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Issue #1643      June 18, 2014

Business agenda to sink Australian shipping

Big business is intentionally overstating the impact of shipping costs in an attempt to replace Australia’s shipping industry with low-cost, low-standard Flag Of Convenience (FOC) options, according to the Maritime Union of Australia and the Australian Workers’ Union.

The Business Council of Australia has linked with other big business lobby groups in an effort to destroy the Australian shipping industry by claiming current shipping costs are making business operations less viable.

A submission by the Australian Aluminium Council to the Abbott government’s Options Paper on regulation of coastal shipping claims the “viability of refineries and smelters is impacted by... shipping costs,” and that “Australian jobs in the bauxite, alumina and aluminium industry are put at risk by the current regime.”

However, shipping costs have never before been nominated as a significant factor by the aluminium industry when explaining the recent closure of major refineries and smelters.

MUA national secretary Paddy Crumlin said big business lobbies, including the aluminium industry, were simply trying to rationalise an irresponsible cash grab.

“It always sounds impressive to say that costs need to be cut or industries will be destroyed, but this is simply untrue,” Mr Crumlin said.

“All we have here is big business sensing an opportunity to squeeze a few extra pennies in profit by destroying an entire Australian industry and replacing it with Flag Of Convenience ships with third-world standards. If we were to follow the BCA’s recommendations and open up our coast completely to lowest-common-denominator Flag of Convenience vessels, we would see 10,000 quality Australian jobs lost very rapidly.

“The 2012 changes to the Coastal Trading Act allow ship owners on the Australian coast to effectively compete in the domestic freight market with FOC ships, despite the latter’s poor standards and exploited crews. Watering down this Act would have dire consequences for our nation, which always has and always will rely heavily on shipping.”

AWU assistant national secretary Scott McDine expressed surprise that the Australian Aluminium Council had cited shipping costs as a significant factor affecting the Australian aluminium industry.

Mr McDine said shipping costs had never been raised as a significant factor during numerous discussions with Rio Tinto or Alcoa regarding the closures of major refineries and smelters.

“During the AWU’s in-depth discussions with Rio Tinto and Alcoa regarding the recent closures of major refineries and smelters, the explanation offered was always the historically low global price of aluminium in conjunction with an historically high Australian dollar,” Mr McDine said.

“Shipping costs were never nominated as a significant factor.”

Next article – Vic rally to bust brutal Budget

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