New Laws To Wipe Out 93% Of Australian Coastal Seafaring Jobs

Cost Benefit Analysis (CBA) of government bill estimates only 88 Australian seafarer jobs will remain under the Department’s preferred option for policy change (table below). This represents a loss of 1,089 Australian seafarer jobs, or 93 per cent of the current workforce.

A submission to the inquiry into Shipping Legislation Amendment Bill 2015 by The Australia Institute commissioned by the Maritime Union of Australia (MUA) assesses the Regulatory Impact Statement and a related Cost Benefit Analysis of the Bill.

Representation Image - Photograph by Angelbert Dungog
Representation Image – Photograph by Angelbert Dungog

The submission found technical shortcomings within the Cost-Benefit-Analysis:

  • It fails to appropriately set the scope of the assessment – in other words, whose costs and benefits count. It appears to include millions in benefits to foreign-owned companies, with little consideration of Australian workers.
  • It adopts an unorthodox approach to the value of labour, without adequate justification, or quantification of losses to seafarers. While the methodology is unclear, there appears to be an unstated $74 million present value loss to Australian seafarers in the CBA.
  • It is based on very high exchange rates of AUD0.90 and 1.00 to the US dollar. This overstates the benefits of the reform to users of shipping by up to 35 per cent.

“The proposed Shipping Legislation Amendment Bill 2015 is likely to reduce employment for relatively little economic benefit,” Director of Research at The Australia Institute, Rod Campbell said.

What little benefit that is generated will accrue largely to foreign owned shipping and bulk freight using companies.

“Our submission identified major issues, including a narrow-scoped cost-benefit analysis, inaccurate Australian Dollar value and unorthodox approach to the value of labour.”

“The economic reality of Australia’s coastal shipping industry is that it must compete with both heavily subsidised land freight options and international shipping that can use foreign labour while in Australian waters. The free-market ideology behind this bill simply ignores that reality.“If an Australian coastal shipping industry is to survive, it needs policy support as is found in many other countries,” Campbell said.

Table 1: Australian and mixed crewed ships in major coastal shipping trades under base case and preferred option

 

Australian crewed

Mixed crew

Trade Base case Preferred option Base case Preferred option
Bauxite Weipa to Gladstone

100%

0%

0%

80%

Bauxite triangular route

0%

0%

0%

0%

Iron ore

30%

0%

0%

0%

Other dry bulk

7%

0%

0%

10%

Crude oil

0%

0%

0%

0%

Petroleum

10%

0%

0%

10%

Other liquid bulk

0%

0%

0%

0%

Cruise shipping

40%

0%

0%

0%

Bass Strait

100%

35%

0%

65%

Source: Predictive Analytics Group 2015 Cost Benefit Analysis of Regulatory Coastal Shipping Options, Tables 5.5 to 5.15

Note: Mixed crewed means 2 Australian crew and 15-16 foreign crew on each ship i.e. each mixed crew ship is around 78% foreign crewed

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2 Comments

  1. I have followed the progress of this government Bill since it was first brought to my notice by your newsletter some months ago. My initial reaction was of concern, considering that the Australian coastal maritime industry is a vital part of our economy, our skills base and to a degree, our national defence.

    But as it is now progressing to a conclusion and more data and information is being released I find that I am shocked by the fact that the Government would willingly remove so many Australian jobs and replace them with foreign seafarers that would actually result in more unemployment and a loss of multi-millions of dollars that would go into our economy.

    What also disturbs me is that the Government does not appear to be even the slightest bit concerned about the consequences for our economy and jobs, not just the jobs of the Australian seafarers that will be lost but also the jobs in those allied industries that support the maritime i8ndustry, including training colleges across each state in Australia.

    It is a sad reflection on an Australian Government that they would even consider this when our economy and unemployment is in a bad way, and not forgetting that other developed countries such as the USA, UK and some in Europe are actually revitalising their coastal shipping and re-introducing a system of cabotage not just to protect seafarers jobs and the economy of their country, but also with a realisation that they may need a maritime skills base and merchant ships in times of international tension.

  2. Neil, I wholeheartedly agree with your comments, I have seen over the years the regression of the Australian maritime industry to the point where it is today. Further regression is certainly unacceptable and it is time for this government to protect what maritime jobs there are left in the country.

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