New proposals to revive Australian coastal shipping

A new report proposing tax changes and regulatory reform could kick-start a flagging coastal shipping industry in Australia

A new report proposing tax changes and regulatory reform could kick-start a flagging coastal shipping industry in Australia, the shipping and logistics sector hopes.

A parliamentary inquiry into costal shipping policy and regulation has produced a bipartisan report of recommendations to revive a coastal shipping network, which only accounts for a quarter of the domestic freight task and the majority of which is bulk freight.

Shipping advocates have long argued domestic sea movement is a more efficient and greener alternative for non-time sensitive freight.

But a complex regulatory regime and limited interest among shipping operators have prevented any significant uptake in domestic sea freight.

Federal Transport Minister Anthony Albanese says the report offers "practical solutions" to critical challenges facing Australian industry.

It identifies a number of roadblocks in moving more freight by sea, including a declining number of registered vessels, an aging fleet, a shortage of skilled maritime employees and, Albanese acknowledges, "growing demands from industry for greater policy certainty from government".

The House of Representatives Committee on Infrastructure, Transport, Regional Development and Local Government has recommended tax changes for coastal shippers, with the introduction of a tonnage-based tax for Australian-registered ships.

The report claims there is a "general consensus" on the introduction of a tonnage tax, which it argues will encourage ship owners to remain registered in Australia while alleviating training costs for seafarers by linking the tax to training requirements.

It also calls for a national port development plan to coordinate infrastructure needs into the future, along with accelerated depreciation arrangements and a single approach to maritime safety.

Australian Logistics Council (ALC) chief Hal Morris says the report will form a basis for coastal shipping to take its place as a vital cog in domestic supply chains.

"It’s time for shipping to build on its place as a key mode of transport in Australia’s supply chains and take its place as part of the solution to our growing freight task," he says.

"A competitive and viable coastal shipping industry is critical for both Australia’s economic and environmental performance, including easing bottlenecks and congestion as well as the potential to reduce greenhouse gas emissions."

Morris says the recommendation for a port development plan is long overdue, particularly for connecting landside infrastructure.

"The ALC has long been advocating for this reform and believes land corridor access infrastructure and port facilities are an essential part of the solution for shipping’s competitiveness," he says.

"Landside infrastructure is as imperative to the viability of shipping as pay and conditions, which have also been recommended for reform.

"Likewise the recommendations for accelerated depreciation arrangements and a single approach to maritime safety should be widely welcomed."

"The solution for Australia’s supply chains is for all modes to reach their full potential together and coastal shipping is part of the answer."

Albanese says the Government will consider the recommendations and respond next year.

"It is obvious from the number of submissions received by the committee that there is significant interest in the future of the Australian industry," he says.

"The Government recognises that coastal shipping is a key sector of the transport industry and a vital contributor to the national economy, given that Australia's international trade is dependent upon shipping."

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