sage Sagittarius that saw three lives lost in 2012. One of the deaths happened as the ship pulled into Newcastle. So these matters are very close to the heart of Novocastrians. We know the value of shipping regulations.

The coastal trading laws put in place by Labor created a level playing field for Australian ships, rather than allowing undercutting on costs, including wages and workplace conditions.

The Abbott-Turnbull government, on the other hand, is more than happy to strip away the rights and conditions of Australian seafarers, proposing instead its very own version of WorkChoices on water. This was outlined in Budget Paper No. 2 this year, which exposed the government's true desire for 'better aligning employment conditions for ships based in Australia with international standards'. Since many shipping companies base their ships in Third World nations to minimise their pay levels and working conditions, this was an explicit statement that the government wants to impose massive reductions in pay and conditions on Australian seafarers.

We already see many ships flagged to countries where taxation and wages are much less and compliance less vigilant. Make no mistake: 88 per cent of the government's estimated 'savings' from this bill are due to sacking Australian workers and replacing them with 90 percent foreign crews. What the government's official modelling does not account for, however, is the cost of Australian jobs lost, of the lost local spending and local tax and the higher welfare spend resulting from this appalling package. This modelling ignores job losses and the impact on local economies affected, like communities in Tasmania, North Queensland and Newcastle, and is negligent.

As noted in the recent Senate inquiry, job losses will undoubtedly come if this bill is passed. Indeed, government officials are already advising shipping operators to sack their Australian staff and replace them with cheap, foreign labour to stay competitive. In sworn evidence to the Senate's Regional and Rural Affair Committee last month, cruise ship operator Bill Milby of North Star Cruises said that government plans to allow foreign-flagged vessels paying Third World wages to undercut Australian vessels on the Australian coasts would damage his business, which operates cruise vessels in the Kimberley region of Western Australia. Mr Milby said on 20 May and again on 16 June that he had discussions with Department of Infrastructure and Regional Development official Judith Zielke, who told him the best way to remain competitive under the changes was to register his vessel overseas, sack his Australian crew and hire foreign workers on lower wages.

This evidence is alarming and lays bare the real implications for Australian workers should this bill pass. Our shipping industry employs 10,000 Australian workers in direct and indirect jobs. It deserves a regulatory regime that allows it to operate on a level playing field. That is what happens in every other industry, including in the road, rail and air freight sectors. Labor's position is simple. If you seek to move freight by road in this nation, the truck driver is paid Australian-level wages and operates under Australian workplace health and safety rules. If you seek to move freight by rail, the train driver is paid by Australian standards and is required to operate in accordance with Australian law. The situation should be no different on the 'Blue Highway'. If you work in Australia, you should be paid in accordance with Australian conditions and legal requirements.

We on this side of the House have every right to be critical of the Liberal government's track record on Australian shipping. They have serious form in this regard. When Labor took office in 2007, the Australian shipping industry was in a state of decline. Under the Howard government, the number of Australian-flagged vessels working domestic trade routes plunged from 55 in 1996 to just 21 in 2007. Labor introduced new laws, designed to revitalise the Australian shipping industry. This followed the unanimous recommendations of a 2008 parliamentary inquiry and an extensive consultation program with all stakeholders between 2010 and 2012. The aim was to support the ability of the Australian shipping industry to compete within its own borders. The package included taxation incentives for flagging ships as Australian and to encourage employment of Australian seafarers, a new 'second register' with tax benefits to ships engaged predominately in the international trade, coastal shipping reform and a workplace package focusing on maritime skills development.

Since the day it was sworn in this government has promised to repeal these laws, undermining their effect and deterring investment in Australian-flagged shipping. This bill rips at the heart of Labor's package by removing a level playing field for Australian shipowners operating in their home waters in the coastal trade. It removes support for the industry and replaces it with nothing. This bill should be condemned. It attacks an industry that is vital to Australia's economic, environmental and national security interest. Having a strong shipping industry is undeniably in our national interest. Current laws, introduced by Labor, help strike the important balance between competition and the national interest. This bill, on the other hand, will decimate the Australian shipping industry. This government stands condemned for its lack of vision and policy to secure Australian jobs and an Australian shipping industry.

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Authorised by Sharon Claydon MP, 427 Hunter Street Newcastle