A Tasmanian company says the Coalition’s proposed shipping laws – which relax the rules for foreign ships on domestic routes – may jeopardise its investment in a new ship worth more than $100m, the Senate has been told.
SeaRoad’s managing director, Michael Easy, has written to a Senate committee, warning that the Abbott’s governments shipping amendments were likely to “severely impact” his plans to invest in two new ships to service Bass Strait.
SeaRoad operates one of three daily freight services between Tasmania and the mainland, along with Toll Shipping and TI-Line. SeaRoad had planned to invest in the $100m-plus ship which would service Australian routes by 2016.
Easy said finance negotiations hinged on 2013 laws – which place greater restrictions on foreign ships and offer Australian companies tax breaks and training subsidies.
“Finance has been secured with the ANZ banking group partnering with a German government-owned development bank and an export credit agency,” Easy said in the submission.
“Central to these negotiations was the positive understanding that the Australian government was actively promoting a reinvigoration of Australia’s maritime industry by encouraging direct investment.
“The proposed legislation will jeopardise this position and is likely to severely impact our current ship replacement plans.”
Easy said the changes would endanger the continued viability of existing Australian shipping operators, echoing concerns of other Australian shipping companies.
SeaRoad argues that shipping on Bass Strait should be treated like a state rather than an international border, given Tasmania is an island state.
The government is coming under increasing pressure over the issue, which will be discussed at a Senate hearing on Monday by the rural, regional and transport committee.
The deputy prime minister, Warren Truss, announced a range of shipping reforms in May. They include the creation of one single streamlined licence for ships that take cargo between domestic ports. Workers aboard non-Australian flagged vessels will only be subject to Australian wages and conditions if the ships trade in Australia for more than 183 days, around double the current cut-off rate.
Truss has characterised the proposed changes as a cut to red tape but Australian ship owners say they will not be able to compete with foreign wages, which are up to one third less than Australian wages.
On Monday, senators will also hear from Bill Milby, representing Kimberly cruise operator North Star Cruises Australia (NSCA). Milby alleged a government bureaucrat advised him to sack his Australian staff and hire foreign crew on cheaper wages to remain competitive under the Coalition’s proposed new shipping laws.
On Wednesday, Tony Abbott described Milby’s allegation as “just not true” but on Thursday, the prime minister backed away when asked if he could guarantee that no government official had made such a suggestion to NSCA.
“I don’t know what is said in every single conversation around Australia, but I can absolutely guarantee that this government would never encourage anyone to do that,” Abbott said.
“What I can guarantee is that this government is determined to reverse the laws on coastal shipping, that the former Labor government put in place, under which the number of vessels engaged in our coastal shipping trade dropped from 30 to 15.
“The share of our freight carried by Australian coastal shipping declined from 27% to 17%, and the costs of Australian coastal shipping went up by 60%-plus.”
