Current Issues

Opinion piece: Coastal Shipping reforms needed

You really do have to wonder if the Labor Party and the Labor movement are genuinely supportive of Australia's manufacturing and agriculture industry or whether it's just something they bluster about in the Senate.

While there is no doubt the high Australian dollar negatively impacted industry the situation was made so much worse by unions and Labor who chose to impose additional costs into the economy.

The Coalition is determined to reduce unnecessary red tape that increases the cost of doing business. We have done as we promised and removed the impost of the carbon tax and the mining tax. We now turn to dealing with some of the more hidden imposts on our local economy that are making it impossible to compete, or in some circumstances even participate, in markets.

One of those additional costs is the sweetheart deal that Labor did with the maritime unions on coastal shipping. It was supposed to revitalise the Australian shipping industry but had the opposite affect and destroyed real competition on coastal shipping routes around Australia and increased shipping rates.

This has had a disastrous impact on the shipping industry, including:

  • Significant cost increases to shipping users
  • Continued decline in the amount of coastal freight loaded at our ports;
  • Reduction in capacity of Australian-flagged vessels of 64 per cent;
  • 2 million tonnes less freight being moved by foreign vessels;
  • Less voyages;
  • Less Australian vessels

The number of major Australian registered ships with coastal licences is down from 30 in 2006/07 to just 13 by 2012/13.

This is definitely not the revitalised shipping industry that Labor promised. Labor's bungled regulations are costing our local industry money and markets.

The Australian Peak Shippers, representing companies like Sunrice and Bega Cheese tell us:

"When it is cheaper to buy product in New Zealand and land it in Brisbane for blending than it is to purchase the equivalent Australian raw material from Victoria and ship it to Brisbane, or indeed when it is cheaper to ship product from Melbourne to Singapore than it is to ship the same from Melbourne to Brisbane, it is not hard to realise that our Australian exports, who are competing with Singapore based companies for the same market are finding it tough to do so."

Labor's disastrous regulations require a vessel to sit in port for a day before it can start loading - at a cost of up to $10,000 each day for foreign ships and a whopping $20,000.00 per day for Australian ships!

As a state almost entirely reliant on shipping, my home state of Tasmania has been even more severely affected.

The changes were one of the reasons that the AAA international service left Tasmania and this loss of the competitive pricing in the market resulted in an increase in costs for all exporters.

During the first year of Labor's Coastal Trading Act, Bell Bay Aluminium saw their shipping freight rate from Tasmania to Queensland increase from $18.20 per tonne to $29.70 per tonne. The rate offered by foreign vessels sits at $17.50 per tonne.

That is a whopping 63 per cent increase and added an extra $4 million per year cost to Bell Bay Aluminium.

Another Tasmanian business, Simplot Australia, had an additional $550,000 per year added to their annual costs and have lost markets as a result. This is a crushing cost burden at a time when they are considering the future of their Devonport plant, which is the last vegetable processor in the country and an important employer in the region.

I have spoken with another major employer who suffered an annual cost to their business of $1 million as a result of the Labor/union deal. They told me it's cheaper to ship product from New Zealand to every port in Australia (except Melbourne) than it is to ship product from Tasmania.

That is even after they have the benefit of the Tasmanian Freight Equalisation Scheme rebate which the Kiwis don't get!

Labor's so called 'coastal shipping reforms' are facilitating the replacement of Aussie made products with imported products. We're now in a position where we can't even be competitive in our own market let alone export markets.

Before the election I said we could save Tasmanian business more in reforms that don't cost taxpayers money compared with the sums that Labor were waving around during the election - this is something we can achieve.

We have removed the impost of the carbon tax and we are slashing red and green tape. It's now time to make our logistics more competitive with changes to our coastal shipping regime and put Australian business back on a competitive footing.

This will realise tangible savings, make our industries more competitive in local and export markets and open up opportunities for growth and employment

Richard's Facebook Page
Richard's Videos
Community Diary

SIGN UP TO RICHARD'S NEWSLETTER