BRIEFING NOTE SUMMARY
- The Special Recreational Vessels Bill 2019 passed by the Senate on 5 December allows foreign owned superyachts to charter in Australia via temporary licences which are issued under the Coastal Trading Act.
- While the change in policy will unlock an estimated 11,800 jobs and $1.64 billion in revenue to the Australian economy by 2021, a sunset clause attached to the Bill will see the temporary licensing option expire on 30 June 2021.
- The inability for foreign flagged superyachts to charter in Australia has historically been the single biggest inhibitor to growth in the Australian superyacht industry.
- Allowing foreign flagged superyachts to charter in Australia beyond 2021 requires a revision of The Coastal Trading (Revitalising Australian Shipping) Act 2012 or an extension of the current Special Recreational Vessel laws.
Allowing foreign superyachts to charter in Australia without the need to be imported is worth an estimated 11,800 jobs and $1.64 billion in revenue to the Australian economy.
To unlock this market and attract increased visitation to Australia, in December 2019 a Special Recreational Vessels Bill was passed by the Senate, allowing foreign owned superyachts to charter in Australia under temporary licencing arrangements. However, the Bill contains a sunset clause that expires on 30 June 2021. A permanent solution is therefore needed, which requires a revision of The Coastal Trading (Revitalising Australian Shipping) Act 2012.
The inability for foreign flagged superyachts to charter in Australia has been the single biggest inhibitor to growth in the Australian superyacht industry. In neighbouring countries such as Fiji, changes in legislation to allow foreign flagged superyacht charters has shown a 40% increase in vessel visitation and an increase of average stay from 21 days to 136 days. New Zealand enjoyed an increase of 54% in superyacht visitation in 2014-2015 with new legislation permitting a vessel to stay up to 2 years and conduct charters.
In 2017, the Federal Government submitted changes to The Coastal Trading (Revitalising Australian Shipping) Act 2012 into Parliament that removed the current requirement for five voyages, removed the requirement for each voyage to be between two separate ports, and allowed exemption from the Customs Act while alongside or in a maintenance yard.
The amendments were passed by the Lower House in August 2018, however were not sent to the Senate and in October 2019, the Department of Infrastructure, Transport, Regional Development and Communications advised the superyacht sector that consultations regarding amendments to the Act would be reopened.
To limit the impact of extended consultations on superyacht sector growth, in December 2019 the Morrison Government introduced a Special Recreational Vessels Bill into Parliament that allows superyacht owners to apply for a temporary licence, enabling superyachts to engage in coastal trading in Australia over a 12-month period. The Bill will expire on 30 June 2021 when it’s anticipated broad reform of the Coastal Trading Act will have been achieved.
With no change to the current policy, economic modelling of the Australian superyacht industry suggests the $1.965 billion industry would grow by approximately 13% over the five years from 2016 to 2021. However, with appropriate policy settings the superyacht sector’s annual contribution to the Australian economy could grow by as much as 70%, delivering $1.64 billion more in GDP and 11,800 more Australian jobs.
In Tropical North Queensland (TNQ) the industry currently injects $324.1 million into the regional economy and supports 2664 full-time equivalent jobs, which represents 18% of the 14,500 jobs supported by the superyacht industry Australia-wide.
Following the recent change in policy, by 2021 the TNQ regional contribution is expected to grow by 78% to $577.7 million per annum, leading to an additional 4504 jobs.
Super Yacht Group Great Barrier Reef (SYGGBR) strongly recommends that following the new round of industry consultation, the resulting amendments to the Coastal Trading Act be passed by Government before 31 December 2020 in order to permit foreign flagged superyachts to charter in Australia beyond 2021. There is no requirement for Government investment in order to secure the additional $1.64 billion in GDP per annum and provide surety to the sector.
The urgency of a solution is demonstrated by interest from international companies such as Burgess (world’s largest superyacht charter company) which has recently established an office in Sydney to support the growing number of international events that will attract superyachts to the Indo-Pacific region.
Current events that will attract superyacht vessels to the region include:
- 28-29 Feb 2020 – SailGP in Sydney Harbour
- Jul to Aug 2020 – Summer Olympics in Tokyo
- Dec 2020 to Mar 2021 – 36th America’s Cup in Auckland
- That in 2019-2020, consultations on options for reform of the Coastal Trading (Revitalising Australian Shipping) Act 2012 be fast-tracked by the Department of Infrastructure, Transport, Regional Development and Communications.
- That to provide surety to the sector and allow foreign flagged superyachts to charter in Australia beyond 2021, the Department of Infrastructure, Transport, Regional Development and Communications work with the Senate to secure the passage of amendments to the Coastal Trading (Revitalising Australian Shipping) Act 2012 by 31 December 2020.
|PROPONENT:||Superyacht Group Great Barrier Reef|
|STATE ELECTORATE:||All TNQ|
|FEDERAL ELECTORATE:||Leichhardt, Kennedy|