A Western Australian shipping company has alleged a senior federal government bureaucrat suggested it sack its Australian workforce and replace it with foreign recruits to remain competitive. 

According to Australian news service ABC, the country’s Prime Minister Tony Abbot has denied the claims. 

The luxury adventure cruise company North Star Cruises Australia reportedly made the claim in a submission to a senate enquiry on government proposals to deregulate the shipping industry.

It claimed it was told that to remain competitive, it should consider taking its ship off the Australian shipping register and re-register it in a foreign country, then lay off the Australian crew and hire cheaper foreigners. 

While the Prime Minister has denied the allegations, a North Star company representative told the Guardian Australia he stood by the claims, would say so under oath and even take a lie detector test.  

Among the government proposals is the easing of labour restrictions, allowing foreign ships to avoid paying Australian wages if in the country for less than six months.

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