Proposed new shipping legislation is extraordinary in its blatant disregard for Australian jobs and business. No other G20 nation takes this approach.
If somebody told you that the federal government was implementing laws specifically designed to put Australians out of work, you’d think they were kidding. It’s the role of a government to act in the national interest, and that means doing everything within reason to support Australian industry and jobs.
However, it has become clear in recent weeks that changes to shipping laws proposed by transport minister Warren Truss have been specifically designed to put Australian mariners out of work. It is clear, in black and white, in the legislation. This is extraordinary.
Truss’s shipping legislation amendment bill, which passed through the House of Representatives on 14 October, will allow foreign vessels registered in places like Liberia to operate for up to six months a year between Australian domestic ports without being required to pay Australian-level wages.
Because the foreign crews of these vessels earn developing nation wages, their operators will be able to easily undercut Australian competitors who are obliged to pay Australian-level wages. This will destroy Australian jobs.
While it is clear that Truss wants to see more foreign vessels working our coastal waters, this is not because there is anything wrong with Australian shipping companies. It’s just that foreigners are cheaper. This is an astounding betrayal of the national interest.
If the government carried its maritime approach to its logical conclusion, it would abolish the minimum wage and enlist foreign labour to take people’s jobs right across the economy.
That would also be cheaper but it would flout the national interest. It is in Australia’s economic interests to maintain a vibrant local shipping industry. It provides jobs for Australians and drives economic activity.
It serves our environmental interests, given that Australian mariners are familiar with our coasts and that all major shipping accidents that have damaged the environment in recent years have involved foreign vessels.
There are also clear synergies between our naval fleet and our merchant fleet that mean that there are good security reasons for wanting a strong Australian shipping industry. Yet Truss is proposing changes that are specifically designed to reduce the number of vessels flying the Australian flag around our coasts.
For months Truss has denied this, claiming that his legislation will actually strengthen Australian shipping. It is time to move beyond the rhetoric and look at the evidence, which is unambiguous in the cost-benefit analysis and the regulatory impact statement that were a part of the legislation.
The cost-benefit analysis predicts that under the reforms:
- Many of the operators currently operating under the Australian General Register would likely reflag their vessels in order to compete with the foreign operators who enjoy the benefit of comparatively lower wage rates.
- Australian seafarers’ jobs would be adversely affected as Australian operators reflag from the Australian General Register.
“Adversely affected” is polite bureaucratic code for people being sacked.
The regulatory impact statement (RIS) is even more straightforward. While Truss has lamely maintained the changes are about removing red tape, the RIS obliterates this fiction. It reveals that while the legislation will produce savings for business, 88% of those savings will be attributable to reduced labour costs.
That’s got nothing to do with red tape. It’s about cutting wage bills by sacking Australians and replacing them with cheaper foreign labour.
The document explicitly predicts a reduction in the number of Australian-flagged vessels operating in Bass Strait from the current level of six.
“We assume four vessels will register under a foreign register to reduce operating costs,” it says.
Whatever Truss says in his media releases, it is explicitly stated in his legislation that the changes will destroy Australian jobs. Australian ship owners have offered the same advice.
Last month, Perth businessman Bill Milby told a Senate committee hearing into the legislation that he approached Truss and senior bureaucrats earlier this year to warn that the changes would damage his cruise ship business, which operates in Western Australia’s Kimberley region.
According to Milby’s evidence, Truss told him he was wrong. But senior bureaucrats advised him that if he wanted his business to remain competitive, he should “consider taking our ship True North off the Australian Shipping register, reregister the ship in a suitable foreign country, lay off our Australian crew and hire a cheaper foreign crew”.
Despite Truss insisting this did not happen, Milby gave his evidence on oath, as did the two senior bureaucrats who confirmed his version of events. Milby had two choices under this legislation: reflag overseas and hire cheap foreign labour, or go out of business.
No other G20 nation has maritime rules anything like those proposed by Truss. It is unilateral economic disarmament.
In the United States, for example, the Jones Act requires that all domestic trade is conducted by ships owned by Americans, built by Americans and crewed by Americans.
By contrast, Australia’s existing maritime regime does not prohibit foreign vessels. It simply requires that they pay local wage levels on domestic sectors to maintain a level playing field for our own businesses.
One of the key roles of government is to balance competing interests in the national interest. In shipping, that should mean doing everything we can to minimise costs for business while also supporting the survival of an Australian shipping industry in recognition of the broader national interests served by its existence.
Truss’s approach, which is to abandon an Australian industry simply to access cheaper service from foreign ships, is a disgraceful affront to our national interest and must be rejected in the Senate.