THE Federal Budget for 2021-22 is tightly focused on driving growth and rebuilding the economy from the COVID-19 pandemic.
There is much to laud, including the commitment of funding for a Melbourne intermodal terminal and also funding for a National Freight Data Hub and a boost for road safety.
And, there are also a few things that industry players feel are lacking, including a lack of attention to the maritime sector.
For a summary some of the important aspects of the budget for customs, and import and export industry, see Andrew Hudson’s commentary in the DCN.
Not a blue highway budget
The Maritime Union of Australia said the government had abandoned the blue highway – as the budget “failed to invest in the nation’s shipping industry”.
“Despite a cash-splash that allocated billions of dollars to road and rail infrastructure, the 2021-22 Budget failed to make any significant investment in the shipping industry, which is integral to Australia’s economic prosperity as an island nation,” the union said.
MUA national secretary Paddy Crumlin said ships take Australian commodities and manufactured products to the world, they deliver fuel and essential goods to Australian consumers and move materials along the coastline.
“The COVID-19 pandemic highlighted just how vulnerable these maritime supply chains are, and how vital they are for keeping Australia’s economy moving, yet the Morrison Government has again failed to make any significant investment in the industry,” Mr Crumlin said.
“While Deputy Prime Minister and Transport Minister Michael McCormack is busy promoting billions of dollars in road and rail investment, he has gone missing on the largest contributor to Australia’s freight sector, shipping. A long-term vision needs to take all transport modes into account,” he said.
“The Blue Highway is the backbone of Australia’s economy, yet since the election of the Coalition Government in 2013 more than half of the Australian ships that carried cargo between our ports have been lost, taking with them more than 500 direct seafarer jobs.
Mr Crumlin said there was growing consensus across the maritime industry that the federal government needed to urgently formulate a comprehensive strategy for Australian shipping.
“Australian manufacturers and resource companies are increasingly facing costly bottlenecks and unreliability caused by just-in-time supply chains reliant on cheap foreign ships,” he said.
“The maritime industry is demanding an integrated national transport policy that levels the playing field and ensures fair competition among all transport modes, rather than a Federal Budget that pours billions into road and rail projects while ignoring shipping.”
Mr Crumlin said short sea shipping for domestic use is a critical component of supply-chain investment.
“It’s time for the federal government to take the blinkers off when it comes to the importance of domestic shipping, otherwise Australia will continue to be left with a flawed and outdated model that is designed for a different distribution and fuelled by tax evasion and labour exploitation,” he said.
“In addition to freight movement, emerging industries like offshore wind will require specialist vessels and highly-skilled maritime workers to undertake construction and maintenance work, which the federal government should be investing in now.”
Mr Crumlin said money should also be devoted to creating a national strategic fleet, consisting of dozens of large commercial trading vessels to carry fuel containers and bulk goods between Australian ports and transport Australian goods to international markets.
“This could be achieved by providing incentives to Australian companies to own and operate Australian-flagged vessels through better design of the tax system and a tailored industry policy support package,” he said.
“Making Australia a regional centre of maritime commerce would not only boost the nation’s economic prosperity, it would contribute to regional security at a time of growing tensions.”
Freight friendly road funding for the Illawarra
NSW Ports welcomed the $240 million in funding allocated in the budget for the Mount Ousley Interchange.
The company said it would support enhanced trade links between Port Kembla and greater and western Sydney.
“NSW Ports has worked with Business Illawarra and other key Illawarra First members including the University of Wollongong to advocate for this vital road project, which will improve the safety, efficiency and productivity of the corridor and improve access to and from Port Kembla for heavy vehicles,” the company said.
“The funding announcement follows the NSW Government’s announcement in November of $21 million for planning the project. These key infrastructure projects will support Port Kembla as the port of growth and will help facilitate its development as the next container terminal for NSW.”
National Freight Data Hub funding
The Australian Logistics Council welcomed the investments in the National Freight Data Hub and the National Heavy Vehicle Regulator announced in Tuesday’s budget.
The government proposes to provide $28.6 million over the forward estimates period ($10.6m this financial year) to “establish a National Freight Data Hub” to enhance the collection of freight data across all modes to:
- support day-to-day operations;
- improve infrastructure and transport investment and other decisions; and
- enable end-to-end performance evaluation for Australia’s freight system.
Additionally $12.1m over three years will be provided to the Heavy Vehicle National Regulator to fund engineering assessments for local government owned road network infrastructure.
These investments are the two expenditures contained in the budget to advance the National Freight and Supply Chain Strategy.
ALC CEO Mr Kirk Coningham said that assisting the government in developing a Freight Data Hub that enhances freight chain productivity is an ALC priority.
“The capital injection provided to the Data Hub project in [the] budget gives industry the confidence that the government is committed to developing a system that will assist the efficient movement of freight from one end of the supply chain to the other. ALC stands ready to assist bringing this project to fruition,” he said.
“The investment in the National Heavy Vehicle Regulator is also important. Funding engineering assessments of local government road infrastructure will assist road owners to make the right decision when considering requests for road access by heavy vehicles rather than making conservative decisions denying access so as to protect the infrastructure from damage.”
ALC also welcomed the investment of $61.8m for the planning and development of the Melbourne Intermodal terminal, and a commitment of “up to” $2 billion for its subsequent construction.
However, the Budget Papers say that “specific funding arrangements, including an option for equity investment (with an equivalent contribution from the Victorian Government) will be settled at a later date”.
Mr Conningham said that ALC hoped that funding arrangements can be finalised as soon as possible so that this important infrastructure can be developed to support the movement of freight in Victoria and the efficient operation of the Inland Rail that is currently being developed
Trucking issues unaddressed
The National Road Transport Association said the budget’s boosts to infrastructure and small business are welcome, but a range of fundamental trucking industry issues remain unaddressed.
NatRoad CEO Warren Clark said a one-year extension to the “full expensing” scheme to allow businesses with a turnover or income of less than $5 billion to immediately write-off the cost of assets they first use or install by June 30, 2023 is a centrepiece.
“Extension of the ‘loss carry back’ allowing eligible companies to use tax losses to offset previously taxed profits will also help most heavy vehicle owner-operators,” Mr Clark said.
“Road funding makes up a quarter of the $15 billion commitment to infrastructure, and that will make roads safer and reduce productivity-killing congestion.
“Major announcements of $400 million for an Inland Freight Route as an alternative to the Bruce Highway in Queensland, $2 billion to upgrade the Great Western Highway in Sydney’s Blue Mountains and $161.6m for the Truro bypass in South Australia are big tickets items that are welcome.”
Mr Clark said structural issues like red tape at state borders, unfair contract laws and a lack of national licensing and accreditation are still to be addressed.
“While we are grateful for the positives, there’s nothing in the budget that tackles any of these structural problems and they are crying out for reform,” Mr Clark said.