Tasmania is not being forgotten about in the raft of promises being made by both Labor and the Coalition in the lead-up to the federal election, with the Tasmanian Freight Equalisation Scheme (TFES) once again taking centre stage.
The Coalition has promised to invest an additional $65 million to “turbocharge” the scheme following 2024’s Senate hearing into its status.
The TFES was initially introduced by Malcolm Fraser in 1977 and offers financial assistance incurred by shippers of eligible non-bulk goods moved by sea across the Bass Strait.
The amount of assistance is based on the difference between the freight costs of moving the goods by sea and the notional freight costs of moving them by road over an equivalent distance.
A total of $181.7 million was spent under the scheme in 2023-24.
The $65 million increase in funding to the program will include:
- A 22 per cent increase in assistance for the calculated freight cost disadvantage for all northbound and southbound movements, increasing the current cap from $755 to $924 per twenty-foot (equivalent) container.
- An increase to the intermodal component from $100 to $200 per container.
- An increase to the trans-shipped (export) freight assistance from $700 to $800 per container, to reflect the increase in intermodal cost.
- Increase the base amount of the King Island and Flinders Island fixed rate by 22 per cent, plus $100 to reflect the increase in the intermodal component of the Scheme.
Liberal candidate for Lyons Susie Bower says the increase to funding of the program will be crucial to Tasmania’s economy.
“Tasmanian farmers and exporters are the backbone of Australia’s economy,” Bowers says.
“The Tasmanian Freight Equalisation Scheme was first instituted in 1977 by Liberal Prime Minister Malcolm Fraser and has been critical to the success of our economy ever since.
“However, over the years its value has been eroded by increasing freight rates and inflation.
“This turbocharging of the TFES is on top of our commitment to contribute $150 million to help catalyse the Greater South East Irrigation Scheme, which will transform agriculture in the south of the state.”
Labor’s early transport-related promises to Tasmania have come in the form of a slice of the overall $17.1 billion of transport infrastructure upgrades, with $200 million committed to Arthur Highway upgrades, $80 million for a Southern Outlet Transit Lane Extension between Olinda Grove and Kingston, and $20 million for planning works towards planning and design works for a new Tamar River crossing.
Tasmanian state Liberal MP Eric Abetz labelled Labor’s decision to allocate nothing to the TFES as “massively disappointing”.
The overall investment in Tasmania as detailed by Labor’s Budget totals $6.309 billion, an increase from the total of $5.779 billion in 2024-25.
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