The 2016 consultation paper—Cost recovery for services under the National System for Domestic Commercial Vessel Safety invited comment on two proposed models for a full cost recovery levy, and fees for service—to offset the costs associated with AMSA delivering national system services from 1 July 2017.
Consultation was open between August and October 2016 and received over 600 individual responses.
Initial response from Australian governments—2016
Following the industry consultation, in late 2016 Australia’s Transport Ministers extended the start date of national service delivery by AMSA to 1 July 2018, to allow more time to address the issues raised by industry.
In early 2017 AMSA undertook further economic analysis to build a more detailed picture of the domestic commercial vessel industry to inform future cost recovery arrangements.
Summary of feedback
The 2016 consultation focused on two options for full cost recovery levy models. The response from industry was that full cost recovery would negatively impact owners and operators across the domestic vessel industries. They were not receptive to either of the proposed levy models although they remained strongly supportive of a national approach to safety.
Concerns were around seven key themes:
- cost increases and impact on industry
- government subsidisation versus full cost recovery
- privatisation of survey services
- service delivery arrangements
- safety implications
- industry sustainability and wellbeing.
Government response—2017
Australia’s Transport Ministers have now considered the views of industry, informed by additional analysis and modelling, and agreed to provide funding to support operators and crew in transitioning to new service arrangements. The additional funding will give industry time to adjust to a gradual increase in costs.
At the same time AMSA has been preparing to deliver services from 1 July 2018.
Following is an overview of the main themes from the consultation and how issues raised have been addressed:
- Implementation
What was proposed in 2016
Transition to national system services under AMSA was proposed for 1 July 2017.
What you told us
Respondents were concerned about the impact on owners, operators and crew of a full cost recovery model implemented within a short time frame.
Request for a delay in implementation to allow time for industry to prepare.
Government response
In late 2016 Australian governments agreed to extend full transition to the national system until 1 July 2018.
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Cost recovery
What was proposed in 2016
Full cost recovery from first year with no government subsidy.
What you told us
Respondents told us the proposed levy represented an unexpected, significant and immediate increase in costs to industry.
Government response
Australian governments have agreed to provide over $100 million to support industry in transition to national services.
No levy will be charged to industry in the first year of AMSA’s service delivery. Fees for service will be charged from 1 July 2018.
- Transition period
What was proposed in 2016
A two-year transition period was proposed.
What you told us
Respondents were concerned the two-year timeframe was not sufficient.
Feedback indicated five years was an appropriate timeframe for transition.
Government response
Australian governments have extended the transition period with levy charges gradually increasing.
- Levy model and structure
What was proposed in 2016
Two levy models options were proposed on the basis of full cost recovery.
Model 1—proportional
Flat charge per metre. Levy rate based on the measured length of the vessel with the rate applied per metre.
Model 2—progressive
Fixed charge, plus incremental rate per metre. Levy rate based on the vessel class and measured length, combining a fixed charge per vessel with an incremental metre rate.
What you told us
The majority of respondents rejected both models arguing that factors—including risk, area of operation, type of operation, meterage, passenger numbers, ability to pay, fleet size, frequency of use, seasonal operations, calm water use, compliance record and time taken up with the regulator—should be taken into account in determining the levy paid by each operator.
Government response
AMSA has developed one levy model—subject to final Australian Government approval—taking into account industry concerns.
The revised model proposed will see the levy calculated on the basis of vessel class, vessel length and area of operation.
The commercial vessel industry is diverse with some sectors facing higher risks than others. To build and administer a model which incorporated each factor would be difficult for industry to navigate and likely to increase administrative costs.
- Fees
What was proposed in 2016
A proposed fee structure was presented outlining a range of fees for services. Fees would be charged for services provided, as per Australian Government Cost Recovery Guidelines.
What you told us
Feedback on the proposed fee structure did not feature heavily in the consultation.
Government response
Currently state and territory governments charge different fees and provide different levels of subsidies.
From July 2018, fees will be the same across Australia.
AMSA will retain the fee structure previously proposed with some minor amendments to reflect refinements in processes and to align with the consumer price index.
