From 1 July 2014, the government will decrease the Protection of the Sea Levy (PSL) to 11.25 cents per net registered tonne for defined vessels on an ongoing basis. The PSL revenue was levied to establish a $10 million pollution response fund to enable the Australian Maritime Safety Authority to respond quickly to pollution incidents at sea. The government will now achieve savings of $39 million over four years by rephasing lower priority maritime safety initiatives and these savings will offset the reduction in revenue. Norton Rose Fulbright partner Ernie van Buuren says that the reduction of the PSL will assist to reduce the cost of conducting shipping business in Australia. He adds that in recent years shipping rates in Australia have surged and this reduction in the levy on ships entering Australian ports will be a welcome measure.

The government is also committed to supporting the recent Review of Coastal Shipping by the Department of Infrastructure and Regional Development, which aims to optimise the regulation of the coastal shipping industry. The review recently gained momentum and on 8 April 2014 Warren Truss, the Deputy Prime Minister and Minister for the department, announced the release of an options paper on approaches to regulating coastal shipping in Australia.

In May 2014, the Department also held an open consultation session in relation to the options to reform the legislation which manages cabotage regulation, which preserves freight routes from one Australian port to another for Australian flagged ships. The government is committed to finding a solution to balance the interests of Australian industry participants requiring competitive shipping services, and the interests of shipping stakeholders seeking to develop an Australian flagged fleet. Mr van Buuren also says that the Australian maritime industry is an unfortunate casualty of the government's funding cuts. The maritime industry's long awaited funding injection to support future workforce training needs of local seafarers has been now been cut, with the government set to achieve savings of $5 million over three years by not proceeding with funding for the Sustaining Australia's Maritime Skills measure announced in last year's budget. The decline, over a number of decades, of the Australian maritime workforce has made it difficult to competitively recruit, train and employ Australian crews. Mr van Buuren considers that this budget measure will significantly increase the challenges that already exist to rebuild a strong Australian maritime capability. The shipping task through Australian waters is forecast to double by 2029-30 which will substantially increase demand for maritime technical skills. Look out for further budget updates on specific areas of industry focus in coming days from Norton Rose Fulbright Australia.

Source: Norton Rose Fulbright Australia