Australia to establish International Shipping Register
The Australian federal government is proposing a series of reforms – including tax breaks for ship operators and an Australian international shipping register – designed to restore Australia’s place in world shippingCargonews Asia reports. The measures being introduced come at a time when the number of Australian-flag ships has fallen from 30 to 22 this year, and from 55 in 1995. The remaining vessels now carry just 0.5 percent of the country’s export trade, 99 percent of which is carried by ships,
Federal Infrastructure and Transport Minister Anthony Albanese said the industry is “at the tipping point. If we do not act now the Australian shipping industry will be lost forever”.
The government said its moves to regenerate the industry would help to stem the downward spiral of an ageing fleet and a declining workforce. The 22 ships that still service Australian ports have an average age of 20 years, almost eight years older then the world average, while employers report that 49 percent of their seafarer workforce is aged 45 years or older.
Albanese said the tax package was designed to take advantage of the opportunities for Australia to be a major force in global shipping.
The minister said Australia needed to grow its international fleet and this would be encouraged through the creation of an Australian International Shipping Register.
“This will help Australians to participate in international trade and address the cost disadvantages experienced by our registered vessels when competing internationally. More Australian ships would also improve maritime security,” he said.
Albanese added, “When they undertake an overseas voyage, vessels must provide the crew with terms and conditions in line with the Maritime Labour Convention. International Register vessels must employ a minimum of two Australian crew, preferably the master and the chief engineer.
“In my view, these arrangements strike a good balance between competing on a level playing field internationally, while ensuring Australia’s domestic maritime cluster can grow.”
Australia’s ports manage 10 percent of the world’s entire sea trade, moving close to US$200 billion worth of cargo annually, making Australia the fourth-largest shipping nation by volume.
Albanese said international experience in Europe, Asia and South America indicates that the introduction of financial support, usually in the form of a tonnage tax and personal tax breaks for seafarers working in the international trade, has had substantial and very positive effects.
“We have gone a step further – we are not introducing a new tax in the form of a tonnage tax and then setting a discounted rate. We will exempt qualifying income from taxation.”
There will also be a roll-over relief scheme so that shipowners can defer their tax liability arising from gain or profit on the sale of old vessels.
“Together with the accelerated depreciation provisions, this will encourage Australian ship owners to modernise their fleet,” Albanese said.
The government realises that Australian shipping operators were competing against foreign operators that enjoyed “very competitive taxation, regulatory and employment arrangements”.
While a typical Australian container ship pays $4.06 million in crew costs a year, a foreign ship pays just $1.65m in crew costs.
Albanese denied claims that the Australian government, through the reforms, is planning to close the coast to foreign shipping. “These reforms are not about protectionism,” Albanese said. “These reforms are about moving forward, not backwards. It is important that Australian coastal shipping is competitive and that shippers can make use of foreign-registered vessels when Australian ships are not available.”
The proposed reforms, he said, would provide clarity and transparency to shippers and operators and enable them to plan long term.
“The new licensing regime will support Australian shipping and set clear boundaries around the necessary role of foreign vessels in our coastal trade,” Albanese said.
Federal Infrastructure and Transport Minister Anthony Albanese said the industry is “at the tipping point. If we do not act now the Australian shipping industry will be lost forever”.
The government said its moves to regenerate the industry would help to stem the downward spiral of an ageing fleet and a declining workforce. The 22 ships that still service Australian ports have an average age of 20 years, almost eight years older then the world average, while employers report that 49 percent of their seafarer workforce is aged 45 years or older.
Albanese said the tax package was designed to take advantage of the opportunities for Australia to be a major force in global shipping.
The minister said Australia needed to grow its international fleet and this would be encouraged through the creation of an Australian International Shipping Register.
“This will help Australians to participate in international trade and address the cost disadvantages experienced by our registered vessels when competing internationally. More Australian ships would also improve maritime security,” he said.
Albanese added, “When they undertake an overseas voyage, vessels must provide the crew with terms and conditions in line with the Maritime Labour Convention. International Register vessels must employ a minimum of two Australian crew, preferably the master and the chief engineer.
“In my view, these arrangements strike a good balance between competing on a level playing field internationally, while ensuring Australia’s domestic maritime cluster can grow.”
Australia’s ports manage 10 percent of the world’s entire sea trade, moving close to US$200 billion worth of cargo annually, making Australia the fourth-largest shipping nation by volume.
Albanese said international experience in Europe, Asia and South America indicates that the introduction of financial support, usually in the form of a tonnage tax and personal tax breaks for seafarers working in the international trade, has had substantial and very positive effects.
“We have gone a step further – we are not introducing a new tax in the form of a tonnage tax and then setting a discounted rate. We will exempt qualifying income from taxation.”
There will also be a roll-over relief scheme so that shipowners can defer their tax liability arising from gain or profit on the sale of old vessels.
“Together with the accelerated depreciation provisions, this will encourage Australian ship owners to modernise their fleet,” Albanese said.
The government realises that Australian shipping operators were competing against foreign operators that enjoyed “very competitive taxation, regulatory and employment arrangements”.
While a typical Australian container ship pays $4.06 million in crew costs a year, a foreign ship pays just $1.65m in crew costs.
Albanese denied claims that the Australian government, through the reforms, is planning to close the coast to foreign shipping. “These reforms are not about protectionism,” Albanese said. “These reforms are about moving forward, not backwards. It is important that Australian coastal shipping is competitive and that shippers can make use of foreign-registered vessels when Australian ships are not available.”
The proposed reforms, he said, would provide clarity and transparency to shippers and operators and enable them to plan long term.
“The new licensing regime will support Australian shipping and set clear boundaries around the necessary role of foreign vessels in our coastal trade,” Albanese said.