THE ISLAND state’s shippers and government have applauded the Senate’s Tuesday passing of a motion to hold an inquiry into the Tasmanian Freight Equalisation Scheme.
The motion, which received a unanimous vote, was put forward by independent Tasmanian senator Tammy Tyrrell, who will now take up the role of chair of the Senate Select Committee’s inquiry.
The TFES was originally introduced by the Federal Government in July 1976 with the objective of alleviating the freight cost disadvantage incurred by shippers of eligible non-bulk goods moved between Tasmania and the mainland by sea.
It has been modified and extended several times since, and is due for a regular four-year review by the Department of Infrastructure, Transport, Regional Economics and the Arts’ Bureau of Transport Research Economics this year.
However, Senator Tyrrell’s contention, on behalf of major Tasmanian shippers, is that Bass Strait freight shipping costs are now vastly in excess of the rates of assistance, most of which have not been increased since January 2016, and the scheme is unduly complex.
“The TFES isn’t helping businesses the way it’s supposed to,” Senator Tyrrell said. “On average it takes four months from when a business ships their produce to when they get money back from the TFES. How many small businesses do you know that can wait four months for an invoice to be paid?”
“There’s never been a Senate inquiry that’s looked into the TFES in its own right. Now there will be.”
The Tasmanian Government welcomed the inquiry with Minister for Business, Industry and Resources, and Minister for Transport, Eric Abetz, saying reliable, affordable transport across Bass Strait was critical to the Tasmanian economy and community.
‘As an island state, Tasmania relies heavily on sea freight and the TFES is vital to placing Tasmanian businesses on a level playing field with the rest of Australia,” Mr Abetz said. “The Scheme has been in place for almost 40 years and has been the subject of a number of inquiries over that period. There is no doubt that Bass Strait shipping has undergone considerable change in that time, with significant increases in service frequency and capacity. Over time, successive amendments to the scheme have created some apparent inconsistencies in its scope and operations.”
TasFarmers CEO Nathan Calman said the review came at a critical time for the industry as primary producers are impacted by drought, rising freight costs, and inadequate support.
“There is an urgency to refresh the scheme to ensure it is fit for purpose,” Mr Calman said. “The industry has made it clear that the review must thoroughly examine the real costs of freight across Bass Strait, identifying the full financial burden on producers and exporters.
“Consideration should be given to mandating the indexation of financial support to cover all associated costs, including rehandling, container hire, port fees, and warehousing.”
Once constituted, the Select Committee will hold public hearings all over Tasmania and report back by November 2024.
