Productivity Commission Draft Report

Productivity Commission Draft Report

The Productivity Commission draft report was released on 9 September 2022. It examines the performance of Australia’s maritime logistics system. MIAL has reviewed relevant aspects of the Productivity Commission’s draft report “Lifting productivity at Australia’s container ports: between water, wharf and warehouse”, with interest.

The exceedingly narrow lens through which the draft report views the benefits to the nation that would be derived from increasing Australia’s maritime capability is disappointing, to say the least. The analysis relating to the alternative options available to secure our supply chains, besides increasing our own sovereign maritime capability, is shallow at best. But of most concern was the proposition that “cadetships and skilled migration (notwithstanding disruptions caused by the COVID-19 pandemic) appear to be working well in meeting needs for blue-water experience”. This is completely at odds with the experience of Australian maritime businesses and broad end users of maritime skills in Australia.

As the report notes, we now have bipartisan support to enhance Australia’s sovereign maritime capability. Both sides of politics are keenly aware that we cannot and should not be completely reliant on overseas interests to secure our critical supply lines. Nor can we rely entirely on immigration and current training capacity to feed the growing demand for maritime skills right across the Australian economy. The report ignores the close ties between merchant marine and Australian navy capability through civilian and naval operations and also ignores the critical nature of maritime skills deficit in this country.

The training, skills and experience obtained while working at sea are utilised in a range of industries and government services across the Australian economy, including in port operations (e.g., pilots, harbour masters, stevedores), the resources industry (e.g., shipping superintendents, marine managers, and towage operators), maritime compliance (e.g., AMSA surveyors, cargo surveyor, ship vetting services, classification societies) and maritime educators and trainers.

The decline in Australian ships has seen a corresponding decline in training opportunities, and the supply of highly skilled Australian seafarers has all but dried up. Compounding the issue is the fact that many end users of maritime skills, with a few exceptions, cannot and do not train or contribute to training and skills development for current and future needs. 

The 2019 MIAL Seafaring Skills Census predicted a shortfall of more than 560 seafarers by 2023. The Census did not predict industry attrition resulting from COVID-19, the upswing in maritime skills demand resulting from increased activity in the existing offshore resources industry, or consider future demand driven by the burgeoning offshore wind industry.  

We are at a crisis point with respect to skills and to claim that this demand will be met by the existing trickle of cadetships and immigration, in the face of global high demand for these skills, is short-sighted and myopic at best. It is very difficult to understand how the Productivity Commission came to this conclusion.  

Enabling Australian maritime businesses to compete on a level playing with foreign ships through changes to Australian corporate tax and seafarers income tax settings that apply to shipping, is an important part of a long-term strategy to build resilience in the Australian economy and national maritime security. MIAL looks forward to working with the Government on the expansion of Australia’s sovereign maritime capability via the maritime strategic fleet in this current bipartisan environment.