Australia To Overhaul Shipping Tax Regime

by Mary Swire, Tax-News.com, Hong Kong

03 December 2010

On December 1 the Australian Minister for Infrastructure and Transport, Anthony Albanese, released a discussion paper outlining fiscal measures to strengthen Australia’s shipping industry, in part through improvements to the tax regime imposed on domestically-flagged vessels.

According to the Minister, the release of the discussion paper delivers on a commitment made by the government on August 13, 2010, to "restore the viability and reverse the decline of Australia’s domestic shipping industry."

“As a large, relatively remote island continent, Australia is particularly reliant on shipping for its ongoing economic development. Indeed almost all our imports and exports are carried by ship and our busy ports manage some 10% of the global sea trade.”

“Yet at present Australia has just 30 registered major trading ships carrying less than 0.5% of our huge export trade - down almost 50% in little over a decade due to the policy neglect of the former government.”

“Without significant economic and regulatory reforms our entire merchant fleet as well as the skilled workforce it trains and supports could be gone within a decade.”

The Minister said that the government is therefore, over the course of the next three years, to:

• Introduce new tax arrangements to attract greater investment into the industry;
• Overhaul seafarer training and provide a better deal for Australian seafarers; and
• Modernize domestic maritime laws and make the Australian Maritime Safety Authority the regulator of all commercial vessels operating in Australian waters.

“Our ambition is simple: a viable domestic shipping industry within a competitive national transport sector - an outcome which would help secure Australia’s long term economic prosperity and national security objectives,” Albanese explained, further adding that:

“It’s time for Australia to again be an active player in the global shipping industry.”

“Put simply, Labor’s ‘nation-building’ agenda of greater investment and long-term reform extends to the transport industry our farmers, miners and manufacturers rely upon to get their products to their international customers.”

“What’s more, a greater use of shipping - an efficient mode of transport - to move cargo from one part of the country to another could also play a major role in reducing Australia’s carbon footprint.”

The measures being proposed by the government are based on the recommendations from the bipartisan parliamentary inquiry the government commissioned shortly after entering office as well as the subsequent work of an advisory group consisting of industry representatives.

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