・In the United States the Jones Act restricts inter-state trade to US owned vessels. This remains a significant barrier to fair competition;
・In Italy, state-owned operators are obliged to purchase Italian hydrofoils, whilst it appears that private operators purchase from the cheapest source, usually Russia;
・The OEDC Agreement on the withdrawal of subsidies, if approved, would leave European countries more vulnerable to competition from expanding Asian shipyards as subsidies have created a fragmented and uncompetitive industry;
・The United States and Japan are not party to the OEDC Agreement and South Korea, one of the most important shipbuilding nations, is not a member of the OEDC. Norway has its own problems with liquidation of Westamarin and cancellation of orders placed by Stena on Finnyards;
・China, some European yards and the Commonwealth of Independent States are keen to gain a share of the new shipbuilding market. On the surface it would seem that lower production and labour costs may provide a price advantage in a price-elastic market, however, this does not necessarily equate to lower total wage bill per vessel; and
All of these factors could create a shift towards consolidation of the industry.
ISSUES FOR AUSTRALIAN INDUSTRY
The major issues arising out of this analysis, for the Australian shipbuilding industry are, concerning north-east Asia:
The possible future involvement of Japan, Korea, and China shipbuilders in fast ferry markets. A large amount of Japanese research and development work is being carried out into various forms of high speed craft. The FAST '93 conference held in Yokohama had a range of papers from Japan dealing with fast vessels ranging from the Techno-Super Liner to a variety of hydrofoils and catamarans.
There is clearly very large expenditure in this field although, just as clearly, the state of practical application is well behind that in Australia.
The smaller Japanese builders and the Japanese ferry operators appear conservative, and home market oriented. Nonetheless, as faster vessels become more generally accepted, Japanese shipbuilders will try to gain access to the current technology so that they can service their own market. Similar moves can be expected from Korean shipbuilders.
Hong Kong and China have been substantial markets for Australian fast ferries. They may be expected to focus increasingly on acquiring the technology for their own emerging shipbuilding industry.
BOUNTY PAYMENTS
A key issue influencing the ability of the Western Australian high speed light weight ferry industry to maintain or expand market share is the Federal government policy on ship's bounty support for shipbuilding. While not devoted entirely to the construction of fast ferries, about 95 per cent of the $23.8 million bounty paid in 1995/96 went to builders of high speed craft (10 out of 12 recipients).
