Tasmania relies on sea freight to deliver 99 per cent of its goods, and with key parts of the Tasmanian Freight Equalisation Scheme (TFES) unamended since 1998, the state government has confirmed it will lobby the federal government to ensure “Tasmanian businesses [are] no worse off”.
The TFES provides financial assistance incurred by shippers of eligible non-bulk goods across the Bass Strait. The assistance is determined on the difference between the costs of moving the freight by sea against the notional costs of moving them by road over an equivalent distance.
A total of $181.7 million was spent through the scheme in 2023-24, however Tasmanian Minister for Transport Eric Abetz says inaction on amending the scheme has left the playing field uneven for Tasmanian businesses, purely based on where they are located.
“There have been numerous inquiries into the Scheme during its near 50-year existence, and we will be urging the federal government to commit to a no-worse-off guarantee, noting the significant changed we’ve observed in Bass Strait shipping frequency and capacity over that time,” Abetz says.
“Inconsistencies in the scheme’s scope and operations seem to have crept in due to numerous amendments over the years; the difference treatment for King Island and Flinders Island being one example I have lobbied the federal government about.
“It is also unacceptable that TFES assistance rates for our farmers and agribusinesses have not changed since 1998 and do not reflect increasing Bass Strait shipping costs, the problem exacerbated further in times of feed and fodder shortage from drought.
“Shipping has inherently high fixed costs across short distances, which is expensive when compared to road and rail transport. Tasmania does not have the luxury of these cheaper alternatives.
“Our island state relies on sea freight for the movement of 99 per cent of our goods, across one of the most expensive stretches of water to move goods and people, with resulting flow-on effects for the cost of doing business and the cost of living.”
“Tasmanian businesses should be no worse off under any changes to the scheme.”
Recent amendments to the Tasmanian Freight Equalisation Scheme have included amendments relating to the eligibility of imported goods which are shipped to Tasmania via a mainland port in 2021, and amendments relation to the inclusion of Southbound assistance for charitable organisations providing hardship relief caused by drought on King Island.
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