EDITORIAL | The Australian government’s maritime madness

The Albanese government’s recent announcement, as reported in The Australian of October 20, that it would “assess whether the maritime industry needs tax breaks and regulatory reform under the government’s plan to create a strategic fleet of up to 12 Australian flagged and crewed merchant ships”, fills me with alarm.

The fleet is expected to include tankers cargo, container and Ro-Ro vessels. There was even an accompanying, hopefully unfounded, rumour that the ships would be Australian built.

The Australian’s report continued that the government would appoint, “a strategic fleet taskforce that includes members from industry, unions and the military that would ‘guide the government on how to establish Australia’s fleet as quickly as possible'”. That looks very much as though the “proposal” has been pre-determined with “gongs” being awarded all round for the hard-working “great and good” task force members once they have confirmed the wisdom of the government’s proposal.

The vessels that will comprise the fleet, Mr Albanese informs us, would be Australian-crewed and -operated but available for requisition by the Australian Defence Force during times of conflict or natural disaster. Quite clearly this is a reward for the support of the government at the recent general election by the thuggish CFMMEU and its odious component, the Maritime Union of Australia (MUA).

History condemns government ship ownership

As one who has been closely involved with the Australian maritime industry for half a century, mostly as a trade publisher, and who is now finishing a comprehensive history of the industry, I am amazed that no one in government has thought to look at the depressing history of similar arrangements in the past. There have been two examples federally and several in the states. All have had the same catastrophic outcomes for Australian taxpayers. Given what has so far been revealed about this latest proposal, it is impossible to imagine that its outcome will be any different. As Albert Einstein very wisely commented, “Insanity is doing the same thing over again and expecting a different result”.

Without knowing the history, it is difficult to argue theoretically, logically, or philosophically with the Albanese government’s merchant ship proposal. Every rational Australian can see the economic, environmental and social value in removing as many trucks as possible from our nation’s roads. And, nearly as much as compared with trucks, ships are also considerably more environmentally and economically attractive than trains. Further, the strategic value of owning and operating our own multi-purpose fleet of cargo ships, as proposed by the Federal government, seems, on the face of it, to be eminently sensible.

Historical vignettes prove the point

However, and very importantly, the devil is in the detail, and in the case of this proposal, the very real and vital historical detail. Such ventures have inevitably resulted in commercial catastrophe. Some brief excerpts from my soon to be published history provide a useful background reality check. It can only be hoped that someone in government might read and take note of them. They are:

Hughes, The Hon William Morris (Billy) MP: The Welsh-born founder and first president of the Waterside Workers Union of Australia (WWU) and, later, Prime Minister from 1915 to 1923. A turbulent and fiery character who caused and institutionalised considerable damage to the maritime industry. Commencing as a rabid socialist, he variously represented four political parties in Parliament. Among other economically destructive actions, without gaining cabinet approval, in 1916 he purchased 15 large modern ships in the UK with which to establish the Commonwealth Line of Steamers. Hughes rapidly expanded the line with 17 captured German ships and many more locally-built vessels. By 1923, the substantial, 54-vessel but massively loss-making fleet was practically given away and the company liquidated. The final cost to Australia’s taxpayers was staggering.

Elliott, Eliot V. (1902-1984): Was the long time secretary (i.e. leader) of the Seamen’s Union of Australia from 1941 to 1978. New Zealand-born, he was a devout self-proclaimed communist. Wily, recalcitrant, difficult, and almost totally destructive, he contributed substantially to the demise of the coastal shipping industry that had once employed large numbers of his members. He was succeeded by the amusingly appropriately named Norm Docker who was equally destructive but rather less flamboyant. They set the scene for nearly a century of very destructive union strife that was of no benefit to their members and even less to Australians generally. Amazingly, he and his successors managed to convince the union’s members that they were working very hard for their benefit.

Bull, Tasnor “Tas”: (1932-2003). A notorious long-time Communist leader of the Waterside Workers Federation of Australia. He was a member, successively, of the Communist Party of Australia and the Australian Labor Party. He succeeded Norm Docker in 1984 and was himself succeeded by John Coombs who, like Bull, did so much damage to his union, its members, the maritime industry and the wider Australian economy.

Coombs, John. (1940-2021): A failed jockey who became national secretary of the Maritime Union of Australia (which encompassed all the major maritime unions of yore). Having worked his way up through the Waterside Workers Federation, he succeeded the notorious “Tas” Bull in 1993. Irrationally revered by the union’s membership, he led it through its bruising and very expensive losing battle with Patrick Stevedores, led by Chris Corrigan, in 1998. He was also one of the founders and the initial chairman of Maritime Super, one of the worst performing of Australia’s “industry” superannuation funds. Needless to say, Coombs died a comparatively wealthy man.

