Government full steam ahead on coastal shipping reform

Media Release


20 May 2015

To deliver Australian businesses the access to the competitive, reliable coastal shipping services they need, the Australian Government is moving ahead with coastal shipping reforms.

Deputy Prime Minister and Minister for Infrastructure and Regional Development Warren Truss, at a Shipping Australia luncheon today in Sydney, said Labor's meddling with coastal shipping has been a disaster for the industry.

“The problems are clear, they are many and they must be fixed,” Mr Truss said today.

“The fleet of major Australian registered ships, ( over 2,000 dead weight tonnes) with coastal licences is in sharp decline, plummeting from 30 vessels in 2006–07 to just 15 in 2013–14.

“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%. And, between 2010 and 2030, Australia's overall freight task is expected to grow by 80%, but coastal shipping will only increase by 15%.

“Labor's Coastal Trading (Revitalising Australian Shipping) Act 2012 (Coastal Trading Act) has not revitalised Australian shipping—in fact, it has torpedoed the industry. Over the first two years of the Coastal Trading Act there was a 63% decline in the carrying capacity of the major Australian coastal trading fleet.

“Unless we act now to correct these failings, businesses relying on coastal shipping will be sunk.

“Without changes to our economic and regulatory settings, shipping will not be able to deliver the competitive, efficient services that Australian businesses need.

“The new legislation I unveiled today will have built-in protections for Australian workers and also for wages and conditions for all seafarers on foreign ships operating primarily in the Australian coasting trade.

“Key features include a greatly simplified permit system that itself will reduce costs to business, and enhance access to competitive international shipping services.”

Mr Truss said the Government will ensure that Australia's rigorous maritime safety and environmental laws will continue to apply to all ships operating in Australian waters.

“Simplifying rules for moving cargo will show Australian waters are once again open for business,” he said.

“We will deliver cheaper freight costs for businesses and greater choice between shipping companies, which will lead to better services being provided to Australian industry.

“Domestic freight is growing exponentially and shipping must carry a much 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 Labor's Act has increased the price of coastal shipping services, hitting Australian businesses hard and adding uncertainty and regulatory burdens without improving the viability of Australian shipping or the quality of shipping services.

“Bell Bay Aluminium reports a 63% increase in shipping freight rates from Tasmania to Queensland in just the first year of the Labor's regime—from $18.20 a tonne in 2011 to $29.70 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. Clearly, that's ridiculous.

“And it is cheaper to ship sugar from Thailand to Australia than it is to ship Australian sugar around our own coastline. Again, that's crazy and self-defeating for the shipping industry, let alone our sugar industry and 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.

“It will also lead to less congestion on our roads—moving cargo from road to the sea will free up our road infrastructure for the transport of more valuable or time-critical cargo.

“Cheaper freight means more freight and more efficient services, all of which make Australian products more competitive internationally and domestically, saving jobs and creating more.”

More information on coastal shipping reforms is online at Setting the course PDF: 3227 KB ReadSpeaker