Tasmania keeps heat on Melbourne port rent issue

By: Rob McKay

Hutchinson writes to Sims at ACCC as Hidding vows to keep TFES out of Victorian pockets

Tasmania keeps heat on Melbourne port rent issue
Eric Hutchinson wants ACCC action.


Already spurred by the Tasmanian Freight Equalisation Scheme (TFES) debate, Tasmanian politicians and industry representatives are being further galvanised by the prospect of Melbourne port rent hikes being passed on to its exporters.

Following the lead of stevedores fearful of swingeing rent hikes in the port of Melbourne especially but also elsewhere, driven by what they see as inflated recent leases, the talk is of involving the Australian Competition and Consumer Commission (ACCC).

But that body says its powers may be limited at present.

The latest to push the issue in this direction is Federal member for Lyons Eric Hutchinson, who has written to ACCC chairman Rod Sims today seeking the investigation after concern expressed that Tasmanian businesses using the port faced massive fee increases.

"Tasmanian businesses have no alternative when it comes to exporting their products," Hutchinson says.

"Annually more than 25 per cent of the volume moved through the port of Melbourne originates in Tasmania."

Hutchinson tells Sims that Tasmania lost its only international shipping service more than three years ago after new coastal shipping regulations were introduced and has been obliged to instead use the Port of Melbourne for goods going to export markets.

"Tasmanian exporters should not be paying the price for the Victorian Government wanting to inflate the value of income derived from its port asset,’’ he says.

Hutchinson asks Sims to undertake the investigation "as a matter of urgency".

"It is untenable, unacceptable and against the notion of free trade between the states if Tasmania is obliged to use the port because of its geographic isolation," Hutchinson says.

However, it is unclear what concrete action the ACCC can undertake beyond keeping the issue alive with the public.

"The ACCC’s only formal role at this stage is the direction from the minister to monitor and provide an annual report on the container stevedoring industry," a spokesman tells ATN.

"In terms of advocacy the ACCC has been pointing out its concerns regarding allowing monopoly infrastructure providers to significantly increase prices just prior to or after privatisation. 

"This practice not only increases prices for consumers but also erodes support for privatisations which, provided they have appropriate access and pricing frameworks in place, would generally benefit consumers and the broader economy."

In its most recent container stevedoring report, the ACCC raised the following points: 

  • the ACCC’s concerns around port privatisations are shared by key port users Asciano and Qube, who have publicly raised concerns about the impact on port costs
  • business will generally operate more efficiently in private hands, however if a State Governments’ privatisation goal is to maximise the sale price, which would come at the expense of poor industry structures or inadequate regulation, this quickly becomes an effective ‘tax’ on future generations
  • the risk remains that . . . port privatisations could lead to greater costs for container stevedores, other port users, businesses, and ultimately for consumers.

Despite that, Sims has indicated greater ACCC power over ports would lead to intervention on links between lease bids and rent hikes and also his interest in examining the National Access Regime as a possible way in for his organisation.

And the Tasmanian Freight Logistics Council notes the ACCC ‘s Transport and General Prices Oversight Branch (TGPO) can advise on infrastructure access prices.

Hutchinson’s intervention comes as Tasmanian infrastructure minister Rene Hidding took up the cudgels again over of his state’s vulnerability to port of Melbourne costs.

"We make very clear that it is the Tasmanian Freight Equalisation Scheme that is designed to address the disadvantages faced by Tasmanian businesses and industries, and we will not stand by and see one red cent flow to Victoria," Hidding says.

"Opposition leader Bryan Green should get on the phone to his Labor colleague, Victorian premier Daniel Andrews, and tell him to back off.

"For my part, I will be meeting with the Victorian minister for ports, Luke Donnellan, early next month to express this Government's deep concerns.

"We will seek a guarantee that the Victorian Government will not seek to unfairly profit from the hard-won gains of struggling Tasmanian businesses."

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