Parliamentary committee finds the expense of moving goods to Melbourne is making Tasmanian exporters less competitive
Tasmania’s legislative council believes freight issues are blocking the state’s potential for economic growth.
The state’s upper house released its Growing Tasmania’s Economy report earlier this month, pinpointing freight and labour constraints as the must-address issues.
“Agricultural producers within Tasmania live with the reality of farming on an island state which, in the current environment, leaves them with no option other than to incorporate the higher cost of delivering their produce to market into their operating structures,” the bipartisan report notes.
Agricultural banking specialist Rabobank noted in a submission to the inquiry that this immediately puts Tasmanian food and agricultural products at a disadvantage.
The view was reinforced by the Tasmanian Food and Grocery Association (TFGA). “TFGA believes that it is vital for the future economic viability of the state to ensure that there is a cost structure for Tasmania that approaches ‘equivalence’ to that enjoyed for freight moved between capital cities in Australian mainland states,” it noted in its submission.
“Getting an extension of the Freight Equalisation Scheme is a good start but we only see it as perhaps an interim measure because we have to look at a long-term solution, whatever that may be.”
Wine Tasmania warned that higher freight costs were flowing into reduced investment in Tasmanian industry. “Investment in the Tasmanian wine sector is not fully capturing the supply chain growth, with some businesses choosing to finish and package wine off-island, as a direct result of the higher freight costs,” it says.
Some believe the answer lies in higher premium products, being exported in smaller quantities via air.
“Cathay Pacific has multiple 747 jumbo freighters flying out of Sydney back to Hong Kong completely empty almost every week of the year,” cherry grower Howard Hansen tells the enquiry.
“It is entirely realistic for us, when the [Hobart Airport] runway is extended, to be working on regular airfreight shipments direct out of Hobart, to avoid all that Melbourne cost.”
The suggestion is in line with a plan mooted by federal politician Eric Hutchinson.
Committee chairman Greg Hall says the report and suggestions will be forwarded to the federal Productivity Commission.