TFES inquiry urges examination of TasPorts role as shipping operator

A Senate select committee has emphasised the need to clarify the primary role of TasPorts, Tasmania's port authority. 

TasPorts are also the owner and operator of Bass Island Line, which services King Island weekly through the vessel John Duigan.

The report recommended that as part of the Tasmanian Government’s ongoing review of Government Business Enterprises, stakeholders are urged to consider: Ensuring TasPorts prioritises efficient and cost-effective trade facilitation; and examining the implications of TasPorts operating as a shipping operator, particularly in light of National Competition Policy concerns and the additional costs generated.

In a bid to address longstanding freight challenges impacting Tasmania and its Bass Strait islands,The Senate’s Select Committee chaired by Independent Senator for Tasmania Tammy Tyrell tabled its Tasmanian Freight Equalisation Scheme inquiry report on Thursday 19 December.  

“The report highlights a scheme that is ineffective, clunky, a deterrent to businesses setting up in Tasmania and a burden to established businesses”. The report has 5 key recommendations aimed at ensuring more equitable and efficient freight operations. 

The committee has also called for a comprehensive review of the Tasmanian Freight Equalisation Scheme (TFES). The review will assess whether the scheme aligns with its original policy intent and remains fit for purpose in the current economic landscape. Key areas for consideration include:

Addressing the freight cost disadvantages for shippers of eligible non-bulk goods between Tasmania, the Bass Strait islands, and mainland Australia.

Evaluating the rates of assistance provided and the class scale system to ensure they adequately support businesses.

This recommendation highlights the importance of an updated TFES to reflect the evolving needs of Tasmanian industries and maintain parity with mainland counterparts.

• To address confusion surrounding the Tasmanian Freight Equalisation Scheme, the committee recommends that Services Australia develop clearer guidance materials and support systems. Proposed initiatives include:
• Audiovisual user guides and comprehensive instructions.
• A dedicated phone line to assist claimants in navigating their eligibility and submitting accurate, timely claims.

This recommendation seeks to make the claims process more accessible, particularly for small businesses unfamiliar with the scheme’s complexities.

Further enhancing accessibility, the committee has urged Services Australia to create an online claims calculator. This tool would enable prospective claimants to estimate the value of their claims and better understand their eligibility under the TFES. Such a resource could significantly reduce administrative hurdles and improve claimant confidence.

The Australian Government has been encouraged to commission the Australian Competition and Consumer Commission (ACCC) to review the competitiveness of trade across Bass Strait and the Bass Strait islands. The review would encompass both sea and air freight and delve into the pricing rationale for commodities, particularly fresh produce.

The committee has acknowledged the unique challenges faced by King Island and the Furneaux Group, proposing tailored solutions and recommends that TFES Coverage expands to include air freight as an eligible mode of transport for time-sensitive goods from Bass Strait islands, addressing the high costs and limited shipping options and that a minimum number of weekly sailings be mandated, incentivise additional operators, and upgrade port infrastructure to reduce delays and improve reliability.

Other proposed initiatives include establishing a coalition of stakeholders, including councils, businesses, and community groups, to ensure Bass Strait island needs are prioritised in future reviews and reforms; aligning northbound and southbound assistance rules and clarify eligibility for charitable shipments to ensure equitable treatment for island communities.

Implementation of the recommendations will require coordination among federal and state governments, as well as industry stakeholders. 

“The scheme has one goal: to make sure Tasmanian businesses aren’t disadvantaged because of the cost of getting things across the Bass Strait. And right now, the scheme is nowhere close to doing its only job”, Senator Tyrell said.

“The challenge is open to Labor and the Coalition to take on the recommendations. If they do, it’ll improve the scheme for Tassie businesses. If they don’t and the scheme continues as it is, businesses will drown in a sea of red tape trying to figure out a confusing system no one understands. And get nothing for their efforts” Ms Tyrell stated.