Fears Cargo Reform Could 'Wipe Out' Local Fleet

[First published in The Australian 17 February 2012]

LABOR reforms to reduce the influence of cheaper foreign ships on cargo ferried between Australian ports could wipe out the entire Australian-owned fleet, the opposition has warned.

The reforms, revealed by The Australian yesterday, would scrap the existing licensing arrangements for foreign-owned ships, replacing them with a new system that issues foreign-owned vessels with licences for 12-month periods and requires more generous conditions for foreign workers.

Maritime Union of Australia national secretary Paddy Crumlin said that the reforms were very carefully nuanced to support the Australian shipping and manufacturing industries by keeping freight rates down and supporting reinvestment.

"The proposals are very carefully positioned to act as a shock absorber for the industry and will provide shipping services that are sustainable, with long-term capital productivity to support reinvestment," Mr Crumlin said.

"They will give industries the ability to access cheaper and more predictable shipping services."

But Liberal infrastructure spokesman Warren Truss said there was no doubt the reforms would provide a privileged position to Australian ships.

"If we don't get this right, there is a risk we will lose Australia's shipping industry altogether and we need ships to play a role in our domestic cargo into the future," Mr Truss said.

"The government has rewarded the Maritime Union for their loyal and faithful service and will provide them with significant additional influence into the shipping industry, which is a concern."

He said success of the coastal shipping reforms relied on the workplace relations changes that the unions and employers were negotiating.

A senior member of a shipping company, who did not want to be named, warned that the changes to Australia's coastal shipping had the potential to "kill the Australian-owned fleet", similar to the experience of the US.

"A historical review of US maritime laws shows that unless you loosen up and allow shipping to compete on an international level your fleet will die out," he said. "By creating a protected Australian flag fleet you will kill the fleet altogether because you become internationally uncompetitive.

"Twenty-two million Australians are going to be held to ransom for 5000 workers with tickets who are mostly employed by the mining industry anyway."

Infrastructure Minister Anthony Albanese did not respond to questions from The Australian.