The Tax and Superannuation Laws Amendment (2015 Measures No. 3) Bill abolishes the seafarers tax offset and reduces the research and development tax offsets. Labor opposes both of these measures but in my contribution tonight I intend to speak mainly about the seafarers tax offset. The seafarers tax offset was introduced by the former Labor government in 2012 as part of a package of reforms aimed at revitalising Australian shipping. The reforms were the result of extensive consultation with the shipping industry. These reforms included changes to taxation to allow Australian-based companies engaged in international shipping to compete on a level playing field with their international rivals. Under Labor’s reforms, two tax changes were introduced. One was to have a zero rate of company tax for Australian ships that were registered on the Australian International Shipping Register. The other was to have effectively a zero rate on Australian seafarers who worked on those ships. The seafarers tax offset, the measure this bill would abolish, is the latter of the two.
The purpose of this measure was to provide an incentive for the employment of Australian seafarers. More Australian jobs in shipping is not only good for Australian seafarers and their familiesbut also it is good for the Australian economy, particularly the local economies in port communities that rely on the industry. This represents one of the government’s many ill-thought-out cost-cutting exercises. In putting these kinds of blunt instruments forward as budget savings measures, the government once again fails to account for the costs of making the cut. After all, overseas-based workers in the shipping industry will pay zero tax and we will lose the economic benefit of Australian workers spending their wages in Australia. Sadly, the Abbott government has failed to stand up for Australian workers in our shipping industry. What we are starting to see under this government is the slow death of Australian shipping.
I mentioned in a previous speech to the Senate that I had spoken with Australian workers from the shipping industry as part of Labor’s Fair Work Taskforce hearings about their concerns for the future of their jobs and job security, and the financial security of their families. Other than providing employment for Australians, and the associated revenue that flows through to the Australian economy, there are plenty of other reasons to maintain a strong Australian shipping industry with Australian-flagged and Australian-crewed vessels. While job security was obviously at the forefront of the concerns of the seafarers I spoke to back in June, they were also worried about safety at sea and Australia’s marine environment. They simply could not understand why the Abbott government has not only stood by while jobs in Australian shipping continue to decline but also is seeking to actively encourage it. Just last week we had the spectacle of SeaRoad Holdings telling a Senate inquiry that it had no choice but to sack its Australian staff and replace them with a foreign crew under the government’s new shipping laws. The Abbott government is attempting to introduce ‘WorkChoices on Water’. The evidence from SeaRoad Holdings should be of no surprise to them. If other shipping companies are adopting foreign flags and employing foreign labour on foreign wages and conditions then it puts enormous pressure on those companies who employ Australians to do the same. How else are they going to compete with crews that are being paid as low as $2 an hour or less?
I believe I recounted this story in my previous speech, but in the Fair Work Taskforce I remember one of the seafarers telling us that he used to conduct inspections for the ILO and he came across a foreign-crewed vessel whose crew were being paid nothing, and they were fishing off the side of the ship to feed themselves. What do you think would happen in any other freight or transport sector if we allowed foreign workers with foreign wages and conditions to enter the industry? It is inconceivable that we would allow in workers from overseas on foreign wages and conditions to drive trucks or load rail cargo, yet this is exactly what this government is proposing to do in Australian shipping.
I think many Australians would be surprised to learn—shocked even—that under the Abbott government’s proposed legislation foreign-flagged vessels with foreign crews working for companies paying Third World wages could actually operate entirely within Australian waters, sailing from one Australian port to another. No industrialised country in the world allows the kind of unfettered access to its domestic shipping industry that this government is proposing. This government claims to be about creating jobs, yet it is doing nothing to stop Australian crews being replaced with foreign labour and they are doing plenty to encourage it. The abolition of the seafarer tax offset would be another nail in the coffin of Australian maritime jobs. It makes us wonder whether this is just a cynical attempt to destroy the Maritime Union of Australia, with the Australian economy and jobs being used as collateral damage. I know that is a pretty cynical view to take but with this government absolutely nothing would surprise me.
The seafarers tax offset is overwhelmingly supported by Australia’s shipping industry. Here is what the Australian Shipowners Association has had to say about the offset:
The Seafarers Tax Offset … helped to reduce the operating costs of Australian vessels, increased the competitiveness of Australian shipping and provided significant opportunity for employment of Australians in international trades … the impact [of abolition] is severe with regard to future opportunity.
Another peak body in Australia’s maritime industry, Shipping Australia, is also strongly supportive of this offset. It would be easy to dismiss this proposal as nothing more than a cynical cost-cutting exercise but it is much more than that. This proposal is one in a long line of attacks on Australian workers—on their jobs, on their wages and on their conditions. I sometimes wonder how often will I and my colleagues on this side of the chamber have to come into this place and defend Australian workers against another attack from the government that promised WorkChoices was ‘dead, buried and cremated’. I will not go through the examples that I have gone over before about attacks on penalty rates, attempts to introduce AWAs via the back door and so on, except to say that, whether it is in the shipping industry or any other part of the Australian economy, this government not only fails to stand up for Australian workers but also consistently undermines their rights, their hard-won conditions and their job security.
The government says it expects to make a saving of $12 million over the forward estimates from this measure. This is a very small amount of money in the context of the overall budget, and it begs the question whether it is really worth the cost. The fact that for such a small saving the Abbott government is willing to scrap a measure that has been in place for only a few years and that has the support of the industry speaks volumes about where its priorities lie. They are certainly not with maintaining an Australian shipping industry or supporting Australian maritime jobs. Nor is it the government’s priority to support the communities across Australia that derive economic benefit from the salaries of Australian seafarers. This is just another short-sighted cut from a mean and out-of-touch government.
We know that the Liberal government does not care about maritime jobs. We have seen media reports about Western Australia’s North Star Cruises—in fact, we have probably all seen the TV replays of the Senate committee hearing—saying they were told by the bureaucrats to hire foreign workers, not once but twice. Twice they were told to do that. Recently, Bill Milby, a spokesman for the luxury cruise line, stood by the accusations he made in his evidence to the Senate committee and recalled a conversation with a senior transport department official in May. He said:
She said to me, there and then, well we are in an international environment, so we have to learn to compete on the international market.
Maybe you should look at de-registering as an Australian ship—in other words taking it off the shipping register—and perhaps put on a foreign flag, which will allow you to put on foreign crew, which will reduce your wages costs.
That is what Mr Milby told ABC Perth radio. He said:
I was staggered, I was really surprised that it was somebody from Canberra representing this department, telling me that.
This is shameful behaviour by this Liberal government. The government does not care about jobs in our maritime industry and it does not care about jobs in the R&D sector. In fact, tonight there is quite a lot of speculation that the only jobs they care about are their own. But it is not just tonight that there has been that speculation, let me tell you. I call upon the Senate to oppose this terrible bill as we on this side will be opposing it.