Opening Address: Australasian Marine Pilots Institute—International Pilotage Conference

Speech

MCCS001/2015

06 October 2015

Australian National Maritime Museum, Sydney

Good morning delegates and it's wonderful to be here and as Rob has just indicated, thank you so much to the sponsors, without whom these sorts of conference could not go ahead and also to the organisers congratulations because these sorts of events do not happen overnight.

It is good to be here with you at the Australian National Maritime Museum and I would like to start by acknowledging a few people: President of the International Marine Pilots Association (IMPA), Captain Simon Pelletier, Secretary-General of the IMPA, Nick Cutmore and the President, as I say, of the Australasian Marine Pilots Institute, Captain Rob Buck. Those people have done and continue to do a huge amount of work for your industry and they certainly deserve acknowledgement.

I would also like to acknowledge the Deputy Prime Minister, Warren Truss, who has asked me to convey his apologies and asked me to represent him today. He is sorry that he could not be with you this morning but he did wish me to pass on his very best regards and good wishes for a successful conference.

I have to say it is an honour to stand in for Warren following my recent appointment as his assistant minister. The desire to represent the interests of regional Australia—particularly the Riverina region, I appreciate there aren't too many coastal shipping lanes and not too many ports at Wagga Wagga, but indeed it was established as a river port of sorts along the Murrumbidgee River and it is the place I call home. It's what inspires and motivates me every day that I'm the Member for Riverina and indeed a Member of Parliament.

Warren is a man who stands for honesty, integrity and reliability in government. In fact he's the longest serving party leader in Canberra at the moment. He has been the Leader of the National Party since December 2007—so, this is his eighth year in the job.

And as I say that's a very good achievement and he's certainly a person who is highly regarded by his peers and I must say that's right across the Parliament. His personal focus is to drive development in infrastructure, building for the future of the nation and investing in significant projects at the local and indeed the national level to improve productivity—and I'm so glad that the new Prime Minister Malcolm Turnbull has actually got an assistant minister for productivity, also one for innovation. They are going to be vital roles which are going to drive economic growth into the future.

Warren takes a great interest in maritime issues; he really does and is highly committed to strengthening Australia's maritime connections. As you know, these connections are critical to advancing Australia's prosperity—we rely on maritime transport for 95 per cent of our merchandise exports.

The Government certainly understands that good maritime links depend absolutely on the skills of dedicated people—people such as those before me and not the least of course of those of Australia's marine pilots. And you perform a very difficult and vital job.

Marine pilots like airline pilots are passionate about their profession. They go to work each and every day, mindful of the personal and public consequences of being involved in marine incidents. Marine pilots regularly work with mechanical breakdowns, difficult ship's crews and during adverse weather often during unpredictable and irregular hours.

Simply getting to work can be hazardous as they climb rope ladders rigged by crews with sometimes skills which are varied on the ships in all weather conditions.

Now Dr Tim Chambers has recently undertaken a study on pilot stress and fatigue, and he'll be presenting at the conference because the previous report into those difficult demands, those physical and mental strains, faced by a lot more airline pilots and air traffic controllers, they have difficult jobs, but to compare marine pilots with them—the last submission in a Parliamentary Inquiry into that was done way back in 2000. That's 15 years ago, and so it'll be interesting to hear Dr Chambers' report and to read about the rigors faced by current-day marine pilots.

And as I say it is a difficult profession. The number of times when the actions of pilots have prevented major disruptions is literally immeasurable. We can fathom the scale of the consequences if they had not intervened; one recent estimate puts the cost of a capital city port closure at $180,000 per minute.

Marine pilots have been indispensable to the growth of nations for millennia; they appear in the Bible—that's just what you need at this hour of the morning isn't it? A politician quoting the bible, but it's in James, I checked. And their operations were first regulated in Ancient Greece around 400 BC.

I don't believe in making hard and fast judgements about the relative difficulties of different professions—each has its own rips and shreds, including politics, but it is very clear that marine pilots operate in a very demanding space. You face the additional demands generated by technological change—as Bob mentioned earlier—including developments in e-navigation, which is revolutionising your workplace on ships' bridges.

And above all, the services of your profession are very high in demand. Some 84 licensed pilots deal with more than 5,300 vessel movements each and every year through the Great Barrier Reef, and 320 pilots handle more than 60,000 vessel movements through Australia's ports. They're big numbers.

Together, these challenges are at least equal to those encountered in some other high-pressure vocations such as long-haul airline pilots and the aforementioned air-traffic controllers. So, I applaud the efforts of the Australasian Marine Pilots Institute to develop the capacity of marine pilots, and to promote your professional interests.

