Tax concessions for ships will sink

The Australian Financial Review

The extraordinary tax exemption for shipping and the shipbuilding industry, announced on Monday, set a bad example supposedly to encourage an individual industry. But the special tax holiday for Australian flagged shipping on all shipping income is made far worse by the fact that, at the same time as offering those concessions, the Gillard government is ignoring the far more serious problem of union power in this area.

The package of concessions applying to Australian flagged ships is supposedly designed to make the local shipping industry competitive, and boost the number of locally owned ships. But as the Australian Shipowners Association’s submission to the review of the Fair Work Act makes clear, ship ­owners are not going to adopt an Australian flag if it means having to deal with our industrial relations system.

As the ASA notes, the 20 or so crew members of any ship may be represented by three different unions, and even short periods of protected industrial action can cause immense inconvenience and cost. But a union can obtain a ballot to start protected industrial action by filling in a few forms, ­without any real check on its actions.

The federal Minister for Infrastructure and Transport, Anthony Albanese, claimed yesterday that the implications of not having a shipping industry would be “unique and extra­ordinary” because of its links to agriculture, defence and the environment.

But every industry, including cars, supposedly has special features. We should not be promoting Australian shipping for its own sake when all that does is increase costs for our wealth-creating industries.

The Australian Financial Review