Fiscal Measures

There will be several fiscal reforms that this industry has long called for. Australian companies that operate Australian registered trading ships above 500 tons would be able to elect to pay tonnage tax, attracting tax liability on income from trading activities based on the tonnage of the ship. In return, businesses will need to agree to train new entrants to the industry.

Alternatively, companies could choose to accelerate depreciation within the existing corporate tax structure by allowing them to depreciate ships over a 10 year life.

To encourage Australian-based international seafarers to stay with the industry, such workers will be taxed according to the number of days spent on a qualifying vessel. This will bring Australian international seafarers in line with those of other countries.

And where a vessel is leased under bareboat charter to an Australian company, the Government will consider granting its owners an exemption from the payment of Royalty Withholding Tax.

International Shipping

A new Australian International Register of ships operated by Australian companies will be established. Under the register, the master and chief engineer must be Australian residents while the balance of the crew may be foreign residents paid at internationally competitive terms and conditions of employment.

This register will make it possible for Australian companies to run competitive international shipping operations with Australian ships.

Ships on the register must be Australian-operated and controlled and used for international trading.

Coastal Shipping

Coastal trading is a part of our domestic transport sector and wherever possible should be undertaken by Australian operated companies and crewed by Australian workers, just as it is with road, rail and aviation.

The Government will retain the capacity to utilise foreign flagged and crewed vessels to supplement the Australian fleet.

The Government will work closely with industry in establishing how the new regulations will operate.

Training Reforms

With a revitalised shipping industry will come a demand for more trained seafarers.

The Government will improve access to education funding programs in both the higher and vocational education sectors.

Incentives now available for trainee seafarers will be more widely promoted and training providers will be encouraged to help with this.

Labour Productivity Reform

The Government will reach a compact with the Union movement. This compact will include changes to work practices, a review of safe manning levels and the use of riding gangs on coastal vessels.

The Way Forward

A discussion paper was released 1 December 2010 and comments are invited on it by the end of January 2011.

Three reference groups will be established to advise on key elements of the reforms.

  • The first group will look at taxation.
  • The second will tackle the workplace expanding the workforce including skills and training, and labour productivity.
  • While the third group will look at the new regulatory arrangements such as permits, the creation of an international shipping register, legislative changes and alignment of these reforms with a new National Maritime Regulator.

They'll start working in January and will be asked to complete their work by the end of May.

The sector will be offered the opportunity to see the draft legislation before it is finalised.

The Broader Shipping Industry Reform Agenda

By 2013 Australia will have one maritime safety regulator the Australian Maritime Safety Authority - and one law - Commonwealth law - applying to all commercial vessels in Australian waters.

The Navigation Act 1912 will be rewritten to provide contemporary and robust regulation for maritime safety.

The Act is outdated and requires modernisation to better reflect current regulatory policies.

It also needs to be more flexible to respond to changes in national and international safety standards and to introduce a new penalty and enforcement regime.

The Act will also need to reflect the Commonwealth's role as safety regulator of all commercial vessels in Australian waters.

The government is aiming to have the new legislation finalised by the middle of next year.

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