This Conference is a particularly useful response to the challenges that pilots face. Significant opportunities often coincide with inherent challenges, and some of the pressures you face reflect very positive trends, and that's good. These include the continuous expansion of Australia's economy since the early 1990s. This has itself been boosted by the growth in our international trade, which all means for scaling-up the demand for pilots' services. And just this morning we've finalised the Trans-Pacific Partnership, the TPP, which will also increase our international trade.

Australians are well aware of the contraction in international demand for our mineral exports. But there are still major opportunities for Australia in international markets, particularly with our growing band of trade partners. The fall in our commodity terms of trade in fact places a premium on sustaining export drive and economic reform—including through the Government's efforts to expand our preferential trade agreements, and as I say our TPP.

And now, as economic data show on a daily basis, Australians need to be firmly focused on growing our national productivity. A great deal of this focus relates to infrastructure—an area that Warren Truss is absolutely driving in this space. And delivering better infrastructure is a high priority not just for Warren but for the entire Coalition Government. This clearly involves building new infrastructure assets, and the Government has made commitments of a record $50 billion to this vital investment.

But we also need to focus on making the most of our existing assets, on delivering infrastructure more effectively, and on cutting red tape to attract private sector investors into infrastructure supply.

Last May, the Government received the Australian Infrastructure Audit, which assessed the nation's infrastructure needs out to 2030. The Audit identified key challenges and importantly inherent risks, such as the increasing congestion and bottlenecks Australia's transport networks face without additional action.

A focal point for these pressures will be on freight movements through and beyond our ports, and that's where you come into play.

The audit found that container movements through Australia's ports are projected to grow by 165 per cent between 2011 and 2031, while non-containerised trade is projected to grow by 138 per cent over the same time. These are staggering projections, and this growth is already underway. Between July and December 2014, the overall throughput at Australian ports increased by 3 per cent, relative to the same six months in 2013. Australia's marine pilots clearly made a major contribution to achieving this growth—and labour productivity at container ports increased by 2.7 per cent in 2013–14.

But of course, other factors also come into play. In particular, land-side efficiency continued its decline in all ports except Adelaide, with average truck turnaround time increasing by 5.7 per cent. This decline highlights a critical link between developments on the land and sea-sides around our ports.

As you would know, container vessel sizes for Australian ports are increasing, and larger post- Panamax size vessels—5,000–13,000 twenty-foot equivalents—are likely to progressively replace smaller vessels. This will place greater strains on the land-side capacity of Australian ports, but if operators respond with more truck movements they could simply create greater congestion levels.

This risk shows that there is an opportunity for rail freight in Australia to grow its market share, help reduce traffic congestion and support the nation's productivity and growth. Rail freight is a sensible and strategic response to integrating the land and sea needs of our island continent.

The Government is supporting several priority freight rail projects around the country which are designed to integrate with our ports, and thus your work with them. In particular, the Melbourne to Brisbane Inland Rail project will meet future transport needs towards ensuring that Australia has the logistical muscle and the infrastructure backbone that we so desperately need. The Government sees many compelling reasons for building it, and we have committed $300 million to accelerate the project. And I know how excited Warren Truss, and indeed the former Nationals Leader and the former Deputy Prime Minister John Anderson, who is one of the drivers, one of the key drivers of the project, are about this huge investment.

Inland Rail will provide an efficient freight connection between Melbourne and Brisbane, and also better connect Adelaide and Perth with the east. The project will complement the existing road and rail networks, and will dramatically boost productivity. This is a significant project for the nation, and will bring enormous benefits to Australian farmers as well as the manufacturing sector by interconnecting the regions with the freight corridors, and the freight corridors with our major ports.

A great example of the impact will have is in my own Riverina region, which is one of the great food and fibre bowls of this nation. For farmers in the Riverina, the Inland Rail project in combination with a trifecta of trade agreements with South Korea, Japan and China, and with the TPP, provides exciting new export capabilities via a direct rail route from the paddock to port, increasing our global competitiveness by connecting farms and regional cities with our ports.

The Delivery Plan, released just last month, indicates Inland Rail will generate economic benefits of around $22.5 billion. Pre-construction is well advanced and the Implementation Group has submitted a delivery plan and business case to the Deputy Prime Minister, which he released, as I say, just last month. The Government will now consider the report in the context of next year's budget.

Australia has not seen a project of this scale since the Snowy Mountains Hydro-electric Project, which was completed in 1974. The Inland Rail project will open up new opportunities and development, and we very much look forward to it.

Here in Sydney, the Government's Moorebank Intermodal Company recently concluded an agreement with the Sydney Intermodal Terminal Alliance to develop the Moorebank intermodal freight precinct. The project will have an import-export terminal able to handle more than a million containers annually, and an interstate terminal with the capacity to deal with up to 500,000 containers a year. And critically, it will have a direct rail link to Port Botany.

