Bills Digest No. 10  1999-2000 Stevedoring Levy (Collection) Amendment Bill 1999


Numerical Index | Alphabetical Index

WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

CONTENTS

Passage History
Purpose
Background
Main Provisions
Further Reading
Endnotes
Contact Officer & Copyright Details

Passage History

Stevedoring Levy (Collection) Amendment Bill 1999

Date Introduced: 2 June 1999

House: House of Representatives

Portfolio: Transport and Regional Services

Commencement: Royal Assent

Purpose

The Bill increases the funding available under the Stevedoring Levy (Collection) Act 1998 (the Principal Act) from $250 million to a maximum of $350 million.

The reason given for increasing the appropriation is the greater than expected cost of waterfront redundancies.

Background

The Principal Act and the Stevedoring Levy (Imposition) Act 1998 came into effect on 3 July 1998 and provide the legislative basis for the Government's plan to restructure working arrangements on the docks.

As part of these arrangements:

  • The Commonwealth has established the Maritime Industry Finance Company (MIFCo), a wholly owned Commonwealth company limited by guarantee, to administer a loan facility of up to $250 million to pay out redundant waterside workers.
  • Funds for the repayment of redundancies are to be recouped from participating stevedores via a levy on the loading and unloading of containers and vehicles in Australia [refer: sections 7 and 8 of the Principal Act].
  • The levy does not attach to bulk cargo and both major stevedores - Patrick Stevedores and P&O - have agreed that the levy will be absorbed into existing cost structures.
  • The levy is presently $6.00 per vehicle and $12.00 per container, loaded or unloaded. Maximum rates of $10.00 per vehicle and $20.00 per container are permitted by the legislation.
  • Prior to introduction, the Government announced that the scheme would be wound up within six or seven years.(1)

Eligibility

Section 18 of the Principal Act provides that the Minister may authorise payments:

  • in connection with 'qualifying redundancies'
  • in connection with specified activities associated with the reform or restructuring of the stevedoring industry including: occupational health and safety programs, training programs and the introduction of new technology or the improvement of wharf facilities
  • in respect of such restructuring activities as are prescribed by regulation,
  • in respect of relevant administrative costs, and
  • administrative costs incurred by the Commonwealth in connection with the collection of the levy.

The Minister for Transport and Regional Services, Hon John Anderson, reiterated in his Second Reading Speech that:

The Government ...will only agree to fund those reform initiatives which have objectives or outcomes that are consistent with the Government's seven waterfront reform benchmarks as the basis for continuing improvement.(2)

Those seven objectives in summary are:

  1. An end to the overmanning and restrictive work practices.

  2. Higher productivity. A commitment from the major stevedores to a benchmark of 25 lifts per hour as a national five port average.

  3. Greater reliability through less industrial disputation and less interruption through elimination of restrictive work practices. The level of industrial action on the waterfront should be no worse, and preferably better, than the national average for all industries.

  4. Injury and fatality levels must come back to the all industries' average or better.

  5. Lower costs throughout the 'logistics chain of the waterfront gateway'.

  6. A drive to make full effective use of the technology available to increase productivity and improve ship turnaround times.

  7. Improved training. We will actively promote training opportunities and apprenticeship programs.(3)

Post settlement

It is beyond the scope of this Digest to review either the history of the Patrick's dispute or the economics of the industry. Those and other related matters have been dealt with extensively elsewhere and interested readers may care to refer to the items listed under 'Further Reading' below.

For present purposes the following outline of events serves to bridge the gap between past publications and the present:

