Logistics News

Shipping reform clears hurdle

Kennedy MP Bob Katter has voiced support for shipping legislation, passed through the House of Representatives yesterday

By Sean Muir | June 1, 2012


MP Bob Katter was among nine MPs to voice support for five pieces of shipping legislation, passed
through the House of Representatives yesterday.

During the legislation’s second reading, Katter compared the shipping reform to sending a champion into an arena with a sword, a helmet and a shield, instead of just a sword.

“Our champion says: ‘Hold on a minute, mate’,” Katter says.

“The other bloke has got a shield and a helmet. They say, ‘If you fight unprotected, without the shield and the helmet, it will make you tough.’ Our champion says: ‘Make me tough, mate? It’s going to make me dead.'”

Also showing support for the legislation was Canning MP Don Randall, who told parliament Australia had the fourth largest shipping task in the world, with sea transport carrying more than 99 percent of international cargo by weight and about 75 percent by value.

According to Randall coastal shipping carries around one quarter of interstate trade,

with the
number of Australian registered ships declining in the past decade.

“Currently there are only 22 Australian registered ships,” he says.

“These bills comprise the shipping reform package and they are designed to provide a regulatory framework for coastal trading in Australia, which will stimulate growth in the number of Australian ships on the coast and maximise the use of the Australian flagged vessels.”

But not all were in support of the reform and several members criticised the legislation during its second reading, including Herbert MP Ewen Jones.

“The question I ask myself is: will these measures work?,” Jones says.

“The response I get from my own reading and from conversations I have held with people in the industry is that they will not. Not only that; we have to be mindful of the consequences of enacting poorly designed and cumbersome legislation which may, in fact, have an effect which is the opposite of the intentions of these bills.”

According to Jones, the legislation aims to stimulate investment in Australia’s shipping industry with tax incentives.

Jones says the tax incentives seek to include accelerated depreciation of ships, income tax relief for Australian operators of Australian registered ships, a refundable tax offset for employers who employ Australian seafarers and exemptions from royalty withholding tax for foreign owners who lease ships to Australian operators under a bareboat or demise charter.

She says these bills also seek to provide changes to Australia’s licensing system, with a three-tiered system that includes a general licence, providing unrestricted access for Australian registered ships; a temporary licence providing limited access for foreign ships or those on the Australian international shipping register; and an emergency licence with restricted access for emergency situations, such as a natural disaster.

“Finally, they seek to create a second register of ships, the Australian International Shipping Register,”
Jones told Parliament.

But Jones says changes to the licensing system which include three new levels of shipping licence will add more red tape.

Jones says this includes a temporary licence designed for vessels registered on the Australian International Shipping Register.

She says the application for the licence comes with requirements, including the provision of detailed information on expected loading dates, loading and discharge ports, and cargo type and volumes for the full 12 months duration of the licence.

“This is yet another unnecessary red tape burden slapped on industry by this government,” she says.

Jones says to be eligible for the licence applicants are required to have a minimum of five voyages planned.

“While this is an improvement over the original minimum requirement of 10 voyages, contained in the draft legislation, it remains to be seen why a minimum number is necessary at all.”

There were more than 65 submissions received by the House of Representatives Standing Committee on Infrastructure and Communications inquiry on the reform. More than 40 submissions were received on a discussion paper, released in 2010.

Bills include the Shipping Reform (Tax Incentives) Bill 2012, Shipping Registration Amendment (Australian International Shipping Register) Bill 2012, Coastal Trading (Revitalising Australian Shipping) Bill 2012, Coastal Trading (Revitalising Australian Shipping) (Consequential Amendments and Transitional Provisions) Bill 2012, Tax Laws Amendment (Shipping Reform) Bill 2012.

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