This Digest was prepared for debate. It reflects the legislation as
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Stevedoring Levy (Collection) Amendment
Date Introduced: 2 June 1999
House: House of Representatives
Portfolio: Transport and Regional Services
Commencement: Royal Assent
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
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)
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
- in respect of such restructuring activities as are prescribed
- 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
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:
- An end to the overmanning and restrictive work practices.
- Higher productivity. A commitment from the major stevedores to
a benchmark of 25 lifts per hour as a national five port average.
- 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
- Injury and fatality levels must come back to the all
industries' average or better.
- Lower costs throughout the 'logistics chain of the waterfront
- A drive to make full effective use of the technology available
to increase productivity and improve ship turnaround times.
- Improved training. We will actively promote training
opportunities and apprenticeship programs.(3)
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
- 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
- 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
- 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
- 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
- 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
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
Item 1 provides for the maximum appropriation in
relation to the scheme to be increased by $100 million.
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
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
Ronald C MacCallum, 'A priority of rights:
freedom of association and the waterfront dispute' Australian
Bulletin of Labour, September 1998, pp 207-221.
- Hon Peter Reith MP, Second Reading Speech, Parliamentary
Debates, 8 April 1998, pp 2725-2726.
- Parliamentary Debates (House of Representatives), 2
June 1999, pp 5749-5750.
- Minister for Workplace Relations and Small Business,
Waterfront Reform: Seven Objectives, 8 April 1998.
- Australian Competition and Consumer Commission, Press
Release, 29 June 1999.
- Sid Marris, The Australian, 14 January 1999.
- Hon Peter Costello, Press Release No.3 of 1999,
'Prices monitoring of container stevedoring services'.
- Helen Trinca, 'Extra $100 million for dock workers'
redundancies', Sydney Morning Herald, 12 May 1999, p 58.
- 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
- Hon John Anderson, Parliamentary Debates (House of
Representatives), 2 June 1999, p 5749.
- Mark Davis, op cit, 14 May 1999.
- Michael Bachelard, 'P&O creates new class of wharfie',
The Australian, 3 June 1999.
- ibid, citing Bureau of Transport and Communications and
Interstate Commission statistics.
- Mark Davis, 'New port rates give little joy', Australian
Financial Review, 1 April 1999.
- 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.
- Michael Bachelard, 'Defiant wharfies vote out P&O deal',
The Australian, 2 July 1999.
- Michael Bachelard, 'Wharies imposed upon', The
Australian, 13 July 1999.
- 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.
- Lindsay Tanner MP, Parliamentary Debates (House of
Representatives), 9 June 1999, pp 5129-5132, at 5129.
- Explanatory Memorandum, Stevedoring Levy (Collection)
Amendment Bill 1999, p 3.
- Hon Bruce Scott MP, Parliamentary Debates (House of
Representatives), 9 June 1999, p 5170.
26 July 1999
Bills Digest Service
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