Blow to Tasmania on freight equalisation

Albanese rules out extension of scheme to north-bound trade in favour of a grant and a review

March 23, 2012

Tasmania has gained an extra $20 million of Commonwealth cash but not an increase in the Freight Equalisation Scheme (TFES)
to include north-bound exports.

Instead, federal Transport Minister Anthony Albanese has stated a review focused on long-term planning was needed, rather than "short tern fixes and bandaids".

"We appreciate the difficulties which have arisen following the decision by the Island’s sole international shipping operator to cease services in April 2011," Albanese says.

"That is why we are acting to provide some short-term help while we continue to work on a permanent solution.

"To this end, I have directed Infrastructure Australia to work with Infrastructure Tasmania to develop a long term strategic transport plan, with the first in a number of industry roundtables to be held in Launceston next Monday.

"While the Federal Government will continue providing leadership, tackling the commercial realities which led to the loss of international services in the first place will require cooperation amongst the Island’s various industries and some hard decisions by the State Government."

State Infrastructure Minister David O’Byrne, while welcoming the assistance package, has not given up hope for the adjustment to the scheme, which he describes as "one of the most effective ways to support Tasmanian exporters in the longer term".

"We've been fighting to support Tasmanian exporters and jobs on this issue for more than six months," O’Byrne says.

"In recent months, the Tasmanian Government - working closely with local industry and other stakeholders - put a proposal to the Federal Infrastructure Minister, Anthony Albanese, for including north-bound exports in the TFES.

"That proposal was a direct response to Tasmania losing its only international freight carrier because of market changes - a situation that was never foreseen when TFES was originally created.

"Our submission to the Federal Government was comprehensive, well-researched, fully costed and affordable.

"The Federal Government has now effectively rejected that proposal to include north-bound exports. However we are pleased the Commonwealth is exploring other options for supporting exporters across Bass Strait.

"While the Tasmanian Government welcomes and supports efforts to find a new international freight shipper for Tasmania, we know that's unlikely to happen in the short to medium term.

"Tasmanian exporters need urgent support, and we'll continue to fight for it.

"I'll be making my disappointment with this decision very clear to Minister Albanese, and will continue to lobby the Federal Government to better recognise Tasmania's island status and give our exporters a fair go."

The lack of the international service and Victoria’s proposed port fee – itself a replacement for the previous state government’s "truck tax" - put the issue into sharp relief last month.

Calling it "both destructive and indiscriminate" and threatening a legal challenge, O’Byrne claims the fee, expected to be worth $74 million to Victoria, is effectively a tax that would cost Tasmanian "shippers, producers and jobs".

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