Ports Australia Breakfast
20 October 2015
Hyatt Hotel, Canberra
Thank you very much, Vincent [Tremaine—Chairman, Ports Australia and CEO, Flinders Ports], and good morning everyone.
Firstly, my thanks to Vincent and his fellow directors, and to David Anderson [CEO, Ports Australia] for your great contributions to a better Australian port network.
A good gateway is the key to any venture, and Australia's ports rank among our most essential economic and national development assets.
They handle 99 per cent of Australia's merchandise exports.
And it is startling that the container throughput handled by our ports grew by more than 270 per cent between 1994 and 2014–some three times Australia's overall economic growth rate.
It seems to me that the Howard Government's waterfront reforms in the 1990s can be given an important part of the credit for this strong and sustained productivity gain. Up to management and workers to strive to achieve ever greater efficiency.
This performance provides a great platform for very strong future growth.
Indeed, container movements are projected to grow by 165 per cent between 2011 and 2031—and non-containerised trade by 138 per cent.
Ports on the Public Policy Radar
These projections underline the importance of competitive and efficient ports.
As you know, the States and the Northern Territory are in process of privatising several ports, including Melbourne, Fremantle and Darwin.
This partly reflects the introduction of our Asset Recycling Initiative which offers incentives for governments to recycle mature infrastructure and develop new assets.
The Australian Government has urged the States to take sensible decisions concerning port privatisations.
We realise that there are risks concerning the potential misuse of market power following privatisation.
However, Australia's competition framework and laws are up to dealing with this risk.
Victoria has committed to adopting the measures proposed by the ACCC to strengthen competition outcomes if the Port of Melbourne is privatised—and we welcome this.
It is also important to recall that concerns about market power abuse were raised before the ports of Brisbane and Sydney were privatised.
However, customers have since generally been satisfied with the results of privatisation—and this is an ultimate measure of success.
And I continue to urge State governments pass the benefits of competition to their port customers, to avoid losing significant business.
Road and Rail Connections to Ports
Our ports must be efficient, but we also face challenges in how well we move freight to and from them.
We can already see a continuing decline in land-side efficiency in all the five major container ports—all have experienced increased truck-turnaround times ranging from 14 to 35 per cent between 2009 and 2014.
Without additional action, Australia's transport networks will face increasing congestion and bottlenecks.
Part of the solution involves investing in better road connections to our ports.
And we are progressing these works, including around the ports of Geelong and Newcastle.
But road connections are not the sole solution.
Rail is a major freight ‘decongestant', and we are supporting several priority freight rail projects around Australia—designed to integrate with our ports.
In particular, both government and private investments in the Moorebank Intermodal Terminal will transform the efficiency of Australia's east coast container ports.
The Government's Moorebank Intermodal Company recently concluded an agreement with the Sydney Intermodal Terminal Alliance to develop the Moorebank freight precinct.
The precinct will have an import-export terminal able to handle over a million containers annually, and an interstate terminal able 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.
And, in the West, we contributed $19 million towards WA's North Quay Rail Terminal project.
This project was completed in July last year. It has reduced reliance on road freight and more efficiently moves goods between inland hubs and the Port of Fremantle.
These and other projects will be major generators of national growth –and port business.
The Inland Rail project between Melbourne and Brisbane would enhance these benefits still further.
We have committed $300 million to accelerate this project and get it started.
Inland Rail will provide an efficient freight connection between Melbourne and Brisbane—and better connect Adelaide and Perth with the east. North/south and east/west lines will intersect at Parkes, providing flexibility and port choice to inland exporters.
I released the delivery plan and business case for Inland Rail last month and the Government will consider these reports in preparing the rail project.
Developing better port-land freight connections demands national planning and action. The Transport and Infrastructure Council of COAG, which I chair, oversees several national land freight and port initiatives agreed with industry.
These include master-plans for significant ports that include measures for better connecting them to their landsides.
The Council applauds the port industry for leading the development of the national guidelines for these plans, which were published in 2013.
The Council urges ports to implement the industry-wide undertaking to put these plans in place by December 2016.
And—as you know–we need a strong shipping industry to make the most of our ports and our transport network.
Our current shipping regulations fall well short of encouraging a competitive and efficient industry.
They have accelerated the decline of Australia's coastal shipping fleet from 30 vessels in 2006–07 to just 15 in 2013–14—and there has been a 63 per cent decline in the carrying capacity of the coastal trading fleet since 2012.
To help arrest this decline I introduced the Shipping Legislation Amendment Bill 2015 into Parliament last June.
The Bill passed the House of Representatives earlier this month.
Our legislation provides for a single, streamlined permit for all ships—Australian and foreign—operating along our coast, replacing the existing, cumbersome three-tiered licence system.
Our approach will reduce business costs, and enhance access to competitive international shipping services– but preserve safety, environmental and workplace safeguards.
I note that Ports Australia has outlined its support for the Bill in your submission to the Senate Committee inquiry, saying that:
‘At this point the Parliament has a clear choice between what is essentially a philosophically based position supporting a failed policy that has generated economic detriment, or a position that short term offers positive scope to revitalise our coastal shipping trade and supports jobs, particularly in the Australian manufacturing sector.'
The Government is keen to see coastal shipping play a more important role in our transport network and we believe that our legislation will facilitate that outcome.
Finally, sustaining Australia's economic growth and the benefits it brings is a key priority for the Coalition Government—and your own efforts are a key part of sustaining this growth into the future.
Thank you all very much—and all the best for your General Meeting.