Australia moves to end cabotage

The Australian government has announced it is to end legislation introduced to promote Australian-flagged shipping and will instead deregulate the coast.

While the move has been hailed by Shipping Australia Limited, the top industry body representing foreign shipping entities in Australia, the Labor opposition, unions, and Maritime Industry Australia – have condemned the move.

Under the new provisions announced in the budget, a single coastal trading permit will cover all foreign shipping and foreign vessels will be allowed to carry petroleum products. Ships only need to hire senior Australian crew on vessels trading for longer than 183 days on the coast, and the national Fair Work workplace provisions for crew will be changed – international employment standards will instead be put in place.

The road to axing cabotage will be rough, as the legislation would first pass through a hostile senate, where the Labor opposition fiercely opposes the proposed changes.

Opposition spokesperson for transport Anthony Albanese described the reforms as “an ideologically charged attack on the viability of Australian shipping”, stating that Australian mariners would by that be put on third world wages.

In an interview with IHS Maritime, Maritime Industry Australia CEO Teresa Lloyd stated that the legislation if passed would destroy the “very nucleus” of the Australian shipping industry.

“Removing the fundamental element of cabotage does change the fabric of the industry and makes it much more volatile,” Lloyd said. “This has big implications for the Australian maritime economy and our strategic maritime skills. We will end up with absolutely no Australian shipping. They won’t wait to be driven out of business – they are not that silly. They will close down or they too will [flag out] and become foreign.”

Shipping Australia, however, has hailed the proposed reform; its CEO Rod Nairn saying it was “the first stepping stone to a better coastal trading regime”.

“But there’s still a long way to go to get changes finalised through consultation and then legislated,” he said.

“The proposed changes will breathe new life into coastal shipping,” Nairn said in an official SAL release. “This sector has languished since the 2012 Coastal Trading Act was introduced. These reforms are absolutely necessary to allow domestic goods to be efficiently carried by sea.”

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