Tasmanian farmers want the Australian Government urgently to review the Tasmanian Freight Equalisation Scheme (TFES), which they say now seriously disadvantages them when compared with mainland producers.
The scheme is worth about $100 million a year to Tasmanian industry as whole and has been operating for 36 years. However, it no longer meets its objectives, Tasmanian Farmers and Graziers Association chief executive Jan Davis said today.
Ms Davis said that, when the scheme was introduced in 1976, it was intended to remove any disadvantage Tasmanian businesses faced in interstate trade in view of the fact that they had no rail or road options and were virtually totally dependent on shipping.
“The scheme is meant to equalise freight costs, both northbound, which includes getting exports to interstate markets; and southbound, which covers raw materials and other inputs used in the means of production,” Ms Davis said. (The TFES does not subsidise exports out of Australia.)
“But there are three new factors that the scheme must embrace if Tasmanian farmers and other industry sectors are not to be priced out,” she said.
They are:
• a three-year moratorium on the new carbon tax being imposed on road fuel, by way of a rebate, does not to shipping fuel, which will be subject to the carbon tax. The TFES will not take that inequity into account;
• the Victorian Government’s new $74 million licence fee imposed on the Port of Melbourne that it says it will pass onto users in full. That alone is expected to cost Tasmanian producers at least $10 million a year. About 98 per cent of Tasmanian freight passes through Melbourne; and
• Tasmania no longer has direct international shipping links and therefore its overseas exports have to be shipped through mainland ports, which means Tasmanian products incur a disproportionately heavy freight cost relative to the eventual destination.
Ms Davis said the TFES had been critical to Tasmanian farmers remaining competitive, by removing both the tyranny of distance and the tyranny of Bass Strait between Tasmanian farmers and their markets.
“It is imperative the Australian Government institutes an urgent review of the scheme,” she said. “The lack of international shipping is already upon us, the carbon tax and port licence fee are imminent. There is no time to lose.”
