Government response to the Productivity Commission’s Tasmanian Shipping and Freight Inquiry
Bass Strait Passenger Vehicle Equalisation Scheme (BSPVES)
The Abbott Government should restore the original purpose of the Howard 1996 Tasmania Package and its national highway promise.
A focus to just drop eligible passenger and vehicle fares an unspecified amount, as referred to in Federal ministerial directives, was not the aim of the 1996 Tasmania Package, or reflective of the wider national responsibilities of the BSPVES.
When introduced, the BSPVES, a multi-billion equalisation scheme, was very publically about two-way highway-cost equalised travel.
Why is it being seen under Mr Abbott as a one-way scheme with a far more limited purpose?
An independent review of the practices that have led to a change in purpose from the Howard initiative to the Abbott Government response is needed.
The independent review suggested by the Productivity Commission (PC) to consider the scheme with a wider tourism focus, to take place at some unspecified future date, is not needed if the original purposes of the Tasmania package are restored.
The PC was right to also raise concerns regarding clarification of the purpose of the BSPVES and the federal monitoring process.
Subject to two-way purposes of the BSPVES being acknowledged by the Abbott Government, appropriate adjustments to monitoring and an independent review as suggested by us should take place urgently.
Given the continuation of massive federal BSPVES funding and substantial under-utilised infrastructure, the BSPVES can be applied by Canberra with a wider focus right now to move all people and all passenger-related vehicles in both directions across Bass Strait.
If the Abbott Government met the responsibilities under the original Coalition package, Canberra could open up fair equalised surface travel between Victoria and Tasmania in days. The Howard expectation of population increase, investment and jobs can follow.
If both Mr Keating and Mr Howard could act – why not Prime Minister Abbott?
BACKGROUND, HISTORY and COMMENT …
Abbott’s Bass Strait policies
There was a time when the sea lanes were the highways that linked the colonies and the world.
Then came Federation.
Federation was about connecting the colonies – forming them into a national integrated economy through the movement of both people and freight.
Interstate road and rail links were established.
Two major federal equalisation schemes were subsequently introduced to link Bass Strait.
In 1976, the Tasmanian Freight Equalisation Scheme, TFES, equalised the movement of freight at the cost of highway travel. It covers about half the freight crossing Bass Strait. Excluded were southbound goods destined for the Tasmanian retail market and international exports.
In 1996, with widespread support across the nation, a core promise by the Howard Coalition was that Bass Strait was to be “part of the national highway”. Mr Howard obtained government on the basis that transport equity for both people and vehicles would be introduced and maintained. The Bass Strait Passenger Vehicle Equalisation Scheme, BSPVES was established.
The scheme was and remains well funded by Canberra and was to be aimed at bringing down both sea passenger and vehicle fares to the equivalent cost of travelling on a highway – also maintaining that outcome through a ministerial directive governing the cost of travel covering a driver and car and with the stated expectation that future sea-based competition would drive down passenger fares – none eventuated.
Then came the exporters. Their case was, in part, also legitimately and largely based on the national sea highway argument.
The enhancement of the TFES scheme to cover exports crossing Bass Strait, not direct to Asia, is the right decision and welcomed.
Despite the Abbott-Hockey argument that the cupboard was bare, these exporters won big. Gone were the old arguments that support for exports could be against WTO rules. Under Abbott, money is to be made freely available to exporters on the basis that it is used to build the Tasmanian economy and increase productivity.
The exporters’ case fits well into this framework.
The Abbott game-changer
Then came the real Abbott game-changer.
At the same time as offering export equalisation, and while responding to a question raised by the Productivity Commission’s Tasmanian Shipping Report asking government to clarify the purpose of the BSPVES, the Federal Government included a one-line statement.
It read: “The aim of the BSPVES does not extend to equalising the cost of inbound and outbound travel across Bass Strait.”
This statement has failed to recognise the sea highway basis for one of the two major equalisation schemes.
Despite massive uncapped demand-driven federal funding obtained by a people and industry campaign across Australia for Bass Strait transport equality, the Howard promises in this regard are now to remain largely undelivered. The Abbott Government seems to be walking away from any chance of further delivery.
With national highway justification for the scheme given by Canberra for many years, why is the people’s highway mandate for transport equality now being ignored?
It is unlikely that any national support for such a large and significant scheme could ever have been given for anything less than a two-way national highay connection.
Is freight to be equalised under Mr Abbott but, the movement of people now not?
With all equalisation schemes now appearing as Tasmanian industry related subsidies, is Tasmania to now become a state reliant on federal subsidies creating a separate self-contained economy – not a federated state requiring similar transport connections to all other states?
People wanting a comprehensive sea-highway link will now have their access controlled by the Tasmanian Government and or its shipping operator – all this in a strategically important interstate transport corridor, half in Victoria and half in Tasmania.
The Abbott Government is all but putting the National Sea Highway concept to rest. It should not be allowed to do so.
Despite all this, a new approach may still be available to some. So welcome to a new world of federal subsidisation policy.
A right stemming from Federation …
The service industries, or industries and activities needing local or interstate customers, generate about 80% of gross Tasmanian state product. Their activities are dependent on direct access to people. This access is as vital to them as coal is to a steam engine.
They can now wait for the Tasmanian economy to improve, based on the flow-on impact of the freight subsidy enhancement. Alternatively, they can look at other industries obtaining Federal subsidies and seek to do likewise.
Service industries will need to prove a potential increase in productivity on an industry-by-industry basis, and go cap in hand to Canberra. They should seek equal treatment to those already subsidised. This would not be difficult if highway fares are not maintained across Bass Strait to link their industries to the nation’s largest population corridor at their doorstep.
In the present political climate, service industries are unlikely to be able to easily argue their case as a right stemming from federation but, will need to see if their now well-skilled federal Liberal political representatives can secure further Bass Strait subsidies without it.
Mainland interests, seeking tourism movement both ways through Victoria, manufacturers seeking southbound freight equalisation for fair trade over the Victorian/Tasmanian border and those seeking to encourage population increase in South-Eastern Australia through equitably linking highways on both sides of Bass Strait may need, under the Abbott government, to forget the sea highway concept or potential opportunities for enhancement of the BSPVES.
Perhaps some may consider making investments in Tasmania instead, as if it were another country, if Canberra can back winners with its subsidies.
In the end, the nation may need to wait for a time when Howard policies that connect the nation are restored.
Alternatively, it can maintain the fight to reclaim the benefits of federal national highway policies under the BSPVES that will offer the simplest, most economically dry, highest right to equity and wealth based on arguments of statehood.
For now, those seeking transport equity can watch as a major federal highway policy, capable of fairly linking the nation’s peoples, removing the barrier to travel in both directions, lowering the price of consumables, increasing productivity, population, investment and jobs in Tasmania and across many industries, disintegrates.
*Peter Brohier was born in Devonport, Tasmania. He now lives in Nth Caulfield, Victoria. He is retired lawyer and Chairman of the former National Sea Highway Committee. Peter started his campaign at a public meeting at the Burnie Civic Centre about 20 years ago and has continued to fight for Bass Strait transport equity since 1992. Peter was described by Paul Lennon as the person most responsible for the introduction of the Bass Strait Passenger Vehicle Equalisation scheme. He is the recipient of the Australian Hotels Association -Tasmania award for outstanding services to tourism.
EARLIER on Tasmanian Times …
• The Question of Bass Strait, includes links to earlier articles