(The) Commonwealth Line of Steamers: Was established by Prime Minister W. M. Hughes, without cabinet approval, in 1916, with the purchase of 15 large, modern ships during a visit to the UK (See above.). The fleet’s liquidation was a feat that was closely replicated with the equally ill-fated Australian National Line some seventy years later. Both of these cost Australian taxpayers very dearly. The ALP, it seems, has no interest in economic history and, so, rarely learns from its mistakes.

Australian National Line: Established as the Australian Coastal Shipping Commission in 1956, the ANL had an interesting and adventurous 40-year life until its ignominious end when, unwanted and beset by labour problems, its carcase was sold to French-owned CMA CGM in 1998. In between (and similar to the Albanese government’s proposed line), it owned and operated some 111 ships of all shapes, sizes, and types from bulkers to Ro-Pax ferries. The company actually enjoyed some good times, operated globally, and occasionally made a profit. Its end, though, was as financially catastrophic as was the Commonwealth Line of Steamers seventy years earlier.

Brereton, The Hon Laurie MP: A controversial one-time electrician, unionist, and state parliamentarian, he was the third transport minister in the Hawke/Keating Labor government of 1983-1996 following the excellent Hon Peter Morris and Hon Peter Cook. When pushing for the demise of the Australian National Line in 1994, he famously remarked that, “you couldn’t give it away”. He redeemed himself publicly, but not within the ALP when he strongly and effectively supported the Howard Coalition government’s intervention in East Timor on behalf of the UN in 1999.

(The) Battle of Milne Bay: Took place at the far south-eastern tip of New Guinea in August and September 1942. It saw the Japanese Imperial Army defeated for the first time on land by the mostly Australian Australian/American Milne Force. Significantly, the Australian troops and flyers were supported by scant Royal Australian Navy warships and Dutch-owned and Asian, not Australian, crewed merchant ships thanks largely to the extortionate and treasonous activities of Australian maritime unionists.

Maritime Union of Australia: The MUA is a conglomeration of most of the previously separate Australian waterfront and maritime unions in Australia including the Seamens’ Union, Ships Painters and Dockers, Waterside Workers Federation and several others. The MUA is now a component of the much larger Construction, Forestry, Mining, Maritime and Engineering Union of Australia (CFMMEU), which even includes the footwear manufacturing union. The MUA remains recalcitrant, rebellious, costly, and negative.

Nothing, it seems, ever changes, especially on the waterfront.

Alternative logistical solutions are readily available

This historical background should surely confirm the perils faced by the government should it proceed with this folly. In any case, while trucks are undoubtedly more expensive, dangerous, and polluting than ships, Australia has, thanks to the recalcitrance of its maritime unions, become used to relying on them. They do the local logistics job pretty effectively and their costs and other disadvantages are now built into the Australian economy and social system.

It would be just as strategically useful as the government’s ship-owning proposal if some more “all weather” roads were to be built to provide better and more reliable access to the coasts of Cape York Peninsula, Arnhem Land, and the Kimberley region. The nation’s ever-reliable and very large trucking industry could handle much of the strategic logistical task relatively easily and inexpensively.

Further, if such were really required in the event of major war, tugs and barges could handle most of the coastal shipping task. We have plenty of those now and more could be comparatively easily, cheaply and quickly built locally.

Both the Commonwealth Line of Steamers and the Australian National Line were established for very similar reasons and against similar backgrounds to the present proposal. Of course, we’ll be told that “this time it’s different”. Anyone who has inhabited this planet for more than fifty years knows that is never true.

Apart from a tiny handful of examples, Australian government involvement in the maritime sphere, whether naval or commercial, has invariably been financially disastrous. It and we, the taxpayers, should therefore be very wary of this proposal. The late Captain Ralph McDonell, a former senior master in the ANL, in his excellent history of the Commonwealth Line of Steamers, Build a Fleet, Lose a Fleet, offers a salutary warning to the present government.

Inexplicably, the former Australian Shipowners’ Association, now known as Maritime Industry Australia, has enthusiastically supported this proposal that can only have dire consequences in the form of unfair, subsidised competition for MIA’s few remaining shipowner members. Its foreign shipowner industry association counterpart, Shipping Australia (SAL) is, unsurprisingly, strongly opposed to the idea. As good servants of the Commonwealth, the Royal Australian Navy has not commented publicly. Presumably, it is bemused, if not bewildered, at the proposal.

Given the parlous state of our Covid-battered economy, the last thing Australia needs is more handouts to its already very generously remunerated maritime unionists. The claimed figures used to support the government’s proposal are nonsensical. Costs, inevitably, will be vastly higher and, given past experience, revenues significantly lower. Canberra, unfortunately, has proved to be completely incapable of realistic cost benefit analysis.

It can only be hoped that the Albanese government’s taskforce, in addition to the “great and good” listed in its press release, will include someone who knows the appalling history of Australia’s government-owned shipping lines. It should also include a tough-minded Chartered Accountant with extensive maritime experience. They may help to counter-balance the self-interested proponents of the “strategic fleet” scheme.

George Santayana was so right when he wrote, “Those who fail to learn from history are doomed to repeat it”.