ALP ‘locks in’ shipping fleet, MUA believes

The MUA is “convinced’’ Bill Shorten will mandate a rise in Australian-flagged and crewed ships driving up business costs.

MUA national secretary Paddy Crumlin. Picture: Aaron Francis

The Maritime Union of Australia is “absolutely convinced” Bill Shorten’s Labor will mandate an increase in ­Australian-flagged and crewed ships if it wins government, prompting warnings the move will drive up business costs.

The MUA also believes a Shorten government will establish a “strategic fleet” of commercial ships that could ­support the navy in a conflict.

While Labor is yet to detail its shipping policy, the MUA — now a division of the militant Construction Forestry Mining Maritime and ­Energy Union — told The Australian that Labor had promised the union it would ­tighten requirements on issuing temporary licences to foreign ships on domestic routes.

“You’d be required to have an Australian-flagged vessel,” MUA national secretary Paddy Crumlin said yesterday.

“At some point it would be phased in because there is an ­Australian trade carrying cargo between Australian ports. That’s No 1. They will be required to have an Australian crew No 2. They would be employed under ­Australian conditions of employment, No 3.

“In the event there are not sufficient Australian ships to meet that need, temporary licences will be issued with very clear criteria … So what we’ve said to the ­Australian Labor Party — and they have agreed — they will be required to have the same scrutiny, temporary licences that ­Australians need in the trade.

“We’re not hoping. We’re ­absolutely convinced they (a Shorten government) will.”

Minerals Council of Australia chief executive Tania Constable warned proposals to restrict ­coastal shipping further would hit consumers with higher prices and “erode the competitiveness of Australian businesses with increased costs”.

She said the Productivity Commission had estimated that removal of restrictions on coastal shipping would boost the economy by up to $36 million a year.

“For some commodity producers, the cost of shipping final ­product around Australia is ­already about the same as shipping from overseas to Australia,” Ms Constable said.

“One company reported a 63 per cent increase in shipping freight rates interstate (in 2012).”

The Opposition Leader last week accused major companies, including BHP, of jeopardising national security by moving away from Australian-crewed cargo vessels. His comments heightened industry concerns about Labor introducing restrictions on shipping if elected. The Coalition warned that the costs of Labor's shipping policy would have to be borne by the government or industry users.

Transport Minister and Deputy Prime Minister Michael McCormack said: “If the cost is passed through to onshore ­industry in Australia, it may have ­adverse impacts on its profitability and could result in the closure or reduced production in some ­significant industries, including ­minerals processing and refining, mining, construction and ­agriculture. This idea from Labor has nothing to do with supporting the nation’s shipping or freight ­industry; this is just Labor taking its marching orders from the ­unions.”

Mr Crumlin said Australian-flagged ships that could provide fuel transport for the military were increasingly important.

“The general view is, firstly, we have to rebuild the Australian shipping capacity, particularly in the area of fuel, because of the ­essential nature of it to the national security and national economic development,” Mr Crumlin said.

“Part of that was to have a dedicated fleet that would be able to support the navy, because they’re increasingly relying on the private sector for the carriage of their resources to maintain their fleet and maintain their operations. It’s also increasingly important in terms of fuel security and our reserves.”

Cabotage legislation introduced by the Gillard government has allowed foreign-flagged ships to operate off Australia’s coast on temporary licences. The fleet of major Australian registered ­vessels with coastal licences has fallen from 30 vessels in 2006-07 to 13 in 2018-19. None of these ships is an Australian-flagged fuel tanker, which Mr Crumlin said was a risk in a crisis.

Opposition infrastructure spokesman Anthony Albanese said last year that consideration should be given to setting up a fleet of Australian-flagged and ­Australian-crewed vessels in areas of strategic importance to the economy, such as distribution of liquid fuel.

Labor MPs including Josh Wilson and Ross Hart have backed the idea, saying it should be a priority. “That strategic shipping fleet would be a fantastic idea,” Mr Hart said. “If you look at our ­maritime security we need to be conscious of the fact that over a number of years the number of coastal vessels that are Australian-manned or Australian-owned has dropped significantly.

“If it did come to a question of crisis, however, that might arise; in the past we’ve been able to work towards a substantial body of Australian workers or domestic maritime crew that we could put into service very quickly.”

Mr Wilson said an Australian-owned and crewed fuel tanker in a strategic fleet was a priority.

While the International Energy Agency mandates that countries hold a fuel stock in reserve “equivalent to 90 days of net imports”, Australia is the only country that does not meet the standard. It has just 56 days of import coverage, with just 22 days of petrol and 17 days of ­diesel in the event of a crisis.

Labor argues that since Australia has to import more than 90 per cent of refined petroleum, relying on foreign ships might not be possible in a conflict situation.

The Coalition’s attempts to reform Australian coastal shipping regulations — which Labor says will further loosen regulations and open the door to more foreign-crewed ships — have failed to gain parliamentary support.