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Wednesday, 6 February 2013
Page: 301


Mr WILKIE (Denison) (19:52): The fact that Tasmania receives more GST per capita than other states is much remarked upon. Regrettably the commentary from the mainland is sometimes shrill and unhelpful, for instance from the Premier of Western Australia, Colin Barnett, who has gone so far as to describe Tasmania as a beggar state. Of course, it is not as simple as that, because there are many reasons why Tasmania receives, and must continue to receive, more GST per capita than other states, including our relatively poor health outcomes and the fact that Tasmania simply does not have the mining revenue stream enjoyed by Western Australia.

Relevant too is Bass Strait, which is no small matter when you consider not so much the length of the journey, or the treachery of the waters, but the very high costs involved which make some commercial endeavours unsustainable or at least marginal. A friend told me recently that he was getting about $20 for a kilogram of wool, but was having to spend about $1 of that to get it to Victoria. Another friend told me that his family's manufacturing enterprise in Hobart pays $1,500 to send a container to Melbourne, and that is three times the cost of sending the container on from Melbourne to China. It is not just exports that are being hit with costs being imposed by the shipping lines and port authorities. One constituent told me last year that he had transported a prefabricated swimming pool from Brisbane to Hobart and two-thirds of the almost $15,000 freight cost was just to get the prime mover and trailer over and back across Bass Strait.

This is a ridiculous situation and one which really should have been remedied by the Tasmanian Freight Equalisation Scheme that was introduced in 1976 and is budgeted to cost $102 million this financial year. In essence, the scheme is designed to help reduce freight costs associated with sea transport. It operates under ministerial directions and guidelines issued by the Minister for Infrastructure and Transport and applies to northbound goods, southbound manufacturing and mining goods, and primary production. The trouble is that the amount of money available is simply inadequate, even more so on account of the federal government's decision to reduce the funding in recent years.

Moreover, the scheme is too narrow, as goods bound for international export are specifically excluded. For example, the boots made by Blundstone in Hobart must first be shipped to Melbourne before being transferred to overseas-bound vessels, yet they attract no subsidy for the Bass Strait leg, even though this constitutes about half of the total freight cost from Tasmania to North America and other destinations. Importantly, this subsidy exclusion for the Tasmania-Victoria leg for international exports is a very significant cost to business and one entirely unavoidable ever since the direct international shipping link out of Bell Bay in northern Tasmania ceased in 2011. It is not for want of trying that this particular problem continues, because the Tasmanian Exporters Group, headed by Bob Gozzi, has been working hard to resurrect a direct overseas freight service and has attracted some interest from the Swire group of companies. Special mention should also go to Doug Dickinson who advocates tirelessly for remedying Tasmania's freight woes, and to Peter Brohier who continues to push for broader reforms that would see the cost of crossing Bass Strait come down to the cost of travelling a similar distance by road.

Bringing down the cost of moving people and freight to and from Tasmania is the one thing governments can do at relatively low cost to bolster the Tasmanian economy and reduce its dependency on Canberra. But as far as freight at least goes it needs to apply to all goods in and out, including international exports. This is something that could be done quickly and simply by expanding the existing freight scheme and giving it the funding to match—perhaps another $60 million a year. I have lobbied the Prime Minister and Leader of the Opposition on this matter and trust they have the sense to act on my concerns. Last year, Canberra did provide a one-off $20 million assistance package for international exporters, but that did not go far, and the Tasmanian government pilfered a quarter of it for other purposes anyway. We can but hope that the dynamics of an election year will generate a more effective and enduring solution.

House adjourned at 19:58