Scott Morrison, the Australian Prime Minister, dropped somewhat of an unexpected announcement on the maritime industries earlier this week in a virtual address to the Australian Industry Group. In a speech covering a variety of topics he discussed various supply chain-related issues and announced a Productivity Commission inquiry into Australia’s maritime supply chains.
Shipping Australia welcomes this announcement. For the convenience of readers, the relevant extract of the speech is given below.
The Hon Scott Morrison MP, Prime Minister of Australia:
“Supply chains, we know, are under increased pressure around the world due to international COVID-related factors. It was a key focus of our discussions at the G20. Global container shipping costs, congestion and supplier delivery times all remain around historically high levels. Global shipping prices are up around six-fold since the beginning of the crisis.
Australian shipping prices have likewise risen sharply, you know this.
And congestion and delays are having flow on effects for domestic supply chains and consumers.
Now, that said, supply chains in Australia have proved generally resilient throughout the pandemic, despite COVID measures, isolated cases at Australian ports and industrial action and other localised disruptions. And encouragingly, the IMF and the OECD both expect the inflationary effects of these supply chain pressures to moderate in 2022, as consumer demand for goods rebalances and industry responds by bringing on more supply.
The Government’s Office of Supply Chain Resilience, that I established, is monitoring supply chain vulnerabilities right across our economy and coordinating whole-of-government responses to ensure access to essential goods.
Economic ministers, together with myself, continue to be briefed regularly on supply chain pressures, and the National Coordination Mechanism – so critical, so critical for business during the course of this pandemic – is meeting weekly with industry players in the run-up to Christmas.
We have learnt through the pandemic just how much better we can get that integration between how our Government integrates with businesses on these most practical of issues.
The key focus is on the flow of goods from overseas suppliers to Australian businesses and consumers.
And our Government is also keeping a close watch on the potential for industrial action to disrupt economic activity, noting that industrial action at Patrick Terminals is on hold until at least the 10th of December.
Now, we encourage the parties to this dispute to negotiate in good faith and to resolve their issues to get this sorted. But at the same time, I want to assure you that our Government will take action, if needed, to protect the Australian economy from serious harm.
In light of the recent ACCC Container Monitoring Report, the Government is also examining broader issues associated with the relative productivity of Australian ports.
Ports are the gateway for our economy. Inefficient ports are a tax on all of us.
Coalition Government’s – Liberals and Nationals – have always understood this, and have always been prepared to take action to ensure our ports can serve our economy as best as they possibly can.
And we are taking action by improving port productivity through infrastructure projects, tackling regulatory inefficiencies at the Australian border through the Simplified Trade System – which will streamline compliance costs for Australian importers and exporters while replacing legacy ICT systems.
Now, it’s clear, however, that productivity challenges remain in Australia’s maritime logistics system. These relate to competition, industrial relations, infrastructure constraints and technology uptake.
Now, shortly the Treasurer will be releasing the terms of reference for a Productivity Commission enquiry into the efficiency of our maritime logistics system. This is not an enquiry that I see going on for a long time. I want to see this back here by the middle of the year.
Having supported our economy strongly at the end of next year, I should say, having supported our economy strongly on the demand side through the pandemic, our focus inevitably turns to the supply side levers as the economy recovers, because it’s those supply side levers that can have such a big impact on inflationary pressures that put pressure on all Australians, whether mortgage holders or small business, as they try to make their payments and ensure their businesses can proceed forward in getting access to the capital they can to take advantage of the recovery”.