  • Interim agreement on the terms of the protracted dispute between Patrick Stevedoring and the Maritime Union of Australia (MUA) was reached June 1998. A final agreement was concluded on 3 September 1998 with financial guarantees being provided to the ACCC in respect of outstanding third party boycott claims against the MUA. (A $3 million pay-out to injured third parties was made from the Stevedoring Industry Reform Small Business Compensation Fund in late June 1999. Further payments of up to $4.5 million are anticipated.(4))
  • On 14 January 1999, reports appeared that Patrick Stevedores' main rival, P&O Ports intended to 'slash' its workforce 1300 strong workforce by 40 percent.(5)
  • On 22 January 1999, the Treasurer, Hon Peter Costello announced that he had directed the Australian Competition and Consumer Commission (ACCC) to monitor 'the prices, costs and profits relating to the supply of stevedoring services at container terminals' in the ports of Adelaide, Brisbane Burnie, Fremantle, Melbourne and Sydney.(6)
  • On 12 May 1999, it was reported that the 'Federal Government ha[d] been forced to add an extra $100 million to its scheme to finance the exit of workers from the waterfront after a blow-out in the cost of redundancies.'(7)
  • Ship owners' representatives, such as the Australian Shipping Federation, have alleged that the stevedoring companies are not passing on cost savings from the Government's reform package. These claims are not, for the present at least, accepted by the Government.(8)
  • Whilst figures cited and estimates vary, it undeniable that there has been a further significant decline in the number of waterfront workers since the start of 1998.
  • About 800 workers have taken redundancy packages under the present scheme and more are to come.(9) Press reports suggest that P&O Ports and Patrick Stevedores are both pushing through job cuts totalling about 50% since the 1998 dock's dispute.(10) In the case of P&O Ports, the cutbacks are to be effected by a new enterprise agreement that sees the departure of 450 full-time permanent staff and their replacement with 360 permanent part-timers.(11)
  • These industry-wide reductions represent a further decline in numbers employed on the docks from

- 1951 24,500

- 1961 22,600

- 1971 16,800

- 1981 8300

- 1990 8146

- 1991 5707

- 1993 3800

- to less than 300 in 1999.(12)

  • Figures for the first quarter after the settlement show a mixed result in terms of productivity improvement. Average crane rates in the five major ports dipped slightly in the 3 months to December 1998 with a significant improvement in Melbourne being offset by equally significant declines in Sydney, Brisbane and Fremantle.(13) There was a marginal improvement in March Quarter of 1999 but the Sydney figure of 17.7 containers per hour is still below the December 1997 figure and well adrift of the Government's target rate of 25 lifts per hour.(14) Later results - after the P&O Ports enterprise agreement comes on stream - may be more encouraging.
  • By early July 1999, P&O Ports had reached agreement with all its workforce bar those in the West Swanson dock on revised work practices and manning levels.(15) The matter was then scheduled to go before a Full Bench of the Australian Industrial Relations Commission.(16)

Senate Committee

The present Bill was passed by the House of Representatives on 9 June 1999.

On 28 June the Bill was referred to the Senate Rural and Regional Affairs and Transport Legislation Committee which is due to report by 24 August 1999.

Debate on the Bill in the House focused on what the Opposition has claimed is the inadequate explanation for the apparent cost blow-out associated with the extension of the scheme which will now be wound up in 2010.(17)

The Opposition has also questioned whether funds have been distributed outside the terms of the seven benchmark objectives set by the Government in April 1998.(18)

The Explanatory Memorandum to the present Bill states that when the legislation was enacted:

... the Government believed that [an appropriation of $250 million] would provide sufficient funds to meet the costs arising from the implementation of reform and restructuring in the stevedoring industry ... However, the estimated number and cost of redundancies is greater than anticipated. Therefore, the Government is seeking to ensure that it is able to authorise funding to meet the total expected cost of redundancies and ensure that sufficient funds are available for other worthwhile reforms and to meet the administrative costs associated with collection of the levy.(19)

Responding to Opposition criticisms alleging a lack of transparency, the 'duty' Minister, the Minister for Veterans' Affairs, Hon Bruce Scott, closed the debate in the House by providing additional information on the scheme. He noted:

As members opposite are aware, MIFCo has estimated that $195 million will be required to meet the cost of redundancies. This is up from the original figure of $148 million. MIFCo is negotiating a loan to cover that amount of principal. Contrary to the assertions of the member for Melbourne, the interest rates which the banks have offered MIFCo have not been falling. The current estimated interest cost for borrowing $195 million over the term of the loan until 2010 is more than $100 million. The total additional cost of redundancies and extra interest is therefore estimated to be in excess of $100 million, and that is why the government seeks an additional $100 million for the appropriation.(20)

Main Provisions

Item 1 provides for the maximum appropriation in relation to the scheme to be increased by $100 million.

Further Reading

Industry Analysis

House of Representatives Standing Committee on Transport, Communications and Infrastructure, Warehouse to Wharf: Efficiency of the Interface between Seaports and Land Transport, AGPS, April 1992.

Bureau of Transport and Communications Economics, Review of the Waterfront Industry Reform Program, Report 91, Commonwealth of Australia, 1995.

Productivity Commission, Work Arrangements in Container Stevedoring, April 1998.

Productivity Commission, International Benchmarking of the Australian Waterfront, April 1998.

Minister for Workplace Relations and Small Business, Waterfront Reform: Seven Benchmark Objectives, 8 April 1998.

