MUA all at sea over shipping facts and the need for reform

Media Release


19 September 2014

Predictable but erroneous claims by the Maritime Union of Australia (MUA) that changes to coastal shipping regulation will cost Australian jobs or maritime skills are not only wrong, but expose a desperate bid to stifle debate on vital industry reforms.

Deputy Prime Minister and Minister for Infrastructure and Regional Development Warren Truss confirmed the Australian Government is actively considering a raft of reforms to turnaround the stark decline in coastal shipping to rescue and, ultimately, rebuild Australia's domestic maritime sector.

“Recent hikes in Australian shipping freight rates have seen shipping sink as a transport mode, with customers reporting increases of up to 63% in coastal freight charges in just the first year of Labor's botched Coastal Trading Act,” Mr Truss said.

“Between 2000 and 2012 shipping's share of national freight fell from a paltry 27% to less than 17% at a time when Australian freight actually grew by 57%. That means more congestion on roads and rail, which drives up their costs too.

“The Australian Government makes no apologies for working to remove the red tape that is unnecessarily burdening our coastal shipping industry, so we can reduce freight costs for shippers and their customers and bring shipping back on an even keel with road and rail.

“My address to the some 300-strong audience at yesterday's Shipping Australia Luncheon drew a sigh of relief from an industry under the pump and heralded a wave of support from the Minerals Council of Australia, the Business Council of Australia, the National Farmers' Federation, the Australian Logistics Council, the Australian Mines and Metals Association and the Port of Brisbane.

“Current protectionist regulations are burdensome and ineffective. Even when an Australian shipper prevents a foreign ship getting a licence, the cargo often may not be awarded to an Australian carrier. The sale goes offshore. How can that be good for Australian business?

“Yesterday, the MUA claimed reform would cost jobs. On the contrary, the Government's agenda of removing red tape is expected to boost activity in the sector and grow the economy, which means more jobs in this country.

“Claims of 2,000 direct job s and 8,000 indirect jobs on the ‘chopping block’ are ridiculous.

“The 2013 industry census identified some 10,000 seafarers employed in Australia. Of that number, the largest single group are, in fact, Navy personnel (4,158), and many of the remaining seafarers (2,893) work in industries unaffected by our proposed reforms, such as the offshore sector, pilotage, dredging or in ports.

“Shore-based jobs in associated industries can only benefit by increasing shipping activity in Australia and reforms to the Act are the only way to have more ships operating around the Australian coast.

“The claim that 500 jobs in towage could be lost is simply not true, as towage workers are engaged regardless of whether a ship is Australian or foreign flagged.

“The Union's claims of an increase in the number of ships licensed as proof of the system working are a fantasy. There are 47 Australian-flagged general licence vessels under the Coastal Trading Act 2012, of which only 18 are major coastal trading ships, 28 are small coastal vessels and one is a scientific vessel.

“The five additional major vessels mentioned by the MUA have capacities of between 2,000 and 3,400 deadweight tonnes, which service the Torres Strait Islands. While this is an important local task it does not significantly add to our coastal trading capacity.

“More telling is that over the two years of Labor's Coastal Trading Act, Australia's coastal shipping capacity fell by a massive 64%.

“There is no basis for the MUA's speculation that is ‘highly likely’ we have seen increases in activity following changes in 2012.

“The Bureau of Infrastructure, Transport and Regional Economics confirms that Australian ports loaded 49 million tonnes of coastal freight in 2012–13, but that five years earlier (2007–08) it was over 59 million tonnes—a 2.4% average annual decline. This is the proof that the system does not work and the slide has continued.

“Finally, the MUA's claim that ‘no such regulation exists’ in reference to the industry example of ships remaining idle in port for a day before loading can begin exposes an appalling lack of knowledge of the sector in which the MUA operates.

“The system implemented by the previous Labor government includes a mandatory minimum 24-hour period to approve a variation, which means vessels can wait in port for a day for a variation to be approved before cargo loading can commence.

“The system is broken and we must act to fix it.

“Without action, coastal shipping will continue to lose market share to road and rail, adding to congestion in our cities, spiralling costs and causing extra wear and tear on land infrastructure. Only rapid reform will help to rescue coastal trading as a viable freight option.”