Australian Shipowners Critical of Audit Report

By The Maritime Executive 05-01-2014 08:45:00

The Australian Shipowners Association (ASA) has labelled the country’s National Audit Commission Report recommendation on coastal shipping as shockingly simplistic, one dimensional and reckless.

Recommendation 4 of phase 2 of the report recommends that Australia’s cabotage policy be abolished. Angela Gillham, ASA’s acting executive director said “It is unclear how the National Audit Commission came to this conclusion as there seems to be absolutely no analysis of the impact of this proposal.”

Cabotage is the common practice around the world whereby domestic ships are given preference over foreign ships to carry domestic cargo or in other words, engage in coastal trade. Where a local ship is not available, a foreign ship undertakes the work. Australia has had a system of cabotage since the beginning of maritime regulation in this country.

“Cabotage regimes are not unusual - many countries recognise that having a domestic shipping industry helps to ensure stability in shipping services and price and provides an important source of the strategic skills necessary for a country to be able to participate in international trade,” Gillham said.

Australia, as a large exporter and island nation relies heavily on the strategic maritime skills developed by our local shipping industry, such as maritime safety inspectors, port pilots, harbor masters and tug operators to name a few.

“The report is completely devoid of any consideration of the strategic impacts of what is recommended and ignores any national benefit of having a local shipping industry, which is most disappointing,” she said.

In a separate process, the existing coastal shipping regime is being reviewed by the Government.

“The Australian shipping industry is fully engaged in the policy discussion on improving coastal shipping regulation and we are confident that the government has the capacity to understand the big picture of which coastal trade is only one part.

“We need to move beyond the overly simplistic, one dimensional and reckless attitude towards coastal shipping and work toward improving the policy settings to achieve a vibrant, sustainable and competitive Australian shipping industry for the long term benefit of the nation,” she said.