Australian shipowners are poised to pump funds into investments including newer vessels, after the announcement of generous tax breaks as part of a Labor push to reduce numbers of cheap foreign ships.
The tax benefits, which start in July, include an income tax exemption and faster depreciation write-offs.
"There are a lot of investment decisions delayed over the last couple of years," said Australian Shipowners Association executive director Teresa Hatch. "Those companies are waiting and they're ready. We think it will have an immediate effect, coupled with the rest of the package."
Beyond tax breaks, the package includes a new licensing regime and shipping register that some have complained will lead to freight price rises by making it harder for foreign-flag ships to compete.
Ms Hatch said the changes put local businesses on a "more equal footing" with foreign ships.
But she questioned whether they would prove generous enough.
Other jurisdictions, particularly Singapore, have had special tax regimes in place for the past 20 years.
"There's no end to the list of countries you could chose to operate your business out of and pay no tax," she said. "And those are the ships that are now filling so much of our own trading task. All that iron ore that leaves this country, and none of it is on Australian ships."
Ms Hatch said resource companies in particular, which domestically used ships as a conveyer belt, might uncover opportunities in international trade.Teekay Shipping managing director David Parmeter said the tax exemption "will certainly be of material assistance for companies like ours that want to base their operations in Australia".
While investment decisions were made by its Canadian parent, Mr Parmeter said the changes would help to "put a compelling case" for investment. The associated rebate for pay-as-you-go tax on seafarer wages would reduce costs for ships operating with an Australian crew.
He said the measures could be extended to include a tax exemption on dividends paid to shareholders and to cover offshore oil and gas fleets, which are currently excluded.
"The blunt reality is the industry would've staggered on for a few more years but was rapidly in danger of getting to a point where it would lose critical mass and be difficult to sustain trading,"' he said.