Lloyd's List Shipping and Maritime Industry Awards Gala Dinner

Speech

WTS027/2015

19 November 2015

Dockside Pavilion, Darling Harbour, Pyrmont

Distinguished guests. Ladies and gentlemen.

It is a pleasure to join you in this elegant on-water venue in our magnificent harbour city.

Tonight is a time for celebration. Firstly congratulations to Lloyd's List Australia on reaching an important milestone earlier this year—125 years of service to Australia's shipping industry.

Lloyd's has a special place in Australian print media history as Australia's oldest newspaper. It is nice to see that age still has its place.

The main reason we are here is to recognise and celebrate the important contributions of individuals and businesses to Australia's shipping industry.

10 per cent of the world's sea trade passes through Australian ports and 99 per cent of Australian trade is transported by sea.

Our coastline is over 60,000 kilometres in length and our search and rescue region covers more than 10 per cent of the earth's surface.

Managing activity of this magnitude doesn't happen without the drive, ingenuity and innovation of many.

To you I offer my thanks.

To continue in the spirit of celebration, but tempered with the reality of the situation the industry finds itself in, I want to emphasise the Coalition Government's commitment to working together with Australia's maritime industry to foster strong and safe growth of shipping in Australia, because it is in both our interests.

The need for coastal shipping reform

This evening I will start with why we need legislative reform, and move to other initiatives the Government has in train that will benefit the industry and the entire supply chain.

I must speak plainly. Our domestic shipping industry is, at best, treading water; it is bound in too much red tape and cannot provide the competitive shipping services that are critical to a number of Australian businesses.

The previous Government's reforms have failed coastal shipping and unless this Government acts now, I fear that businesses relying on coastal shipping will continue to suffer, and shipping in Australia will continue its decline.

The 30-strong fleet of licensed major trading ships over 2,000 dead weight tonnes we had in 2006–07 has plummeted to just 15 in 2013–14.

In just two years, from 2012–2014, there has been a 63 per cent decline in the carrying capacity of the major Australian-flagged fleet with coastal trading licences.

On top of that, between 2010 and 2030, Australia's overall freight task is expected to grow by 80 percent, but coastal shipping is only forecast to increase by 15 percent.

Shipping must carry a larger share of our domestic freight task.

The Shipping Legislation Amendment Bill 2015 I introduced into Parliament in June this year replaces the existing tiered licencing system with a single coastal shipping permit that will be available to both Australian and foreign registered ships.

With this permit, ships have unrestricted access to the Australian coast for 12 months and are protected from Customs importation requirements.

Ours is a simpler, streamlined approach, and a far cry from the overly bureaucratic, cumbersome and inflexible one introduced by Labor in 2012.

One of the counterintuitive consequences of the existing framework is that petroleum from Australian offshore facilities is being processed overseas and shipped back to Australia because offshore facilities are outside the scope of the licencing system.

With the legislative reforms we are proposing, petroleum products can be transported from our offshore facilities to the mainland for processing.

Jobs

I have heard concerns that the Bill will lead to loss of seafarer jobs.

Firstly, I have to point out that the continued decline of Australian flagged coastal shipping vessels has in turn resulted in fewer jobs on our ships. This is a trend that is set to continue into the future. If we leave the current settings much longer, frankly there will be no industry left to salvage.

As is always the case, seafarer jobs will ultimately depend on commercial decisions by shipping operators. Already major ship owners such as Rio Tinto have indicated that they will retain their current arrangements, irrespective of our legislation.

Beyond that, increased activity on our coast will lead to increased employment at our ports and stevedoring facilities. I was very encouraged by the recent announcement by Australia's largest stevedore, DP World, that they have plans to establish an international container terminal at Burnie Port if our coastal shipping legislation is passed.

In a significant win for the Tasmanian economy, DP World estimate that the cost of shipping a 20 foot container from Tasmania to Shanghai will reduce from $2,800 to $1,350.

This is not to mention the benefits that increased competition will have for shipping users like gypsum, cement, aluminium, fertilizer, sugar, minerals, grain and the many, many others that can our could utilise coastal shipping services.

However, these benefits will only be realised if we reform the current arrangements.

More broadly the Bill encourages industry to pursue opportunities for ship maintenance in Australia as opposed to overseas.

For the first time, and in a major win for our bourgeoning cruise industry which is growing at the fastest rate in the world, the coastal shipping framework will be extended to include ships engaged in dry-docking.

This will mean more business for Australian dry dock and repair facilities and it will mean that our growing fleet of cruise vessels can stay in Australia for repairs, rather than going to Singapore or elsewhere for routine maintenance.

This is on top of the Government's recent announcement that we will implement a continuous build of surface warships in Australia. This means that Australia's shipbuilding workforce will build Navy's Future Frigates and Offshore Patrol Vessels.

These two programmes will guarantee around 2,500 Australian shipbuilding jobs for decades. In addition the Government is aiming to set an environment for Australian industries that incentivises and rewards innovation and science. As part of this agenda, the Government is looking to promote innovation in Australian industries, including our maritime and shipbuilding sectors.

Training

The Government is also cognisant of current difficulties in seafarer training. As the number of Australian flagged vessels on our coast continues to decline, we need to make sure that we are able to provide a pathway into the industry and for advancement and skills development within the industry.

Training is vitally important for the long-term sustainability of the shipping industry in Australia.

It goes without saying that we need to train the future tug boat captains, engineers and marine pilots which are of course important to my home state of Queensland with the tricky waters of the Great Barrier Reef.

To this end, the Government intends to commission an independent study to consider the need for new seafarer training incentives, including how these measures could be financed, to secure these critical maritime skills in Australia.

The study will involve consultation with shipping industry stakeholders, including shipowners, maritime trade unions, shippers and training institutions.

Conclusion

Everyone in this room as well as the wider government and maritime industry sectors, want the same thing—a strong, efficient coastal shipping sector—because it is imperative to lifting the competitiveness of Australian businesses and contributing to a more productive national economy.

It is therefore incumbent on us all to take the path that will help us achieve this goal.

I firmly believe the Shipping Legislation Amendment Bill 2015 has the best prospects to secure the long term viability of shipping in Australia.

It is well targeted and effective regulation that has the power to substantially generate economic benefits and operational efficiencies that will be enjoyed by us all.

We look forward to working collaboratively with all shipping industry participants to build a strong coastal shipping future based on the reforms contained in the Bill, and the many other initiatives we are putting in place.

Thank you for listening.