Nationals leader Warren Truss has hit back at criticism after the Federal Government proposed amendments to shipping laws that would open up more opportunities for foreign boats and crews to work off the Australian coast.

The comments come after Bill Milby, a representative of WA-based company North Star Cruises, said he was taken by surprise when told by a senior government bureaucrat at the launch of the draft bill that the best option would be to switch to using cheaper, foreign labour.

"I was staggered. I was really surprised that it was somebody from Canberra, representing this department, telling me that," he said.

"I told her that, at that particular time, I said I can't believe what I'm hearing."

Mr Truss did not dispute the statements, but dismissed any possibility a company would remove local Australian employees in favour of overseas workers.

"This is a matter that is currently before the Senate committee and the Senate will have a look at the issue," he said.

"It needs to be established that it's got some veracity before any kind of investigation would be appropriate."

"It's not a practical option for somebody to put foreign crew on a cruise vessel in Australia if they want to have a 12-month operation around Australia's shores.

"If you're going to operate 12 months on Australian shores you have to have an Australian crew, so it doesn't seem to me that the story is credible," he said.

Opening up industry could 'pose safety risk'

Kimberley Marine Tourism Association secretary Kylie Bartle said opening up the industry to overseas operators could also pose a safety risk.

"You've got reefs, you've got sandbars, all types of different things happening. It's a really treacherous part of the coast to cover," she said.

"If you don't know what you're doing, there's a real potential to become unstuck, and it can be disastrous, for human lives, for vessels, but for the environment as well."

Mr Truss blamed the previous Labor government for the current difficulties faced by the industry.

"The arguments being put forward now by the MUA and by Mr Albanese are completely fallaciously based," he said.

"The facts are that the legislation [Labor put in place] have been an appalling failure, it has resulted in the halving, more than halving, of the domestic fleet in Australian waters."