Albanese and Truss Clash Over Shipping Reform

A verbal stoush has broken out between Federal Transport Minister Anthony Albanese and his coalition counterpart Warren Truss over Mr Albanese's recently announced shipping reforms.

Last Friday Mr Albanese announced a package of reforms to the Australian shipping industry, including a zero tax rate for Australian ship operators.

The reforms are designed to make the Australian shipping industry more internationally competitive and allow Australian shipping companies to compete on international routes.

They also intended to reform and revitalise coastal shipping in Australia to create a competitive environment that's attractive to investors.

The package has four key elements:

  • Tax reforms to remove barriers to investment in Australian shipping.
  • A simplified three-tier licensing framework for participation in the coastal trade.
  • Establishment of an Australian International Shipping Register to put Australian companies on a level footing with their international competitors.
  • Establishment of a Maritime Workforce Development Forum to progress key maritime skills and training priorities.

Companies will also be given a financial incentive to replace ships earlier, with the depreciation rate reduced from 20 years to ten years to encourage renewal of the fleet.

An international study also found the cost of operating a 20 year-old ship compared to a five year-old ship is 40 per cent higher.

The reforms also include a tax break for companies employing Australian seafarers on international voyages.

Warren Truss replies

"Knowing how beholden Minister Albanese and Labor are to the Maritime Union, Australian shipping has every reason to be suspicious about this so-called reform package," Leader of The Nationals and Shadow Minister for Infrastructure and Transport Warren Truss said.

"While it promises benefits to some shippers, everything will depend on the undisclosed detail and the accord being proposed between shippers and the unions.

"Australia's shipping industry has been uncompetitive and in decline, dropping from 55 vessels in 1995 to 22 today. Shipping has also been losing its share of the domestic freight task at a time when we need to move more cargo by ship to take pressure off our roads.

"Cost pressures are critical. Right now sugar is being shipped from overseas direct to our southern ports because it's cheaper than shipping it from eastern Australia.

"The abolition of single voyage permits, except in times of national emergency, has the potential to make domestic freight movement by ships between Australian ports even less competitive.

"This upward pressure on costs will also be compounded by the carbon tax. Under the 6.21 cent per litre slug on coastal shipping fuel as part of the carbon tax regime, everything being shipped by Australian vessels will be more expensive, but if you want to ship those same goods in from overseas they won't incur this tax.

"The decision to grant more generous income tax and depreciation arrangements will be welcome by seafarers and the Australia's shipping industry, but this gesture will undoubtedly encourage other Australian industries facing international tax disadvantages to demand similar concessions.

"Those industries would have a fair case. If it's good enough for the shipping industry then why not food producers, car manufacturers or the tourism industry? If seafarer's income earned offshore is tax-free why not other overseas workers?

"QANTAS and other Australian airlines face massive competition from airlines based in low tax countries or who receive special government concessions.

"The proposed compact between the union and shippers will be critical to competitiveness, even with these concessions. If the costs of crewing ships in Australia are over-the-top compared to world standards, then our industry will continue to decline." 

Article reprinted from Transport and Logistics News: