A report released this week by one of the government's federal parliamentary committees concluded that the country's shipping sector has declined so rapidly since the mid-nineties that it now only has 46 Australian-flagged ships under its registry.

According to the report - entitled Rebuilding Australia’s coastal shipping - a lack of trading incentives and an out-of-date port system are creating major challenges for the industry by restricting growth and obstructing investment opportunities.

Concerns have also been raised over the large number of ageing workers which make up the industry's workforce - more than 50% of individuals employed by the industry are over 40, causing concern for the lack of interest in the sector by those under 21.

The government has now put forward proposals for a series of measures which would see a major reorganization of the shipping sector and bring it in line with the more successful maritime industries in place elsewhere in the world, starting by introducing a tonnage tax for Australian-registered ships.

The introduction of such a tax would be a vast improvement for the profitability of the industry, as companies would no longer have to pay tax on their overall earnings, but just according the tonnage of their ships, instead. Another key recommendation was the re-introduction of accelerated depreciation, which was abolished in 1996.

The report stated:

"The benefits (of a tonnage tax) would be two-fold: ship owners would be encouraged to register and remain registered in Australia and, by linking the tax to training requirements, the cost of training seafarers would be partially alleviated."

In addition to this, the government has also expressed its desire to begin major port re-developments in order to increase business interest and opportunity for Australia, and is also looking at ways of increasing the number of maritime specialists within the industry's workforce.