Australian plans to reform the national shipping industry could threaten coastal cargo, said a submission to the government by Ports Australia, an industry body counting both government and privately owned ports among its members.
The government has proposed a reform package that would limit foreign-flagged ships to temporary licenses for coastal trades, while allowing Australian-operated and crewed vessel to operate without restrictions.
The reforms are designed to reinvigorate the struggling local shipping industry. Permits for foreign-flagged vessels were easily available after a relaxation of rules under the last government, and cheaper wages on foreign vessels made them more competitive.
"Our view is that there is a strong national interest in the promotion of coastal seaborne freight and there is a strong risk of failure if this goal were to be subsumed to highly interventionist policies that at best may bring one or two Australian ships onto the coast," stated a Ports Australia submission.
"If dedicated coastal shipping were not to be successful, international lines should not be discouraged or prevented from carrying coastal cargo. We suggest more consideration of transitional arrangements.
"Measures designed to restrict the presence of other flags in our coastal trades run the risk of deterring interest from foreign flagged operators shipping freight on the coast where they currently address a significant proportion of the total domestic freight task, while at the same time stimulating little or no Australian flagged presence. The net effect is that the role of coastal shipping in the total domestic freight task diminishes and we are left with a double policy failure of considerable significance and impact.
"We would have accordingly expected that a discussion paper might identify measures with a dual purpose – to foster Australian coastal shipping and to stimulate an increase in the total amount of cargo uplifted on the coast – and not to provide a formula that runs the risk of it declining. It makes sense therefore that before any new arrangements are instigated detailed industry research should be carried out on the possible service outcomes of the new regulations and whether in fact they are sufficient to provide incentives for investment in dedicated services. The [government reforms] paper suggests a pre-occupation with developing a complex architecture for a new regime with no assessment of all the likely impacts, in particular as to whether the government's policy goals will actually be realised."
