Australian seafarers are warning that the local industry is at risk of going under unless the influx of foreign workers is halted.

Key points: Seafaring industry in one of worst downturns in half a century

Seafaring industry in one of worst downturns in half a century Union claims foreign workers getting paid $2 per hour

Union claims foreign workers getting paid $2 per hour Law lecturer says 457 visa system poorly policed

Hundreds of overseas contractors are currently working on the Australian coast despite close to 1,000 local maritime workers looking for jobs — about one sixth of the entire workforce.

"Families are devastated," said Thomas Mayor, secretary of the NT branch of the Maritime Union.

The lack of jobs has been blamed on falling commodity prices and a decline in manufacturing, but unions have said that is only half the story.

"[Jobs] aren't drying up because there's no work, but drying up because the Government is allowing $2 an hour exploited labour to replace them on the coast," Mr Mayor said.

"The industry at the moment is going through a very, very tough time, there's no question about that," said the chief executive of Maritime Industry Australia, Teresa Lloyd.

Maritime unions have been running a campaign against the laws that allow so-called $2-per-hour workers.

Under the national shipping regime, foreign vessels can obtain temporary licences to operate in Australian waters without needing to pay their workers Australian wages.

The temporary licences are meant to apply for two trips only, but industry insiders say companies are easily able to obtain 'rolling' licences.

"Seafaring jobs are just the same as carrying cargo on a truck from Darwin to Adelaide — on a truck you expect Australian wages, Australian safety conditions, Australian work conditions," Mr Mayor said.

The job hunters include Darwin's Myra Leong, who is part-way through her training to become an integrated rating, but cannot find anyone to take her on.

The 23-year-old worked as a deckhand before undertaking further training at the Australian Maritime College last year in Launceston, where she was the only woman in her class.

Her timing could hardly have been worse, with shipping going through one of its worst downturns in half a century.

'The only way to stay competitive'

Some in the industry have said the use of cheap foreign labour is often the only way the Australian industry can remain competitive.

"At the end of the day, it's cost," said the chairman of Shipping Australia, Ken Fitzpatrick.

"In some cases that's been absolutely the only way they can survive without having to resort to importing from overseas."

Shipping Australia represents both local and overseas companies and has been pushing for further deregulation in the industry.

That position is opposed by another lobby group, Maritime Industry Australia (MIA), which speaks exclusively on behalf of local businesses.

MIA chief executive Teresa Lloyd said the maritime sector is treated differently to other industries when it comes to protecting local workers.

"It's one area of the Australian economy where for whatever reason, the idea that that particular activity needs to be done by Australians isn't supported the same way it is in almost every other aspect of the domestic economy," she said.

But Ms Lloyd said it may be too late for change and it had been a long time since job protection existed in the maritime industry.

Last year, the Federal Government failed to pass its Shipping Legislation Amendment Act which would have made it easier for foreign ships to operate in Australian waters, but Transport Minister Darren Chester said if re-elected the changes will be back on the agenda.

Labor and the Greens opposed the legislation, dubbing it "WorkChoices on water".

Calls to overhaul 457 visa program

The Government is also facing calls to overhaul its 457 visa program, which enables skilled workers to be employed in Australia for up to four years.

High-level maritime jobs like ships masters and ships engineers are currently listed on the Government's skilled shortage list, meaning foreign workers can be hired under the 457 system.

According to the most recent figures from the Department of Immigration, there are 303 foreign workers employed in the maritime industry under the 457 program — that is despite hundreds of similarly qualified Australians looking for work.

The 457 program is designed to give employers more flexibility in accessing skilled labour when demand is particularly high.

MIA has said the inclusion of seafaring jobs on the skilled shortage list made sense during the commodities boom, but not today when a large number of people in the sector were unemployed.

The 457 system requires employers to try the local job market before hiring overseas workers, but law lecturer at the University of Adelaide Dr Joanna Howe said it is poorly policed.

"There is currently no proper mechanism, no robust mechanism for identifying a skill shortage and for ensuring that where a foreign worker is coming in, they're not taking a job away from a local worker," Dr Joanna Howe said.

The Federal Opposition has called for a review of the skilled shortage list, while the Government has said it is awaiting further advice from the Department of Education and Training.