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The International Transport Workers’ Federation (ITF) welcomes the Australian Government’s budget announcement of funding for an Australian Strategic Fleet in the Albanese Government’s third budget.
The Australian Strategic Fleet was a key election commitment during the 2022 Australian Federal Election and underscores the importance of shipping and freight for a major island economy such as Australia’s.
$21.7 million over five years will be invested from 2024–25 to support the establishment of a Strategic Fleet, which will be established through an initial pilot program with three vessels which would be available to government for requisitioning in times of need.
Applications to participate in the pilot will open later this year with the first vessels expected to be operational as quickly as possible.
"The commitment now being delivered on by Prime Minister Albanese demonstrates the Australian Government’s understanding of the importance of global supply chain resilience, national sovereignty and defence capacity, as well as the economic and social importance of cabotage for nations like Australia which depend on global sea freight," said ITF General Secretary Stephen Cotton.
“In the wake of the Covid-19 pandemic, governments around the world are addressing major supply chain challenges like port congestion, labour shortages, and infrastructure needs to sustain domestic and international trade in major ports. The pandemic demonstrated the impact of what can happen when that market is distorted – which was nothing short of chaos.
“In many countries, domestically-owned and operated fleets are able to supplement supply chain capacity and move cargoes via national-flag vessels. This strategic capacity allows the industry to use vessels to move cargoes to smaller ports located further inland or has supplemented the capacity to move goods inland by rail and road, to reach their final destinations. This has significantly lessened the extent of pressure on major ports and infrastructure and is made largely possible through cabotage regimes in these countries,” Cotton explained.
The 2024 Australian Budget papers draw specific attention to the complex and uncertain global outlook for Australia’s economy and make the observation that escalating geopolitical tensions have the potential to further disrupt Australia’s access to international trade routes and global shipping services.
Shipping is critical to Australia’s social and economic well-being; it moves 99% of Australia’s goods traded by volume, and around 79% by value. However, as of December 2022, there are only 11 Australian-flagged and crewed vessels over 2,000 deadweight tonnes (DWT) holding General Licences under the Coastal Trading (Revitalising Australian Shipping) Act 2012 that operate in Australia’s coastal trade. This stands in stark contrast to the 504 foreign-flagged vessels which undertook 2,309 voyages to, from or around Australia during 2021.
As Australia becomes increasingly dependent on renewable energy, a strategic fleet of Australian ships will become more and more important as the transportation needs of energy exports and domestic energy supply continue to shift. This will include the refining and transportation of critical minerals, the export of renewable hydrogen, green metals, and low carbon liquid fuels, as well as supporting new manufacturing industries producing clean energy infrastructure for export to the rest of the world.
It will also buttress defence capacity during times of crisis or conflict, with sea lift, essential transport capacity and sea lane security being vital areas of strategic concern around the Australian coastline.
“The establishment of the strategic fleet is as much as anything else a national security measure that supports and complements other initiatives being taken by the Albanese Government to enhance Australia’s strategic posture,” said Chris Given, Secretary Treasurer of Canadian seafarers’ union SIU Canada and Chair of ITF’s Cabotage Task Force.
“Australia needs a level of domestic shipping capability to counter the almost complete dominance of foreign ship ownership in their sea transportation needs and to provide capability for defence sea lift needs and sea lane protection. The strategic fleet will respond to the geographic challenges to supply remote and geographically dispersed communities and the often-remote location of sources of raw materials required for manufacturing and will provide a baseline domestic vessel capability to replenish Australia's seafarer labour supply requirements,” Given added.
The Budget announcement follows careful planning and reporting phases of the Strategic Fleet Taskforce, which brought together industry, defence and labour representatives, including Paddy Crumlin representing the MUA, to advise on the makeup, structure and capacity of the government’s planned fleet of up to 12 Australian flagged and crewed vessels that would form the basis of a revitalized and expanding Australian shipping sector.
The Budget will also make $4.7 million available for the review of the Coastal Trading (Revitalising Australian Shipping) Act 2012 and the Shipping Registration Act 1981 which will commence later this year and a $2.7 million pilot program for the Fair Work Ombudsman to monitor compliance with the Seagoing Industry Award Schedule A Wages.
KEY NEEDS IDENTIFIED BY THE AUSTRALIAN GOVERNMENT’S STRATEGIC FLEET TASKFORCE:
The Strategic Needs identified by the Taskforce as being essential to Australia’s economic and social security were:
- Coastal shipping of refined petroleum from Australian refineries or import terminals to Australian end-users, including to regional and remote ports in northern Australia;
- Conducting independent cargo operations (self-load/unload) where a natural disaster or other disruption affects the supply of key goods in Australia’s regions or Pacific neighbours;
- Enhancing capability to facilitate Defence or national mobilisation via the shipping of vehicles, equipment, and stores to northern Australia;
- The coastal shipping of containerised cargo between Australian ports to deal with smaller short-term disruptions;
- The movement of project and over-sized cargo domestically and internationally; and
- The coastal shipping of dry and non-liquid bulk cargoes that are key inputs to domestic manufacturing.
Photo: REUTERS/David Gray