- Charging arrangements
What was proposed in 2016
The proposed levy would be charged to the holder of the following vessel permissions:
- Certificate of Survey
- Non-survey approval (EX02)
- Restricted C approval (EX40), or
- Other exemptions which allow the vessel to operate.
What you told us
Respondents requested a greater range of exemptions be considered.
Government response
AMSA is considering the list of vessels which may be exempt from the levy and any regulatory changes will be consulted on further.
- Service provision
What was proposed in 2016
The consultation paper described services being delivered nationally through a truly national model with services made available through a range of channels—online services, phone support and face to face support provided through selected AMSA locations and Australia Post offices around Australia.
What you told us
Respondents questioned what they would receive for their money, especially in remote areas—given the proposed cost increases.
Government response
AMSA has progressed its service offer and a full outline of these services is set out in the customer service offer information sheet.
To achieve the benefits of a national system—a centralised model will be adopted for the management of administrative and regulatory functions, development of standards, safety education and support, compliance and incident reporting.
This model ensures all people who participate in the national system receive the same level of service, can seek support and obtain consistent advice. Services will be delivered through multiple channels, including regional offices so the regulated community can contact, interact and transact with AMSA—wherever they are located and at a time that suits them.
- Privatisation of services
What was proposed in 2016
It was described in the consultation paper that vessel owners would be required to engage a private accredited marine surveyor to undertake a range of survey functions.
What you told us
Respondents indicated the privatisation of surveyors and full cost recovery would add significantly to survey costs. There were also concerns over quality control and how increases in demand for services would be managed by AMSA.
Government response
Most state and territory marine safety agencies have already ceased, or are phasing out, the provision of government survey services.
From 1 July 2018, all surveys will be conducted by AMSA accredited private surveyors. This will give vessel owners the choice of who they engage and introduces a competitive market mechanism.
As at 1 November 2017, AMSA had accredited 257 surveyors and 8 recognised organisations to perform survey services.
The integrity of surveyor services is assured by the accreditation system developed and managed by AMSA. It requires surveyors to:
- have a deep understanding of national system legislation, standards and other relevant documents
- obtain and maintain professional indemnity insurance
- obtain and hold a membership of a professional association
- operate under the ISO 9000 or equivalent management system
- have appropriate experience, and
- have appropriate qualifications.
AMSA provides updates and conduct educational workshops with surveyors each year.
The proposed streamlined survey arrangements will assist in reducing costs over time.
- Safety
What was proposed in 2016
The national system includes a range of core services and activities aimed at promoting safety and delivering benefits for commercial boating, fishing and tourism operations across Australia.
It will encompass safety education and support to encourage people to actively promote safety by fulfilling their regulatory responsibilities and fostering safe practices in their industry.
What you told us
Respondents believed the limited capacity to absorb an increase in costs will have a negative impact on maintaining safety standards and/or modernising vessels.
They also indicated increased costs would affect safety throughout the industry as a result of cost cutting leading to smaller crews, less resources for training, carrying out operations in smaller vessels and pressure to reduce maintenance costs.
Government response
The decision of Transport Ministers to subsidise transition over an extended period of time has been taken to address industry’s concerns about their ability to absorb cost increases.
The national system under AMSA will deliver nationally consistent regulation of safety for the first time. This will be done in collaboration with owners, operators and crew, as well as third party service providers and industry stakeholders.
AMSA is negotiating with its state and territory partner agencies in relation to the delivery of compliance and inspection services to ensure the same presence for on water and alongside inspections is maintained.
- Industry sustainability and wellbeing
What you told us
Respondents indicated increased costs would put additional pressure on sectors, particularly small operators in the fishing sector, and the increase may have an impact on their commercial viability and the health and wellbeing of some operators.
Government response
Australian governments have acknowledged feedback about increases in costs and the impact this may have on this industry.
In response, they have agreed to provide funding over an extended period to support industry as they adjust to new national system services.
While fees for services are standardised and AMSA assumes service delivery—no levy will be charged to industry in the first year.
This will ensure fair and equitable treatment of all operators around the country during the implementation period.
New fees for services will apply from 1 July 2018.