Dr Clive Hamilton, Productivity in Australian Container Terminals: New evidence from an international study, The Australia Institute, 24 April 1998.

Honor Figis, Reforming the Waterfront: Background to the Current Debate, Briefing Paper No.5/98, NSW Parliamentary Library, 1998.

Waterfront Dispute and Beyond

Steve O'Neill, Information and Research Services, 'Outline of the waterfront dispute', Current Issues Brief No.15 of 1997-98, 12 May 1998.

Bob Bennett, Information and Research Services, Stevedoring Levy Collection Bill 1998 and Stevedoring Levy (Imposition) Bill 1998, Bills Digests Nos 201-202 of 1997-98, 12 May 1998.

Steve O'Neill, Information and Research Services, 'The waterfront dispute: from High Court to Settlement - summary and comment, Current Issues Brief No.1 of 1998-99, 14 September 1998.

Michael Bachelard, 'Dust finally settles to show real dock winners', The Australian, 5 April 1999.

Gerard Griffin and Stuart Svensen, 'Industrial relations implications of the Australian waterfront dispute', Australian Bulletin of Labour, September 1998, pp 194-206.

Ronald C MacCallum, 'A priority of rights: freedom of association and the waterfront dispute' Australian Bulletin of Labour, September 1998, pp 207-221.

Endnotes

  1. Hon Peter Reith MP, Second Reading Speech, Parliamentary Debates, 8 April 1998, pp 2725-2726.

  2. Parliamentary Debates (House of Representatives), 2 June 1999, pp 5749-5750.

  3. Minister for Workplace Relations and Small Business, Waterfront Reform: Seven Objectives, 8 April 1998.

  4. Australian Competition and Consumer Commission, Press Release, 29 June 1999.

  5. Sid Marris, The Australian, 14 January 1999.

  6. Hon Peter Costello, Press Release No.3 of 1999, 'Prices monitoring of container stevedoring services'.

  7. Helen Trinca, 'Extra $100 million for dock workers' redundancies', Sydney Morning Herald, 12 May 1999, p 58.

  8. Mark Davis, 'Ship owners want their cut', Australian Financial Review, 14 May 1999, p 7. See also 'Docks duopoly takes its toll', Australian Financial Review, 6-7 March 1999.

  9. Hon John Anderson, Parliamentary Debates (House of Representatives), 2 June 1999, p 5749.

  10. Mark Davis, op cit, 14 May 1999.

  11. Michael Bachelard, 'P&O creates new class of wharfie', The Australian, 3 June 1999.

  12. ibid, citing Bureau of Transport and Communications and Interstate Commission statistics.

  13. Mark Davis, 'New port rates give little joy', Australian Financial Review, 1 April 1999.

  14. Helen Trinca, 'Wharfies speeding up their loading', Sydney Morning Herald, 25 June 1999, and Michael Bachelard, 'Wharfies lift game', The Australian, 25 June 1999. Both articles cite Bureau of Transport Economics figures.

  15. Michael Bachelard, 'Defiant wharfies vote out P&O deal', The Australian, 2 July 1999.

  16. Michael Bachelard, 'Wharies imposed upon', The Australian, 13 July 1999.

  17. Cheryl Kernot MP, Parliamentary Debates (House of Representatives), 9 June 1999, pp 5125-5127. Hon Bob McMullan MP, Parliamentary Debates (House of Representatives), 9 June 1999, pp 5168-5170, at p 5170.

  18. Lindsay Tanner MP, Parliamentary Debates (House of Representatives), 9 June 1999, pp 5129-5132, at 5129.

  19. Explanatory Memorandum, Stevedoring Levy (Collection) Amendment Bill 1999, p 3.

  20. Hon Bruce Scott MP, Parliamentary Debates (House of Representatives), 9 June 1999, p 5170.

Contact Officer and Copyright Details

Bob Bennett
26 July 1999
Bills Digest Service
Information and Research Services

This paper has been prepared for general distribution to Senators and Members of the Australian Parliament. While great care is taken to ensure that the paper is accurate and balanced, the paper is written using information publicly available at the time of production. The views expressed are those of the author and should not be attributed to the Information and Research Services (IRS). Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion. Readers are reminded that the paper is not an official parliamentary or Australian government document.

IRS staff are available to discuss the paper's contents with Senators and Members
and their staff but not with members of the public.

ISSN 1328-8091
© Commonwealth of Australia 1999

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members of the Australian Parliament in the course of their official duties.

Published by the Department of the Parliamentary Library, 1999.

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