Over 30 years the project will generate close to $9 billion in economic benefits to New South Wales and indeed the nation. In Western Australia, the North Quay Rail Terminal at the Fremantle Port has been expanded to accommodate longer trains, without time-consuming break-ups and shunting. These are just three of the projects completed, underway, and under development across Australia.

Together they will create a much closer knit between our major ports and the other elements of the nation's transport networks—and this will form an important part of our economic growth going forward. But—as you'll all be well and truly aware—we need a strong shipping industry to have a well-balanced freight and transport network. Australia's current regulations fall well short of meeting our needs for competitive and efficiency in shipping.

The fleet of major Australian registered ships with coastal licences is in sharp decline, from 30 vessels in 2006–2007 to just 15 in 2013–14. Between 2000 and 2012, while the volume of freight across Australia actually grew by 57 per cent, shipping's share of the national freight task fell from about 27 per cent to under 17 per cent. Perhaps the most troubling statistic of all is the 63 per cent decline in the carrying capacity of the Australian coastal trading fleet since 2012. The case for reform is therefore crystal clear, and we have taken a major step towards it as a Government.

In June this year, the Deputy Prime Minister Warren Truss introduced the Shipping Legislation Amendment Bill 2015 into Parliament. The Bill seeks to ensure that Australian businesses and industries can take maximum advantages of the opportunities created by global connectivity. The Bill addresses key challenges that Labor's 2012 legislation created. The central feature of our legislation is a single, streamlined permit for all ships-Australian and foreign—operating along our coast, replacing the existing three-tiered licence system.

With domestic freight growing exponentially our shipping network must carry a larger share of the load. Industries relying on shipping say the Coastal Trading Act is a barrier to competition and market entry by foreign ships. Evidence supplied by shippers, shows that this Act has increased the price of coastal shipping services, hitting Australian businesses hard and adding regulatory burdens without improving the viability of Australian shipping or the quality of shipping services. Bell Bay Aluminium reports a 63 per cent increase in shipping freight rates from Tasmania to Queensland in just the first year of Labor's regime—from $18.20 a tonne in 2011 to $29 a tonne in 2012. We know that the cost of shipping dry food powder from Melbourne to Brisbane is the same as shipping the same product from Melbourne to Singapore, and clearly that's unsustainable, that is quite frankly ridiculous. And it's cheaper to ship sugar from Thailand to Australia than it is to ship Australian sugar around our own coastline. Again, it's crazy and self-defeating for the shipping industry and we don't need that, let alone our sugar industry and indeed local manufacturers.

The extra cost for Australian businesses using an Australian vessel is outlandish and unsustainable at some $5 million a year more than using a foreign vessel. Reform is required to simplify the rules and reduce the cost to business. Importantly, Australia's rigorous maritime safety and environmental laws will continue to apply to all ships operating in Australian waters, and that is important. For foreign ships operating primarily in the Australian coastal trade, the Bill incorporates provisions to ensure the presence of senior crew with Australian work rights, and safeguards for the wages and conditions of all seafarers on these ships. These are important protections for Australia's maritime skills-base and for the appropriate application of Australian workplace laws.

The Government also understands the need to maintain career paths for Australian junior officers to provide these skills. And Rob mentioned this earlier. The seemingly unending decline of the fleet of Australian trading vessels is the single biggest threat to the careers of these Australian seafarers, of these Australian junior officers. The Government recognises that we need to train the pilots of the future, we absolutely do, and we will continue to work with the industry to ensure that careers in the maritime industry are viable and they are encouraged. However, without reforms to promote a viable shipping sector it is highly likely that the current declining trend will unfortunately continue.

A stronger shipping sector will be a fillip both to the industries which use shipping and for jobs that rely on shipping. Currently the Bill is being reviewed by the Senate Rural and Regional Affairs and Transport Legislation Committee, which is due to deliver its findings on 12 October, so that's not far away, and we await them with great interest. The recent Senate inquiry has provided encouraging evidence that the very negative predictions about the effects of the reforms on seafarer employment contained in some submissions to the inquiry will be substantial overestimates, and we certainly hope that is the case. We firmly believe that if we make better use of just a fraction of the capacity of the foreign ships that operate in Australian waters, it will make a major difference to the long-term efficiency of Australia's maritime links.

To sum up, and I hear a sigh of relief from all of you, sustaining Australia's economic path and the benefits it brings is a key priority for the Coalition Government. We are committed to driving the reforms needed to enhance the nation's maritime connections on both its sea and land sides—reforms which will greatly benefit our nation. But the skills of marine pilots and other mariners are essential to realising the full benefits of these reforms—we will always need the red and white flag.

Thank you very much for doing what you do on behalf of our nation each and every day, for the safety aspects, for the logistical aspects and for driving that freight task right throughout and across Australia. I wish you all the best for the remainder of your conference. Thank you very much.